Shares of Sarepta Therapeutics Inc were in freefall today after the U.S. Food and Drug Administration expressed skepticism about the effectiveness of its treatment for a rare disorder that causes muscles to waste away. Regulators published a briefing document with their initial concerns about the drug. Sarepta shares dived by as much as 52.89% to $14.90 per share in heavy during regular trading hours. By 11:23 a.m., more than 9 million shares of the biotech firm had already changed hands, compared to the average daily volume of 1.1 million shares. Just yesterday, the stock was trading at more than $30 a share.
Sarepta’s study called into question
According to Reuters, the FDA hasn’t yet approved any drugs to treat Duchenne muscular dystrophy (DMD), a fatal disorder that strikes one out of every 3,600 baby boys per year. Most of the patients who are diagnosed with the disease, which restricts movement, die by the time they reach 25 or 30. Because there are no approved treatments for it in the U.S., the agency has been under pressure to approve a treatment.
However, regulators said they wanted to see more proof that eteplirsen is effective in treating DMD even though they also said they’re willing to be “flexible” in terms of the disease because of the lack of available treatments. The FDA is holding off on approving the drug because regulators question whether the results of Sarepta’s small study were valid. Regulators ruled that the trial was just “exploratory” because of how the biotechnology firm designed it.
On Jan. 22, the FDA will conduct an outside advisory panel to further review the data from the eteplirsen study, which only included 12 patients who took the drug for up to three years. The agency isn’t expected to officially reject or approve the drug until February.
This isn’t the first setback Sarepta has had in its quest for approval for eteplirsen. In November, the FDA issued another negative opinion.
Sarepta competitor also hit by bad news
The bad news about Sarepta’s drug comes just one day after similar news about competitor BioMarin Pharmaceuticals, which also is developing a drug to treat DMD. According to Bloomberg (via the Chicago Tribune), the FDA rejected the once-a-week injectible drug Kyndrisa on Thursday. An advisory panel ruled in November that the drug trials for Kyndrisa did not prove that it was an effective treatment, although some members of the panel suggested that just a few children might respond to it at some point. The advisory panel asked for more research on the drug.
There was a big difference between BioMarin’s and Sarepta’s applications for FDA approval, however, as the former applied for full approval while the latter sought accelerated approval, which would allow it to market the DMD treatment while waiting for more solid data from another study that’s currently underway.
Washington Analysis analyst Ira Loss told Bloomberg that Sarepta’s situation was different from that of BioMarin because it had patients who are still walking after three years on the drug. The problem, according to Loss, was that the sample size was so small. The question now is exactly how biotechnology companies that are developing drugs for very rare diseases can ever secure FDA approval because any sample size is likely to be quite small.