Regenxbio (RGNX) won an appeal in its patent dispute with Sarepta Therapeutics (SRPT) after the US Court of Appeals for the Federal Circuit reversed a lower court ruling that had held certain patent claims ineligible under section 101.

The appellate court said the claims covering cultured host cells containing recombinant genetic material, including the AAV rh.10 sequence and a heterologous non-AAV sequence, are human-made and not directed to a natural phenomenon.

Judges rejected Sarepta's argument that the patents merely isolate naturally occurring genetic sequences. The claimed host cells contain engineered recombinant nucleic acid molecules that are markedly different from anything found in nature, according to a court filing.

The Federal Circuit said that the courts should not ignore claim elements simply because they are conventional. The panel reversed the district court's decision and sent the case back for further proceedings.

Shares of Regenxbio and Sarepta Therapeutics were down 2.7% and 0.8%, respectively, in recent trading.

Price: 8.18, Change: -0.23, Percent Change: -2.73