While there doesn't appear to be any clear catalyst for the sell-off in shares of Sarepta Therapeutics (SRPT -6%), investors are hyper-sensitive to any and all news about the company's DMD program, especially in the wake of drisapersen's failure.
The company "updated" the program on Thursday and held a Q&A session on the call.
CEO Chris Garabedian did discuss the idea of the FDA mentioning a placebo control arm: "We have highlighted in previous communications that we believe that a placebo arm maybe infeasible, it could significantly impact our ability to enroll the study and get through IRB approvals and possibly to get patient consent, it has risk in patient dropout if eteplirsen were to be approved. And so we continue to have those discussions with the FDA, the feasibility or infeasibility of including a placebo-controlled arm." (transcript)
Stifel has apparently spoken with management and confirmed that SRPT will take any action the FDA deems appropriate.
Sarepta Therapeutics (SRPT +1.9%) may be up 100% YTD, but that doesn't mean it can't rally another 294% or so, Deutsche's Robyn Karnauskas thinks.
Karnauskas — whose price target is currently $71 — further highlights the apparent efficacy disparity between drisapersen and eteplirsen noting that patients taking eteplirsen saw "stabilization in 6MWD as early as 24 weeks [and remained] stable even at 96 weeks."
Here's the real kicker though: "We could see FV in $98-$125 range if we assume 100% probability to Eteplirsen and 80-100% market share in treated patients. If we assume 100% probability to their other exon program, we get to SRPT FV of $213/share." (emphasis added)
Sarepta Therapeutics (SRPT +4.9%) is on the move, and with today's gains the shares are up some 10% since Wednesday when disappointing dystrophin production data from Prosensa's (RNA) drisapersen boosted sentiment around eteplirsen.
Today's catalyst appears to be a note out of Piper which emphasizes eteplirsen's safety profile.
SRPT is now up more than 50% since the end of August.
The divergence of fortunes for Prosensa (RNA -2.9%) and Sarepta Therapeutics (SRPT +11.8%) continues today, as investors and analysts digest Friday's drisapersen data.
SRPT is up double-digits for a second session, bringing gains since Thursday to ~31%.
Meanwhile, RNA extends its losses as Wedbush says the company's call "suggests the anticipated causes for concern with [DEMAND-III] did not result in its failure, which ... calls into question drisapersen's therapeutic activity.”
Chad Messer says "drisapersen's failure may lead to skepticism on the exon-skipping approach in general, [but Needham] remains confident in eteplirsen's efficacy and believes [the drisapersen news] improves the competitive situation."
For what it's worth (which might not be much after Friday's 70% rout), Leerink sees some upside for Prosensa (RNA) from current levels.
Analyst Joseph Schwartz says the shares could go to $11 based on "the promising efficacy signal seen in patients below 7-years old and the fact that pooling DEMAND III data with strong DEMAND II and DEMAND V results could demonstrate that a clinically significant drisapersen treatment benefit is likely."
Adding insult to injury today for RNA shareholders is Sarepta (SRPT), which closed 18% higher after falling 10% premarket following the drisapersen news.
Deutsche's Robyn Karnauskas is out with commentary on what Prosensa (RNA -69.8%) and GlaxoSmithKline's (GSK +0.6%) drisapersen data means for Sarepta (SRPT +2.4%)
Long story short, it's a good news-bad news scenario.
The good news is that this is now a one-horse race and that horse's name is eteplirsen. If the DMD treatment gets approved, it's obviously better to be the only drug on the market than to have competition.
The bad news is that DEMAND-III "highlights it is difficult to design a clinical trial in this patient segment" and presents some uncertainty regarding "what the FDA requirements [will be] for [eteplirsen] clinical trials."
Last week, Baird noted that DEMAND-III results for drisapersen would "have important implications for Sarepta (SRPT) as complete failure or overwhelming success would be a hard blow to the bull thesis." It appears the Phase 3 results out today may have dealt such a blow.
SRPT is off 10% premarket on news Prosensa (RNA) and GlaxoSmithKline's (GSK) drisapersen did not meet its primary endpoint in DMD114044.
Questions going forward: How valid are exon skipping drugs? Will the size of GSK's trial (186 boys) raise more questions about SRPT's data given the smaller size?
Look for sell-side to defend RNA, but for now, the shares are simply pricing in an end game: -76% premarket.
GlaxoSmithKline's (GSK) and Prosensa's (RNA) Drisapersen treatment for Duchenne Muscular Dystrophy fails to reach its primary goal in a Phase III trial of enabling a statistically significant improvement in the Six-Minute Walking Distance test vs a placebo.
Prosensa says it remains committed to the overall program and will continue to work closely with GSK.
GSK intends to complete a full evaluation of the benefit-to-risk profile of Drisapersen across all studies by the year-end. This could include analyses of pooled results from various Drisapersen studies.
Prosensa collapses 23% and GSK is +0.3%. Sarepta Therapeutics (SRPT), which is also developing a treatment for Duchenne Muscular Dystrophy, is +12.8%. (PR)