Sarepta Therapeutics Inc (NASDAQ: SRPT)
Sarepta Therapeutics is having a horrible day in the market after BioMarin Pharmaceutical (NASDAQ: BMRN) announced that the FDA has rejected its recent NDA. Today, we’ll talk about the FDA rejection, why SRPT is involved, how the market is reacting to the news, and what we can expect to see from the stock moving forward.
SRPT Sinks After FDA Rejects BMRN Drug
Today, the FDA announced that it has rejected Biomarin’s NDA for Kyndrisa, a drug designed for Duchenne muscular dystrophy. Unfortunately, the FDA believed that the NDA provided inadequate evidence of effectiveness. As a result, we’re seeing large declines in both BMRN and SRPT, but why does this have anything to do with Sarepta Therapeutics? Here’s why…
Why Bad News With Regard To BMRN Becomes Bad News For SRPT
The reason investors are reacting on SRPT in a negative way is relatively simple. SRPT has been working on a drug that competes with Kyndrisa. The SRPT version is known as Eteplirsen. However, that’s not the only two things the companies have in common. The reason Kyndrisa was declined was straightforward. The drug failed to meet primary endpoints in clinical trials. As a result, there was not enough evidence that the drug was effective. Unfortunately, Sarepta is likely to have the same fate as Eteplirsen didn’t produce overwhelmingly positive results during clinical trials either. So, the chances are high that SRPT might have the same fate when it comes to getting their treatment approved.
How SRPT Is Reacting To The News
As mentioned above, SRPT is having a horrible day in the market. After all, when negative news is released with regard to a publicly traded company, we expect to see declines. However, the declines we’re seeing today are far worse than anyone could have expected. Currently (10:23), SRPT is trading at $13.75 per share after a loss of $17.88 per share or 56.53%.
What We Can Expect To See Moving Forward
First and foremost, it’s important to remember that while there are some similarities between the SRPT treatment and the BMRN treatment, they are also very different. With that said, the idea that SRPT will face the same fate as BMRN with regard to FDA approval may not pan out. I have a relatively mixed opinion with regard to what we can expect from SRPT. On the one hand, my expectations of FDA approval have been brought down – not to zero, but I still think that chances are relatively slim. As a result, I’m expecting to see more downward movement in the long run. However, it’s also important to remember that the market moves through a series of overreactions. Any decline that’s as large as 56.53% is very likely an overreaction. As a result, I’m expecting to see a positive correction between Monday and Tuesday before the slow and steady downward movement continues. Nonetheless, things aren’t looking great for SRPT overall.
What Do You Think?
Where do you think SRPT Is headed and why? Let us know your opinion in the comments below!
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