What happened
Shares of Sarepta Therapeutics (SRPT -3.71%) slid over 16% last month, according to data from S&P Global Market Intelligence. The stock's September tumble was an extension of what began a month earlier, when two important pipeline assets made news for the wrong reasons. Last month was relatively quiet by comparison, but investors are still a little nervous over recent events.
The pessimism has weighed heavily on the biopharma stock. Shares of Sarepta Therapeutics are now down 35% in the past year and 42% since the beginning of July. Despite the recent mishaps, the company did report promising data for an early-stage drug candidate in the first few days of October.
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So what
The misery began in early August, when a patient in a phase 2 study evaluating the potential for micro-dystrophin to treat Duchenne muscular dystrophy (DMD) developed rhabdomyolysis. That triggered a submission to the U.S. Food and Drug Administration's (FDA) adverse event reporting system. Two weeks later, Sarepta Therapeutics received a complete response letter from the FDA related to its application seeking accelerated approval for golodirsen in DMD.
Investors had all of September to let the bad news sink in, but Sarepta Therapeutics reported promising data for an important drug candidate, a gene therapy called SRP-9003, in early October.
Three patients with Limb-girdle muscular dystrophy type 2E (LGMD2E) were given SRP-9003 and observed for nine months. Researchers witnessed consistent functional improvements, an important primary outcome; high levels of expression for the protein encoded by the gene therapy, suggesting it works at some level; and significantly reduced levels of creatine kinase, a key biomarker in muscular dystrophies.
Sarepta Therapeutics still needs to study a higher dose of SRP-9003 before confirming the dose that will be used in a midstage clinical trial, but the positive trial paves the way for the company's four other drug candidates taking aim at different forms of Limb-girdle muscular dystrophies.
Now what
Sarepta Therapeutics has earned a $6.3 billion market valuation by staking out a leadership position in developing treatments for muscular disorders. Those difficult-to-treat conditions aren't exactly the easiest path to glory in the pharmaceutical industry, but the company has bagged more successes than failures. Investors just hope that continues so the business can grow into its premium valuation.
