In a July 29 research note, Biotechnology Technology Equity Research LLC (BTIG LLC) Analyst Yun Zhong, Ph.D. advised that Sarepta Therapeutics Inc. (SRPT:NASDAQ) recently announced that this autumn it plans to submit a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for its Duchenne muscular dystrophy (DMD) drug SRP-9001. The firm expects that the BLA for SRP-9001 will fall under the accelerated approval pathway reflecting the strength of Sarepta's research and clinical program data and the flexibility that the FDA has afforded to new therapeutics targeting largely unmet medical needs.
BTIG noted that it is likely that an advisory committee (AdCom) will be convened by the FDA to evaluate the information presented in the BLA. The analyst mentioned that earlier in July Sarepta released full one-year data from three studies in which patients treated with SRP-9001 demonstrated statistically significant results across multiple key endpoints.
BTIG advised that as the company previously submitted the same dataset to the FDA it believes that the decision to move forward with the BLA filing may be due to positive feedback received from the agency.
The analyst explained that the threshold for accelerated approval is predicated upon either the use of a "reasonably likely to predict clinical benefit" surrogate endpoint or an intermediate clinical endpoint that can be "measured earlier than irreversible morbidity or mortality."
BTIG indicated that though it is uncertain, there is a good chance that the FDA may decide to grant accelerated approval for SRP-9001. BTIG said that potentially SRP-9001's accelerated approval might be based on microdystrophin expression as a surrogate endpoint. The research firm stated that across all trial age groups SRP-9001 has shown "robust and consistent microdystrophin expression levels."
The analyst commented that if the proposed filing in the fall goes according to the schedule outlined by the company, the FDA may rule on and accept the priority review BLA submission prior to the end of this year with The Prescription Drug User Fee Act (PDUFA) data available during mid-2023.
BTIG said that positive data from Sarepta's ongoing Phase 3 trial forms the basis for its projections of achieving full approval for SRP-9001 in 2024, with Sarepta starting booking revenue in the U.S. in the same year.
The analyst from BTIG commented, "We believe an accelerated approval for SRP-9001 would be an important win for Sarepta given the close competition with Pfizer Inc. (PFE:NYSE) (Not Rated by BTIG) and we have always believed that SRP-9001 is a superior program between the two."
BTIG cautioned that it is possible that definitive proof of correlation between microdystorphin and clinical benefit may be insufficient. However, the firm pointed out that "Sarepta has successfully received three FDA approvals for exon-skipping products using truncated dystrophin as a surrogate endpoint."
The analyst noted that even though Sarepta has three separate FDA-approved products in the market the company's valuation is also dependent on the development potential of its clinical pipeline.
Sarepta Therapeutics Inc. is a biotechnology company based in Cambridge, Mass. that is engaged in developing and marketing precision medicines for complex and rare genetic diseases. Sarepta is highly focused on seeking new treatments for both Duchenne muscular dystrophy (DMD) and limb-girdle muscular dystrophies (LGMDs). The firm presently has three FDA-approved products in the market along with over 40 active development programs in its RNA Technologies, Gene Therapy, and Gene Editing pipelines.
Biotechnology Technology Equity Research advised that it has a "Buy" rating and a $125.00 price target for Sarepta Therapeutics Inc. The firm indicated that it arrived at that price by taking an average of three different valuation methods including discounted earnings, discounted cash flow, and clinical net present value.
Sarepta Therapeutics' shares trade on the Nasdaq Exchange under the symbol "SRPT" and last closed for trading at $101.45 on Thursday, August 4, 2022. The company has approximately 87.5 million shares outstanding and a market cap of about $8.41 billion. It is currently trading at $49.92 per share.
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Disclosures for BTIG Research., Sarepta Therapeutics Inc., July 29, 2022
Analyst Certification: I, Yun Zhong, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
Company–Specific Regulatory Disclosures: BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Sarepta Therapeutics, Inc. (SRPT) BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Biogen, Inc. (BIIB)
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