William Blair Bullish on Sarepta Therapeutics Inc (SRPT) Amid First Patient Dosing in Phase III Trial and Catabasis Partnership

On Wednesday, Sarepta Therapeutics Inc (NASDAQ:SRPT) announced that it has dosed the first patient in the Phase III ESEENCE trial for patients with Duchenne muscular dystrophy (DMD), a 96-week pivotal study for exon 45 and exon 53 skipping therapies.

Additionally, SRPT and Catabasis Pharmaceuticals Inc (NASDAQ:CATB) announced a joint research collaboration to investigate combination treatment for DMD, pairing SRPT’s exon-skipping therapies with CATB’s oral NF-kB CAT-1004 in a mouse model of DMD.

In light of the Phase III trial progress and the SRPT-CATB partnership, William Blair analyst Tim Lugo reiterates an Outperform rating on shares of SRPT with an $88 price target, which represents a 44% increase from where the stock is currently trading.

The analyst sees the collaboration as an “intriguing” approach to treating DMD, particularly considering CATB’s oral drug has revealed preclinically potential to reduce muscle degeneration and indicated reduced fibrosis, improved dystrophin-production and muscle regeneration when studying 8-week old mdx/SCID mice.

“Combining a dystrophin producing agent such as an exon-skipping therapy should be an intriguing combination,” Lugo believes.

For Lugo, SRPT is in a stellar position moving forward, contending, “We remain confident in the potential of eteplirsen ahead of the launch; we believe anticipation for the approval was high in the community and even skeptical key opinion leaders we have consulted with in the past have noted that uptake should be strong. We believe that at peak in the United States and Europe, Exondys 51 will exceed $1.2 billion in sales annually, with the follow-on exons amounting to a doubling of that peak sales estimate for the DMD franchise.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Tim Lugo is ranked #491 out of 4,200 analysts. Lugo has a 38% success rate and gains 13.3% in his annual returns. However, when recommending SRPT, Lugo loses 21.6% in average profits on the stock.

TipRanks analytics exhibit 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 $72.85, marking a 19% upside from where the shares last closed.


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