Prosensa Rises on Encouraging Data - Analyst Blog

Shares of Prosensa RNA rose approximately 3.85% following the announcement of encouraging data from a phase II study on drisapersen. Prosensa is developing drisapersen for the treatment of patients suffering from Duchenne muscular dystrophy DMD.

The placebo-controlled phase II study (DMD114876 or DEMAND V) compared the use of drisapersen versus placebo in 51 boys above five years of age and suffering from DMD. Data from the study indicated that at a higher-dose of drisapersen (6 mg/kg once weekly), patients experienced stabilization and improvement in muscle function and physical activity during the 24-week treatment period. Patients also maintained that improvement during the 24-week follow-up phase. Additionally, a clinically meaningful treatment difference of 5.2% (at week 24) and 4.8% (at week 48) was observed between drisapersen and placebo in the 6 Minute Walking Distance (6MWD) test.

We remind investors that Prosensa had received a major setback, with the stock price tumbling approximately 70% in Sep 2013, when it had announced that a phase III study failed to meet the primary endpoint as drisapersen did not show a statistically significant improvement in the 6MWD test versus placebo. No difference in the key secondary assessments of motor function was observed.

However, initial findings from further analysis of the aggregate drisapersen data suggests     that use of drisapersen earlier in DMD patients and longer treatment duration leads to a delay in the progression of the disease.

Drisapersen enjoys orphan drug status in the EU and the U.S. In Jun 2013, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation to drisapersen. Prosensa has full rights to drisapersen after GlaxoSmithKline GSK terminated its agreement for the candidate earlier this year.

Prosensa plans to engage in discussions with regulatory authorities in the U.S. and EU regarding the future development path of drisapersen in the second quarter.

Meanwhile, the company also announced its full year 2013 financial results. The company reported a loss of 51 cents per share for 2013, wider than the year-ago loss of 37 cents per share but narrower than the Zacks Consensus Estimate of a loss of 65 cents.

Our Take

We are pleased with the encouraging data on drisapersen. However, keeping in mind the disappointing phase III results, we remain cautious.
 
According to Prosensa, DMD is a fatal rare genetic disease affecting 1 in 3,500 boys worldwide. It represents an underserved market as currently there are no approved disease-modifying therapies for DMD. We note that several other companies including Sarepta Therapeutics, Inc. SRPT are developing therapies targeting the DMD market.

Prosensa, a biopharmaceutical company, carries a Zacks Rank #2 (Buy). Investors may also consider another biopharmaceutical company Alexion Pharmaceuticals, Inc. ALXN, which sports a Zacks Rank #1 (Strong Buy).