Health and Healthcare

Why This Duchenne Muscular Dystropy Deal Could Be Huge

Chris Lange

Published: December 23, 2019 10:20 am

Last Updated: January 30, 2020 11:54 am

Sarepta Therapeutics Inc. (NASDAQ: SRPT) shares made a handy gain to start the week after it announced a licensing agreement with Roche. The deal provides Roche exclusive commercial rights to SRP-9001, Sarepta’s investigational gene therapy for Duchenne muscular dystrophy (DMD), outside the United States.

The collaboration combines Sarepta’s leading gene therapy candidate for DMD with Roche’s global reach, commercial presence and regulatory expertise to accelerate access to SRP-9001 for patients outside the United States.

Under the agreement, Sarepta will receive $1.15 billion in an upfront payment and an equity investment. The company will receive up to $1.7 billion in regulatory and sales milestones, and royalties on net sales, which are anticipated to be in the mid-teen percentages. Additionally, Roche and Sarepta will share equally global development expenses. Sarepta will retain all rights to SRP-9001 in the United States.

As part of the agreement, Sarepta will continue to be responsible for the global development plan and manufacturing build-out for SRP-9001. Sarepta also has granted Roche an option to acquire ex-U.S. rights to certain future DMD-specific programs, in exchange for separate milestone and royalty considerations and cost sharing.

The transaction is expected to close in the first quarter of 2020.

Doug Ingram, president and CEO of Sarepta, commented:

This collaboration will not only increase the speed with which SRP-9001 could benefit DMD patients outside the United States, but will also greatly expand the scope of territories within which we could potentially launch SRP-9001 and improve and save lives.

Shares of Sarepta were last seen up about 5% at $132.70, in a 52-week range of $72.05 to $158.80. The consensus price target is $195.86.