BOSTON ( TheStreet) -- I heard from a few Sarepta Therapeutics ( SRPT) skeptics on Wednesday after the announcement of the 48-week eteplirsen data. (Psst ... some might even be short the stock.) Since it's always helpful to know what the other side thinks about a company, I'll try to summarize the Sarepta bear thesis.

The most significant criticism is the lack of dose response with respect to dystrophin production. Eteplirsen dosed at 30 mg resulted in an increase in dystrophin-positive fibers to 52% of normal, while the drug at 50 mg produced dystrophin at 42% of normal.

Despite producing more dystrophin, the boys in the 30 mg eteplirsen arm performed poorly on the six-minute walk test. Two of the 30 mg boys dropped off the study early because they became wheelchair bound. Only one of the remaining two 30 mg boys walked farther on the 6MWT than the placebo/delayed treatment group and none did as well as the boys in the 50 mg group.

The Sarepta bears believe these results blow a hole in the correlation between dystrophin production and the clinical benefit of walking farther on the 6MWT. The data also raise questions about whether the dystropin being produced following treatment with eteplirsen is functional.

In response, Sarepta bulls argue that it is unrealistic to expect a tight correlation between dystrophin fiber production and performance on the 6MWT in a study with so few patients. The measurement of dystrophin fibers can be variable and depends on many factors, including the location from where the muscle biopsy was obtained. The precise number -- 52% versus 42% -- is not as important as the real and obvious trend showing increased dystrophin.

Taking a look at the Sarepta study results again, the two placebo patients who switched over to 50 mg eteplirsen were shown to have dystrophin fibers that were 42% of normal. The two placebo patients who went on to receive 30 mg of eteplirsen measured dystrophin at 34% of normal. There's your dose response.

What the results of the study suggest -- strongly -- is that some increased level of dystrophin production is correlated to a real clinical benefit -- walking farther on the 6MWT. The exact amount of new dystrophin required to achieve this benefit isn't known, but it's highly unlikely that the correlation doesn't exist given the results seen across all the patients in the study.

DMD is a disease in which patients cannot produce functional dystrophin. Eteplirsen is the first drug shown to produce new dystrophin in a blinded trial that incorporated measurement of baseline dystrophin levels. The GlaxoSmithKline ( GSK)-Prosensa studies did not do this. Over time, the patients who produced more dystrophin improved their performance on the 6MWT (or declined less). Is this all luck? Seems unlikely.

A couple of points on the functionality of the dystrophin produced. I'm a healthy person and I don't have Duchenne muscular dystrophy, therefore I have 100% functional dystrophin fibers. Usain Bolt doesn't have DMD either (as far as I know) so he has 100% functional dystrophin. But I can't run as fast as Usain Bolt. That's curious, unless something else affects speed and muscle function besides the number of dystrophin fibers.

Second point: Research showing eteplirsen creates functional dystrophin has been published. This 2012 paper in Molecular Therapy shows how dystrophin-associated glycoprotein complexes were detected following eteplirsen treatment. Dystrophin is functional only when it joins with other proteins to form these complexes. DMD patients have these other proteins present but they don't join together with dystrophin to form complexes. However, after treatment with eteplirsen, researchers were able to detect the dystrophin complexes -- suggesting the dystrophin produced is functional.

A bull-bear debate is healthy. I'm still a Sarepta bull.

One last note of interest (at least to me): Sarepta may not have reached that incredible milestone if not for financial life support from a New York hedge fund. Perceptive Life Sciences Fund was an investor in a primary financing of Sarepta (then known as AVI Biopharma) in 2009 when few on Wall Street were interested. Perceptive chief Joe Edelman and analyst Adam Stone talked to experts about the technology and science behind eteplirsen and were convinced that the exon-skipping approach could work. Edelman's fund has been a key investor in Sarepta ever since and that financial support helped the company pay for the clinical trials that culminated in this week's great news for DMD patients (and shareholders).

Investors often knock hedge funds for being evil short sellers but the feel-good Sarepta story shows how Wall Street money can play a significant role in bringing a medically groundbreaking therapy to patients who desperately need it. And the wallet-busting returns aren't bad either.

Vertex Pharmaceuticals ( VRTX) presents important final data from the phase II study of VX-809/Kalydeco at the 2012 North American Cystic Fibrosis (NACF) conference on Thursday, Oct. 11. I'm flying to Orlando, Fla., for the conference to cover the presentation and Vertex's investor meeting.

