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moved this week to raise up to $225 million by selling its publicly traded stock, which has more than doubled in price this week. (It was approaching $61 a share in mid-day trading Thursday.) The firm also is likely to earn nine figures by selling an FDA voucher it earned by gaining approval of a drug for a rare pediatric disease. Similar vouchers, redeemable for a fast FDA review of another drug, have sold for up to $350 million.
Sarepta’s sudden fortunes are all the more shocking because the FDA earlier this year rejected two other Duchenne drugs: drisapersen from BioMarin Pharmaceutical (NASDAQ: BMRN) and ataluren from PTC Therapeutics (NASDAQ: PTCT). The agency called BioMarin’s data “inconsistent and in some cases contradictory” and said PTC’s ataluren application was “not sufficiently complete to permit a substantive review.” Both companies failed Phase 3 trials, but the companies claimed that post-hoc analyses showed the drugs were benefiting patients. BioMarin has since discontinued development of drisapersen. PTC said in July that its efforts to appeal the FDA’s rejection of ataluren haven’t yet succeeded.
Eteplirsen’s price tag is in line with some rare-disease drugs, but above the average of $111,820, per patient, per year between 2010 and 2014, according to a 2015 report from EvaluatePharma. Eculizumab (Soliris), for a rare blood disease, costs more than $400,000. Elosulfase alfa (Vimizim), for a rare metabolic disease, costs more than $380,000.
The difference, however, is that those drugs showed significant clinical benefit, said Simeonidis. Eteplirsen seems to increase the production of dystrophin, the muscle protein Duchenne boys lack—that’s what the data examined by FDA scientists showed. Woodcock’s dissenters at least agreed with her on that point. But they strongly disagreed that the dystrophin boost could predict a future health benefit.
When asked if Sarepta would consider giving back money if the drug failed to work—a pay for performance scheme that a few drug makers have begun to explore—Kaye said Sarepta has not discussed it with payers.
The company is trying to collect data to show the drug improves patients’ lives—such as the preservation of lung or upper arm function, or the ability to use a keyboard, mobile phone, or wheelchair, Kaye says. The idea is to eventually help justify why these patients—particularly older ones whose disease is further along—should be on therapy.
But until those data arrive, Kathryn Wagner of the Kennedy Krieger Institute will have to manage her patients’ expectations. “I would tell them that this is a drug with potential benefit, [and] that we’re still waiting for more data,” she said. “And that it looks like the risks are minimal.”
Wagner said the safety problems seen in the clinical trials, infections or clots, were related to the infusion of eteplirsen, not to the drug itself. But others believe there are risks involved nonetheless. “I wouldn’t be comfortable saying the risks are minimal when there’s so little data,” says Sharon Batt, a bioethics professor at Dalhousie University in Nova Scotia. “There are also costs to patients in putting their hopes in something—emotional costs—and I think those are important and are often underestimated.”
Eteplirsen’s average $300,000 annual price tag would be for a boy of 25 kilograms (roughly 55 pounds), according to Kaye, which means the price would increase if the boys gain weight, or come back down if their disease progresses and their muscles atrophy. Single dose 2 ml and 10 ml vials of the drug, which is either infused intravenously or through a port, cost $1,600 and $8,000 respectively. It’s expected, Kaye said, that patients will be on the drug for the rest of their lives. Leerink analyst Joseph Schwartz estimated in a research note that eteplirsen could peak at more than $900 million in annual sales worldwide.
While analyst predictions of future drug sales should always be viewed skeptically, there’s no argument that, thanks to the historic FDA decision, Sarepta now has an open window to make as many of those millions of dollars as possible.
“Will insurance companies say, ‘No, you can’t have this drug when it is the absolute only drug approved for your disease?’” said Debra Miller, the CEO of Cure Duchenne. “I don’t know, that’d be pretty tough for an insurance company to say.”
Image of Kathryn Wagner courtesy of the National Institutes of Health.