Sarepta Therapeutics' stock soars 38% after FDA expands use of its Duchenne muscular-dystrophy drug

By Ciara Linnane and Eleanor Laise

Sarepeta Therapeutics Inc.'s stock soared 38% in premarket trade Friday, after the biotech said the U.S. regulator has approved an expanded indication of its treatment for the rare muscle disorder Duchenne muscular dystrophy.

The Food and Drug Administration will now allow Elevidys to be administered to boys at least 4 years old with a confirmed mutation in the DMD gene, Sarepta said in a statement.

Duchenne muscular dystrophy is a genetic disease that primarily affects boys and causes muscle degeneration and weakness that often appears in early childhood. There are about 15,000 cases in the U.S., according to the Muscular Dystrophy Association. Many patients do not survive beyond their early 20s.

The expanded approval is for boys who can still walk and those who can't. The FDA gave traditional approval for ambulatory patients and accelerated approval for non-ambulatory patients.

Sarepta last year received accelerated Food and Drug Administration approval for the gene therapy for children ages 4 and 5 with Duchenne.

Accelerated approval gives patients earlier access to promising new treatments while the company continues clinical trials to confirm the drug's expected benefits.

The company suffered a setback last fall when data showed that Elevidys helped patients' movement and walking ability but did not produce a statistically significant improvement versus placebo in an ambulatory assessment after one year of treatment.

"Continued approval for non-ambulatory Duchenne patients may be contingent upon verification of clinical benefit in a confirmatory trial," Sarepta said in a statement released late Thursday.

The company has committed to a randomized, controlled trial to verify and confirm the clinical benefit of Elevidys in non-ambulatory patients, said the statement.

Mizuho analysts, who have a buy rating on Sarepta's stock, said the approval was "the best case scenario, with the FDA granting the broadest label possible" for the treatment called Elevidys.

"While the extent of Elevidys label expansion is in-line with our expectation, it is better than what most investors expected based on our recent investor survey," analyst Uy Ear wrote in a note to clients.

The stock (SRPT) could trade up to about $190, he wrote, or about 54% above its current price.

Sarepta's stock got a boost earlier this month when Pfizer said its experimental gene therapy for DMD fell short of the main goal of improving motor function in boys 4 through 7 in a Phase 3 trial.

Still, the drug has generated controversy that goes beyond questions over its efficacy. Last year, Sarepta priced the treatment at $3.2 million per dose, according to the website Biopharma Dive, making it one of the most expensive therapies in the U.S.

The stock has gained 28% in the year to date, outperforming the S&P 500 SPX, which has gained 15%.

-Ciara Linnane -Eleanor Laise

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06-21-24 0805ET

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