Sarepta Therapeutic (SRPT) Gains as Janney Sees AA for Eteplirsen This Month

Sarepta Therapeutic (NASDAQ: SRPT) is gaining Wednesday (+3.15) amid positive comments from Janney Montgomery Scott analyst Debjit Chattopadhyay saying they would not be surprised by an AA for eteplirsen during August. The analyst raised his fair value target to $30.00 (from $25.00) but maintained a Neutral rating.

Chattopadhyay commented, "As highlighted in multiple notes before, assuming a positive read through from dystrophin Western blots, the rate limiting step for accelerated approval is likely to be the formal initiation of the ESSENCE study. We believe that ESSENCE has been formally activated, implying IRB approvals from one or more sites is available. We anticipate patient screening to begin shortly and enrollment to follow thereafter. Since the agency has not yet handed a CRL, we are assuming the 48-week biopsies from the PROMOVI study point to a mechanistic validation. Hence, we would not be surprised by an AA for eteplirsen during August."

On why it's taking so long, he said: "If the agency was set on an CRL, it should have happened on the PDUFA date or shortly thereafter; however, the agency requested additional data, which was likely to be readily available and would allow for a quick resolution. Also, recall the vote on question number two, which was specifically geared towards accelerated approval was 7 to 6 against, and would have been 7 to 6 for approval, had the question been formulated correctly. A positive vote on question two would have translated into an accelerated approval, based on the safety profile, advocacy, and political pressure, independent of data limitations."

"Hence, if majority of patients have evidence of de novo dystrophin, the delay could be related to: Magnitude of increase / clinical significance, Label discussions, and ESSENCE study initiation (now initiated); and firm timelines from the sponsor on data from the ESSENCE study."

If eteplirsen is granted AA, it could stay on the market till 2020 pending the final read from ESSENCE, the analyst estimates.

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 $25.52 yesterday.

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