Wall Street’s bull camp on Sarepta Therapeutics grew on Tuesday, a day after the US drugs regulator approved its treatment for a rare and fatal childhood muscle disorder.

Sarepta shares climbed more than 13 per cent to $55.36 after analysts at Cowen and Piper Jaffray upgraded the stock. The company now has 11 “buy” ratings, three “hold” ratings and no “sell” ratings.

The upgrades arrived a day after the Food and Drug Administration approved its treatment for duchenne muscular dystrophy, which prevents children from producing dystrophin, a protein that works as a shock absorber to stop muscles from wasting.

The company said the treatment will have a net price of $300,000 a year using an average patient weight of 25 kilogrammes.

Analysts at Cowen upgraded the stock to “outperform” from “market perform” with a $64 price target.

“Based on our calculations, we estimate an average gross price of [about] $665k for a 25kg patient,” said Ritu Baral, an analyst at Cowen. “We estimate average early patients will be heavier than this and this may prove to be a conservative weight estimate.”

Sarepta shares have climbed more than 96 per cent over the past two days and are up more than 40 per cent so far this year.

Sarepta’s gains came alongside modest gains in US stocks. By midday, the S&P 500 rose 0.3 per cent to 2,145.31, the Dow Jones Industrial Average climbed 0.4 per cent to 18,183.89. and the Nasdaq Composite rose 0.3 per cent to 5,249.49.

Elsewhere, shares in liver disease specialist Tobira Therapeutics surged more than sevenfold after Allergan, the Botox maker, struck a deal to buy the biopharmaceutical company for as much as $1.7bn.

Under the terms of the deal, Allergan will offer Tobira shareholders an upfront payment of $28.35 a share in cash, plus certain contingent value rights worth up to an additional $49.84 a share if development, regulatory and commercial milestones are met.

The deal is the latest in a string of smaller bolt-on acquisitions made by Brent Saunders, Allergan’s chief executive, after the US government thwarted its plan to sell itself to Pfizer for $160bn.

Tobira stock jumped from Monday’s closing price of $4.74 to $38.81 a share. Allergan shares fell 2.5 per cent to a seven-session low of $239.16.

Meanwhile, shares in Ascena Retail Group, the company behind Ann Taylor and Lane Bryant, fell more than 27 per cent to $5.89 after the company issued a disappointing earnings outlook and was downgraded by at least three firms on Wall Street.

The New Jersey-based company said it expects to earn between 60 to 65 cents a share, excluding certain one-time items, in financial 2017, which was shy of analysts’ estimates for 82 cents.

The news came alongside a steeper than expected drop in financial fourth quarter like-for-like sales.

Ascena said comparable sales fell 4 per cent in the three months to the end of July, steeper than expectations for a 2.1 per cent drop. Fiscal fourth-quarter adjusted earnings of 8 cents a share were shy of forecasts while sales of $1.8bn were modestly ahead of analysts’ expectations.

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