2023-05-15 07:55:16 ET
Following a trading halt on Friday, Sarepta Therapeutics ( NASDAQ: SRPT ) climbed ~29% in the pre-market as Wall Street reacted to a favorable decision by an FDA advisory committee last week over the company’s marketing application for gene therapy SRP-9001.
Catalent ( CTLT ), Sarepta’s ( SRPT ) manufacturing partner for SRP-9001, is also on the rise even after delaying its Q3 earnings release and conference call for a third time. Roche ( OTCQX:RHHBY ) ( OTCQX:RHHBF ) has partnered with Sarepta ( SRPT ) for commercialization of SRP-9001 in overseas markets.
Last Friday, the FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee voted 8 to 6, backing the agency’s accelerated approval for SRP-9001 targeted at certain patients with Duchenne muscular dystrophy.
While the FDA is not required to follow the AdCom decision, the regulator usually considers it before making a final decision which, in the case of SRP-9001, is due before May 29, 2023.
Despite the split vote, Bank of America expects SRPT to win FDA accelerated approval for the treatment by the regulatory action date. Expecting more than a $40 upside on Monday, the analyst Neena Bitritto-Garg reaffirmed the Buy rating while raising the price target on SRPT to $204 from $170 per share.
Citi analysts a Buy rating and $204 per share target agreed, citing a potential approval and a sharp upside for the stock on Monday.
“Panelists expressed reservation on validity of SRP-9001 microdystrophin expression as a surrogate, but the vote was ultimately positive as panelists believed risks were manageable and patients should be allowed to have access to drug” the firm wrote.
However, Baird, which has an Outperform rating and a $202 per share target, had concerns. According to the firm, SRPT will not fully reflect a likely approval as a potential failure of EMBARK, the company’s ongoing Phase 3 trial for SRP-9001, could force SRPT to pull the treatment from the market.
“SRPT shares are unlikely to be given full credit for the market opportunity, even on accelerated approval, given concerns that EMBARK failure would potentially lead to withdrawal from market,” Baird argued while noting that a positive outcome to the trial will send SRPT to mid $200s.
More on SRP-9001
- Sarepta gains as Citi issues Buy despite AdCom for gene therapy
- Sarepta's Prospects For SRP-9001 Approval Remain Strong Despite AdCom Setback
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Sarepta jumps 29% after FDA panel nod for gene therapy