US stock futures flounder amid tech weakness, Fed caution
Tuesday, Mizuho (NYSE:MFG) analysts reiterated their Outperform rating on Sarepta Therapeutics (NASDAQ:SRPT) stock, suggesting that the market’s reaction to a reported death related to the company’s drug Elevidys may be excessive. The stock, currently trading at $80.84, has fallen significantly from its 52-week high of $173.25, with analysts setting a high target of $215. The reassessment follows an incident where a patient treated with Elevidys suffered acute liver failure (ALF) and subsequently died. This marked the first fatality in over 800 treated patients.
According to Mizuho, the patient who passed away had a recent cytomegalovirus (CMV) infection, a condition known to cause liver damage. The analysts emphasized that while acute liver injury is a recognized risk of taking Elevidys, the death appears to be an isolated case given the drug’s track record. InvestingPro data shows the company maintains strong financials with a current ratio of 4.2, indicating robust liquidity to manage potential challenges.
Mizuho’s commentary highlighted the overall positive benefit/risk profile of Elevidys, despite the recent adverse event. The analysts at Mizuho believe that the drug’s therapeutic advantages continue to outweigh the risks associated with its use. The company has demonstrated strong commercial execution, with revenue growing nearly 53% over the last twelve months to $1.9 billion.
Sarepta Therapeutics has been focusing on the development of precision genetic medicine to treat rare neuromuscular diseases. Elevidys is part of the company’s portfolio aimed at addressing unmet medical needs in this area. For deeper insights into Sarepta’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis including 13 additional ProTips and detailed valuation metrics in our Pro Research Report.
The market’s response to the reported death has prompted a review of the situation, but Mizuho’s analysts remain confident in the drug’s potential and Sarepta’s strategy. The firm’s maintained Outperform rating reflects their ongoing positive outlook for the company’s stock, supported by expectations of net income growth this year and a P/E ratio of 32.1.
In other recent news, Sarepta Therapeutics has been in the spotlight following the unfortunate death of a patient treated with its gene therapy product, Elevidys. The incident involved acute liver failure, a known potential side effect of the therapy, as detailed in the drug’s prescribing information. Sarepta has reported the event to health authorities and plans to update Elevidys’s label to include this occurrence. Despite the incident, BofA Securities maintained a Buy rating with a $210 price target, citing a positive risk-benefit profile for Elevidys and projecting peak sales of $4.2 billion. Meanwhile, Scotiabank (TSX:BNS) initiated coverage with a Sector Perform rating and a $105 price target, expressing caution about market expectations already being reflected in the stock price. Cantor Fitzgerald maintained an Overweight rating and a $163 target, updating their financial model to align with Sarepta’s guidance. RBC Capital Markets adjusted its price target slightly to $161 but maintained an Outperform rating, highlighting potential underappreciation of Sarepta’s pipeline. These developments underscore the varied perspectives among analysts regarding Sarepta’s financial outlook and product safety.
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