Sarepta Therapeutics (NASDAQ:SRPT)
On Monday June 6, 2016 shares of Sarepta Therapeutics were up more than 31% in after-hours trade after the company announced that the FDA had requested for additional data for the Eteplirsen decision. The market clearly viewed the fact that the FDA needed more data as a positive. Which is why shares had gone up so much after the announcement. The problem is that a few weeks ago the FDA has postponed its decision on whether it would like to approve Eteplirsen or not.
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Depending upon what side of the fence you are on, it can be seen both as a negative and a positive. Looking at it from the negative angle, one would say that the FDA couldn’t approve the drug because it doesn’t have enough efficacy data. If you are on the positive end of the spectrum, one would conclude that the FDA is asking for more data as it prepares to approve the drug. However, the FDA is asking for data which may not sway in favor of Sarepta.
The FDA is requesting dystrophin data for Eteplirsen. While the drug showed some nice efficacy in helping boys with muscle movement, the dystrophin data to date has been lackluster. To understand the FDA approval process investors must understand that the regulator approves drugs based on efficacy and data. Unfortunately, many believe that the FDA trades on emotions and that is a huge misconception.
Many investors are banking on the fact that the FDA will approve the drug, because it targets an unmet medical need. The FDA doesn’t work this way, they will not be lenient since Eteplirsen treats a rare disease. They will look at the efficacy, and then evaluate if there is enough to warrant FDA approval. Make no mistake if the FDA feels that there is not enough efficacy in the data, they will flat out deny it. Even at the cost of leaving patients with no other recourse. The good news though is that even with a rejection, patients would still be able to use the drug under the new compassionate use rule.
Sophiris Bio (NASDAQ:SPHS)
On Monday June 10, 2016 shares of Sophiris Bio finished the day up by 69% after the company had announced positive phase 2a results in patients with prostate cancer. The trial, which was a phase 2a confirmatory trial, was testing PRX302 in these patients with prostate cancer. The PRX302 drug is also known as Topsalysin, and it showed some remarkable results to date. The good part about the drug is that patients are injected once into the local area, and then are evaluated six months later.
This means that patients don’t have to go through the pain of having to go through multiple treatments over the six-month period. This is nice for keeping side effects low, and being more convenient for the patient. The drug was able to kill tumor cells in half of the patients in the trial, or 9 out of 18 total. While the results are early in nature it doesn’t dismiss the fact that the results are pretty good. With these substantial results the company has chosen to advance Topsalysin to another phase 2 trial that is powered with a placebo compound.
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The Topsalysin drug hasn’t only been successful in one indication alone. It has already met the primary endpoint of a phase 3 trial in patients with BPH. With all these good results on hand, it is no surprise that Sophiris had announced that it has obtained the help of Oppenheimer & Co. for a potential strategic transaction. The PR for such a transaction was released on May 12, 2016. The company has such a small market cap, and with the positive results seen to date it should be able to achieve a strategic transaction with ease.
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