Drug Trial Extension By FDA Doesn't Change Baird's Outlook On Sarepta

Last week, Sarepta Therapeutics Inc (NASDAQ: SRPT)'s Phase 3 ESSENCE study was updated and extended from 48 to 96 weeks. To many, the extension of the endpoint signaled a lack of confidence in the study's readout, however Baird thinks otherwise.

Baird's Interpretation

Despite the market's bearish interpretation of the extension, Baird's Brian Skorney maintains Sarepta's Outperform rating and $23.00 price target. The analyst argued no change in Sarepta's outlook due to the ESSENCE trial extension after confirmation from Sunday night's Sarepta update.

"Bears think this may signal lack of confidence in the ultimate readout; however, last night's update from Sarepta reaffirms our view that it is simply the make-or-break trial for approval for the class and is not a reflection of a change," stated Skorney.

'The Most Well-Designed DMD Study to Date'

Sarepta's Essence study showed the company's strong commitment to working with the FDA. "What's clear from these updates and Sarepta's communication to the DMD community is that the company is making an attempt to work with the FDA, even though some components of the study appear less than preferable for the DMD community," stated Skorney.

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Additionally, the Baird analyst was "much more comfortable that disease heterogeneity wouldn't result in a type two error" following the extension.

Eteplirsen Decision 'Pretty Cut And Dry'

Skorney believes Sarepta's expected Eterplirsen decision will be a clear one, predicting a rapid accelerated approval for the Sarepta drug, as long as results were positive.

According to TipRanks, Brian Skorney has a success rate of 38 percent with an average return per recommendation of -1.2 percent. The analyst was ranked 2,936 out of 3,980 analysts.

At time of writing, Sarepta Therapeutics traded at $16.89, down 8.80 percent Monday.