Sarepta Drops Duchenne Drug Amid Gene Therapy Sales Growth

Sarepta Therapeutics is halting the development of its experimental drug SRP-5051 for Duchenne muscular dystrophy, citing several factors behind this decision. The company's executives discussed the matter during a conference call on Wednesday, highlighting safety concerns, feedback from the Food and Drug Administration (FDA), and the changing landscape of Duchenne treatment with the approval of Sarepta's gene therapy, Elevidys. Chief Scientific Officer Louise Rodino-Klapac explained that these elements influenced the decision to discontinue SRP-5051.

Elevidys has shown significant market success, with its revenue soaring to $181 million in the third quarter from $122 million in the second quarter, surpassing analysts' projections of around $160 million. Additionally, Sarepta garnered $9.5 million in royalties from Roche, which markets the gene therapy outside the U.S.

Analysts view the termination of SRP-5051 as disappointing, but they believe the success of Elevidys will compensate for it. Leerink Partners analyst Joseph Schwartz predicts that sales of the gene therapy could exceed $2 billion next year. The revenue surge for Elevidys in the third quarter followed the FDA's label expansion in late June, making the therapy accessible to most individuals with Duchenne, a genetic disorder that primarily affects boys and leads to progressive muscle degeneration. Although second-quarter sales for the product were below expectations, executives were optimistic that increasing demand would boost revenue.

SRP-5051 was aimed at Duchenne patients with mutations in exon 51 of the dystrophin gene. Sarepta envisioned it as a new-generation treatment building on its approved therapy, Exondys 51. The drug was developed with an enhanced form of exon skipping technology, which is the foundation of Exondys 51. However, clinical trials revealed that while SRP-5051 might be more effective, it also caused some patients to experience prolonged low magnesium levels, known as hypomagnesia.

Initially, company officials believed hypomagnesia could be managed and monitored, but it persisted in some patients even after discontinuing the treatment, according to Rodino-Klapac. Consequently, Sarepta has decided to cease the development of SRP-5051 and similar PPMO drugs.

Despite this, analysts expect sales of Sarepta's three marketed exon-skipping drugs, including Exondys 51, to continue growing and not face significant competition from Elevidys until after next year. These medicines generated a combined revenue of approximately $249 million in the third quarter.

William Blair analyst Sami Corwin expressed support for the company's decision to discontinue its PPMO franchise, given the commercial success of its first gene therapy and its potential to become a blockbuster product.