Leerink downgrades Sarepta to under perform

Leerink has downgraded Sarepta Therapeutics (NASDAQ:SRPT) to “under perform” and slashed its price target to $5 from $13. The stock closed at $17.92 on Monday.

Sarpeta has been a confounding stock for which to forecast each twist and turn, but now going into the PDUFA of May 26, 2016, we believe investors have the most information yet available to ascertain investability in Sarepta,” writes analyst Joseph Schwartz.

“While the FDA is at liberty to make its own decision, we believe the agency’s interpretation of empirical data for eteplirsen (for exon 51 skip-amenable mutations in Duchenne’s muscular dystrophy/DMD) will mirror the recent negative panel, which was critical despite powerful human testimonies,” he added.

Mr. Schwartz said that with a need for additional capital to fund the completion of a questionable Phase 3 study, “we believe Sarepta shares will be a show-me story and underperform.”