The U.S. Food and Drug Administration deferred a highly anticipated decision on whether to approve Sarepta Therapeutics Inc’s muscle-wasting disorder drug, a month after an advisory panel determined that the treatment was not effective. The Company is primarily focused on rapidly advancing the development of its potentially disease-modifying DMD drug candidates, including its lead DMD product candidate, eteplirsen, created to skip exon 51.
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Shares of Sarepta spiked by as much as 25% in pre-market and early trading on hopes the delay might indicate a higher possibility of approval for eteplirsen.
The news said more about the FDA’s inability to vet and report back in a timely and orderly fashion, but some analysts said that they had given an outcome of a delay a one-third chance – which therefore means that there was a two-thirds chance it would have delivered on time on Thursday.
Eteplirsen is created to treat about 13 percent of patients with the disease, which is caused by a genetic defect affecting mostly young boys. When the company announced its intention to file with the FDA three years ago, the shares dropped as investors felt the drug wasn’t ready, and the agency later pronounced the application premature. While this announcement may supplement the volatility surrounding this stock, we maintain our cautious view on the overall NDA submission and believe the FDA will be more scientifically-driven at the end of the day. The filing was eventually completed in 2015.
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Leerink is similarly cautious about the FDA decision, noting that eteplirsen is likely being carried more so by intangible factors such as pressure from advocates and politicians rather than by science and data on which the FDA is likely to base its eventual decision. “If the FDA doesn’t hear that voice it will beg the question of how they hear the voice of the public”.
