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What happened?

After the FDA approved its lead drug candidate for the treatment of Duchenne muscular dystrophy (DMD) on Sept. 19, shares in Sarepta Therapeutics (SRPT) soared an eye-popping 131% last month, according to S&P Global Market Intelligence.

So what?

DMD is a rare muscle-wasting disease that's caused by the inadequate production of dystrophin, a key protein necessary for building and maintaining muscle. Dystrophin production in DMD patients is often halted because of mutations at specific exons in the dystrophin production sequence; one of the more common of these mutations, occurring in 13% of DMD patients, is at exon 51.

To restore functional dystrophin production in patients with exon 51 mutations, Sarepta Therapeutics developed Exondys 51, a therapy that skips over exon 51. However, results from a phase 2 trial evaluating Exondys 51 in 12 boys were mixed, leading a key advisory committee to vote 7 to 6 against recommending Exondys 51 for accelerated approval back in April.

Nevertheless, after reviewing additional dystrophin data supplied by the company over the summer, the FDA decided to ignore the committee's recommendation and grant Exondys 51 a green light last month.

Now what?

There was intense debate at the FDA over Exondys 51's efficacy, and Exondys 51's approval requires a confirmatory study be completed by the company in order for Exondys 51 to remain on the market.

Data from the confirmatory study, however, isn't likely to be available for a while, and that means Sarepta Therapeutics could still generate significant revenue from Exondys 51, which costs $300,000 per year.

That revenue will come in handy, given that Sarepta Therapeutics is spending heavily on therapies that can skip over other common DMD mutations. A phase 3 trial evaluating therapies that skip exon 45 and 53 is already under way.

Exondys 51 sales also give Sarepta Therapeutics the financial flexibility to collaborate with others on next-generation DMD drugs. In late September Sarepta Therapeutics inked a collaboration deal with Catabasis Pharmaceuticals (CATB 1.87%) to investigate combining Sarepta Therapeutics' approach with Catabasis' approach to inhibiting NF-kB, a protein activated in DMD that plays a role in inflammation and fibrosis.

On Oct. 4, Sarepta Therapeutics also acquired European licensing rights to Summit Therapeutics' (SMMT) utrophin-modulating drugs. Utrophin is a protein that helps keep muscle cells intact, and results from a phase 2 trial of Summit Therapeutics' lead utrophin drug, ezutromid, are expected in 2017,

Overall, Sarepta Therapeutics' market cap has swelled to $2.75 billion -- arguably a bit pricey given that we haven't seen any quarterly sales for Exondys 51 yet. Additionally, a dispute with BioMarin regarding Exondys 51's patents adds uncertainty. Therefore, while Exondys 51's approval makes Sarepta Therapeutics' stock intriguing, I'm focusing my attention on other investment ideas, at least until I get more insight into Exondys 51's sales trajectory.