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Sarepta's Next Step: Early FDA Approval

On the negative side, you can't dismiss the risk that comes from a tiny study of just 12 patients. The data are not pristine -- remember the two patients in the 30 mg eteplirsen dose who were excluded from the analysis because they experienced rapid declines in walking ability. FDA may simply conclude that more clinical data is needed for approval.

Manufacturing could be an issue. It's something investors often overlook but remember FDA can't approve a drug unless reliable manufacturing at commercial scale is in place. Sarepta is right now working on ramping up its eteplirsen manufacturing capacity but this process takes time. If there are delays in manufacturing scale-up, approval could be delayed.

Sarepta does face competition from a similar drug developed by GlaxoSmithKline (GSK - Get Report) and a partner in a phase III study. We should see results from this study relatively soon. A key question will be safety. The Glaxo DMD drug has shown some evidence of kidney toxicity in the past. If that persists, Sarepta's eteplirsen could be deemed superior.

Are there unresolved risks to the Sarepta story? Sure. Are these risks small next to the stellar eteplirsen data announced Wednesday and the $400-500 million market opportunity for the drug in the U.S.? Absolutely.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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