Sarepta Therapeutics’ shares plummeted after the Food and Drug Administration said it was seeking input from a panel of independent experts on the biotech’s new gene therapy drug, but analysts remained upbeat, calling the update “surprising” but not negative.
Just about two weeks ago, Sarepta said the FDA has no plans to hold an advisory committee meeting to evaluate SRP-9001 for treating Duchenne muscular dystrophy, a genetic disorder. But on Thursday, in a call with analysts, Sarepta said the FDA had changed…
Sarepta Therapeutics’ shares plummeted after the Food and Drug Administration said it was seeking input from a panel of independent experts on the biotech’s new gene therapy drug, but analysts remained upbeat, calling the update “surprising” but not negative.
Just about two weeks ago, Sarepta said the FDA has no plans to hold an advisory committee meeting to evaluate SRP-9001 for treating Duchenne muscular dystrophy, a genetic disorder. But on Thursday, in a phone call with the analysts, Sarepta said the FDA changed its decision because SRP-9001 is one of the first gene therapy biologics applications to be based on a surrogate endpoint — a surrogate for clinical outcomes.
The stock fell almost 20% on Friday to $120.12.
Tim Lugo, an analyst at William Blair, reiterated his outperform statement, the equivalent of a buy, saying the stock’s move was an overreaction. Lugo reminded investors that no new data or issues triggered this change in decision and that an advisory committee was largely expected ahead of the company’s first update.
Mizuho’s Uy Ear said the “surprising reversal” doesn’t change his view on the chances that the treatment could receive accelerated approval or timely approval given the FDA’s interest in the drug. On the conference call, Sarepta said the regulator is ensuring that the decision to address the Advisory Committee will not cause a delay and that it intends to schedule the meeting before May 29, when a decision on SRP-9001 is expected.
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This was announced by the FDA Barrons that the Advisory Committee is “critical” and “working expeditiously” to assess the safety and efficacy of the treatment in a timely manner.
Ear has a target price of $160, which represents a 33% gain from current levels.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com