For Sarepta, Goldman Adopts 'Wait-And-Watch Approach' On Exondys 51

Goldman Sachs launched coverage of Sarepta Therapeutics Inc SRPT with a Neutral rating as it prefers to take a “wait and watch” approach on the launch of Exondys 51, which has been granted accelerated approval for Duchenne Muscular Dystrophy (DMD).

“GS/ consensus estimates project Exondys 51 will have one of the steepest launch curves vs. historical IV/SO orphan drugs (excludes orals Orkambi/ Kalydeco). We therefore take a watch and wait approach to the launch,” Goldman analysts wrote in a note.

Goldman says it would become more constructive on the stock once it gets further clarity on net price, payor outlook and physician adoption. As of now, six out of large seven payors have opted to reimburse the drug and KOL’s anticipate to use given this is the only approved therapy.

“We model for Exondys 51 and follow-ons SRP-4045 and SRP-4053 (+16% of DMD genotypes) with 2025 WW peak sales of $1.6bn,” the analysts continued.

The brokerage expects a gradual launch due to payor coverage, patient genotyping and securing of IV/infusion sites, followed by a sales inflection after 3-6+ months.

“Our physician diligence suggests significant awareness of Exondys 51 among neuromuscular specialists, and we expect widespread uptake in ambulatory patients (-50% of DMD) and more restricted use in non-ambulatory patients,” the analysts added.

Further, the analysts suggest that the Sarepta’s implied net price guidance of 55 percent gross-to-net discount (25kg/patient) could prove conservative.

At last check, shares of Sarepta fell 2.33 percent to $29.29. Goldman has a price target of $40, implying a potential upside of 36 percent.