Sarepta Therapeutics shares fell by almost 37% Friday, after news broke that the US Food and Drug Administration was considering whether or not to stop the distribution of Elevidys – the company’s gene therapy flagship for Duchenne muscular dystrophy (DMD).
Sarepta is currently investigating multiple deaths linked to its gene therapy program.
Sources familiar with the situation told CNBC the FDA was preparing to ask Sarepta to suspend the shipments of Elevidys voluntarily, but the agency had not yet contacted the company.
Sarepta stated that it has not heard directly from FDA since Friday.
Separately FDA Commissioner Marty Makary told Bloomberg News the FDA is reviewing whether Elevidys will remain on the marketplace, and this has raised fears about the potential withdrawal of Sarepta’s main commercial product.
Safety concerns re-ignited by recent deaths
Concerns from the FDA follow two deaths in teens of liver failure that occurred earlier this year following Elevidys.
Recently, another patient who was enrolled in the Phase 1 of a trial for an alternative Sarepta Gene Therapy also passed away.
Both therapies use the same delivery method, despite the fact that they have different targets. This raises safety concerns.
Elevidys was controversial right from the start.
In 2023, the conditional approval for DMD patients who can still walk was extended to all patients 4 years and older.
This decision was criticized because the clinical data indicated that there were weaker efficacy evidences in this particular group.
Elevidys’ failure to achieve its main goal during a phase 3 trial raised further concerns.
Peter Marks, the former FDA official, supported Sarepta and cited secondary benefits from the trial as a justification for expanded approval. This decision has been questioned again since.
Baird lowers the stock price of Sarepta; analysts warn that revocation of Elevidys’ approval could have dire consequences
Sarepta has suffered a major blow as it relies on Elevidys to generate its revenues.
Sarepta’s net revenue from the therapy was more than 50% of its total.
Investors are expecting the FDA to revoke the FDA’s approval. The company shares have fallen more than 87% in the past year.
BMO Capital Markets analyst Kostas Biiouris noted that, while other gene therapy products, like Novartis Zolgensma have faced similar safety concerns, Zolgensma’s clear benefits outweigh the risks.
Biliouris stated, “That is why the deaths in this area are so important compared to Zolgensma for instance.”
Elevidys is no longer being shipped to patients who are not ambulatory while the company evaluates other delivery methods.
Sarepta’s executives claim that the drug can still bring in 500 million dollars per year, even if it is only used to treat ambulatory patients.
Now, the future of Sarepta depends on FDA decision. Biliouris said that Sarepta would be in trouble if the FDA pulled Elevidys off the market.
William Blair, the brokerage, said that “even though the development of SRP-9004 was discontinued, the death of the SRP-9003 could result in greater scrutiny on the safety profile of SRP-9003 before its BLA is submitted and may affect commercial interest if it’s approved.”
Baird has downgraded Sarepta Therapeutics from Outperform to Neutral, and set a price target of $15.
The ICD published the article Sarepta share prices fall 37% after FDA raises questions about future gene therapies.
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