In a surprise decision, the Food and Drug Administration said it would hold an advisory committee to discuss Sarepta Therapeutic‘ (SRPT) gene therapy for muscular dystrophy, and SRPT stock fell on Friday.
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Just two weeks ago, Sarepta said the FDA would not ask a panel of independent experts to comment on the risks and benefits of its gene therapy for Duchenne muscular dystrophy. But the agency changed its mind at an end-of-cycle meeting, Sarepta said in a press release Thursday.
Sarepta is seeking fast-track approval, which means it still hasn’t completed two Phase 3 studies of the drug, SRPT-9001. But he thinks the treatment works based on high levels of a key protein in patients. Outside experts will likely debate whether this protein signals a benefit for patients.
“While we now see more potential for near-term equity volatility with upcoming regulatory events, we still see many avenues for SRPT-9001 to eventually cross the line,” said RBC Capital Markets analyst Brian Abrahams. , in a note to customers.
In today’s stock market, SRPT stock plummeted 18% and closed at 122.69.
Stock SRPT: Placeholder
Sarepta has developed its gene therapy for patients with Duchenne muscular dystrophy. In this condition, patients’ bodies do not make enough of the dystrophin protein needed for muscle function and strength. Sarepta’s drug codes for a shortened version of this dystrophin protein.
The company is banking on accelerated approval based on high levels of this shortened protein in patients’ blood. This is called a “substitute endpoint”.
Mizuho Securities analyst Uy Ear said Sarepta does not believe there are any issues with its application. The company also doesn’t believe the FDA has any manufacturing issues. Two out of three sites have already passed the inspection with minimal problems.
This “suggests that one reason for this change in decision could be because the agency is exploring the innovative use of surrogate endpoints, if any, in accelerated approval to advance cell and gene therapy for degenerative diseases. rare and deadly,” Ear said in a note.
He kept his buy rating and target price of 160 on SRPT stock.
Streamlining Gene Therapy Approvals
Promisingly, the advisory committee meeting will take place before May 29, the day the FDA must make a decision on whether or not to approve SRPT-9001.
UBS analyst Colin Bristow says the news from the advisory board is not a “red flag”. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, has publicly supported the use of surrogate endpoints to streamline expedited cell and gene therapy approvals.
But “given the announcement of the advisory committee’s decision, in the context of (the FDA office) communicating how limited capacity is at each public appearance, we see a potential risk of an extension (of the date of approval),” he said in a note. .
Still, he kept his buy rating and price target of 158 on SRPT stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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