The Food and Drug Administration said Monday it will perform a speedy review of Sarepta Therapeutics' muscular dystrophy gene therapy, and SRPT stock jumped.
Sarepta filed for approval based on three clinical studies of the gene therapy, SRP-9001. But one study, called Embark, is still underway with results expected by the end of 2023. The FDA will make an approval decision ahead of those results in May. This means Sarepta could launch the drug early before it has the final results in hand through a process known as accelerated approval.
"In the best case, this would accelerate '9001's time to commercialization," RBC Capital Markets analyst Brian Abrahams said in a report to clients. Accelerated approvals are always contingent upon a confirmatory study. Embark could become that, analysts said.
On the stock market today, SRPT stock surged 3.1% higher, ending the regular session at 118.13. Sarepta stock has a strong Relative Strength Rating of 96, which puts it in the top 4% of all stocks in terms of 12-month performance, according to IBD Digital.
SRPT Stock: Replacing A Faulty Gene
Patients with Duchenne muscular dystrophy carry an abnormal gene responsible for making the protein dystrophin. Dystrophin is key to muscle health and function. Sarepta's gene therapy aims to insert a corrected gene that codes for a shortened version of the dystrophin protein.
Analysts expect the FDA to schedule an advisory committee meeting to discuss the benefits and risks of Sarepta's gene therapy. If so, the advisors will make a nonbinding recommendation to the full agency.
Still, the news Monday "partially de-risks Sarepta, given investors were questioning the chances of the FDA agreeing to an accelerated timeline with the Embark study being so close behind," Needham analyst Gil Blum said in a report.
He has a buy rating and 158 price target on SRPT stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
