Sarepta Therapeutics Inc (SRPT), GlaxoSmithKline plc (ADR) (GSK): An Edge Emerges in the Race to Treat Muscular Dystrophy

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In a previous article, I speculated on the race to develop a Duchenne muscular dystrophy, or DMD, drug and who might win it. It seems now that Sarepta Therapeutics Inc (NASDAQ:SRPT) has moved a step ahead after disappointing mid-stage study results from GlaxoSmithKline plc (ADR) (NYSE:GSK) and Prosensa. Their drug, drisapersen, failed to show a statistically significant sustained response, leaving investors to question its potential phase 3 results and whether Sarepta Therapeutics Inc (NASDAQ:SRPT)’s eteplirsen now has an edge over its larger rival.

In the last 12 months, Sarepta Therapeutics Inc (NASDAQ:SRPT) stock had a significant spike and traded at price range of $9.82-$47.35. The upward trend is due to positive studies on its flagship novel candidate eteplirsen. On approval, eteplirsen would be considered as the first-in-class therapeutic against DMD.

Sarepta Therapeutics Inc

Market opportunity for eteplirsen
Eteplirsen is an antisense oligonucleotide developed on Sarepta Therapeutics Inc (NASDAQ:SRPT)’s proprietary RNA-based technology. The product is moving through mid-stage clinical trials with encouraging efficacy and was well-tolerated with no side effects across all studies. Sarepta expects to submit the new drug application (NDA) in the first half of 2014.

DMD is a rare disease that usually affects one in 3,500 boys worldwide. Around 35,000 patients have DMD across the U.S. and EU. The disease is due to absence or defect in dystrophin protein. Dystophin acts as a shock absorber for muscles, and its absence hampers muscle function. There is no specific disease modifying therapy currently available.

Sarepta estimates that around 1,950 patients in the U.S. need the eteplirsen therapy. It is estimated that the cost of therapy for a rare disease is approximately $300,000-$500,000 per year. Considering the target population and treatment costs, Sarepta Therapeutics Inc (NASDAQ:SRPT) expects to generate sales of $585 million-$975 million from the U.S. alone. In addition, EU will add 2,600 additional patients to the therapeutics market. Overall, Sarepta’s eteplirsen has huge potential.

Sarepta’s development programs
Compared to other RNA technologies, Sarepta’s technology modulates generic expression and target specific sequences. It allows chemical modification of specific tissues and target pathogens and also has excellent safety profile. In addition, the product is resistant to enzyme degradation. Most of these are advantages that traditional antisense technology does not have.

Sarepta is developing products based on its proprietary technology. Sarepta Therapeutics Inc (NASDAQ:SRPT)’s RNA-based drug programs are clinically evaluated for treatment of rare and infectious diseases. In addition to eteplirsen, the company is also developing SRP-4045, SRP-4050, and SRP-4053 against DMD. The technology based program is also being assessed against antiviral activity in infectious diseases such as Marburg and H1N1 influenza, with product candidates such as AVI-7537, AVI-7288, and AVI-7100. Eteplirsen, therefore, is not just a single success but could be the vanguard of a whole slew of products using RNA technology.

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