BMO initiates coverage on Sarepta Therapeutics with Outperform rating

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BMO initiates coverage on Sarepta Therapeutics with Outperform rating
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Equity research analysts at BMO have initiated coverage of Sarepta Therapeutics (NASDAQ: SRPT ) with an ‘Outperform’ rating and a $170 price target, citing leadership in Duchenne Muscular Dystrophy (DMD).

“DMD’s high unmet need is all that matters,” wrote the analysts in a note to clients Wednesday.

Sarepta currently offers four commercial DMD therapies generating over $1 billion annually, and BMO’s rating is based firstly on robust efficacy of Elevidys in 4-5yo patients; secondly, on BMO’s physician checks that support the view that unmet DMD can drive significant Elevidys uptake; and thirdly, on high barriers to entry on account of unparalleled clinical, commercial and regulatory expertise.

BMO expects Elevidys quarterly sales to drive the SRPT story in 2024.

“Elevidys generated $200M (+12% vs. cons) in the first two quarters post-approval, reflecting a strong patient demand. Our physician checks suggest that the vast majority of eligible patients will be willing to receive Elevidys, as even the most bearish/negative physicians expect ~50% of their patients to use Elevidys,” wrote the analysts.

“We believe Elevidys will receive full approval with ambulatory restriction from the FDA, uniquely positioning Sarepta to leverage its DMD expertise, broad patient/payer/prescriber access, and market leadership to drive revenue growth as we don't see any meaningful near-term competitors,” they added.

The company’s gene therapy portfolio provides further potential upside.

Following the announcement, SRPT stock is trading 0.87% higher at $120.13 Wednesday.

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