Will Sarepta Receive Accelerated Approval?

Let me start by saying that I think the Food and Drug Administration should grant an accelerated approval to Sarepta Therapeutics' (SRPT 3.70%) eteplirsen to treat Duchenne muscular dystrophy.

But then again, I think the FDA should allow a lot of drugs onto the market that the agency doesn't. Let the doctors and their patients figure out if the risk/benefit profile is acceptable for the individual patient. Based on this petition, I'd guess there's a substantial market for the drug even though there's limited data that the drug works.

Unfortunately the FDA doesn't follow my libertarian, free-market view of drug development. All the petitions in the world aren't necessarily going to get the FDA to approve the drug with the limited data that Sarepta has produced to date.

Open to interpretation
The FDA leaves itself a lot of leeway to determine exactly what qualifies for accelerated approval.

First, the drug has to treat a disease with an unmet medical need. Being the tenth diabetes drug to lower blood sugar a little isn't going to cut it. Even Roche and ImmunoGen's (IMGN +0.00%) breast cancer drug T-DM1 didn't qualify because the FDA said the patients tested in the phase 2 trial hadn't exhausted all of their options. I don't see eteplirsen running into problems here; there aren't any options for Duchenne muscular dystrophy.

The FDA allows companies asking for an accelerated approval to use surrogate endpoints. Sarepta doesn't have to show that the drug extends the lives of kids with Duchenne muscular dystrophy; another measurement of efficacy will be sufficient.

The phase 2 data used a six-minute walk test as the primary clinical outcome, which seems completely reasonable. Being able to walk is a pretty big quality-of-life issue. The company also has data showing that the drug increases the level of dystrophin-positive fibers. While that's certainly supportive of the view that the drug works, a laboratory test is less convincing than the walk test because it doesn't say, by itself, whether the change is clinically meaningful.

An accelerated approval allows for less data than a full approval would require. A phase 2 trial is sufficient if the company promises to run a larger trial after approval to confirm the phase 2 data. If that trial fails, the accelerated approval is revoked.

What constitutes "less data" is the sticking point for whether eteplirsen can get an accelerated approval. The phase 2 trial only had four patients take each of the two doses. And two patients in the lower-dose group weren't counted in the walk test because they were unable to perform the test after rapid disease progression.

By comparison, here are a couple of other drugs for rare diseases and the number of patients in the drug arm(s) of their pivotal trial.

Source: FDA labels.

Clearly, Sarepta has an uphill battle to convince the FDA to approve the drug with the current patient count.

New rules
The renewal of the Prescription Drug User Fee Act was part of the larger Food and Drug Administration Safety and Innovation Act, which loosened the requirements for an accelerated approval. The problem for investors is the act was just enacted, so there's no history of drugs gaining approval under the new statute. How the FDA will interpret the changes is still a big unknown.

Careful what you wish for
Don't interpret Sarepta's announcement that the FDA said it should apply as a guarantee that the agency will actually issue an accelerated approval. The FDA doesn't talk about unapproved drugs, so any information investors get will come with a slant from the company.

The agency could advise the company to submit the data package because it thinks the data is fine on its own, but its advice to the company could be a little more neutral, requesting the data so the agency can review the full data package further. In both cases, the company can factually say the FDA wants us to make an application for an accelerated approval, but it's clear the level of enthusiasm is entirely different.