Sarepta Therapeutics Inc. (NASDAQ: SRPT) plunged early on Friday, but this is not on news that it has done anything wrong or failed any clinical trials. Sarepta is dropping as the result of a failed clinical trial by BioMarin Pharmaceutical Inc. (NASDAQ: BMRN).
On Thursday, the U.S. Food and Drug Administration (FDA) turned down a New Drug Application (NDA) for BioMarin’s treatment of Duchenne muscular dystrophy (DMD). But how does this impact Sarepta?
Sarepta is developing its own treatment for DMD, a drug called eteplirsen, which will face an FDA review on Friday January 22. The FDA will give its decision by February 26.
What we’re seeing here is investors getting spooked by a failed study within one major biotech, and thinking this could very well happen to the other. However, the fallout from this failed study within Sarepta is much more crippling than in BioMarin.
DMD affects approximately one in every 3,500 to 5,000 male children, making it the most common fatal genetic disorder diagnosed in childhood. There is currently no FDA-approved therapy designed specifically to treat DMD.
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Sarepta’s stock was already suffering, down 18% year to date to Thursday’s close, underperforming the broad markets. However, over the past 52 weeks the stock was an absolute winner, up nearly 160%.
Shares of Sarepta were down 57% to $13.60 Friday morning, with a consensus analyst price target of $46.75 and a 52-week trading range of $11.42 to $41.97.
BioMarin shares were down just 1% to $83.50, within a 52-week trading range of $77.59 to $151.75. The consensus price target is $137.94.
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