Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Fools! It's time to check in on the health-care stocks making headlines this morning.

Sarpeta gets a notable backer
Sarepta Therapeutics (SRPT 0.14%) is up on heavy volume this morning after receiving a favorable mention from notable biotech investor Joseph Edelman over the weekend. Specifically, Edelman said that he believes Sarepta's Duchenne muscular dystrophy, or DMD, drug eteplirsen will eventually get approved by the Food and Drug Administration, and the drug could see eye-popping sales of $4 billion in the U.S. alone. He also suggested that Sarepta looks to have the highest remaining upside of any mid-cap biotechs right now.

As a refresher, the FDA rejected Sarepta's request for an accelerated approval for eteplirsen last November because the mid-stage trial only enrolled 12 patients. Essentially, the FDA is concerned that there is currently insufficient data to properly assess the drug's effectiveness and safety profile. As a result, the agency wants Sarepta to perform a much larger late-stage trial prior to submitting a New Drug Application, or NDA, for eteplirsen. After discussing the issue with the FDA, Sarepta now plans on initiating the new trial next year.

Upon receiving the bad news, Sarepta shares plummeted more than 75% in a single day. However, Sarepta has now rallied more than 30% since this time and continues to head upwards this morning.

Why was Sarepta's drug denied?
Many experts in the sector view eteplirsen's rejection to be the result of GlaxoSmithKline (GSK 1.60%) and Prosensa's (NASDAQ: RNA) DMD drug drisapersen failing to provide any clinically meaningful benefit to patients in a late-stage trial. Namely, drisapersen looked like a promising DMD treatment at the mid-stage level as well, but the late-stage results dashed any hopes that a breakthrough DMD therapy was close at hand. And because the two therapies are broadly similar in that they skip mutated genetic sequences that lead to the production of dysfunctional muscular proteins, the FDA appears to be concerned that eteplirsen may also fail in a larger late-stage study.

Foolish outlook
Personally, I am skeptical about eteplirsen's chances for success in a late-stage trial. While it is a more potent drug that drisapersen and can be dosed at higher levels, it remains to be seen if the drug does in fact work. While eteplirsen's dramatic effects on some patients afflicted with DMD are reasons to be optimistic, you should understand that these are preliminary results, and this is how the FDA views the matter as well. Moreover, drisapersen looked extremely promising early on and that turned out to be a false indicator of the drug's ultimate fate. In sum, my take is that Sarepta currently doesn't offer much of a discount with a market cap over $700 million compared to the clinical and regulatory risks surrounding the company's lead drug candidate. As such, Foolish investors might want to wait until the drug's regulatory fate is better understood than it is today.