Sarepta still shines, despite setbacks

Sarepta has an uncanny knack of turning bad news into good. But setbacks yesterday – in the form of weaker than expected sales and a knockback in Europe for its flagship Duchenne muscular dystrophy therapy Exondys 51 – might finally give investors pause.

Then again, Sarepta backers are known for their optimism. And a partnership with another muscular dystrophy player, Myonexus Therapeutics, as well as the promise of data from one of Sarepta’s DMD gene therapy candidate next month, will no doubt give them reason to be cheerful.

Negative trends

True to form, Sarepta’s stock was up as much as 10% this morning despite yesterday’s negative trend vote from the EU’s CHMP on Exondys 51. The agency seems determined to hold a stricter line than the FDA before it, apparently taking exception to the use of external controls, rather than a placebo arm, in clinical trials.

Sarepta appears to be taking a similar tack to the one that helped it gain US approval for Exondys 51 against the odds. The company said it would file for re-examination in the EU and seek input from a scientific advisory group that will “provide insight” into the validity of external controls. It is unclear whether patient advocates will also be in attendance.

Even if the company manages to convince European regulators, launch in the region will likely be delayed until 2020, Leerink analysts estimate, from their previous forecast of the third quarter this year.

Sarepta could have done with a new revenue stream from Europe as Exondys 51’s US growth now appears to be slowing. The company’s first-quarter sales totalled $64.6m, representing 13% sequential quarterly growth – on the face of it impressive, but disappointing after previous quarter-on-quarter rates of 25-31%.

On Sarepta’s earnings call yesterday the group’s chief executive, Doug Ingram, blamed disruption caused by moving to a permanent J reimbursement code and the fact that patients often change health plans in the first quarter of the year. With Sarepta saying it remains on track to meet $295-305m full-year revenue guidance, the company will have to hope that this is indeed just a blip rather than a sign that the addressable market is reaching saturation point.

Gene therapy

This market portion comprises the 13% of patients amenable to exon 51 skipping. Eventually Sarepta hopes to broaden its franchise to cover all DMD patients regardless of their underlying mutation, and this is where gene therapies could come into play.

The company has two gene therapy candidates in the clinic, targeting micro-dystrophin and GALGT2, both originating from the Nationwide Children’s Hospital in Columbus, Ohio. Sarepta plans to report the first clinical data on the former “from at least two patients” at its R&D day on June 19.  

The micro-dystrophin project, which originated at Nationwide Children’s Hospital in Columbus, Ohio, uses a shortened version of the dystrophin gene that is affected in DMD. The aim of gene therapy is to spur production of the dystrophin protein that is missing in DMD patients.

On yesterday’s call Mr Ingram said micro-dystrophin expression levels of 10% or above in the study would represent a “home run”.

The company added that it had now enrolled four patients in the ongoing phase I/IIa trial, with no significant adverse events – something that investors will be keeping an eye on after safety issues with a rival DMD gene therapy project from Solid Biosciences (Solid stumble sets up Sarepta, March 15, 2018).

Sarepta might have escaped Solid’s fate by using a different viral vector, AAVrh.74 – which is also employed by Sarepta’s latest partner, Myonexus. The private group is developing gene therapies for a different group of rare diseases, limb-girdle muscular dystrophies (LGMDs).

Myonexus pipeline
Project Indicaton Gene Status
MYO-101 LGMD2E Beta-sarcoglycan Phase I/IIa to begin mid-2018
MYO-102 LGMD2D Alpha-sarcoglycan Phase I/II 
MYO-103 LGMD2C Gamma-sarcoglycan Preclinical
MYO-201 LGMD2B Dysferlin Phase I
MYO-301 LGMD2L Anoctamin 5 Preclinical
Source: Company website.

There is already a connection between the two companies: Myonexus’s co-founder and chief scientific officer, Louise Rodino-Klapac, is a principal investigator at the Nationwide Children’s Hospital and is involved in the aforementioned micro-dystrophin gene therapy trial.

Sarepta has gained an exclusive option to acquire Myonexus for $60m up front and milestones of up to $45m.

Sarepta’s willingness to double down on gene therapy technology from the Nationwide Children’s Hospital appears to be a vote of confidence in this approach, despite recent doubts about the field. But with growth in its existing franchise apparently slowing and the door to the European market shut, at least for now, maybe the company had little choice but to diversify.

Project Study details Trial ID
Micro-dystrophin gene therapy 12-pt phase I/II trial NCT03375164
GALGT2 6-pt phase I/II trial NCT03333590

To contact the writer of this story email Madeleine Armstrong in London at madeleinea@epvantage.com or follow @ByMadeleineA on Twitter

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