Image source: Flickr/Steve Jurvetson.

What happened

After a comprehensive (and at times contentious) review process, the FDA has given Sarepta Therapeutics (NASDAQ:SRPT) a green light to begin marketing Exondys 51 to Duchenne muscular dystrophy, or DMD, patients. The news of Exondys 51's approval sent shares in the company rocketing 74% today.

So what

DMD is a rare muscle-wasting disease caused by the inadequate production of dystrophin, a key protein necessary for building and maintaining muscle. 

Sarepta Therapeutics filed for early approval of Exondys 51 following the completion of a small, 12-person study; however, an FDA advisory committee opted against recommending eteplirsen for early approval in April after determining that the study didn't prove that Exondys 51 boosts dystrophin to levels high enough to suggest a clinical benefit.

Despite the advisory committee's determination, the FDA indefinitely delayed a decision on Exondys 51 in May so that it could further review and debate Exondys 51 dystrophin data.

Now what

There was considerable disagreement within the FDA regarding Exondys 51's approve-ability, but now that the approval is in hand, the company plans to begin providing this drug soon to patients who are amenable to it.

Management estimates that roughly 13% of DMD patients could benefit from Exondys 51 therapy, and during the 4 p.m. EDT conference call, management said Exondys 51 will cost approximately $1,600 per 2 mg vial and $8,000 per 10 mg vial, or roughly $300,000 per year. The company hasn't said exactly how many patients they believe Exondys 51 can help, but DMD is a rare disease occurring in just one out of every 3,300 male births.

Sarepta Therapeutics says it may be 60 to 90 days before it begins generating revenue from Exondys 51, so it will still be a bit before we fully understand the commercial opportunity for this drug. Investors should also know that the company will need to launch a larger, confirmatory trial that will increase its expenses. Fortunately, some of those expenses will be offset from the planned sale of a pediatric review voucher awarded to the company because of Exondys 51's approval. In the past, these vouchers have fetched more than $300 million.

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