If you like long shots and can stomach some risk, then you might want to put Sarepta Therapeutics (SRPT) in your portfolio.
Sarepta Therapeutics is the company that developed eteplirsen — a drug under investigation for the treatment of Duchenne muscular dystrophy. It shows a lot promise, and there was even some speculation that the company would seek the FDA’s approval just with its Phase 2 trial results, and completely skip the usually required Phase 3 testing (shortening the development time by years).
Once the market was told by the FDA in November that the administration wasn’t interested in an early review of eteplirsen, however, SRPT stock tanked, falling from $36 to $13 in just one day.
Here’s the problem … the FDA never said it would refuse to consider an early approval of eteplirsen. One of several explanatory letters the FDA’s Catherine Chew wrote stated, “FDA has reached no conclusions about the possibility of using accelerated approval for any new drug for the treatment of Duchenne muscular dystrophy, and for eteplirsen in particular.”
Now, don’t get your hopes up, as this isn’t to say Sarepta is going to be allowed to skip Phase 3 trials. Indeed, the FDA rarely allows a biotech company to skip an entire phase of testing, and Sarepta Therapeutics doesn’t look like it’s going to be an exception to the norm either.
If the FDA is going to make a generous decision on the matter, though, its apt to happen within the next few weeks … at the most. At the very least, this will make SRPT stock one of the most-watched biotech stocks of Q1.