Thinly traded nano cap Catabasis Pharmaceuticals (NASDAQ:CATB) is up 12% premarket, albeit on only 1,270 shares, in response to its announcement that data from a Phase 1 study assessing edasalonexent in adult subjects has just been published in the Journal of Clinical Pharmacology. The product candidate is being developed to treat Duchenne muscular dystrophy (DMD).
The results showed that edasalonexent was safe, well-tolerated and inhibited activated NF-kB.
Edasalonexent (CAT-1004) inhibits an protein activated in DMD called NF-kB which plays a key role in inflammation and fibrosis. The company is collaborating with Sarepta Therapeutics (NASDAQ:SRPT) to explore a combination approach of exon skipping and NF-kB inhibition for treating the disorder.
Sarepta Therapeutics (NASDAQ:SRPT) opened sharply lower on what may have been "disappointing" Q4 Exondys 51 sales of $5.4M in Q4, but Adam Feuerstein says the worst-case fears of insurance reimbursement denials and other treatment roadblocks have been allayed.
Don't overlook another important number, he says, and that's 250 patients in the queue for treatment. The boys are working through the insurance reimbursement process, says CEO Ed Kaye in an interview at the JPMorgan Healthcare conference - something that is likely to take 30-90 days.
At $31 per share prior to the open, Sarepta trades at roughly the same level as it stood prior to the drug's approval in September, says Feuerstein. Bears may want to reassess.
Beaten down Sarepta Therapeutics (SRPT +5%) finally perks up. Shares had lost almost 60% of their value since peaking when the FDA approved Duchenne muscular dystrophy (DMD) med Exondys 51 (eteplirsen) in September. Investors have been concerned about whether doctors will prescribe the drug and if insurers will pay for it.
Barron's Ben Levisohn reports that a survey of 49 DMD specialists conducted by Morgan Stanley showed that they expect as many as 30% of available patients to be on the drug in the next three months and 75% by year end despite a very sluggish launch to date (only one patient currently being treated). The data suggests that demand will be driven by physicians as well as patients and the expected ramp-up will finally happen.
First off, will M&A pick up after a sharp drop in deals last year? The consensus says "yes," and an uptick is seen by investors as the most important tailwind for the sector this year. "I don't need to tell you what happens if deals don't materialize."
Drug pricing? Normally, Republican control of Congress and the White House would take this concern off the table, but these aren't normal times.
Biotech investor sentiment? It's lousy at the moment, which could be bullish as there may only be one direction for it to go.
As followers of Sarepta Therapeutics (NASDAQ:SRPT) know, there is a wide variety of views about its valuation and efficacy/market potential for DMD drug Exondys 51 (eteplirsen). Sell-side analysts, for example have fair valuation targets ranging from $32 - 106.
Leerink's Joseph Schwartz rates the stock Market Perform with a $33 (17% upside) price target, down from $55. He says the company has yet to announce the launch metrics it will use (due next month) but he expects the company to fall short of expectations, especially considering that consensus estimates imply that Exondys 51 will be one of the biggest orphan drug launches in history. He adds that payers have indicated a "wide range of reimbursement behavior" from outright denials to more accommodative positions.
JPMorgan's group rates it Overweight with a $40 (42% upside) price target despite negative sentiment on the company's business and mixed feedback from payers. They expect the stock to be range-bound in H1 2017 with a possible rally thereafter once market dynamics are better known.
Goldman Sachs initiates coverage on Sarepta Therapeutics (NASDAQ:SRPT) with a Neutral rating and $40 (33% upside) and a "wait and see" attitude on the Exondys 51 launch.
The analysts cite "one of the steepest" launch curves for an orphan drug if consensus estimates are accurate. Their view could change are net price, reimbursement and physician adoption are more clearly known. Six of seven large payors have signed on to reimburse and key opinion leaders should step up, at least in ambulatory patients, since Exondys 51 is the only approved therapy for DMD amenable to exon 51 skipping.
Another potential upside is the implied net price guidance of 55% gross-to-net discount, very conservative by many observers.
Price targets by other shops vary widely, from $32 to $106.
The European Medicines Agency accepts for review Sarepta Therapeutics' (NASDAQ:SRPT) Marketing Authorization Application (MAA) seeking conditional approval of eteplirsen for the treatment of Duchenne muscular dystrophy amenable to exon 51 skipping. The standard review period is 210 days.
As the name implies, conditional approval means that there will be conditions tied to the approval. In this case, Sarepta will most likely have to conduct a post-marketing study to prove eteplirsen's clinical benefit, if the European Commission approves it.
Sarepta Therapeutics (SRPT -4.8%) moves south on light volume in apparent response to a price target cut by Jefferies analyst Gena Wang. She reduced her fair value price to $32 (7% upside) from $46 citing the "slower than expected" Exondys 51 launch. The slower pace is most likely due to the genetic testing required to identify the appropriate DMD patients for the therapy.
Eight shops that recently updated coverage rate the stock at Buy with price targets ranging from $41 - 106.
The FDA's controversial approval of Sarepta Therapeutics' (NASDAQ:SRPT) eteplirsen for the treatment of Duchenne muscular dystrophy (DMD) patients amenable to exon 51 skipping has translated into a difficult path to insurance coverage.
Humana says it will cover the $300K+ cost of therapy only for ambulatory DMD patients. Those who are wheelchair-bound or deteriorate to wheelchair status are apparently out of luck.
Anthem (NYSE:ANTM) has declined to cover it at all because it considers eteplirsen experimental despite the OK from the FDA.
Aetna (NYSE:AET) and Express Scripts (NASDAQ:ESRX) plan to conduct a full clinical review of the drug before deciding to cover. UnitedHealth Group (NYSE:UNH) is considering coverage with a prior authorization while Cigna (NYSE:CI) has only indicated interest in providing coverage.