Shares of Sarepta shot up 21% on Tuesday, buoyed by some enthusiastic remarks for the biotech’s first round of sales of its Duchenne muscular dystrophy drug Exondys 51, which were talked up by CEO Ed Kaye at the JP Morgan conference. And a deal to kick off a gene therapy research pact may have helped.
The sales figure for Exondys 51 didn’t amount to much. Sales hit $5.4 million for the first three months the drug was on the market, which fell behind Leerink’s estimate and general consensus — pegged by Joseph Schwartz at $7.9 million and $6 million. But with more than 250 DMD patients amenable to an exon-skipping therapy seeking coverage, and a positive assessment that Sarepta could manage the backlash that’s grown among payers, the biotech earned a 21% spike in its stock price.
This is one of the most controversial drugs to ever hit the market. The FDA’s label specifies that there’s no proof of clinical benefit, and the internal war at the FDA over this drug encouraged a slate of insurers to either refuse to cover it or limit it, causing the big share price spike that greeted an OK to melt away.
But Sarepta’s stock has been on a roller coaster ride for years now, lurching from big gains to big losses with each turn of the card.
Baird’s Brian Skorney was and is an optimist.
“While we expect hurdles to getting insurance authorization and putting a plan in place for each patient to have a weekly infusion, we believe the vast majority of these patients will convert to revenue in 1H17,” he wrote. “We also believe this is a strong indicator of initial demand and expect new start forms to continue to increase over 2017.”
Gena Wang at Jefferies, who never expected to see this drug on the market, still expects plenty of stubborn pushback from payers. She writes:
Mgmt guidance on Exondys 51 access and reimbursement consistent with our expectation of strict payer pushback. Only 13% of covered lives have a favorable policy, while 8% of covered lives are denying coverage, per mgmt. Rest (79%) are either pending policy decisions, covering with restrictions, and/or reviewing pts case by case, in line with our expectations of strict payer pushback.
The drug is slated to cost more than $300,000 a year.
The Cambridge, MA-based Sarepta, meanwhile, signed up to support a microdystrophin gene therapy program at Nationwide Children’s Hospital run by Jerry Mendell and Louise Rodino-Klapac. Sarepta gets an option to acquire the program, with a Phase I/IIa trial starting later this year.
Sarepta also struck a deal to partner with Oxford, UK-based Summit in October on a therapy that follows a complementary pathway to treat DMD.
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