The race was led to prove that gene therapy can cure dysfunctional muscle development, a genetic disorder that progressively weakens children’s muscles. At the end of the day, however, the company announced that a controlled trial of its gene therapy had failed to statistically clarify the average muscle strength of treated children.
“To say that I was initially not only surprised, but deeply disappointed,” Sarepa Chief Executive Doug Ingram said at the Thursday evening conference. The company accused the ominous randomization of sick children to show the poor in the treatment group, as opposed to the placebo group. Younger children did well on gene therapy, Sarapta said.
But clearly, if gene therapy had produced a strong medical benefit, no statistical quabbling would be required.
Wall Street was Crestafellen. In early Friday trading, Sarafa stock (ticker: SRPT) was up 50% to $ 85. Many analyst fans of the company maintained their purchase recommendations, but a price target was set for the stock across the board, as the company’s head started on a medical treatment rival
(PFE) evaporated. Only four of the nearly 20 analysts surveyed by FactSet downgraded the stock.
Pfizer’s shares were essentially flat on Friday morning, while another company with an experimental gene therapy for muscular dystrophy-
(SLDB) —a stock slip of around 12%, up to $ 7.48.
Meanwhile, the index was up 0.8%.
Both Sarpeta and Pfizer are starting phase 3 trials of their gene therapy, which inject patients’ muscle cells with healthy copies of genetic instructions for a muscle cell protein that patients inherited from broken instructions. to step up. But a mid-stage study reported by Sarepa on Thursday offered previously randomized, placebo-controlled data on muscular dystrophy gene therapy and the company hoped to allow treatment in the market based on US regulatory results can give.
Now, an approval for Sarpta’s gene therapy will have to await the results of its Phase 3 study, which could delay any launch of the Sarpeta product by two years until 2024, Mizuho Group analyst Defy in Friday’s note Yang writes.
The disappointing top-line result announced on Thursday is only an interim analysis, and the study continues. On Thursday’s call, CEO Ingram and Sarpeta’s chief scientific officer, Louise Rodino-Clapack, argued that medicine could still prove itself. Children in a set of 4 to 5 year olds showed significant improvement in the study battery of muscle strength measures, and muscle cells produced healthy proteins in treated children of all ages.
Sapera officials attributed the overall poor score on muscle strength to the older set of 6 to 7-year-olds, whose performance actually deteriorated slightly on the study. Upon inspection, older children who were randomly assigned to treatment were weaker than children assigned to receive playbos at the beginning of the study. Treated and placebo patients were well matched in a younger set performing better in the study.
Ingram told the audience, “I am not ignoring the fact that I am exceptionally disappointed that we have missed statistical significance because of this imbalance.”
Analyst Brian Abraham of RBC Capital Markets generally agrees that the study’s omission was a result of bad luck. His Friday note also noted that patients with chronic muscular dystrophy have suffered more, and therefore may find it harder for gene therapy to be avoided. Abraham reduced his price target for the Sarpta share from $ 200 to $ 143, as Sarepa’s need for Phase 3 data now would reduce its first-mover advantage to gain market share.
But the RBC analyst maintained his outperform rating, with the belief that Sarpta’s current sales of drug treatment for muscle will rise from $ 381 million in 2019 levels to $ 552 million by 2020 and $ 713 million by 2021 . Abraham had hoped that a gene therapy would enable Sarpatta to reach a profitability of $ 2.50 per share in 2022, but she now projects that its losses would continue, with a $ 2.20 loss on sales of $ 1 billion in 2022 Will be a part of
Abraham wrote, “All is not lost,” noting that Friday’s saleoff fails to take into account opportunities in which the gene therapy of serpta may not yet take place.
Sarepa said that more than 50 children are now safely treated with its SRP-900 gene therapy, with a production version of 10 in which it hopes to commercialize. “We are confident that SRP-95 will play a transformational role in the treatment of Duchenne muscular dystrophy,” Ingram told his audience on Thursday.
But Thursday’s bad news will revive the debate over the value of treatments for serepta, including its current pharmaceutical products. The company’s first drug Exondis 51 was approved in 2016 after a top US Food and Drug Administration official rejected the rejection recommendation by the agency’s scientific staff. The drug improved biological measures of protein levels in children, but did not show that it improved their muscle performance. Sarpta’s second drug, Vyndis 53, was also approved by the agency after its initial reprimand.
Healthy protein production measures in the latest gene therapy data were disappointing for some analysts who questioned Sarpta’s Thursday call, and the average levels of those biological measures were not associated with muscle strength.
Therefore, investors will eagerly wait for this year’s data which could hamper Sarpta’s muscle prospects.
Write Bill Alpert at [email protected]