Sarepta Therapeutics Inc (NASDAQ: SRPT) is rocketing in the market today, gaining more than 30% after announcing that the FDA has approved its DMD drug, VYONDYS 53. Moreover, the company also announced that it has gained access to $500 million in non-dilutive funds, which will likely assist in the commercialization of the drug. Here’s what’s going on:
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SRPT Stock Pops On FDA Approval
In an after-hours press release yesterday, Sarepta Therapeutics announced that the FDA has approved VYONDYS 53 well ahead of schedule. The drug has been approved as an option for patients with Duchenne muscular dystrophy in patients with a confirmed mutation amenable to exon 53 skipping.
It’s important to keep in mind that the drug was approved using the accellerated approval pathway. This means that continued approval of the drug is contingent on the confirmation of clinical benefit in a post-marketing confirmatory trial.
In the release, SRPT said that ESSENCE, the placebo-controlled, post-marketing confirmatory trial to support continued approval is already enrolling. The trial is expected to come to an end by 2024.
In a statement, Doug Ingram, President and CEO at SRPT, had the following to offer:
Today is monumental for Sarepta and, more importantly, for the DMD community. VYONDYS 53, our second approved exon-skipping RNA therapy for DMD, may treat up to 8% of the DMD community, representing those patients who have a confirmed exon 53 amenable mutation. Along with EXONDYS 51® (eteplirsen), we now offer treatment options for approximately 20% of those with DMD in the U.S.
In the span of four months, we commenced and completed the formal dispute resolution process culminating in the grant of our appeal, resubmitted our NDA and obtained an approval – a great benefit to DMD patients awaiting treatment. This unprecedented timing could not have been achieved without the commitment of the Review Division under the leadership of Dr. Billy Dunn, and the Office of New Drugs, which expeditiously heard and granted our appeal. Along with the DMD community, we owe our gratitude to both the Review Division and the OND for their objective, evidence-based approach to this review, for their fairness, and for the sense of urgency with which they addressed and resolved the CRL and granted this approval.
The above statement was followed up by Pat Furlong, founding president and CEO at Parent Project Muscular Dystrophy. Here’s what Furlong had to say:
With the approval of VYONDYS 53, up to another 8% of Duchenne families will have a therapy to treat this devastating disease. For 25 years, PPMD has been working with researchers, clinicians, industry, and the Duchenne community to find treatments for all people living with Duchenne. And while we need to ensure that these approved therapies are accessible for patients, today we celebrate this approval and thank Sarepta for their continued leadership in the fight to end Duchenne.
$500 Million In Non-Dilutive Funds Up For Grabs
Shortly after announcing the FDA approval, Sarepta Therapeutics announced that it has entered into an agreement that gives it access to up to $500 million in non-dilutive funding.
The agreement was entered into with funds managed by Pharmakon Advisors, LP. The first $250 million will be made available shortly after the close of the agreement. SRPT said that the other $250 milion will be available by December 31, 2020.
The funds will be made available to the company at an annual rate of 8.5%, payable quarterly. the company said that the facility will mature four years following the close of Tranche A.
This News Is Huge
At the end of the day, the news released by Sarepta Therapeutics this morning is incredible. First and foremost, it’s worth keeping in mind that patients with DMD have very few therapeutic options. Moreover, these options lack efficacy in a big way.
With SRPT bringing a new product to market in the space, it has a good chance of taking a large share of the market. Which brings me to the next point… this market is huge.
In fact, Grand View Research expects that the DMD drugs market will grow to be worth $4.11 billion by the year 2023. So, should commercialization go right, this could be a billion dollar or more opportunity per year for SRPT.
Finally, with the announcement that the company has gained access to $500 million in non-dilutive funding, the company is only expanding the reason for excitement. This funding will give SRPT everything it needs financially for a successful launch, helping to solidify the opportunity that this drug approval brings to the table.
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