Sarepta Therapeutics Inc (NASDAQ:SRPT)
Sarepta Therapeutics is having an overwhelmingly rough day in the market today, and for good reason. The company recently received bad news from the FDA with regard to a treatment that it is working on getting approved. Today, we'll talk about the news, how the market is reacting, and what we can expect to see from SRPT moving forward. So, let's get right to it...
SRPT Receives Negative News From The FDA
Sarepta Therapeutics has been working hard to get eteplirsen approved by the FDA as a treatment for Duchenne muscular dystrophy. Unfortunately however, the FDA still seems to be looking at the treatment in a negative light. SRPT announced that the FDA is expected to conduct an outside advisory panel on April 25th to review eteplirsen data. Nonetheless, an internal assessment by the FDA's review team appears to cast doubt with regard to the drug's chances of becoming an approved treatment.
The New Drug application was postponed on January 21st by the panel as they pointed out what it believed was errors in the original FDA review of the treatment from SRPT. Unfortunately, it seems though this opinion has not yet changed. In a statement, the FDA had the following to offer...
“[W]e do not agree with the applicant's characterization of inaccuracies in the initial FDA briefing document... Although FDA is prepared to be flexible with respect to a devastating illness with no treatment options, we cannot approve drugs for which substantial evidence of effectiveness has not been established.”
How The Market Reacted To The News
As investors, we know that the news moves the market. Any time there is positive news released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with that company. Adversely, negative news will generally lead to declines. Given the fact that the FDA is still doubtful with regard to the treatment from SRPT, the news that was released today was overwhelmingly negative. As a result, we're seeing big declines surrounding the stock at the moment. Currently (9:59), SRPT is trading at $11.95 per share after a loss of $7.76 per share or 39.37% thus far today.
What We Can Expect To See From SRPT Moving Forward
While I would love to see the stock gain, I have to say that my opinion of Sarepta Therapeutics is incredibly bearish at the moment. The reality is that the company has been working to get eteplirson approved for quite some time. However, the FDA seems to continue finding problems with regard to the drug that will likely stop it from being approved. With that said, short term sentiment following the negative news is likely to drag the stock quite a bit further down. On top of that, when it is announced that the drug is not being approved, as there is a high likelihood of this happening, chances are that SRPT is going to sink much, much further. In the long run, I'm sure that the company will make it over this hurdle. However, as it is at the moment, there seems to be no end in sight for the declines we're seeing at the moment.