Sarepta bets on DMD drug approval with a $25M plant buy

Sarepta CEO Chris Garabedian

After months of back and forth with regulators yoked its share price up and down, Sarepta Therapeutics ($SRPT) is all-in on its odds of winning FDA approval for its Duchenne muscular dystrophy treatment, putting up $25 million for a manufacturing plant to produce the drug.

For its money, Sarepta gets a 60,000-square-foot facility on 26 acres of land in its home state of Massachusetts, an operation that will employ about 40 people once it's up and running. All that space will allow the Cambridge biotech to manufacture eteplirsen, an RNA-based DMD treatment that promises to delay the progression of the muscle-deteriorating disease.

The current plan at Sarepta is to launch four mid-stage trials of eteplirsen in the coming months, piling up enough data to support an FDA application by year's end. Positive results would set up a 2015 approval for the drug, and the biotech intends to be ready for launch, looking to start scaling up as soon as the deal closes in July, the company said.

Sarepta's shares jumped about 5% on the news, following a roughly 75% leap last month when the biotech outlined eteplirsen's path to the FDA.

The drug was once expected to ease its way onto the market on the strength of one small, if very promising, study. But, after a late-stage efficacy slip up by competitor Prosensa ($RNA), the FDA seemed to tighten its scrutiny on DMD drugs, walking back its willingness to consider an early approval for eteplirsen. That November revelation more than halved the value of Sarepta's shares, carving $700 million out of its market cap, and the biotech has been working its way back into investors' good graces ever since.

Now, after months of conjecture, Sarepta has a well-defined road to market for eteplirsen and plans to build a franchise of RNA therapeutics around its lead drug--and that's where its $25 million new shop will prove doubly useful, CEO Chris Garabedian said.

"While we scale up to address the potential U.S. commercial demand for our lead product candidate eteplirsen in the event of an approval next year, the addition of internal resources will enhance our ability to advance the development of our broader exon-skipping platform and explore the potential of our technology platform in other therapeutic areas," Garabedian said in a statement.

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