Mizuho maintains Sarepta stock with $195 target on trial data

Published 27/01/2025, 19:40
Mizuho maintains Sarepta stock with $195 target on trial data

On Monday, Mizuho (NYSE:MFG) Securities maintained their positive outlook on Sarepta Therapeutics (NASDAQ:SRPT), reiterating an Outperform rating and a price target of $195.00. With a market capitalization of $11.27 billion, Sarepta has garnered strong analyst support, with consensus targets ranging from $75 to $219. According to InvestingPro data, 4 analysts have recently revised their earnings expectations upward for the upcoming period. The firm's stance comes in response to Sarepta's recent announcement of additional data from the Phase 3 EMBARK trial, which evaluates the efficacy of the company's gene therapy product, Elevidys, in treating Duchenne muscular dystrophy (DMD).

The newly reported results are significant as they show that older patients who crossed over from the placebo group to receive Elevidys in Part 2 of the trial exhibited marked improvements in key functional endpoints. Notably, these patients demonstrated a statistically significant increase in the North Star Ambulatory Assessment (NSAA) score, a decrease in time to rise (TTR), and an improved 10-meter walk/run (10MWR) performance after one year of treatment when compared to matched external controls.

Additionally, the two-year follow-up data from Part 1 treated patients provided further evidence supporting the durability of Elevidys' therapeutic effect. The company's strong financial position, evidenced by a healthy current ratio of 3.84 and impressive revenue growth of 48.45% over the last twelve months, supports its continued investment in therapeutic development. InvestingPro subscribers can access detailed financial health metrics and 12 additional ProTips that provide deeper insights into Sarepta's investment potential. The sustained expression of Elevidys micro-dystrophin and the consistency in functional benefits align with the minimal progression of muscle pathology observed in skeletal muscle MRI data. Encouragingly, all patients who were studied remained able to walk after two years, and no new safety concerns were identified throughout the trial.

The EMBARK trial's positive outcomes contribute to the growing body of evidence that supports Elevidys as a potential treatment for DMD, a genetic disorder characterized by progressive muscle degeneration and weakness. Mizuho's reiteration of their Outperform rating and $195 price target reflects confidence in Sarepta's prospects, as the trial data strengthens the case for Elevidys' use in the DMD patient population. With net income expected to grow this year and an overall "GOOD" financial health score from InvestingPro, Sarepta appears well-positioned to capitalize on these clinical achievements.

In other recent news, Sarepta Therapeutics reported a significant increase in quarterly and annual revenues, primarily driven by the robust performance of its Elevidys product and RNA-based PMO products. Notably, Elevidys revenue for the fourth quarter reached $384.2 million, marking a 112% quarter-over-quarter growth. Despite these positive results, H.C. Wainwright analysts maintained a Sell rating on Sarepta, expressing concerns about the long-term market penetration of Elevidys.

Conversely, Piper Sandler has reaffirmed its Overweight rating on Sarepta, citing the company's promising pipeline developments, particularly concerning its limb-girdle muscular dystrophy (LGMD) portfolio. The company anticipates revealing EMERGENE expression data for SRP-9003, a therapy for LGMD Type 2E, in the first half of 2025.

BMO Capital Markets and RBC Capital Markets have also spotlighted Sarepta, highlighting the company's potential upside in revenue growth and strong financial health. However, investors should note that these are recent developments and the actual performance may vary based on various factors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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