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What: Shares of Sarepta Therapeutics (NASDAQ:SRPT), a clinical-stage developer of RNA-based therapeutics that's primarily focused on creating drugs designed to treat Duchenne muscular dystrophy (DMD), imploded in October and sank by 23%, based on data from S&P Capital IQ, following a regulatory update on lead DMD drug eteplirsen.

So what: In spite of moving in step with the overall market for much of October, Sarepta shares swooned in a big way early in the previous week after announcing delays in the filing of its proposed new drug application for eteplirsen.

According to Sarepta's press release, following a September meeting with the Food and Drug Administration, the FDA gave Sarepta guidance on what data would be required to submit a new drug application. This includes an independent assessment of dystrophin images from its 168-week follow-up with midstage patients, as well as additional safety and MRI data. Furthermore, Sarepta suggests additional talks are planned with the FDA with the proposed filing now being pushed back to mid-2015 from a previous expectation of late 2014.

However, as The Wall Street Journal pointed out late last week, the FDA issued its own statement (which is itself a rare move) that clarified its points on the development timeline for eteplirsen, which it believes Sarepta may not have understood well. As the FDA noted, it's willing to conduct a rolling review that could expedite eteplirsen's NDA submission. 

Perhaps the only factor keeping Sarepta from being the worst performing biotech stock of the month was its mid-month early stage Ebola drug data for AVI-6002 which demonstrated no clinical safety concerns. Keep in mind we're merely talking about safety and not efficacy at this point, but it's one step in the right direction on a very touchy subject for the American people at the moment.

Now what: Until we get better clarity and communication between Sarepta and the FDA we could continue to see volatility be the name of the game.

Eteplirsen data through week 120. Source: Sarepta Therapeutics.

On one hand the data has been pretty impressive on eteplirsen, which treats a subtype of DMD that comprises 13% of all DMD cases. Through 144 weeks patients taking eteplirsen have seen a decline in the six-minute walk test, or 6MWT, of just 33.2 meters, which the company notes is a 75.1-meter benefit over the control. By a similar token, those in the control group that were switched to eteplirsen after 24 weeks have seen a stabilization in their 6MWT since week 36.

The other side of the coin shows a company which has fumbled on numerous occasions in its ability to communicate with the FDA, and which is only relying on data from a pool of a dozen patients. When GlaxoSmithKline's (NYSE:GSK) and Prosensa's (UNKNOWN:RNA.DL) drisapersen went on to a larger trial after succeeding in a smaller midstage trial it flopped miserably. In other words, skeptics still have plenty to latch onto.

For now, while cautiously optimistic on Sarepta, I feel that sticking to the sidelines is investors' smartest course of action.