Sarepta Therapeutics (SRPT - Get Report) and top officials at the U.S. Food and Drug Administration are working cooperatively to approve the Duchenne muscular dystrophy drug eteplirsen. Both sides want to find a way to approve eteplirsen, which is why Monday night's announcement of a compromise solution to resolve the long-delayed clinical review is good news and a positive step.

Under the new plan, Sarepta will submit to FDA additional clinical data aimed at confirming eteplirsen's ability to produce dystrophin, the muscle-lubricating protein that is missing in patients with DMD. The inability to produce dystrophin (due to a genetic mutation) is why muscle function degenerates in DMD patients and they end up in wheelchairs at a young age.

Sarepta is obtaining the data from two muscle biopsies taken from each of 13 boys being treated with eteplirsen right now as part of the ongoing phase III study known as "Promovi." Dystrophin expression will be compared at baseline (the start of the study) and after 48 weeks of treatment with eteplirsen.

If eteplirsen helps DMD patients make partially functioning dystrophin, as the company believes it does based on results from the prior phase II study, then the proof should be evident in the new muscle biopsy data from the 13 patients.

And these confirmatory data will be all that FDA needs to finally grant accelerated approval to eteplirsen. 

Sarepta plans to submit the results of the dystrophin muscle biopsies "in the coming weeks." No more detailed timeline was provided but hopefully, we get a decision from the FDA in two or three months.

The big question: How much dystrophin does eteplirsen need to produce in order for FDA to approve the drug?

We don't know the answer definitively because Sarepta and FDA aren't saying. But it's entirely logical and likely that FDA will be satisfied with eteplirsen dystrophin production which approximates and confirms the 0.9% of normal seen in the prior study.

We've already seen baseline dystrophin production data from some Promovi patients at essentially zero -- in line with patients enrolled in Sarepta's phase II study. So for the win, the 48-week dystrophin expression from the Promovi patients needs to remain consistent with prior experience.

This is a reasonable and make-able threshold for approval.

I've read some bearish analyst reports this morning which claim FDA will need dystrophin expression of 10% of normal or more in order to approve eteplirsen. Frankly, that's absurd. The FDA knows eteplirsen cannot meet that threshold -- no DMD drug likely can -- so placing the approval bar that high makes no sense.

Remember, despite all the criticism leveled at Sarepta and eteplirsen's dystrophin data at the April advisory committee meeting, the invited experts only recommended against accelerated approval by a slim 6-7 vote.

Those experts who did vote no said they wanted to see additional pre- and post-treatment dystrophin expression data. They wanted just a little more evidence that eteplirsen was producing partially functioning dystrophin.

That's what Sarepta is readying to submit to FDA.

Sarepta shares are up 30% to $20.85 in early Tuesday trading. The reaction is appropriate because the bull case for eteplirsen's approval was strengthened by Monday night's compromise decision between the company and the FDA.

This is not an adversarial relationship. Going back to the April advisory committee meeting, top FDA officials made it clear they're supportive of Sarepta and want to approve eteplirsen. They just need a bit more scientific evidence of dystrophin expression to support the decision.

Bears believe eteplirsen is a placebo that doesn't produce any dystrophin at all. You can't dismiss the bear case outright. But if they're wrong and Sarepta delivers confirmatory dystrophin data, the FDA will approve eteplirsen.

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.