Biotech stocks are looking to erase their losses over the past month today, as the iShares Nasdaq Biotechnology ETF (IBB) gained nearly 2%. Among the equities in focus are Sarepta Therapeutics Inc (NASDAQ:SRPT) and Aerie Pharmaceuticals Inc (NASDAQ:AERI). Let’s take a closer look.
Sarepta Therapeutics Inc
Sarepta Therapeutics Inc (NASDAQ:SRPT) shares are skyrocketing today following the news that the FDA’s head of clinical review Dr. Ronald Farkas left his job. Dr. Farkas was argued against the approval of Sarepta’s eteplirsen for Duchenne muscular dystrophy (DMD), and his departure raises hope for FDA approval.
Oppenheimer analyst Michelle Gilson commented, “The nature of Farkas’ departure is unclear, but it may signal an imminent decision. We believe he would not voluntarily leave unless the FDA had come to a final conclusion in its eteplirsen review, as (1) his value in the private sector would likely increase following a decision in line with his perceived opposition to eteplirsen approval, given a proven ability to influence outcomes, or (2) resignation in protest could be reactionary to a perceived eteplirsen approval.”
“We believe the FDA has already made a decision on eteplirsen approval at this point and is no longer reviewing data; therefore, lack of Farkas’ input is unlikely to change the outcome of the review anyway. Very little is known about the departure, and Farkas may have left for reasons independent of eteplirsen’s review,” the analyst added.
Gilson rates Sarepta shares an Outperfrom, with a price target of $60, which represents a potential upside of 85% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michelle Gilson has a yearly average return of 15.6% and a 50% success rate. Gilson has a 59.1% average return when recommending SRPT, and is ranked #940 out of 4163 analysts.
Out of the 13 analysts polled by TipRanks (in the past 3 months), 4 rate Sarepta stock a Buy, 5 rate the stock a Hold and 4 recommend a Sell. With a downside potential of 50%, the stock’s consensus target price stands at $16.30.
Aerie Pharmaceuticals Inc
Aerie Pharmaceuticals shares are up nearly 8% to $21.14, after analyst Elliot Wilbur of Raymond James initiated coverage on the stock with a Buy rating and price target of $48, which implies an upside of 122% from current levels.
Wilbur wrote, “Aerie’s flagship asset is Rhopressa, netarsudil ophthalmic solution 0.02%. Rhopressa functions as a “triple-action” once-daily eye drop that lowers inter-ocular pressure (IOP) by inhibiting both Rho kinase (ROCK) and norepinephrine transporter (NET). Buttressed by its achievement of its primary endpoint and demonstration of a compelling safety profile in pivotal Phase III trial ROCKET 2, with additional supporting evidence provided by ROCKET 1, the company has filed its new drug application (NDA) and is readying a commercial infrastructure and gathering safety data for Rhopressa’s international submissions; we forecast a 1Q18 launch in the U.S.”
Furthermoere, “Aerie’s second key asset is Roclatan- a combination of Rhopressa and latanoprost, a key conventional therapy currently used in the treatment of glaucoma. Top-line 90-day data from Roclatan’s first Phase III trial (MERCURY 1) is expected in September, with an anticipated NDA filing date in 2H17 and estimated 1Q19 launch.”
“Assuming clinical and regulatory success, we believe these products could vie for top-position within glaucoma’s expanding $2.7 billion domestic market and that AERI could emerge as a major player in the ophthalmology space,” the analyst concludes.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Elliot Wilbur has a yearly average return of 23.9% and a 69% success rate. Wilbur has a 39.0% average return when recommending AERI, and is ranked #98 out of 4163 analysts.
As of this writing, all the 6 analysts polled by TipRanks rate Aerie stock a Buy. With a return potential of 108%, the stock’s consensus target price stands at $4480.