Sarepta Therapeutics Inc (SRPT): Analyst Bullish on This Key Small-Mid Cap Stock Pick Heading into 2018

Is SRPT a bull's dream? Oppenheimer's Hartaj Singh believes with commercial and clinical momentum into the new year, and no real DMD rivals for 3 to 5 years, the drug maker is a good bet.


Oppenheimer analyst Hartaj Singh is out with strong praise on Sarepta Therapeutics Inc (NASDAQ:SRPT) approaching a “substantial” 2018 for the drug maker.

A biotech company that has 15 programs in the works, as the SRPT team spots leverage in gaining a first-mover upper hand as a commercial Duchenne muscular dystrophy player, Singh sees every reason to “stay bullish” on the stock. Commending the fresh “strategic and tactical” eye new CEO Doug Ingram brings to the company, one thing is clear to this bull: “SRPT enters 2018 firing on all commercial and clinical cylinders. ”

As such, the analyst reiterates an Outperform rating on SRPT stock with a price target of $76, which implies a close to 33% upside from current levels. (To watch Singh’s track record, click here)

Singh writes, “As we enter 2018, we highlight Sarepta (SRPT) as a key SMID-cap pick in our coverage universe. […] In addition, while competitive intensity in DMD is starting to build […] the competitive landscape is still a mish-mash of approaches, most of which are still in early/mid-stage development. We do not see any meaningful competition to SRPT’s DMD franchise for another 3-5 years.”

Underscoring positive short-term expectations, the analyst sees seven exciting points ahead for Sarepta: “(1) continued positive updates to the Exondys 51 sales trajectory, (2) a positive CHMP opinion for Exondys 51 in 1H18, (3) expansion of global commercial footprint in 2018, (4) updates to the gene therapy and PPMO clinical programs, (5) multiple partner clinical updates, (6) publication of Exondys long-term pulmonary data, and (7) Exondys post-marketing commitment.”

However, with a prospective FDA meeting in the first half of the new year, Singh notes there hangs in the balance investor questions of the chances of an accelerated approval for golodirsen, the biotech company’s lead candidate therapy for exon 53 skipping with potential to treat DMD. With some “controversy” circling eteplirsen approval, the analyst is assigning low probability of 20%.

Yet, regarding a positive CHMP opinion, the analyst angles for a high probability of 70% to 80%, asserting: “The fact that CHMP has requested long-term data on Exondys 51 underpins our belief.”

TipRanks points to a unanimous bullish analyst consensus on the Street betting on Sarepta, with all 10 analysts polled in the last 3 months rating a Buy on this biotech player. With a return potential of nearly 34%, the stock’s consensus target price stands at $75.67.