In Defense of Sarepta’s Chris Garabedian

11/14/13Follow @BradLoncar

Anyone who follows the biotechnology industry surely is aware of the setback Cambridge, MA-based Sarepta Therapeutics (NASDAQ: SRPT) experienced this week after FDA changed their mind about the company’s ability to request early approval for its Duchenne Muscular Dystrophy drug, eteplirsen, on the basis of an encouraging Phase IIb study of 12 patients. However, the news appears to be considerably worse than the headline because there is also new doubt about what FDA will require of Sarepta’s Phase III study, the one needed to truly confirm the signal seen in the prior study.

The agency appears to be asking for new additional endpoints, a longer study duration, and a larger study population than what most people were expecting going into this. In other words, the company unfortunately has in many ways been sent back to the drawing board. Sarepta and FDA expect to formally discuss those things in the coming weeks, and hopefully will come to a speedy agreement.

Before getting to the main point I would like to make here, it is first important to recognize that there are no words to express how rightfully disappointed the Duchenne Muscular Dystrophy patient community must feel about this news. They currently have no good treatment options, and these patients undergo a steady decline before they typically die in their 20s. They deserve nothing less than urgency and clarity, yet seem to have come up on the short end of both of those things. That is particularly disappointing in this case because I have seen how they worked with all parties on this issue with dignity, class, and professionalism. Their contribution to this debate has truly been meaningful. I have the utmost confidence that all parties do place the highest importance on patients’ interests, and can only hope that will somehow bear itself out over the coming weeks and months in their favor.

Chris Garabedian, CEO of Sarepta Therapeutics

Chris Garabedian, CEO of Sarepta Therapeutics

With that being said, what I wanted to write about today is the job Sarepta CEO Chris Garabedian has done getting us to this point. No matter what the outcome, big news events like this bring out the “I told you so” crowd in full force, so it is only natural that some of those types of people will point the finger at him for this setback. The issue here is that some have said he should not have pushed for accelerated approval of eteplirsen as hard or openly as he did. While I don’t normally think those types of things are worth responding to, in this case I have also seen a handful of journalists, investors, and other commentators who I have the highest regard for say similar things, so I felt compelled to write something in his defense.

First of all, I think it is important to remember how we got here in the first place. Luke Timmerman has already done a great job here reporting about how Mr. Garabedian brought this company back from the brink a few years ago. Without his leadership, there arguably would have never been a phase IIb study to begin with. Therefore, I think it is important to put into context any debate we are having today about FDA decisions or early approvals, because they likely are a moot point without him. He and his team deserve a lot of credit and appreciation for even getting us here.

I do recognize that all of those previous accomplishments don’t change the fact that today we are left with a company that has suffered a significant setback, a DMD community that is sorely disappointed, and investors who have experienced a substantial decline of over 65 percent in one day (two quick disclosures: 1. I’m one of them and 2. investment losses PALE in comparison to what families of these kids are feeling right now). Add the fact that some critics are crowing loudly and you can see why a company’s leader will naturally be one of the first people to take some flack when news like this happens. However, take it from an investor who is usually one of the first people to loudly dish it in a case like this…I strongly believe any criticism is misplaced here. I’d like to offer three reasons why:

First, while many people have argued Sarepta’s phase IIb study of only 12 DMD patients, 2 of which sadly dropped out of the walking portion early, was not robust enough to seek early approval, I think the time had arrived to go for it. For example, political support for speeding up what I believe is exactly this type of program could not be any clearer. In July of 2012, Congress passed the FDASIA legislation. Among other things, FDASIA argued for expedited paths to approval for breakthrough therapies (Sarepta technically did not apply for this specific designation), it had a provision that explicitly asked FDA’s Center for Drug Evaluation and Research (CDER) and Centers for Biologics Evaluation and Research (CBER) to come up with policy related to patient outreach and advancing drug development for rare diseases, and offered a pediatric rare disease review voucher that was meant as extra incentive for companies to go after these diseases. Those signals show how there is a lot of outside support for programs like this, and a need for change, so I think publicly seeking them was entirely appropriate.

Second, you cannot ignore the human factor. There are no approved treatments that seek to correct the cause of DMD, so as you can imagine, families have an incredible sense of urgency to do anything to help their children who have this condition. In fact, if you discuss biotech on Twitter, you may have come across a DMD patient advocate, many of whom sadly use the hourglass as their avatar and a symbol of what they are up against. It is heartbreaking to think what these families must be going through.

Given that, put yourself in Mr. Garabedian’s position. You can bet he receives phone calls and letters, probably every day, from families urgently asking him for help. In my opinion, if you are in his shoes, receiving calls for help like that every day, and you believe your drug works, the only choice is to push for rapid approval. I follow this very closely and can tell you that he has always done so in an entirely appropriate, ethical, professional, and level way with both those families and the regulators. He has been careful not to overhype the results Sarepta has seen, and not to try to bulldoze his way through the FDA.

