UPDATED: Sarepta shares crash on a harsh FDA review of Duchenne's drug

Sarepta Interim CEO Ed Kaye

Sarepta's quest to gain an accelerated approval for eteplirsen to treat lethal cases of Duchenne's muscular dystrophy was subjected to some harsh scrutiny by regulators at the FDA. And the insiders concluded that much of the data submitted for an approval was a mess, with weak, inconsistent and untrustworthy data raising serious questions about the efficacy of the drug.

In an internal review, regulators carefully zeroed in on Study 201/202, a tiny trial in two parts that provides the bulk of the data that are being considered for an approval. The review was prepared for outside experts to consider as they ponder the fate of the drug at a meeting on January 22.

The FDA repeatedly highlighted shortcomings in the trial, including a lack of placebo evidence to compare to the drug as well as a strong chance that the drug data were skewed to a positive outcome. The results of 6-minute walk tests were simply written off as unreliable.

Even after reanalyzing troubled biomarker evidence that the patients taking eteplirsen were producing dystrophin needed to support muscles, the data analysis was hampered by the extremely small patient group in the study, with little evidence of success to persuade the agency in the drug's favor.

The Cambridge, MA-based biotech's stock ($SRPT) cratered soon after the report was released, plunging 52% in early trading.

The study failed to hit its primary endpoint, the FDA points out in its review, and "patients in Study 202 appeared to be receiving optimal care, including intensive physical therapy and intensive steroid regimens."

"The lack of an effect with the higher dose group tends to undermine the finding in the lower dose group, and the lack of even a positive trend at the earlier time point (with a higher dose) sheds doubt on the finding at a later time point," writes the FDA. "All in all, this was a comparison of only 4 vs. 4 patients, in the context of serious methodological concerns identified by FDA, and with considerable inconsistency for the two doses."

The FDA review comes just a day after the FDA formally rejected drisapersen, a rival DMD drug from BioMarin ($BMRN) which failed to convince either the inside or the outside experts at the FDA that it could help patients. The company subsequently told several analysts that it's clear that they'll have to do a new Phase III study if they expect to win an approval in the U.S.

That rejection was expected to heighten pressure on the FDA to approve eteplirsen, which has won warm support from patient groups lobbying for a quick approval. But while the review stops short of concluding whether the drug should be approved, the regulators hammered away at the data, raising doubts about the company's case at every turn.

Sarepta has been on a roller coaster ride for several years now, enticing investors with evidence of the drug's success in the mini-study, with setbacks and advances on the regulatory front roiling their stock price along the way. Internal turmoil at Sarepta has also been evident, with a top scientist fired soon after he was hired in 2014 and CEO Chris Garabedian ousted the following spring.

Sarepta execs will likely face close questioning next week on the way they conducted this study.

"FDA noted that for most of its duration, Study 202 was open-label with all patients receiving eteplirsen (and no placebo arm), and that performance on the 6-minute walk test could be influenced by motivation and coaching. FDA expressed concern that open-label trials are susceptible to bias on the part of investigators, patients, and parents."

Where Sarepta claimed to see a significant advantage of the drug arm over historical data drawn from other patients, the agency experts saw nothing of note as the boys in the study steadily deteriorated.

Says the FDA: "(T)he clinical course of the 12 patients participating in Study 201/202 appears to be within the expected natural history of DMD."

Many analysts expected the FDA to take a far kinder approach to this drug, given the absence of any treatment for the rare disease. But the regulators added in their review that flexibility does not mean the elimination of standards.

"Although FDA is prepared to be flexible with respect to a devastating illness with no treatment options," the review states, "we cannot approve drugs for which substantial evidence of effectiveness has not been established."

There's plenty of drama ahead for Sarepta, no matter what happens during next week's panel review. The FDA will still have to make a formal decision on marketing the drug, and Sarepta has another ongoing late-stage study underway that will hopefully add much better data on efficacy and safety.

- here's the review (PDF)

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