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Shares of Dyne Therapeutics (DYN.O) and Sarepta (SRPT.O) slumped on Tuesday after Novartis' (NOVN.S) treatment for a muscle-wasting disorder failed in a trial, fueling investor concerns ​about the prospects of similar therapies for the tough-to-treat rare ‌disease.

Dyne's stock led declines among companies developing a treatment for myotonic dystrophy type 1, tumbling nearly 18%. Shares of Sarepta and PepGen (PEPG.O) fell more than 9% and ​5%, respectively. Novartis' shares closed 10.9% lower on the Swiss exchange ​on Tuesday.

The genetic disorder, which causes progressive muscle weakness and delayed muscle ⁠relaxation known as myotonia, has no approved treatments. Drug development for it ​has been challenging, with several companies, including Biogen (BIIB.O), abandoning or shelving ​their programs over the past decade.

"This definitely increases the risk for the space, and it's a disappointment, a $12 billion disappointment," Oppenheimer analyst Kostas Biliouris said.

Novartis acquired the ​drug through its $12-billion acquisition of Avidity.

The failure was particularly concerning for Dyne as its ​trial, like Novartis', uses video hand opening time - how quickly a patient's hand relaxes after ‌squeezing - as ⁠a key trial goal for its candidate, DYNE-101.

"The (Novartis) failure makes Dyne's own trial much more risky," Cantor Fitzgerald analyst Eric Schmidt said.

Novartis said late-stage trial data showed its drug, del-desiran, failed to show a statistically significant improvement over placebo ​on video hand ​opening time.

The Swiss company ⁠did not disclose numerical results, saying that it is evaluating the full dataset and will engage with health authorities ​to determine the most appropriate development path for ​the drug.

"The ⁠big question is whether it's an endpoint miss or... whether mechanism has completely failed or not," said H.C. Wainwright analyst Ananda Ghosh.

Dyne plans to present ⁠additional ​one-year data at conferences this month.

Sarepta is ​evaluating an investigational small interfering RNA therapy called SRP-1003 in early stage trial for type ​1 myotonic dystrophy.

The market expects Sarepta Therapeutics (SRPT - Free Report) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis biopharmaceutical company is expected to post quarterly earnings of $0.58 per share in its upcoming report, which represents a year-over-year change of -71.3%.

Revenues are expected to be $355.55 million, down 41.8% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 7.53% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Sarepta Therapeutics?For Sarepta Therapeutics, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +9.38%.

On the other hand, the stock currently carries a Zacks Rank of #4.

So, this combination makes it difficult to conclusively predict that Sarepta Therapeutics will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Sarepta Therapeutics would post earnings of $0.9 per share when it actually produced earnings of $3.16, delivering a surprise of +251.11%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Sarepta Therapeutics doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Expected Results of an Industry PlayerAmong the stocks in the Zacks Medical - Biomedical and Genetics industry, Harmony Biosciences Holdings, Inc. (HRMY - Free Report) , is soon expected to post earnings of $0.97 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +42.7%. This quarter's revenue is expected to be $252.54 million, up 26% from the year-ago quarter.

The consensus EPS estimate for Harmony Biosciences has been revised 0.8% higher over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +14.14%.

When combined with a Zacks Rank of #1 (Strong Buy), this Earnings ESP indicates that Harmony Biosciences will most likely beat the consensus EPS estimate. The company could not beat consensus EPS estimates in any of the last four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

• Sarepta Therapeutics shares are climbing with conviction. What’s fueling SRPT momentum?

The FDA approved VYONDYS 53 in 2019 and AMONDYS 45 in 2021.

The agency set a Prescription Drug User Fee Act target action date of Feb. 28, 2027.

The applications are supported by findings from the Phase 3 ESSENCE confirmatory study, along with published real-world evidence and the established safety profiles of both exon-skipping therapies.

Louise Rodino-Klapac, president of research and development and technical operations at Sarepta, said that more than 1,800 patients worldwide have received Sarepta’s exon-skipping therapies, with continued observations suggesting preservation of muscle function and slower disease progression.

ESSENCE Data and Real-World Evidence Support ApplicationsSarepta said the ESSENCE study did not meet its primary endpoint, although treatment groups showed numerical advantages over placebo.

The company said additional post-hoc analyses addressing disease progression variability and the effects of the COVID-19 pandemic found increased dystrophin expression at week 96, and consistent reductions in four-step ascend decline across multiple analyses.

The therapies were also well tolerated through 144 weeks, with no new safety signals reported.

According to Sarepta, published real-world studies have linked VYONDYS 53 to a 7.5-year delay in the need for nighttime ventilation, while AMONDYS 45 has been associated with slower declines in lung function and delayed need for cough assist devices.

Across its phosphorodiamidate morpholino oligomer portfolio, the company also cited evidence suggesting benefits in survival, delayed loss of ambulation, improved cardiac outcomes, and fewer hospital visits.

SRPT Stock Price Activity: Sarepta Therapeutics shares were up 5.93% at $18.03 at the time of publication on Tuesday, according to Benzinga Pro data.

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