Sarepta stock jumped Thursday after Pfizer's rival gene therapy for Duchenne muscular dystrophy failed in final-phase testing.
The news gives Sarepta Therapeutics an edge heading to June 21, when the Food and Drug Administration will decide whether to fully approve Elevidys for patients with the muscle-wasting disease. Elevidys has accelerated approval to treat children age 4 and 5 who can still walk. But Sarepta hopes the FDA will allow older and non-ambulatory children to receive the gene therapy.
For Pfizer, the results are the "final nail in the coffin for the program," Leerink Partners analyst Joseph Schwartz said in a report. Pfizer is still evaluating its next steps, but Schwartz says it's unlikely Pfizer will move forward with the gene therapy.
On today's stock market, Sarepta stock rose 4.2% to 125. Pfizer stock skidded fell a fraction, closing at 27.65.
Sarepta Stock Buoyed On Pfizer Setback
Pfizer tested its gene therapy in children age 4 to 7. It found no change in the North Star Ambulatory Assessment one year after treatment. Secondary measurements — including 10-meter run or walk and time to rise from floor — also didn't meet the bar for success.
Investors didn't expect a "clean" readout, Leerink's Schwartz said. In Sarepta's study, patients given the gene therapy also didn't pass muster on the North Star Ambulatory Assessment, though secondary measurements were promising.
Further, Pfizer's gene therapy has been tied to safety issues. In this study, Pfizer says most treatment-related serious side effects "generally" responded to clinical management. Last month, Pfizer said a young boy in its Phase 3 study died following treatment. In an email to Investor's Business Daily, Pfizer emphasized the patient died a year after receiving treatment.
Benefits For Regenxbio, Solid
But most analysts didn't consider Pfizer a serious competitor.
"The major safety concerns would likely have precluded approval or commercial uptake anyway, so we do not believe this will substantially change Street numbers for Sarepta," RBC Capital Markets analyst Brian Abrahams said in a report.
He has a sector perform rating and 142 price target on Sarepta stock.
Leerink's Schwartz expects $1 billion in sales of Elevidys this year, noting there are upsides given the potential for an expanded label. He also noted the news benefits companies like Regenxbio and Solid Biosciences, both of which are working on treatments for Duchenne muscular dystrophy.
Regenxbio stock rose 1.3% to 13.32 early Thursday. Solid Bio stock popped 2.7% to 8.14.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
