It was a busy week in the biotech sector with important regulatory and pipeline updates. Among these, Sarepta Therapeutics SRPT crashed following report of a patient death after treatment with Elevidys. Incyte INCY also declined after study data disappointed investors.

Recap of the Week’s Most Important Stories:

SRPT Stock Plunges on Adverse Event

Shares of Sarepta Therapeutics plunged earlier in the week after it reported the death of a patient after treatment with Elevidys, its one-shot gene therapy for Duchenne muscular dystrophy (DMD).

Per the company, this patient died of acute liver failure. While acute liver injury is a known risk of Elevidys, this is the first time a death has been reported of anyone taking the therapy. However, Sarepta stated that the patient also had a recent cytomegalovirus (CMV) infection, which may have contributed to the outcome, as CMV can damage the liver.

Sarepta has reported the event to health authorities, clinical study investigators and prescribing physicians. It intends to update Elevidys’ prescribing information accordingly. Despite the incident, the company maintains that the benefit-risk profile of its gene therapy remains positive, with more than 800 patients treated in clinical studies or commercial use. However, this adverse event could make doctors more hesitant to prescribe Elevidys or lead to slow overall market adoption.

GILD Stock Down on Report

Gilead Sciences, Inc. GILD stock tumbled after the Wall Street Journal reported that The Health and Human Services Department is evaluating plans to slash the federal government funding for HIV prevention in the country.

GILD boasts a market-leading portfolio of HIV treatments both for treating the disease and prevention.  The company has two drugs for HIV prevention in its portfolio – Descovy and Truvada. Gilead to looking to get another drug approved for HIV prevention – lenacapavir.

However, the direct impact of this reduction under the Trump administration is likely to be minimal. The reduction in funding would primarily target a Centers for Disease Control and Prevention division that helps fund local health departments and nonprofits.

Per the report, while programs do provide free pre-exposure prophylaxis, reductions to the same wouldn’t directly affect reimbursement policies for the drugs. The report of a cut in the federal government funding for HIV prevention adds to investor anxiety about broader potential reductions to Medicaid, which could impact access to HIV drugs.

GILD currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

INCY Stock Down on Study Data

Incyte shares declined after the announcement of data from two late-stage studies on an oral small-molecule JAK1 inhibitor, povorcitinib, for the treatment of hidradenitis suppurativa (HS).

HS, a chronic inflammatory skin condition, is characterized by painful nodules and abscesses.

While both the late studies STOP-HS1 and STOP-HS2 studies met their primary endpoint, the results lagged investor expectations, and consequently, shares declined.

The studies have enrolled approximately 600 patients each with HS patients diagnosed at least three months prior to the screening visit. Data showed a significantly higher proportion of patients treated with povorcitinib once daily (QD) compared with placebo-achieved Hidradenitis Suppurativa Clinical Response (HiSCR) and a greater or equal to 50% reduction from the baseline in the total AN count, with no increase from the baseline in an abscess or draining tunnel count.

Per INCY, the data support the planned regulatory submission of povorcitinib for the treatment of HS worldwide.

However, the results did not meet analysts’ expectations who are also skeptical about the potential role of povorcitinib given multiple biologics with higher levels of activity.

VTVT Stock Up on Removal of Clinical Hold on Study

Shares of clinical-stage biopharmaceutical company VTv Therapeutics Inc. VTVT gained after the FDA lifted the clinical hold on its program on oral, liver-selective glucokinase activator cadisegliatin. The program includes the CATT1 phase III study in type 1 diabetes (T1D).

The FDA placed a hold on the cadisegliatin clinical program in July 2024. The clinical hold was based on the discovery of a chromatographic signal in a recent human absorption, distribution, metabolism and excretion (ADME) study of cadisegliatin that could not be resolved by standard mass spectroscopy. The regualatory body then stated that it requires a single in vitro study to characterize this signal before the cadisegliatin program can resume.

The clinical hold was lifted last week, following the submission of a complete response letter by VTVT, which concluded that the chromatographic signal was an experimental artifact.

vTv Therapeutics expects to resume the trial following the submission of a protocol amendment to reduce the overall duration of the CATT1 trial from 12 months to six months. This, in turn, is expected to help expedite the initiation of required larger pivotal studies for future new drug application submissions.

Performance

The Nasdaq Biotechnology Index has gained 0.26% in the past five trading sessions and INCY’s shares have lost 10.91%. In the past six months, shares of MRNA have plunged 51.01%. (See the last biotech stock roundup here: Biotech Stock Roundup: TSVT Up on BMY Deal, PTGX Up on Data & More)

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What's Next in Biotech?

Stay tuned for more pipeline updates.

 

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