Healthcare analysts are weighing in today on biopharmaceutical companies Sarepta Therapeutics Inc (NASDAQ:SRPT) and Catalyst Pharmaceuticals Inc (NASDAQ:CPRX), as shares of both companies fell sharply today due to FDA concerns. Let’s take a closer look.
Sarepta Therapeutics Inc
Shareholders of Sarepta Therapeutics are having a rough day as the company’s stock is falling 31% following a negative vote by an FDA advisory panel regarding the effectiveness of the company’s muscular dystrophy drug, eteplirsen.
Cowen analyst Ritu Baral commented, “Unanimous negative votes yesterday make us think a CRL is highly likely on the 5/25 PDUFA day. We think the market is also expecting a CRL on the PDUFA date, although yesterday’s proceedings were not as horrifically negative as last week’s briefing documents suggested the panel could be. Overall we predict the market’s low estimate of 2016/2017 eteplirsen regulatory approval chances mean SRPT shares will likely trade to $8-10 today, despite the fact that most investors we speak to (including those not invested in the story currently) believe, like us, that the drug is active […] “We do think there is a small (~10%) chance FDA will choose to approve eteplirsen on a subpart H ‘accelerated’ basis around the PDUFA.”
Baral reiterated a Market Perform rating on Sarepta shares, without providing a price target.
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 6.9% and a 43% success rate. Baral has a -20% average return when recommending SRPT, and is ranked #393 out of 3906 analysts.
Out of the 15 analysts polled by TipRanks, 6 rate Sarepta stock a Buy, 8 rate the stock a Hold and 1 recommends a Sell. With a return potential of 223%, the stock’s consensus target price stands at $31.28.
Catalyst Pharmaceuticals Inc
Catalyst Pharmaceuticals shares lost nearly half of their value today after the FDA requested the company to conduct a new Phase 3 clinical trial to assess lead product candidate Firdapse for the treatment of Lambert-Eaton myasthenic syndrome (LEMS). In reaction, Piper Jaffray analyst Charles Duncan downgraded the stock from Buy to Neutral, while slashing the price target to $1.00 (from $6.00).
Duncan noted, “We are unclear as to the exact requirements for such a trial in LEMS, including size, timing, and cost, and we have no additional agency feedback on the second CMS indication. This is a clear negative for the program as it increases time and capital to a possible approval and first sales, and our visibility on the overall clinical and regulatory strategy is greatly reduced for both indications. Therefore we are downgrading to N and taking our PT to $1. ”
As of this writing, out of the 3 analysts polled by TipRanks, 2 rate Catalyst stock a Buy, while 1 rates the stock a Hold. With a return potential of 1274%, the stock’s consensus target price stands at $8.63. Stay tuned for more updates.
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