2023-09-13 15:31:39 ET
Summary
- Sarepta Therapeutics, Inc. results from pivotal EMBARK study, using ELEVIDYS for the treatment of ambulatory DMD patients between ages 4 to 7 expected in Q4 of 2023.
- The primary endpoint being met in EMBARK study would allow label expansion for all ambulatory DMD patients, regardless of age.
- Another expansion opportunity for ELEVIDYS would be the targeting of non-ambulatory DMD patients; This might be possible with a successful outcome from the ENVISION study.
- With the Accelerated Approval of ELEVIDYS for DMD, plus being able to expand the label in two other ways, would allow it to target up to 95% of the entire DMD patient population.
Sarepta Therapeutics, Inc. ( SRPT ) has made great progress in being able to advance the use of its gene therapy SRP-9001 [ELEVIDYS] for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. Why I believe it has great potential for investors still is because it is possible that it may be able to expand its approved label to include all DMD patients regardless of age. That's because the current label of ELEVIDYS is only for ambulatory DMD patients who are 4 and 5 years of age. What expansion opportunity of ELEVIDYS is there to treat this patient population? There is the ability to broaden the label to cover all ambulatory DMD patients regardless of age.
This might be possible with the ongoing EMBARK study, which is using ELEVIDYS to treat ambulatory DMD patients who are between 4 and 7 years of age. Investors won't have to wait long to see results from this EMBARK study. That's because it is expected that data from it will be released in Q4 of 2023. If the endpoint is met, then Sarepta will likely be able to receive approval of a label expansion. Lastly, the end game is to target 95% of DMD patients. Having said that, it has already moved on to initiate a study known as ENVISION [study-303], which is using ELEVIDYS to target this non-ambulatory DMD patient population.
ELEVIDYS Label Expansion Is Possible In Two Ways
On June 22nd, 2023, Sarepta Therapeutics announced that the FDA had granted it Accelerated Approval of ELEVIDYS for ambulatory Duchenne Muscular Dystrophy [DMD] patients ages 4 and 5. However, as I noted above, there are two ways where it might be able to expand its label to possibly treat up to 95% of the entire DMD patient population. If it ultimately achieves this goal, then it can expect to target a huge chunk of the market with its gene therapy ELEVIDYS.
The global Duchenne Muscular Dystrophy drug market size is expected to reach $4.11 billion by 2023 . Thus, one way to expand its label of ELEVIDYS would be to receive approval for all ambulatory DMD patients regardless of age. In order to accomplish this task, everything is resting on the ongoing pivotal EMBARK study . This late-stage study is expected to evaluate the use of ELEVIDYS for the treatment of 120 ambulatory boys with DMD who are between the ages of 4 to 7 years of age. The primary endpoint of this study is going to be the change in North Star Ambulatory Assessment [NSAA] total score from baseline up until week 52. This leads to the next possible way for Sarepta to expand its label for ELEVIDYS and that would be through the targeting of non-ambulatory DMD patients.
It will be able to accomplish this with the ongoing trial known as ENVISION . Again, the goal of this study is to target non-ambulatory DMD patients. However, this study targeting this specific DMD patient population is going to have a different endpoint. The primary endpoint for this study is going to be a change from baseline in total score of performance of upper limb version 2, which is going to be evaluated over a 72-week period.
Financials
According to the 10-Q SEC Filing , Sarepta Therapeutics had cash, cash equivalents, investments and long-term restricted cash of $1.9 billion as of June 30, 2023. This pharma company though has already received prior regulatory approvals for three DMD-targeted drugs which are EXONDYS 51, AMONDYS 45 and VYONDYS 53. Thus, the company generates net product revenues for these approved drugs. For the 3 months ending June 30, 2023, it was noted that net product revenues of $239 million were achieved . This, compared to the same time period the year before where net product revenues only reached $211.2 million. Sales of ELEVIDYS were not achieved during the most recently reported quarter, but this is another way Sarepta can generate revenues from the DMD market. I believe that such expansion can be further bolstered with the two ways it can expand its label, as I mentioned above.
Risks To Business
There are several risks that investors should consider before investing in Sarepta Therapeutics. The first risk to consider would be with respect to the upcoming results from the phase 3 EMBARK study, which is using ELEVIDYS for the treatment of ambulatory patients who are between ages 4 to 7. That's because in order for the FDA to allow label expansion approval of ELEVIDYS for all ambulatory patients regardless of age, then it must meet the primary endpoint of it. There is no guarantee that this endpoint will be met, nor that the label expansion will occur.
A second risk would then be the second label expansion I noted above, which is the targeting of non-ambulatory DMD patients in the ongoing ENVISION study. There is no assurance that Sarepta will be able to achieve positive results from this late-stage study. Thus, it may not be able to capture another chunk of the DMD market. The third and final risk to consider would be the cost of ELEVIDYS. While this gene therapy holds great potential, it is set to be sold for $3.2 million for a treatment . The risk here is that there is no assurance that ELEVIDYS will do well on the market with this list price. At that point, management will either have to be patient or end up reducing the cost of this gene therapy.
Conclusion
The conclusion is that Sarepta Therapeutics has done well to advance ELEVIDYS for the treatment of ambulatory patients ages 4 and 5. There are two ways to expand its label for this gene therapy as I stated before. If both ways are achieved, then it will have the ability to target up to 95% of the entire DMD patient population. As I noted above, it is expected that the global DMD indication will be a multi-billion dollar market. The other three approved DMD drugs are already doing well for it, but now it has another way to target this market.
I believe that the release of results from the pivotal EMBARK study in Q4 of 2023 is going to be the first critical part of expanding the label. With Accelerated Approval of ELEVIDYS for ambulatory DMD patients ages 4 and 5, plus two ways to possibly expand the label, I believe that investors might be able to capitalize on any gains made from the upcoming catalysts.
For further details see:
Sarepta: Broad Label Expansion Possible With Q4 2023 Catalyst