What's The Deal With Sarepta?

It’s been a wild ride so far this year for shareholders of Sarepta Therapeutics Inc (NASDAQ: SRPT). The year got off to a disastrous start back in January when the stock plummeted 55 percent in a single trading day after the FDA released advisory committee briefing documents that were highly critical of the company’s leading muscular dystrophy drug Eteplirsen.

The stock suffered another 66 percent plunge in April when the FDA advisory committee voted against recommending the drug for approval.

The stock quickly recovered much of its losses just days later when the FDA subsequently released a number of questions for Sarepta, including one about the effectiveness of Eteplirsen compared to historical data from boys suffering from Duchenne, but not included in the current trials.

On Wednesday, Sarepta’s announced that it has planned a $37 million public offering. Following the news, shares are trading up 10.9 percent in Thursday’s session.

Public Offerings In Store

Public offerings are usually seen as bad news for stocks, but PreMarket Prep’s Dennis Dick was not surprised by the positive market reaction.

“They’re doing an offering here, raising some cash,” Dick said on Thursday morning’s show. “They obviously think they’re going to get approval [for Eteplirsen] or they wouldn’t be raising this cash.”

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He saw Thursday’s positive market reaction coming a mile away.

“I think people are going to look at this as a bullish signal that the company thinks they’re getting approval of the drug or they wouldn’t be raising cash,” Dick concluded.

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