Growth stocks have hit a rough patch lately. The Nasdaq Composite, a benchmark for many growth-oriented companies, has declined by about 5% since the beginning of August, and many individual growth stocks have suffered even bigger losses. However, this recent weakness probably won't persist for much longer. Smart investors, therefore, may want to use this pullback to load up on high-quality growth stocks before the start of another bullish trend. 

Sarepta Therapeutics (SRPT 1.08%), a biotechnology company developing RNA-based medicines, gene-edited products, and gene therapies for rare diseases, stands out as a particularly interesting candidate in the growth stock landscape right now. The main reason is that analysts covering the stock think the biotech company could deliver gains in excess of 56% over the next 12 months. Read on to find out more about this potentially explosive growth stock.

What's behind Wall Street's optimistic take?

This bullishness stems from the recent Food and Drug Administration (FDA) approval for Elevidys. Elevidys is a groundbreaking gene therapy designed to treat the root cause of the inherited muscle-wasting disease known as Duchenne muscular dystrophy (DMD). The therapy is presently approved on an accelerated basis by the FDA for ambulatory pediatric patients aged 4 to 5 years old. Sarepta co-developed the landmark gene therapy with Swiss drugmaker Roche. 

The duo is gearing up to announce pivotal-stage results later this year that hold the potential to expand Elevidys' eligible patient population to include children as old as 7. An expanded label could elevate the drug's peak sales into the $4-billion-a-year territory, according to commentary from both Sarepta and Roche.

Apart from this sizable peak sales forecast, Elevidys also comes with several built-in advantages over more traditional drugs, such as premium pricing power, a potentially longer-than-normal commercial shelf life due to the challenges associated with treating DMD, along with a less onerous reimbursement process. There is also enormous demand for DMD treatments capable of bending the curve on this devastating condition. 

However, Sarepta isn't without risk. Pfizer, along with several other top biopharmas, is attempting to break Sarepta's virtual monopoly on DMD. There's no guarantee these companies will succeed in the clinic, but there's a good chance Sarepta will eventually face some form of competition in the DMD marketplace in the near future.

Another important consideration is the biotech's substantial regulatory risk. The FDA could pull Elevidys from the market if the drug's confirmatory trial data don't live up to expectations. Although Sarepta does have three other DMD drugs on the market (Exondys 51, Vyondys 53, and Amondys 45), this Roche-partnered gene therapy is widely expected to be the biotech's main growth driver in the short term. Hence, an unfavorable outcome in the therapy's ongoing confirmatory trial would likely cause its shares to fall in a significant manner.

Time to buy?

Sarepta's stock may not be suitable for risk-averse investors, as it depends on the success of its clinical trials, its regulatory filings, as well as the development of rival DMD therapies. However, for those who are willing to take on some risk and have a long-term horizon, this newly minted large-cap biotech stock may offer an attractive opportunity to invest in a company with the potential to generate significant revenue growth in the future.