February 27, 2019 / 12:44 PM / in 22 days

Sarepta shares rise after gene therapy deal, promising data

(Reuters) - Sarepta Therapeutics Inc beefed up its gene therapies portfolio through the purchase of its partner Myonexus Therapeutics Inc and reported positive data for a genetic disorder therapy from the privately held company, sending its shares up 9 percent on Wednesday.

The $165 million-deal gives Sarepta access to the therapy, codenamed MYO-101, that is being tested for limb-girdle muscular dystrophy (LGMD), a type of muscle-wasting disorder.

Gene therapy, an emerging field of biotech, uses specially engineered viruses, or viral vectors, to deliver genetic material into defective cells, in hopes of improving or potentially even curing an inherited condition.

The sector received a fillip this week after drugmaker Roche agreed to buy gene therapy specialist Spark Therapeutics for $4.3 billion.

Sarepta had already signed a deal with Myonexus last year to test five gene therapy candidates, with an option to acquire the company which it has now exercised.

On a conference call on Wednesday, after the deal was announced, Sarepta said all three patients treated with its gene therapy showed 51 percent levels of a protein that the company expects could improve symptoms of a form of LGMD.

“This data really surpasses our pre-defined threshold of a 20 percent expression,” said Louise Rodino-Klapac, who leads Sarepta’s gene therapy business unit.

Patients also showed a 90 percent mean reduction in levels of serum creatine kinase, an enzyme tied to muscle damage, with one brokerage saying that the reduction was higher than its expectations.

Bernstein analyst Vincent Chen said he had been looking for an 85 percent or greater decrease in these enzyme levels, calling the drop encouraging.

The company said two patients had elevated liver enzymes in the trial, after being tapered off their steroid therapies. However, after the patients were given their steroids, the enzymes reached normal levels.

The small trial, the first ever study testing the treatment MYO-101 in humans, is aimed at treating patients with a subtype of LGMD, that results in deteriorating muscle function and strength.

Sarepta is also developing a gene therapy for another muscle wasting disorder, Duchenne muscular dystrophy, and last year saw its shares rise after another three-patient study showed high levels of micro-dystrophin - a protein that helps keep muscles intact.

Baird analyst Brian Skorney said Wednesday’s data supports not just this discrete opportunity but Sarepta’s micro-dystrophin program.

Sarepta’s shares were up 9.2 percent at $152.98 in midday trade.

Reporting by Saumya Sibi Joseph and Manas Mishra in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty

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