On Friday, Sarepta Therapeutics (NASDAQ:SRPT), trading on NASDAQ:SRPT, maintained its Buy rating and a price target of $172.00 at Citi, following the approval by the FDA of its drug Elevidys for both ambulatory and non-ambulatory Duchenne muscular dystrophy (DMD) patients.
The company announced the FDA's decision after the market closed on Thursday, which led to the expansion of Elevidys' label to include all ambulatory patients aged 4 years and older. The drug also received accelerated approval for non-ambulatory DMD patients, contingent upon further data from an ongoing study.
The FDA's full approval of Elevidys for ambulatory patients marks a significant expansion from its previous age-restricted approval for 4-5 year olds. With this broader label, more patients suffering from DMD will have access to the treatment. Meanwhile, the accelerated approval for the non-ambulatory segment of DMD patients will require additional evidence from the Phase 3 ENVISION study, which is expected to provide results in 2026.
Citi's affirmation of the Buy rating and price target reflects the unfolding of the most scientifically plausible scenario that the firm had anticipated for Sarepta Therapeutics. Following the FDA's announcement, Sarepta Therapeutics' shares approached the $172 price target in post-market trading. In response to the regulatory update, Sarepta has scheduled a conference call for today at 8:30 am ET to further discuss the implications of the Elevidys label expansion.
Investors and stakeholders will be looking to the conference call for more details on how this approval will impact Sarepta's commercial strategy and the potential benefits for DMD patients. The company's progress and the FDA's decision are closely watched indicators of Sarepta's trajectory in the biopharmaceutical industry.
In other recent news, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Sarepta, projecting strong demand for Elevidys and forecasting peak revenue for the therapy to reach $2.6 billion by 2028.
RBC Capital Markets has also increased its price target for Sarepta to $182, following the FDA's approval of Elevidys. The firm estimates a peak U.S. market opportunity of $2.8 billion for the drug. Meanwhile, BMO Capital Markets has maintained an Outperform rating with a price target of $170, while JPMorgan (NYSE:JPM) and Mizuho Securities have also maintained positive outlooks with price targets of $175 and $179, respectively.
Sarepta has committed to a Phase 3 trial, ENVISION, to confirm the clinical benefit of Elevidys in non-ambulatory patients. The company is also in partnership with Roche (LON:0QQ6) for the global distribution of Elevidys.
These are among the recent developments that have put Sarepta Therapeutics in the spotlight.
InvestingPro Insights
As Sarepta Therapeutics celebrates the FDA's approval of Elevidys, investors are keenly observing the company's financial metrics and market performance. With a significant market cap of $11.67 billion and a striking revenue growth of 43.83% over the last twelve months as of Q1 2024, Sarepta's financial health is a focus. The company's robust revenue growth is further underscored by a quarterly increase of 63.1% in Q1 2024, indicating a strong upward trajectory in sales.
InvestingPro Tips suggest that while Sarepta is trading at a high earnings multiple with a P/E ratio of 684.5, analysts have a positive outlook, predicting profitability this year. This optimism is backed by a 36.09% price uptick over the last six months, reflecting investor confidence. Additionally, Sarepta's liquid assets surpass its short-term obligations, providing financial stability and the ability to meet immediate liabilities.
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