August 19, 2020
BIOINVEST NEWS
BioInvest News – BMRN/SGMO – Surprise Roctavian CRL – Bad For BioMarin, Good For SGMO
This morning, the FDA issued a surprise Complete Response Letter for BioMarin’s Roctavian, its lead hemophilia A gene therapy program. This will cause a significant delay in BMRN’s product. On the other hand, this is good news for MTSL Rec SGMO, with partner PFE now starting Phase III trials using the new FDA rules. SGMO takeover potential rising.
Two-Year ABR Introduced & Delays Commercialization – Despite gaining Breakthrough Therapy Designation and guiding the Company through the approval process, in the CRL the FDA introduced a new primary endpoint of a 2-year annual bleed rate (ABR). The Company has used a one-year ABR in its studies. In addition, because the patient enrollments are so small – BMRN was attempting to gain approval on Phase II data – the agency had difficulty comparing the Phase II and ongoing Phase III trials. The PDUFA for Roctavian was for August 21 and the CHMP gave a favorable review earlier this year. That decision is expected in late 2020/early 2021. We alway questioned Roctavian’s durability and FVIII variability, the regulatory support (e.g., the FDA’s new gene therapy division made hemophilia its first guinea pig) and long-term ABR reduction was enough for us and the consensus to believe Roctavian would gain approval on time. Now, follow-up data is not expected until H1:21. Ultimately, we believe that Roctavian will get approved.
Now SMGO/PFE SB-525 Gets A Lot Closer – In June, Pfizer presented positive updated data for SB-525, or PF-07055480 – Sangamo’s hemophilia A gene therapy that we believe is at least as effective as Roctavian (https://www.businesswire.com/news/home/20200618005091/en/Pfizer-Sangamo-Announce-Updated-Phase-12-Results). However, with Pfizer just starting Phase III trials this year, before today the were 2-3 years behind BMRN. With today’s news, we believe the BMRN’s lead time is basically cut in half. Also, with the new trial guidance, PFE/SMGO has the luxury of delivering exactly what the FDA now wants. With another deal with PFE for ALS, in our view, today’s news could also trigger PFE to make attempts to take SGMO out. It is so cheap compared with any other gene therapy company around (e.g., CRSP).
- BMRN is a BUY under 100 with a TARGET PRICE of 130
- SGMO is a BUY under 20 with a TARGET PRICE of 30