Why This FDA Departure Is Huge for Sarepta
Sarepta Therapeutics closed out Wednesday with its shares up over 25% following positive developments surrounding eteplirsen, its treatment of Duchenne muscular dystrophy.
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Sarepta Therapeutics Inc. (NASDAQ: SRPT) closed out Wednesday with its shares up over 25% following positive developments surrounding eteplirsen, its treatment of Duchenne muscular dystrophy. Although this development is not truly definitive in what will happen with the appeal, it does yield some optimism for the patients and parents of the patients in extending the trial.
Dr. Ronald Farkas was the lead on a critical U.S. Food and Drug Administration (FDA) review of eteplirsen, but it was reported that he would be leaving this position. Previously, the Wall Street Journal had reported that Farkas was the most vocal critic of this drug, although he is not the only member of the 13-person committee that has concerns on the drug.
In particular Farkas took issue with the randomized controlled trials and open-label extension studies conducted by the sponsor. However, many of the critics against Farkas pointed to the safety and efficacy data from the trials, which should provide an avenue for continuation.
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With the Farkas departure seemingly removing the largest obstacle to a regulatory approval, the bulls took over and pushed even higher. More bearish investors could argue that despite Farkas leaving, not much will change from the FDA. But the question is how do you price these opposing views into the stock?
If eteplirsen is not approved, then not much has changed; the stock had already bottomed from this news at its price level prior to Wednesday’s move. However, should the drug win approval and come back online, Sarepta stands to have some serious upside.
Excluding Wednesday’s move, Sarepta has underperformed the broad markets, with the stock down about 34% year to date. Over the past 52 weeks, the stock is down 30%.
Shares of Sarepta closed Wednesday up nearly 27% at $32.45, with a consensus analyst price target of $21.00 and a 52-week trading range of $8.00 to $41.97.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
