Ed Kaye was the chief medical officer of Sarepta Therapeutics for nearly six years before being thrust into the spotlight. In April 2015, CEO Chris Garabedian resigned, and Kaye took up the job of trying to notch the first-ever approval for a Duchenne muscular dystrophy drug, eteplirsen (Exondys 51)—with the slimmest of data, no less.
Kaye succeeded. He navigated Sarepta (NASDAQ: [[ticker:SRPT]]) through one of the more controversial regulatory proceedings for a drugmaker in recent memory. Under his stint as CEO, Sarepta filed for and won FDA approval of eteplirsen in a significant decision that illuminated a rift inside the FDA and typified the increasing power of boisterous and mobilized patient advocacy groups. That meant that finally, the company that started out as AVI Biopharma uback in 1980 and founded in Bothell, WA, could start selling a commercial product.
Just months after Sarepta turned that corner and started selling eteplirsen, Kaye has unexpectedly announced plans to leave. A regulatory filing shows that Kaye will resign on Sept. 20 or “at a later date,” but stay on as a Sarepta boardmember and adviser. Kaye announced his intentions now, he said on a conference call, to help with a “smooth and seamless transition” and find a replacement. He’ll try to get eteplirsen approved in Europe first.
In April 2016, an FDA advisory panel had voted against approving eteplirsen, and FDA scientists had skewered the data, which were largely based on results from a tiny, 12-patient trial, in briefing documents. But last September, after months of deliberation, the agency—which had rejected two other Duchenne drugs earlier that year—approved eteplirsen on an accelerated basis, on the condition that post-approval studies definitively prove its effectiveness. The decision was championed by top drug evaluator Janet Woodcock, a key proponent of patient-centric drug evaluation, but derided by others within the agency, some of whom questioned how much the pressure from politicians, patients, and advocates influenced her thinking.
Nonetheless, despite Sarepta’s victory, the transition to a commercial-stage company hasn’t been easy. Sarepta priced its drug at an average of $300,000 per patient, per year, and many insurers have fought back, writing policies questioning whether the drug—meant to slow the progression of the deadly genetic disease Duchenne—is medically necessary, and citing the need for further evidence.
Kaye first detailed the battles Sarepta was having with payers at the J.P. Morgan Healthcare Conference in January, at which time he noted that some insurers still considered eteplirsen an “experimental therapy” because of the conditional approval. “That had to be dismissed as a concept for them,” Kaye said at the time, adding that Sarepta had had 50 meetings with top payers in the U.S.—often explaining the disease from scratch, trying to convince them that eteplirsen is needed to maintain patients’ muscle function so they don’t progress. Eteplirsen generated just $5.4 million in sales during its first quarter on the market, short of analysts’ expectations.
Sarepta reported more encouraging numbers, however, on Thursday. Eteplirsen revenue climbed to $16.3 million, and Sarepta bumped up its 2017 financial forecasts from $80 million to $95 million, citing “continued patient and physician interest” and “progress in the reimbursement landscape.” Bo Cumbo, Sarepta’s senior vice president of global commercial development, said on the call that there are now more than 130 physicians submitting “start forms,” which patients fill out to get access to the drug—a 30 percent increase. “This last quarter, we’ve really turned a corner,” he said on the call.
Though Sarepta said March was its best month, the company didn’t provide many further details on the drug’s launch—such as how many patients filing start forms were approved for treatment, or how many of those who started treatment have stayed on the drug. Sarepta still posted a $59.8 million net loss for the quarter. But curbing those losses, and finally making Sarepta sustainably profitable, will largely be the job of a new chief executive.
“Since transitioning into CEO of Sarepta, we have faced many challenges but also achieved some of the greatest professional accomplishments, not only in my career, but also in the history of the company,” Kaye said on the call. “I feel much more comfortable about our commercial progress to-date and feel that my skills are best utilized for our key regulatory and scientific challenges that will allow Sarepta to grow into an international company.”
