Wedbush has initiated Sarepta Therapeutics (SRPT) at outperform saying that a selloff that began earlier this year following the deaths of two boys who were taking one of its Duchenne muscular dystrophy gene therapies is overdone.
The firm has a $32 price target (~46% upside based on Dec. 8 close).
Analyst Yun Zhong said that he sees further upside coming given the US FDA's potential re-approval of Elevidys (delandistrogene moxeparvovec), the drug involved in the deaths, in non-ambulatory patients in early 2027. The treatment, currently, can only be used in ambulatory patients.
The drug now has a Boxed Warning on the risk of fatal acute liver failure. Zhong noted that Sarepta has received clearance to begin a study to evaluate the addition of sirolimus as part of an immunosuppression regimen to Elevidys therapy by the end of the year, with primary endpoint data collection expected in H2 2026. He added that another study showed no acute liver injury when sirolimus was added on a prophylactic basis to Elevidys.
"Importantly, a KOL that we talked to sees Elevidys' profile as still favorable for non-ambulatory patients, although the criteria for eligibility needs to be defined with specific parameters," he wrote.
Zhong added that he expects the company's other Duchenne drugs to continue to perform well. "We project continued patient uptake based on a high compliance rate that SRPT has reported, comprehensive real world data supporting clinical benefit, and favorable KOL feedback."
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