The FDA approval comes less than four months after the company received a CRL from the agency
Shares of Sarepta Therapeutics (SRPT) soared after the company said the Food and Drug Administration approved Vyondys53 injection, its its muscular dystrophy treatment in patients with a confirmed mutation amenable to exon 53 skipping. The news came as a surprise to many analysts, since the approval came less than four months after the agency issued a complete response letter.
FDA APPROVAL FOR DMD TREATMENT: Sarepta on Thursday announced that the FDA has approved Vyondys53, an antisense oligonucleotide that is Sarepta's second drug to treat Duchenne's Muscular Dystrophy. Its first drug, Exondys51, received FDA approval following a separate clash with the FDA.
Sarepeta said the FDA approval is based on a statistically significant increase in dystrophin production in skeletal muscle observed in patients treated with Vyondys53, which is reasonably likely to predict clinical benefit for those patients who are exon 53 amenable. Consistent with the accelerated approval pathway, Sarepta said the continued approval of Vyondys53 may be contingent on confirmation of a clinical benefit in its post-marketing confirmatory trial. The company noted that its placebo-controlled, post-marketing confirmatory trial to support the Vyondys53 accelerated approval is currently enrolling and expected to conclude by 2024.
“Today is monumental for Sarepta and, more importantly, for the DMD community,” said Doug Ingram, president and chief executive officer. “Vyondys53, our second approved exon-skipping RNA therapy for DMD, may treat up to 8% of the DMD community, representing those patients who have a confirmed exon 53 amenable mutation. Along with Exondys51, we now offer treatment options for approximately 20% of those with DMD in the U.S.”
WHAT'S NOTABLE: In August, Sarepta said it received a complete response letter from the FDA for its Vyondys53 application, citing risk of infection and renal toxicity. The CRL generally cited two concerns, namely the risk of infections related to intravenous infusion ports and renal toxicity seen in pre-clinical models of golodirsen and observed following administration of other antisense oligonucleotides, the company said. Renal toxicity with golodirsen was observed in pre-clinical models at doses that were ten-fold higher than the dose used in clinical studies. Renal toxicity was not observed in Study 4053-101, on which the application for golodirsen was based, said Sarepta, which added that it will immediately request a meeting with the FDA to determine next steps.
In its statement on Thursday, Sarepta said it had appealed the rejection of its application for Vyondys53 approval to the director of the FDA’s Office of New Drugs.
ANALYST REACTION: Following the approval, analysts generally expressed their surprise, with SVB Leerink analyst Joseph Schwartz saying the news did confirm his theory that Vyondys53's complete response letter was "merely a bump in the road" towards approval with the FDA leaving Sarepta to "twist in the wind" for a short while before ultimately approving the drug. He believes Vyondys53 approval removes a major overhang for the stock and raised his price target to $216. Piper Jaffray analyst Danielle Brill also raised her price target for Sarepta Therapeutics to $210 after Vyondys53, "in yet another surprise," received accelerated approval from the FDA less than four months after the agency issued a complete response letter. The analyst said that the quick resolution of the letter indicates Sarepta has the FDA's support and is validating to management's credibility and said she continues to believe gene therapy will ultimately cannibalize the market if successful. However, Sarepta's exon-skipping franchise provides "meaningful downside protection" for next year's pivotal microdytrophin gene therapy trial readout, she contended.
RBC Capital analyst Brian Abrahams raised his price target on Sarepta to $215, saying the FDA's decision is a "big win" for the company, giving it a "second market product" and a "a foundation of revenues" for its gene therapy offerings. The analyst added that the event marks the FDA flexibility in expediting new DMD drugs considering the prior rejection of Vynodys. Janney Montgomery Scott analyst Yun Zhong raised Sarepta Therapeutics' price target to $175 and projected a trajectory in market penetration that is similar to what Exondys51 achieved in 2017, adding that available dystrophin production data could support an FDA accelerated approval for casimersen by the end of 2020.
Cantor Fitzgerald analyst Alethia Young thinks shares of Sarepta Therapeutics should rally 20%-30% on last night's news of the FDA approval, saying the "market punished the shares when not approved in a big way, so what goes down must go up." H.C. Wainwright analyst Debjit Chattopadhyay raised his price target for Sarepta Therapeutics to $260 and said he expects the stock to "churn higher into 2021." Friday's move "could be just a harbinger," he said.
PRICE ACTION: In morning trading, shares of Sarepta Therapeutics are up nearly 35% to $135.04.
Keywords: drug trial, DMD, Duchenne muscular dystrophy, CRL, FDA, approval