On Friday, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Sarepta Therapeutics (NASDAQ:SRPT) stock with a price target of $223.00, following the Food and Drug Administration's (FDA) decision to broaden the label for Sarepta's gene therapy Elevidys.
This expansion now includes both ambulatory and non-ambulatory patients who are at least four years old. The therapy, which is used to treat Duchenne muscular dystrophy, was previously approved for ambulatory children aged 4-5 under the accelerated approval pathway.
The FDA's decision is seen as a reflection of the current regulatory environment, which has shown a willingness to be flexible and to expedite approvals. This flexibility was recently demonstrated when the Director of the Center for Biologics Evaluation and Research (CBER) chose to override the review team's recommendation for a Complete Response. The Phase 3 ENVISION trial, which is expected to be completed in 2027, is set to act as the confirmatory study for the accelerated approval.
Goldman Sachs anticipates that Sarepta will continue to successfully launch Elevidys, citing strong demand, site readiness, and favorable payer dynamics. The firm expects Sarepta's fiscal year 2024 sales to be weighted towards the second half of the year, with projections aligning with the Goldman Sachs and FactSet consensus of $909 million and $1,006 million, respectively.
Sales are forecasted to increase to $1,820 million and $1,981 million by 2025. Despite acknowledging the potential for site capacity and manufacturing constraints in the near term, the outlook for Sarepta remains positive.
Goldman Sachs projects peak Elevidys revenue for Sarepta to reach $2.6 billion by 2028. The firm also notes the potential for expansion outside the United States through its partnership with ROG and the possibility of mergers and acquisitions.
The valuation model used by Goldman Sachs suggests that the inclusion of all ambulatory patients supports a valuation of approximately $150 per share, which could rise to over $200 per share when non-ambulatory patients are also considered.
In other recent news, Sarepta Therapeutics has been making significant strides in the pharmaceutical industry. The company's drug, Elevidys, received approval from the FDA for treating Duchenne muscular dystrophy (DMD) in patients four years and older.
This approval has led to an increase in Sarepta's shares target by RBC Capital Markets from $142 to $182. The firm has a positive view on the revenue potential of Elevidys, estimating a peak U.S. market opportunity of $2.8 billion.
In addition, Sarepta Therapeutics has committed to conducting a randomized, controlled Phase 3 trial to confirm the clinical benefit of ELEVIDYS in non-ambulatory DMD patients.
Analysts from firms like BMO Capital Markets and JPMorgan (NYSE:JPM) have maintained a positive outlook on Sarepta, reiterating their respective price targets of $170 and $175.
The recent failure of Pfizer (NYSE:PFE)'s phase 3 trial for a gene therapy targeting DMD has been seen as a positive development for Sarepta's Elevidys. Analysts from various firms like Mizuho Securities and Morgan Stanley (NYSE:MS) have expressed optimism about Sarepta, maintaining positive ratings and increasing price targets based on the potential for Elevidys' expanded label.
These are some of the recent developments that have put Sarepta Therapeutics in the spotlight. The company's progress with Elevidys has been closely watched by investors and the DMD community, marking a significant milestone in the treatment landscape for this debilitating muscle-wasting disease.
InvestingPro Insights
Following the optimistic outlook shared by Goldman Sachs on Sarepta Therapeutics, InvestingPro data supports a strong financial position for the company. Sarepta's market capitalization stands at $11.67 billion, reflecting its significant presence in the biopharmaceutical market. The company's revenue has shown a remarkable growth of 43.83% over the last twelve months as of Q1 2024, indicating a positive trend in its financial performance. Additionally, the robust quarterly revenue growth of 63.1% in Q1 2024 further underscores the company's successful commercial strategies and the potential for continued expansion.
As for InvestingPro Tips, analysts predict that Sarepta will be profitable this year, which aligns with the company's recent performance showing profitability over the last twelve months. Moreover, the company's liquid assets are reported to exceed its short-term obligations, suggesting a healthy liquidity position that could support ongoing operations and strategic initiatives. With these factors in mind, investors may find Sarepta's current trajectory promising. For more detailed analysis and additional InvestingPro Tips, consider exploring https://www.investing.com/pro/SRPT, and remember to use the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. There are 9 additional InvestingPro Tips available that can further guide investment decisions regarding Sarepta Therapeutics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.