Sarepta shares soar on FDA's eteplirsen review delay

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Shares of Sarepta Therapeutics rose nearly 27 percent Wednesday after announcing the Food and Drug Administration is delaying its review of a key drug made by the firm.

The FDA notified Sarepta that "they are continuing their review and internal discussions related to our pending NDA for eteplirsen and will not be able to complete their work by the Prescription Drug User Fee Act (PDUFA) goal date of May 26, 2016," Sarepta said, in a statement. "The FDA has communicated that they will continue to work past the PDUFA goal date and strive to complete their work in as timely a manner as possible."

In a statement, the FDA said:

"As mentioned in the company's statement, the FDA contacted Sarepta Therapeutics to let them know we are continuing necessary work on their New Drug Application for eteplirsen and will not take action by the goal date. We cannot comment further on the drug review, but you may contact the company for additional details. The FDA is prohibited by law from commenting on pending applications because such information is considered confidential and proprietary to the applicant."

Eteplirsen is a drug designed by Sarepta to treat Duchenne Muscular Dystrophy.

Analysts at Janney Montgomery Scott said Tuesday there was a 35 percent chance the review would be delayed, adding Sarepta's stock could break above $20 in that event. In the premarket, Sarepta traded near $22.80.

Sarepta has taken investors on a wild ride this year, with the stock posting 10 percent moves to the upside or downside 12 times.

SRPT this yearSource: FactSet

Many investors are betting against Sarepta as almost 54 percent of its shares outstanding are sold short, according to FactSet.

— CNBC's Tae Kim and John Melloy contributed to this report.

Disclosure: Janney Montgomery Scott makes a market in Sarepta.