Burrill Starts Sarepta (SRPT) at Market Outperform; Sees Plenty of Upside in DMD Space
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Price: $18.79 -2.24%
Rating Summary:
19 Buy, 18 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
19 Buy, 18 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Burrill Institutional Research started coverage on Sarepta Therapeutics (Nasdaq: SRPT) at Market Outperform/Speculative risk earlier, establishing a $54 price target in the process.
Analyst/managing director Reni Benjamin commented, "To date, the company has demonstrated both safety and preliminary efficacy in Phase 1 and Phase 2 trials with patients amenable to Exon 51 therapy in Duchenne’s Muscular Dystrophy (DMD). Given the final encouraging results from the 201/202 Phase 2 study, we believe shares are poised to move higher. If successful, we believe Sarepta’s directed alternative splicing technology has the potential to revitalize the RNA therapeutics space and address multiple multi-billion dollar orphan disease markets. In our opinion, the company represents an undervalued opportunity with multiple near-term drivers poised to create shareholder value in 2013."
Benjamin notes that there are some 15,000 Duchenne muscular dystrophy (DMD) patients in the U.S. right now, with Sarepta's dug addressing 2,000 of those. With a price tag of $500,000 per year, Benjamin sees it as a $1 billion market opportunity in the U.S. alone. That could "easily" double if Europe and Japan are included.
Additionally, given Sarepta's technology platform, Benjamin thinks the pharma's "new oligonucleotide combinations could one day address 80% of DMD patients, as well as other genetic diseases including sickle cell anemia, resulting in a multi-billion dollar potential market opportunity."
Though Sarepta isn't alone in this space, Benjamin thinks the pharma would be able to forge a partnership with a large pharma or biotech company, garnering an upfront payment of $100 million in addition to clinical, regulatory, and sales milestones that approach $1 billion. Benjamin sees Sarepta negotiating double-digit royalties on the drug.
Sarepta earlier announced that it entered a collaboration for the development of an additional exon-skipping drug targeting exon 53. For more color, click here.
Analyst/managing director Reni Benjamin commented, "To date, the company has demonstrated both safety and preliminary efficacy in Phase 1 and Phase 2 trials with patients amenable to Exon 51 therapy in Duchenne’s Muscular Dystrophy (DMD). Given the final encouraging results from the 201/202 Phase 2 study, we believe shares are poised to move higher. If successful, we believe Sarepta’s directed alternative splicing technology has the potential to revitalize the RNA therapeutics space and address multiple multi-billion dollar orphan disease markets. In our opinion, the company represents an undervalued opportunity with multiple near-term drivers poised to create shareholder value in 2013."
Benjamin notes that there are some 15,000 Duchenne muscular dystrophy (DMD) patients in the U.S. right now, with Sarepta's dug addressing 2,000 of those. With a price tag of $500,000 per year, Benjamin sees it as a $1 billion market opportunity in the U.S. alone. That could "easily" double if Europe and Japan are included.
Additionally, given Sarepta's technology platform, Benjamin thinks the pharma's "new oligonucleotide combinations could one day address 80% of DMD patients, as well as other genetic diseases including sickle cell anemia, resulting in a multi-billion dollar potential market opportunity."
Though Sarepta isn't alone in this space, Benjamin thinks the pharma would be able to forge a partnership with a large pharma or biotech company, garnering an upfront payment of $100 million in addition to clinical, regulatory, and sales milestones that approach $1 billion. Benjamin sees Sarepta negotiating double-digit royalties on the drug.
Sarepta earlier announced that it entered a collaboration for the development of an additional exon-skipping drug targeting exon 53. For more color, click here.
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