Ed Kaye on Sarepta’s Duchenne Quest, Rising to CEO & His New Startup

Xconomy Boston — 

[Updated, 2:45 pm ET, see below] Ed Kaye never thought he’d run a biotech —until waking up one day in 2015 realizing not only that he could, but that Sarepta Therapeutics, where he was chief medical officer at the time, may fall apart if he didn’t.

In March 2015, Kaye (pictured) was one of many high-level executives ready to leave the Cambridge, MA-based company, which was developing a Duchenne muscular dystrophy drug called eteplirsen (Exondys 51). Kaye and many others, he says, were no longer willing to work with then-CEO Chris Garabedian. Garabedian had resurrected Sarepta (NASDAQ: SRPT), but Sarepta had also gotten into an ugly, public dispute with the FDA over eteplirsen under Garabedian’s watch. Reported board squabbles emerged, and Sarepta missed development deadlines, angering investors. Sarepta declined to comment for this story, but there was widespread coverage in the Wall Street Journal and elsewhere about the turmoil within the company. Kaye was looking for houses in San Francisco, ready to take another job. “People were very frustrated,” he says. “It was not a good situation.”

[Updated with response from Chris Garabedian] In response to a request for comment shortly after publication, Garabedian offered this response: “There’s always more than one side to every story and it is unfortunate that I was not contacted by Xconomy to present my views on the circumstances described in the article. That said, I will simply state that I disagree with many of the conclusions and characterizations outlined in the article and the state of the company and my leadership at the time of my departure as described by Ed Kaye. I’m very pleased with Sarepta’s success to date and proud of my contributions as its CEO from 2011 to 2015.”

Kaye says relayed his concerns and plans to leave the company to Sarepta’s board of directors. They came back with a request: what would it take to keep you? His answer: the top seat at Sarepta.

On March 31, 2015, that’s what Kaye got, and the rest is history. Kaye led Sarepta’s controversial quest to win FDA approval of eteplirsen, largely off of evidence from a tiny, 12-patient trial. Sarepta would’ve had to scrap eteplirsen and restructure if the effort had failed. Instead, during a year in which the FDA rejected two other Duchenne drugs, eteplirsen succeeded and became the first-ever approved treatment in the U.S. for the disease. The decision caused a rift within the agency and remains a polarizing topic within biotech circles.

After spending a year launching eteplirsen and battling with insurers to cover the pricey drug, which costs an average of $300,000 per year, Kaye abruptly stepped aside in April. For his work turning Sarepta around and getting eteplirsen to market, Kaye was named a 2017 co-winner of Xconomy’s CEO Award.

The 68-year-old Kaye is just resurfacing now as the CEO of a startup called Stoke Therapeutics based on the work of Cold Spring Harbor Laboratory researcher Adrian Krainer. Krainer is one of the inventors of Biogen’s (NASDAQ: BIIB) nusinersen (Spinraza), the first-ever spinal muscular atrophy drug. The Apple Tree Partners-backed company is developing treatments for rare genetic diseases based on RNA regulation, and will likely be announcing more news soon.

Xconomy spoke with Kaye about his rise through the industry, the eteplirsen saga, Stoke, how the pricing of rare disease drugs is changing, and how he would do clinical development differently. Edited excerpts from the conversation follow below.

Xconomy: You started your career in academia. Why did you make the transition to industry in the first place?

Ed Kaye: I was trying to develop gene therapies for diseases of the central nervous system, but it became very apparent to me that the amount of money and expertise that it took to actually get a drug into the clinic was well beyond what you could do in an academic setting. I wanted to do translational medicine. Instead of just making a diagnosis and consoling a family, I wanted to help pioneer some new therapies that actually helped people. And ironically, I was thinking about this, and out of the blue I got a phone call from Richard Moscicki [the former chief medical officer of Genzyme].

X: After a decade rising through the ranks at Genzyme, you left for a struggling, small biotech, AVI Biopharma, in 2011—why?

EK: I originally came in as this internal consultant; they weren’t sure what to do with me. But I ended up having more and more programs and by the time I left, my team had had five drugs approved, which is incredibly exciting. When Sanofi took over Genzyme [in 2011], I really wanted to have the position of chief medical officer, to be in charge. I was ready. Genzyme had previously looked at both [Duchenne drug developer] Prosensa and AVI. We really liked the chemistry [at AVI], but we thought the management team was crazy so we didn’t do a deal with them. Yet when I was considering moving out of Sanofi and this opportunity came in to work there, I said I like the chemistry, I think there’s something there.

