RBC Recommends Buying Sarepta (SRPT) on Weakness Related to UnitedHealthcare Commercial Drug Policy
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RBC Capital analyst Simos Simeonidis weighed in on Sarepta Therapeutic (NASDAQ: SRPT) saying he believes UnitedHealthcare Commercial Drug Policy on Sarepta's EXONDYS 51 may have spooked investors. Simeonidis still believes EXONDYS 51 gets covered in the end.
"... we continue to believe that EXONDYS51 will end up getting past its reimbursement overhang: The debate about whether eteplirsen works probably won't be settled until we have randomized Phase III data from the confirmatory trials. Until then, and despite the legitimate concerns of regulators, payors and clinicians, we believe that given that 1) this is the only approved agent for a deadly pediatric disease, and 2) which only affects a small number of patients (thankfully), we don't expect this to become the next major pricing/coverage battlefield between biopharma and payors. This isn't PCSK9 or HepC. We're dealing with 2,000 young children with no other treatment options; the payors do not want the bad press that can come from refusing an FDA-approved agent to "dying children". We continue to expect EXONDYS51 to get past its reimbursement overhang and we would be buyers of SRPT in this weakness."
The firm reiterated an Outperform rating ad price target of $106. Shares of SRPT are down 6.6% currently.
Shares of Sarepta Therapeutic closed at $34.26 yesterday.
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