Ahead of the Parent Project Muscular Dystrophy 2019 annual conference that will take place between June 26-June 30, Piper Jaffray analyst Danielle Brill told investors that given that Pfizer (PFE) is Sarepta's (SRPT) main competitor, the findings presented could have "meaningful read-through" to the latter. Further, the analyst argued that any indication that Sarepta may have the superior product would "significantly de-risk" the stock.
PFIZER DUCHENNE DATA READ-THROUGH: Piper Jaffray's Brill noted that Pfizer will be presenting initial patient data with its micro-dystrophin DMD gene therapy at the PPMD conference. Given that Pfizer is Sarepta's main competitor, the analyst thinks the findings could have "meaningful read-through" to Sarepta. Moreover, any indication that Sarepta may have the superior product would "significantly de-risk" the stock, she contended. While Brill ultimately believes there is room for two DMD gene-therapy players, timelines will become a primary focus should the two data-sets appear in-line, as being first to market will be "extremely critical," especially in DMD where she expects a significant bolus effect as patients are desperate for treatment options.
Overall, the analyst told investors that she expects Pfizer's update to be a net positive for Sarepta and remains bullish into the competitor's data. While she thinks it is possible Sarepta's gene therapy will appear superior to Pfizer's, data-sets appearing in-line or even Sarepta's data looking inferior, Brill believes an inconclusive comparison is the most likely outcome as Pfizer reportedly plans to present MD expression measurements quantified by mass-spectroscopy. The FDA's "gold standard" assay is western blot, and it is impossible to accurately cross compare data generated by two unique assays, she contended. The analyst still sees upside for Sarepta in this scenario, as not showing micro-dystrophin expression measured by western blot will likely signify to the Street that Pfizer is "hiding something." Brill has an Overweight rating and $208 price target on Sarepta's shares.
SAREPTA STILL IN 'POLE POSITION': Also keeping an Overweight rating on Sarepta's shares ahead of Pfizer's presentation of data from its ongoing Phase 1b clinical trial evaluating microdystrophin-AAV9 gene therapy PF-06939926, JPMorgan analyst Anupam Rama told investors that he continues to believe Sarepta is in "the pole position" in the micro-dystrophin space and the burden lies with the competition - both Pfizer and Solid Biosciences (SLDB) – to present compelling data. Relating to Sarepta, more and more, it appears the debate revolves around what the potential impact of PF-06939926 mass spectrometry data could mean to the shares, Rama noted. However, the analyst maintains his view that it will be difficult to make strong comparisons on mass spectrometry alone.
PRICE ACTION: In Monday morning trading, shares of Sarepta have dropped about 1% to $128.30.
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