Sarepta (SRPT) Eteplirsen Delay Increases Probability of 'Middle Ground Scenario' - Baird

Baird maintained an Outperform rating on Sarepta Therapeutic (NASDAQ: SRPT) with a price target of $23. Earlier Sarepta said it was notified by the FDA that they are continuing their review of its pending NDA for eteplirsen and will not be able to complete their work by the PDUFA goal date of May 26.

In the view of analsyt, Brian P. Skorney the delay incrementally increases the probability of accelerated approval but more meaningfully decreases the likelihood of a complete response letter.

"The FDA has continued to put itself in a politically unfavorable position, should it present an uncompromised rejection, going into a year where PDUFA VI will be sculpted. Though weakness of the eteplirsen data imply a likely CRL this go-around, political pressures may be pushing the FDA towards a compromise," said Skorney.

The analyst continued, "The submitted data clearly doesn't meet a threshold that the FDA is comfortable with but it isn't so outlandish that it can be easily rejected. We believe that if accelerated approval was really off the table, we would not be seeing this delay; it's not like it is the last week in December (i.e., BioMarin's drisapersen). We're particularly interested in the language around continuing 'internal discussions.' This isn't language we believe is common in FDA communications about PDUFA delays and is yet another indication that there is an internal disagreement between the review team and senior leadership."

Skorney added, "Our main incremental takeaway is that the longer it takes to reject eteplirsen and request a placebo controlled study, the harder it is going to be to do that. We think the worst-case scenario looks increasingly unlikely. If anything, this delay probably increases the probability of some middle ground scenario, for examples breaking PROMOVI protocol and analyzing biopsies or charging under an IND."

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

Shares of Sarepta Therapeutic closed at $18.44 yesterday.

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