Street Crowns Sarepta DMD Gene Therapy King After Pfizer Results

(Bloomberg) -- Wall Street analysts are more bullish on Sarepta Therapeutics Inc. and its market-leading gene therapy for Duchenne muscular dystrophy after Pfizer Inc.’s early results for a competing medicine showed largely uninspiring effectiveness and safety concerns.

RBC analyst Brian Abrahams advised clients to continue buying Sarepta shares amid a 20% rally as the Pfizer data remove a competitive overhang and further established Sarepta’s “significant lead in the space.” Another Sarepta bull is Baird’s Brian Skorney, who said “Pfizer fell way short on both safety and efficacy” and piled on praise for the safety of Sarepta’s therapy.

Shares of the Cambridge, Massachusetts-based drugmaker surged as much as 20% to $155.75, the most since a presentation of its initial data a year ago, to trade near the highest level since October. Pfizer stock erased initial losses to trade higher with the broader market as Solid Biosciences Inc. rose to touch the highest level in a month.

Here’s a roundup of what analysts are saying:

Baird, Brian Skorney

“We believe Sarepta’s position in DMD is even stronger coming out of PPMD. Pfizer fell way short on both safety and efficacy. All measures of expression looked worse, in our view.”

Pfizer data didn’t look safe with bad side effects, and “even more concerning, was a hospitalization due to complement activation and acute kidney injury.”

While it’s not over for Pfizer with a pivotal trial expected next year, “we think it should be.”

Rates Sarepta a Fresh Pick outperform with a $202 price target.

RBC, Brian Abrahams

“This represented a best-case scenario” for Sarepta, with a significant safety setback for Pfizer helping to enhance Sarepta’s lead time and potentially make it challenging for Pfizer to recruit additional patients.

“With this competitive overhang past and SRPT’s likely significant lead in the space established, we would be buyers into strength, as we expect the focus to expand to better recognition of the potential not only for microdystrophin/DMD but also SRPT’s other gene therapies.”

Pfizer’s therapy looked active, though the choice of assay makes comparisons to Sarepta challenging with safety issues that are notable. Data had a meaningful number of side effects with “notably a high rate of nausea, vomiting, anorexia and fatigue,” with one patient going into acute renal failure.

Rates Sarepta outperform with a $188 price target.

William Blair, Tim Lugo

Sarepta is the “clear leader in DMD with no close No. 2 after Prizer results disappoint” with Sarepta having best-in-class efficacy data.

“We see this as validation of the microdystrophin gene therapy class approach for treatment of DMD, rebutting the bear thesis that microdystrophin expression is not a functional surrogate of full length dystrophin.”

Rates Sarepta outperform.

Cantor Fitzgerald, Louise Chen

“While we view the early secondary and exploratory data positively, we think safety will continue to be a focus as Pfizer progresses to its Phase 3 trial.”

There will be upside for Pfizer if it’s able to commercialize the drug, though Wall Street expectations were modest going into the data. Thinks Pfizer’s plans to move into a Phase 3 program is positive though investors will want more color on manufacturing and safety.

Rates Pfizer overweight with price target at $53.

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, Lisa Wolfson

©2019 Bloomberg L.P.