June 21 (Reuters) - Sarepta Therapeutics shares surged about 33% to a more than three-year high in early trading on Friday as an expanded use approval cemented its dominant position in the gene therapy market for Duchenne muscular dystrophy (DMD).

At current levels, nearly $4 billion was set to be added to the company's market value.

On Thursday, the U.S. FDA 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.

"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," said William Blair analyst Tim Lugo.

Given the high demand and acceptable safety, analysts flagged manufacturing concerns and insurance coverage for newly added patients as limiting factors.

"We do not anticipate any near-term supply constraints," Sarepta CEO Doug Ingram said on a call with investors, adding the company does not intend to modify the price.

Elevidys is among the most expensive treatments in the world with a list price of $3.2 million.

Sales of the therapy came in at $200.4 million in 2023 and are expected to rise to $1.07 billion 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.

Elevidys' could now be given to about 13,000 patients, or nearly 90% of U.S. patients, said BMO Capital analyst Kostas Biliouris.

The decision also follows concerns around an "uphill battle" to secure traditional approval after the therapy failed to meet the main goal in a key confirmatory late-stage trial.

A top official of the agency, Peter Marks, pushed for the "no strings attached" label for Elevidys overruling recommendations, RBC markets analyst Luca Issi said. FDA staff had recommended declining the expansion, citing a lack of benefit to certain patients, documents show.

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

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.

(Reporting by Mariam Sunny and Bhanvi Satija in Bengaluru; Editing by Sriraj Kalluvila)