Partial top-line results from this VX-809/Kalydeco study were announced over the summer (more on those data below). At the NACF meeting, we'll see a breakdown of response from the three different VX-809 dose groups, individual patient data and perhaps more insight into why the reduction in sweat chloride was smaller than expected (and whether this matters or not).

Vertex has already made the decision to move the 600 mg dose of VX-809+Kalydeco into a phase III study to start early next year. A higher 400 mg twice-daily dose of Kalydeco may also be included.

The phase II study of VX-809/Kalydeco has been shrouded in some controversy. Recall, investors were angered after Vertex was forced to revise (lower) interim results because of an internal data-analysis screw up. The company also changed the way it reported final data from the study, leaving the impression that some nasty bits about VX-809/Kalydeco might be in hiding.

Vertex shares soared from $37 to $64 in May after the initial data from the VX-809/Kalydeco study were announced. Since then, however, the stock traded down, falling to $49, and is now close to $60.

Vertex's cystic fibrosis drug franchise is the company's most important growth driver now that sales of the hepatitis C drug Incivek are falling. The F508del mutation patient population targeted by the VX-809/Kalydeco combination represents about 40% of cystic fibrosis patients and could generate $3 billion to $4 billion in sales (on top of the $1 billion or so in peak sales of Kalydeco monotherapy in the much smaller G551D mutation patient population).

Here's your handy-dandy primer on what we know already about the phase II VX-809/Kalydeco study:

The study tested three different doses of VX-809 (200 mg, 400 mg, 600 mg) plus the standard dose of Kalydeco against a placebo. For the first 28 days of the study, VX-809 was dosed alone; VX-809 was then combined with Kalydeco for days 28-56. The primary endpoint was improvement in lung function assessed by FEV1, which measures the amount of air a patient can forcibly exhale in one second. FEV1 is the measure of clinical benefit accepted by FDA and European regulators for the approval of new cystic fibrosis drugs.

Reduction in sweat chloride is a laboratory marker of improved CFTR protein function (missing or malfunctioning CFTR proteins causes cystic fibrosis) and is a co-primarny endpoint of the study.

The results: From the start of the study through day 56, patients treated with high dose (600 mg) of VX-809 and Kalydeco experienced a 6.7% improvement in lung function compared to placebo and a 3.4% improvement within the drug treatment group. Both results were statistically significant.

Over the same time period, placebo-treated patients saw their lung function fall by 3.3%.

Vertex has not yet disclosed final lung function results for all patients across the three different doses of VX-809. The company did say that patients treated with the low- and mid-doses of VX-809 plus Kalydeco also experienced statistically significant improvements in lung function compared to placebo although the improvements were lower than what was seen with the highest dose of VX-809.

There was no decrease in sweat chloride for placebo patients from day 0 to 28 or day 28-56 in the study. For 600 mg VX-809 patients, there was a -5.91 nmol/l reduction in sweat chloride from day 0-28 and another -2.82 nmol/l reduction during day 29-56. The reduction in sweat chloride between the 600 mg VX-809 dose and placebo was not statistically significant.

@chasingthealpha asks, "How is $OSIR almost $360M in mcap? This is junk."

Osiris Therapeutics ( OSIR) shouldn't trade for much more than cash -- let's call it $2 per share -- for fundamental reasons that I've written about for a long time. I'm not a believer in Osiris' stem-cell therapy Prochymal because the clinical data are entirely unconvincing. It's been months since the Canadian approval but still no sales. Worse, Osiris has a bad habit of misleading investors about its business. Most recently, Sanofi ( SNY) ended unilaterally a Prochymal partnership entered into originally by Genzyme, before Sanofi took over.

Just about the only thing Osiris does well is manage its stock price, which at almost $11 has more than doubled this year. Shocking, but true.

How does Osiris CEO Randy Mills do it? Simple, he doesn't really run a publicly traded company. Here's what he said this summer at an investor conference, in a fleeting moment of transparency:

It's important to understand the ownership of Osiris and how we think. We are more than 50% held inside and I can walk into a room in Zurich with a handful of people and probably have 75% of the outstanding shares represented. Not by new traders but by people who have been investing in the company for 20 years. They are very long-term investors in the company and understand what the company is and where it's going. They are in it to create value and not to have the stock fluctuate day to day.

Because of this, I get very clear direction. I know exactly who my boss is and I know exactly whether he is pleased or not pleased with what I'm doing. Because it is our company, because we essentially own it, we don't do things that in the long term would decrease our value.
Emphasis mine.

The "boss" Mills refers to is Swiss investor Peter Friedli and the handful of people who own 75% of Osiris' outstanding shares -- Friedli's friends and business associates.

This is why Osiris has a $360 million market value.

-- 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.