Pfizer's gene-therapy trial failure boosts Sarepta's stock

By Eleanor Laise

Sarepta's gene therapy for Duchenne muscular dystrophy could soon get expanded label from FDA

Shares of Sarepta Therapeutics Inc. (SRPT) gained 4% premarket on Thursday after a potential competitor to its gene therapy stumbled in a late-stage trial.

Pfizer Inc. said late Wednesday that its experimental gene therapy for Duchenne muscular dystrophy fell short of the main goal of improving motor function in boys age 4 through 7 in a phase 3 trial. Duchenne muscular dystrophy is a genetic disease that primarily affects boys and causes muscle degeneration and weakness that often appears in early childhood.

Sarepta last year received accelerated Food and Drug Administration approval for its gene therapy, Elevidys, for children age 4 and 5 with Duchenne. Accelerated approval gives patients earlier access to promising new treatments while the company continues clinical trials to confirm the drug's expected benefits. The FDA is set to decide by June 21 whether to convert the accelerated approval to a full traditional approval and expand the group of patients who can be treated with Elevidys.

The overall Elevidys trial data support expansion of the label to include older boys, although expansion to include some non-ambulatory patients is "more of a stretch," William Blair analyst Tim Lugo said in a note Thursday. BMO Capital Markets analysts also see full approval for ambulatory patients as the most likely outcome, a scenario that could boost Sarepta's stock price to a range of $170 to $180, the analysts wrote in a research note Wednesday.

The Pfizer trial results eliminate any near- to mid-term competition for Elevidys and strengthens the case for a broader label for the drug, given the high unmet medical need, the BMO Capital Markets analysts wrote. Elevidys has "an extended first-mover advantage," the analysts said.

After the Pfizer trial failure, Elevidys's closest potential competitor is an experimental treatment from Regenxbio Inc. (RGNX), the analysts said. Solid Biosciences Inc. (SLDB) is also working on a gene therapy for Duchenne.

Like Pfizer, however, Sarepta has also faced setbacks in developing the gene therapy. Sarepta trial results released last fall showed that Elevidys helped patients' movement and walking ability but did not produce a statistically significant improvement versus placebo in an ambulatory assessment after one year of treatment.

"We are extremely disappointed that these results did not demonstrate the relative improvement in motor function that we had hoped," Dan Levy, Pfizer's development head for Duchenne, said in a statement Wednesday. The company will share more detailed trial results at upcoming medical and patient advocacy meetings, Levy said, with the aim of improving future research and development of Duchenne treatments.

Pfizer's stock (PFE) fell 0.4% premarket on Thursday and is down 3.9% in the year to date. Sarepta shares have gained more than 24% in the year to date, while the S&P 500 SPX is up 13.7%.

-Eleanor Laise

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06-13-24 0849ET

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