Prosensa Sinks as Muscular Dystrophy Drug Fails in Trial

Prosensa Holding NV plunged 70 percent after the Dutch company’s experimental muscular dystrophy drug failed to help patients walk better in a clinical trial. Sarepta Therapeutics Inc., the maker of another experimental medicine for the disease, soared.

Prosensa dropped to $7.14 at the close in New York, with trading volume 87 times the three-month daily average. The Leiden, Netherlands-based company’s shares are listed on the Nasdaq Stock Market. Sarepta, based in Bothell, Washington, jumped 18 percent to $43.30 for the biggest gain in more than 10 months.

Prosensa is developing the treatment, drisapersen, with London-based GlaxoSmithKline Plc. In a late-stage study dubbed Demand III, drisapersen failed to help patients more than a placebo in a test of six-minute walking distance, the companies said today in a statement. The results call into question the future of the drug, as the partners said they will conduct a full evaluation of the benefit-to-risk profile across all studies that will be completed by the end of 2013.

“While we are disappointed that this study did not meet its primary endpoint, we remain committed to the overall program and will continue to work closely with GSK,” Prosensa Chief Executive Officer Hans Schikan said in the statement. “Research and development of possible treatment options is of critical importance” for patients because of a lack of long-term treatments for the illness.

Estimated Revenue

Before today’s announcement, analysts predicted sales of $350 million for the drug in 2020, according to the average of three estimates compiled by Bloomberg.

Results from a separate late-stage study are expected late next year, and successful results combined with positive data from a mid-stage data could outweigh the results released today, Joseph Schwartz, a Boston-based analyst at Leerink Swann & Co., said in a report to investors.

“The Demand III safety data do not seem significant enough to bar drisapersen from obtaining regulatory approval,” Schwartz said.

Duchenne muscular dystrophy is a neuromuscular disease with no known cure that affects one in 3,500 newborn boys.

Sarepta, which is working on a drug called eteplirsen, may see some benefits from drisapersen’s failure, Robyn Karnauskas, an analyst with Deutsche Bank, said.

“Drisapersen failure leaves eteplirsen alone in the market, which could lead to higher market share upon approval,” Karnauskas wrote today in a research report, noting also that the “failure highlights it is difficult to design a clinical trial in this patient segment.”

Prosensa sold shares in June in an initial public offering at $13 each. The company had a market value of $840.1 million based on yesterday’s closing share price of $24. Glaxo rose less than 1 percent to 1,577 pence in London.

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