The FDA's approval of Sarepta Therapeutics' (NASDAQ: SRPT) Exondys 51 as a treatment for Duchenne muscular dystrophy was far from an obvious decision. A raging debate within the agency regarding the drug's efficacy put the director of the team reviewing Exondys 51 at odds with the agency's head of drug evaluation.
In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes is joined by contributor Todd Campbell to dive into the soap-opera-style backstory.
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A full transcript follows the video.
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This podcast was recorded on Sept. 21, 2016.
Kristine Harjes: Sarepta investors went through the best of times earlier this week. Listeners will remember this company name from our May 4 episode. This is the company that was developing a treatment for a rare but devastating disease known as Duchenne muscular dystrophy, or DMD. On Monday, we found out that they got approval from the FDA for their drug, which was known as eteplirsen, and will now go by the trade name Exondys 51.
Todd Campbell: What an amazing and intriguing story for investors and for those who like soap-opera backstories. There was so much involved in the review of this drug leading up to the application. You almost have to look at it and say there's two stories here. There's the story of, "Wow, this is the first FDA-approved drug that actually targets the cause of DMD." And then, there's the second story, which is, "Did the FDA stretch the bar too far, lower the bar too low, in approving this drug?"
Harjes: Right. The story involves a pretty heated internal conflict in the FDA. You had some people in the agency really pushing for approval of this drug, saying, "Look at the stories that the patients who are taking this can tell. Look how amazing this is, this drug must be working." And then you had people on the other side, saying, "Wait a second, that's not what we're here to do. We're not here to be pulled by emotions. We're here to look at the clinical evidence," which was, admittedly, a little bit lacking.
Campbell: Right. How much do you weight the science at the FDA, versus the unmet need of DMD patients? I think that was a core debate within the agency. On the one hand, in support of this drug, you had the head of drug evaluation, Dr. Janet Woodcock. And on the other side, you had the head of the group within the FDA that was tasked with reviewing the data on this drug. The director of that group was a Dr. Unger. The two, Woodcock and Unger, had very different views on the subject of the science versus the unmet-need issue.
Harjes: Exactly. So what they were really disagreeing about was whether an increase in this protein known as dystrophin, which was a surrogate endpoint in the trial, whether that necessarily implied clinical benefit. Dr. Woodcock said, "Yes, it does. If we can show that they have increased levels of dystrophin, then there is a very good chance that the patients will have a clinical benefit." Whereas Dr. Unger worried about this, and aside from the worry over the data not being there, he also worried about whether approving this drug just based on this limited data set would be a bad signal, would send a message that the FDA can be pressured by things like politics and intimidation, as opposed to strict science.
Campbell: Yeah. Let's go back in time for a second. Maybe we should spend a little bit of time talking about DMD, and what dystrophin is. DMD is a muscle-wasting disease. What ends up happening is, in patients that can't produce adequate levels of functional dystrophin, which is a protein used to produce and maintain muscle fiber, over time, their muscles weaken, and they lose the ability to walk by the time the reach their teens, and sadly, they lose heart muscle function typically when they get into their 20s. Unfortunately, they tend to succumb to their disease some time between their 30s and 40s. So this is an extremely progressive, life-shortening disease. And up until now, there has been nothing other than corticosteroids that has been approved by the FDA to try and offer some hope to this patient population.
Because of that, and because of the history with muscular dystrophy fundraising and awareness, there was advocacy for the approval of this drug on a level that is unprecedented. I don't think I've ever seen anything like this. You had people within the FDA saying they were receiving communications from Congress, letters and communications from patient advocates, from patients, from other interested parties. And sometimes those letters weren't so nice.
Harjes: Right. There was an advisory-committee meeting ... how these approvals work with the FDA is that first, you have an advisory committee that convenes, and they review the evidence and make a recommendation for or against approval. When the team was considering the evidence, they heard testimonial from patients. I think was actually one of the longest-ever patient testimonial periods, where these young boys that are suffering from this disease, and their parents, and their caregivers, were essentially pleading with the people from the FDA: "Please, approve this drug, there's no other option for these boys." As rare as the disease is, when you're looking it in the face, that pulls at you. I can understand that.
Campbell: Yeah. So, investors and everybody who's interested to know, what ended up happening is that Woodcock had wanted to approve the drug all along. Unger and some of the other people on the review committee were not convinced that the drug provided enough of a boost in dystrophin production to determine that it would produce a clinical benefit. Eventually, they went to an appeals board.
