Sprinting in an “urgent race against a brutal disease,” just like patients, Sarepta has raised a $1.2 billion war chest to prepare for a launch of the Duchenne muscular dystrophy gene therapy SRP-9001, which was filed for accelerated approval with the FDA during the third quarter.
“Those living with Duchenne are in an urgent race against a brutal disease that hourly and daily irreversibly damages their muscle and robs them of a future,” said CEO Doug Ingram in the company's third quarter earnings report. “In an effort to match the urgency of our patients, after months of evidence-based dialog with the U.S. FDA, we submitted our biologic license application (BLA) for the accelerated approval of our gene therapy SRP-9001 to treat ambulatory Duchenne patients.”
SRP-9001 is a gene therapy designed to deliver the microdystrophin-encoding gene into muscle tissue to prompt production of the microdystrophin protein. Patients with DMD have a mutation in the DMD gene and can’t make the protein on their own, leading to a progressive loss of muscle strength.
Patients and their advocates have been calling for a therapy that can help patients now since the disease moves faster than the drug development life cycle. To get the gene therapy in front of patients sooner, Sarepta is seeking an accelerated review with the U.S. agency, which allows the review of a therapy based on surrogate endpoint data, or data that does not speak specifically to the efficacy of a medicine but rather is reasonably likely to predict clinical benefit.
Sarepta is moving fast to make sure it has the resources to bankroll the launch of SRP-9001 once the FDA gives its okay. Ingram said the company raised more than a billion dollars during the quarter “to ensure we have the resources necessary to fully prepare for and successfully launch SRP-9001.” The company is changing its commercial, medical affairs, access and reimbursement and patient services teams to prepare for “what could be the most consequential gene therapy launch in history.”
The company issued $1.2 billion in 1.25% convertible senior notes due in 2027. Sarepta expects that the money raised and $2.1 billion in cash and cash equivalents on hand will fund operations to profitability.
The BLA for SRP-9001 was filed under the accelerated approval pathway in September based on data that shows the gene therapy spurs the expression of the dystrophin protein. Sarepta used data from three phase 1 studies known as Endeavor and an analysis that compared results from all three trials.
Therapies approved under the accelerated approval pathway can be marketed right away, but companies have an obligation to complete a post-marketing study to confirm clinical benefit. Sarepta hopes to do that with the Embark trial, which is already fully enrolled and dosed. The phase 3 study’s main endpoint will look at improvement in functional motor abilities in ambulant children.
Sarepta expects the accelerated approval decision to land in May 2023, with data from the phase 3 following in the third quarter. Berenberg Capital Markets analysts said this readout timeline is possible but tight, and any delay would put pressure on Sarepta's shares. If the approval arrives as planned, SVB Securities analysts said a launch could occur mid-year 2023.
SVB Securities predicts that SRP-9001 will capture most of the market share in DMD, rising to $3.6 billion in global peak sales by 2028.
"We continue to expect high interest in the stock heading into the SRP-9001 U.S. regulatory decision and see a compelling commercial opportunity ahead," SVB analysts said in a note.
SVB Securities wondered if the close timeline between the accelerated approval due date and the planned readout for the confirmatory trial might spur the FDA to pass on the accelerated nod and wait for the results. Management, however, was bullish that the need to deliver the therapy to patients as fast as possible will outweigh any reluctance from the agency.
Without the accelerated review pathway, Ingram estimated that Sarepta would not be filing its request for approval until 2024.
"It's not an exaggeration: every day when the sun comes up and then the sun goes down at the end of that day, a Duchenne patient has been damaged, and damaged in ways that neither our therapy or any other therapy currently envisioned would rectify," he said during the earnings call.
One option SVB Securities sees is for Sarepta to delay the Embark readout, but the FDA would have to approve that change.
SRP-9001 will be reviewed by a panel of FDA advisors in the spring, which will provide advice to the agency about whether to approve the therapy or not.
Meanwhile, Sarepta is making moves to expand the potential DMD patient population to reach 14% more through an expansion of the Endeavor study, according to Berenberg.