Leerink Swann initiates coverage on Sarepta Therapeutic (NASDAQ: SRPT) with a Outperform and $45 price target as they are bullish on Duchenne muscular dystrophy treatment eteplirsen.
The firm believes eteplirsen will be priced at a premium and could benefit from a more lenient and transparent regulatory process.
The potential eteplirsen NDA filing decision is the next major event after SRPT meets with the FDA this quarter, the firm notes. That said they think conditional/accelerated approval based on Ph II would not be of much practical consequence. Their view "reflects the derisking of Ph III which occurred in Ph II, the rapidity with which Ph III would enroll, and the fact that mfg scale-up would likely limit the near-term magnitude of revenues generated in a conditional/accelerated approval (AA) scenario." They said the inability to attain AA could provide investors with an attractive buying opportunity.
The firm's sum-of-parts discounted cash flow analysis attributes ~$15 to eteplirsen (for DMD) in the U.S., ~$8 to eteplirsen in the EU, ~$17 to the PMO pipeline, and ~$5 to net cash.
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Shares of Sarepta Therapeutic closed at $30.07 yesterday, with a 52 week range of $3.30-$45.00.