Oppenheimer Remains Positive on Sarepta Therapeutics Inc (SRPT) in Wake of Santhera FDA Rejection
Analyst Michelle Gilson of Oppenheimer feels confident about eteplirsen, a pipeline drug for Sarepta Therapeutics Inc (NASDAQ:SRPT), even though Santhera, a competitor of Sarepta, failed to obtain a New Drug Application, or NDA, from the FDA for Raxone, a similar drug for disease Duchenne muscular dystrophy (DMD). The key question investors are asking: how will this impact Sarepta shares?
Raxone and eteplirsen are drugs that treat Duchenne muscular dystrophy, or DMD, which is a disease that causes muscle degeneration and ultimately premature death. Although Santhera was unable to attain an NDA for Raxone, the analyst is not worried about the future prospects of eteplirsen because of major differences between the drugs. The analyst argues that comparing Santhera’s Raxone to Sarepta’s eteplirsen is essentially dealing with data-differentiated apples and oranges. Specifically, eteplirsen is designed to attack the underlying cause of DMD while Raxone just improves energy production to help symptoms. Another aspect that sets SRPT’s eteplirsen apart from just denied Santhera’s Raxone is a Six Minute Walk Test to test the capacity of patients undergoing the experimental drug- which over a period of four years proves improvement and further supports the key ingredient dystrophin. Meanwhile, while Raxone is a far more general in its DMD therapy, Gilson comments that eteplirsen is mutation-specific and therefore is “unlikely to be prescribed off-label.”
Gilson is expecting the approval process for eteplirsen to continue over the next few months. She notes that Sarepta has “likely completed analysis of PROMOVI biopsies,” which indicates how far along the drug is in the process of approval.
The analyst reiterated her Outperform rating with a price target of $60, marking an increase of 188% from current levels.
Gilson is ranked #1,727 out of 4,058 analysts on TipRanks, with a 100% success rate and an average return of 25%.
TipRanks shows that out of the 14 analysts who rated Sarepta in the last 3 months, 5 gave a Buy rating, 5 gave a Hold rating and 4 gave a Sell rating. The average 12-month price target for the stock is $22.27, marking a nearly 7% increase from current levels.