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Sarepta’s surprise FDA approval for rare disease drug excites investors

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The unexpected approval by the Food and Drug Administration of Sarepta Therapeutics’ second Duchenne muscular dystrophy (DMD) drug on Friday spiked the company’s shares.

Sarepta SRPT actions,
+1.81%
jumped 35% in morning trading after Vyondys 53 was approved on Thursday night.

DMD is a rare disease that primarily affects male children. About 8% of children with DMD have the genetic mutation that Vyondys 53 treats.

“The approval of Vyondys 53 removes a major overhang for the stock as concerns about SRPT’s future commercial products such as Exondys 51 being taken off the market and the cash flow required to support SRPT’s growing gene therapy platforms. have now been lifted, ”Joseph Schwartz of SVP Leerink wrote on December 12.

Read: Astellas’ $ 3 billion gene therapy deal stabilizes investors after Roche acquisition blocked

Sarepta already markets Exondys 51, which was the first DMD treatment approved by the FDA in 2016. And so far, it is the company’s only marketed therapy, generating $ 99 million in revenue. in the third quarter, compared to $ 78 million in the same period. one year ago.

Until August 19, when the regulator sent a full response letter to the company citing a pair of risks regarding the then-experimental treatment, Vyondys 53 was expected to follow the same fast-track as Exondys 51. The company’s shares fell 18% to $ 120.31 that day and has since failed to regain its annual high of $ 156.91 on July 15. The stock closed Thursday at $ 100.47. Company officials said they were surprised by the letter at the time.

“Within four months, we began and completed the formal dispute resolution process which resulted in our appeal being granted,” our appeal re-submitted. [new drug application] and obtained approval, a great benefit for patients with DMD awaiting treatment, ”Sarepta President and CEO Doug Ingram said in a press release.

A spokesperson for Sarepta said that Exondys51 and Vyondys53 both have an annual list price of around $ 300,000. However, pharmacy benefits manager Prime Therapeutics told the New York Times in 2017, that the price can sometimes reach $ 750,000 per patient, in part because it is based on weight.

This price tag has raised questions among experts, even though there are limited treatment options for patients with DMD. The Institute for Clinical and Economic Review, a watchdog that conducts comparative research on clinical effectiveness, said in August that most insurers responded to the high price of Exondys 51 by cutting coverage. “Three years after the approval, the manufacturer has not provided any high quality evidence of the benefits, many patients and families are surely the losers, and only the manufacturer is really benefiting from this deplorable situation,” said the chief medical officer of ICER David Rind in a statement. .

Do not miss: Sarepta makes a bold bet on genetic medicine

Sarepta is also developing casimersen, another investigational treatment for DMD that is expected to receive an FDA decision in the first half of next year. But not all analysts think the approval of Vyondys 53 bodes well for the FDA’s decision making on casimersen and other DMD drugs in the industry pipeline.

“While the approval of [Vyondys 53] provides some relief to the operational burn of the P&L, we remain cautious about the next development steps for both the PMO and the gene therapy franchise, ”wrote Hartaj Singh, analyst at Oppenheimer.

Investors are less careful. Actions of Wave Life Sciences WVE,
+ 7.66%,
who develop DMD treatment, are up 6%. Audentes Therapeutics United States: BOLD,
that Astellas Pharma announced last week its intention to buy for $ 3 billion, is also working on a DMD drug. His stock was flat.

Sarepta stock has gained 25% year-to-date, while S&P 500 SPX,
+ 0.81%
is up about 26%.


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