Investors wondered for months if Sarepta Therapeutics (NASDAQ:SRPT) would pursue accelerated approval for Duchenne muscular dystrophy, or DMD, drug eteplirsen. Sarepta gave its answer to those questions before the market opened on Wednesday: "Accelerated approval? Forget about it!"

Sarepta now plans to file a New Drug Application, or NDA, for eteplirsen in the first half of 2014 based on the Food and Drug Administration's response that it is "open to considering an NDA" based on data that the biotech submitted recently. However, the FDA wouldn't commit to an accelerated approval pathway for the drug.

Hip, hip, uh-oh?
The press release announcing the decision to move forward with the eteplirsen NDA hit the wires at 7 a.m. ET. Sarepta shares immediately jumped 21% in pre-market trading. The exuberance didn't last long, though.

Sarepta started its conference call to discuss the announcement at 8 a.m. ET. By that point, its stock had given up most of the pre-market gains. The more Sarepta CEO Chris Garabedian spoke, though, the more shares went down. The stock opened 2.5% down and continued to fall like a rock. Within an hour of the market open, Sarepta was trading 17% lower than its Tuesday closing price before regaining a couple of percentage points.

This sell-off, the largest in more than a year, came about as investors parsed through what Garabedian said in the conference call. His words boiled down to plenty of uncertainty. Uncertainty about whether the FDA will actually accept the NDA. Uncertainty about whether dystrophin levels would be acceptable as a surrogate endpoint for the treatment of DMD. Uncertainty about the chances of ultimate approval based on current data. 

Sarepta's news didn't inspire confidence in several analysts. Burrill, Deutsche Bank, and Piper Jaffray all downgraded the stock following the press release and conference call.

Getting to "hooray"
Sarepta appears to be rolling the dice that the FDA will look favorably on the results obtained in the phase 2 clinical study. Those results were impressive -- excellent improvement in walking ability for young boys who took eteplirsen. The FDA could give considerable weight to the improvement seen in those six-minute walk tests. However, the small number of patients involved in the study (only 12 boys participated) is a definite hurdle.

GlaxoSmithKline (NYSE:GSK) and Prosensa (NASDAQ: RNA) claim larger studies for rival DMD drug drisapersen. The phase 2 study for the drug included 53 patients, while an ongoing phase 3 clinical study involves 186 boys with DMD. Glaxo and Prosensa received breakthrough therapy designation for drisapersen in June. The FDA has not awarded this designation to eteplirsen thus far.

Despite Sarepta's smaller study, I think that the FDA could still give a positive decision on approval of the eteplirsen NDA. There has been considerable pressure on the FDA from families of boys with DMD to approve a treatment for the rare disease. The strong results Sarepta brings to the table combined with a real need for alternatives for patients just might sway the FDA to allow eteplirsen to be marketed.

Sarepta's news on Wednesday didn't have too many investors cheering. However, my view is that this pullback could be a good buying opportunity for those willing to hold on through the uncertainty. I think that eteplirsen will gain FDA approval -- sooner or later. "Hoorays" will be in order eventually for Sarepta shareholders and, more importantly, for those young boys with DMD and their families.

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.