GENE THERAPY: ROCHE COMMITS OVER $1 BILLION IN SAREPTA THERAPEUTICS DEAL

Gene therapy continues to draw multi-billion dollar investments from biotech and pharmaceutical companies worldwide

Roche ( OTCMKTS: RHHBY ) is committing over $1 billion dollars up front to Sarepta Therapeutics ( NASDAQ: SRPT )  in a licensing deal with substantially more to follow depending upon the progress of SRP-9001, an investigational gene therapy targeting Duchenne muscular dystrophy.

Roche and Sarepta develop a product development and licensing deal

Based on its $1.15 billion deal with Sarepta, Roche will have global rights to launch and market SRP-9001 except for the United States:

• Sarepta received $750 million in cash from Roche
• Roche purchased about $400 million of Sarepta stock at $158. 59 per share

For now Sarepta, based in Cambridge, Massachusetts, has decided to retain the U.S. market sector for its own commercial ventures.  Sarepta will continue to manage clinical development and production manufacturing of SRP-9001; Roche has agreed to cover half of the global clinical development costs. If the drug meets unspecified regulatory and sales milestones, Sarepta could receive up to $1.7 billion more in funds from Roche, as well as royalties on any net sales, if SRP-9001 achieves certain regulatory approval requirements as well as sales revenue targets.

The patient care science of SRP-9001

SRP-9001 has the potential to be a breakthrough therapy in a challenging patient care sector. SRP-9001 is presently in Phase II clinical development. The agent is designed to deliver the micro-dystrophin-encoding gene directly to the muscle tissue for the targeted production of the micro-dystrophin protein.

Sarepta's strategy to fund clinical trials for SRP-9001

With Roche’s investment, Sarepta can continue to invest in the development of the product and conduct clinical trials. They are selecting patients for the two-part Phase II SRP-9001-102; a 40-patient study focused on safety and efficacy of SRP-9001 in a 48-week randomized, double-blinded, placebo-controlled timeframe plus a 96-week, double-blinded extension period. This clinical study program has an anticipated wrap up targeting the 4^th quarter of 2022.

Based on positive results, Sarepta and Roche will pursue marketing opportunities worldwide

If the product is approved, Sarepta will have funds to orchestrate commercialization initiatives to launch the product in the United States. Roche, headquartered in Basel, Switzerland, has the global expertise and commercial resources that will enable it to move forward in other markets around the world. Roche, which just completed a $4.3 billion acquisition of gene therapy company Spark Therapeutics, will be a lucrative partner for Sarepta to market other gene therapy pipeline products with in the future or perhaps be wholly-acquired by Roche.

Partnerships and licensing agreements are popular options for large and mid-sized biotech and pharmaceutical companies to explore gene therapy commercial opportunities while avoiding risk

Gene therapy and other highly-focused clinical research or product development firms do not always have the financial resources or business structure to orchestrate a complete commercial lifecycle of their work. Established, publicly-held drug companies frequently collaborate with gene therapy and other smaller, highly advanced biotherapeutic concerns. As pipeline candidates move through the clinical trials process, it is easier to gauge the likelihood of their chances for approval by regulators. They provide financial support to these activities and when it appears their success is almost imminent, larger investments and commitments are made to assure trial completion, approval and subsequent clinical / commercial launch traction. 

The high cost and high risk involved with gene therapy research is a barrier to entry; less firms and highly focused therapies reduce competition in the sector

As an advanced area of life sciences with potential to cure diseases by replacing missing or mutated versions of a gene found in a patient’s cells with healthy copies gene therapy is not a sector many companies can participate in based on time, clinical and financial commitments. Depending on the patient and the genetic-based issue involved, gene therapy in has been proven to significantly reduce or eliminate complex, life threatening conditions. Success in the gene therapy sector also enriches the clinical insights and manufacturing attributes of their organizations which can be applied in other product development ventures outside of the gene therapy realm.

LinkedIn: John G. Baresky

Twitter: Healthcare & Content Marketing Guy