Sarepta Therapeutics Inc (NASDAQ:SRPT) shares are down almost 3% to $31.40 in pre-market trading, following a statement from Jefferies’ key opinion leader (KOL) regarding yesterday’s news that Dr. Ronald Farkas, the lead on a critical FDA review of Sarepta’s eteplirsen for Duchenne muscular dystrophy (DMD), is leaving his position.
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Ron Farkas left his position last week as a member of the FDA staff that criticized studies of Sarepta’s drug for a lethal muscle disease, according to multiple posts on Twitter and a Benzinga report late Tuesday. “Additionally, he is no longer listed in the HHS (Health and Human Services) employee directory”. Farkas’ departure would “suggest approval” for eteplirsen.
The US Department of Health and Human Services is the overseeing body for the FDA.
The advisory committee meeting, where patients hurled angry comments at Farkas, was the latest example of the growing impact of patient lobbying in influencing the FDA’s decision-making. The FDA continues to review the drug. Farkas was the drug’s most vocal critic, although there were many other FDA members who agreed there was little efficacy for eteplirsen. Although this development is not truly definitive in what will happen with the appeal, it does yield some optimism for the patients, and parents of the patients in extending the trial.
Sarepta was one of the best performers on September 14’s rather quiet trading session, along with Advanced Micro Devices and Vonage Holdings. (NASDAQ:SRPT) in a research note published on Wednesday.
Or, Farkas’ exit from the FDA might not be related to the eteplirsen review at all, but is just another example of a government official deciding to make more money in the private sector.
If the drug fails to gain approval, then naturally not much has changed, the stock had already slumped from this news at its price level before Wednesday’s move. However should the drug win approval and come back online, Sarepta stands to have some serious upside.
Not counting Wednesday’s event, Sarepta has underperformed the broad markets with the stock down at an estimated 34% year to date. The current price escalated 30.75% from its SMA 50 of $26.33. Since February 10, 2016, SRPT has risen 187.42% and is still uptrending. The company will report its next earnings on Nov 3 – Nov 7 (Est.). The company reported ($1.35) earnings per share for the quarter, missing the consensus estimate of ($1.19) by $0.16.
What may be surprising, however, is how quickly that big short position caused a run-up in Sarepta Therapeutics’ share price today.
Sarepta Therapeutics (SRPT) was up 24%, at an eight-month high above 31.
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