What happened

Shares of Sarepta Therapeutics (NASDAQ:SRPT) rose 17% in September, according to data from S&P Global Market Intelligence, following up on a solid August. Investors were clearly excited about the biotech's opportunity in Duchenne muscular dystrophy -- both its currently approved Exondys 51 and its gene therapy, dubbed AAVrh74.MHCK7.micro-dystrophin, which has produced solid data to date.

So what

On the micro-dystrophin front, in September, the Food and Drug Administration lifted a clinical hold on the gene therapy program that was issued in July. The hold was easily fixable, since it arose from a problem with a component of the manufacturing process that comes from a third party and wasn't directly related to patient safety, which would be substantially more concerning. The company agreed to audit the supplier and committed to using a higher-grade component for future production, and the FDA lifted the clinical hold.

The relatively quick fix will allow Sarepta to start a pivotal clinical trial that it'll use to get regulators to approve the treatment, which it plans to start by the end of this year. The company hasn't disclosed the size of the trial or the endpoints it'll use to measure efficacy, so it's unclear at this point when data from the study will be available.

September 2018 calendar

Image source: Getty Images.

Now what

In the first part of this month, Sarepta has given up all of the gains it made in September, highlighting the volatile nature of biotechs. Sarepta has great promise, but it's most appropriate for long-term, risk-tolerant investors willing to hold through the volatility, which is likely to continue until the pivotal trial for the gene therapy reads out.

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