What can Sarepta do in a year?

Sarepta Therapeutics completed a biotech odyssey on the way to winning conditional approval last month for a gene therapy designed to treat Duchenne muscular dystrophy. Now we'll find out just what the market for it might be.

Later this afternoon, Sarepta will present its second-quarter earnings, but Wall Street will be listening for the company's full-year sales projections on that gene therapy, marketed as Elevydis. Expectations are all over the map. Analysts' consensus is about $95 million for 2023, but TD Cowen is expecting a number closer to $50 million, and surveyed investors are leaning more toward $25 million.

Elevydis' ultimate success is key to Sarepta's business, but the complexities of administering a gene therapy, coupled with the medicine's $3.2 million price tag, have seeded concerns about its commercial uptake. Further complicating matters, data from a large, randomized study are expected at the end of the year, which could either confirm Elevydis' benefits or cast doubt on its clinical utility.

And there's potential competition from a gene therapy being developed by Pfizer. During its earnings update Tuesday, the pharma giant said it planned to conduct an interim analysis of an ongoing, fully enrolled Phase 3 study toward the end of the year.

Closer Look

Pfizer spooked the Covid market

Pfizer's Covid-19 related revenue came in dramatically below analysts expectations in the second quarter, leading CEO Albert Bourla to float the idea of cost cuts and alarming Wall Street in the process.

Sales of Pfizer's Covid vaccine fell about 80% in the quarter, following an expected cratering of demand for booster shots. But sales of Paxlovid, Pfizer's antiviral pill, were decimated, coming in about 80% below analysts' expectations.

Taken altogether, Pfizer's results suggest the market for Covid vaccines might be in a steeper decline than anyone anticipated. The news sent shares of Moderna, which will provide an update on its own finances on Thursday, down more than 3% and Novavax down about 6%.

Venture

Biotech's newest VC celebrity is a Jobs

Reed Jobs, the 31-year-old son of a certain famous turtleneck wearer, is raising $400 million for a biotech venture capital fund focused on oncology.

It's called Yosemite, and it's a spinoff of the Emerson Collective, a firm that combines VC and philanthropy that is run by Jobs' mother, Laurene Powell Jobs. According to the Information, Emerson is among the investors in Yosemite, and Jobs told the New York Times the fund had raised $200 million to date from the likes of Silicon Valley VC John Doerr and MIT.

The plan is to at once make investments in cancer-focused startups and issue grants to academic researchers, Jobs said. His job at Emerson was leading its health investments, which included bets on Sana Biotechnology, EQRx, and Volastra Therapeutics.

Biotech

Deciding the fate of $1 billion

EQRx shareholders bought into a company that promised to revolutionize medicine, and all they're getting for it is a bunch of shares in a company called Revolution Medicines.

In an agreement announced yesterday, EQRx, which had long since abandoned its plan to develop lower-cost cancer drugs, will merge with Revolution in an all-stock transaction. Revolution, at work on cancer treatments of its own, gets EQRx's more than $1 billion in cash, and EQRx shareholders get stock in the combined company that's worth roughly the same amount.

The question now is whether that's what they want. According to the deal announcement, stockholders representing about 40% of EQRx's shares have already signaled their support of the merger, but closing the agreement will require a shareholder vote. It's not impossible the majority of EQRx's investors, who have watched the company lose 80% of its value since going public in 2021, would rather see it simply liquidate and return that $1 billion in cash to them.

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