Hoping To Smooth Relations With FDA, Sarepta Moves On From CEO Garabedian

Seeing Garabedian’s relationship with FDA as strained, Sarepta promotes Chief Medical Officer to interim CEO post in hopes of keeping eteplirsen on track for a mid-year NDA filing.

The ouster of Sarepta Therapeutics Inc. CEO Chris Garabedian and his temporary replacement by Chief Medical Officer Edward Kaye is intended to smooth the development and regulatory path forward for the company’s Duchenne muscular dystrophy treatment eteplirsen.

Kaye and interim chairman John Hodgman attempted to be diplomatic in their comments about the changeover at the Cambridge, Mass.-based firm, but Wall Street analysts and investors viewed the situation as Sarepta moving on from a chief executive whose strained relationship with FDA could have been a detriment to the near-term prospects for eteplirsen.

Sarepta’s shares closed up nearly 8% to $14.29 after the announcement on April 1, as the company held a conference call before the market opened to assure investors that its plan to file an NDA for eteplirsen in the second quarter remains on track. Following a March 20 FDA-NIH workshop that considered biomarkers for measuring dystrophin in DMD drug development, Sarepta is preparing for a yet-to-be-scheduled meeting with FDA to review its pivotal data (Also see "Biomarkers Need Validation, But Maybe Not Perfection" - Pink Sheet, 30 Mar, 2015.).

Investors were rattled last October when Sarepta announced that new data requests from FDA would scuttle its plan to file eteplirsen, which uses proprietary exon-skipping technology to skip exon 51 of the dystrophin gene, whose mutations are implicated in causing about 13% of DMD cases, by the end of 2014. FDA then took the unusual step of stating publicly that the eteplirsen setback was due to misinterpretation in communications between it and the sponsor, not a policy change (Also see "Sarepta Delay Due To Misinterpretation, Not Policy Change, FDA Says" - Pink Sheet, 31 Oct, 2014.).

During the conference call, Kaye, Sarepta’s CMO since 2011 and before that the group VP of clinical development at Genzyme Corp., said his top priority is to work constructively with FDA toward approval of eteplirsen. Sarepta repeatedly emphasized that Kaye led teams at Genzyme that obtained market approvals for drugs such as Myozyme/Lumizyme (alglucosidase alfa) and Fabrazyme (agalsidase beta).

“My goal is nothing short of doing whatever I can to optimize our efforts in Sarepta to engage the FDA, the medical community, the patients and advocates to make eteplirsen available to patients as soon as possible,” Kaye said. “I look forward to re-energizing our discourse with the regulatory authorities and facilitating the process to get the drug to people who need it the most as quickly as possible.”

Kaye said Sarepta expects to hold its pre-NDA meeting with FDA during the second quarter to discuss the pivotal data and “the robustness of the package.” Among the items for review will be 168-week efficacy data with eteplirsen and a 120-day safety update, he noted.

Hodgman, who joined the Sarepta board in 2014, was not specific when asked why Garabedian, who is stepping down from his office and the board of directors effective immediately, is leaving now, when a review of the CEO’s tenure last year resulted in his retention.

“It was after discussions with [Garabedian] that we mutually agreed to go in different directions,” the chairman said. “He has provided a lot of effort over his four years, and we do appreciate his service. But we believe that [Kaye] really is a good fit at this time for the company and its programs. With this upcoming FDA meeting which [Kaye] has described and the planned NDA submission mid-year, we wanted to take steps to help facilitate however we could a successful clinical and regulatory process.”

Permanent CEO Will Follow NDA Filing

Hodgman indicated that the search for a permanent CEO would take several months and would be unlikely to reach fruition before the filing of eteplirsen, assuming the current timeline for the NDA remains in place. He added that Kaye will be considered for the position if he decides he wants to be a candidate.

Kaye was asked if he was concerned about other top execs leaving Sarepta since many of them were recruited to the firm by Garabedian. The interim CEO told listeners not to expect any high-profile departures.

“One of the things that I’ve been very pleased about is that the entire executive management team that you know very well is staying on and have been really incredibly supportive for me as part of this process and also with the board,” he said.

In a same-day note, JMP Securities analyst Liisa Bayko called Garabedian’s departure and replacement a positive step for Sarepta and one not expected to affect the timing of the anticipated mid-2015 NDA filing.

“We are pleased with the choice for the interim CEO and view this to be a smart move at a critical time for the company,” Bayko wrote. “Although we view this news as an incremental positive for the company, we remain cautious on the upcoming FDA meeting prior to the NDA filing and look forward to the meeting for additional color on the regulatory path forward for eteplirsen.”

Sarepta is one of several companies jockeying to bring the first drug therapy for DMD to market, a competition that was heightened in November 2014 when BioMarin Pharmaceutical Inc. bought out Prosensa Holding BV for $680 million on the promise of drisapersen, its Phase III candidate for the disease (Also see "Regulatory Environment In DMD Encourages BioMarin Bet On Prosensa" - Pink Sheet, 24 Nov, 2014.).