Sarepta shares volatile on plans to file Duchenne muscular dystrophy drug eteplirsen for FDA approval

Shares in Sarepta Therapeutics rose as much as 21 percent Wednesday after the company said it plans to seek FDA approval of eteplirsen as a treatment for Duchenne muscular dystrophy (DMD) in the first half of 2014. However, shares then fell by as much as 17 percent amid investor concerns the regulator will not consider the exon-skipping treatment on an accelerated basis, as the company had previously suggested it might.

Sarepta noted that following "productive interactions" with the FDA this week, the agency requested additional information related to the methodology and verification of dystrophin quantification, which the company believes can be addressed. According to Sarepta, the FDA stated that it is nonetheless "open to considering" a marketing application for eteplirsen based on two recently submitted summary documents that include data on dystrophin and clinical outcomes from existing studies on the experimental compound.

However, the drugmaker revealed that the agency would not commit to declaring dystrophin an acceptable surrogate endpoint under the accelerated approval pathway prior to its filing. According to Sarepta, the FDA stated that a decision to allow the eteplirsen filing "would not indicate that we have accepted dystrophin expression as a biomarker reasonably likely to predict clinical benefit," specifying that a submission "only [indicates] that the question merits review, and that we deem the data to be reviewable." Nonetheless, CEO Chris Garabedian remarked that "we are encouraged by the feedback from the FDA and believe that data from our ongoing clinical study merits review by the agency and will be sufficient for an NDA filing."

Commenting on the news, Deutsche Bank analyst Robyn Karnauskas remarked that pessimistic investors believe the FDA "is just saying 'file,' and the management is filing just because they can, not because they think they're going to get approved." Karnauskas noted that if Garabedian "had just said 'we're filing,' [the stock] would have been up, but he added some colour about what the FDA said, and that colour was not enough to encourage" investors.

In October 2012, Sarepta shares more than doubled after the company released positive data showing the Phase IIb 4658-US-201 study of eteplirsen in 12 boys with DMD and appropriate deletions of the dystrophin gene met its main goal of significant clinical benefit in a 6-minute walk test. GlaxoSmithKline and partner Prosensa are also developing the exon-skipping drug drisapersen for DMD, with top-line results from a Phase III study expected later this year.

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