announced Monday that the Food and Drug Administration has agreed to quickly review its application for accelerated approval of a gene therapy to treat Duchenne muscular dystrophy, in what investors appear to be taking as a sign the agency is disposed to approve the drug.
Sarepta stock (ticker: SRPT) is up 5.6% in Monday morning trading. As of the close of trading on Friday, shares of Sarepta had climbed 27.2% so far this year.
Sarepta’s Phase 3 trial of the Duchenne muscular dystrophy gene therapy, known as SRP-9001, is not expected to produce results before the end of next year. In late July, the company shocked Wall Street with news that it would seek accelerated approval of the gene therapy before the Phase 3 trial was finished.
Analysts had expected Sarepta to wait for the Phase 3 data. Instead, the company went ahead.
(PFE) is also developing a gene therapy for Duchenne muscular dystrophy; its Phase 3 trial is ongoing.
In its Monday announcement, Sarepta said that not only had the FDA accepted its accelerated approval application, but that the agency had awarded the application Priority Review status. That means that the FDA will announce a decision on the application within six months, rather than the standard 10.
The FDA set a deadline for a decision on SRP-9001 by May 29 of next year.
“The Priority Review likely emphasizes FDA’s high interest in approving the drug,” RBC Capital Markets analyst Brian Abrahams wrote in a note out early Monday. He rates Sarepta stock at Outperform with a $190 price target.
Duchenne muscular dystrophy is a fatal, progressive condition that causes muscle weakness. It usually manifests in young boys between the ages of two and five; patients are generally bound to a wheelchair by their early teenage years.
SRP-9001 is a one-time treatment that delivers a version of the gene missing in Duchenne muscular dystrophy patients. The company has run a number of small trials of SRP-9001, and says it has seen statistically significant functional benefits.
Sarepta already has a number of Duchenne muscular dystrophy drugs on the market; they are Exondys 51, Vyondys 53, and Amondys 45. Approval of some of those drugs has been controversial: Exondys 51 received accelerated approval in 2016, despite opposition from some FDA staff and advisors, while Vyondys 53 was approved in 2019 just months after the agency rejected the drug over safety concerns.
While the FDA requires companies to complete confirmatory trials on drugs that receive accelerated approval, Sarepta has yet to complete the required confirmatory trials for any of the three drugs.
For SRP-9001, Sarepta says that it hopes to use the ongoing Phase 3 trial, for which data is expected by the end of 2023, as its post-marketing confirmatory trial. In a note out Monday, SVB Securities analyst Joseph P. Schwartz said that setup could improve SRP-9001’s chances, as the FDA now generally likes to see a confirmatory trial under way at the time of accelerated approval.
“Although we believe there was some debate concerning the company’s pursuit of the accelerated pathway, we believe the FDA acceptance of the BLA filing, feedback from doctors in the space, and Sarepta’s extensive know-how in the DMD space will help to support approval,” Cantor Fitzgerald analyst Kristen Kluska wrote in a note out Monday. She rates Sarepta stock at Overweight with a $150 price target.
Write to Josh Nathan-Kazis at firstname.lastname@example.org