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CHMP Reconfirms Negative Opinion for Sarepta's Exondys

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CHMP Reconfirms Negative Opinion for Sarepta's Exondys

The CHMP re-confirmed the negative opinion for Sarepta's (SRPT) Exondys, which is developed to treat individuals who have a specific type of Duchenne muscular dystrophy.

Shares of Sarepta Therapeutics, Inc. SRPT plunged 3.4% after the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) upheld its earlier negative opinion for marketing approval of Sarepta’s sole marketed drug, Exondys (eteplirsen). However, year to date, the company’s shares have increased 165.3% against the industry’s decline of 3.9%.

Exondys, which is already marketed in the United States, is indicated to treat patients with Duchenne muscular dystrophy (DMD) amenable to skipping exon 51 of the dystrophin gene. If approved, it would be the first injectable therapy in Europe designed to treat the underlying cause of DMD.

Sarepta had announced the CHMP’s negative opinion on May 31, after which it requested a re-examination of the opinion. The negative opinion was expected. We note that in early May, along with its first-quarter earnings, Sarepta had informed that its marketing approval application for Exondys 51 received a negative trend vote in Europe, following its oral explanation to the CHMP.

The company said it will seek scientific advice from the EMA to get approval for Exondys in Europe. A decision is expected by end 2018. Sarepta is expecting the EC to adopt the CHMP’s opinion.

One of the most common fatal genetic disorders affecting children around the world, DMD is a devastating and incurable muscle-wasting disease. There is a significant unmet need for DMD treatments. Exondys 51 has the potential to address up to 13% of the total DMD population. Exondys 51 has Orphan Drug status in the United States and the EU, thereby entitling it several years (7 in the United States and 10 in the EU) of marketing exclusivity.

Exondys 51 generated sales of $138.1 million in the first half of 2018, which was considerably higher from $51.4 million generated in the first half of 2017. Based on impressive sales trends witnessed in the first half, Sarepta expects Exondys 51 sales to be almost $300 million in 2018.

Sarepta Therapeutics, Inc. Price

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Zacks Rank & Stocks to Consider

Sarepta is a Zacks Rank #3 (Sell) stock.

Some better-ranked stocks in the biotech sector are Gilead Sciences Inc. GILD, Ligand Pharmaceuticals Inc. LGND and Regeneron Pharmaceuticals Inc. REGN. While Gilead and Ligand carry a Zacks Rank #1 (Strong Buy), Regeneron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates have increased from $6.54 to $6.58 for 2018 and from over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 6.43%. The stock has rallied 4.5% so far this year.

Ligand’s earnings per share estimates have moved up from $5.64 to $6.33 for 2018 and from $5.59 to $5.74 for 2019 in the last 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 59.54%. Share price of the company has increased 89.8% year to date.

Regeneron’s earnings per share estimates have increased from $18.99 to $20.38 for 2018 and from $21.15 to $21.74 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 8.18%. The stock has rallied 3.8% so far this year.

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