Sarepta’s (SRPT) Gain Is Wave Life Sciences’ (WVE) Pain

Wave Life Sciences (NASDAQ:WVE) shares tumble nearly 14% in Tuesday’s trading session, following the news that competitor Sarepta (NASDAQ:SRPT) achieved impressive results in a Phase 1/2a gene therapy clinical trial assessing Dystrophin in individuals with Duchenne muscular dystrophy (DMD).

The question here is what does this mean for Wave Life Sciences? Mizuho analyst Salim Syed argues that not much has changed for WVE with this new data in the domain.

Syed recognizes that the key overarching questions are whether gene therapy is a real threat to WVE? Will it get used ahead of a DMD oligo (like the WVE compound in development)?

“While Street perception is that it may, we’d propose a counter argument. That is, gene therapy is one-and-done. Oligos are chronic therapy (so that means you continue to take the drug). Remember, these are DMD boys, not full grown men. They are still developing. So there is an argument to be made here than an effective oligo may be better to give first, then once the boys have matured, only then give the gene therapy. If one administers the gene therapy too early, it probably won’t get into the “undeveloped” satellite cells that become “mature” muscle cells later on in life. This is a notion that that Street yet hasn’t come around too admittedly, largely because most haven’t thought of it when we talk to investors, but as we understand it, sequencing oligo vs gene therapy is something being discussed in DMD patient / medical communities. Of course, we won’t know how effective WVE’s DMD compound is until 2H19, when we get dystrophin data, but the pre-clinical data looks encouraging,” the analyst opined

Net net, Syed reiterates a Buy rating on Wave Life Sciences shares, with a price target of $65, which implies an upside of 49% from current levels. (To watch Syed’s track record, click here)

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