On the news that a Food and Drug Administration advisory committee had declined to recommend the approval of eteplirsen, an experimental drug designed to treat Duchenne muscular dystrophy (DMD), the price of shares of Sarepta Therapeutics Inc. (SRPT, Financial) fell by nearly half in early trading Tuesday.
The committee’s vote Monday night was 7-3 against recommending approval with three abstentions.
“The FDA is not obliged to follow the advice of its advisory panels,” Reuters reported, “but typically does so."
Sarepta, a Cambridge, Massachusetts-based medical research and drug development company, sold for $8.58 per share, Sarepta’s lowest share price since August 2012, when markets opened Tuesday. On April 18, shares of Sarepta sold for $22.43 apiece.
On Oct. 7, 2013, the stock sold for $53.81 per share.
Duchenne muscular dystrophy is a rare genetic degenerative muscle disease that is typically found in one boy in 3,500 to 5,000 worldwide. Both sexes can carry it, but females are seldom affected by it. An estimated 9,000 to 12,000 Americans suffer from the disease.
It is caused by a mutation in the gene dystrophin, an important element in muscle tissue. Eteplirsen is concentrated on mutations in a region linked to about one in eight cases.
Steven Cohen (Trades, Portfolio) is Sarepta’s leading shareholder among the gurus with a stake of 2,375,700 shares. The stake is 5.2% of Sarepta’s outstanding shares and 0.76% of Cohen’s total assets. Cohen raised his stake by nearly 161% in the fourth quarter.
Sarepta has a P/B of 2.3 and a P/S of 325.3. GuruFocus gives Sarepta a Financial Strength rating of 3/10 and a Profitability and Growth rating of 1/10.
The stock’s price rebounded by the close of trading Tuesday, selling for $11.02 per share.
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