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On Wednesday, H.C. Wainwright reiterated a Sell rating on Sarepta Therapeutics (NASDAQ:SRPT) with a stable price target of $75.00. The firm’s analyst, Mitchell S. Kapoor, highlighted concerns following the death of a Duchenne muscular dystrophy (DMD) patient who had been treated with Sarepta’s ELEVIDYS. The 16-year-old patient experienced acute liver failure, a known potential adverse event associated with the treatment, in December. The news has contributed to the stock’s recent decline, with shares trading at $73.54, down 26% in the past week and approaching their 52-week low of $73.06.InvestingPro analysis shows 16 additional key insights about Sarepta, including detailed valuation metrics and growth indicators. Get access to the complete analysis with an InvestingPro subscription.
Kapoor expressed that this incident may pose another obstacle for the drug’s adoption by healthcare providers, who may now be more hesitant to recommend ELEVIDYS due to the associated risks and minimal efficacy benefits. The analyst anticipates that prescribers might either avoid or delay recommending the drug until more conclusive data on its risk profile is available from the follow-up of over 800 DMD patients already treated with ELEVIDYS. Despite these challenges, Sarepta maintains strong financials with a current ratio of 4.2 and revenue growth of 53% in the last twelve months to $1.9 billion.
The analyst also noted the particular risk in older, non-ambulatory DMD patients, suggesting that the risk-benefit profile in these subgroups is increasingly questionable. This skepticism is bolstered by what the analyst describes as a lack of convincing efficacy data for ELEVIDYS in these patient groups. Discussions with payers seem to support the analyst’s perspective, further casting doubt on the drug’s use in these populations.
Kapoor also questioned Sarepta’s ability to meet its revenue guidance for ELEVIDYS, which implies at least a 160% year-over-year growth, equating to revenues of at least $2.1 billion. Given that the non-ambulatory and older DMD subpopulations, which are estimated to comprise approximately 80% of the total DMD population, are unlikely to see significant uptake of ELEVIDYS, the analyst expects the drug to fall short of the projected revenue targets.
In conclusion, the death of a DMD patient treated with ELEVIDYS is seen as a significant challenge to the drug’s market acceptance, leading H.C. Wainwright to reiterate its Sell rating and maintain a 12-month price target of $75 for Sarepta Therapeutics shares. The company, currently valued at $7.1 billion, shows mixed signals with an InvestingPro Financial Health Score rated as "GOOD" despite recent market challenges.Discover more comprehensive insights and access the detailed Pro Research Report for Sarepta Therapeutics on InvestingPro, along with analysis of 1,400+ other US stocks.
In other recent news, Sarepta Therapeutics has been in the spotlight following a reported patient death associated with its Elevidys treatment. Despite this event, several analyst firms, including Cantor Fitzgerald, Leerink Partners, JPMorgan, TD Cowen, and Mizuho (NYSE:MFG), have maintained their positive ratings on the company’s stock. Cantor Fitzgerald reaffirmed its Overweight rating with a $163 price target, emphasizing that the incident may not be broadly applicable to all patients. Leerink Partners upheld their Outperform rating and $200 price target, noting the low incidence rate of severe side effects and projecting strong future sales for Elevidys. JPMorgan also reiterated its Overweight rating with a $187 target, suggesting that the long-term potential of Elevidys remains intact. TD Cowen maintained its Buy rating and $203 price target, with insights suggesting continued confidence in the treatment’s use for younger patients. Mizuho echoed a similar sentiment, keeping an Outperform rating, highlighting that the fatality appears to be an isolated case and emphasizing the drug’s overall benefit/risk profile. These developments indicate that while the patient death has raised concerns, analysts remain optimistic about Sarepta’s prospects.
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