For companies developing drugs for rare diseases, data in just a handful of patients can have enormous clinical implications and influence millions of dollars in market value.
So it has been for Sarepta Therapeutics, developer of an experimental drug for Duchenne muscular dystrophy, a disease that affects about 1 in 3,500 boys worldwide—or about 14,000 to 15,000 people in the U.S. Sarepta said Thursday a study of 12 boys suggests that its drug eteplirsen helped slow declines in walking ability for almost three years.
Yet the stock sank, and was down about 24 percent mid-morning amid heavy selling in the broader market. One analyst said the data may call into question how well the drug works over longer periods. (For the latest stock quote for Sarepta, click here.)
The results will be part of the company's application for approval of eteplirsen, which it plans to submit to the Food and Drug Administration this year, Sarepta Chief Executive Chris Garabedian said in an interview. The company also plans to start three broader studies, in over 100 patients, to provide further information.
"This dataset supports the treatment benefit we've seen over the last three years," Garabedian said by telephone. "This supports the consistent thesis we've had, which is that eteplirsen is slowing the progression of the disease or stabilizing the disease."
In April, Sarepta said it received guidance from the FDA that provided a path for seeking regulatory approval, driving shares up 40 percent. That came just five months after the stock lost 64 percent of its value in one day after the company said regulators considered its plan to file for approval premature. Sarepta's market value was about $1 billion as of Wednesday's market close.
The results reported Thursday were from 144 weeks after the 12 boys started the study. (Duchenne muscular dystrophy affects primarily boys because of the way it's inherited.) Six who took the drug from the beginning of the trial and who were able to perform a six-minute walking test showed a decline of 33.2 meters, or about 8.5 percent, from baseline in walking ability.
Patients who took the drug from the start of the study showed a benefit of 75.1 meters on the six-minute walk test compared to those who took a placebo for 24 weeks before starting on drug, Sarepta said. The patients initially on placebo lost 68.4 meters on the walk test through week 36, and then 39 meters through week 144.
In Sarepta's statement, the study's lead researcher, Dr. Jerry Mendell, called the results "very encouraging, ... particularly when compared with the growing body of DMD natural history data which clearly show that similarly aged patients typically experience an increasingly rapid decline in walking ability and lose ambulation in their early teen years."
Mendell is director of the Centers for Gene Therapy and Muscular Dystrophy at the Nationwide Children's Hospital in Columbus, Ohio.
Robyn Karnauskas, an analyst with Deutsche Bank, noted a decline of 23 to 32 meters observed among treated patients from baseline.
"We do not know if this decline is driven by just one patient or this was seen with all patients," she wrote in a research note. "If this decline is across the board, there may be questions around the long term efficacy of the drug."
The company said patients also showed benefits in pulmonary function, another important gauge. The drug was well-tolerated through 144 weeks, Sarepta said. Karnauskas said she expects more context on the data at a future medical meeting.
Caused by a lack of the protein dystrophin, DMD is characterized by progressive loss of muscle function, affecting everything from walking to breathing. Boys with the disease often must use wheelchairs by their teens and generally don't survive past age 30.
Eteplirsen, because of the mutations it targets, may be helpful to about 13 percent of people with the disease, according to Sarepta. It's working on additional medicines that could target as many as half of all patients.
—By CNBC's Meg Tirrell