SunTrust On Sarepta Therapeutics: FDA Likely To Deny Approval For Eteplirsen

SunTrust said the "logical decision" for the FDA would be to deny approval for Sarepta Therapeutics Inc SRPT's Eteplirsen drug for the treatment of Duchenne Muscular Dystrophy.

DMD is a genetic disorder caused by an absence of dystrophin, a protein that helps keep muscle cells intact.

Shares of Sarepta soared more than 23 percent after Benzinga reported that Dr. Ron Farkas, Eteplirsen's harshest critic, left the FDA, bringing hopes that the drug may be approved.

But, analyst Edward Nash thinks otherwise.

Related Link: Exclusive: Dr. Ron Farkas, Eteplirsen's Harshest Critic, Has Left The FDA

"We believe that from an empirical standpoint, the only decision likely to come from the FDA should be a denial of approval," Nash wrote in a note.

Nash, who reiterated his Reduce rating on the stock, cited the following reasons for his argument of FDA potentially denying approval for the drug:

• "Drisapersen briefing docs highly negative on clinical data presented by BioMarin Pharmaceutical Inc.and the FDA's own analysis of the drug."
• "FDA presentation at drisapersen AdCom was extremely negative."
• "AdCom vote on drisapersen was negative."
• "Eteplirsen briefing docs highly negative on clinical data presented by BioMarin and the FDA's own analysis of the drug."
• "FDA presentation at eteplirsen AdCom was extremely negative."
• "AdCom vote on eteplirsen was negative."
• "FDA Deputy Director Eric Bastings, MD was critical on the approval of eteplirsen at the AdCom."
• "FDA Clinical Team Leader Ron Farkas was also highly critical of the clinical data of eteplirsen at the AdCom."

"What seems clear to us is that all of the points listed above should lead to a rational decision of no approval, but with emotions and advocacy groups and likely political pressure coming to bear, it could turn what we believe should be a clearly derived outcome into another irrational 180-degree turn with the Agency," Nash added.