What happened

Shares of rare disease specialist Sarepta Therapeutics (SRPT -0.11%) rose by as much as 67.7% today on over ten times the average daily volume. What sent this mid-cap biotech stock into orbit?

This monstrous rally was triggered by a positive interim data release for experimental gene therapy AAVrh74.MHCK7.micro-Dystrophin, which is designed to boost the levels of a key functional protein largely absent in the muscles of patients suffering from Duchenne muscular dystrophy (DMD).   

Rocket taking flight.

Image source: Getty Images.

Although Sarepta's shares cooled off after their red-hot start, they still managed to end the day up by a healthy 36.7%. This positive clinical update also sent shares of fellow DMD gene therapy developer Solid Biosciences (SLDB 0.99%) up by more than 46% today. 

So what

Turning to the details, Sarepta's clinical team reported that this next-generation gene therapy significantly increased the levels of the missing structural protein in the first three patients enrolled in the study. These same patients also all exhibited significantly lower serum creatine kinase levels following treatment. That's key because this enzyme is strongly associated with muscle damage resulting from DMD progression.

Taken together, these two interim efficacy results seem to suggest that this experimental DMD treatment could very well turn out to be a major breakthrough in the battle against this deadly genetic disease.

Now what

All of that being said, there's a lot more work to be done before Sarepta can truly claim victory, and there's also the issue of which company will take home the lion's share of this emerging market. 

Solid, for instance, is set to resume the early-stage trial for its competing DMD gene therapy, SGT-001, after the Food and Drug Administration lifted a clinical hold on the experimental product earlier this week. The FDA originally placed the hold on SGT-011's early-stage study last March after a patient experienced an adverse event. But with that safety issue now resolved, Solid is set to potentially become a major competitive threat to Sarepta's dominance in the high-value DMD space going forward.

As such, my view is that investors may want to temper their expectations for Sarepta's early-stage gene therapy program for the moment. This novel space is just getting off the ground, after all, and at this point, there's no way to predict which company will ultimately come out on top.