Third, it is not his fault that a competitor’s drug (Prosensa and GlaxoSmithKline’s drisapersen) with similar, but very different, characteristics failed a large study a couple of months ago. Those that criticize Sarepta’s goal of seeking early approval seem to forget that FDA signaled this summer that they were open to accepting such a filing for review. It wasn’t until after the competitor failed (and a natural history study from another DMD candidate was recently published) that FDA changed its mind and insisted that the 12-patient study doesn’t provide enough evidence for Sarepta to seek approval. I do not see how any of that is Garabedian’s fault. I also do not see how Sarepta could have kept FDA’s previous willingness to review a filing private considering how patient interest in this issue is so high and urgent. In my opinion, he did the right thing to seek the go ahead to file, he basically received it, and it is not his fault that outside circumstances have so unfortunately changed the situation. None of that was foreseeable, so you cannot hold it against him.

I would just like to conclude by saying that I think Chris Garabedian and his team deserve not only a break on this, but tons of gratitude and respect for their hard work, under an insane amount of pressure, over the last year and a half. There is no doubt this has been a very disappointing week. However, his leadership has already moved mountains to get us where we are, and while this week’s news frankly stinks, I cannot think of a better person to manage the company back to a path of ultimate success. Hindsight is always 20/20, but I still would not change a thing about the way this was managed. I’m immensely proud and supportive of the work he has done.

Brad Loncar is an individual investor. Follow @BradLoncar

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  • Tim Klapp

    Brad. That’s a pathetic response. You were long and wrong. Just admit it and move on. Sarepta was trying to take short cuts. You know it. FDA knows it. End of story.

    • Doble Ciego

      When you hire a good car salesman, he could do magic to sell you car. Just a new logo, a fresh paint job. Voila! You got a shiny new(-ish) car. Best car ever. Jesus himself would have driven it. Investors bought it. Poor patients bought it. Even Adam bought it.

      Unfortunately, the FDA is like the DMV. They have all the records of how the car looked like before the paint job. Also the fact that the car was a wreck formally known as AVII.

  • micro kid

    Brad, Great message! Many of us were long and unfortunately wrong about the short sided decision the FDA made! Those who were negative are jumping with joy at the pain of the longs and ignoring the real tragedy of the boys with DMD!

  • betty

    Well said. I was wondering if you could respond to a question I have. The tone of the comments from the FDA seem to be very harsh. At points, it sound like they are accusing Chris of overhyping the results. I am particularly confused as to their skepticism regarding dystrophin quantification, which to me is the key difference between Etep and Drisa. Have you read the comments from “Renaldo Phlegm” to Matt Herper’s column in Forbes?

    http://www.forbes.com/sites/matthewherper/2013/11/12/what-the-delay-of-a-promising-muscular-dystrophy-drug-means-for-patients-investors-and-all-of-biotech/

    While I find many of his criticisms off base, the substance of his complaints regarding dystrophin quantification are beyond me. Given the FDA’s comments, it sounds as though they take his accusations seriously. Is there any merit to what he has said on this issue? Thanks in advance for any response.

  • Jenn Mcnary

    thank you for this

  • ombudsman

    Apparently Serepta packages its Cool-Aid with its stock certificates. There is no other explanation for taking your position. Dude should be fired from Serepta and a calculated strategist should be given the honor of navigating the way for these boys who desperately deserve not only to have this drug approved, but in a way that results in insurance companies actually paying for it.

  • 24inchpythons

    Ohhh….. YEeeeaaahhhh!!!

    Hulk Here,

    Good thing da FDA snapped into that slim jim of a scam SRPT…..

    Yo Brad, you know what I heard? It ain’t too cool being a jive turkey so close to thanksgiving brotha!!!! How yah like that yah jabroni!

    Everyone had to listen to you and the rest of the morons call the bears idiots… well who is the idiot now? Everything they said was right…..

    Yeah, I just talked to jake the snake, he said even he wasnt stupid enough to fall for the sarepta scam on his worst hangover days brotha!!!!

    Chris the dirty dog Garabedian has been organizing a long running fraud for that last year,

    Now we have a new twits, “the sarepta apologist” who spends his days trying to revise history….. nothing sadder than that…. reminds me of genta…..

    Why the stock sell off so hard if the drug is promising? Oh yeah,,, any 6 year old can figure out the drug doesnt work…….

    I just got off the phone with the macho man and he told me he’s selling a new slim jim, called the sarepta crunch…..

    You should go down to the pawn shop, buy a 1970s velvet suit and sell used cars, you seem to be good at selling lemons to unsuspecting retail mom and pops so you can inflate the value of worthless stocks…only to sell to them at inflated prices…..

    Ohhh yeeeahhhh…