Sarepta Faces Major Hurdle, and Not From Ebola

Health and Healthcare

Published: October 27, 2014 11:10 am

Last Updated: October 27, 2014 11:15 am

In non-Ebola related news, Sarepta Therapeutics Inc. (NASDAQ: SRPT) shares took a big hit on Monday morning as disappointing news started its week out on the wrong foot. The stock was slammed lower on news that the U.S. Food and Drug Administration (FDA) requested additional information from this biotech company regarding the submission of its New Drug Application (NDA) of eteplirsen. Eteplirsen specifically is designed to treat Duchenne muscular dystrophy (DMD).

The FDA gave updated guidance regarding the specific data to be included as part of Sarepta’s NDA submission. Basically the guidance requires more specific data about the minimum duration of safety in new patients exposed to eteplirsen, patient-level natural history and MRI data from a recent study by an independent academic group.

However, the FDA was not done after requesting this information. It noted that further discussion with Sarepta “will be necessary to determine what would constitute a complete NDA.”

Based on this development Sarepta is planning on submitting a NDA by mid-year 2015, pending any future requests for further discussions with the FDA.

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President and CEO of Sarepta Chris Garabedian said:

We are committed to satisfying the FDA’s updated requests for these specific data to be included as part of an NDA submission and will continue to work with the Agency toward the goal of a complete and acceptable NDA filing. We believe all of the data requests and additional FDA discussions that have currently been outlined can be completed in time for an NDA submission by mid-year 2015. Obtaining an FDA approval of eteplirsen for the DMD patients who may benefit from the drug continues to be our highest priority.

Short sellers look for stocks to go lower in price, so they must be very happy. In fact, the most recent short interest was 12.9 million shares. That was the highest reading since April and marked the fifth highest short interest reading of 2014. Many of those short sellers may have been more involved in this name due to Ebola rallies rather than on the DMD drug, but they are likely nonetheless happy.

Shares of Sarepta traded down about 33% at $15.74 in late morning trading. On the day, shares dropped as low as $14.10, or over 40%.

The stock has a consensus analyst price target of $37.94 and a 52-week range of $12.12 to $44.03. The market cap is $659 million.

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