Sarepta Therapeutics Inc said patients trialing its muscle wasting disorder drug showed an accelerated decline in walking ability after nearly three years of use, sending the company's shares down as much as 28 percent.
Analysts said that, while the decline was disappointing, it was unlikely to delay the company's plan to file for approval of its lead drug by the end of this year.
The drug, eteplirsen, is designed to treat Duchenne muscular dystrophy (DMD), a degenerative disorder that hampers muscle movement and affects one in 3,600 newborn boys. There is no known cure and patients rarely live beyond 30.
"The reason for the sell-off in the stock is related to the acceleration in the rate of decline over the last six months, which can be taken as waning in eteplirsen efficacy," Roth Capital Partners analyst Debjit Chattopadhyay wrote in a note.
The mid-stage trial involves 12 patients to whom either the drug or a placebo was initially administered. After 25 weeks, both groups were given the drug to evaluate the increase in production of dystrophin - the lack of which causes DMD.
Trial data released on Thursday showed that, after 144 weeks, patients treated with eteplirsen from the beginning of the study reported a maximum loss of 32.2 meters from baseline walking ability, as measured by a six-minute walk test.
The decline in walking ability was smaller than the 107.4 meters clocked by those patients who began on placebo and switched to eteplirsen, but the declines were much greater than those reported in January after 120 weeks of the trial.
Sarepta reported in January a decline of only 13.9 meters in patients who received eteplirsen from the start and 9.5 meters in the other group.
Eteplirsen, like Prosensa Holding NV's rival drug, Drisapersen, skips a faulty section of the gene to produce dystrophin. Prosensa's shares were down about 5 percent in afternoon trading.
The U.S. Food and Drug Administration this year recommended an alternate path toward eteplirsen's approval after it deemed Sarepta's marketing application as premature in 2013.
The FDA said in April that safety and efficacy data from studies without placebo groups could support the company's application.
Brian Klein, analyst at Stifel & Co, said that eteplirsen's ability to show an improvement over the placebo group still qualified the drug as a success.
"If, after 144 weeks, you're concerned about disease progression, it's not a problem that you want," he said. "But it's better than no efficacy at all."
Shares of Sarepta were down 12 percent at $22.55 on the Nasdaq on Thursday.
(Editing by Don Sebastian)