Sarepta Therapeutics, Inc. (NASDAQ: SRPT)
Sarepta Therapeutics, Inc. (SRPT), a biopharmaceutical company fell over 50% on Friday in pre market trading. Due to news that the FDA released briefing documents stating that they are unconvinced Sarepta’s new drug application Eteplirsen is effective in treating Duchenne muscular dystrophy (DMD). DMD is a progressive genetic disorder that limits muscle movement, it is found in 1 in 3,500 newborn boys and most patients die before the age of 30. The news raises doubts that the FDA will approve the drug. This news comes after BioMarin Pharmaceutical’s a competitor had their DMD drug application Drisapersen rejected by the FDA. Which was originally good news as many thought that with the FDA rejecting their rivals drug, that Eteplirsen would be approved given the lack of available treatments for this fatal muscle disorder.
“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,” the FDA states in a summary of the eteplirsen medical review. The Street
SRPT Technical Analysis
SRPT gapped down in price Friday to $15.00, down from the prior day’s close of $31.63, which is a 53% decrease in price. Taking a look at the daily chart, we can see the last time SRPT traded below this price level was on May 13th when it traded at $14.87. Taking a closer look at the daily chart we can see that SRPT stock is in a freefall dating back to December 29th when it traded at $39.12. SRPT is approaching its 52 week low price of $11.42, and I would not be surprised if it is tested in trading on Friday. SRPT has a float of 39.01 million shares and is trading over 4 times the normal daily trading volume. SRPT did reach pre market lows of $13.95, but bounced back $1.05, or equivalent to 8%. For trading purposes, my entry point short would have been $14.90 looking for a run to $13. My stop loss would have been $15.10, fearing anything above that and the stock would start to fill in the gap down.
Sarepta Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery and development of RNA-based therapeutics for the treatment of rare, infectious, and other diseases. Its lead product candidate is Eteplirsen, an antisense phosphorodiamidate morpholino oligomer therapeutic, which is in Phase III clinical development stage for the treatment of individuals with Duchenne muscular dystrophy (DMD), a rare genetic muscle-wasting disease caused by the absence of dystrophin. The company also focuses on developing therapeutics for the treatment of drug-resistant bacteria, Becker muscular dystrophy, progeria, adult onset pompe, lupus and graft-versus-host diseases; and other rare, genetic, anti-infective, neuromuscular, and central nervous system diseases. The company is also involved in developing treatments that are in Phase I clinical trials for infectious diseases, including AVI-7288 for Marburg virus; and AVI-7100 for H1N1 influenza virus. Sarepta Therapeutics, Inc. was founded in 1980 and is headquartered in Cambridge, Massachusetts. Yahoo Finance