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Sarepta says FDA asks for more data for its muscle-wasting treatment

Sarepta Therapeutics said the U.S. Food and Drug Administration has requested for additional data from an ongoing study for its muscle-wasting treatment as the agency decides whether to approve the drug or not.

Shares of the company soared more than 40 percent in premarket trading on Tuesday as investors pinned hopes on a possible approval. (Get the latest quote here.)

Analysts at Wedbush Securities upgraded the stock to "outperform" from "neutral," and raised their price target to $36 from $14 after the announcement.

"We believe there is a good chance these data will demonstrate required dystrophin production and recommend shares ahead of a regulatory decision, which could come in 2016," they said in a Monday note to clients.

The FDA deferred a highly anticipated decision on whether to approve Sarepta's drug, eteplirsen, last month, after an advisory panel determined that the treatment was not effective.

The agency requested that Sarepta provide dystrophin data from biopsies already obtained from the ongoing confirmatory study of eteplirsen, the company said on Monday.

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Jody Amiet | Getty Images

Sarepta's drug has been in the spotlight over the past few months with patient groups and parents arguing passionately in favor of the treatment to pressure the regulator to approve the drug.

Duchenne muscular dystrophy is a rare genetic disorder characterized by progressive muscular weakness and is caused by a lack of dystrophin, a protein needed to keep muscles healthy. Eteplirsen is designed to increase the production of dystrophin.

Sarepta said on Monday it plans to submit data from thirteen patient biopsy samples to the FDA over the coming weeks to facilitate a prompt decision by the agency.

The agency said last week that companies could only charge patients for the cost of manufacturing experimental treatments used under compassionate grounds, and it cannot force government or private health insurers to pay for these drugs.

Analysts had said that the FDA's move seemed to be intended to soften the repercussions of a possible rejection of Sarepta's drug.

Up to Friday's close, the company's shares had almost halved since mid-January when the FDA staff said they were unconvinced about the effectiveness of eteplirsen.

CNBC contributed to this report.

Disclosure: Wedbush Securities makes a market in Sarepta.