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Why Is Sarepta Therapeutics (SRPT) Stock Plunging Today?

Shares of Sarepta Therapeutics SRPT are down a staggering 45% today. Investors initiated a selling frenzy after the medical research and development company received some bad news from the FDA regarding its Duchenne muscular dystrophy drug.

The drug, known as “Eteplirsen,” looks like it will be fighting an uphill battle to gain FDA approval. Back in January, Sarepta requested that the FDA review its original assessment of the drug, citing errors in its report. Today, the FDA review board announced its decision:

“[W]e do not agree with the applicant's characterization of inaccuracies in the initial FDA briefing document... Although FDA is prepared to be flexible with respect to a devastating illness with no treatment options, we cannot approve drugs for which substantial evidence of effectiveness has not been established.”

As we know, research-based drug companies depend heavily on their ability to develop new treatments and get them on the market. Of course, this depends on the FDA's approval. Sarepta has pushed hard to get this treatment approved, but it is now clear that the regulatory body is not satisfied with the results.

While today's news is certainly not great, it is not exactly the end of the road for Sarepta and eteplirsen. The company announced today that the FDA is still expected to conduct an outside advisory panel next week.

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