Analysts Laud Sarepta's 'Increasingly Active' Gene Therapy Clinical Development

Sarepta Therapeutics Inc SRPT reported fourth-quarter results Wednesday alongside positive results for its muscular dystrophy gene therapy candidate.

The Analysts

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

Cantor Fitzgerald analyst Alethia Young reiterated an Overweight rating and increased the price target from $217 to $231.

Janney: Strong Balance Sheet Needed For Active Clinical Program

Sarepta continues to move ahead with its gene therapy and exon-skipping pipelines, Zhong said in a Thursday note.

The company will initiate a multicenter registrational study of microdystrophin gene therapy using commercial-scale material by the end of 2019, the analyst said. 

Sarepta is seeking to discuss a regulatory pathway for all five limb-girdle muscular dystrophy, or LGMD, gene therapy programs with the FDA, Zhong said. 

Janney projects that Sarepta will more than double the exon-skipping market in 2020, given the scheduling of the golodirsen PDUFA date for August and the potential for a midyear NDA submission for casimersen.

Reviewing the results, Janney attributed Sarepta's fourth-quarter loss to upfront and milestone payments due to gene therapy partners Lysogene and Myonexus.

Even as the company forecast an increase in operating expenses due to gene therapy manufacturing, Zhong said a strengthened balance sheet should support its "increasingly active" clinical development.

Cantor Sees Compelling LGMD Opportunity

The limb girdle data released Wednesday exceeded expectations, Young said in a Thursday note. The analyst views the collective LGMD opportunity as a compelling one, with a target population similar to DMD, with over 10,000 patients in the U.S.

The analyst said she hopes to get further updates on LGMD development strategy later this year following regulatory interactions. The Paragon commercial manufacturing facility is expected to be ready by the first quarter of 2020, Young said. 

"We have raised our probability of success for MYO-101, '103 and '201 to 50 percent from 25 percent and left MYO-102 and '301 programs unchanged." 

Cantor sees meaningful read-through across these programs because they use a similar approach.

The Price Action

After advancing 8.3 percent Wednesday, Sarepta shares were slipping 4.27 percent to $145.21 at the time of publication Thursday. 

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