In a major setback, shares of
Sarepta Therapeutics, Inc
) plunged 64.01% after the U.S. Food and Drug Administration
stated that a New Drug Application (NDA) filing for candidate
eteplirsen will be premature.
We note that Sarepta Therapeutics is evaluating eteplirsen for
the treatment of Duchenne muscular dystrophy (DMD).
Sarepta Therapeutics met with the FDA to finalize its
confirmatory study design on eteplirsen. However, the FDA is
doubtful on both the dystrophin biomarker and the supportive
clinical efficacy assessed on the 6-minute walk test in the phase
IIb clinical trial on eteplirsen, owing to recent developments
(post Jul 2013).
These recent developments include a failed phase III trial of
) and Prosensa's candidate drisapersen for DMD and negative
) candidiate ataluren.
Moreover, recently published natural history data on DMD has
made the FDA more skeptical on dystrophin as a biomarker and the
supporting studies on eteplirsen.
Hence, the FDA is expected to discuss different clinical
endpoints, combined endpoints, and different DMD subpopulations
for a confirmatory clinical study, along with questions on
dystrophin as a biomarker and the need for a placebo-controlled
study in a follow up meeting with Sarepta Therapeutics. The
meeting is scheduled later in the month.
The FDA's negative response to the potential submission of NDA
on eteplirsen will delay the initiation of dosing in the
eteplirsen confirmatory study until the second quarter of 2014.
Further, there will be an increase in study costs also as the FDA
has asked Sarepta Therapeutics for a placebo-controlled study as
the agency believes that efficacy endpoints in DMD are effort
dependent and susceptible to buyers while the natural history is
The response of the FDA overshadowed the company's third
quarter results. Sarepta Therapeutics reported a net loss of 73
cents in the third quarter of 2013, wider than the Zacks
Consensus Estimate of a loss of 66 cents. Revenues of $4.2
million in the third quarter of 2013 were down 44.9% from the
year-ago quarter but surpassed the Zacks Consensus Estimate of $4
We remind investors that Sarepta Therapeutics currently does
not have any approved product in its kitty. The delay in
eteplirsen's NDA filing was disappointing, thereby pushing back a
potential approval by more than two years.
The stock plunged to a 52-week low on the news but recovered a
bit therafter. We expect investor focus on further updates
on Sarepta Therapeutics' follow up meeting with the FDA later
Sarepta Therapeutics currently carries a Zacks Rank #3
) looks attractive with a Zacks Rank #1 (Strong Buy).
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