Over four of the past five trading days (Tuesday is the exception), Sarepta has said nothing about its Duchenne muscular dystrophy drug eteplirsen and the stock price increased 18%.
This is not a totally random trading pattern.
Sarepta has been in a self-imposed quiet period for a little longer than two weeks as it runs the muscle samples collected from Duchenne patients in the "PROMOVI" clinical trial through a Western blot machine to measure the amount of dystrophin produced by eteplirsen.
These are the new data requested by the U.S. Food and Drug Administration to complete the eteplirsen review. Dystrophin is the muscle-lubricating protein that is missing in patients with Duchenne. Eteplirsen's chance at securing accelerated approval hinges on the ability to produce functional dystrophin.
Sarepta isn't telling anyone exactly when the Western blots were done on the new muscle samples, nor has the company told us if or when the data were sent over to the FDA.
But Sarepta would probably have to come out of its quiet period to update investors if the new eteplirsen dystrophin data obtained from the Western blots were a total bust. If the company discovered eteplirsen wasn't producing any dystrophin in Duchenne patients, that would mean the drug doesn't work and there would be no need for an FDA submission.
That would be horrible, terrible, negative news Sarepta could not keep to itself.
So, if you talk to a group of healthcare investor pros -- Sarepta bulls all -- as I did recently, you'll hear this line of thinking: Every passing day without bad news from Sarepta boosts the odds that the Western blots performed on the patients' muscle samples came back with enough eteplirsen dystrophin production to warrant sending the data over to the FDA.
And that absence of bad news is good news, which is why the stock's price is trending higher. Shares trade around $20.
Of course, no one knows exactly how much dystrophin made is enough to convince the FDA to approve eteplirsen, nor do we know how much time the agency needs to make a decision.That's a debate already raging.