Prosensa punished for disclosure as it joins Sarepta in race to FDA

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The 6% drop in Prosensa’s shares yesterday in response to a seemingly positive announcement – that the FDA had mapped out a path to accelerated approval for its Duchenne muscular dystrophy project – demonstrates exactly why companies frequently choose to release as little information as possible.

In a rare and commendable act of full disclosure Prosensa published the letter it got from the FDA detailing its thoughts on drisapersen, and despite the company’s positive spin it is clear that much work remains to convince the regulator the project should be on the market. Rival Sarepta is in much the same situation, but when it made a similar announcement six weeks ago it only selectively disclosed the FDA’s thoughts. Its stock has surged 32% since then.

Sarepta is now worth $1.3bn and even managed to capitalise on the news with a share sale to raise $100m. This topped up its coffers to a healthy $233m – funds it will need to pay for the extensive trials still needed to prove the efficacy of its candidate, eteplirsen.

If Prosensa was hoping to replicate this strategy it might rue the decision to publish the letter. The Dutch company needs more money if it is to fulfil the demands of the FDA – it ended last year with €82m ($112m) – and yesterday’s share price fall probably had a lot to do with investors’ anticipating a dilutive fundraising.

Of course, the company’s comparatively diminutive $359m market cap also reflects the fact that drisapersen has a failed phase III trial under its belt and a blot on its reputation in the shape of an exiting partner, GlaxoSmithKline (Other shoe drops on Prosensa as Glaxo hands back rights, January 13, 2014).

Prosensa has generated much more data on its candidate than Sarepta – drisapersen has been administered to around 300 boys across several studies while eteplirsen only has arguably positive data from a tiny subset in a study that only recruited 12. So it is not inconceivable that eteplirsen will also go on to disappoint.

But for the moment the risks associated with drisapersen are much more apparent, and the potential of eteplirsen much easier to imagine.

Kicking the can

Investor opinion of these companies might have diverged – rightly or wrongly – but it is clear that both have a substantial amount of work to do to convince the regulator that their novel exon-skipping products deserve endorsement.

As well as requesting much new analysis of existing and new clinical trial and biomarker data, the FDA has insisted that more rigorous studies be under way by the time the companies seek early market access; both have said they intend to file by year end.

The FDA also confirmed that both will face advisory committee hearings, which will no doubt be hugely influential in any subsequent regulatory decision. Should one or both of these products receive strong endorsement the regulator will be under great pressure to sanction accelerated approval.

Assuming Prosensa and Sarepta have suitable confirmatory work in place, the FDA will probably feel comfortable in kicking the can down the road.

But this does not mean the FDA’s bar for full approval has been lowered. The agency will quite rightly demand much more convincing proof of clinical benefit, though patient group pressure not to rescind approval would be huge.

The letter published by Prosensa laid all this bare, but Sarepta is facing no less of a challenge. Had it also elected for full disclosure, this would no doubt be readily apparent.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter

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