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Investing.com - Jefferies has reiterated its Buy rating and $35.00 price target on Sarepta Therapeutics (NASDAQ:SRPT) after the company resumed shipments of its Duchenne muscular dystrophy (DMD) drug Elevidys. The stock, which has fallen over 85% in the past year, currently trades significantly below InvestingPro’s Fair Value estimate.
The FDA concluded that the death of an 8-year-old patient was unrelated to Elevidys, allowing shipments to resume in ambulatory DMD patients. Each shipment will now include a healthcare provider letter about acute liver failure and maintain Elevidys’ current label.
The drug will carry a black box warning applicable to the entire DMD indication, along with additional warnings about acute liver injury and acute liver failure risks.
Jefferies notes that returning to market significantly improves Elevidys’ sales outlook in the near term, adding visibility to Sarepta’s medium-term cost structure. The firm projects potential annual sales of $1.4 billion into 2027, including over $500 million from Elevidys and $900 million from PMOs. This outlook builds on the company’s impressive revenue growth of 64.89% over the last twelve months, though analysts expect profitability challenges to persist in the near term.
The firm also acknowledges that the market is monitoring Dr. Prasad’s return to the FDA’s Center for Biologics Evaluation and Research, but points out that patient advocacy groups, DMD doctors, and Sarepta/Roche continue to highlight Elevidys’ positive benefit-risk profile in ambulatory DMD patients. For deeper insights into Sarepta’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Sarepta Therapeutics reported second-quarter earnings that surpassed analyst expectations, with adjusted earnings at $2.02 per share compared to the projected $0.70. The company achieved a revenue of $611.1 million, exceeding the anticipated $532.86 million and marking a 68% increase from the same period last year. Net product revenues also rose by 42% year-over-year, totaling $513.1 million. The resumption of ELEVIDYS shipments for ambulatory Duchenne muscular dystrophy patients has been a significant development, contributing to the positive outlook for the company’s mid-term revenue, as noted by Freedom Broker. Following this, Freedom Broker upgraded Sarepta’s stock rating to Buy and increased its price target to $37.00. Additionally, Wells Fargo (NYSE:WFC) raised its price target for Sarepta to $50.00, citing advancements in the company’s siRNA programs. BMO Capital also maintained its Market Perform rating with a $50.00 price target, acknowledging the resumption of Elevidys infusions after a temporary pause. Meanwhile, TD Cowen reiterated its Hold rating with a $17.00 price target, following Sarepta’s disclosure of liver adverse event data during a recent webinar.
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