One of the longest and most contentious biotech sagas in recent memory is finally over(ish).
The FDA on Monday granted accelerated approval to Sarepta's drug Exondys, which treats the rare muscle-wasting disease Duchenne Muscular Dystrophy (DMD). The drug could be available to patients before the end of the year. The approval is conditional and can be reversed if a more-rigorous new trial shows the drug doesn't work.
But for now the FDA's decision ends a years-long conflict between scientists and patients. The drug's doubters (yes, including me) had warned there was limited and flawed evidence the medicine worked. The drug's boosters cited a huge unmet need for such a treatment and enough evidence of its effectiveness to justify approving the drug for patients with no options.
The decision could have a major impact beyond DMD patients and Sarepta shareholders, who enjoyed an 86-percent price gain on the news. The market seems to take the drug's approval as evidence the FDA will err on the side of approval in such cases; the Nasdaq Biotech Index rose as much as 1 percent on Monday. Sarepta's fellow DMD drugmaker PTC Therapeutics rose 24 percent.
The approval suggests new medicines might get to market more quickly and on thinner trial results than investors have come to expect. It also bolsters faith that the kind of patient lobbying behind Exondys may be able to shift bureaucratic mountains.
In 2012 Congress gave the FDA extra tools and a mandate to get new drugs for deadly diseases to patients more quickly. The agency appears to be taking that seriously.
Scientists have not been impressed with Exondys. They produced a negative review of the drug in February that cratered Sarepta's shares and left many doubting the drug's chances. An FDA panel of experts voted against letting the drug hit the market. The FDA isn't bound to follow the vote of these panels, but usually does.
But Janet Woodcock, the head of the FDA's Center for Drug Evaluation and Research, overruled the scientists' objections and pushed for the drug's approval, eventually backed by FDA commissioner of food and drugs Robert Califf.
Depending on your point of view, this is either a tragic blow to scientific and statistical rigor, or a victory for patients over myopic bureaucrats with unrealistic expectations.
We'll have to see if this was a one-off -- a unique combination of dire patient need and overwhelming political pressure backing a drug of uncertain effectiveness -- or if there will be many more accelerated approvals based on less-than-ideal studies.
At the very least, Califf's support of Woodcock over the scientists seems like a meaningful hint of where the FDA is leaning under his leadership, which began in February.
There's no doubt the approval is a lifesaver for Sarepta. The company can now sell what will almost certainly be a very expensive drug. And if it follows the playbook other companies have, it is likely to sell more of its now-pricier shares to raise more cash. If the drug had been rejected, then the company's shares likely would have plummeted, and it may have had trouble raising money to continue developing its drug -- something Woodcock worried about openly, according to an FDA document.
At its second-quarter spending rate, Sarepta's cash reserves may have run out early next year without replenishment.
Either way, a previously uncertain door to the market has been opened a crack, and a lot of biotechs are undoubtedly hoping they can squeeze through.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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