Sarepta's Launch Of Exondys 51 Likely Slower Than Expected As Payers Deny Or Restrict Coverage

Sarepta Therapeutics Inc (NASDAQ: SRPT) shares nearly doubled back in September after the FDA granted accelerated approval for the company’s first drug, EXONDYS 51. However, after conducting a round of due diligence by talking to private payers and other experts, Jefferies analyst Gena Wang believes EXONDYS 51 uptake may be delayed.

EXONDYS 51

Wang spoke to four private payers, three Medicaid experts and two Duchenne Muscular Dystrophy (DMD) experts. In addition, she reviewed published medical policies from 21 other private payers.

According to Jefferies, 3/5 national and 8/15 regional managed care organizations have either denied or limited their coverage of EXONDYS 51.

“There appears to be no legal consequence, according to KOLs, for payers (Medicaid and private) to restrict/deny coverage, citing clinical benefits as #1 criteria for coverage decisions and FDA approval status as secondary,” Wang explained.

She isn’t surprised by the push-back and expects the road ahead for EXONDYS 51 to be an uphill climb.

Push-Back

“Our analysis suggests likely slow uptake of Exondys 51 due to additional time required for genetic tests, uncertainty of clinical benefits, and exhaustive payer oversight; decisions to continue would likely depend on close monitoring of clinical benefits, safety and pt interest,” Wang noted.

Jefferies maintains a Hold rating on Sarepta’s stock and a $46 price target.

At last check, shares of Sarepta were down 5.88 percent at $29.95.