X: AVI was then renamed Sarepta, and management problems followed. How did you end up as CEO?

EK: I had told the board I had major problems [with the management of Sarepta]—as an officer of the company, I felt an obligation I had to let them know. And they said if you leave the whole company, it’s going to fall, what would it take to keep you here? I said, well, let me run the company and let me get us back on track. Unbeknownst to me, the entire senior management team had said we will leave, but if you name Ed as the CEO then we’ll stay with him. So it was a unique opportunity that, in essence, I had this oath of allegiance from the entire senior management team.

X: Were you always on board with the idea of seeking accelerated approval of eteplirsen off of such a small trial?

EK: That was a very controversial discussion point within Sarepta itself. Around 2012, there was such enthusiasm about a drug for Duchenne that could actually make dystrophin [the muscle-boosting protein that patients lack] that I think everybody— even the FDA to some extent—got ahead of themselves.

Once the FDA made the statement that they would be open to considering an approval filing based on 12 patients, once you say something like that, there’s no way that a CEO (and at the time it wasn’t me) or a board member would say “no, go back and do a placebo-controlled Phase 3 study.” The die was cast, and I think it would’ve been very difficult for the patients to accept it once there was this glimmer of hope.

But we knew that it would be challenging, we knew it would be an uphill battle at the FDA, and we also knew it would be challenging for reimbursement.

X: Looking back, is there anything you would have done differently?

EK: We did the best we could with a limited dataset. It was an iterative process. Even though it was challenging, in the end it was the right thing to do. If we went back to 2011, would I have done things differently if I had been CEO at the time? Yeah, I would’ve done that Phase 3 trial. But the decisions that were made were based on the information they had at the time. They weren’t bad decisions, but they proved to be more challenging than people had assumed.

X: What do critics within biotech circles say to you about it?

EK: I understand why people were critical, but people didn’t really understand the complexity of the story and how difficult it was. We tried to get as much information as we could and tried to supplement it as best as we could. One CEO of a biotech company—I won’t tell you which one—said “first I thought you were crazy, and then I realized you actually know what you were doing, you know about clinical development, you’re not some crazy guy.” It wasn’t just a wild and crazy path dictated by patient pressure. In fact, there was a lot of data that suggested that this drug was working. And the proof in the pudding is that the experts in the world are prescribing it, and people are interested in taking it—when you have a drug that doesn’t work, people don’t buy it.

X: What lessons do you take from the experience?

EK: Going forward, I would make sure that I have a clinical development program that would meet the needs not only of the regulatory authorities, but the payers. The days when, just because it is a rare disease you can command any drug price, are going to be gone. You’re going have to demonstrate there is a significant improvement in the quality of life for these people. What are the instruments that demonstrate that you’re making things better? That’s what I’ve been thinking a lot about, because I’ve been concerned that the science is outstripping our ability to pay for it.

X: Why did you leave Sarepta and go to a startup?

EK: Sarepta is much more of a commercial stage company now. What I really liked is the development—picking a target, taking it into the clinic, and going through the approval process. I like these difficult problems when it comes to developing therapies for patients, and I really wanted to do it one more time.

Adrian Krainer contacted me and said he has a new way of regulating RNA and making more proteins [at Stoke]. It’s very elegant science, and looks like a really good way to make therapies for diseases that aren’t going be easily amenable to gene therapy. Right now I’m trying to sit down with the team and figure out what diseases [to target]. We’ll be announcing a Series B soon. It’s an exciting time. For me, the interest is we have enough money to take a whole new platform into the clinic, and there aren’t too many times that people offer you that.

X: You worked with Henri Termeer while at Genzyme. Did you maintain a relationship with him after leaving?

EK: When I took over as CEO [of Sarepta] I asked Henri if he would be my adviser, and he was incredibly gracious. We would probably meet every month to go over  any issues I was having. And I remember he would always say, “This is my advice, but you’re sitting in the corner office and it’s your decision. It’s not my decision.” He was someone I could trust and talk about problems and challenges with. He really helped me.

At the Xconomy Awards [Gala, in September in Boston] Belinda Termeer was there, Henri’s widow. And after the awards she came up to me and said, “you know, Henri would be so proud of you now.” And as I thought about it, that was probably true—he was very proud of his people. There are over 60 presidents and CEOs now that are ex-Genzyme. It was that culture of, “just because it hasn’t been done before, doesn’t mean you can’t do it.”