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Exclusive: SunTrust Managing Director Goes Over Sarepta Therapeutics' Story

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Exclusive: SunTrust Managing Director Goes Over Sarepta Therapeutics' Story
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Same as many other biopharmaceutical stocks, Sarepta Therapeutics Inc (NASDAQ: SRPT) ad a rocky start to the year. However, its luck changed in September, when the FDA approved Exondys 51 (eteplirsen) for the treatment of Duchenne muscular dystrophy (DMD), leading the stock to more than double in price in just a few days. And, while the shares lost about 14.5 percent in October, three-month gains still surpass the 150-percent threshold.

SunTrust has been following the Sarepta story for years now, even since the company was named AVI BioPharma. Benzinga recently had the chance to discuss the company with SunTrust Robinson Humphrey Managing Director and Senior Biotechnology Analyst Edward Nash and Associate Biotechnology Analyst Mike Guo.

An Unexpected Turn Of Events

The firm rated Sarepta a Sell “because the FDA was so negative,” same as experts, Nash began. Clinical data (almost everything empirical, actually) also suggested its lead Duchenne muscular dystrophy (DMD) drug would not be approved.

However, the drug was approved in the end, although reasons were more emotional than data-based. “I believe it should’ve been approved, but I think it was approved for the wrong reasons,” the expert stated.

Related Link: Wedbush Boosts Target On Sarepta Shares From $66 To $72 Amid U.S. Launch Of Exondys 51

One way or another, Sarepta’s drug for DMD is approved now. And, while many health insurance providers are on board with it, others like Anthem Inc (NYSE: ANTM) are still questioning if it will do its customers any good — given the drug’s accelerated approval. “They may run into some more of this,” the analyst added.

The firm is also waiting to see pricing, in terms of price by weight. Adoption numbers might also be higher than currently forecast. “There’s no doubt though, for Exon 51, a particular type of DMD patients that eteplirsen targets, that we would see a significant number of those patients being put on therapy.”

Other Exon Programs

In addition to the Exon 51 program, Sarepta has two other Exon skipping programs in Phase III clinical trials, Exon 45 and Exon 53. Nonetheless, these two programs face much higher hurdles, Nash explicated.

For the approval of eteplirsen, the company needs to run some additional Phase III trials, which should start sometime next year – most likely before mid-year, and would need to beat some more endpoints to remain in the market. This is what the firm will be looking at, Nash concluded.

SunTrust has a Hold rating and $52 price target on shares of Sarepta Therapeutics. Check disclosures here.

Full ratings data available on Benzinga Pro.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

Latest Ratings for SRPT

DateFirmActionFromTo
Sep 2017Credit SuisseMaintainsOutperform
Sep 2017BarclaysInitiates Coverage OnEqual-Weight
Jul 2017Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for SRPT
View the Latest Analyst Ratings

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