Sarepta rises as second gene therapy shows potential in early study

Sarepta also exercised an option to acquire Myonexus Therapeutics, which is developing gene therapies

Shares of Sarepta Therapeutics (SRPT) are on the rise after the company reported promising results from its second gene therapy program, MYO-101, targeting a lesser known, severe form of muscular dystrophy that primarily affects shoulders and hips. Noting that the data was “well ahead” of consensus expectations and is tracking with his “best case/home run scenario,” JPMorgan analyst Anupam Rama argued that the LGMD2E program could warrant Sarepta shares “grinding higher” by potentially 20%-30% as it gets factored into estimates. Voicing a similar opinion, his peer at Piper Jaffray told investors that she also sees 10%-20% upside in Sarepta’s shares on the news.

LGMD2E STUDY RESULTS: Sarepta has announced results from three Limb-girdle muscular dystrophy, or LGMD, Type 2E clinical trial participants who received MYO-101. MYO-101 is a novel gene therapy intended to transduce skeletal and cardiac muscle with a gene that codes for the full-length, native beta-SG protein, the lack of which causes LGMD2E. An autosomal recessive muscular dystrophy, those with LGMD2E begin showing neuromuscular symptoms such as difficulty running, jumping and climbing stairs before age 10. The disease progresses to loss of ambulation in the teen years and often leads to death before age 30. There is currently no treatment or cure for LGMD2E. In Cohort 1 of the MYO-101 study, three participants ages 4-13, were treated with an infusion of MYO-101 at a dose of 5x13vg/kg, with post-treatment biopsies taken at approximately two months. All three participants in the study showed robust expression of transduced beta-SG, properly localized to the muscle sarcolemma, as measured by IHC. The pre-defined measure of success for expression in the study was 20% positive fibers. Actual mean protein expression, properly localized to the sarcolemma of the muscle, was 51%. Mean fiber intensity, as measured by IHC, was 47% compared to normal control. All participants showed robust quantification of beta-SG, as measured by Western blot, with mean beta-SG of 36.1% of normal control. All participants showed a striking decrease in serum creatine kinase, or CK, levels from pre-treatment baseline measure to last measure, with a mean CK reduction of more than 90% from baseline. CK is an enzyme biomarker strongly associated with muscle damage. Two participants had elevated liver enzymes, one of which was designated a serious adverse event, as the patient had associated transient increase in bilirubin. Both events occurred when the participants were tapered off oral steroids and, in both instances, elevated liver enzymes returned to baseline and symptoms resolved quickly following supplemental steroid treatment. There were no other clinically significant laboratory findings and no decreases in platelet counts were observed.

SAREPTA ACQUIRES MYONEXUS: Sarepta also announced that it has exercised its option to acquire Myonexus Therapeutics, a clinical-stage biotechnology company developing gene therapies for five LGMDs. Subject to satisfaction of closing conditions, Sarepta will pay the Myonexus shareholders $165M. In May 2018, Sarepta and Myonexus entered into an exclusive partnership to develop Myonexus’ five LGMD gene therapy candidates, which target the most severe and common forms of the disease. Three of the programs are in clinical development and two are in the pre-clinical stage and ready to progress into the clinic. As part of the agreement, Sarepta had an exclusive option to acquire Myonexus.

‘WELL AHEAD’ OF EXPECTATIONS: Following the LGMD2E data, JPMorgan’s Rama told investors that Sarepta’s 60-day biopsy results from the first three was “well ahead” of consensus expectations and is tracking with his “best case/home run” scenario, most critically driven by 51% mean beta-sarcoglycan fiber expression. On the back of this update, the analyst argued that the LGMD2E program warrants “broad inclusion” in Wall Street analyst’s models. Further, Rama believes the update itself could warrant Sarepta’s shares “grinding higher” by potentially 20%-30% as LGMG2E gets factored into estimates. Overall, the analyst told investors that he continues to believe Sarepta’s shares are “underappreciated on the potential of the company’s broad pipeline,” including its “pole position” in Duchenne Muscular Dystrophy alone. He reiterated an Overweight rating on the stock. Also commenting on the study results, Piper Jaffray analyst Danielle Brill said the efficacy data “look great” and the safety, while “not perfect,” should be fine moving forward. The analyst noted that she believes accelerated approval is a possibility and added she sees 10%-20% upside for Sarepta shares on this news, given her view of a risk-adjusted LGMD2E opportunity of about $400M and the potential for positive read-through to other programs. Brill reiterated an Overweight rating and a $200 price target on the shares.

https://thefly.com/permalinks/entry.php/id2871391/SRPT-Sarepta-rises-as-second-gene-therapy-shows-potential-in-early-study