"This has been a big quarter for the company."
-- Sarepta (Nasdaq: SRPT) CEO Chris Garabedian

You can say that again. Shares sat below $5 before releasing tremendous 36-week clinical trial data for Duchenne muscular dystrophy drug eteplirsen, and then even more impressive 48-week data sent the company's market cap to $1 billion at the height of enthusiasm.

So where does that leave us? Today's conference call after releasing third-quarter earnings looked to answer a few questions.

Earnings releases for development-stage biotechs are largely meaningless. It is the operational updates and color provided in the conference call that get to the real meat of the issue, and largely, Sarepta is no different. However, it is important to check in on financial health. The company's operating loss of $6.9 million is 39% smaller than last year, while its current cash balance is a substantial $57.4 million after executing an "at the market" offering during and after the quarter. The company filed another shelf registration, but investors shouldn't expect immediate large-scale dilution.

On the call, management was clearly determined  to advance eteplirsen but not rush ahead recklessly. The company plans to request a meeting with the FDA to discuss the design and primary endpoints of a confirmatory before the end of the year that would likely occur in the first quarter of 2013. There will be no accelerated approval decisions made before that meeting. Sarepta may also seek the breakthrough therapy designation for eteplirsen.

The next data collections would be a weeks 62 and 74, so investors have two more binary events to circle on their calendars, although we don't know the exact dates of those releases. The large confirmatory trial won't begin dosing until 2014, so if accelerated approval doesn't happen, it may be a while before eteplirsen gets to market. Sarepta will submit INDs for at least two (and possibly four) more exon-skipping DMD candidates that same year.

Investors are likely hoping for a Big Pharma buyout, and Sarepta has certainly caught the industry's attention. The company received "tremendous" interest, from roughly a dozen companies. However, Sarepta is looking for a partner for the ex-North American rights to eteplirsen, so a swift takeover doesn't appear to be in the works.

There is a lot of action around Sarepta, especially given the ongoing phase 2 trial, the FDA meeting in the first half of the year, and a potential partnership. This company has all the makings of the next biotech success story, but because of its dependence on one novel drug in midstage trials, only risk-tolerant investors should think about buying.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.