Business Corpus: These Gene Therapy Stocks Are Spiking — Here's WhyShares of gene therapy firms Sangamo Therapeutics and Sarepta Therapeutics popped Thursday on bullish expectations for their respective hemophilia A and Duchenne muscular dystrophy drugs. The post These Gene Therapy Stocks Are Spiking — Here's Why appeared first on Investor's Business Daily.

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Shares of gene therapy companies Sangamo Therapeutics (SGMO) and Sarepta Therapeutics (SRPT) popped Thursday on bullish expectations for their respective hemophilia A and Duchenne muscular dystrophy treatments.

In midday trading on the stock market today, Sangamo stock jumped 12% in high volume, near 15.50, and Sarepta stock leapt 9.1%, near 132. Meanwhile, shares of the broader biotech group rose 0.7%.

Gene Therapy Studies

Late Wednesday, Sangamo and partner Pfizer (PFE) unveiled data from a test of a gene therapy to treat hemophilia A. The field is ripe with contenders including Spark Therapeutics (ONCE) and BioMarin Pharmaceutical (BMRN).

Sangamo and Pfizer plan to test up to 20 patients with severe hemophilia A. To date, five patients have received treatment at three different dose levels. So far, patients have tolerated the gene therapy with no treatment-related side effects.

The fifth patient in the study was treated in June. Since then, that patient has experienced an improvement in the level of a key blood-clotting protein called factor VIII. Sangamo and Pfizer didn't go into how much of an improvement the patient saw.

RBC Capital Markets analyst Kennen MacKay expected Spark to dive on the news. Spark and BioMarin also are working on gene therapies to treat hemophilia A. Earlier this week, Spark's results in a recent test seemed to lag BioMarin's.

Two patients in Spark's study experienced damaging immune responses and required on-demand treatment. Spark thinks it can control this kind of side effect by using preventative steroids. But in Sangamo's study, patients didn't require tapering steroids.

Sangamo's release was scant on details, but it could "potentially (add) a competitive threat to Spark," MacKay said in a note to clients. "Further, Sangamo touted that no use of tapering courses of oral steroids was required in these initial five patients, suggestive of a clean safety profile."

Sarepta's Exondys 51 Tops

Sarepta spiked on its earnings report. Sales of Sarepta's approved Duchenne muscular dystrophy drug, Exondys 51, came in at $73.5 million. That more than doubled vs. the year-ago period and topped views for $71 million, Piper Jaffray analyst Edward Tenthoff said in a note.

The biotech firm also reported a loss of $1.67 per share. That was wider than analyst views for a per-share loss of 89 cents, JMP Securities analyst Liisa Bayko said in her report to clients. On an adjusted basis, Sarepta reported a 43-cent loss per share vs. a 48-cent adjusted loss in the year-ago period.

For the year, Sarepta projects $295 million to $305 million in sales. JMP's Bayko sees the company bringing in $301 million. Piper Jaffray's Tenthoff is more bullish and expects $309 million in 2018 sales.

Treating Duchenne Muscular Dystrophy

Analysts are also excited about what's next for Sarepta. The firm has several bites at the apple in treating Duchenne muscular dystrophy, a genetic condition that tends to affect boys. It's characterized by progressive muscle degeneration and weakness.

Sarepta said it's nearing resolution of a clinical hold on a study of its drug, micro-dystrophin. In July, the Food and Drug Administration placed the study on hold after discovering a trace amount of DNA in a material provided by a third party and used in the gene therapy.

To resolve that issue, Sarepta said it's now partnered with Brammer Bio to provide its clinical and commercial manufacturing for micro-dystrophin and future gene therapy platforms. The biotech expects to respond to the FDA's hold by the end of August.

What's Next?

Sarepta expects to complete its rolling application for approval of a drug called golodirsen by the end of the year. Golodirsen is being investigated in Duchenne muscular dystrophy. It works by skipping over faulty or misaligned sections of genetic code.

Tests also show Sarepta's drug called casimersen is just as efficient as golodirsen in skipping over faulty genetic code and promoting a key protein necessary for muscle movement. This could help Sarepta to file for accelerated approval of casimersen by mid-2019, the firm said.

"Golodirsen and casimersen combined serve an even larger population than Exondys 51," Chief Executive Doug Ingram said on the earnings conference call. "So, the near-term opportunity to bring these therapies to the community is very significant."

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