Delayed FDA Decision Sends Sarepta Therapeutics Soaring
The Market continued from where it had left off on the previous day, rising further on May 25, 2016. The Dow Jones Industrial Average rose by 0.8%, while the SPDR S&P 500 ETF (SPY) rose by 0.7% on the day.
Financial stocks and technology stocks led the Market. Biotechnology and pharmaceutical stocks also rose in the rejuvenated market atmosphere.
FDA delays decision on Sarepta’s eteplirsen
Sarepta Therapeutics (SRPT) was the top performer within the SPDR S&P Biotech ETF (XBI) on May 25, 2016. It rose by 26.6%.
The stock rose on the sentiment that the FDA’s delay on the approval of Sarepta’s eteplirsen was a positive development for Sarepta.
The above chart indicates Sarepta’s performance in May 2016 compared to the performances of the SPDR S&P 500 ETF and the SPDR S&P Biotech ETF.
In a press release, Sarepta announced that the FDA “has notified the Company that they are continuing their review and internal discussions related to our pending NDA for eteplirsen and will not be able to complete their work by the Prescription Drug User Fee Act [PDUFA] goal date of May 26, 2016. The FDA has communicated that they will continue to work past the PDUFA goal date and strive to complete their work in as timely a manner as possible.”
Sarepta closed at $23.35 and was trading above its 20-day moving average price of $17.50. Despite the stock’s rising by over 50% during the month, it has fallen by 39.5% year-to-date (or YTD).
Approximately 21.3 million shares were traded on May 25 compared to SRPT’s three-month average trading volume of ~6.3 million shares per day. Sarepta has a book value of $3.04 per share. At its current price, the stock is trading at a price-to-book value (or PBV) of ~7.7x.
Analysts’ consensus estimate suggests that Sarepta’s 12-month target price is $17.7. Four analysts recommend “buys” on the stock, five recommend “sells,” and five recommend “holds.” Sarepta accounts for ~1.6% of XBI’s total portfolio.
On the other hand, Neurocrine Biosciences (NBIX) was the biggest loser within XBI, falling by 4.5% on profit-booking. The stock fell after rising for six trading sessions. It closed at $46.56 and was trading above its 20-day moving average price.
NBIX has fallen by 17.7% YTD. The stock has a book value of $4.77 per share. At its current price, the stock is trading at a PBV of ~9.8x.
Neurocrine Biosciences has a weight of 2.5% in XBI’s portfolio. Only Medivation (MDVN), Anacor Pharmaceuticals (ANAC), and Acadia Pharmaceuticals (ACAD) have better weights, with ~2.9%, 3.0%, and 3.1%, respectively.