Sarepta Falls on Investor Skepticism of Approval Plans

Sarepta Therapeutics (SRPT) Inc. plummeted the most in 14 months on investor concerns that U.S. regulators wont consider the companys treatment for Duchenne muscular dystrophy on an accelerated basis.

Sarepta, with no products on the market, fell 12 percent to $40.95 at 11:11 a.m. The shares of the Cambridge, Massachusetts-based company declined as much as 17 percent, their biggest intraday drop since May 2012, after at least three analysts cut their ratings on the stock.

The biotechnology company announced today it plans to seek approval of eteplirsen in the first half of 2013 after the Food and Drug Administration said it was open to a filing based on data from existing studies. The agency requested information on methodology and verification that will be incorporated into the filing, the company said in a statement today. Regulators didnt commit to considering approval of the compound on an accelerated approval basis, Sarepta said.

If youre a bear, you believe that the FDA is just saying file, and the management is filing just because they can, not because they think theyre going to get approved, Robyn Karnauskas, a New York-based analyst at Deutsche Bank AG, said in a telephone interview. She reduced her rating on Sarepta to hold from buy.

Sareptas stock began falling while Chief Executive Officer Christopher Garabedian talked about the companys plans on a conference call this morning.

If he had just said were filing, it would have been up, Karnauskas said. But he added some color about what the FDA said, and that color was not enough to encourage the bulls.

Duchenne muscular dystrophy is a form of the disease that affects boys and worsens quickly. It is caused by a defective gene for a protein in the muscles and occurs in about one of every 3,600 male infants, according to the National Institutes of Health.

Eteplirsen, the developmental drug, manipulates RNA to repair a gene mutation in about 13 percent of patients. If successful, the drug helps the patients produce the missing protein and gain strength.

To contact the reporter on this story: Samuel Adams in New York at sadams69@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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Sarepta Falls on Investor Skepticism of Approval Plans