Analyst Mitchell Kapoor of H.C. Wainwright reiterated a Sell rating on Sarepta Therapeutics (SRPT – Research Report), retaining the price target of $10.00.
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Mitchell Kapoor has given his Sell rating due to a combination of factors surrounding Sarepta Therapeutics and its product ELEVIDYS. The FDA is currently investigating the drug following two patient deaths related to acute liver failure in non-ambulatory Duchenne muscular dystrophy patients. This investigation raises concerns about the potential need for further regulatory actions, which could include updating the U.S. prescribing information to reflect the risks of liver failure or even withdrawing the drug from the market entirely.
Kapoor also considers the valuation and risks associated with Sarepta. Using a discounted cash flow approach, he estimates the company’s enterprise value at approximately $1.5 billion, with a total firm value of $1.0 billion, leading to a 12-month price target of $10 per share. The potential headwinds from the FDA, combined with the company’s current market challenges, contribute to the Sell rating. Additionally, the skepticism expressed by key FDA figures about the approval of ELEVIDYS further complicates Sarepta’s position.