Markets

Why Sarepta Therapeutics Shares Are Soaring Today

Source: BioMarin

What: After updating investors on the efficacy of its therapy for Duchenne muscular dystrophy (DMD), shares in Sarepta Therapeutics jumped by more than 22% earlier today.

So what: It's been a busy couple of days for Sarepta that began with the U.S. Patent Trial and Appeal Board ruling in favor of one patent licensed to its competitorBioMarin's for the exon-skipping approach used by both companies to treat DMD and ended with Sarepta providing more insight into the efficacy of its DMD drug, eteplirsen.

BioMarin and Sarepta's drugs both employ an exon-skipping approach that attempts to restore dystrophin production in DMD patients to slow disease progression.

According to Sarepta, the ruling by the patent office in favor of BioMarin relates to one patent on eteplirsen and the decision has no impact on eteplirsen's primary patent, which protects the drug until 2025.

In its press release today, Sarepta reports that patients treated with eteplirsen showed a 151 meter advantage relative to a control in a six minute walk test. Sarepta also reports that nearly all of the patients receiving eterplirsen are producing dystrophin and that over the study period, the rate of loss in meters walked was less in the eteplirsen arm than in the control arm.

Now what: Both BioMarin and Sarepta are awaiting an FDA decision on approval to begin marketing their DMD therapies and those decisions are expected within the next few months. The FDA is scheduled to issue a decision to BioMarin on December 27 and to Sarepta on February 26.

If approved, these drugs will offer new hope to DMD patients with an amenable genetic makeup. Specifically, 13% of DMD patients have genetic mutations that could respond to BioMarin and Sarepta's exon-skipping therapies.

Overall, that's a relatively small addressable patient population. DMD occurs in roughly one out of every 3,500 boys born worldwide and that means that only a few thousand patients would qualify for treatment.

Regardless, because there is a significant need for new therapies for this life-shortening disease, there's a good chance that the FDA will approve these drugs and if so, then depending on the price that is charged by these drugmakers, these therapies could still generate hundreds of millions of dollars in sales. Additionally, if both drugs are approved, these companies will be awarded a transferable priority review voucher that could be worth hundreds of millions of dollars given prices that have been recently paid for them on the open market.

Overall, because there's still a chance that eteplirsen will fail to win FDA approval and it's uncertain what the impact could be on Sarepta if the ongoing patent litigation ends up favoring BioMarin, Sarepta remains a high risk stock suitable only for the most risk tolerant of investor.

The next billion-dollar iSecret

The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

The article Why Sarepta Therapeutics Shares Are Soaring Today originally appeared on Fool.com.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends BioMarin Pharmaceutical. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BMRN SRPT

Other Topics

Stocks

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More