Sarepta stock plunged again Thursday on a report that the Food and Drug Administration will require additional clinical testing to validate the safety profile of its controversial gene therapy, Elevidys.
According to William Blair analyst Sami Corwin, citing Endpoints News, a senior FDA official reportedly said the Center for Biologics Evaluation and Research will ask Sarepta Therapeutics to perform additional testing before it can return Elevidys to the market.
"It is unclear if additional clinical trials would be needed and/or what endpoints would be necessary to validate Elevidys' safety profile," she said in a report.
Sarepta stock initially plummeted by double digits, but recovered somewhat to close down 3.3% at 12.99.
Sarepta Stock: A Brutal Two Weeks
The latest follows a brutal two weeks for Sarepta. The company agreed to stop shipping Elevidys, a gene therapy for Duchenne muscular dystrophy, after two teenage patients died of acute liver failure. The deaths prompted Sarepta to restructure the company, laying off some 500 employees to cut costs.
A 51-year-old man also died of acute liver failure after receiving treatment with Sarepta's limb-girdle muscular dystrophy gene therapy. Though Sarepta had already stopped developing the experimental drug, the news pushed the FDA to ask Sarepta to voluntarily stop selling Elevidys. All of Sarepta's gene therapies use the same viral vector delivery system.
It's important to note, however, that the deaths occurred in older patients who could no longer walk. This means they were likely given the highest doses of the gene therapies.
But there haven't been any deaths among the younger, ambulant patients. This is the population where Elevidys has a traditional approval. The FDA signed off on the gene therapy for nonambulatory patients with an accelerated approval. The latter requires additional testing. Sarepta had already stopped selling Elevidys to these patients.
"It would be unprecedented for the agency to require Sarepta to conduct another clinical trial in ambulatory patients, considering Elevidys has full approval in the population and no deaths have occurred in the ambulatory population," Corwin said.
'Dangerous Precedent' For Gene Therapies
Sarepta has treated 800 patients with Elevidys, including 100 nonambulatory patients, Corwin said. It would set a "dangerous precedent" if the FDA required additional testing in ambulatory patients.
"Based on the frequency of the fatalities, it's unclear if the FDA would require all gene therapies to treat hundreds of patients prior to approval to prove safety, which would be unreasonable, in our view, given more gene therapies are being developed for rare diseases with few to no other therapeutic options."
She notes that three patients died of liver toxicity following treatment with Novartis' Zolgensma, a gene therapy for spinal muscular atrophy. Yet Novartis has never stopped selling its gene therapy, suggesting the conservative FDA view is specific to Sarepta and Elevidys.
"While we believe there is a possibility the pause is lifted before year-end, specifically for young, ambulatory patients, we think uncertainty regarding the length of the pause and the additional steps necessary to lift it will continue to put pressure on the stock," she said.
Corwin rates Sarepta stock a market perform.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
