Ahead of the Bell: Sarepta shares slide

Sarepta shares slide as Janney downgrades; concern eteplirsen may not get accelerated OK

Associated Press

Sarepta Therapeutics Inc.'s study of its experimental Duchenne muscular dystrophy drug eteplirsen may be too small for the faster approval the company seeks from regulators, according to an analyst who lowered her rating on the stock. Shares slide in premarket trading Tuesday.

The Cambridge, Mass., company said Monday after markets closed that the U.S. Food and Drug Administration asked for more information from existing data on eteplirsen to help with its decision on whether to approve the treatment.

Janney Capital Markets analyst Kimberly Lee said in a Tuesday morning research note she could not rule out the possibility that Sarepta's study of 12 patients treated with eteplirsen is too small for accelerated approval.

Investors didn't seem optimistic, either. Sarepta shares slid 6.7 percent, or $2.64, to $36.60 before markets opened Tuesday.

A Sarepta spokesman did not immediately return a call from The Associated Press seeking comment.

The FDA grants accelerated approval to promising medical products designed to treat serious diseases. The program allows the agency to clear innovative drugs based on promising preliminary results.

Duchenne muscular dystrophy is a fatal, genetic disease that causes increasing muscle weakness and affects one of every 3,500 boys worldwide. Sarepta said death usually occurs before patients reach age 30.

Eteplirsen aims to address the disease's underlying cause by enabling the body to produce a functional dystrophin protein, which plays a key role in muscle fiber function.

Regulators "need to become more comfortable" with the idea that there is a direct correlation between dystrophin and a clinical benefit, Lee said. She lowered her rating on shares of the company to "Neutral" from "Buy."

Sarepta has no drugs on the market. Eteplirsen is its most advanced product. It also is developing other potential treatments for Duchenne muscular dystrophy, influenza and the Ebola virus.

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