6/08/2014

A Post-Mortem on Sarepta's Epic Explosion, Mea Culpa Included

Sifting through the detritus of Tuesday's Sarepta Therapeutics  (SRPT) explosion and thoughts on the future of the company's Duchenne muscular dystrophy drug eteplirsen.

I was wrong to be bullish on Sarepta, even if I had warned recently about greater regulatory risk. I'll have more to say about my mistakes below, but first let's start with some thoughts from a fund manager who has been critical of Sarepta and short the stock.

I can't identify him by name but he made the right call and he does a good job explaining why Sarepta's stock price took such a beating. Below is an email from this investor, reprinted with his permission:

The FDA's issues with trial design are so wide-ranging that it seems like wishful thinking that Sarepta will be able to agree on a study design and start enrolling by the second quarter 2014. Major questions with dystrophin quantitative assay. Questions with results of anything less than two years. Need for a larger study to power the six-minute walk test (6MWT) data. Possible need to expand study population both high and low and go beyond 6MWT as primary endpoint. T

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