Dive Brief:
- Sarepta Therapeutics shares jumped 25% Wednesday morning after the company unveiled promising early clinical data for two medicines that it gained rights to through a deal with Arrowhead Pharmaceuticals worth more than $1 billion.
- The experimental drugs, dubbed SRP-1001 and SRP-1003, aim to treat two rare, genetic conditions that cause dangerous muscle deterioration. The therapies work by delivering small interfering strands of RNA, or siRNA, into muscle tissue to target the genetic abnormalities.
- Results from two Phase 1/2 studies released Wednesday show both medicines achieved high muscle concentrations without severe side effects, according to Sarepta. The company said it also has proof-of-concept data showing these treatments can hit their genetic targets.
Dive Insight:
Sarepta licensed the two medicines in 2024 amid concerns that its pipeline was too thin. It paid Arrowhead $500 million up front, made a $325 million investment in the biotechnology company and agreed to pay another $50 million annually for five years, plus future royalties and milestone payments. The pact included two other clinical-stage therapies as well as three more in preclinical testing.
The new results help validate the deal as Sarepta struggles on other fronts. Research setbacks and safety concerns over its gene therapy Elevidys have stripped most of the company’s market value since mid-2024. Last year, CEO Doug Ingram announced plans to lay off more than a third of Sarepta’s staff and pause several programs to ensure “long-term viability.” Ingram is now planning to retire.
Amid the tumult of the last two years, analysts pointed to the siRNA platform as a potential bright spot. Sarepta originally planned to release initial results from the SRP-1001 and SRP-1003 studies by the end of 2025, but pushed that timeline back. Analysts believe that led some investors to speculate the data weren’t very strong and others to expect more breadth from the results when they were released.
In the end, investors got “a bit of a mixed bag,” Leerink Partners analyst Joseph Schwartz wrote in a note to clients. The results for SRP-1003, designed to treat myotonic dystrophy type 1, are still “very limited” compared with the data on SRP-1001 in facioscapulohumeral muscular dystrophy type 1, he wrote.
SRP-1001 aims to reduce the production of a protein called DUX4, which is toxic to muscle cells and spurs degeneration. Based on the data generated thus far, the drug’s ability to knock down DUX4 is “impressive,” Schwartz argues. “After a single dose, SRP-1001 suppresses DUX4-related genes at a greater level than we have seen with other sponsors.”
Analysts at Mizuho Securities and TD Cowen went further, saying the data for both medicines was “impressive” and suggesting each could offer advantages over rival treatments in testing.
Schwartz, meanwhile, wrote that the safety of both medicines will likely remain open for debate, especially with SRP-1003, since researchers recorded two cardiac events apparently unrelated to treatment. Such findings could spook investors.
“The data confirm the siRNA platform is viable, though there are still some outstanding questions, and we look forward to additional data later this year,” Schwartz wrote.
