Sarepta Therapeutics Stock Slumps 3.5% After Other DMD Drug Is Denied Accelerated Approval

Sarepta Therapeutics Inc. shares dropped 3.52% in morning trade Thursday after another company's Duchenne muscular dystrophy drug was denied accelerated approval by the Food and Drug Administration. A FDA committee voted against recommending approval for Sarepta's DMD drug in late April, but patient advocacy on the drug's behalf and various moves by the FDA itself have stoked speculation about the drug's chances. The FDA's lack of approval for Santhera's DMD drug "makes a positive decision on eteplirsen even more unlikely," said RBC Capital Markets' Simos Simeonidis in a note Thursday, since Santhera's data were of a higher quality than Sarepta's and the company was still told to redo its phase 3 trial. A FDA decision to approve Sarepta's drug would tell companies that it was acceptable to "ignore FDA's instructions to conduct a placebo-controlled trial and instead delay, delay, delay, rally the patient community and put the FDA on the spot to either approve a drug on very little evidence or look like heartless bureaucrats that are keeping a life-saving drug away from little kids," Simeonidis said. Sarepta's shares dropped 6.50% over the last three months, compared with a 3.94% rise in the S&P 500 .