It has been an explosive twenty-four hours in the biotech-verse, as analysts are prompted to offer insights on Sarepta Therapeutics Inc (NASDAQ:SRPT), with shares shooting up 74% yesterday on back of surprising news from the FDA, and on Vical Incorporated (NASDAQ:VICL), where shares toppled 22% yesterday in light of a failed Phase 2 setback.
Sarepta Therapeutics Inc
Sarepta hosted a call yesterday to discuss approval of its pipeline drug eteplirsen, EXONDYS 51, designed to treat exon 51 skipping amenable Duchenne’s muscular dystrophy (DMD), announcing a net annual cost projection of $300,000.
Oppenheimer analyst Michelle Gilson deems this a “conservative” estimate, “given the broad label,” and reiterates an Outperform rating on shares of SRPT with a $76 price target, which represents a 38% increase from where the stock is currently trading.
Gilson believes, “Sarepta indicated the weight was derived from its clinical trial experience, and we believe it indicates sales efforts will be directed initially to younger and ambulatory boys. Additionally, greater awareness and earlier diagnoses of DMD amenable to exon 51 skipping may result in a lower average price (though growing boys on eteplirsen likely to offset), but could grow the US market beyond our 1,800 patient estimate.”
The biotech firm has plans to sell its Rare Pediatric Disease Priority Review voucher. Currently, the analyst models a first-quarter sale for 2017 of $250 million, although Gilson admits for now, the value remains “unclear.” Prior priority review vouchers indicate sales of $67.5 million in 2015 up to $350 million in 2015 and based on Gilson’s checks, there are already buyer prospects expressing interest.
The analyst concludes, “We anticipate SRP-4045 and SRP-4053 could be approved prior to the conclusion of the two-year postmarketing study required with the EXONDYS 51 approval. We anticipate an update on FDA discussions in 1H17 following dystrophin data for SRP-4053.”
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, four-star analyst Michelle Gilson is ranked #741 out of 4,163 analysts. Gilson has a 64% success rate and realizes 16.2% in her yearly returns. When recommending SRPT, Gilson yields 48.5% in average profits on the stock.
TipRanks analytics demonstrate SRPT as a Buy. Based on 14 analysts polled in the last 3 months, 10 rate a Buy on SRPT, 3 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $57.33, marking a 5% upside from where the shares last closed.
Vical and Astellas are confronting a setback, as the biotech firms announced that their Phase 2 trial of CMV vaccine ASP0113 failed to meet its primary endpoint. The trial measures the proportion of patients who still have CMV viremia in juxtaposition against a placebo in the duration of one year following the study drug’s first dose.
Despite the Phase II failure, H.C. Wainwright analyst Shaunak Deepak reiterates a Buy rating on shares of VIC, but reduces the price target from $11 to $8, which represents a nearly 167% increase from where the stock is currently trading. In reaction, the analyst has removed ASP0113 sales in solid organ transplant (SOT) from model estimates as well as from the overall valuation of VICL shares.
Deepak explains his maintained optimism for the biotech firm, noting, “Although we are completely removing ASP0113 SOT sales from our estimates, we are maintaining our estimates for ASP0113 in the hematopoietic cell transplant (HCT) setting. We believe this trial readout is an inherently independent event from the Phase 2 SOT trial,” noting “meaningful differences” in aspects of trial enrollment, immunosuppression protocol, and primary endpoints.
In press released from both VICL and Astellas, the firms indicate meting their target enrollment in the 500-patient pivotal trial for the drug in the HCT setting, with Astellas’ development timeline suggesting a study read-out come fourth-quarter of 2017. Deepak believes this “could lead to a 2019 launch. We maintain our 50% probability of success estimate for ASP0113 in HCT.”
Deepak affirms despite the time it will take for a pivotal trial data read-out of ASP0113, “We believe Vical will have several catalysts in their pipeline programs VL2397 and HSV-2.”
Ultimately, “Although these trials remain too early for us to include in our valuation, we could see either program as meaningfully driving upside with positive late-stage data,” the analyst concludes.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Shaunak Deepak is ranked #3,916 out of 4,166 analysts. Deepak has a 45% success rate and faces a loss of 20.4% in his annual returns. When recommending VICL, Deepak loses 11.4% in average profits on the stock.