Evercore downgrades Sarepta, says path to expand Elevidys label unclear

Evercore ISI analyst Gavin Clark-Gartner downgraded Sarepta to In Line from Outperform with a price target of $139, down from $151, after DMD gene therapy Elevidys received accelerated approval yesterday in the subset of 4-5 year old ambulatory boys. While attention will begin to shift to the launch of this product, and the firm notes that its estimates this year are “a bit above consensus,” it calls the readout of their confirmatory phase 3 trial in Q4 this year the “bigger event to watch.” Evercore says that not only will Phase 3 data be needed to keep the drug on the market, but Sarepta will also need positive data to expand the label. The firm is moving to the sidelines since it “can’t get comfortable” with the Phase 3 outcome and argues that the path to expand the label “isn’t that clear,” the analyst tells investors.