Sarepta Therapeutics recorded lower-than-expected quarterly sales of its gene therapy for Duchene muscular dystrophy, sending the company’s shares down nearly 10% in after hours trading.
The biotech announced $121.7 million in Elevidys revenue for the second quarter, which was both lower than the $133.9 million generated in the first quarter and Wall Street expectations of $143 million.
The company has previously said that it was expecting flat sales of Elevidys this quarter, as the therapy’s initial label included only children ages 4 and 5 diagnosed with Duchenne, while the average age of diagnosis of the muscle disease is 5 years of age.
“We would have been perfectly flat, but a couple of kids that were scheduled towards the back half of the quarter actually had a viral infection, and they’d been pushed into this quarter,” said Sarepta’s CEO Doug Ingram on the company’s earnings call.
In June, the FDA granted Sarepta a wide label expansion for Elevidys, making the gene therapy available to around 80% of people with Duchenne muscular dystrophy. The decision to expand the label that widely was highly controversial, and FDA documents released at the time showed that Peter Marks, the FDA official that oversees gene therapy approvals, overrode staff reviewers in granting the expanded label.
In light of the lower sales, analysts repeatedly asked about potential bottlenecks in getting Elevidys to patients, whether constraints ranging from manufacturing to the capacity at active treating centers.
Ingram repeatedly responded that “we don’t have bottlenecks.” He said that the company projects it takes three to five months to get patients from starting the process to gene therapy infusion, and that it expects some growth next quarter with a big jump at the end of the year, following the broad FDA label expansion.
The company noted it expects the new gene therapy to begin to cannibalize its older exon-skipping Duchenne drugs, and projected 2025 sales of $2.9 to $3.1 billion.
Analysts did not explicitly ask about Sarepta’s move to censor critical comments toward the company made by a parent of a Duchenne patient at a conference, which was reported by STAT last week. The annual conference is run by well-known Duchenne patient advocacy group Parent Project Muscular Dystrophy and sponsored in part by Sarepta. Sarepta demanded that the comments were removed from the video recording and the advocacy group obliged.
“You haven’t delivered any of this evidence you’re supposed to have for your $3.2 million drug,” the parent, Catherine Collins, said in a video that has since widely circulated around social media.
A Sarepta spokesperson said in an email to Endpoints News that “Sarepta and PPMD behaved appropriately” when asked about the STAT report.
When asked broadly about disconnect with the patient community during the earnings call, Ingram said, “The great bulk of the patient community fully understand that and are cheering us along.”
The company also disclosed that it ended a gene therapy manufacturing deal with a Thermo Fisher subsidiary. Sarepta said that it had yet to receive regulatory approval for commercial Elevidys at Thermo manufacturing facilities, and will record between $55 to $65 million in additional R&D expenses next quarter as a result. The company currently works with Catalent to manufacture its gene therapy, and Sarepta is still working with Thermo Fisher on suspension manufacturing, which it hopes can help scale up its gene therapy production.
“We’re in a good place from a supply perspective, and based on several factors, including the progress we’ve made with our suspension manufacturing process, we did not believe that it made strategic or financial sense to continue to invest,” Sarepta’s chief financial officer Ian Estepan said of the Thermo Fisher deal during the earnings call.
Editor’s note: This story was updated to clarify that Sarepta still has an agreement with Thermo Fisher on suspension manufacturing.