Morgan Stanley says Elevidys label unlikely to have near-term impact on Catalent

After the FDA granted accelerated approval of Sarepta’s (SRPT) Elevidys for use in ambulatory DMD patients 4-5 years of age, Morgan Stanley analyst Tejas Savant reminded investors that Catalent (CTLT) is currently Sarepta’s sole CDMO partner for manufacturing SRP-9001, with Thermo Fisher’s (TMO) Patheon set to be added to the mix in the quarters ahead. While it is “theoretically possible” that Sarepta could temporarily pull back on orders in light of a narrower age-restricted label, the firm thinks this is unlikely to have a meaningful near-term impact on Catalent’s FY24 revenue, especially given that the EMBARK trial readout should enable a non-age-restricted label, if successful. The firm has an Overweight rating and $52 price target on Catalent shares.