- Usually analysts are just cheerleaders, but Jefferies' Gena Wang declines to jump on the bullish bandwagon related to Sarepta Therapeutics (SRPT +5%) and its Duchenne muscular dystrophy candidate, eteplirsen. Shares have rallied 85% despite a negative Ad Comm vote on Monday. Punters are counting on the FDA to yield to the political pressure and override the Committee's vote despite the absence of proof that the drug works. Its action date is May 26.
- Ms. Wang has downgraded the stock to Underperform (Sell) with a $7 price target saying there is virtually no chance of approval because the clinical evidence isn't there to support efficacy.
- TheStreet's Adam Feuerstein, however, remains optimistic about the FDA override, citing encouraging comments from senior agency officials who, like everyone in attendance, appeared moved by the comments from 52 attendees, including children with DMD and their parents and caregivers. Considering eteplirsen's benign safety profile, it could happen, although without evidence of efficacy it will set an uncomfortable precedent for the FDA (political pressure to approve insufficiently-vetted cancer therapies, for example).
- Sarepta investors will need to hold on to their hats over the next several weeks. It will undoubtedly be a white-knuckle ride.