US stock futures flounder amid tech weakness, Fed caution
Monday, Oppenheimer analysts lowered the price target on Sarepta Therapeutics (NASDAQ:SRPT) to $184 from the previous $215, while maintaining an Outperform rating on the company’s shares. The stock, currently trading at $54.43, has experienced significant pressure, falling nearly 54% over the past six months. The adjustment follows a key opinion leader (KOL) call with a leading neurologist, who discussed the gene therapy ELEVIDYS, currently approved for Duchenne muscular dystrophy (DMD).
The neurologist underscored ELEVIDYS’ favorable benefit/risk profile, despite a recent patient death following treatment. Acute liver injury, the cause of the fatality, is a recognized risk of adeno-associated virus (AAV)-based gene therapies. The specialist anticipates the possibility of another fatality but believes there is minimal risk of ELEVIDYS being withdrawn or its use restricted. Further, there is an expectation for an expanded label to include children under four years old, and the expert’s overall perception of the drug remains positive. This outlook aligns with Sarepta’s strong financial position, maintaining a healthy current ratio of 4.2 and achieving impressive revenue growth of 53% over the last twelve months.
Oppenheimer’s analysts echoed the sentiment that the market’s reaction to the patient death and the European Medicines Agency’s (EMA) temporary clinical hold was exaggerated. They suggest that the recent decline in Sarepta’s stock price has been an overreaction, fueled by initial fears, and see potential for the stock to rebound. This outlook is supported, in part, by Sarepta’s announcement in November 2024 of a share repurchase program of up to $500 million.
The KOL’s insights and Oppenheimer’s analysis indicate confidence in the ongoing use and commercial potential of ELEVIDYS. Despite the recent challenges faced by Sarepta, including the impact on stock performance, the outlook for ELEVIDYS remains largely unchanged according to the firm’s perspective. The share buyback plan also presents an opportunity for Sarepta to bolster its stock value in the market. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional ProTips available for subscribers, including insights on valuation metrics and growth potential. For comprehensive analysis of Sarepta and other biotech companies, investors can access detailed Pro Research Reports covering 1,400+ top stocks on the platform.
In other recent news, Sarepta Therapeutics has announced the resumption of clinical trials for its gene therapy ELEVIDYS after a favorable safety review by an independent committee. The trials, previously paused due to safety concerns, will continue without changes to the protocol, as confirmed by both Sarepta and its partner Roche. Meanwhile, Barclays (LON:BARC) has maintained its Overweight rating on Sarepta with a $209 price target, expressing confidence in the drug’s prospects despite the European Union’s temporary suspension of ELEVIDYS studies. Needham has adjusted its price target for Sarepta to $183 from $202 while maintaining a Buy rating, reflecting ongoing regulatory challenges and revised sales forecasts.
H.C. Wainwright has upgraded Sarepta’s stock from Sell to Neutral, setting a $75 price target, based on the stock’s alignment with expectations ahead of the company’s first-quarter 2025 earnings. The firm anticipates solid earnings influenced by continued demand for ELEVIDYS, although concerns remain about the revenue prospects for the second half of 2025. The European Medicines Agency’s clinical hold on ELEVIDYS trials, prompted by a patient death, has raised questions about the drug’s future uptake among non-ambulatory and older DMD patients. Sarepta’s ongoing efforts in developing precision genetic medicines continue to draw attention from investors and analysts, with the recent developments playing a significant role in shaping market sentiment.
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