Back to top

Image: Bigstock

Here's Why Sarepta Stock is Up More Than 60% So Far in 2017

Read MoreHide Full Article

Shares of Sarepta Therapeutics, Inc. (SRPT - Free Report) have been rising since the beginning of this year. This biotech company is up 64.7% so far this year, outperforming the 15.6% increase registered by the industry during this period.

Let’s analyze the factors that have driven the rally so far.

The company’s Exondys 51 is the first drug approved for the treatment of duchenne muscular dystrophy (DMD) in the United States. It was approved in September last year. Exondys 51 sales have witnessed an impressive rise so far this year. Sarepta registered sales of $51.4 million in the first half of 2017. The company, based on the positive trend, increased the 2017 sales outlook from $95 million to the range of $125 million to $130 million in its second quarter earnings press release.

Exondys 51 is a RNA-based therapy for treating DMD, which is a fatal genetic disorder affecting the muscles in children around the world. There is a significant unmet need for this indication and Exondys 51 has the potential to address 13% of the total patient population. Meanwhile, the drug is under review in Europe.

Sarepta has other pipeline candidates, which are being developed for the treatment of DMD, which target other genes. Two late stage studies are currently ongoing.

The company has also collaborated with Catabasis Pharmaceuticals, Inc. and French company Genethon for developing solo and combination drugs for the treatment of DMD.

In a bid to develop drugs beyond DMD, Sarepta signed a collaboration agreement with Summit Therapeutics to acquire the rights to latter’s utrophin modulator pipeline. The collaborations also generate revenues for Sarepta in the form of milestone payments.

The settlement of the patent litigation with BioMarin Pharmaceutical Inc. (BMRN - Free Report) in July 2017, pertaining to exon skipping technology used in DMD therapies was also a positive. Without this settlement, BioMarin could have restricted Sarepta from commercializing Exondys in certain jurisdictions. However, the settlement cost Sarepta a one-time payment of $35 million and also future milestone and royalty payments.

However, Sarepta’s dependence on a single product, Exondys 51, for near-term growth is concerning. Lower-than-expected sales will be a setback for the company. Also, there are several companies developing RNA-based therapies for DMD like Pfizer, BioMarin, PTC Therapeutics, Inc. (PTCT - Free Report) to name a few.

Sarepta has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


BioMarin Pharmaceutical Inc. (BMRN) - free report >>

Sarepta Therapeutics, Inc. (SRPT) - free report >>

PTC Therapeutics, Inc. (PTCT) - free report >>

Published in