JPMorgan Healthcare Conference Highlights: Sarepta Therapeutics

The past four days have brought together pharmaceutical, biotechnology, and medical device makers all under one roof in what is arguably the most important health care conference of the year, the 2014 JPMorgan Healthcare Conference.

Just like the recently concluded Consumer Electronics Show in Las Vegas, this annual event gives health care companies a chance to demonstrate to investors and Wall Street where they've been and where they're headed. Because earnings guidance can be somewhat irrelevant for clinical-stage biotech and medical device companies, consider this event your chance to gain guidance from some 300 top health care companies.

Today, we're going to take a closer look at Sarepta Therapeutics' (NASDAQ: SRPT  ) presentation, which was delivered Wednesday by President and CEO Chris Garabedian.

Sarepta Therapeutics' past year
Like many of the companies we've chronicled this week, Sarepta's had a wild ride over the past year, flying high at one point on continued follow-up data of its relatively small midstage study of eteplirsen for Duchenne muscular dystrophy, or DMD, a disorder that results in muscle degeneration and early death in boys.

Shares of Sarepta climbed to a 52-week high of $55.61 in September shortly after an experimental rival drug, drisapersen, developed by Prosensa (NASDAQ: RNA  ) and GlaxoSmithKline (NYSE: GSK  ) , missed its primary end point by a mile in late-stage trials. However, Sarepta also tanked just weeks later after the Food and Drug Administration decided against supporting an accelerated drug approval for eteplirsen; the agency would not make the connection that increased dystrophin production led to its remarkable trial results. Also, given the recent failure of drisapersen in a phase 3 study, the FDA felt it pertinent that Sarepta engage in a broader study. Shares ultimately dipped as low as $12.12. 

What Sarepta had to say
As you might expect, with Sarepta being the leading DMD drug developer, Garabedian spent pretty much the entirety of his JPMorgan conference presentation discussing the benefits of eteplirsen and its potential superiority over other treatment possibilities. He also alluded to a number of new pipeline products.

The two factors that I found most intriguing from Sarepta's presentation were its new DMD and infectious disease ventures and the recently released 120-week data on eteplirsen.

Garabedian wasted no time by pointing out early that Sarepta exon-skipping technology would add another three exons to its clinical focus -- exon 52, exon 55, and exon 8 -- which are currently in the lead sequence identification process. DMD has many genotype variables, so this isn't a disorder where one therapy fixes all. Sarepta anticipates having the lead sequence selected for all three exons by the second quarter, and plans to file two or more investigational new drug applications for these compounds in the latter half of the year. In addition, it expects to have a pre-investigational new drug application meeting with the Food and Drug Administration over exon 53 sometime this quarter. All told, as you can see below, Sarepta is now targeting eight specific exons. Most importantly, it expects to dose the first patient in its critical phase 3 trial for exon 51 with eteplirsen in the second quarter.


Source: Sarepta Therapeutics.

Garabedian, toward the end of his presentation, also noted Sarepta's burgeoning infectious disease pipeline, with an influenza, Marburg virus, and Ebola virus all in early stage clinical trials, and additional infectious disease drugs in the discovery stage, including tuberculosis and dengue.

What really stole the show, however, was the release of new data that demonstrated that eteplirsen's clinical benefit continued well into the 120th week. Sarepta's study is small, but it's working with two specific patient cohorts – an eteplirsen intent-to-treat, or ITT, arm and a placebo arm that was switched over to eteplirsen after noticeable six-minute walk test, or 6MWT regression at the 24-week mark. The results at 120 weeks are nothing short of remarkable with the ITT-eteplirsen arm showing only a 13.9-meter decline in 6MWT, or less than 5%, since the baseline more than two years prior. Even the placebo group has stabilized, with the walk test regression since week 36 totaling roughly 9 meters.


Source: Sarepta Therapeutics.

Even more impressive, whether they were patients well above 350 meters in the 6MWT or below 350 meters, the benefits have been similar, meaning it's helping at all stages of the disease.

Dystrophin production and safety were two other focal points of the presentation, with Garabedian focusing on demonstrable increases in dystrophin production at both doses in its phase 2 trial compared to the placebo, and in demonstrating that this medication leads to a sustained and statistically significant response in the body. Furthermore, even though the sample size is incredibly small, eteplirsen hasn't led to any serious adverse events.

Making sense of it all
Sarepta's presentation was certainly one of the most anticipated and exciting of the week, and yesterday's 40% climb in the company's share price indicates it did not disappoint. The stock stood at $28 on Friday morning.

What we heard was a lot of encouraging news from its CEO about the company's exploration of new exon-skipping technology and expansion of its portfolio beyond DMD.

We also received interesting news earlier this week when GlaxoSmithKline announced it would not renew its pact with Prosensa in developing drisapersen, leaving the small-cap company without a development partner. Although Prosensa announced yesterday that a further study of its phase 3 clinical results leads it to believe that earlier and longer treatment of patients on drisapersen would delay the disease progression, it only appears to further clarify that Sarepta's eteplirsen is in the driver's seat.

The real focus and ultimate share price driver for Sarepta in 2014 is going to be the design and data from its upcoming phase 3 trial for eteplirsen. This quarter will be spent out hashing out the details and end points of this study with the FDA, followed by enrollment and dosing beginning next quarter. Based on the length of time before notable results were delivered in the phase 2 study, we're probably looking at the second quarter of 2015 before truly meaningful data is available. If this new data supports the small sample size data from its phase 2 trial, then Sarepta will likely own 13% of all DMD cases with its exon 51-skipping eteplirsen and could therefore add some validity to the remainder of its DMD pipeline.

My suggestion would be not to get too caught up in Sarepta's wild swings this year, as we shouldn't have the juicy pieces of evidence until closer to the midpoint of 2015. That doesn't mean eteplirsen won't be a success, but it means we're just going to be witnessing a lot of very early stage moves this year (new indication filings) rather than much in the way of late-stage advancement. So keep that in mind as you watch Sarepta vacillate wildly up and down this year.

Sarepta is off to the races so far, but it may not be able to keep up with this top stock for the remainder of the year!
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