Sarepta not sure of patient numbers--but is sure of $300K-plus price tag

As you’ll know, against all odds, the FDA approved Sarepta’s Duchenne muscular dystrophy (DMD) treatment Exondys 51 (eteplirsen) yesterday amid a cloud of internal regulatory protestations, months of delays and indecision, as well as an FDA panel rejection back in the spring.

Afterhours yesterday the exec team from Sarepta, including its interim CEO, as well as its CMO and SVP Ed Kaye, set up a brief webcast and spoke to investors, who spent much time congratulating the team on their unlikely success, but then we got down to brass tacks.

Initially the cost seemed, in context of other rare and ultrarare meds, reasonable: the price tag is a net annual cost of $300,000 per patient, less than Wall Street analysts’ had thought and less than other meds that treat such small patient populations.

But further down the line, and after some investor questioning, it became clear that this price was literally weighted for boys who tipped the scales at 25 kg.

After the meeting, many analysts pointed out that this would be, in that patient population, a fairly typical weight for a 7- to 8-year-old, and would mean the costs would rise as the boys aged and grew. Some see the ceiling price being as high as $450,000.

“There were many factors involved in putting the cost of this drug together,” Sandy Mahatme, its CFO, explained in the call. “This includes the development costs of the medicine; the number of patients; the patient’s ability to access the medicine, as well as re-investing in future research. We also have weighted the price against its novelty and the fundamental benefits we think this drug can bring to DMD.”

This is also based on the fact that the company sees testing boys at a younger age than in its trials, and can therefore stop the disease from progressing, lowering the overall healthcare burden.

But what about the patient population for its drug? No word and no guidance from the exec team on that front, though they say they are pushing hard to get genetic testing done across the U.S. to find all the boys who can benefit from their med.

The estimated prevalence of Duchenne and Becker muscular dystrophy (DBMD) was 1 in every 7,250 males aged 5 to 24 years, according to the CDC, but Sarepta’s drug is for patients who have a confirmed mutation in the DMD gene that is amenable to exon 51 skipping. In a release, the company said its drug could treat up to 13% of patients with DMD have the mutations that can be treated by Exondys 51.

And when can it start to see revenue? Kaye said: “As is typical for most rare disease launches, we anticipate to take 30 to 90 days for patients to get coverage, so we expect to see some lag until these sales are recognized.”

On the extra trials, Kaye said the biotech’s goal was to treat as many patients amenable to exon skipping as possible.

“The first step in achieving this goal is the initiation of our ESSENCE study for patients amenable to skipping exon 45 and exon 53. ESSENCE, a placebo-controlled study of exon 45 and exon 53, is now recruiting patients. Based on feedback from the advisory committee meeting and the FDA draft guidance, we believe that trials for exon skipping drugs may need to be of longer duration.”

This means that those in the ESSENCE study will be tested for up to two years. He said that Sarepta will “continue to work with the agency on endpoints and interim analyses that could potentially end the trial earlier if clear efficacy is achieved. We hope this study will establish dystrophin as a surrogate endpoint and will help validate other endpoints besides the 6-minute walk test that can be used to measure efficacy in a shorter time period.”

In the Q&A session, however, Kaye said when it came to the post-marketing studies mandated from the FDA, there was still some way to go. “We're still in the preliminary stages. We haven't had any direct discussions with the FDA specifically about the [trial] protocol, and we will be working with them. I think the emphasis in our discussions have been that they would like to look at higher doses and to look at the comparison. And, obviously these would also be long studies.”

He added that they had a “fair leeway” in helping to develop the protocols. “We'll be looking at novel endpoints. So, I think we're firmly committed to working with the FDA to make sure that we get them the clinical information that they need to eventually give us a long-term approval.”

He added that the protocols will likely not be finalized until around mid-2017.

There had been some manufacturing concerns from the biotech, but Kaye said, given the delays in getting to approval, much of these were now resolved. He explained: “I think there has been a great deal of effort that we've put into the manufacturing. So, we have enough supply right now on hand to really supply patients for over a year. And we are developing and continuing to develop our processes, so that we will also be ready for a European approval and rest of world.

“So, many of the concerns I think that had been expressed earlier, because of the delays that we've had in getting this drug approved, we've been able to overcome. So, we feel very confident that we'll be able to supply it.”

Kaye concluded: “We are ready; our team is in place. And our supply chain is ready to supply products to patients.”

The biotech also plans to file in Europe by the end of the year, but this may be a tougher sell--should it clear the EMA--given the high number of cash-strapped governments and their health technology bodies, who may have difficulty in translating and justifying the current data sets into the likely high price tag.