The iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), which tracks 144 biotech and pharmaceutical companies – fell nearly 4% this week amid a renewed selloff in crude oil prices, fresh fears over China and a smattering of poor economic data out from the U.S. Among the equities in focus are biopharmaceutical company Sarepta Therapeutics Inc (NASDAQ:SRPT), and biotechnology company Heron Therapeutics Inc (NASDAQ:HRTX). Let’s take a look and see what the analysts have to say about SRPT and HRTX.
Cowen analyst Ritu Baral reiterated a Market Perform rating on shares of Sarepta, after the FDA posted negative briefing on eteplirsen, the company’s drug for a rare muscle wasting disorder.
Baral wrote, “We are lowering our conviction on the potential for a successful AdComm and 2016 Etep Approval. While we estimate the odds of a positive AdComm and 2016 approval at ~40% (vs our previous slightly over 50% sentiment), we continue to doubt that SRPT will receive a CRL on its late February PDUFA date, given the ongoing Ph2 extension and Ph3 trials and additional data anticipated in 2016 and 2017.”
The analyst continued, “Pending additional data, we think etep has a good chance of eventual approval (~60% in the 2017 timeframe), and a relatively low chance of approval this year (30%). It is unlikely (even unrealistic) that SRPT would be able to conduct new confirmatory trials which would essentially require SRPT to wait for a new generation of boys with DMD amenable to exon-51 skipping. We expect to move our etep launch estimates out 18 months, to late 2017, although this will not impact our current rating.”
“We expect SRPT shares to be range bound ($15-20) for most of 2016, with increasing investor interest as we approach new Ph2 extension data presentation (possibly October, Grenada, Spain)”, Baral concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a yearly average return of 9.6% and a 39% success rate. Baral has a -20% average return when recommending SRPT, and is ranked #249 out of 3607 analysts.
Out of the 15 analysts polled by TipRanks, 12 rate Sarepta stock a Buy, while 3 rate the stock a Hold. With a return potential of 201.5%, the stock’s consensus target price stands at $43.50.
Heron Therapeutics Inc
Leerink Swann analyst Jason Gerberry reiterated an Outperform rating on shares of Heron Therapeutics, with a $56 price target, following the news that the FDA is delaying the conclusion of its review of the Sustol NDA (extended release granisetron for CINV), and will now take until the end of February rather than by the January 17th PDUFA date.
Gerberry noted, “We caught up with HRTX management this morning and learned: (1) the FDA did not ask for any new large data analysis; (2) management had internally known that the Agency got a late start on the Sustol review as it was also working on the review of TSRO’s (OP) rolapitant, and it appears the Agency wasn’t able to catch up. The PDUFA delay does not impact HRTX’s ability to launch Sustol by its target April 2016 target date nor would it impact timing of a J-Code in 2016. We view today’s update as a minor setback, but ultimately we believe strength of Sustol registration data support an approval in February.”
According to TipRanks.com, analyst Jason Gerberry has a yearly average return of -0.3% and a 48.7% success rate. Gerberry has a -5.4% average return when recommending HRTX, and is ranked #2177 out of 3607 analysts.