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Shares of Sarepta Therapeutics (SRPT) have gotten crushed today after the FDA offered a negative take on Sarepta's Duchenne muscular dystrophy drug. In fact, Leerink's Joseph Schwartz and team contend that Sarepta's "dystrophin argument strongly challenged and largely invalidated by the FDA." They explain:

Andrew Harnik/Associated Press

The updated FDA review is even more negative on the historical control data. 4-yr. clinical effectiveness data submitted in January at the time was considered as major amendment to eteplirsen NDA that had resulted in the 3-mos. delay in PDUFA action date. Having had multiple months to review this additional submission, the FDA has become even more critical by identifying many potential confounding factors, including two matched historical control patients that were reported to have lost ambulation but also had 10m walk test values reported as well as a secondary analysis showing that when 6MWT scores are plotted based on patient age (rather than years of treatment) that there is substantial overlap between eteplirsen-treated patients and the control group.

SRPT's dystrophin argument strongly challenged and largely invalidated by the FDA. Recall, the panelists were very critical of dystrophin data forBioMarin Pharmaceutical (BMRN), and we expect a similar level of scrutiny. The FDA points out two major concerns with Sarepta’s method of quantifying dystrophin expression: 1) reconciling the low correlation between Western blot vs. immunofluroesscence, and 2) overexaggeration of the data. To the first point, not only was the correlation between the two methods “not strong”, when considering Western blot as a more relevant and reliable quantitative measurement for dystrophin expression, FDA sees the resulting 0.9% (of normal) after 3.5 years as “disappointing”. To the latter point, the applicant’s suggestion of an “11.6-fold increase in de novo dystrophin production” assumes a baseline of 0.08% dystrophin level, which is below the instrument’s detection level of 0.25%.

Shares of Sarepta Therapeutics have plunged 41% to $11.65 at 10:30 a.m. today, while BioMarin Pharmaceutical has fallen 3.1% to $86.53.