Janney, Morgan Stanley Say Sarepta's Gene Therapy Remains On Track

Sarepta Therapeutics Inc SRPT shares were under pressure this week following a regulatory update that analysts say may have been misunderstood by the market.

Sarepta shares were down 5 percent at the start of the week against a biotech index that was up 3 percent after the company provided an update on its microdystrophin gene therapy program that investors perceived as being different from what had previously been expected.

The Analysts

Janney analyst Yun Zhong reiterated a Buy rating on Sarepta with a $200 fair value estimate.

Morgan Stanley analyst Matthew Harrison reiterated an Overweight rating with a $161 price target.

The Thesis

In a follow-up discussion with Janney, Sarepta clarified that the pathway for regulatory approval of the new therapy remains the same as what the company had previously indicated and reiterated that a U.S. launch by the end of 2020 remains possible based on positive data from clinical studies, Zhong said in a Tuesday note.

“Sarepta's active and ambitious pipeline building is on track,” the analyst said. “We continue to see significant upside potential in Sarepta's gene therapy pipeline.”

Janney also pointed out other positives for Sarepta, including that it continues to build manufacturing capacity.

Harrison said Morgan Stanley also didn’t see the announcement that the therapy would require an additional registration study as a significant d from previously announced timelines.