Sarepta Roils Wall Street - Why?

Check out Twitter on any given day, and you will likely see numerous tweets by Adam Feuerstein of the The Street and other Wall Street pundits talking about Sarepta. Most of the chatter centers on the company’s regulatory progress with its lead product, eteplirsen, for Duchenne muscular dystrophy (DMD). As the rumors fly and the agency appears to send mixed signals, Sarepta’s stock is subject to endless speculation in both a conceptual and a financial sense. Why is Sarepta so much in the spotlight, and how does all the stock talk affect its fortunes? The company’s president and CEO, Chris Garabedian, answers:

“As a public company, we tell our story the best we can to attract a variety of investors. But we only have so much control and a story can create a life of its own, particularly in social media. A single erroneous Tweet, as we’ve found, can move our stock in ways that do not reflect what is going on in the company. We have to be conscious of it, but it doesn’t change the way we do drug development.

“Why is there seemingly more volatility or interest in the Sarepta story? I believe we are capturing some themes in the industry: whether the FDA wants to expand its use of the accelerated approval pathway specifically in rare diseases or for new technologies. Here we have a technology that works at the genetic level and has shown a lot of promise, and a broader antisense platform that can create value and recapture the promise of treating many diseases previously deemed untreatable. People are looking at this story beyond how it might impact Sarepta, to what it says about our industry.”

“How much is really at stake in whether the FDA grants accelerated review status for eteplirsen? We don’t see changes in the fundamental side of the company much at all, because we believe that we have enough evidence the drug is working mechanistically. Every biochemical signal suggests that we’re producing dystrophin, and we have now dosed patients for two years. No safety issues have popped up, and we even have a clinical signal that seems to be quite robust. If the FDA says no, it simply means we need to get more information from some additional patients, delaying review for approval, but it will not reduce the likelihood of getting the drug to market.”

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