Jefferies Sees 'Slim Chance' Of Approval For Sarepta's Eteplirsen

Count Jefferies among those not too keen on Sarepta Therapeutics Inc SRPT right now.

Sarepta shares plunged more than 28 percent on Thursday after reports surfaced that the U.S. Food and Drug Administration may pressure the company to provide its Duchenne muscular dystrophy patients with at-cost access to its Eteplirsen therapy on a "compassionate use."

The Street's Biotech expert Adam Feuerstein attributed this theory to an FDA announcement in which the agency detailed a new streamlined process for patients with serious diseases to gain access to yet to be approved drugs, such as Eteplirsen.

Jefferies analysts Gena Wan And Xiaobin Gao said they "continue to see a slim chance of approval given likely datadriven decision by the FDA under current laws."

"Based on current law, the standard of evidence is not lower for accelerated approval based on surrogate endpoints," the Jefferies note continued. "If the FDA decides to approve eteplirsen based on the weak data set (according to the FDA clinical review team), other companies that received CRL in DMD and other orphan diseases might view a high-level inconsistency in the review process. In addition, the approval might impact on the clinical trial design in orphan diseases and shift the focus from statistical-oriented to more patient-focused. Our KOL noted that congress could get involved more productively through amending current laws to allow a lower standard for orphan diseases (vs. sending open letters to the FDA)."

The firm holds and Underperform rating and $7 price target on Sarepta shares.

The stock traded recently at $15.28, down 28.7 percent.