The FDA dealt a “surprise” rejection to Sarepta Therapeutics Monday, telling the company in a Complete Response Letter (CRL) that it was passing its second Duchenne muscular dystrophy (DMD) drug over due to risks of infusion port infection and kidney toxicity seen in animal studies.
Sarepta’s first move will be to meet with the FDA to negotiate a black box warning or other labeling for the drug, golodirsen, to spell out the risk of kidney toxicity and infection risk, rather than to carry out more studies, wrote Evercore ISI analysts in a note Tuesday. But the implications of the rejection range beyond golodirsen.
“The real driver(s) of the aytpical golodirsen CRL will continue to be a debate based on limited public disclosure of the granularity of facts, but the macro take home is clear in our minds—there is a regulatory “raising of the bar,” the analysts wrote. This could spell bad news for Sarepta’s other programs, namely its microdystrophin gene therapy that the Evercore ISI analysts consider the “major valuation driver of [Sarepta] stock.”
Sarepta paved the way for its pipeline with its first DMD drug, Exondys 51, which works in about 13% of patients. The company secured a speedy approval for the drug in 2016, using a surrogate biomarker endpoint and without showing any trial data to prove the treatment improved muscle function. It promised to carry out a post-approval confirmatory trial to provide that information, but, three years later, the FDA is still waiting.
At the time, the approval was controversial given the treatment's limited efficacy and seemed to cause a split in the FDA, with some favoring a more relaxed approach to its approval while others vehemently argued against it.
Even though Sarepta said the rejection was not efficacy-related, it’s worth noting it used the same strategy for golodirsen. As for microdystrophin, the analysts wrote, it’s working with what it thinks the FDA will accept for approval:
“Yesterday’s golodirsen setback is a reminder that the ... consensus assumed approval pathway for μdystrophin is based on SRPT’s ”hypothesis” on what the FDA will accept for approval—most notably—(1) bridging of 102 and 103 studies and concomitant (2) expression/function correlation at 12 months using [the North Star Ambulatory Assessment] as the functional endpoint,” the analysts wrote.
Although the promise of Sarepta’s microdystrophin gene therapy has been attractive enough that the “stock price has largely managed to absorb/largely discount increased implied risk,” around those programs, the analysts “ponder” whether the company’s stock will swing the other way thanks to Sarepta’s communications.
Sarepta’s recent communication strategy “on many elements has been atypical relative to traditional biotech company communication—yesterday’s press release [about golodirsen] is obviously just the most recent example,” the analysts wrote.
The golodirsen rejection follows an entry in the FDA Adverse Events Reporting System (FAERS) discovered earlier this month saying that a 7-year-old child in a study of Sarepta’s microdystrophin gene therapy SRP-9001 was hospitalized after developing rhabdomyolysis. Hours later, the company said the report had been "erroneously submitted" to the FAERS database, "a post-marketing surveillance database for approved therapies."
"Our investigation to date indicates that this report was not submitted to the FAERS database by a Sarepta employee or the study’s principal investigator," the company said in a statement.
The child was hospitalized in February but not revealed until months later, raising questions as to whether Sarepta was trying to keep the hospitalization under wraps. The news followed a similar hiccup for golodirsen back in February 2018, when the company stopped dosing in a U.K. study due to “one serious adverse event that could possibly be related to the investigational drug product,” Sarepta said in an emailed statement.
It came out in a Facebook post from a parent whose child participated in that study that the adverse event had, in fact, been rhabdomyolysis.