An experimental drug improved walking ability in boys suffering from a rare degenerative disease that causes progressive muscle loss, data from a new study showed, nearly tripling the market value of its developer Sarepta Therapeutics Inc.
The drugmaker's shares rose as much as 188 percent, valuing the company at about $975 million. About 20 million shares changed hands by midday, more than 10 times their 25-day moving average volume.
The drug, eteplirsen, significantly improved walking ability in a mid-stage trial for patients with Duchenne Muscular Dystrophy (DMD) -- a genetic disorder that appears as early as infancy in male children and leads to severe muscle loss and eventual death.
DMD affects about one in every 3,600 boys worldwide and has no approved treatments.
"This is a potentially disease modifying drug and the company's most advanced product," Thinkequity analyst Kimberly Lee said.
"The best case scenario is if they get accelerated approval, the product could be on the market by next year," Lee added.
The company plans to request for a meeting with the U.S. Food and Drug Administration around year-end or early next year, Chief Executive Chris Garabedian said on a conference call.
The CEO said Sarepta has seen a lot of interest from potential partners but did not disclose any names.
Through Tuesday, the shares of the company had more than tripled in value since late-July, when trial data showed improvement in walking ability at 36 weeks.
IMPROVED PROTEIN PRODUCTION
The mid-stage study compared two separate once-weekly doses of the drug, 50mg/kg and 30mg/kg, with a placebo and the higher dose improved walking ability by 89.4 meters after 48 weeks.
The improvement was measured by a standard test called the six-minute walk test that checks the cardiac, respiratory, circulatory, and muscular capacity of patients.
DMD is caused by mutation of the gene that helps produce dystrophin, a vital protein that plays a key role in muscle fiber function.
Eteplirsen enables the production of dystrophin.
Sarepta, which changed its name from AVI Biopharma in July, said there were no safety concerns reported in the study.
EBOLA CONTRACT CANCELED
Sarepta said in a separate statement that the U.S. government terminated a part of a contract worth about $291 million awarded to the company in July 2010.
The U.S. Department of Defense contract was to develop drugs for treating fever caused by Ebola and Marburg viruses. DoD canceled the Ebola part of the contract on Wednesday due to funding constraints.
The Defense Department will now only fund Tekmira Pharmaceuticals Corp's Ebola program, which the government temporarily halted on August 6.
Ebola and Marburg virus infections, whose symptoms are very similar, cause hemorrhagic fevers and are often fatal.
(Reporting by Adithya Venkatesan and Balaji Sridharan in Bangalore; Editing by Sreejiraj Eluvangal and Sriraj Kalluvila)