April 27, 2016
By Mark Terry, BioSpace.com Breaking News Staff
After Monday’s 6-7 vote against a recommendation for Cambridge, Mass.-based Sarepta Therapeutics ’s eteplirsen for Duchenne Muscular Dystrophy (DMD) by the U.S. Food and Drug Administration (FDA)’s Peripheral and Central Nervous System Advisory Committee (PCNSC), it’s reasonable to speculate on what the FDA’s final decision will be on May 26 and what the company’s plans and financial status may be for either decision. Forbes collated the highlights from six Wall Street analysts’ notes to see what they’re thinking.
Simos Simeonidis
Simos Simeonidis, with RBC Capital Markets, expects the FDA will give Sarepta a Complete Response Letter (CRL) recommending or requesting it conduct a large, randomized, placebo-controlled trial. “We see only an outside chance for approval by the May 26 PDUFA date (less than 20 percent). If we’re correct and the agency issues a CRL, we expect SRPT shares to settle in the low to mid-single digits.”
On the other hand, if the FDA approves, which seems unlikely, shares could go as high as $50.
Joseph Schwartz
Joseph Schwartz with LeeRink Partners, expressed concern over Sarepta’s apparent inability or unwillingness to follow the FDA’s recommendations for the testing of eteplirsen to date. He noted that the FDA staff, which included the “unprecedented presence of key CDER (FDA’s Center for Drug Evaluation and Research) power-hitters (Woodcock, Dunn, Temple, Unger) to address and clarify any ambiguities,” seemed “understandably perturbed” that after the FDA spent several years giving the company advice and suggestions on how to run the trials, they ignored them. Overall, Schwartz thinks Sarepta will get a “no” on May 26.
Brian Skorney
Brian Skorney, with Robert W. Baird, doubts the drug will get passed. He noted that the Advisory Committee’s presentations, from a realistic point of view, couldn’t have been more positive for Sarepta. However, “the results of the panels voting questions may make approval on this review look increasingly less likely.” He gives the approval less than a 10-percent-chance.
Chad Messer
Chad Messer, with Needham & Company, doubts the drug will get approved, notes, as have most others, although FDA Director Janet Woodcock and Deputy Director Bob Temple seem to be hinting at some potential flexibility while urging panel members to take patient testimony into account.
Messer wrote, “While we view eteplirsen’s chance for accelerated approval as diminished given the negative vote, we continue to be buyers of SRPT shares particularly on any sell-off today. Regardless of accelerated approval decision, we expect full approval of eteplirsen as early as next year.”
Christopher Marair
Christopher Marai, of Oppenheimer & Co., has downgraded Sarepta stock to “perform,” but eliminated his $60 price target after the hearing. In an email to Forbes, he wrote, “I believe that the FDA is risking a Type 2 error by not approving a drug that works vs. the Type 1 error of approving a drug that does not work. This is particularly troubling because a Type 2 error is reversible (or correctable) should a Sarepta confirmatory trial fail, by removing the drug from the market.”
It could be argued, however, that Marai’s argument only holds up if there are no deadly side effects related to the drug. So far, the drug appears to be safe. Its efficacy, however, and the size of the trial and the basic lack of a control group, are the problem.
Debjit Chattopadhyay
Debjit Chattopadhyay of Janney Montgomery Scott, had some strong criticism of the FDA panel, noting, “We were dismayed by the quality of the discussion at the panel, all of which highlighted the lack of clinical depth (in understanding DMD) both among reviewers as well as the panel members.”
Originally, the FDA was to review Sarepta’s New Drug Application (NDA) for eteplirsen for DMD on Jan. 21. It was postponed until Monday because of an impending snowstorm on the east coast.
DMD is a muscle wasting disease caused by mutations in the dystrophin gene. Dystrophin is a protein that plays a central role in muscle fiber. The disease is progressive and typically causes death in the mid- to late-twenties. It mostly affects boys, about 1 in every 3,500 to 5,000 male children.
Sarepta’s clinical trial was based on 12 boys, two for whom the drug did not work. The company has argued that their data should not be included, because it wasn’t expected to work for them since they both have later-stage disease. In addition, instead of a control group that took a placebo, Sarepta utilized data from European studies.
