Anthem (ANTM) Dragging Feet on Sarepta's (SRPT) Exondys 51 is Likely Negotiating Tactic - Oppenheimer

October 7, 2016 3:14 PM EDT
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Price: $46.33 -1.26%

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    16 Buy, 8 Hold, 1 Sell

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Oppenheimer affirms Sarepta Therapeutics (Nasdaq: SRPT) at Outperform with a price target of $76 as Anthem said EXONDYS 51 wasn't medically necessary earlier today, putting pressure on SRPT shares.

The firm commented: Anthem's medical policy took the position that eteplirsen (EXONDYS 51) is "investigational and not medically necessary," and it is not currently covered by Anthem. However, we remind investors that this is the third week of the EXONDYS 51 launch. While Sarepta has been able to quickly mitigate its negotiations with some large payers (Cigna, Humana, United Health), other discussions will take longer to conclude. We view this move by Anthem to be a negotiation tactic and not a final decision on reimbursement. Additionally, we note that there is an appeals process.

Anthem is one of the largest owners of Blue Cross Blue Shield plans, though sets its own drug formulary. Anthem has ~40 million members. We spoke with an Anthem rep today who said coverage decisions can change and there is an appeals process available through Anthem that either/both patients and physicians can go through to try to obtain access to drugs not covered, the firm noted.

For an analyst ratings summary and ratings history on Sarepta Therapeutic click here. For more ratings news on Sarepta Therapeutic click here.

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