Deutsche Bank initiates coverage on Sarepta Therapeutic (NASDAQ: SRPT) with a Buy and $45 price target calling RNA modulator, Eteplirsen, a breakthrough drug and platform for muscular dystrophy.
"While our checks indicate Eteplirsen is unlikely to get accelerated approval, we see approval likely by mid-2015," the analyst said. "We see Eteplirsen as having better safety profile versus its competitor Drisapersen that will allow it to take majority share. We see fair-value of Eteplirsen in the US only at $45/share & tremendous upside."
On approval, the firm said their consultants suggest a key challenge with FDA will be the validity of dystrophin as a surrogate endpoint. "The FDA may want more extensive data for the approval of its first RNA therapeutic according to our checks. Phase 2a data with shorter treatment durations and lower doses did not show correlation of dystrophin with 6 minute walk in a few patients with high responses. In addition, limited manufacturing capacity may reduce urgency for approval. However, our checks also indicate the FDA could allow an accelerated filing and vet the issue at an FDA panel."
On the valuation, the firm sees a floor at $25/share but upside on accelerated filing at $48-$71/share.
Thanks, Stimy, for the actual transcript quotations..
"On the valuation, the firm sees a floor at $25/share but upside on accelerated filing at $48-$71/share.'
And that 48-71 is just upon our filing for approval. Were we to then get approval - lets say in September - I'd guess they would expect $125 or so. And then (as they say) upwards from there - "tremedous upside"..