Sarepta (SRPT) Receives Termination Notice from U.S. DoD for Ebola Program

October 3, 2012 7:07 AM EDT
Sarepta Therapeutics, Inc. (Nasdaq: SRPT) received notice from the U.S. Department of Defense (DoD) that the Ebola portion of the Company's contract for the advanced development of hemorrhagic fever virus therapeutics was terminated for the convenience of the government due to funding constraints. The DoD's Joint Project Manager Transformational Medical Technologies (JPM-TMT) awarded this contract in July 2010 to advance a platform capability for treating both Marburg virus and Ebola virus. The Marburg portion of the contract remains in effect.

Sarepta previously received a stop-work order for the Ebola portion of the contract which was in effect from August 2, 2012 through the termination on October 2, 2012 while JPM-TMT conducted an evaluation of its Ebola medical countermeasure candidate development efforts. JPM-TMT selected an alternative contractor's candidate for continued development. However, upon entry into a settlement agreement between the Company and DoD regarding costs associated with the termination, the government may reserve the right under the settlement agreement to reinstate the Ebola portion of Sarepta's contract if Sarepta's Ebola therapeutic becomes the only alternative under which the government can fulfill its requirement because the other company fails in developing its Ebola therapeutic or is in default of contract requirements, provided that the Marburg portion of the contract is continuing at that time, or if DoD subsequently identifies additional funding to enable both companies' Ebola medical countermeasure efforts to continue in parallel.

Earlier this year, Sarepta completed Phase I single ascending-dose studies in healthy adult volunteers with its drug candidates for the treatment of Ebola virus and Marburg virus demonstrating positive safety data for each therapeutic candidate. In September, Sarepta announced both lead candidates received Fast Track designation from the FDA.

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