Shares of Sarepta Therapeutics (SRPT) tumbled as much as 28% after it updated its phase 2b data from its Eteplirsen study through 144 weeks. However, the stock fell for the wrong reasons, and so we reiterate that Sarepta is still a strong buy for those long-term investors that have patience.

Sarepta's drug, known as Eteplirsen, is being developed for male children with a disease known as DMD -Duchenne Muscular Dystrophy. DMD is a disease characterized by muscle weakness and inability to walk due to reduced dystrophin levels. The disease occurs when a male child is born with an x-chromosome, but it is random in nature. Meaning not all boys born with the x-chromosome will have DMD, but it still is a huge possibility.

The breakdown of the results are important to understand what they mean for boys suffering from DMD. In order for Sarepta to test these patients' walking ability they used a test known as the 6MWT or 6 minute walk test. This test is used to measure the amount of muscle strength the patient has to walk for a certain amount of distance, before they are unable to continue. The patients that took the 30 mg/kg and 50 mg/kg eteplirsen cohorts saw an average decline of only 33.2 meters from the normal baseline walking ability. The most important portion of the results is that patients taking the Eteplirsen drug saw an overall benefit of 75.1 meters, or p less than or equal to .0004, which was way above the placebo group.

With such promising results, what has caused the stock to decline so much? For starters the CEO for Sarepta, Chris Garabedian, has stated that with this data the company can file an NDA (new drug application) to the FDA by the end of this year. The problem though comes from other media sources and analysts whom are now stating that Sarepta may have to delay its NDA. By this they mean that Sarepta may be forced to run a phase 3 trial to confirm that the data results can be taken as fact. This probably stems from another drug company known as Prosensa Holdings N.V. (RNA) which had failed a phase 3 trial on patients with DMD. All this doubt can be understood but what investors need to realize is that these two companies have different methods for delivering RNA oligonucleotides. The only similarity is that they both use RNA technology, but each company has a different method of action formulating their RNA technology.

Going forward  we think that the eventual approval for Eteplirsen will be possible. While we can't predict what the FDA will want - meaning Sarepta may have to run an additional phase 3 trial as more proof of concept for DMD patients -- the FDA is looking for a treatment to help these boys who suffer from DMD with no available treatment options. Sarepta's Eteplirsen drug is safe, and has the ability to significantly increase the amount of walking distance compared to a placebo that hardly does anything to help these patients with DMD.

We should note however, that investors might see some short term volatility. But for the long term we tend to be optimistic that the FDA will want to finally approve a treatment for DMD patients. Especially since there is intense pressure for approval from the parents of these afflicted children, to improve their quality of life. Sarepta currently trades at $21.36 per share which is close to its 52-week low of $12.12 per share so investors have an opportunity to buy for the long term. With that said we believe that this Sarepta tumble has created a big buying opportunity for investors to capitalize on in the near future.