3 Reasons Not to Worry About Sarepta Therapeutics Inc.

Sarepta Therapeutics fell on its 144-week data, but the approvability -- based on trials run by PTC Therapeutics and Prosensa -- is likely to be based on 48-week data.

Jul 10, 2014 at 6:00PM

Sarepta Therapeutics (NASDAQ:SRPT) fell 13% today after announcing 144-week data for the trial testing its Duchenne muscular dystrophy drug eteplirsen. Investors seem to be freaking out about the possibility that the drug is no longer working.

Patients taking the drug during the entire time were able to walk 33 meters less in six minutes than they could at the start of the treatment. At the last measurement -- at 120 weeks -- the decline was just 14 meters from baseline.

It could be noise 
While the patients walked the shortest distance that they ever have, the decline in walking distance was as high as 21 meters at the 84-week time point, and then "improved" to a decline of 14 meters at the previous measurement after 120 weeks. I put "improved" in quotes, because we're likely just looking at variation in the test. At one point in the trial, the six-minute walk test went from a 16-meter decline to a seven-meter improvement to a 17-meter decline over the course of three readings at 36 weeks, 48 weeks, and 62 weeks respectively.

Investors are likely also worried about the magnitude of the decline, from 14 meters below baseline to 33 meters below baseline during the last 24 weeks, which is a delta of 19 meters. But, as noted above, the walk test previously declined from a seven-meter improvement to a 17-meter decline over baseline -- a delta of 20 meters -- and that was over just 14 weeks.

We need at least one more data point to know if this is truly a trend downward, suggesting the drug is no longer helping the boys as much.

It doesn't have to be a cure
There's no way the Food and Drug Administration is going to use the efficacy data after 144 weeks to determine whether eteplirsen is approved. The drug doesn't have to be a cure to get approved.

There are no approved treatments for the type of Duchenne muscular dystrophy that eteplirsen treats, but PTC Therapeutics (NASDAQ:PTCT) received a positive opinion from Europe's Committee for Medicinal Products for Human Use for Translarna, which treats Duchenne muscular dystrophy caused by a different mutation. The conditional marketing authorization, assuming the European Medicines Agency follows through, is based on 48-week data, and PTC Therapeutics has started a confirmatory phase 3 trial that will look at walking ability at 48 weeks.

Sarepta Therapeutics hasn't started its phase 3 confirmatory trial yet, but it will likely readout at 48 weeks, which should be sufficient to convince the FDA that the drug works. In the current phase 2b trial, the control group who got placebo for the first 24 weeks walked 69 meters less at the 36 week time point -- the last time point when you wouldn't expect the delayed treatment to have started working -- compared to a 16-meter decline for those who received eteplirsen from the beginning.

144 weeks is nearly three years
In addition to the standard pathway to approval using a phase 3 trial, Sarepta Therapeutics has a chance for an accelerated approval based on the current trial. The small size -- just six patients in the treatment group, and only four in the control group after two patients were excluded because they stopped being able to walk shortly after the trial began -- makes it hard to have confidence in the comparison, because patients start to decline at different ages. At this point, the boys are, on average, 12-years old, well into where they would be expected to lose their walking ability.


Source: Sarepta Therapeutics.

The trial is also open label -- at this point, all the boys know they're on eteplirsen -- which is dangerous for something like a six-minute walk test where the result is ultimately determined by the effort patients put in. It's possible there could be a placebo effect, where patients push themselves more because they believe the drug is working. But that theory only goes so far. If the drug wasn't working, eventually the biology of disease progression would catch up.

The longer the boys are on the drug without a steep decline, the more regulators can feel confident that the effect is real. The FDA also has data from Prosensa's (NASDAQ:RNA) phase 3 trial testing its Duchenne muscular dystrophy drug, drisapersen. While Prosensa's trial failed, the placebo group could act as a historical control for Sarepta's trial.

Bad news buy?
I think so. I did a pretty good job calling the bottom when Sarepta had bad news last November.

The longer the drug works, the longer patients will take it, and the higher sales will be, so a decline in walking ability -- if it's real -- is somewhat of a negative. But a decline unfortunately is also inevitable, and doesn't take away from the drug's approvability.

It's asking a little much to expect eteplirsen to be a cure. And investors seem to be overreacting at this point.

Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There's a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns, you'll need The Motley Fool's new free report on the dream team responsible for this game-changing blockbuster. CLICK HERE NOW.

Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers