Shoulda, woulda, coulda. You could have bought Sarepta Therapeutics (NASDAQ:SRPT) in early 2012. If you had any inkling that the stock would increase by more than five-fold during the next 12 months, you would have bought it. With that kind of return, many of us are thinking we should have bought it.

It's easy to see that now, but were there any signals that could have tipped us off about Sarepta's potential back then? If so, can they help us in spotting the next biotech multibagger? Let's look back -- and look ahead.

What went right
The single most important event in Sarepta's phenomenal surge was the results from the phase 2 study evaluating eteplirsen for the treatment of Duchenne muscular dystrophy, or DMD. The company announced on July 24 that eteplirsen significantly improved the distance that DMD patients were able to walk after 36 weeks of taking the drug. Sarepta's shares immediately jumped 146% on the news.

Over the next couple of months, the stock climbed 75% higher. The next round of good news came on Oct. 3. After 48 weeks of the study, patients experienced even better improvement on the six-minute walk test. The stock nearly tripled in one day, although shares sank over the next month as investors perhaps realized they might have been overly exuberant. 

Possible clues for success
While there really was no way to know with certainty that Sarepta would have a banner year in 2012, there were some clues that could perhaps also help investors spot future winners. Here are a few:

1. Swimming in a blue ocean
Rare diseases with limited treatment alternatives present excellent opportunities for smaller biotechs to make a big splash. W. Chan Kim and Renee Mauborgne referred to markets with no competition as "blue oceans" in their book Blue Ocean Strategy. The bar to attain success is lower when competition is scarce or non-existent.

Sarepta targeted DMD, a disease affecting around one in 3,600 boys that has no effective treatment options.The company's primary competition in treating DMD will likely stem from GlaxoSmithKline (NYSE:GSK) and Prosensa. However, these two organizations were largely quiet about their antisense oligonucleotide DMD drug during 2012. Their relative silence helped make more of an impact for Sarepta's good news about eteplirsen. 

2. No safety issues
Had eteplirsen shown worrisome adverse effects, we likely wouldn't be talking about Sarepta's incredible run last year. That wasn't a problem, though. The company announced in early 2012 that its independent Data Safety Monitoring Board found no safety concerns with the drug.

Some companies with promising drugs have seen shares take a hit because of safety concerns. Dynavax (NASDAQ:DVAX), for example, looked to have a clear winner with its hepatitis-B vaccine Heplisav. However, an FDA advisory committee voted against recommending the vaccine because the data didn't adequately support its safety. Dynavax shares subsequently plummeted around 50% in one day. 

3. Multiple clinical study announcements with impressive early results
Clinical results must be impressive to spark a multibagger run like Sarepta's. However, investors can't really know in advance how those clinical results will turn out, so what clues are really available on this front?

One thing you can do is to understand the science behind the drug as much as possible. A review of published articles about the company's exon-skipping technology could have helped investors to appreciate the promise of the approach.  

Another thing to note is when companies report very positive clinical results early. In Sarepta's case, the 36-week results provided a great hint of good things to come. Even though you would have missed out on some of the share appreciation, buying Sarepta after the initial results were announced on July 24 would have still netted a gain of more than 200% in just five months. 

A similar situation happened with Infinity Pharmaceuticals (NASDAQ:INFI). The company announced great phase 1 results on Nov. 12. Buying after this early good news would have resulted in a gain of 74% by the end of the year.

Blues clues
Are the clues still in alignment for Sarepta going forward? Glaxo and Prosensa are already under way with a phase 3 study, with results expected in the second half of this year. Depending on the outcome, the blue ocean for DMD could become less blue -- or perhaps even more blue.

So far, the safety profile for eteplirsen still looks good with no serious adverse events or trial dropouts. More clinical results are yet to come, which could present further catalysts for the stock. Always consider the risks, though. The studies thus far for eteplirsen had small numbers of patients involved. A lot can happen with clinical-stage drugs.

The stock still has potential room to run, however. Sarepta's shares could rise 85% from current levels and still not hit where they were in early October. Look at all the information at hand and make your best judgment. By doing so, at least you won't look back this time next year thinking "shoulda, woulda, coulda."

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.