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.

What : Shares of clinical-stage biotech Sarepta Therapeutics (NASDAQ:SRPT) cratered by nearly 40% this morning after the company announced yet another regulatory setback for its experimental Duchenne muscular dystrophy, or DMD, treatment eteplirsen.

Following a Type B Pre-NDA meeting, the FDA informed Sarepta that they will now require an independent assessment of the dystrophin images due to questions about their "reproducibility", additional safety data in patients newly exposed to eteplirsen, and the individual-level natural history data for the patients that participated in the mid-stage trial expected to be the basis of the regulatory filing, before deeming the regulatory filing "complete". Per the press release, Sarepta believes they can complete these additional requests by mid-2015. Prior to today's news, the company was hoping to have eteplirsen's NDA submitted by year end.

So what : Although Sarepta is reportedly working on a high profile Ebola therapy, the company's valuation is primarily tied to its exon-skipping DMD platform, led by eteplirsen. What's key to understand is that eteplirsen looked like it was closing in on a regulatory approval after an apparent sea-change in sentiment among regulators earlier this year. Today's news shows that this optimism was, once again, premature.

Now what : Sarepta had a similar fall roughly a year ago after the FDA surprised the market by declining to review eteplirsen's NDA based on its mid-stage trial. While the stock subsequently rebounded following that negative catalyst, I am not so sure history is about to repeat itself. The FDA appears not to be a fan of this limited dataset, given that they keep putting up roadblocks to the drug's approval. And the questions over the reproducibility over the dystrophin production data look, to me, like a major red flag. So, I think it's best to stay safely on the sidelines with this risky biotech for the time being.

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.