One of the biggest winners on Friday was a pretty large biotech stock with a market cap of around $9 billion. Sarepta Therapeutics (NASDAQ: SRPT) shot up significantly just before the weekend after the company announced that the Food and Drug Administration (FDA) gave its unexpected approval for Duchenne’s Muscular Dystrophy drug called Vyondys 53, making it the company’s second drug that targets the disease.
This was a surprising piece of news considering that the FDA had previously denied the drug’s approval back in August due to safety concerns. Sarepta’s stock was pretty hard hit once the announcement came through, but things have now taken a drastic turnaround after the FDA gave its approval. Vyondys 53 is Sarepta’s second drug candidate to treat Duchenne’s Muscular Dystrophy, a condition where a patient’s muscles rapidly deteriorate starting as a young child, with its first drug, Exondys 51, having received approval back in 2016 amidst plenty of controversy.
“Surprisingly, Sarepta is approved for golodirsen much faster than we ever expected. We had thought perhaps the delay was political. Sarepta went to the FDA appeal board and was able to regain a positive approval. We think that the shares should go up 20-30%+,” commented Cantor Fitzgerald analyst Alethia Young in note before the weekend. “While the news came as a surprise to us, it did confirm our theory that Vyondys53’s complete response letter (CRL) was merely a bump in the road towards approval with the FDA leaving SRPT to twist in the wind for a short while before ultimately approving the drug,” added SVB Lerrink analyst Joseph Schwartz.
However, that’s not to say that everything is in the clear for Sarepta’s drug. Currently, the company is continuing a longer-term trial that further evaluates whether or not the drug can improve motor functions in patients over a longer period. The FDA added that should the trial end up in a flop, it would revoke its previously granted approval. While this doesn’t seem particularly likely, it’s definitely something investors should watch out for in the future.
Shares of Sarepta Therapeutics jumped up by 32% in response to the news, a development that many hadn’t had expected. However, despite this jump, shares of the company haven’t changed much in regards to where they started back at the beginning of 2019. However, the vast majority of analysts have a positive impression of Sarepta. Out of the 24 analysts or so covering the stock, 21 of them have “buy” ratings on Sarepta, while 2 have an “overweight” rating and only one has a “hold” rating.
Sarepta Therapeutics Company Profile
Sarepta Therapeutics is a biotechnology company focused on treating rare, infectious, and other diseases. It targets a broad range of diseases while focusing on rapid development of its drug candidates. Sarepta’s strategy involves proprietary RNA-targeted technology platforms to be used for developing novel pharmaceutical products to treat a broad range of diseases and address key unmet medical needs. The company uses third-party contractors to manufacture its product candidates. Most of Sarepta’s product candidates are at an early stage of development. – Warrior Trading News
