Shares of Sarepta Therapeutics (SRPT 1.08%) were crashing 43.6% lower as of 11:10 a.m. ET on Tuesday. The huge sell-off came after the company announced top-line results from its phase 3 Embark study evaluating Elevidys in treating young patients with Duchenne muscular dystrophy (DMD).
Sarepta said that the primary endpoint of the late-stage study wasn't met. Patients receiving Elevidys saw a 2.6-point improvement on the North Star Ambulatory Assessment (NSAA) total score 52 weeks after treatment. However, that wasn't statistically significant compared to the improvement experienced by patients receiving placebo.
Why did Sarepta's CEO sound so upbeat?
You might expect Sarepta's management team to express disappointment over Elevidys failing to meet the primary endpoint, but CEO Doug Ingram actually sounded upbeat. Ingram stated in a press release announcing the results that Sarepta plans "to move swiftly to request an update to expand the labeled indication to treat all patients."
Is Ingram just spinning the bad news? Perhaps. However, he revealed that Sarepta has already shared the Embark top-line results with the U.S. Food and Drug Administration (FDA). Elevidys is already on the market as a treatment for DMD in patients ages 4 and 5 thanks to an accelerated approval. According to Ingram, FDA leaders expressed an openness to expanding the label for Elevidys to treat all DMD patients.
The key is that any decision would be made on a review of all of the data from Embark. Although Elevidys didn't achieve the primary endpoint, it did achieve statistical significance on all key secondary endpoints and did so across all age groups.
What should Sarepta investors do now?
Many investors are probably tempted to dump their shares of Sarepta after today's news. And that could be the smartest move. However, there's still a possibility that Elevidys won't just remain on the market but could also have its label expanded. Perhaps the best approach, for now, is to wait and see what happens with the biotech stock and the ongoing saga with Elevidys.
