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Biotech Stock Mailbag: New Sarepta Risk, Zafgen Patient Death, Bluebird Gene Therapy Update


BOSTON ( TheStreet) -- Welcome back to another Biotech Stock Mailbag. This week's stocks: Sarepta Therapeutics (SRPT - Get Report) , Zafgen (ZFGN) and Bluebird Bio (BLUE - Get Report) .

Graham R. writes, "Sarepta Therapeutics has acted badly since the FDA [advisory committee] dates were straightened out. Why is this perceived to be bad news for Sarepta?"

I'll give you the "new" Sarepta bear thesis to explain why the stock is sinking, but let me first set the stage based on what we learned Wednesday.

Biomarin Pharmaceuticals (BMRN - Get Report) will bring drisapersen in front of an FDA advisory panel on Nov. 24. The FDA's approval decision deadline for drisapersen is Dec. 27. Sarepta believes FDA will convene a second advisory panel for its drug eteplirsen on Jan. 22, 2016. [That date is currently tentative.] The FDA approval decision deadline for eteplirsen is Feb. 26, 2016.

Under this timeline and assuming all goes well for Biomarin, drisapersen will be approved before Sarepta's advisory panel. Therefore, the FDA -- theoretically -- will have less urgency to approve eteplirsen.

This is the new Sarepta risk factor now that we know the two drugs won't be reviewed at FDA advisory panels on consecutive days in November, as previously expected.

The bright side of the current timeline: Sarepta has a greater opportunity to learn and react to whatever happens during the earlier Biomarin advisory panel.

In case you're interested, I've previously predicted how FDA will rule on the Biomarin and Sarepta drugs, and I've taken a closer look at the Sarepta investment bear case. I also wrote about the new analysis of eteplirsen conducted by Sarepta.

so in your experience is this death a big deal?

— Hard Money (@hardmoneynow)

Update: On Friday morning, after this column was written, Zafgen announced that the FDA had placed a partial clinical hold on all beloranib clinical trials. Zafgen confirmed that the patient who died was being treated with beloranib. The cause of death is still unknown but Zafgen's statement Friday suggests a thrombolic (blood clotting) adverse event was involved.

The death of a patient in a clinical trial is always a big deal, particularly when the cause of death -- and the role an experimental drug may have played -- is not known. Zafgen is taking the Prader-Willi Syndrome patient deathreported in the beloranib study very seriously, as it should. Unfortunately, the company handled the disclosure of the material event to investors very poorly.

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Given the lack of information available Friday, it's difficult to assess the impact of the patient death on the future clinical development of beloranib. Zafgen shares rebounded Wednesday and Thursday because the worst-case...