Turn the Page: Sarepta Stock Pops on Rumors DMD Drug Naysayer Leaves the FDA

Published: Sep 15, 2016

Turn the Page: Sarepta Stock Pops on Rumors DMD Drug Naysayer Leaves the FDA September 14, 2016
By Mark Terry, BioSpace.com Breaking News Staff

Investors are scanning the tea leaves and crystal balls for any sign on what the U.S. Food and Drug Administration (FDA) is going to do about Sarepta Therapeutics ’s eteplirsen for Duchene Muscular Dystrophy (DMD). The company’s stock popped this morning after news that Ronald Farkas, who headed the clinical review team that oversaw the drug’s approval process, has left the agency for a job in the private sector. Farkas was notably critical of the drug and the clinical trial data, but hardly the only one.

DMD is a muscle wasting disease caused by mutations in the dystrophin gene. It is a progressive disease that usually causes death in early adulthood, with serious complications that include heart or respiratory-related problems. It mostly affects boys, about 1 in every 3,500 or 5,000 male children.

Sarepta and eteplirsen have been one of this year’s most dramatic stories. In January, the FDA was scheduled to review eteplirsen’s New Drug Application (NDA), but postponed it because of a pending snowstorm on the east coast. It was rescheduled for April 25.

In February, 109 members of Congress sent a letter to the FDA urging it to accelerate approval of a DMD drug, not specifying eteplirsen. In March, 36 DMD experts signed a letter to the FDA urging it to approve eteplirsen.

The April meeting was a media circus. It lasted 12 hours, had 52 public commentators, often offering emotional plays for help from families of DMD children or the patients themselves. In May, the FDA delayed its decision, indicating it wanted more time and data. Then, on August 4, the clinicaltrials.gov website indicated that Sarepta’s Phase III ESSENCE trial for DMD had begun to recruit patients. This news also caused the stock to jump.

As TheStreet notes, “The departure of an important eteplirsen critic from the FDA could be a sign that the internal agency debate over Sarepta’s drug is coming to an end, with officials advocating for approval getting their way.”

Or not. It could simply mean that Farkas has left the job and someone else will replace him who may have the same (or different) opinions.

And as The Street also points out, the FDA review of eteplirsen has gone on almost twice as long as the review for other rare disease drugs.

Although neither the FDA or Farkas has confirmed that he’s left the agency, TheStreet reports that a source told them that he took a job with Parexel , a clinical research organization (CRO) and consulting firm.

Adam Feuerstein, writing for TheStreet, said, “As a team leader in the neurology division of the FDA, Farkas oversaw the clinical review of eteplirsen. In their review, Farkas and his team concluded the eteplirsen clinical data compiled by Sarepta was not strong enough to warrant the drug’s approval. But not everyone at the FDA agreed with this negative assessment, which is why the agency’s deliberations are still ongoing.”

It’s also likely that with extremely significant political pressure and the overall public outcry over this drug and the approval process, which definitely has a heartbreaking, emotional component, is complicating the review process.

MarketWatch wrote, “Farkas’ role in the drawn-out saga of eteplirsen has been attacked, notably by The Wall Street Journal, which said in an August editorial that Farkas and another FDA employee ‘have lost the public’s confidence that they can conduct a fair review, and no bureaucratic proceeding should stop the FDA from reviewing their fitness for service.’”

Sarepta was trading yesterday for $25.60, and is currently trading for $32.62. Shares had a year high on Dec. 29, 2015 of $39.12, and a low on Feb. 8, 2016 of $10.74.

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