Sarepta Therapeutics Inc (NASDAQ:SRPT) shares have been extremely volatile of late, and they soared by more than 23% to as high as $19.75 on Tuesday. The drug maker said it has reached an agreement with the Food and Drug Administration regarding dystrophin data from trials of its drug Promovi. Wedbush analysts upgraded Sarepta after the news, although analyst calls on the company are simply all over the place.
Wedbush upgrades Sarepta Therapeutics (SRPT)
Analyst Heather Behanna said in a report dated June 6 that she upgraded Sarepta Therapeutics Inc (NASDAQ:SRPT) from Neutral to Outperform and more than doubled her price target from $14 to $36 per share. She believes the agreement between the company and the FDA will enable it to get onto the fast track to getting Promovi (a.k.a. eteplirsen) approved. The agency has agreed to review the dystrophin data that Sarepta already has on hand. This is good news because it means that the company won’t have to spend more time and money collecting new biopsies because it can use those it already collected.
She believes the data will show that dystrophin production is within an acceptable range, so she thinks the drug maker’s stock is a buy before the regulatory approval. However, she also noted that there is still a risk that dystrophin will be a problem in terms of getting Promovi approved because there are no clear guidelines of how much of an increase in dystrophin production is needed. She believes that an increase of two to three times may be all that’s needed in order for approval, however.
Rough waters for Sarepta Therapeutics (SRPT)
Analysts are all over the map in terms of ratings on Sarepta Therapeutics Inc (NASDAQ:SRPT). For example, Janney analysts have a Neutral rating but raised their price target from $18 to $25 per share following the FDA news. On the other hand, Jefferies analysts have an Underperform rating and $7 per share price target, as they don’t see much chance of Promovi receiving FDA approval. Their take on the deal announced this week is that the agency is granting one more chance to Sarepta to demonstrate that its drug works.
JPMorgan has an Underperform rating and $10 price target, while Leerink has an Underperform rating and $5 price target. On the extreme bullish side, we have Oppenheimer with an Outperform rating and $60 per share price target, as the firm’s analysts believe the FDA is already fairly certain that accelerated approval is warranted for Sarepta Therapeutics’ drug.
Volatility in the stock has been exceptionally high of late, and 24/7 Wall Street posits that the reason analyst ratings and price targets vary so much is become of this volatility as the stock has punished longs and shorts alike. Short interest in the company has skyrocketed over the last few months as about 22.6 million shares were out on loan as of May 13, compared to only 10 million shares at the beginning of the year.
Shares of Sarepta Therapeutics Inc (NASDAQ:SRPT) skyrocketed 22.55% to close at $19.67 on Tuesday.