Sarepta cuts employees, maps forward gene therapy paths and narrower pipelines
Sarepta Therapeutics' second death report for patients with toxic muscular dystrophy gene therapy this year raises the prospect of potentially absorbing products from the market. The company avoids this worst-case scenario and issues a stricter safety warning on the label of therapeutic therapy. But Sarepta is also cutting its workforce and pipeline, with Moves executives saying the need to make the company financially viable.
Sarepta announced after the market closure on Wednesday that the company's restructuring would reduce its workforce by 36%, representing about 500 employees. The company predicts layoffs and pipeline repositioning will save about $400 million a year.
The first was March and the second was June, both of whom had acute liver failure. These patients are non-injectable adolescents, which is important because older patients require higher doses of leveridys. Sarepta said the FDA requires the product’s label to be updated with a black box warning, calling for the risk of liver damage and liver failure. The warning is consistent with other gene therapies delivered by adeno-associated viruses, and Sarepta agrees to update. The company added that the change seems to address any problem citing labels that are not outpatients.
In response to the death toll, Sarepta voluntarily stopped transport of non-patient levidys. The company also convened a committee of Duchenne and a liver expert for advice. The committee recommended that the Sarepta study add the immunosuppressant Silorimus to the standard immunosuppressive regimen for gene therapy. The committee's findings will be submitted to the FDA as part of a proposal that tested the revised immunosuppressive regimen in a new cohort added to the ongoing clinical trial. The six-month study will enroll up to 25 non-mammalian patients. Sarepta said the results may reestablish the dose for patients with non-injection Duchenne.
In the two years since Everidys entered the market as Duchenne’s first gene therapy, the product quickly became Sarepta’s top seller and pushed the company to profitability. Even if it is now available for one-time treatments for outpatient Duchenne patients, the company’s program will remain a strong seller, with the narrower patient group earning at least $500 million in 2027. However, by 2027, this narrower patient group. But Levidys still faces business headwinds. During a conference call Wednesday night, Sarepa executives admitted that some patients had lower interest in canceling proven gene therapy after the death report.
Sarepta also sells three antisense oligonucleotide drugs for Duchenne, which are long-term dosages. The company plans to sell approximately $900 million in annual sales for these products.
Sarepta's gene therapy research has produced three other clinical-stage gene therapies, all of which are used for limb muscle dystrophy. These procedures will be suspended in addition to the state-of-the-art SRP-9003, a gene therapy for potential limb waist muscle dystrophy 2e. According to a speech by investors, Sarepta plans to submit an FDA Biologics license application for the therapy in the second half of this year.
Sarepta said it would seek strategic alternatives to the moratorium on the plan, including potential partnerships with other companies. The company's remaining R&D resources will focus on small interfering RNAs (siRNAs), a genetic medicine that works by knocking down the overexpression of disease kinesin. Sarepta has clinical siRNA programs for Faciocapulohumeral dystrophy type 1, actinic dystrophy type 1, spinal cord cerebral ataxia type 2, as well as idiopathic pulmonary fibrosis and a preclinical treatment of Huntington's disease. The plans come from licenses and collaboration agreements announced last fall, from Arrowhead Pharmaceuticals. Sarepta invested $825 million in advance, including cash and arrow stock investments.
In addition to Sarepta's plan to take over, the deal allows the company to select up to six new targets for Arrowhead to conduct research through its RNA interference technology platform. Sarepta said it will continue to work with Arrowhead to develop treatments for skeletal muscle diseases.
Joseph Schwartz, an analyst at Leerink Partners, said in a note sent to investors that the FDA requested a black box warning to Everidys, indicating that the agency will not remove the product from the market. He added that the cautionary modified immunosuppression protocol additional warnings and research is prudent, and that Sarepta's share price should be relieved since the prospect of removing the product has been avoided.
“More work needs to be done to restore investor enthusiasm, but it is undoubtedly a step in the right direction,” Schwartz said.
Sarepta said it will record a one-time fee of between $32 million and $37 million related to the dismissal benefits. Through the restructuring, the company expects it to maintain access to its $600 million revolving credit line and generate sufficient cash flow to manage its financial obligations, including repayment of 2027 convertible notes.
Sarepta Therapeutics photos
