Source: Flickr user Jim Makos.

Wall Street and investors received quite the jolt in August when major indexes, such as the Dow Jones Industrial Average and S&P 500, lost more than 10% of their value in a matter of one week. While stock market corrections are actually quite common -- we've had 33 stock market corrections of 10% or more since 1950 according to Standard & Poor's data -- they're nonetheless an unwelcome sight for sectors that trade at arguably aggressive valuations. One such sector is biotechnology.

Biotechnology stocks are difficult to grasp to begin with because valuing them on traditional fundamental metrics is often not feasible. Around 90% are losing money as they try to develop their pipelines -- thus Wall Street and investors are left to rely on their instincts, emotions, and peak sales projections of a pipeline when valuing these companies.

The downside is that emotion- and instinct-based investing can lead to biotech stocks getting hit especially hard during a correction. In fact, since peaking in mid-July the SPDR S&P Biotech ETF has fallen by 12%.

What stock market correction?
But, for a handful of biotech stocks the latest stock market correction might as well be a passing gust of wind. The following biotech names have all surged to a recent 52-week high amid the chaos; and even though all three have retreated a bit from their peak, they remain well above where they were before this stock market correction began.

Sarepta Therapeutics (SRPT -1.22%)
Sarepta Therapeutics and its shareholders really don't care about the market correction, as Sarepta's share price has risen by a little more than 10% since mid-August. The catalyst for Sarepta remains the upcoming Food and Drug Administration advisory board committee meeting for eteplirsen (likely in November) and its PDUFA decision date on Feb. 26, 2016.

Eteplirsen is Sarepta's exon 51-skipping therapy designed to treat roughly one in eight Duchenne muscular dystrophy patients. In Sarepta's phase 2 extension study eteplirsen has time and again demonstrated a statistically significant advantage over the placebo.

Source: Sarepta Therapeutics. 

At week 168, the most recently published update, the eteplirsen arm exhibited a 65.4-meter advantage over the control group in the six-minute walk test. The big question is whether the FDA will see eye to eye with Sarepta on eteplirsen, because there have been documented miscommunications between the FDA and Sarepta before.

Personally, I am cautiously optimistic that Sarepta will land its first FDA approval on or before Feb. 26, 2016, but I also understand that if eteplirsen isn't approved for whatever reason is could be devastating for Sarepta and its shareholders.

Portola Pharmaceuticals (PTLA)
Shares of Portola Pharmaceuticals, a clinical-stage biotech company with a focus on inflammation, thrombosis, and hematologic disorders, are up around 16% since the market began to melt lower. The impetus for the upside in Portola is the release of positive phase 3 results for andexanet alfa from the ANNEXA-R study, and the expected phase 3 readout for betrixaban later this year.

Source: Portola Pharmaceuticals.

The clear boost thus far has come from andexanet alfa, which met both its primary and secondary endpoints in the second part of the ANNEXA-R trial. Andexanet alfa is designed to reverse the anticoagulant effects of Factor Xa inhibitors. The first portion of its phase 3 study established that andexanet alfa led to a rapid reversal of the anticoagulation effect, and the second portion of the study demonstrated that the effect of this reversal was durable. If approved, it could have blockbuster potential.

Portola shareholders can also look forward to the release of the phase 3 APEX data on betrixaban, an oral, once-daily Factor Xa inhibitor that's being studied as an extended duration anticoagulant to prevent venous thromboembolism in the hospital and post-discharge setting. What's interesting is betrixaban could present a lower risk-of-bleed profile relative to other Factor Xa drugs.

With catalysts galore upcoming, investors are clearly stoked. As for me, while I do suspect Portola is in line to soon gain its first FDA approval, I also believe much of this optimism is baked into its share price until we see the APEX data.

Intra-Cellular Therapies (ITCI -1.21%)
One clinical-stage company that's left its skeptics in the dust is Intra-Cellular Therapies, which scorched higher by 112% last week after announcing positive top-line results from its phase 3 trial involving ITI-007 as a treatment for schizophrenia.

Source: National Institutes of Health.

The first of two phase 3 studies by Intra-Cellular Therapies examined ITI-007 given in either a 60 mg or 40 mg dose for schizophrenic patients versus a placebo. The 40 mg dose did not meet statistical significance. However, the 60 mg dose met its primary endpoint at the end of week four by creating a mean reduction from baseline in the Positive and Negative Syndrome Scale (PANSS) score of 14.5 points compared to a 10.3-point reduction for the placebo group. The 60 mg cohort also met an important secondary endpoint of improving the global severity of illness score, although it should be noted that it was not tested against the placebo on this endpoint. A second phase 3 study is expected to yield results in 2016.

ITI-007 is of particular importance to Intra-Cellular (beyond just the obvious that it has no approved therapies and could really use recurring revenue) because a number of previous blockbuster drugs designed to treat schizophrenia have come off patent in recent years. With little in the way of new treatments for schizophrenia in recent years, ITI-007 could be a major step forward.

The risk, of course, is that schizophrenia studies typically have a very high failure rate. The good news is the success of the 60 mg dose in the first of two studies demonstrates that ITI-007 probably has a better than 50/50 likelihood of succeeding in subsequent studies. However, with that high documented clinical failure rate for neurological disorders, I'd suggest that Intra-Cellular's share price may be a bit pricey here.