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Eric Chiu
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My name is Eric Chiu, a recent graduate from Western University (UWO) and CFA level 2 Candidate. I am particularly interested in the healthcare sector and within it, the research and development of pharmaceuticals. From the community at Seeking Alpha, I hope to generate thoughtful discussion and... More
  • Sarepta Therapeutics And Discussion Of Eteplirsen Vs. Drisapersen 0 comments
    Nov 11, 2013 4:52 PM | about stocks: SRPT, GSK, RNA

    Sarepta Therapeutics (NASDAQ:SRPT) is a pharmaceutical company that develops RNA based therapies. Over the last 4 years, Sarepta has recorded annual operating losses since its inception and has not yet made any sales. The Capital structure of the company is primarily financed through the issuance of stock. A majority of net losses pertain to the non-operating expenses are due to an increase in the fair value of warrants. Looking forward, the upside of this company remains in the hands of their main drug, Eteplirsen. This is a Morpholino Antisense Oligomer that is used to treat Duchenne Muscular Dystrophy (NYSE:DMD), which causes muscle degeneration and eventually death.

    Scientific Analysis and Comparison

    Dystrophin is a protein that connects the cytoskeleton of a muscle fiber to the surround extracellular matrix through the cell membrane. In DMD patients, during the replication process of this protein, exon 51 is usually excised when it is not normally in those without DMD. Eteplirsen and rival drug Drisaspersen both skip over exon 51.

    Drisaspersen (2'OMe backbone) is a rival drug with the same mechanism that has a different backbone and was being developed by Glaxosmithkline (NYSE:GSK) and Prosensa (NASDAQ:RNA). However their studies were put on hold in the midst of Phase 3 when they failed to show significant change between drug effect and placebo. Thus far Eteplirsen has been able to show significant benefits vs. placebo and an almost sustained baseline up to week 96.

    (click to enlarge)



    It appears the key difference lies in the dosage in which Eteplirsen is at 30-50mg/kg/week while Drisapersen is at 6mg/kg/week. Since these are biological drugs are essentially strands of genetic code, the potency per amount of product is constant. In addition, the mechanism of these two drugs are the same and therefore I believe its effect is directly proportional to its dosage. After reading the Phase 1 report of Drisapersen it appeared that due to safety, the dosage was not increased and remained at 6mg/kg/week. At at 6mg/kg/week Drisapersen was not able to sustain enough of a benefit over the placebo, while the higher dosage Eteplirsen continually maintained baseline.


    Since Eteplirsen is similar to Drisapersen, FDA may still find the efficacy of the drug not enough. Though the higher dosage has thus far shown promising results. Intellectual property battles with Prosensa play a role with commercialization of Eteplirsen however management feels that they have valid defenses against these claims.

    Long term exposure (>2years) to Eteplirsen may yield non-serious side effects, but can be mitigated by staying off the drug for a week or two. Further testing is required to confirm this. This was barely mentioned in the research data due to insignificance.

    Looking Forward

    FDA approval will be looking for a consistent results as Phase 3 clinical trials are performed. Since this is considered to be an orphan drug (treats a rare medical condition), fast tracking (selling the drug during testing) can still possibly be granted and efficacy (positive effect of the drug) requirements will not be as high. Since this technology is designed to skip the exon, continual use throughout the patient's life will be required. Sarepta has ensured a moat for the coming years by patenting Eteplirsen as well as other technologies (Morphino backbone, Exon skipping, etc.).

    Sarepta will be announcing third quarter FY2013 financial results and corporate update on November 12, 2013.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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