On Thursday shares of Biomarin (BMRN) closed flat as the FDA rejected approval for its Duchenne Muscular Dystrophy – DMD drug Kyndrisa. The FDA stated in their Complete Response Letter — CRL — that there was not enough evidence of effectiveness for approval. The company will now meet with the FDA to determine the next steps it must take to possibly retry for approval at a later time. 

DMD is a genetic disorder where muscle generation is lost, because the body is not able to produce enough dystrophin levels. Dystrophin levels are important for the body to form muscles, and allow for muscle movement. There are no treatments approved for DMD in the U.S. and there is no cure for it either. 

This FDA rejection is not surprising at all. An independent panel of advisers for the FDA indicated that the drug was not efficacious enough for approval. The FDA doesn’t have to listen to their FDA advisory panel, but the majority of the time they do. Therefore, it was not a good indication when the independent panel didn’t recommend Kyndrisa approval for DMD. 

This is not the end for Biomarin because it awaits for Kyndrisa approval in Europe. The European Regulatory Advisory Committee is expected to announce their decision by April or May. Ultimately, a final decision is expected by the European Medicines Agency — EMA — by the third quarter of 2016. Truth be told, the European DMD market is a bigger population than the U.S. DMD market.

This failure of approval in the U.S. for Kyndrisa gives Sarepta (SRPT) drug Eteplirsen the opportunity to pass approval. The FDA advisory panel is expected to review Sarepta’s drug next week on January 22nd, 2016. Shares of Sarepta closed down 1% on Thursday, but next week it provides investors a great catalyst opportunity for share price appreciation.