Sarepta surges after FDA panel backs Duchenne gene therapy

By Aditya Samal

(Reuters) -Shares of Sarepta Therapeutics jumped 25% on Monday as a backing by the U.S. health regulator's advisers increased the certainty of an accelerated approval for the company's gene therapy for a muscle-wasting genetic disorder.

The stock was set for its biggest percentage jump in over three years, while the drugmaker's market capitalization was on track to add nearly $3 billion, if current gains hold.

Eight of the 14 advisers to the Food and Drug Administration late Friday voted that the company had enough data to support an accelerated approval for its gene therapy for Duchenne muscular dystrophy (DMD).

"We are increasingly optimistic that SRP-9001 will be granted accelerated approval, especially as the panel voted in concordance with how we think senior leaders at the agency view the application," said SVB Securities analyst Joseph Schwartz.

The vote came after FDA staff had earlier last week voiced concerns that the data from the company's mid-stage trial lacked "unambiguous evidence" about benefits from the therapy.

TD Cowen analyst Ritu Baral expects an approval for the therapy, especially considering the FDA leadership's interest in promoting biomarker-based accelerated approvals for gene therapies.

Top FDA official Peter Marks said in March the regulator is moving to encourage the use of disease-related biomarkers that may predict efficacy for gene therapies for diseases with small patient populations rather than waiting for definitive proof of patient benefit.

The FDA, which often follows the advice of its expert advisers, is slated to make a decision on accelerated approval by May 29.

"There was little chance the vote would have been positive if not for the engagement by patient advocates during the whole development and review process," William Blair analyst Tim Lugo said in a note on Monday, describing the close nature of Friday's voting.

Trading in the stock was halted on Friday due to the meeting.

(Reporting by Aditya Samal; Editing by Sriraj Kalluvila)