After many months of waiting, Sarepta Therapeutics (NASDAQ:SRPT) finally got its day in front of an FDA Advisory Committee. Sarepta is trying to convince the FDA to approve its drug Eteplirsen for the treatment of the symptoms associated with Duchenne Muscular Dystrophy. The results for the panel were mixed for Sarepta, and now investors will have to wait to see what the FDA ultimately decides.
FDA Panel Results
Sarepta was hoping to learn from the mistakes of competitor Biomarin Pharmaceuticals (NASDAQ:BMRN), by convincing an FDA panel to this time come around and support a drug for DMD. Had the panel supported the approval of Eteplirsen, it is likely that the FDA would have been forced to go along with the decision. While the FDA is not officially bound by the decisions of its advisory panels, it usually follows them, also with the unusual amount of public scrutiny and patient support surrounding the Eteplirsen approval process, the FDA would have been in a hard spot in terms of public relations if it refused to approve of a drug for patients that have very little hope.
Fortunately, for the FDA, they just barely avoided that outcome. The advisory committee voted 7-3 with three absententions that the clinical trial did not provide substantial evidence that the drug was effective for DMD in patients with the genetic mutation making them eligible for Eteplirsen. This finding was significant, as it would suggest that the panel needs more data in order to feel confident that the drug is effective. Part of this problem could be that there were not a lot of patients in the study, with only twelve patients in the study. This could likely lead to calls from the FDA that would force Sarepta to run a trial with even more patients, which would likely take a lot of time to enroll (as it is hard to find the patients that qualify for the drug), and would be expensive for Sarepta to set up. On another key question, the panel sided with the FDA against Sarepta.
The panel also voted 7-6 against the idea that the study findings suggest that Eteplirsen produces dystrophen to a level that is likely to be of clinical benefit. This could also be problematic for Sarepta, as it is not simply an issue of running another study. Sure, another study could show different results than we saw previously, but the belief that Eteplirsen does not produce dystrophen to a level that is likely to be of clinical benefit could point to a more fundamental problem.
Possible Next Steps
With the panel results coming back against Sarepta, I believe that we will see the FDA issue a CRL, refusing to approve Eteplirsen. The real question for shareholders will be what additional steps Sarepta will have to take in order to get Eteplirsen approved. I believe that additional clinical trials will be a requirement, and potentially the trials will have to be larger and more robust in scope. We could also see a changing of the primary endpoint. With that said, there has to be mentioned the possibility that the FDA could decide to still approve Eteplirsen. With the rather limited subset of patients that would even be eligible for the drug, and the touching testimonials that the panel heard from the parents, it is clear that the patients need hope. While there could be additional testing done as a requirement for approval, if this drug has what the FDA even believes to be a marginal benefit, it is possible that the FDA could justify approval. I would suggest that the FDA is unlikely to approve the drug this time around.
For shareholders, this result was not totally unexpected. After the FDA raised substantial concerns about a competing drug, many investors were likely to believe that if the FDA was not going to approve of one drug, that they were unlikely to approve of the other. In a previous article, I pointed out some of the differences and the reasons why the FDA could justify an approval, while rejecting Biomarin's drug. Shareholders should now be prepared for a complete response letter, and await more information.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.