Sarepta Therapeutics’ Accelerated Approval Application

EDIT: roughly 12 hours after I wrote this post, the FDA’s briefing docs came out earlier than expected and crapped all over the thesis in this post. 

first, a disclaimer, copied from my previous $SRPT posts:

I am very critical of people who pretend to have expertise in subjects which they then go on to demonstrate that they clearly lack expertise in.   There’s a word for these people: charlatans.    Let me be clear: I am no sort of expert in biotech stocks.   I’m not even an *almost* expert in biotech stocks.  If you called me an idiot when it comes to biotech stocks I wouldn’t argue with you.   Now I’m going to write about a biotech stock.

Today we got the news that $BMRN’s Drisapersen (aka: Kyndrisa) received a CRL (complete response letter) from the FDA.   $BMRN’s PR included the note:

“FDA has concluded that the standard of substantial evidence of effectiveness has not been met.”

This touched off a lot of chatter on message boards, Twitter, and otherwise where some people were worried about how $SRPT would demonstrate “substantial evidence” with their small 12 boy sample size.  Other claimed that since Sarepta’s approval pathway is via Subpart H “Accelerated Approval,” they don’t have to provide substantial evidence – but rather only a “reasonable likelihood” that the drug works.   I’m writing this post because my understanding is that this latter claim is false, although I’m eager for anyone to point out anything they think is inaccurate in this post, given my disclaimer.

Now, the FDA’s own May 2014 guidance on Accelerated Approval explains a few things.   I’m including a screenshot here instead of text, because the formatting gets messy when I copy and paste it:


The “reasonably likely” language describes the relationship between the surrogate endpoint and the clinical effect.  The “substantial evidence” requirement is still in effect, and describes the realization of the surrogate endpoint.  In other words, the drug must provide substantial evidence of an effect on a surrogate endpoint which is reasonably likely to predict a clinical benefit.

The FDA repeated this in BRMN’s Drisapersen briefing documents, noting that the standards are not lower for biomarker endpoints:


So where does that leave us with Sarepta’s Eteplirsen?   Well, it is my opinion that Sarepta’s data demonstrates substantial evidence of the production of dystrophin – a surrogate endpoint.    Furthermore, Dystrophin is reasonably likely to predict a clinical benefit  – Duchenne Muscular Dystrophy is all about dystrophin.

I’m not going to try to argue the claims I just made in the preceding paragraph in this post.   It is a core topic, and I don’t want to get bogged down in trying to quantify “how much Dystrophin is enough?”   However, I think that Sarepta will be able to argue that whatever quantity of Dystrophin they have substantial evidence of producing (and I do think they have substantial evidence, having re-scored the measures I talked about in my previous posts,)  is reasonably likely to have a clinical effect – based on their existing data package (yes: even though “only” 9 of the 11 boys tested positive for Dystrophin in the 4th biopsy).

Anyway,  the point of this post is not to try to convince anyone to buy or sell $SRPT.   I am long the stock at the moment, it is very very risky, and my position may change at any time.   I think that elements of the FDA’s ADCOM briefing docs (specifically: the questions for the panel), expected next Tuesday (Jan 19th) or more likely Wednesday (Jan 20th) ahead of the Friday (Jan 22nd) ADCOM will give decent insight into the FDA’s approach to their review of eteplirsen.


my prior SRPT posts

disclosure: as noted: long $SPRT – but that doesn’t mean that you should own it





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