Sarepta Gene Therapy Report Is Chance at Redemption After $6 Billion Wipeout
Sarepta Gene Therapy Report Is Chance at Redemption After $6 Billion Wipeout
(Bloomberg) -- Sarepta Therapeutics Inc. has a chance to shake off a summer slump -- which cut shares in half from a July peak and wiped out $6 billion in market value -- when the drugmaker presents early results from its experimental gene therapy.
The first data showing how patients receiving its Limb-girdle muscular dystrophy drug are able to function “could begin to soften the negative sentiment being applied” to shares, RBC Capital Markets analyst Brian Abrahams wrote. Investors hope positive conversations with U.S. regulators in the coming months for a separate, recently rejected drug can piggyback on positive data.
The earlier-stage asset could “finally get some credit” from Wall Street when it takes the spotlight, starting with a company-hosted call on Friday morning, according to SVB Leerink analyst Joseph Schwartz. Sarepta will announce early study results during the call, which starts at 8 a.m. New York time.
Key measures that will be closely watched include the time it takes patients to walk 100 meters, the length they can walk in six minutes as well as the reduction of fat in muscles and respiratory function. Schwartz said Sarepta is evaluating no less than 14 targets, though one or more of these four key measures will “most likely be pursued” in a larger, late-stage study.
The former biotech darling that took Wall Street by storm with its promising one-time treatment for Duchenne muscular dystrophy was whipsawed in August after an adverse event report was tied to the gene therapy and a separate medicine was rejected by the FDA.
Shares of the Cambridge, Massachusetts-based drugmaker rose for a fifth consecutive session Thursday, on pace to extend their longest winning streak since July. The rally comes after the stock closed near a 17-month low on Sept. 26 as the broader market churned.
Sarepta’s “relentless slide” was called “excessive” by the SVB Leerink analyst, who highlighted that current levels are lower than his perceived fair value of $88 a share. Schwartz is one of 22 analysts with buy-equivalent ratings. His 12-month price target of $193 is more than double where Sarpeta has been trading. Among reasons to be optimistic, he sees potential intervention from advocacy groups for the company’s rejected drug, progress for a different medicine and updated results at the World Muscle meeting.
While this weekend’s data may serve as a catalyst for shares in the near-term, focus remains on the binary nature of mid-stage data from the company’s micro-dystrophin study due next year. Updates from competitors Pfizer Inc. and Solid Biosciences Inc. on the status of their respective studies will also be of interest for investors looking to see if Sarepta can keep its crown in DMD.
To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jeremy R. Cooke
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