By Senad Karaahmetovic
Sarepta Therapeutics (NASDAQ:SRPT) shares are trading almost 4% higher in Tuesday’s pre-market trading session after Citi analysts initiated research coverage with a Buy rating and a $179 per share price target.
The new price target implies a 30% upside room in SRPT stock as the broker likes the setup into SRP-9001’s planned AdCom meeting, which is expected later this month or in early May.
“In our view, an AdCom was likely always needed, but FDA’s OTP may have been under-staffed due to a leadership change/restructure that completed in March. Thus, the change in plans to hold an AdCom may not be indicative of a meaningful change in FDA’s position on the filing, which we believe has been favorable given the broader push to flexibility in CNS and gene therapy reviews championed by both CBER/CDER leadership,” the analysts wrote in an initiation note.
If the AdCom vote turns out to be positive, analysts see the potential for a $30-$40 rally in shares.
As a result, the analysts also opened an upside 90-day catalyst watch on SRPT shares on the AdCom vote, as well as the expected FDA decision (late May).
“We assign 75% PoS to approval of SRP-9001 in the US, and assume $3.0B in US peak sales,” the analysts concluded.
Sarepta shares are up 6.1% year-to-date (YTD).