William Blair Sees An End To Sarepta's Regulatory Saga, Upgrades And Lifts Price Target To $88

Following Sarepta Therapeutics Inc. (NASDAQ: SRPT) receiving the U.S. Food And Drug Administration's accelerated approval for eteplirsen for treating exon 51 skipping amenable Duchenne's muscular dystrophy, William Blair upgraded its rating and price target. The firm sees the approval as an end to the company's regulatory saga.

Analyst Tim Lugo noted that the approval came after a series of setbacks and was given based on meaningful increases in dystrophin levels in 13 DMD patients from the PROMOVI study. The analyst now expects the company to go into a hyper-growth phase of profit generation in a DMD market with no competitive pressure.

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William Blair feels that the DMD exon 51, as well as development compounds for exon 45 and 53, holds comparable attractive marketing opportunities as that of rare disease companies such as Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY).

The firm noted that the approval accords the status of confirmatory study for the ESSENCE study on exon 45 and 53. Accordingly, the firm estimates a read out in 2019 and potential full approval decision by the FDA in 2020.

Accordingly, William Blair upgraded shares of Sarepta to Outperform from Market Perform and raised its price target to $88, giving it a conservative $4 billion valuation.

At time of writing, the stock skyrocketed 90 percent to $53.61.