Sarepta Therapeutics (SRPT) and Prosensa Holding NV (RNA) were both big movers today, although in very different directions.
At recent check, Prosensa was down 69%. Earlier today the company, partnered with GlaxoSmithKline (GSK), announced that the primary endpoint in its Phase 3 study of its Duchenne muscular dystrophy treatment Drisapersen was not met.
In a randomized double-blind study of 186 boys over 48 weeks, the drug did not show statistically significant improvement in the 6 Minute Walking Distance (6MWD) test compared to a placebo.
On a conference call, management said that it could take weeks, if not months to analyze the data, and thus could not offer guidance in regard to its next step would be.
By contrast Sarepta was jumping 22% on the news, as it is developing the drug Eteplirsen as a rival treatment. Barron's Andrew Bary correctly predicted last month that Prosensa's loss would be Sarepta's gain. Nonetheless, there was some chatter about potentially increased difficulty for Eteplirsen's approval in the wake of the Drisapersen disappointment.
Still, both Needham’s Chad Messer and Robert W. Baird’s Brian Skorney view the news as a bullish event.
Messer writes “Although we concede some people, potentially including the FDA, may now be more skeptical of exon-skipping technology in general, we are confident in Etelpirsen’s efficacy based on the long-term consistency of the Phase IIb data.” He also believes that with Drisapersen’s removal, there is less risk to Etelpirsen’s market share position. He has a $57 price target on the stock.
Skorney also notes that the news may not be all positive, given the possibility of caution from regulators, but writes “we believe the elimination of Prosensa as a potential competitor more than offsets any increase in risk to the fundamental thesis.” He has a $63 price target on the stock.
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