2022 Will Bring New Questions For Sarepta; Jefferies Raises Price Target From $7 To $50

Jefferies raised its rating on Sarepta Therapeutics Inc (NASDAQ: SRPT) as the din dies down on the euphoria generated by the company receiving accelerated approval for eteplirsen in Duchenne Muscular Dystrophy. That said, the firm is still circumspect and feels 2022, when the full approval decision is due, will bring open questions.

Among the questions raised by Jefferies are regarding the weak basis for approval and questionable efficacy, manufacturing capability to supply commercial and ongoing clinical trials and debatable market potential for exon 51 outside of the US.

Related Link: Sarepta Analysts Turn Bullish After Duchenne Muscular Dystrophy Drug Eteplirsen Gets Approval

Woodcock Backing Behind Approval

The firm sees the positive verdict from FDA as solely due to the push by Janet Woodcock, the director of the Center for Drug Evaluation and Research, despite multiple internal oppositions. The approval is seen by the firm as the result of the FDA perceiving that dystrophin increase in skeletal muscle in some eteplirsen-treated patients reasonably predicts clinical benefits in some patients.

The firm also noted that specifics of the data submitted from 13 patients at baseline and 48 weeks were not disclosed. The FDA seems to want a two-year randomized, double-blind, controlled confirmatory trial, with the trial mandated to end by November 2010 and the final report due to be submitted by May 2021. The firm believes the currently ongoing PROMOVI phase 3 study will not suffice.

As such, the company raised its rating on shares to Hold from Underperform and upped its price target on shares to $50 from $7. The actions were based on expectations of eteplirsen commercialization until 2022.

Following the 74 percent gain notched on Monday, the stock is up another 11.36 percent at $54.50.