2023-04-04 08:12:59 ET
Sarepta Therapeutics ( NASDAQ: SRPT ) shares trended higher in the pre-market Tuesday after Citi initiated its coverage with a Buy recommendation citing a compelling setup ahead of an FDA advisory committee meeting scheduled for its gene therapy candidate SRP-9001.
SRP-9001 is currently under the FDA review for Duchenne muscular dystrophy, with a PDUFA regulatory action date on May 29, 2023.
Sarepta ( SRPT ) shares plunged last month after the company announced that the FDA's Office of Therapeutics has decided to convene an advisory committee meeting to discuss its biologics license application for SRP-9001.
"We like the setup into SRP-9001's planned AdCom meeting (likely late April early May) and PDUFA post the pullback on announcement that an AdCom will be held," the analyst Neena Bitritto- Garg wrote with a $179 per share target on SRPT.
The analyst projects a $30-$40/share gain in the event of a positive AdCom vote and a downside of high double digits/share.
Bitritto- Garg thinks that an AdCom for SRP-9001 was always on the cards, but the FDA's OTP may have been short-staffed due to a leadership change/ restructuring in March.
Sarepta ( SRPT ) has partnered with Roche ( OTCQX:RHHBY ) ( OTCQX:RHHBF ) for SRP-9001. The company shares dropped in February after FDA's neuroscience chief Billy Dunn who backed newly approved treatments for Alzheimer's and amyotrophic lateral sclerosis (ALS), decided to retire.
"Thus, the change in plans to hold an AdCom may not be indicative of a meaningful change in FDA's position on the filing, which we believe has been favorable given the broader push to flexibility in CNS and gene therapy reviews championed by both CBER/CDER leadership," Bitritto- Garg wrote.
Read: Seeking Alpha contributor Clinically Sound Investor upgraded Sarepta ( SRPT ) to Strong Buy from Buy despite the upcoming AdCom meeting.
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Sarepta gains as Citi issues Buy despite AdCom for gene therapy