Sarepta and BioMarin race for an FDA tag that could be worth $350M-plus

Rivals Sarepta Therapeutics ($SRPT) and BioMarin ​Pharmaceutical ($BMRN) are in line to become the next recipients of an FDA coupon for a fast review, each potentially picking up a sellable asset that recently brought in $350 million on the open market.

The two companies separately received the FDA's rare pediatric disease designation for their in-development treatments for Duchenne muscular dystrophy. And if they can win approval for the drugs next year--by no means guaranteed--each will receive a voucher that promises its holder a 6-month FDA review for any drug, truncating the standard 10-month process. Such vouchers can be sold to the highest bidder, and their market value has skyrocketed over the past year.

Each company is developing a treatment for DMD, a muscle-wasting disease that primarily affects young boys and severely shortens life expectancy. And each has faced setbacks along the way, as critics have questioned whether positive results from tiny studies merit approval. But after months of delays, both treatments will likely be up for FDA decisions over the next 8 months. BioMarin, which acquired Prosensa Therapeutics for up to $840 million to get its DMD drug, filed first and expects final word by the end of this year. Sarepta is about two months behind.

Now, in addition to old fashioned revenue, the pair could be in for a sizable cash windfall if they can win approval.

The first priority review voucher to change hands came from BioMarin, which sold the coupon to Sanofi ($SNY) and Regeneron ($REGN) last year for $67.5 million, helping the pair leapfrog Amgen ($AMGN) in the race to launch a new class of cholesterol treatments. Months later, Gilead Sciences ($GILD) paid $125 million for Knight Therapeutics' voucher in hopes of accelerating its HIV pipeline, followed by Sanofi splurging $245 million for Retrophin's ($RTRX) priority ticket and, just this week, AbbVie ($ABBV) promising $350 million to United Therapeutics ($UTHR) for the same asset.

Whether the value of priority review vouchers will continue along that trajectory remains to be seen, but the agency's induction of Sarepta and BioMarin into the program adds another layer to what has already been a contentious race in DMD.

Both treatments target the roughly 13% of DMD patients whose disease stems from a flaw in the gene responsible for producing the protein dystrophin. The drugs work by getting the body to skip over that genetic defect, restoring the flow of dystrophin and alleviating symptoms of DMD.

- read the Sarepta announcement
- here's BioMarin's statement