S Why Sarepta Therapeutics Inc Looks On Track For A Second DMD Approval

One of the most controversial drug approvals of 2016 was that of Eteplirsen, Sarepta Therapeutics Inc (Nasdaq:SRPT)'s then-lead development asset targeting Duchenne muscular dystrophy (DMD). Many reading might remember the situation. For those that don't, the drug had demonstrated a degree of efficacy in clinical trials when measured against quality-of-life endpoints but, in what is generally regarded as the gold standard biomarker for these patients, the levels of dystrophin in the body (more on this shortly), patients that received Eteplirsen as part of the study only saw an average increase of dystrophin (in terms of percentage of normal levels from baseline) of 0.16% to 0.44%.

That's an around 3.5 times multiple, but it is a far claim to be anywhere near a return to normal.

With that said, DMD is a devastating disease and is the most common fatal genetic disorder diagnosed in childhood, affecting approximately 1 in every 3,500 live male births and amounting to about 20,000 new cases each year worldwide.

Before Eteplirsen, there was no approved treatment for the condition and therein lay the controversy – would the FDA approve the drug based on a tiny efficacy signal so as to give these patients something to take that could potentially alleviate their symptoms?

A well-publicized meeting took place at which the head of the FDA was questioned and interviewed by DMD sufferers and their parents (most of these patients are children) and the outcome was yes – the agency would approve the drug.

Markets expected a relatively slow uptake, however, despite this asset being the only option this market. As it turns out, things have been anything but slow and Sarepta is now expecting to bring in $125 million in revenues from the drug during 2017 (reliant on a near-term approval in Europe).

So why is this news now?

Well, the company has spent the last 12 months trying to develop what it calls a next-generation version of Eteplirsen, called golodirsen. The mechanism of action of the drug is different at its core from that of Eteplirsen, but the route it is taking to therapy is essentially the same.

Both drugs aim to skip what's called exon 35, which is the gene in which the mutation that causes defective dystrophin to be produced is located. A deficiency of dystrophin, which is a protein that plays a key role in muscle structure, is what causes DMD.

The idea, then, is that by skipping exon 35, the drug can induce effective production of dystrophin and, in turn, can help to alleviate the symptoms of the condition.

This is why the tiny increase in dystrophin levels in patients that took part in the pivotal trial that underpinned the Eteplirsen application was so controversial – the drug is only slightly affecting the underlying cause of the disease.

So, the reason this is news now is that the company just put out data from a phase 1/2 trial investigating the impact of golodirsen in DMD patients and, subsequent to the data release, presented the numbers at the Annual Congress of the World Muscle Society in France.

And at a glance, they seem strong.

The study took 12 patients and randomized them so as eight would receive golodirsen and four would receive placebo for what was called part 1 of the investigation. Then, in part 2, an additional 13 were added to the initial 12 and all patients received the active drug.

As per the results, all 25 participants displayed an increase in skipping exon 53 (p < 0.001) over baseline levels, representing a 100% response rate as measured by what's called the RT-PCR, demonstrating proof of mechanism.

And here's the key figure – Mean dystrophin protein increased to 1.019% of normal compared to a mean baseline of 0.095% of normal. That still seems small but it's a tenfold increase which dramatically outweighs that of the threefold increase seen with Eterplirsen.

So what's next?

Management expects to meet with the FDA during the first quarter of next year so as to carve out a path forward for golodirsen in this population. If the agency allows the company to go ahead with the same endpoints in a pivotal trial, it's tough to see the drug failing to get approval, given the leniency shown towards Eterplirsen last year.

From a trader's perspective, Sarepta looks like it could be a strong pick heading into early 2018 and beyond. 

Disclosure: The Author has no positions mentioned in any of the stocks mentioned. 

Disclaimer: Opinions are my own and I have no business relationship with/am not receiving compensation ...

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Carol Klein 4 years ago Member's comment

Looks promising, thanks. $SRPT.