Sarepta’s Stock Drops 40% Amid Concerns Over Gene Therapy’s Future

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Douglas Ingram, president and chief executive officer of Sarepta Therapeutics Inc., during the Forbes Healthcare Summit in New York, US, on Tuesday, Dec. 5, 2023. Michael Nagle | Bloomberg | Getty Images

Shares of Sarepta Therapeutics plunged more than 30% on Friday as the future of its approved gene therapy treatment appeared at risk. The Food and Drug Administration (FDA) is expected to request that the company voluntarily stop all shipments of the treatment, Elevidys, according to a source familiar with the matter. Sarepta stated that it had not received any communication from the FDA.

In a separate interview with Bloomberg News, FDA Commissioner Marty Makary mentioned that the agency is evaluating whether the gene therapy should remain on the market. The FDA has been investigating two patient deaths linked to Elevidys, which constitutes over half of Sarepta’s total net product revenue. The company also reported a third death associated with another experimental gene therapy.

Elevidys has been controversial since before its approval. The therapy has yet to convincingly demonstrate benefits for individuals with Duchenne muscular dystrophy, a condition that progressively impairs muscle function. Patients eventually lose the ability to walk, and most do not survive past their early 20s, indicating a critical need for effective treatments. In 2023, the FDA initially granted Elevidys conditional approval for patients aged 4 to 5, the demographic that showed the most benefit during clinical trials. The following year, it granted full approval for patients 4 and older who are still able to walk, alongside accelerated approval for those who can no longer walk, although evidence supporting the latter decision was less robust.

Additionally, Elevidys did not meet its objectives in a Phase 3 trial, although the company asserted that the drug showed promise in other aspects of the study. Peter Marks, who was then the head of the FDA’s Center for Biologics Evaluation and Research, sided with Sarepta’s interpretation and overruled staff objections to broaden Elevidys’s approval.

Earlier this year, Sarepta disclosed that two teenage boys experienced liver failure after receiving Elevidys. Recently, reports surfaced of another death during a Phase 1 trial investigating an alternate gene therapy for a different disease. Although the therapies differ, they utilize the same delivery method, raising safety concerns regarding Elevidys. These risks are particularly concerning given the uncertain benefits, as highlighted by BMO analyst Kostas Biliouris.

For comparison, Novartis’ gene therapy Zolgensma for spinal muscular atrophy has also resulted in liver toxicity and fatalities, yet its benefits are well-established. “That’s why deaths here matter so much versus Zolgensma,” Biliouris remarked. Unlike Novartis, which has a diverse portfolio, Sarepta is heavily reliant on Elevidys.

This week, executives attempted to reassure investors that even if the treatment can only be provided to those who can still walk—where fatalities have not been reported—it should generate at least $500 million annually. Last month, Sarepta halted shipments of Elevidys to patients who can no longer walk while it seeks safer administration methods.

Investor concern circles around the potential FDA withdrawal of the drug, with Sarepta’s stock experiencing a decline of over 87% this year. “If the FDA pulls Elevidys from the market,” Biliouris stated, “Sarepta is done.”

Jennifer Handt, whose son was diagnosed with Duchenne muscular dystrophy in late 2020, expressed her heartache over the possibility of other patients lacking treatment options if Elevidys shipments are suspended. Her son, Charlie, was treated with Elevidys in 2022 as part of Sarepta’s late-stage trial, and improvements in stamina and mobility were observed within six to twelve months. The drug also alleviated Gowers’ sign, a symptom causing difficulties in rising from a sitting or lying position. Handt noted that her son remains “completely stable” three years post-treatment. She acknowledged the risks of liver toxicity before Charlie entered the trial, stating, “We don’t have the luxury of not taking the risk. There are families that dealt with this disease before who would have done anything for an option, even with risks involved.”

“Every family should have the choice to take this leap with this drug and potentially see benefits,” she added.