UPDATED: Sarepta's embattled CEO steps down as DMD drug heads to the FDA

Former Sarepta CEO Chris Garabedian

Chris Garabedian, the bullish, controversial CEO of Sarepta Therapeutics ($SRPT), has resigned from his post, leaving the company just as it prepares to file its Duchenne muscular dystrophy treatment for FDA approval.

Garabedian, whose relationship with the FDA sometimes verged on hostile, will be replaced by Chief Medical Officer Edward Kaye on an interim basis, and Sarepta says it's still on track to submit its drug, eteplirsen, by the middle of this year.

Garabedian's resignation comes about a year after a behind-the-scenes squabble with his board spilled out into the public, as he reportedly clashed with then-Chairman William Goolsbee over how the CEO handled meetings with the FDA. Goolsbee moved to bar Garabedian from meetings with the agency, The Wall Street Journal reported last year, but the rest of the board appeared to side with its chief executive. Goolsbee resigned weeks later, replaced by board member John Hodgman, who, in a statement at the time, said Sarepta had "full confidence" in Garabedian and his "management of our interactions with the FDA."

That, apparently, has changed, and, in an announcement issued late Tuesday night, Hodgman suggested that Garabedian's exit will improve Sarepta's relationship with regulators.

"We believe this change will facilitate the company's clinical and regulatory discussions and relationships with the goal of meeting its stated timelines for bringing a potentially disease-modifying treatment to patients with DMD as soon as possible," Hodgman said in prepared remarks. Kaye, he continued, "has excellent relationships with the clinical, regulatory and patient advocacy communities so critical to making this treatment a reality for this underserved patient population."

The shakeup certainly helped with investors. Sarepta's shares surged close to 10% Wednesday morning as news of the CEO's abrupt departure spread.

"We continue to view the CEO change as an incremental net positive for Sarepta, since we believe that Dr. Ed Kaye's professional experience and personal gravitas will help improve the company perception among investors and its interactions with the agency," noted RBC's Simos Simeonidis.

Eteplirsen, a closely watched candidate for a devastating disease, has faced doubts, scrutiny and delays along its path to patients. In October, Sarepta nixed its plans for a year-end filing after the FDA requested to see an independent assessment of eteplirsen's effect on dystrophin--the protein whose absence leads to DMD--plus more safety results and historic data.

But the agency has repeatedly affirmed its willingness to work with Sarepta on eteplirsen's review, with Commissioner Margaret Hamburg taking the uncommon tack of issuing a public letter affirming its support of the company and the "dire urgency" of its work in DMD. Hamburg said the agency is willing to conduct a so-called rolling review for the drug, which would allow the company to hand in portions of application as they become available. Furthermore, the FDA "expects the NDA for eteplirsen will qualify for a priority review," meaning Sarepta would get a final decision in 6 months instead of the requisite 10.

The biotech had largely stayed quiet since the fall, presumably working to gather the data needed to finally get eteplirsen in front of regulators.

- read the announcement

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