StemCell Therapy

On the heels of research deals with two small biotechs, shares of Sarepta Therapeutics Inc. (NASDAQ:SRPT) hit their all-time high of more than $172 on June 23.

The share price of the Cambridge, Massachusetts-based biopharmaceutical company has doubled since mid-March. It has a market cap of more than $13 billion.

Sarepta has made a host of deals in the past several years that have made gene therapy a key part of its business, which had been dominated by drugs for muscular dystrophy. One of those pacts, with Roche (RHHBY), could be worth more than $3 billion.

Sarepta currently has a half dozen gene therapies in clinical trials, with another six waiting in the wings, according to BioPharma Dive. One of the companys compounds has shown promise in treating a type of muscular dystrophy, a genetic disease that causes weakness and wasting of the muscles in the arms and legs.

A major challenge of gene therapy is immune system reactions. Sarepta, like other developers, uses a type of virus in its therapy that, while effective, may not be able to given more than once because patients can create antibodies to it.

Thats a problem Sarepta is trying to address in its latest deals with privately held Codiak Biosciences and Selecta Biosciences Inc. (NASDAQ:SELB). In both cases, Sarepta has an option to license the biotechs' technology to develop and commercialize its therapies.

The Selecta deal focuses on gene therapies for Duchene muscular dystrophy and certain limb-girdle muscular dystrophies.

A Zion Market Research report said the global demand for the Duchenne muscular mystrophy therapeutics market was valued at approximately $2.4 billion in 2018 and is expected to grow to more than $20 billion by the end of 2025, a compound annual growth rate of more than 36% between 2019 and 2025.

Given the size of the opportunity, its no surprise Sarepta has plenty of competitors vying for a share of the business, including Pfizer Inc. (NYSE:PFE), PTC Therapeutics (NASDAQ:PTCT), FirbroGen Inc. (NASDAQ:FGEN), Roche and Bristol-Myers Squibb Co. (NYSE:BMY).

The two-year deal with Codiak gives Sarepta the right to license its technology for up to five neuromuscular diseases. If Sarepta exercises an option, Codiak will then handle research until right before the candidate goes into human testing. Sarepta will then be responsible for clinical development and commercializing the drug.

In April, the company announced it has resurrected its antiviral program in response to Covid-19. It has a therapy that is meant to block the coronavirus ability to replicate. The treatment will be tested at the U.S. Army Medical Research Institute of Infectious Diseases.

If it works, it will reduce the ability of the virus to replicate and its ability to infect other cells, Sarepta CEO Doug Ingram told Forbes. He cautioned that the drug is at an early stage.

According to CNN Money, the 21 analysts offering 12-month price forecasts for Sarepta have a median target of $192, with a high estimate of $260 and a low $152. The stock is rated a buy.

Disclosure: The author hold positions in Pfizer and Bristol-Myers Squibb.

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Barry Cohen

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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Sarepta Addressing Gene Therapy Issue With Two Acquisitions - GuruFocus.com

This entry was posted on June 26, 2020 at 4:48 pm and is filed under Gene therapy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |