Sarepta Moves From Seattle to Boston for the Talent
Just when it looked like Seattle might be getting another emerging biotech company in Sarepta Therapeutics, it has picked up and moved East.
Sarepta (NASDAQ: SRPT), the company formerly known as AVI Biopharma, has moved its headquarters from Bothell, WA, to Cambridge, MA, CEO Chris Garabedian said yesterday in a phone interview. The company currently has about 110 employees, with about 40 in Bothell and the rest in Cambridge and Corvallis, OR. Sarepta hasn’t made a final decision about what to do with its Bothell site, but Garabedian says the company’s lease expires near the end of 2012 and Bothell staff are being evaluated and may be offered transfers to one of the two other locations.
“It was a decision we made with a lot of thought,” Garabedian says. “As we have focused in more on rare diseases, and looked for people with necessary skills in development, biostats, regulatory affairs, we found that many of the people we were interested in were already living in Boston, and not interested in moving to Seattle.” Some candidates Sarepta has been recruiting from elsewhere in the U.S. were also more interested in moving to Boston, he says.
Sarepta, founded in Oregon back in 1980, has burned through more than $320 million of investor money in its history without ever getting close to introducing a marketable drug in the U.S. The company originally moved its headquarters to the Seattle area in 2009, saying at the time it wanted to advance to the next level as a drug developer, and that it needed to tap into a deeper biotech talent pool to achieve that goal. But the management team that made that decision was swept aside a year later in a shareholder revolt, and Garabedian was brought in to turn around the struggling company at the start of 2011.
Garabedian, a former executive at biotech powerhouses Celgene (NASDAQ: CELG) and Gilead Sciences (NASDAQ: GILD), vowed in his first major interview as Sarepta CEO that he wanted to build another breakout independent biotech company in the Seattle area. The company endured some hard times in his first year as CEO, seeing its stock dip below $1. Despite the tough stretch, Sarepta did find some excellent people in the Seattle area, particularly with expertise in infectious diseases, Garabedian says. But ultimately, there weren’t enough people with the right skills to execute on its strategy to become a rare-disease drugmaker, he says.
The Boston area, by contrast, is loaded with people who know the rare-disease business because of the regional history with Genzyme, Shire, and many small biotech companies and Big Pharma operations.
Chris Rivera, the president of the Washington Biotechnology & Biomedical Association, said he’s “a little surprised, and disappointed” to hear that Sarepta’s headquarters has moved out of town. Sarepta didn’t seek help with recruiting from the local trade group, and it might have been able to help, he says. “I hope they succeed for the patients and for the company,” Rivera says. “I wish they had given it a little further shot here.”
It’s too early to say yet if Sarepta really has the right stuff to grow into a major player in the rare disease category, modeled after Cheshire, CT-based Alexion Pharmaceuticals (NASDAQ: ALXN)—which was just featured this week in Forbes. But the company has been revitalized since July, when it reported interim data from a study of 12 boys that said its experimental drug for Duchenne Muscular Dystrophy was able to outperform a placebo after 36 weeks of follow up. Final study data, which includes a more rigorous evaluation of the drug’s impact on walking ability at 48 weeks, is expected to be available next month.
Even though the results are preliminary, and Sarepta will almost surely have to reproduce the findings in a larger, longer-term clinical trial to begin next year, investors have been virtually screaming about this being a breakthrough for Duchenne Muscular Dystrophy and the company. Sarepta shares have skyrocketed from $3.46 a share on July 23—the day before the 36-week analysis was released—to $14.55 a share at yesterday’s close. That bullish run has given the company a market valuation of about $330 million.
Sarepta’s technology is for making drugs that specifically shut down certain biological processes at the level of RNA, so at least in theory it ought to be useful against far more than just Duchenne Muscular Dystrophy. Besides that lead drug candidate, the company has been putting its chemistry to work on making antivirals for the Ebola and Marburg viruses, under a pair of contracts with the U.S. Department of Defense. Last month, the government issued a “stop work” order to Sarepta on its Ebola program, saying it may end up terminating that contract as it re-assesses budgets. The Ebola program represents about half of Sarepta’s potential $291 million worth of defense contracts against hemorrhagic viruses. The status of the Ebola contract is still up in the air, according to a recent regulatory filing Sarepta made with the Securities & Exchange Commission.