This week, Sarepta Therapeutics Inc (NASDAQ:SRPT) dosed its first patient with commercial Exondys 51 (eteplirsen), the biotech firm’s intravenous infusion Duchenne muscular dystrophy (DMD) drug designed for those who have a confirmed mutation of the DMD gene amenable to exon 51 skipping.
In reaction, Wedbush analyst Heather Behanna reiterates an Outperform rating on shares of SRPT while raising the price target from $66 to $72, which represents just under a 34% increase from where the stock is currently trading.
In considering the US launch of the firm’s pipeline drug, the analyst considers U.S. prospective penetration into each segment of boys who are amenable to treatment: younger boys, ambulant boys, and non-ambulant boys, anticipating that “penetration could be highest in the ambulant population.”
As such, Behanna has tweaked 2016 revenues down to $4.8 million, but has boosted peak revenues from $420 million up to $439 million with the assumption that by 2022, over 1000 boys, which is considered an estimated 80% of genotyped patients in the U.S., will be on therapy.
Behanna asserts, “We believe launch should have a rapid start, but logistical challenges remain. In our view, there is near unprecedented awareness of Exondys 51 and we expect many families to be queued up for drug. However, we believe 4Q sales will be modest, as it could take 30-90 days for reimbursement and we believe it will take time for boys to schedule appointments for infusion.”
“We see recent concerns on reimbursement as overdone and believe that case by case, near all boys will be covered. We continue to like shares of Sarepta ahead of full Exondys 51 launch, and clarity on an EU regulatory path,” Behanna concludes, assuming a 50% “chance of success” in Europe combined with a 5% royalty paid to BioMarin, on the conservative assumption that the firm does not win the appeal.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Heather Behanna is ranked #486 out of 4,184 analysts. Behanna has a 46% success rate and earns 16.1% in her annual returns. When recommending SRPT, Behanna garners 159.8% in average profits on the stock.
TipRanks analytics demonstrate SRPT as a Strong Buy. Based on 14 analysts polled in the last 3 months, 11 rate a Buy on SRPT, while 3 maintain a Hold. The 12-month price target stands at $74.23, marking a nearly 38% upside from where the shares last closed.