Shares of Sarepta Therapeutics, Inc. SRPT have been rising for the past six months. The biotech company’s stock has rallied 72.4%, significantly outperforming the 0.6% rise of the industry in this period.
The company has only one marketed product in its portfolio, Exondys 51, which received accelerated approval last year in September. The drug is approved for treating patients with Duchenne muscular dystrophy (“DMD”), a rare genetic disorder affecting children, who have confirmed mutation of the DMD gene susceptible to exon 51 skipping.
The company has progressed well with the commercialization of Exondys 51 and development of pipeline candidates in the past six months
Exondys 51 Picks Up Well
Combined sales of the drug in these two quarters were $81 million, with sales increasing 31.4% sequentially in the third quarter. Sarepta has increased its revenue guidance for the fiscal in its second and third quarter results due to impressive adoption of Exondys 51 among patients. The company expects to end the year with total sales in the range of $150 million to $155 million, indicating sequential growth of 15%-25% in the fourth quarter.
In July, Sarepta had launched a Managed Access Program in Europe and Americas to increase the reach of the drug.
In July 2017, Sarepta settled an ongoing global patent litigation with BioMarin Pharmaceutical Inc. BMRN regarding the exclusive license on a patent pertaining to exon skipping technology used in DMD therapies. The settlement removes a major overhang for Sarepta as BioMarin has granted global exclusive rights to its DMD patent estate for Exondys 51 and all future exon-skipping products to Sarepta.
Pipeline Progress
Sarepta is looking to build its DMD pipeline beyond Exondys 51 by developing other exon-skipping treatments.
Sarepta’s lead candidate, golodirsen, has demonstrated 100% response rate with 10.7 times increase in mean dystrophin protein from baseline in DMD patients in a phase I/II study. The data were reported in September 2017.
We remind investors that Exondys 51 had achieved nearly three times increase in mean dystrophin protein from baseline. The better efficacy shown by golodirsen in dystrophin production has increased investors skepticism about its potential to become a new and better treatment option for DMD patients.
Sarepta has also entered into a gene therapy research collaboration with French Muscular Dystrophy Association, Genethon to gain access to the latter’s micro-dystrophin gene therapy that is capable of targeting majority of DMD patients.
Meanwhile, in June, the company appointed Douglas Ingram as its new president and CEO. Ingram has extensive experience in leading a biotech company as he had worked in various capacities at Allergan plc AGN. It remains to be seen how Ingram uses his expertise to help Sarepta achieve its potential.
Sarepta Therapeutics, Inc. Price
Sarepta Therapeutics, Inc. Price | Sarepta Therapeutics, Inc. Quote
Zacks Rank & Key Pick
Sarepta carries a Zacks Rank #2 (Buy).
Corcept Therapeutics Incorporated CORT is another health care stock, carrying the same rank as Sarepta. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Corcept’s earnings per share estimates have increased from 45 cents to 47 cents for 2017 and from 77 cents to 88 cents for 2018 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 14.32%. The company’s stock is up 129.8% so far this year.
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