(NASDAQ: SRPT)market value, thanks to a pair of upsetting developments. ” data-reactid=”11″ type=”text”>Over the past couple of weeks, the market has shaved a few billion dollars from Sarepta Therapeutics‘ (NASDAQ: SRPT)market value, thanks to a pair of upsetting developments. 

Has this former top-performing biotech stock been beaten down too far, or should investors remain braced for more losses ahead? Here’s what you need to know.

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What happened

Sarepta’s approved treatment, Exondys 51, racked up $181.7 million in sales during the first half of 2019, despite being limited to around 13% of those with Duchenne muscular dystrophy (DMD). Unlike Exondys 51, SRP-9001 is capable of treating the entire DMD population, which could drive annual sales past the $1 billion mark in a few years. 

Sarepta stock tanked after SRP-9001, a still-experimental gene therapy candidate, showed up on a system the Food and Drug Administration (FDA) uses to track dangerous side effects associated with drugs that have already been approved. Apparently, a boy in a clinical trial with Sarepta’s experimental gene therapy excreted a lot of creatine kinase, which can lead to permanent kidney damage.” data-reactid=”36″ type=”text”>On Aug. 8,Sarepta stock tanked after SRP-9001, a still-experimental gene therapy candidate, showed up on a system the Food and Drug Administration (FDA) uses to track dangerous side effects associated with drugs that have already been approved. Apparently, a boy in a clinical trial with Sarepta’s experimental gene therapy excreted a lot of creatine kinase, which can lead to permanent kidney damage.

complete response letter (CRL) regarding a completely different new drug candidate called golodirsen, or Vyondys 53. This exon-skipping treatment would have been the first available treatment option for around 8% of the DMD population. Instead of a new revenue stream in 2020, Sarepta will have to address the agency’s concerns.” data-reactid=”37″ type=”text”>The stock plunged further after the FDA sent Sarepta acomplete response letter (CRL) regarding a completely different new drug candidate called golodirsen, or Vyondys 53. This exon-skipping treatment would have been the first available treatment option for around 8% of the DMD population. Instead of a new revenue stream in 2020, Sarepta will have to address the agency’s concerns.

Sarepta’s explanations

drug label for Vyondys 53, so the agency’s CRL came as a complete shock. Also according to Sarepta, the letter generally cites just two concerns that must be addressed before the agency will consider reviewing the application: the risk of infections related to intravenous infusion ports that deliver Vyondys 53, and signs of kidney damage observed during non-human studies. ” data-reactid=”39″ type=”text”>According to Sarepta, the FDA had already worked with the company to hammer out an official drug label for Vyondys 53, so the agency’s CRL came as a complete shock. Also according to Sarepta, the letter generally cites just two concerns that must be addressed before the agency will consider reviewing the application: the risk of infections related to intravenous infusion ports that deliver Vyondys 53, and signs of kidney damage observed during non-human studies. 

With respect to the company’s experimental gene therapy, SRP-9001, the reported adverse event involved a patient who had dark-colored urine and elevated levels of creatine phosphokinase two weeks after receiving the experimental gene therapy. The patient was hospitalized for observation and discharged the following day.

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Reasons to be nervous

Analysts who had confidently predicted an approval for Vyondys 53 initially considered the FDA’s surprise response an act of pure spite. In 2016, the agency approved Exondys 51 despite a lack of credible evidence that the treatment provided a significant benefit. Although Sarepta agreed to perform a confirmation study to maintain the drug’s approval, Sarepta has hardly started yet. 

It’s extremely unlikely that pure emotion was responsible for the FDA’s rejection of Vyondys 53’s application for accelerated approval. A randomized, placebo-controlled study with golodirsen is ongoing, and there’s a good chance the FDA is simply waiting for outcome measurements that show a significant benefit. In other words, the agency probably wants to see evidence that one of Sarepta’s exon-skipping DMD drugs actually slows down the progression of DMD. Sarepta has claimed the agency hasn’t been clear about what a confirmatory study for Exondys 51 should look like, but investors are beginning to think the company’s dragging its feet out of fear that it doesn’t actually work.

It’s also important to note that the agency may have cited more reasons that we’ll never hear about, because most communication with the FDA is considered confidential and not subject to disclosure. According to Sarepta, the agency generally cited two minor concerns — infections that are extremely common whenever children have infusion ports, and signs of muscle and kidney damage strongly associated with their disease.

The issues Sarepta described mi

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