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Oppenheimer analysts express mixed sentiments on Sarepta Therapeutics, Inc. (NASDAQ:SRPT) and BioCryst Pharmaceuticals (NASDAQ:BCRX) as one company awaits an extended review from the FDA and the other company’s pipeline drug falls short of expectations in anticipated trial, respectively.
Sarepta Therapeutics, Inc.
Christopher Marai of Oppenheimer is bullish on Sarepta, a company developing RNA-based therapeutics for rare and infectious diseases, and maintains an Outperform rating on the stock with a price target of $45.
Sarepta recently announced that the FDA has extended its review period for Eteplirsen until May 26 (from Feb 26) due to an addendum filed with the NDA. Eteplirsen is a drug that intends to treat specific forms of Muscular Dystrophy. The recent tests indicated that 10 out of 12 patients treated with Eteplirsen continue to walk four years following the treatment. The delay, according to Marai, however, should be considered positive given the negative tone in the drug’s briefing documents as it suggests the FDA’s interest to review the drug further.
On the other hand, Marai is concerned that a rejection by the FDA could push Eteplirsen’s approval out for three or more years until phase 3 reads out. Given the difficulty with 6MWT (6-Min Walking Test) and LOA (Loss of Ambulation) data integrity, it is a possibility that Phase 3 endpoints and timelines will be modified. Marai anticipates that pipeline candidate trials will be designed to include LOA. Further Marai recommends “owning SRPT into the panel, after which the stock could appreciate to low-$20s, in conjunction with a hedging strategy protecting against downside.”
Marai concludes that the LOA data is compelling and will be the new focus of the NDA. This data shows that Eteplirsen may prolong ambulation at four years even taking into account the best-performing historical control cohorts.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Christopher Marai has a yearly average return of 7.4% and a 47% success rate. Marai is ranked #164 out of 3656 analysts.
In addition, Oppenheimer analyst Akiva Felt remains sidelined on BioCryst, maintaining a Perform rating, after the company announced that its drug Avoralstat did not meet the primary efficacy endpoint. Avoralstat is a pipeline drug for Hereditary Angioedema (HAE), a blood disease. Felt noted, “Management did not try to salvage the trial based on post-hoc analyses concluding instead that the liquid formulation used is simply not a viable treatment option.” Felt remains cautions on the company’s ability to develop an “effective HAE treatment, and await the PK Avoralstat solid dose (mid-2016) and APeX-1 Phase 2 data (YE2106) before reassessing the viability of BCRX’s oral program.”
Looking further, Felt writes that BioCryst will delay timing on data from APeX-1 Proof of Conception trial of BCX7353 in HAE from mid-2016 to YE2016. Management stated that they delayed the trial in order to conduct an in depth analysis of OPuS-2 to see if it can apply any read-throughs to the APeX-1 trial.
Felt concludes that OPuS-1, 400mg Avoralstat did show a 35% reduction in heart attack frequency although the trail was substantially different by using patients with more sever HAE. Felt highlights that the difficulties inherent to running HAE trials are in play given the results of the trial.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Akiva Felt has a yearly average loss of 2.5% and a 31% success rate. Felt is ranked #2,948 out of 3,656 analysts.
Out of the 7 analysts who have rated the company in the past 3 months, 1 gave a Buy rating, 1 gave a Sell rating, and 5 remain on the sidelines. The average 12-month price target for the stock is $4.00, marking a 99% upside from current levels.