Shares of Sarepta Therapeutics (SRPT 1.08%) were soaring 10.4% higher as of 10:58 a.m. ET on Friday. The big gain came after the biopharmaceutical company announced that the U.S. Food and Drug Administration (FDA) had accepted Sarepta's efficacy supplement to its Biologics License Application (BLA) for Elevidys in treating Duchenne muscular dystrophy (DMD), a rare genetic disorder.
Sarepta's first objective in filing the efficacy supplement was to expand the label for Elevidys to remove any age and ambulation restrictions. The company's second objective was to flip the accelerated approval for the gene therapy to a traditional approval. It achieved both goals.
The FDA set a Prescription Drug User Fee Act (PDUFA) date of June 21, 2024, to make its approval decision. In addition, the agency confirmed it doesn't plan to convene an advisory committee to review the efficacy supplement.
How important is Elevidys to Sarepta Therapeutics?
Sarepta's sneak peek at its fourth-quarter and full-year 2023 results provided at the J.P. Morgan Healthcare Conference in January expected Elevidys sales of $200.4 million last year. That represents roughly 17.5% of Sarepta's anticipated total net product revenue in 2023.
Importantly, though, Elevidys was only on the market for two quarters last year. Sales for the gene therapy are growing rapidly. An FDA approval that removes the age and ambulation restrictions would almost certainly further accelerate this growth.
Is Sarepta Therapeutics stock a buy?
Like many biotech stocks, Sarepta Therapeutics is highly volatile. Risk-averse investors will be better off looking for other opportunities.
However, I think more aggressive investors should consider buying Sarepta. Its shares currently trade at a forward earnings multiple of under 11.7x -- an attractive valuation. The potential full FDA approval with a label expansion for Elevidys this summer would make the stock even more appealing to growth investors.
