(Reuters) – Sarepta Therapeutics shares fell over 42% in premarket trading on Tuesday, after its gene therapy for a progressive muscle-wasting disorder failed to meet the main goal in a trial that was key to the treatment securing full U.S. approval.
At least four analysts cut their price target on Sarepta’s stock, saying the data created uncertainty over the therapy’s future growth as it may lead to reluctance from health insurers to cover it.
However, at least two analysts said it was unlikely that the treatment would be pulled from the market.
The therapy, Elevidys, in June gained accelerated approval from the U.S. health regulator for children aged between 4 and 5 years who can walk, despite questions over its effectiveness.
The initial approval was based on a mid-stage trial, where the gene therapy produced a mini version of the dystrophin protein needed to help keep muscles intact, but did not improve patient clinical outcomes like their ability to walk and stand.
The late-stage trial was meant to confirm the therapy’s effectiveness in treating patients with Duchenne muscular dystrophy, an inherited disorder that almost always affects young boys
The study, which tested Elevidys in patients aged between 4 and 7 years, failed to significantly improve motor function when compared with placebo-treated patients at 52 weeks.
The therapy, however, met all secondary study goals with statistically significant results, and no new safety signals were observed.
Sarepta said it plans to seek expanded approval in other age groups.
Its shares have dropped nearly 17% this year.
(Reporting by Mariam Sunny in Bengaluru; Editing by Devika Syamnath)
