Sarepta surges as investors cheer expanded use of gene therapy

Regenxbio

21/06/2024 11:46

June 21 (Reuters) - Sarepta Therapeutics  SRPT.O  shares
surged about 36% in premarket trading on Friday as an expanded
use approval opened up a bigger market in the U.S. for its gene
therapy for patients with Duchenne muscular dystrophy (DMD).
    On Thursday, the U.S. Food and Drug Administration granted
traditional approval for the therapy, Elevidys, in patients four
years and above who can walk, as well as an accelerated approval
for those who cannot. 
    William Blair's Tim Lugo estimated potential sales of
Elevidys to reach $3 billion in 2025 and peak sales of $5
billion in 2027 with the expanded approval.
    "Many patients below age 4 are not yet diagnosed but will
age into the label, opening the DMD market to all current and
future patients who will be eligible for treatment," Lugo wrote
in a note.
    Sales of Elevidys came in at $200.4 million for 2023 and are
expected to rise to $991.91 million this year, as per LSEG data.
    DMD is an inherited progressive muscle-wasting disorder that
affects an estimated one-in-3,500 male births worldwide,
according to the U.S.-based National Organization for Rare
Disorders.
    Given the high demand and acceptable safety, analysts
flagged manufacturing and supply concerns as the only limiting
factors.  
    Elevidys' addressable population is now about 13,000
patients, or nearly 90% of patients in the U.S., according to
BMO Capital analyst Kostas Biliouris. 
    Biliouris expects Elevidys to be the "dominant" DMD gene
therapy with no near-term competition until later than 2027.
    RegenxBio  RGNX.O  is testing a rival gene therapy in early-
to mid-stage, while Pfizer's  PFE.N  treatment recently failed
in a late-stage study. 
    The global treatment market for DMD - including gene
therapies and other drugs - is expected to grow to $11.47
billion by 2034, according to research firm ResearchandMarkets.
    Meanwhile, Sarepta will host a call with investors at 08:30
am ET to discuss the expanded approval. Elevidys is currently
among the most expensive treatments in the world with a list
price of $3.2 million.  
    Sarepta's price-to-tangible-book-value ratio, a common
benchmark for valuing stocks, was 12.52 on Friday, compared with
1.49 for RegenxBio. 

 (Reporting by Mariam Sunny and Bhanvi Satija in Bengaluru)
 ((Mariam.ESunny@thomsonreuters.com;))