What happened

After updating investors on the outlook for its Duchenne muscular dystrophy (DMD) drug program, Sarepta Therapeutics' (NASDAQ:SRPT) shares rallied nearly 18% in January, according to S&P Global Market Intelligence.

So what

Until the approval of Sarepta Therapeutics' Exondys 51 in 2016, there weren't any FDA-approved drugs that patients could take to help delay the progression of DMD, a life-shortening disease.

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DMD patients fail to produce adequate amounts of the muscle-building protein dystrophin. However, Exondys 51 skips a mutation in the dystrophin gene that can increase production for some people. The importance of Exondys 51 has quickly turned it into a top seller, and based on Sarepta Therapeutics' comments at the J.P. Morgan healthcare conference last month, that's not changing anytime soon.

At the conference, management said Exondys 51's fourth-quarter sales would be $57.3 million and its full-year 2017 sales would be $154.6 million. In both cases, those figures were slightly better than industry watchers were forecasting. Management also unveiled a sales forecast for 2018 of between $295 million to $305 million.

Sarepta Therapeutics also said it plans to meet with the FDA soon to discuss its next DMD drug, golodirsen, and that it expects data for another DMD drug, casimersen, this year. If those drugs can make their way to market, it would increase the addressable market for its exon-skipping drugs to about 29% of the patient population.

Now what

Exondys 51's sales are already in the nine figures, so winning an FDA OK for its other drugs presents a big opportunity. Management projects the peak annual sales potential of its late-stage DMD drugs is $2 billion.

Sarepta's also investing in other DMD drugs that could be winners someday. For example, it previously licensed a drug from Summit Therapeutics that increases utrophin, another muscle-building protein. Recently, Summit Therapeutics reported intriguing mid-stage trial results for it, and more data is expected later in 2018. 

The company's also got projects under way on next-generation drugs that are more selective and potent than its current late-stage pipeline, plus it's pursuing gene therapies that may improve upon treatment. For instance, the company's micro-dystrophin program could conceivably help between 60% to 70% of DMD patients, and its GALGT2 gene therapies could help the majority of DMD patients if trials pan out.

Overall, this is a fast-growing rare-disease-drug developer with plenty of cash in the bank, so it's little wonder investors have been buying its shares. 

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