Sarepta CEO Ed Kaye on FDA courage, NICE and resilience

Back in the spring, it was dark days for Sarepta ($SRPT) after the biotech was slapped with a rejection from an FDA advisory panel for its Duchenne candidate eteplirsen. A formal rejection from the U.S. regulator, coming after months of delays, setbacks and lingering questions over efficacy, seemed to many an inevitability.

Its shares were constantly hit, rebounded on the tiniest sliver of potential news that could be seen as a read-through, then hit again when this didn’t turn out so positive.

But this week, with the help of the families of young boys with Duchenne muscular dystrophy, an executive team from Sarepta who wouldn’t give up, and an emerging new philosophy from some within the FDA, eteplirsen, now Exondys 51, was approved in patients with a confirmed mutation of the dystrophin gene amenable to exon 51 skipping.

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And things got even better just two days later when Sarepta won an important part of a patent fight with BioMarin ($BMRN) over rights covering “exon skipping,” seeing its shares jump nearly 14%, adding to its already impressive stock rise since Monday that now sees it with a market cap of $4.64 billion.

It’s a cliché, but it’s been a roller-coaster ride for everyone involved.

FierceBiotech sat down with Sarepta interim CEO Ed Kaye on what the last few days has been like for the team, and whether this decision marks a major turning point in getting these kinds of drugs to market.

Ben Adams: My first question is, well you’re currently the interim chief executive of Sarepta; I think you’ve done enough to become the full-time CEO. I’m not sure what you guys have to do to get the job, but I’m willing to bet getting eteplirsen on the market is more than enough to see “interim” removed from your title.

Ed Kaye: I appreciate that. I would say for now, well just stand by--we’ll be having some news soon.

BA: You of course were not privy to and had no part in the internal discussions going on in the FDA over your drug, but I’m sure you’ve seen the documents and you know the big players, i.e., Woodcock and Califf, were key to this drug getting over the line as they wanted to forgo the hardliner science route and think more about getting a drug onto the market that might help young boys with so little options. When it comes to rare and ultrarare diseases, do you think this level of flexibility should be built into the FDA, and allow themselves to look past an RCT and toward things like surrogate endpoints?

EK: Well what happened with our drug conforms with exactly what was put into law in 2012, which allows for the idea of listening to the patient and patient groups. I think that’s exactly what the FDA did, and I think it was designed for these exact kind of conditions which are life-threatening; there are no therapies, and there is only a small population.

So I do think they used a surrogate endpoint, but we were able to follow the law from the perspective of having a statistically significant increase with dystrophin. They used that endpoint, and I think it was courageous for them to do that. And there is a comparison here to what was done in the early years of HIV and how that progressed. If you think of it, there was tremendous progress after the first drug was approved [in HIV], and you know the same was true in multiple sclerosis going back to 1993, and think of how many drugs we have now. And then even with immuno-oncology that is today pushing the envelope. So I think what we have done in 2016 with this DMD treatment is very similar.

Getting a drug like this for patients with a disease like DMD is important, and I think what the FDA has done this week is they gave hope to an entire generation of these boys who had none before. That’s really important, and you can’t overstate that. And look, hopefully this will also be a catalyst to spur a lot more innovation and investment in DMD from other companies, not only ours, that will help the whole field.

BA: OK, so we’re talking about these young boys, but just what difference will this drug make to their lives? There’s lots of questions still around efficacy, but you talk of hope and I think that’s what has caused the jubilant and emotional scenes from these families who have campaigned for so long.

EK: It’s been challenging, and we along with these families have had our ups and downs and it has not been an easy course. But Ben, every time we got discouraged or downtrodden during this long process, we just thought about what these patients were going through. Every time we thought about them and how difficult their lives are every day compared to ours, that always makes you focus and say no, we have to get this done. For me, I never wanted to have to tell the boys that we couldn’t get this drug approved, because I know it has a positive impact on their lives.

That thought was on my mind constantly--that I had an obligation to get this to the finish line and allow them to use the drug if they wanted. That was always the focus. And everyone at Sarepta has felt the same obligation; we took this on knowing this was so important to patients and we said to ourselves we have to do this, there is no alternative.

BA: So now they can get this drug, but at a cost of around $300,000. Although of course this was lower than Wall Street’s estimates. Just how much have you had to take into account the pricing debate coming from presidential nominee Hilary Clinton and the anger around price hikes from Mylan, Valeant et al. over the last year?

EK: I think our focus was: How do we make sure we price this drug so that we can get into the market place and so that patients can have access to it? So yeah, we took all of those dimensions into play, alongside of course our historic R&D costs as well as our future R&D costs for this drug--so we need to make sure we can cover all of this.

What we tried to do was to put it at a level within a medium price range for the rare disease populations. We thought about it and we tried to do it the best way we could.

