RBC Capital Defending Sarepta Therapeutics (SRPT), 'we believe weakness presents a buying opportunity'

RBC Capital analyst Brian Abrahams reiterated an Outperform rating and $218.00 price target on Sarepta Therapeutics (NASDAQ: SRPT)

The analyst comments "This morning, SRPT announced that the PDUFA date for '9001 will be delayed until June 22, 2023, from May 29th, to give the FDA additional time to complete the review, which we note had been a topic of intense investor debate in recent weeks. Additionally, SRPT also announced that the initial label will be targeted towards 4-5 year olds. While the push-out on timelines may on the surface seem to be a negative, our sense from multiple recent investor discussions has been that there was a lot of concern on potential slippage in timelines given the short window between the panel and the May 29th PDUFA, and investors had been looking to use weakness on a delay as a potential buying opportunity. As such, we think, this delay could, in some ways, be viewed as a clearing event, as there is now more definitive clarity on a timeline for accelerated approval well before the EMBARK readout, when before the perceived timelines were more murky. We also sensed there was some uncertainty coming out of the mixed panel vote on whether the drug would receive an approval, and we believe this development makes it increasingly likely that the drug will in fact be approved, as a one-month delay here is not indicative of any major review issues given the focus on later-stage label negotiations and post-marketing requirements. The potential limitation of the population to 4-5 year olds is incrementally negative, as this would restrict the initial eligible population and is a bit surprising -- as while this had always been viewed as a possible middle-ground to more cleanly justify an expedited approval given the better data in these patients, it had not been formally discussed at length during the AdComm. While this could incrementally raise the bar for EMBARK to enable broadest approval, we continue to believe EMBARK is very likely to show enough activity for '9001 to maintain and expand the drug's label. Additionally, we had not expected significant revenue contribution from the drug this year pre-EMBARK anyway, as access and administration logistics are more likely to take time to establish. BOTTOM LINE: PDUFA delay at least offers concrete timelines, and although initial potential label limitation is a slight disappointment, we see limited effect on '9001's medium/long-term opportunity and remain believers into EMBARK and on '9001's long-term prospects. As such, we believe weakness presents a buying opportunity. "

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

Shares of Sarepta Therapeutics closed at $146.91 yesterday.

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