Sarepta Therapeutics (NASDAQ: SRPT), a pharmaceutical company that describes itself as specializing in “precision genetic medicine for rare diseases”, saw its stock price shoot up by 36% in after-hours trading last night.
But why?
Ground-breaking medical breakthrough
Toward the end of the trading day yesterday, Sarepta announced that it had obtained approval from the U.S. Food and Drug Administration (FDA) for a treatment targeting a rare genetic disease called Duchenne muscular dystrophy (DMD).
Sarepta’s DMD treatment, named ELEVIDYS (delandistrogene moxeparvovec-rokl), was given full FDA approval, according to yesterday’s announcement, for all DMD patients with full mobility.
The FDA also granted accelerated, conditional approval for more severe, limited mobility cases.
Stock market reaction
Unsurprisingly, the news caused the stock price of the Nasdaq-listed company to skyrocket.
Sarepta’s share price surged from the Thursday’s closing price of $123.50 to $175.02 in under an hour, following the close of the US stock markets at around 5pm EDT.
At the time of writing, Sarepta’s had a pre-market trading price of $165.33. Yesterday’s closing price was $123.50.
Hope for DMD patients
The news represents a significant medical breakthrough for medicine in the treatment of Duchenne muscular dystrophy (DMD) – a rare genetic disorder characterized by progressive muscle degeneration and weakness, caused by the absence of protein dystrophin in the body.
Doug Ingram, president and chief executive officer, Sarepta, said of the news that:
The expansion of the ELEVIDYS label to treat Duchenne patients aged 4 and above, regardless of ambulatory status, is a defining moment for the Duchenne community. Today also stands as a watershed occasion for the promise of gene therapy and a win for science.
Co-inventor of ELEVIDYS and senior advisor of medical affairs at Sarepta, Dr. Jerry Mendell, explained that the treatment was a ground-breaking development, which is effectively “a gene therapy that could be safely and effectively delivered to muscle.”
“The initial approval of ELEVIDYS was a significant milestone, and the expanded indication means clinicians now have a treatment option for the great majority of boys and young men living with Duchenne,” he added. “This expansion speaks to the success of the science, the evidence and the improvements in the trajectory of the disease we have seen to date.”
The hope of a cure for muscular degeneration does not come cheap, however. A one-time treatment ELEVIDYS will cost patients approximately $3.2 million.
Latest Sarepta earnings
This is not the first 2024 win for Sarepta. On May 1st, the company reported triumphant Q1 financial results, beating earnings expectations.
Among other highlights, the company reported revenues 10% higher than anticipated and earnings per share of $0.37 – thoroughly surprising analysts, who had been expecting an EPS of $-0.11.
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