BA: So you’ve got launch, you’ve got more trials to do and seemingly it will be a few months until you realize the first pay packet from Exondys 51, so how is your cash flow going forward? Will you need a long-term partner?

EK: So of course we are planning to sell our Rare Pediatric Disease Priority Review Voucher which should raise a lot of capital, but outside of that we’re always going to be opportunistic when it comes to raising money to make sure we have enough cash to fund our R&D. I think in regards to a partner, we have all of the resources that we need to launch this drug in the U.S. and Europe, without needing anyone else. This is unusual I know for a company at our stage to not have a partner, but for me I think it gives us a lot of flexibility.

I’ve had a lot of experience at Genzyme launching drugs in Europe and the U.S. and I think, given that it takes a fairly small commercial group to be able to do this, there’s no reason why a company our size can’t do it. We have plans to really build a commercial presence in Europe, and we’re starting that right now.

BA: On Europe, you’re planning to file with the European Medicines Agency at the end of the year. That will be a hurdle in itself, but then of course should you clear that, you will then have to clear the secondary health technology assessor hurdles. How are you preparing for what will likely be some tough pricing talks with strapped European healthcare systems with let’s say unconventional data with a relatively high price tag?

EK: You know in fact we had a health technology assessment conference last week, so I think we’re all prepared, and actually we had our first talks with [England’s pricing watchdog] NICE in person last week as well as in France. So we’ve started that assessment, and you know the patients have been very supportive, so that helps.

BA: Sorry, you’ve already spoken with NICE before the drug has even been filed with the EMA? That’s very early!

EK: You know Ben, they reached out to us and we were on their radar list and they wanted to talk to us. We didn’t initiate those talks; they came to us.

BA: I’ve been covering NICE for nearly 7 years and that’s the most proactive thing I’ve ever heard them do, and actually I don’t think they’ve ever done that before.

EK: I know! It’s never happened to me before either, but we were more than willing to talk. And you know it was really helpful for us because it aided us to figure out exactly what information we’ll need in our dossier that could try to help expedite things.

BA: It really seems like there’s a new willingness to get these drugs on the market come hell or high water; the FDA and now even NICE appear more flexible than ever before. Is 2016 the year we can say we turned a corner on the regulatory and pricing watchdog side of things in rare disease, where both patients and patients’ groups as well as the biotech/pharmas spending billions on developing medicines are taken ever more into account, rather than just the data handed in for review?

EK: I hope so, because if you think about the FDA, the EMA and the companies, and then you think of the physicians who are like-minded and want to get a therapy onto the market where there are none, generally we all want the same thing.

There are different hurdles and different perspectives and the companies are focused on doing things as fast as possible, where the regulatory agencies want to make sure it’s safe and effective and will take what time it needs to ensure this.  But saying that, there is common ground and as I’ve said, I think we saw this when the FDA used its flexibility, within the law, with our drug.

BA: When it comes to flexibility, however, the FDA will likely not be flexible if your drug doesn’t prove the desired efficacy in your longer term postmarketing studies. If at the end of this period your drug doesn’t come through, how easy will it be for you to take this off the market? I don’t think anyone, including the FDA, wants a repeat of what happened in 2011 when Roche saw its breast cancer license for Avastin, which had been approved under an accelerated review, pulled after not being safe or effective enough in the follow-up confirmatory trials. But you face this as a possible scenario.

EK: That’s true, but one of the things we’re trying to do to mitigate that is to obviously, with our ongoing studies, prove the efficacy that the FDA wants to see. And you know, if there is a problem with one study then we’d hope to have other data that are supportive. The other thing we’re doing of course is developing that next-generation chemistry in DMD that could prove more effective, so we could certainly consider using that next-gen chemistry to take our work forward and try and make it better.

We have a lot of shots on goal to make sure we can continue to supply a product for these boys, but there is always a risk. If we can’t show efficacy in the way the FDA wants, then yes they have the option to take it off the market.

BA: Finally, there must have been many, many times when keeping the faith was hard. How did you and the team get up and come in each day when there were delays, snowstorms, a panel rejection, and people questioning your drug at every turn?

EK: It’s all about resilience. One of the things we’ve had is a group of people of like minds and anytime one of us gets down, somebody else is there to pick you up. One of the things we’ve always done is: Every time we’ve felt sorry for ourselves, we just need to think about those patients and what they go through. Our struggles in comparison very quickly become meaningless. You end up saying to yourself: What am I complaining about? Quit whining; get up and do your job.

I’d say all in all, it’s been a unique experience and what it shows it just how much a small group of people, who are very dedicated, can do. As Woody Allen once said, 80% of success is showing up; so you’ve just got to hang in there every single day, and remember why you’re doing what you’re doing.