Sarepta makes history with Roche deal

The Sarepta bulls have been proved right to the tune of more than a billion dollars. This morning’s deal, under which Roche will pay $750m up front and also make a $400m equity investment in exchange for ex-US rights to the group’s microdystrophin gene therapy, is the biggest single-asset ex-US license in all of biopharma history.

On a conference call today Sarepta’s management refused to say whether the Swiss group had had an advance peek at the data from the ongoing phase II trial of SRP-9001. Perhaps Roche felt it had to jump: Sarepta had conducted a bidding war for the Duchenne muscular dystrophy project with several companies vying for the asset, which has 2024 sales forecasts reaching well into the billions.

Sarepta reckons the deal could ultimately net it $10bn – fairly simple maths, it contends, based on the upfront cash, $1.7bn in milestones and mid-teen royalties on net sales outside the US. Having Roche on side will help it push into markets it could not reach by itself, it says, such as China.

Roche’s investors might wonder whether that company’s calculations add up to the same sum. Currently forecasts for SRP-9001 put its 2024 sales in excess of $2.7bn, according to consensus compiled by EvaluatePharma – but $1.9bn of that is in the US. 

So far

So far the drug has shown promise – in four patients. In a phase I trial SRP-9001 led to microdystrophin expression levels of 74-96% at three months. Enrolment into a phase II trial is close to completion; a blip on safety here caused brief alarm this summer, but Sarepta seems to have weathered the squall.

In fact SRP-9001’s safety looks better than that of rival Duchenne gene therapies from Pfizer and Solid Biosciences. Two of six patients treated with Pfizer’s PF-06939926 have experienced toxicity, one of them suffering acute kidney injury, leading to its phase I trial being halted. And Solid’s phase I/II study of SGT-001 was halted last month after a swathe of adverse events (Another dystrophy catastrophe for Solid Biosciences, November 12, 2019).

The current trial, and all subsequent development, will remain under Sarepta’s control despite SRP-9001’s development costs being shared equally. Manufacturing is also within Sarepta’s purview; the group says it will not expect to have to meaningfully expand its capacity for a couple of years. 

Roche will have control over the pricing of the asset outside the US and obtaining reimbursement, assuming it makes it that far. 

Doug Ingram, Sarepta’s chief executive officer, cautioned against any expectations of further licensing deals, or indeed business development efforts, despite its vast newfound cash pile. 

But Sarepta’s cheerleaders are hard to satisfy, justifiably so far. And some of the keenest are now wondering when the company will be bought.