Morgan Stanley thinks that one of Sarepta Therapeutics ‘ drugs will receive accelerated approval from the Food and Drug Administration — creating a promising investing opportunity. Analyst Matthew Harrison upgraded Sarepta shares to overweight from equal weight, saying that the path for SRP-9001, an investigational gene therapy for Duchenne muscular dystrophy (DMD), now appears “de-risked.” “On SRPT’s 4Q earnings call, [management] highlighted recent commentary following the mid-cycle review of SRP-9001 suggesting that the FDA is comfortable with the surrogate endpoint and acknowledged no safety-related issues … The risk/benefit skews positive given the manageable safety profile,” Harrison wrote in a Wednesday client note. Morgan Stanley said that with the accelerated launch of SRP-9001, Sarepta has potential for over $5 billion in peak sales. The firm added that Sarepta’s management continues to build inventory for the anticipated launch of SRP-9001, and will be able to serve 80% of the Duchenne muscular dystrophy community upon launching. To be sure, Harrison said potential risks to a downside include updates to the DMD gene therapy program, as well as manufacturing and regulatory risks. Data from competitors could also negatively impact Sarepta’s position in the DMD market, the analyst noted. Harrison hiked his price target to $187 from $141 per share. The new forecast implies upside of 53% from Tuesday’s close. While shares have fallen almost 6% in 2023, they have popped 60.6% during the past 12 months. Shares were up 20% on Wednesday before the bell. —CNBC’s Michael Bloom contributed to this report.
