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Thoughts on Sarepta's Future Following Drisapersen's Failure (Updated)

Updated with more information.

CAMBRIDGE, Mass. ( TheStreet) -- GlaxoSmithKline (GSK - Get Report) and Prosensa (RNA) announced Friday the failure of a large phase III study of drisapersen, their experimental exon-skipping therapy for Duchenne muscular dystrophy (DMD).

Here are my initial thoughts on the how this negative drisapersen result might affect Sarepta Therapeutics (SRPT - Get Report), which as you know, is developing eteplirsen, a competing DMD drug.

1. The regulatory risk for Sarepta just went up. Remember, the company intends to seek FDA approval for eteplirsen next year based on positive results from a very small phase II study of just 12 DMD patients. The failure of drisapersen in a large phase III study (186 DMD patients) heightens the risk that FDA will want to see more eteplirsen data before making an approval decision.

2. Sarepta doesn't have any more eteplirsen data to show FDA, so what does this mean? It means Sarepta may be asked by the FDA to conduct another, larger phase III study before eteplirsen is approved. That is not a new risk to the Sarepta story, but the likelihood of that happening just increased with the failed drisapersen study.

3. The drisapersen failure eliminates Sarepta's only competitor for an effective DMD treatment. That's a big positive for Sarepta. It's premature to write off drisapersen completely, but the drug has suffered a major setback, no doubt. That eliminates a lot of competitive pressure from Sarepta, even if a pre-approval phase III study of eteplirsen is required, delaying its approval.

4. Eteplirsen is a more potent, effective drug than drisapersen. I still believe that because eteplirsen can be dosed higher and has demonstrated a more profound effect on dystrophin production than drisapersen in previous studies. The ability to produce functional dystrophin is still key, in my mind.

5. We need to see more details of the failed drisapersen study. Some of the detailed data will be presented Oct. 5 at the World Muscle Society meeting. Other data, including dystrophin production, won't be ready for weeks or months, Prosensa said today.

We learned today that the walking ability of DMD buys treated with a placebo in the drisapersen phase III study declined 53 meters, on average. That's good, meaning positive for Sarepta, because it confirms the DMD "natural history" data. Remember, in the Sarepta phase II study, the walking ability of boys on placebo declined rapidly and then stabilized once they switched over to eteplirsen.

6. The European DMD treatment market may have just opened up for Sarepta. Remember, Prosensa controlled drisapersen patents in Europe which blocked Sarepta from accessing patients there with eteplirsen. Sarepta is appealing those patent rulings, but if drisapersen is never approved, the point is moot and eteplirsen could be approved in Europe.

7. What if exon-skipping doesn't work at all in DMD? That is the worst-case scenario and cannot be ignored. Drisapersen and eteplirsen are both designed to skip over faulty/missing exons in order to produce functional dystrophin in DMD kids. Drisapersen looks like it doesn't work, and so it's not completely illogical to worry that eteplirsen, likewise, will not work. I'm not there yet for reasons stated above, but you can't dismiss the possibility altogether.

8. Drisapersen might just be a placebo and we've known this since April. In other words, exon-skipping in DMD works, it's just drisapersen that's a lousy, ineffective exon-skipping drug. Eteplirsen, on the other hand, skips those exons just fine. This is the counterbalancing argument to point number 7 above.

I sound conceited, so apologies, but I sorta called this in April when I wrote about the phase II study of drisapersen presented at a meeting at Cold Spring Harbor Labs.

This is the key slide on 6 minute walk from the drisapersen phase II study.

Now remember, the drisapersen injection hurts -- a lot. As a result, the drisapersen studies aren't really blinded. DMD kids know pretty quickly if they're on drisapersen or placebo. With that in mind, this is what I wrote in April:

It's entirely possible patients who knew they were receiving drisapersen were motivated to perform better during the two six-minute walk tests performed at weeks 13 and 25. Likewise, the kids on placebo were unmotivated. It's impossible to quantify with any precision the effect of unblinding might have had on this trial, but the placebo effect needs to be taken into account.

At some point during the course of a clinical trial, the positive impact of the placebo effect runs out. Take a look at the slide again. From week 25 through week 48, continuous drisapersen patients (green line) and placebo patients (blue line) behave exactly the same. The two lines mirror each other, which suggests -- but doesn't prove -- drisapersen might be nothing more than a placebo.

I can't wait to see the curves for six-minute walk from the drisapersen phase III study. Prosensa, on its conference call, said walking ability in drisapersen patients fell by 42 meters, on average, after 48 weeks, compared to a loss of 53 meters for placebo patients. Clearly, these kids performed worse than in the phase II, but what do the slopes representing the drisapersen and placebo patients look like between the start of the study and the end? Was there an initial separation of the curves, suggesting a benefit for drisapersen, that disappeared over the course of the study? Or, do the two curves mirror each other for most of the 48 weeks?

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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