One of the things that's interesting about this story is that in May, the FDA was supposed to issue its final determination: go or no go. The advisory committee meeting, after hearing all of that testimony, still concluded on a 7-to-6 vote not to recommend early approval. Yet walking out of that meeting, Woodcock, within days, was already saying, "I'm going to approve this drug." So Unger went to an appeals board. The appeals process went through and looked at the science, evaluated the stories from both ends, and eventually submitted a memo on this entire subject to the commissioner of the Food and Drug Administration. So this went all the way up to the top.
Throughout the entire process, Unger maintains, and Woodcock doesn't dispute the fact, that she was involved very heavily, right from the get-go. And that process included various meetings with patients and advocates during a period of time where the committee was reviewing the science. So all along, there was this push and pull between the science and the very big unmet need. And I think what Woodcock was arguing was, "Listen, we can't just operate only on the science, because there's nothing that can be done to help these patients and prolong their lives as it stands today. If we have something that even offers them minimal chance of a benefit, that's safe and in trials" -- that was the one thing that everyone agreed on, this drug was safe -- "then we should approve it." And I think others at the agency took a different view, worrying that if they approved a drug that wasn't scientifically proven to have the clinical benefit, what kind of recommendations would they have to give in the future?
Harjes: Exactly. It definitely did show that the FDA has more flexibility than maybe you would have thought. One thing that Woodcock had mentioned that I definitely can't get behind is, apparently she was talking about Sarepta's need for capitalization. She noted that their stock price has reacted to different FDA actions. That, this is my own opinion here, I would say definitively should not be considered when you look at something like this. I mean, she's right, if Sarepta didn't get approval, they probably would have run out of money and wouldn't be able to deliver this drug. But that can't be considered. And indeed, an FDA spokeswoman did say that the FDA did not consider those factors in their final decision. But I think that does highlight that Woodcock was willing to go to some unprecedented levels to push for this drug's approval.
Campbell: Yeah. Kristine, I believe those comments were actually made during the review-board hearings. I don't think those comments were made during the evaluation of the science behind this drug. I think the point that Woodcock was trying to make, in fairness, was that we have to recognize that Sarepta is working on all sorts of other medicines that can treat these diseases that could work better, and if they were to go out of business, what would that mean for that science? It could end that science, and basically prohibit the development of a second-generation drug that conceivably works better.
If we just look at it from what could have gone differently, obviously, the drug could have worked better. If it was a slam-dunk approval, none of this would have happened. But the reality is, you had a 12-person trial that had all sorts of gaps in it as far as the validity of the trial results.
Harjes: For example, there was no control group.
Campbell: Yeah. Both Woodcock and Unger basically looked at it and said, "We don't know what we can trust out of this data." That's why, this past summer, they requested additional information from Sarepta, intro analysis of another trial that's going on right now and took a look at another 12 boys, trying to determine just how much dystrophin is being produced by taking this drug. They determined, after doing their own analysis, that is was a 0.3% improvement in dystrophin production. By any measures, that's tiny. I think the argument from Woodcock was, "Yeah, but it's an improvement." And the argument from Unger was, "We don't know without a shadow of a doubt that that level of improvement would result in a clinical benefit."
Harjes: Exactly. So, technically, what happened to you was an accelerated approval. What that means is that Sarepta is not off the hook just yet. They did get their green light, but they'll still have to provide more proof of efficacy as it becomes available. I would say that's a pretty good middle ground. They're not getting a go-ahead with no strings attached. But yet, this drug will become available, which is really important.
Campbell: Yeah. This is a very small treatment population. We're talking about 1 in 3,500 male births. I did the math on that, DMD therefore is occurring about 580 times new patients diagnosed per year. And of that, this drug only works in about 13% of them. So, every year, we're talking about 60 or so kids that this drug might be able to benefit. It's great that they're going to continue their research and the study. But as we just talked about previously, once you open these studies up to more and more patients, that does not necessarily mean that you're going to get the outcome you want.
Harjes: Exactly. So it's definitely still a case to watch going forward. Interestingly, Sarepta's other drugs could potentially work on a much broader portion of the DMD population. We're talking about up to 80% of these patients. So hopefully, for the sake of the patients and their families, Sarepta can continue to prove that their drugs do work, and validate their entire platform.
Kristine Harjes has no position in any stocks mentioned. Todd Campbell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.