Sarepta sells Exondys 51 PRV to Gilead for $125M

Sarepta has struck a $125 million deal to sell a voucher it got with last year’s controversial FDA approval of its new Duchenne drug to Gilead, which will give the Big Biotech a one-time speedy review pass for an NDA app to the U.S. regulator.

The biotech got the Rare Pediatric Disease Priority Review Voucher as part of its green light for Exondys 51 in certain Duchenne patients in the fall of last year. Analysts had long expected the biotech to sell the valuable voucher.

It's set up to go out to companies that are treating rare diseases that can hit children (and as an added incentive to develop these types of meds), but it can also be sold under the FDA policy, which Sarepta has promptly done.

The biotech had been struggling with money last year, and things got worse when it looked as if the FDA would be knocking its lead drug back after its R&D data looked thin.

But in a decision that shocked a number of observers, the DMD drug was approved in September.

The $125 million will now be funneled into its R&D for the next-gen form of its med, including, according to its CEO Ed Kaye, for “the rapid advancement of our follow-on exon skipping candidates and next generation RNA targeted antisense platform.”

Who bought the PRV? Sarepta kept mum on that in its PR, saying however that it had reached out “to multiple pharmaceutical and biotech companies.” But this morning the biotech released a SEC filing confirming that Gilead had bought the voucher. The Big Biotech has not, however, said for which new med it will use the PRV. 

Analysts at Leerink however think Gilead got it cheap, saying in a note to clients that “Upon Exondys 51 approval and the receipt of the PRV, we had initially estimated a ~$350M PRV value in our DCF. With the reauthorization of the PRV program, we decreased our estimate to $200M to account for a reduction in the scarcity value of these instruments and to reflect the minimal benefit accorded by the previous PRV purchased by Regeneron from Biomarin.

“Today's announcement of $125M is even lower than our adjusted estimates. And while this non-dilutive amount will surely add additional runway to Sarepta's cash position, we cannot help but wonder if this transaction reflects a 1) broader decline in PRV interest among bidders, or 2) an undervalued asset sale.”