June 21 (Reuters) - Sarepta Therapeutics shares surged about 36% in premarket trading on Friday as an expanded use approval opened up a bigger market in the U.S. for its gene therapy for patients with Duchenne muscular dystrophy (DMD).

On Thursday, the U.S. Food and Drug Administration granted traditional approval for the therapy, Elevidys, in patients four years and above who can walk, as well as an accelerated approval for those who cannot.

William Blair's Tim Lugo estimated potential sales of Elevidys to reach $3 billion in 2025 and peak sales of $5 billion in 2027 with the expanded approval.

"Many patients below age 4 are not yet diagnosed but will age into the label, opening the DMD market to all current and future patients who will be eligible for treatment," Lugo wrote in a note.

Sales of Elevidys came in at $200.4 million for 2023 and are expected to rise to $991.91 million this year, as per LSEG data.

DMD is an inherited progressive muscle-wasting disorder that affects an estimated one-in-3,500 male births worldwide, according to the U.S.-based National Organization for Rare Disorders.

Given the high demand and acceptable safety, analysts flagged manufacturing and supply concerns as the only limiting factors.

Elevidys' addressable population is now about 13,000 patients, or nearly 90% of patients in the U.S., according to BMO Capital analyst Kostas Biliouris.

Biliouris expects Elevidys to be the "dominant" DMD gene therapy with no near-term competition until later than 2027.

RegenxBio is testing a rival gene therapy in early- to mid-stage, while Pfizer's treatment recently failed in a late-stage study.

The global treatment market for DMD - including gene therapies and other drugs - is expected to grow to $11.47 billion by 2034, according to research firm ResearchandMarkets.

Meanwhile, Sarepta will host a call with investors at 08:30 am ET to discuss the expanded approval. Elevidys is currently among the most expensive treatments in the world with a list price of $3.2 million.

Sarepta's price-to-tangible-book-value ratio, a common benchmark for valuing stocks, was 12.52 on Friday, compared with 1.49 for RegenxBio. (Reporting by Mariam Sunny and Bhanvi Satija in Bengaluru)