Sarepta – LGMD2E Data May Become the Next Inflection Point

Sarepta Therapeutics (SRPT) has a long history with several inflection points through the years. Moving upward from a penny stock back in the days they used to be called AVI Biopharma, through the first inflection point and stepping under the spotlight with first real eteplirsen success, meeting the primary endpoint of increase dystrophin and achieving significant clinical benefit on 6-MWT (Minute Walk Test) after 48 weeks of treatment in Phase IIb Study in DMD in October 2012. The second inflection point was back on 09/19/2016 after announcing FDA accelerated approval of Exondys-51, the first drug for DMD patients, an Exon Skipping therapy to treat Duchenne Muscular Dystrophy (DMD) patients amenable to skipping Exon-51.

The third and most important inflection point was the day they started thinking about the next gen therapy and put their trust in Dr. Mendell’s gene-therapy program, which ends to be the safest and aims to be the most effective gene-therapy. The cherry on the cake was the R&D day back on 06/19/2018 where Sarepta with Dr. Mendell stunned the scientific world and wall street with outstanding results, presenting positive preliminary results from the first three kids dosed in the Phase 1/2a Gene-Therapy Micro-dystrophin clinical trial to treat patients with DMD-Duchenne Muscular Dystrophy.

All patients showed robust expression of transduced micro-dystrophin, which is properly localized to the muscle sarcolemma, as measured by immunohistochemistry. Mean gene expression, as measured by percentage of micro-dystrophin positive fibers was 76.2% and the mean intensity of the fibers was 74.5% compared to normal control.

All post-treatment biopsies showed robust levels of micro-dystrophin as measured by Western blot, with a mean of 38.2% compared to normal utilizing Sarepta’s method, or 53.7% compared to normal pursuant to Nationwide Children’s quantification of Sarepta’s method that adjusts for fat and fibrotic tissue.

The next important step after choosing Dr. Mendell’s GTx program was the day Sarepta announced the appointment of Dr. Louise Rodino-Klapac, to lead its gene therapy business unit as vice president, gene therapy, overseeing the development of the Company’s gene therapy and gene editing programs. That was a bold statement saying we are going to build the most meaningful precision genetic medicine company in the world. Dr. Louise is the co-founder of Myonexus Therapeutics and the inventor of its Limb-girdle muscular dystrophy (LGMD) portfolio, and the main reason to partner with Myonexus Therapeutics, which was developing transformative gene therapies for various forms of Limb-girdle muscular dystrophies (LGMDs).  Myonexus’ five LGMD gene therapy candidates target the most severe and common forms of the disease and include three clinical and two pre-clinical stage programs. While the leading program was the first indication in LGMD-2E MYO-101.
 
Are we looking for the fourth inflection point in Sarepta?

Wednesday morning 02/27/2019, at 8:00 am ET, Sarepta will host a webcast and conference call to announce results from the first 3-patient cohort of the phase I/IIa gene transfer clinical trial using MYO-101 to treat patients with LGMD2e – Limb-Girdle Muscular Dystrophy Type 2E (beta-sarcoglycanopathy).

What makes MYO-101 study even more important, is the fact it is similar to the micro-dystrophin gene therapy program for DMD that presented an outstanding safety profile and dystrophin expression much higher than the market expectation. On the other hand, unlike micro-dystrophin that deliver a truncated gene due the vector maximum capacity of ~5.1kb, MYO-101 (scAAVrh74.MHCK7.hSGCB) delivers the full length of beta-sarcoglycan protein to restore the dystroglycan complex.

So, Sarepta is using the same gene therapy as microD, same AAVrh74 vector and same MHCK7 promoter. This makes me more optimistic to see a clean safety profile, establish a POC (Proof-of-Concept) and will de-risk other LGMD programs in one hand, and on the other hand confirming the importance of choosing the AAVrh74 for both the LGMD2E and DMD gene-therapy, and to the next 2 LGMD indications as well.

LGMD2E study:

MYO-101 Ph1/2 clinical trial in LGMD2E (beta-sarcoglycan deficiency) with cohort 1 consisting of three patients systemically dosed at 5e13vg/kg. Biopsy has been taken after 60 days from the gene transfer, Sarepta will present data with details regarding vector copy numbers, beta-sarcoglycan expression levels and restoration of the dystrophin associated complex.

Post review of cohort 1 data, Sarepta will decide whether to dose-escalate to 2e14vg/kg for cohort 2 which will include 3 treated and 3 placebo LGMD2E patients if first cohort showed <50% fiber expression by IHC.

Based on the high levels of expression seen in preclinical studies including strong safety and efficacy data, and previously demonstrated positive translation from animal studies to human studies with the rh74 AAV vector, as well as the use of a self-complementary vector (more efficient format for cell transduction), I expect MYO-101 to increase beta-sarcloglycan fiber expression and reduce CK levels dramatically.

While a 20% increase in beta-sarcoglycan positive fibers could prove to be functionally relevant, and in line with most analysts’ expectations, I think MYO-101 will show higher percentage of positive fiber expression, and meaningful reduction in CK levels in circulating blood.

 

What we should look for in the LGMD data?

Sarepta will present Key outcome measures from this study include measuring beta-sarcoglycan gene expression levels via immunofluorescence and Western Blot, as well as CK levels

Both “positive fiber expression by IHC (immunofluorescence)” and “WB-Western Blot” are important measures.

As Sarepta highlighted at its R&D Day in June 2018, in the preclinical studies (in mice model) systemic delivery leads to a greater than 95% expression of β-sarcogylcan in the diaphragm and the heart. This preclinical mouse data was following treatment of mice with 1e12 vg dose which is equivalent to 5e13 vg/kg in humans and resulted in >98% positive fibers across all skeletal muscles, so this should be translated in human to >20% positive fiber expression by IHC and should be easily achievable.

At JPM Q&A section Sarepta has noted that in natural history, if you get over 30% of normal in limb-girdle, that’s associated with a non-manifesting carrier. The expression levels between 20% to 50% positive fiber expression by IHC would be positive signal and they can go higher than 5e13 but will do that only if they want to see more expression.

 

I see 4 possible outcomes from the upcoming LGMD-2E data:

  1. Less than 20% fiber expression by IHC but with clean safety and the share price might drop by 15% to 20%.
  2. Over 20% but less than 50% and the price will act with volatility and the share price might close with 5% to 10% upside. The market will expect moving to Cohort-2 and dose-escalating, dosing with 2e14 vg/kg in 6 patients 3:3 placebo-controlled study.
  3. Over 50% fiber expression by IHC and the share price will spike sharply to test the 52W high. The market will expect Sarepta to move to Pivotal study in the summer after getting the FDA agreement following the same pathway as the micro-dystrophin study for DMD.
  4. My Blue-Sky prediction, over 95% fiber expression by IHC and the share price will print a New-52W-High, and I won’t be surprise to see the price with 200’s handle if the street understands how important the data for LGMD program is, and re-approving the micro-Dystrophin study as well.

In this case I will upgrade my Blue-Sky price target to $380 which take in consideration 90% probability of success for DMD gene therapy and 80-85% market share for SRPT’s DMD gene therapy in case PFE could move up their microD program and treat the 15% of patients with immunity to SRP-9001, and  75% probability of success for LGMD gene therapy, and 100% probability of success for Golodirsen and 90% for Casimersen, and 50% probability of success for PPMO program and 40% probability of success for MPS3A gene-therapy.

 

Disclosure: Author is LONG SRPT

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