Cowen Shares Two Cents on Sarepta Therapeutics Inc (SRPT) Amid Exondys Launch


Cowen analyst Ritu Baral is chiming in with her two cents on Sarepta Therapeutics Inc (NASDAQ:SRPT) as to what the early days of Duchenne muscular dystrophy drug Exondys (eteplirsen) might yield for the biotech firm. Though the analyst anticipates longer-than-expected delays associated with payor negotiation might initially drag down numbers in the fourth quarter, extending revenues into 2017, she remains bullish overall on the firm’s long-term prospects.

As such, the analyst reiterates an Outperform rating on shares of SRPT with a $62 price target, which represents a 99% increase from current levels.

Baral believes, “We have had multiple client conversations on what the early Exondys launch (4Q16 to 2Q17) could look like. Q4 consensus has come down to ~$7M, but we think additional payor negotiation related delays could further drive down Q4 numbers. We do not think this issue will have a major impact on Exondys’ longer term commercial potential, but still await finalization of payor talks to be sure.”

“We believe, based on our KOL conversations that early patients are significantly heavier, and currently model a 60kg average weight, and an average annual treatment price of ~ $1M. Based on these assumptions we estimate 60 patients on average would have had to be on therapy throughout the quarter to meet consensus (sensitivity analysis included later in this report). We see this number as somewhat high and think a more appropriate average number is ~30 patients based on extrapolations on anecdotes posted on social media. This leads us to our new Q416 number of $4.1M,” Baral contends.

Worth of note, though the drug was granted approval in September 2016 and commercially launched in October, it had a rocky beginning with an unexpected and highly controversial approval, leading investors’ eyes peeled toward what demand, payor pushback, and commercial ramp will bring to the table for SRPT.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Ritu Baral is ranked #1,518 out of 4,283 analysts. Baral has a 35% success rate and gains 1.6% in her annual returns. However, when recommending SRPT, Baral loses 26.9% in average profits on the stock.

TipRanks analytics exhibit SRPT as a Strong Buy. Out of 13 analysts polled by TipRanks in the last 3 months, 10 are bullish on Sarepta stock and 3 remain sidelined. With a return potential of 121%, the stock’s consensus target price stands at $68.83.