Sarepta Therapeutics (NASDAQ:SRPT)
On Monday April 25, 2016 Sarepta Therapeutics had an FDA advisory panel shoot down its drug Eteplirsen, used to treat patients with Duchenne Muscular Dystrophy — DMD. The panel voted against Eteplirsen on all questions. Even the last question which asked if Eteplirsen should be approved for DMD patients was also voted down on. The panel vote was: 3 “yes” for approval, 7 “no” against approval, and 3 panelists abstained from even answering the question.
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The main concern with Sarepta’s drug was that it had only ran a clinical trial with a total of 12 patients. The panel noted many times during the hearing that proper efficacy can’t be concluded from just a small patient population. That would have been enough to typically reject a drug compound, except for the fact that the way Sarepta designed its trial it gets much worse. The company ran the trial with no placebo arm. A placebo arm is important in a clinical trial, because it proves whether the new drug is better than the current standard. By not applying a placebo compound, Sarepta left the FDA panel to guess what the placebo would have been.
In addition, Sarepta tacked into their data historical controls. Historical controls, means that the company used placebo data from old trials done many years ago. It does make you wonder though, maybe the company didn’t do placebo trials because they knew that the drug wouldn’t perform any better than placebo. The FDA is set to decide upon whether it should approve Eteplirsen or not by May 27 of this year. If the FDA decides to accept the panel advisors’ decision then it is likely that the drug will not be approved for DMD patients.
Putting aside the no use of placebo in the trial and running a small 12 patient trial something else can be pointed as solid evidence on why Eteplirsen won’t be approved. That is the fact that Biomarin (NASDAQ:BMRN) which ran a 290 patient trial and ran the trial with a placebo failed to receive approval of its drug Kyndrisa. The FDA panel was not happy with the efficacy of this drug either thus the rejection. Which brings me to the main point that if the FDA didn’t approve Kyndrisa with such a large trial and good efficacy, why on earth would it approve Eteplirsen? After all, it only recruited 12 patients in a trial and no placebo arm. I don’t expect the FDA to play favorites, and I predict that Sarepta will receive a Complete Response Letter — CRL.
Investors have to keep in mind that yes people tend to live off of emotions, but keep this one thing in mind. The FDA doesn’t work based off of emotions. They approve or disapprove drugs based on clinical facts and findings. Therefore with the weak data, I don’t expect the FDA to approve Eteplirsen for patients with DMD.
Acadia Pharmaceuticals (NASDAQ:ACAD)
On Friday April 29, 2016 Acadia Pharmaceuticals had announced that it had received FDA approval for its drug Nuplazid. It had received approval to treat a disease known as Parkinson’s Disease Psychosis. Patients with Parkinson’s Disease Psychosis — PDP — experience hallucinations and delusions. This is an extraordinary feat for Acadia, because it will be the first drug ever to be approved for PDP.
According to data from the National Parkinson Foundation there are approximately five million people globally that suffer from Parkinson’s Disease. Out of all those people, around 40% have the psychosis component of the disease. The problem has been that there has been no FDA approved drugs to treat this portion of the disease until now. Acadia had received breakthrough designation back in 2014. The good part about Breakthrough therapy designation is that the company receives a faster review time.
Instead of the company having to wait 7 to 9 months for review they only need to wait typically 2 to 3 months. It saves a lot of time this way, and this is especially good if the drug treats a population that have no other treatment options. With this approval patients won’t even have to wait that long of a time period, because Acadia expects to launch the drug in June. In just a few months patients will be able to relieve their symptoms of psychosis.
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Acadia stands to make a lot of money with the drug, because analysts expect that Nuplazid could potentially produce $1 billion in sales. Such a huge amount of revenue with no competition, could be an attractive takeover target for big pharmaceutical companies, with a large pocket book. Big pharmaceutical companies are struggling with weak R&D and they need to buy small-cap biotechnology companies to keep their revenue stream flowing. Well, Acadia with a recently approved drug with limited competition should stir a bidding war battle among the big pharma players.
[Image Courtesy of Pixabay]