Gilead Sciences Inc (GILD)

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Sarepta sells FDA review voucher for $125M, but analyst questions price

Feb 21, 2017, 9:49am EST

Max Stendahl
Biotech Reporter
Boston Business Journal

Sarepta Therapeutics on Tuesday sold a voucher that can speed up FDA reviews to Gilead Sciences for $125 million, but one analyst said the Cambridge biotech may have undervalued the asset.

Sarepta (Nasdaq: SRPT) received the rare pediatric disease priority review voucher when the FDA approved its Duchenne muscular dystrophy drug, Exondys51, in September. Companies can use the vouchers to shorten the review period for a subsequent drug, or sell them to other firms.

The headquarters of Sarepta Therapeutics at 215 First St. in Cambridge.
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The headquarters of Sarepta Therapeutics at 215 First St. in Cambridge.

Gilead (Nasdaq: GILD) may now use the voucher to potentially speed up approval of any drug that treats a serious or life-threatening disease that affects people up to age 18.

In a research note, Leerink Partners analyst Joseph Schwartz said that the price tag was lower than his expectation of $200 million. In recent years, such vouchers have fetched anywhere from $67.5 million to $350 million.

"While this non-dilutive amount will surely add additional runway to Sarepta's cash position, we cannot help but wonder if this transaction reflects a 1) broader decline in PRV interest among bidders, or 2) an undervalued asset sale," he wrote.

Exondys51 targets a specific gene mutation shared by about 13 percent of patients with DMD, a disorder that causes progressive muscle weakness. It works by skipping over one specific gene mutation that prevents the creation of dystrophin, a protein needed for muscle maintenance. The FDA’s approval sparked controversy given the limited nature of the company’s trial data.

“Our mission at Sarepta Therapeutics is to treat more boys with Duchenne muscular dystrophy,” Sarepta CEO Ed Kaye said in a statement Tuesday. “The sale of the PRV provides an important source of non-dilutive capital to support the rapid advancement of our follow on exon skipping candidates and next generation RNA targeted antisense platform.”

Shares of Sarepta were 2 percent higher on Tuesday to $28.78 as of 9:45 a.m.

Sarepta announced in January that Exondys51 had generated $5.4 million in sales in the fourth quarter of 2016, beating analysts’ expectations. The company is developing other exon-skipping treatments for DMD, as well as drugs that take a gene therapy approach to the disorder.
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http://www.bizjournals.com/boston/news/2017/02/21/sarepta-sells-fda-review-voucher-for-125m-but.html?ana=yahoo

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