Five months after Sarepta Therapeutics lost 64 percent of its market value in one day, the company got the go-ahead to file for approval of its experimental drug for Duchenne muscular dystrophy.
Sarepta said Monday it received guidance from the Food and Drug Administration that will enable it to apply for regulatory approval of eteplirsen by the end of this year, before completing a larger scale, confirmatory clinical study. The company will supplement its FDA filing with additional safety and efficacy data from an earlier trial as well as from a confirmatory study it plans to start in the third quarter, according to a statement.
The agency's guidance comes after Sarepta shares took a record plunge in November, when the company said that the FDA considered its plans to file for approval based on existing data premature. The communication followed a failed late-stage clinical study of a competitor drug called drisapersen, being developed by Prosensa and GlaxoSmithKline. Glaxo has since ended the partnership.
Sarepta shares were trading up 50 percent in early trading. (Track Sarepta shares here.)
The FDA made clear that its guidance doesn't reflect how it will vote on Sarepta's drug, and said the company should be prepared for an advisory committee meeting to evaluate the application before the agency makes its decision, Sarepta said.
"They haven't reversed their decision from November," Sarepta Chief Executive Chris Garabedian said in a telephone interview. "They've reinforced the questions and concerns they had of being able to accept an NDA and consider accelerated approval of just the data set they had in-house, but evolved to say, 'If you give us a little more data, it should be fileable.'"
Garabedian is expected to appear on "Street Signs" at 2 p.m.
The last study Sarepta conducted involved just 12 patients, a very small set for the FDA to consider. But Duchenne muscular dystrophy is a rare, fatal condition for which no other treatment options exist. And the company argues its data, most recently reported out to 120 weeks in these 12 patients, show the drug helps stem declines in walking ability.
Duchenne muscular dystrophy, or DMD, affects about 1 in every 3,500 boys born worldwide (the disease affects boys because of the way it's inherited). It's caused by errors in the gene that codes for the protein dystrophin, important for muscle strength. Boys with DMD often lose the ability to walk by their teens and generally don't survive past 30 years old.
Eteplirsen is aimed at a subset of patients that accounts for about 13 percent of all boys with DMD. Sarepta is working on additional drugs that address different subsets, and plans to start a study of one or more of those by the end of this year, the company said.
—By CNBC's Meg Tirrell.