There’s a new FDA-approved DMD medication on the scene. On Friday, the FDA green-lighted Sarepta Therapeutics’ (SRPT) Vyondys 53, the company’s treatment for Duchenne muscular dystrophy patients with exon 53 mutations. The approval decision comes as a surprise after the company’s original NDA received a complete response letter (CRL) back in August and the company has refrained from giving any guidance on the timing or outcomes of its subsequent discussions with the FDA. In reaction, Sarepta shares skyrocketed 35% in the past two trading days.
Along with Exondys 51, the company’s first FDA-approved DMD drug, this approval allows commercialization of Vyondys 53 into an additional 8% of the U.S. DMD population, bringing total therapeutic coverage of the company’s exon-skipping program to roughly 20%.
5-star RBC analyst Brian Abrahams sees Vyondys 53 as a “$230M revenue contributor. Abrahams notes that following the earlier rejection, he had modeled an end of 2021 launch, but now expects “meaningful contribution to revenue in 2020, with immediate availability of the drug upon today’s approval and likely rapid uptake…” The analyst added, “With sentiment having remained negative since golo’s initial rejection, we see this news as potentially providing a key valuation inflection, and would be buyers into strength given increased clarity and confidence on the go-forward paths for SRPT’s overall portfolio.”
To this end, Abrahams reiterated a Buy on Sarepta, and increased his price target from $200 to $215. Following Friday’s leap, the target still implies ample upside of over 60%. (To watch Abrahams’ track record, click here)
5-star Cowen analyst Ritu Baral appears to echo Abrahams’ bullish sentiment. Baral noted, “We think approval will improve overall investor sentiment and bodes well for exon-45 casimersen’s review and approval. Urine protein monitoring shouldn’t hamper uptake. We model peak US sales of $192MM in 2024, which may be conservative.” The analyst continued, “We anticipate a timely review and approval of casimersen possibly by late 2020 given the clinical data package for casimersen is at least as strong as golodirsen. Casimersen’s commercial potential is likely equal to golodirsen’s based on patient population.”
This prompted Baral to reiterate an Outperform rating, alongside a price target of $213.(To watch Baral’s track record, click here)
The FDA approval has instigated bullish sentiment across the Street. Sarepta currently has a Strong Buy consensus rating, with a breakdown of 16 Buys and just 1 Hold. The average price target is $204, providing further upside of 55%, should the target be met over the next 12 months. (See Sarepta stock analysis on TipRanks)