BofA Downgrades Sarepta, But Hikes Price Target

In a report published Thursday, BofA Merrill Lynch analysts downgraded the rating on

to Neutral, while raising the price objective from $20 to $28. Sarepta is currently developing exon-skipping therapeutics for treatment of Duchenne Muscular Dystrophy (DMD). The company has received FDA approval to initiate a rolling NDA submission for eteplirsen for the treatment of DMD. The company will file certain portions of the application this week and the final component by mid-2015. "We are not surprised by FDA's support due to pressure from patient advocacy groups and that SRPT has initiated all the confirmatory studies FDA requested. No additional data requests were made at the meeting. We have raised our probabilities of approval by 10% (e.g. US approval for eteplirsen from 50% to 60%, and other exon skipping drugs from 30% to 40%)," the analysts mentioned. In the report BofA Merrill Lynch noted, "The next key catalyst is likely an advisory committee meeting this fall to review eteplirsen and BMRN's drisapersen, which could recommend waiting for more eteplirsen data."