What's Going On With Sarepta, Capricor And Other Gene Therapy Stocks On Wednesday?

In May, FDA Commissioner Marty Makary named Vinay Prasad the next director of the U.S. Food and Drug Administration’s (FDA) Center for Biologics Evaluation and Research (CBER). Within three months, Prasad resigned.

“Dr. Prasad did not want to be a distraction to the great work of the FDA in the Trump administration and has decided to return to California and spend more time with his family,” a spokesperson for the US Department of Health and Human Services told CNN.

Citing sources, CNN said Prasad’s departure came amid fresh pressure from the White House for him to resign amid internal dynamics, and followed days of criticism from Laura Loomer, a right-wing activist with ‘extraordinary’ access to President Donald Trump.

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Dr. Prasad has openly criticized the biopharmaceutical industry and the FDA for using accelerated approvals that are broadly based on surrogate endpoints.

Prasad had railed against a decision to approve Sarepta Therapeutics Inc.’s (NASDAQ:SRPT) drug for Duchenne muscular dystrophy known as Elevidys, arguing that there was little evidence favoring the gene therapy.

Earlier in July, the FDA requested that Sarepta halt shipments of the drug after a reported death in a young patient in Brazil.

Just one day before Prasad’s departure, the agency unexpectedly reversed its decision and allowed Sarepta to resume shipments for certain patients.

Following Prasad’s appointment, stocks in the cell and gene therapy sector reacted negatively. There are now outstanding questions and increased uncertainty as the analyst waits to see whether Makary or Prasad will have a greater impact on the guidelines and regulatory development requirements for these novel therapies, particularly in the treatment of rare diseases.

In July, the FDA issued a Complete Response Letter (CRL) to Capricor Therapeutics Inc.’s (NASDAQ:CAPR) Biologics License Application (BLA) for Deramiocel, the company’s lead cell therapy candidate for cardiomyopathy associated with Duchenne muscular dystrophy (DMD).

In the CRL, the FDA stated that it had completed its application review but could not approve the BLA in its current form.

The agency specifically cited that the BLA does not meet the statutory requirement for substantial evidence of effectiveness and that additional clinical data is needed.

During his short tenure at the FDA, Dr. Prasad’s division reviewed vaccines, issued complete response letters for cell and gene therapies targeting rare diseases and provided regulatory recommendations for Sarepta’s Elevidys.

William Blair writes that it’s unclear how much direct influence Dr. Prasad had on recent decisions by the FDA’s CBER. However, the high-profile and controversial handling of Elevidys may have drawn public attention and impacted how the agency was perceived, potentially contributing to his departure.

Analyst Sami Corwins expressed concern about CBER’s frequent leadership changes, warning that they could delay review timelines and cause inconsistent product regulation.

Although it’s unclear who will succeed Dr. Prasad, the firm noted that Dr. Makary has strongly supported cell and gene therapies, especially those targeting rare diseases.

Other gene therapy companies that are trading higher include:

uniQure NV (NASDAQ:QURE)

Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT)

Cabaletta Bio Inc. (NASDAQ:CABA).

Neurogene Inc. (NASDAQ:NGNE)

Intellia Therapeutics Inc. (NASDAQ:NTLA)

Price Action: CAPR stock is up 16.2% at $7.83, and SRPT stock is up 13.7% at $17.99 at the last check on Wednesday.

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