Sarepta Tumbles As Report Of Internal FDA Strife Scorches Its Gene Therapy

Sarepta's stock falls after a report that some FDA staffers were leaning toward rejecting the company's gene therapy.

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May 10, 2023 • 2 min read

A report published on Thursday sent the stock of SRPT into a nosedive. It said that several Food and Drug Administration employees were strongly leaning toward rejecting a gene therapy closely watched by Sarepta Therapeutics.

The gene therapy for Duchenne muscular Dystrophy is currently being tested. Duchenne is characterized by the absence of dystrophin in the body. Muscles degenerate without that protein. Sarepta’s gene therapy causes the body to produce a microdystrophin, a smaller version of this protein.

Stat News reports that some FDA employees questioned whether microdystrophin levels in the blood of patients prove that the gene therapy has been successful. Sarepta wants accelerated approval for microdystrophin and functional improvements.

Next month, the FDA advisory committee will likely hold a meeting to discuss the issue. Independent experts will evaluate the benefits and risks of a drug.

In a client note, RBC Capital Markets' Brian Abrahams acknowledged that this could add to the uncertainty if there were more discussions within the agency. It might also make the documents for the advisory committee less clear.

SRPT shares fell 9.4% today to close at 124.72.

Some FDA staffers decided to reject Sarepta’s gene therapy. Peter Marks was reportedly the director of the Center for Biologics Evaluation and Research. He instructed staff to schedule a meeting of the advisory committee for May 12.

Meetings of the advisory committee will be crucial. Exondys, Sarepta’s controversial Duchenne muscle dystrophy drug has been approved accelerated. The approval came following a meeting of the advisory committee, which included comments from a number of patients and advocates.

In a note to clients, SVB Securities analyst Joseph Schwartz stated that he believes the support of DMD patients advocacy groups such as PPMD will be influential as they are likely to give compelling testimony in favor of approval during the advisory committee meetings. He has given SRPT a rating of outperform.

Schwartz and Abrahams both say that Sarepta believes Wilson Bryan is responsible for the discord within the FDA. Bryan, a conservative employee who retired earlier this year from the FDA, is one of those people. Schwartz stated that CBER's Marks, and Celia Witten (the group's deputy-director), have been involved in the Sarepta review since then.

Abrahams, of RBC, expects that the FDA's decision on Sarepta’s gene therapy will set an important precedent for the FDA. Marks has been a vocal advocate of the accelerated approval path to get more gene therapy to market quicker.

Abrahams has also given SRPT a rating of outperform.

The company has completed enrolling patients for a study in its final phase called Embark, with results expected in the fourth quarter. SVB's Schwartz added that if Sarepta’s therapy is approved accelerated, the Embark trial will serve as a confirmatory study.

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