What's Behind Sarepta's Tumble?

On Thursday, shares of Sarepta Therapeutics (SRPT) tanked 26% after the FDA announced new rules for expanded access to unapproved drugs as compassionate use. Sarepta's stock dropped because many investors believed that  the FDA enacted the new rule particularly  for Eteplirsen. In other words, investors believed that the FDA was setting up Eteplirsen for being denied. 

Janet Woodcock, the head of the FDA, stated that this rule was in the works long before any decision about Sarepta's drug. But is this true? After all, the FDA panel shot down the drug claiming that a 12-patient trial was insufficient, and that a trial with no placebo is not acceptable by any means. The FDA sets a high standard for approving drugs, and approving Sarepta's drug would open the door for other biotechs to do the same, i.e., run smaller trials with 12 patients, and do trials with no placebos.

I think the FDA is setting up for denying Eteplirsen, because with the new compassionate-use rule patients will still be able to get the treatment. It's just that the drug won't be marketed in the U.S.. This is a win/win scenario for the FDA, because it can deny the approval of Eteplirsen without looking like a bad guy in the face of DMD patients. 

The FDA can point to the compassionate use, and state that patients can still gain access to the drug through the program. It was just recently announced that the FDA postponed Eteplirsen's review date for approval. Is it a huge coincidence that this new rule has been implemented only one week after the FDA postponed Eteplirsen's review? I think not; I believe it's all part of the FDA's plan to reject the drug for now, in a manner where patients can still gain access to it through another means.