Profiles in Long-Termism: Sarepta Therapeutics CEO Chris Garabedian
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show a scientific and medical benefit from the drug. Garabedian was scrambling. A few days after that negative reaction, he told me he was even re-considering his prior vow to go it alone in drug development. He figured he might need to lean on a partner for help, just to get money.
“I couldn’t even get investors interested in giving us $15 million,” Garabedian recalls. “This was back in May 2012, to give us a bridge to the 48-week data. Those were some of the darker days.”
The company’s only real hope was to hold on, white knuckles and all, for a glimpse at the 36-week follow-up report scheduled for July, and the all-important 48-week analysis in October. The stock was below $1, and the company was facing the threat of a Nasdaq de-listing. Like many desperate executives would have done, Garabedian went to the board and asked for clearance to do a reverse stock split to prop up the stock price above $1—always a very unpopular move with shareholders who end up getting less. Some members of the management team Garabedian had recruited walked out the door.
Garabedian also asked the board to allow him to change the name of the company to Sarepta Therapeutics, to foster the new identity he was trying to build, and shed some of the old baggage that went with the old name. While he didn’t announce it publicly at the time, Garabedian was also looking to move the company from its headquarters in Bothell, WA to the Boston area, where he saw a deeper talent pool for people with experience in developing drugs for patients with rare diseases.
In July, the Garabedian and the Sarepta team caught a big break. Four boys who got a high dose of Sarepta’s drug, eteplirsen, saw their walking ability decline by just 8.7 meters on a standard 6-minute walk test after 36 weeks of treatment. That was a statistically significant improvement compared with boys on the placebo, who lost 78 meters of walking ability over the same period of time. No drug-related adverse events were reported, and no patients dropped out of the study because of side effects.
Shares went from $3.46 to $8.52 that day.
Still, there was reason to reserve judgment on the Sarepta drug. Sarepta hadn’t taken a muscle biopsy from patients at 36 weeks—that’s invasive for patients—and there was no biopsy data that could confirm the walking improvement was connected to increased dystrophin production. For that extra layer of convincing data, everyone would have to wait until the 48-week analysis in October.
With more follow-up time, the data kept looking better and better. Boys on the Sarepta drug were able to walk an average of 89 meters further than those on a placebo after 48 weeks, when both groups took the 6-minute walk test. Much of that difference was explained by the rapid decline of patients on the placebo, but the boys who got the drug actually improved, and were able to walk an average of 21 meters further after 48 weeks than they could at the start of the study. The results were better than anything anyone had seen for this patient population. And critically, dystrophin levels continued to increase over time. The boys weren’t yet producing 100 percent of normal dystrophin levels, but they were getting enough to improve muscle function, and it provided a sound scientific explanation for the clinical benefit researchers were seeing.
By this time, parents and the patients in the study were seeing notable improvements, and some compelling stories started getting told by local television. Patient advocacy groups who had supported the program were suddenly invigorated with possibilities of getting the first treatment that could turn their lives around.
The Sarepta bandwagon was now full. Shares went from $14.99 before the 48-week data presentation to $44.93 after. By December, Garabedian took advantage of his sky-high stock price to raise $125 million for the company, from many of the same folks he had been briefing on his vision a year or two earlier.
Now the Sarepta story is all about what happens next with the FDA. Hearing from so many passionate patient advocates and parents, Garabedian has sought to at least inquire with the FDA about the possibility of getting an “accelerated approval” to start selling the drug on the basis of his intriguing, but tiny, data set of just 12 patients.
Sarepta is crafting plans for a larger, traditional Phase III clinical trial to confirm the results, but everything that comes next depends on whether the FDA goes out on a limb to approve a drug that has such promise for a group of children who have no other good options. Patient advocates have been banging on the FDA’s door, much like AIDS activists did two decades ago, demanding that regulators allow them to have access to a potentially transformative therapy.
Meanwhile, this run of success has given Garabedian a whole slew of options he didn’t have before. He could have sold some of his newly valuable shares, which he didn’t. He could have struck a partnership on one of Sarepta’s other internal drug programs, although he has chosen not to, believing that he needs the company’s energy focused on getting eteplirsen approved.
Once that happens, he said Sarepta will be on a mission to apply the lessons of eteplirsen to boys with genetic abnormalities in exons other than exon 51. Essentially, the company wants to get to the point where it has a portfolio of exon-specific drugs that serve as what you could call personalized medicines for most Duchenne patients.
Brad Loncar, an individual biotech investor based in Lenexa, KS, said he bought Sarepta shares once he saw the 36-week data release last July. He said he intends to hold onto the stock for a long time.
“Chris is not in this for a short-term fast buck,” Loncar says. “Eteplirsen is their first product. It’s very important they get it absolutely right. Everything will flow from that. As a long-term investor, that appeals to me.”
On my visit to Garabedian’s office in April, he made clear that while there are lots of directions things can go in the short-term, the long-term plan is still intact. He’s a student of biotech history, and has seen how sticking with a long-term plan can pay off.
“In most cases, the breakout biotechs were built largely on one drug that got approval for an unmet medical need,” Garabedian said. “You can see a few companies currently, like Aegerion and Ariad, that are on the cusp of delivering a real commercial product. It can catalyze a company. Once you do that, it becomes a more strategic endeavor on how you continue to add, build up the pipeline, acquire other companies or technologies.
“Truthfully, there have been six breakout large cap biotechs—Genzyme, Genentech, Gilead, Celgene, Biogen and Amgen. Everybody aspires to be that next one. Alexion has an opportunity. Vertex too. Regeneron has a nice business model working. All of that hinges on that one product that’s approved that drives real demand. We think we have that and we think we have what it takes to build one of the great biotechs for the future.”
Sarepta will need to execute on its strategy for many years to even hope to get in the same sentence with those companies. It’s still audacious—and more than a little conceited—for Garabedian to talk like this. His company still only has about 100 employees and not a single FDA-approved drug. But I do hope Sarepta can deliver on this plan and do something important for Duchenne patients. Its stock may dip if it doesn’t get the cherished “accelerated approval” from the FDA right away, and some of its good luck could easily turn bad. But it wouldn’t even be close to this position without having a long-term vision, and sticking with it, even when times got tough.
With that, I’m off on my own personal long-term journey of sorts, climbing with a couple old friends on Denali (Mt. McKinley), the highest peak in North America. That means I won’t be online to read and respond to any comments until July 1. I plan to post a few photos when I get back. See you all here at BioBeat next month.