Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

The worst kind of race is one that everyone loses.

Since their peaks last year, BioMarin, Sarepta, and PTC Therapeutics have fallen 49.32 percent, 63.68 percent, and 85.72 percent, respectively. The three companies are trying to get the first drug for Duchenne Muscular Dystrophy (DMD), a deadly and incurable form of M.D. that affects young boys, approved in the U.S.

None of the three look likely right now to get a drug to market. As hard as it might be for patients, early optimism about these treatments may have been unfounded. A triple rejection may bring criticism raining down on the FDA, while signaling a tougher road for companies seeking rapid approval for drugs that treat rare, or "orphan," diseases.

The FDA outright rejected BioMarin’s drug in January over concerns about its safety and effectiveness. Just a day later, the FDA  released a briefing memo about Sarepta’s drug, saying data hadn't proved the drug was effective, hurting its chances of approval.

And on Tuesday, the FDA sent PTC a relatively rare "refuse to file" letter -- which means it didn’t think the company's application was complete enough for a full review of the drug -- sending PTC shares tumbling.  

Filed Away
PTC shares plunged more than 50% after the FDA said its DMD data didn't warrant a review for approval.
Source: Bloomberg
Intraday times are displayed in ET.

These drugs have suffered clinical or regulatory setbacks in the past, only to get new hope after patients and lawmakers pushed the FDA to be more flexible. But even under that pressure, the agency seems unimpressed by the data on these drugs. 

After expensively acquiring Prosensa for its DMD drug in 2014, BioMarin was worth as much as $22 billion last summer. It’s now worth half that. PTC and Sarepta are also worth less than half of what they were at their peaks. All are underperforming the Nasdaq Biotech Index, even as it has plunged this year.

Optimism, Derailed
Companies making DMD drugs have suffered steep falls from grace.
Source: Bloomberg

This is not the end of the road for these drugs. BioMarin is still seeking approval in Europe and says it is looking for a path forward in the U.S. 

Sarepta is still going to have an FDA panel in the spring and submitted a data update in an attempt to counter some of the FDA’s worries. Some investors and patients are still holding out hope for the drug, and pressure will mount on the FDA to approve something after setbacks for other drugs. 

PTC managed to get its drug conditionally approved in Europe based on phase II data and a promise it would conduct phase III trials. Those failed, though PTC is still seeking approval in the U.S. and to stay on the market in Europe based on results in certain subgroups of patients.

It’s possible the FDA’s refuse-to-file letter to PTC didn’t come because of the failed phase III trials, but for some other, more correctable issue -- though the market doesn’t seem to agree.

At the moment there’s a real possibility that all three drugs won’t make it in the U.S. and that PTC’s drug will be pulled from the European market, too.

This has implications for orphan drugmakers beyond the three looking for a DMD approval. Investors may become more skeptical of companies that try to use similar tactics, or similarly ambiguous data, to seek FDA approval.

The FDA’s accelerated approval rules, set in 1992 and expanded in 2012, mean there is an extra-rapid bridge to market for badly needed drugs. But that bridge is starting to look rickety in some cases. A high bar has been set even for DMD, a deadly disease that affects thousands and has a highly organized patient lobby.

The FDA’s flexibility has limits, which impacts the whole industry. The agency is showing it will be tough on orphan drug evidence, even when that means a possible death sentence for some patients.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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Mark Gongloff at