While I will be the first to admit my disappointment at the CC this morning, something isn't adding up here. There is something else going on here that we don't know about and my hunch is that it will end up in favor of SRPT. I wish I could put my finger on it, but I can't. Only time will tell, but something tells me there is more going on here than we know about.
This doesn't add up.
This is the second request by the FDA for evidence that dystrophin is a surrogate marker. GSK went the route of Breakthrough Therapy (BT) so that they would qualify with only preliminary trial data. Everyone jumped for joy. GSK did not start their trial with a muscle biopsy so they didn't have a surrogate marker they could demonstrate and perhaps the biopsy would have shown dystrophin because the boys were young. So GSK's BT is meaningless unless they can answer the same questions as Sarepta. They have a phase III trial due for completion in the fall.
Sarepta, on the other hand. had the beginning muscle biopsies but now the FDA is asking for the second time to explain why dystrophin should be a surrogate marker. The starting slides showed no dystrophin and the later slides showed 40%+ dystrophin positive fibers. Yes, this is only a corelation but is more direct to Eteplirsen that sun spots. It seems that Sarepta could have received BT but Chris said they were only exploring that alternative and obviously they did not persue it.
So there are three players SRPT, FDA, and GSK. SRPT appears to have the lead in proof of correlation and safety. GSK has an apparently worthless BT designation but everybody loves them. Sarepat was told they could file a NDA. The FDA requested more information on the dystrophin correlation. Sarepta says they need until the first half of 2014 to answer the FDA's question although they ought to know by now in their own files how drstrophin is associated with Eteplirsen.
It looks like both SRPT and GSK are playing cat and mouse over the dystrophin correlation. SRPT is now waiting for GSK to produce their own correlation evidence first. Apparently nobody is submitting much to the FDA. Why? Is the FDA full of leakers? It seems SRPT is in as good a position as if they received AA. They have superior safety. Are they waiting to smoke GSK's data out? Prosensa got their IPO and it was enhanced by the BT designation. Perhaps they don't have proof.
Sentiment: Strong Buy
To begin with, we need to motivate 60 kids to enter our trial that doesn't start for another 5 months Think about that. Secondly I expect we'll submit the NDA shortly after the trial starts Jan. 1 or so - let's say the submit it on Feb 15th. . Then we'll add supplementary data to it (as Chris has said). The FDA will review it and give the approval - and accept dystrophin as the surrogate for the future exon trials - probably by May or June of next year. At that time according to Chris we'll likely have enough drug ready to meet all comers. That's it folks. Live with it.
What else is also odd is the parent reaction to the news which was extremely positive. So, if the investor belief is this will delay drug's actual arrival to market why do the parents that are directly involved with FDA, SRPT basically celebrating the announcement? CG explained that by end of 2014 there will be enough of a supply to treat all exon 51 skipping patients. If AA application filling would have been announced yesterday would it had made the drug get to market any quicker?? It does not sound like it. Buy on this dip, does'nt make any sense for stock to react how it did.
I agree with you, system. Something is up. I'd like to hold here, and maybe buy more. Holding such a large position in this stock has been painful and frustrating. But I can't believe, more than anything, how these DMD moms and their sons keep getting hit over the head by the FDA's delays. It seems too inhumane to be true. But then again, so did the notion that AA would be announced with joy by CG on this morning's CC, and share price skyrocketed to $150. I knew I felt deep down that something like that happening would be too good to be true. And as we found out today, that notion the AA and share price explosion was too good to be true. But really, more than that, this is just way too inhumane on the part of the FDA too be true. I know I'm obviously ignorant of all that's really at work here with the FDA's, PPMD's, and SRPT's communications, but something is seriously amiss here. What could it be? In the long run, I also feel that SRPT will come out winning big, but what could possibly be going on, after all these agonizing months of uncertainty and pain. Are we really in for another 10-12 months of agonizing uncertainty? Eteplirsen works, does it not?
In thinking this through, maybe the FDA was reluctant to do AA because it would set a precedent with such a low clinical trial patient count, and they were cautious about using the surrogate endpoint because it could block out the competitors who don't increase dystrophin in meaningful amounts and have significant influence over the FDA.
So I think the FDA is going to help SRPT navigate a new way - maybe go full approval - take them via NDA and give them breakthrough designation or something else and maybe grant them provisional marketing rights to let them start selling it early while they review as well as quietly guarantee them approval as part of the bargain. Something like that.
I couldn't agree more...my only take on this was maybe the manufacturing scale up to provide for 50-100% of the market would take the balance of the year to get to where it needs to be for approval?
The signal from the FDA is actually positive for the future of Eteplirsen and Sarepta, but very painful in the short term for us investors. The fact is we didn't expect an outright granting of AA today, but rather welcoming an application for AA. Instead we got a welcome to submit an NDA for full approval, which is even better. The rest of the language and CG's wordy explanations in the CC today just played psychological games with traders' minds, resulting in the large dump of shares (I didn't expect such aggressive selling). Over time, SRPT will settle and come back again and make new highs, but unfortunately the bumpy ride is still pretty bumpy. Anyway, the story is that the stock today was governed by an irrational herd mentality where people don't pay attention to the company fundamentals, but that is always temporary and SRPT will recover.
Sentiment: Strong Buy