3. Sarepta Therapeutics Inc. (NASDAQ:SRPT)
Market Capitalization as of September 13: $11.89 billion
Number of Hedge Fund Holders: 55
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is a commercial-stage biopharmaceutical company, focused on helping patients through the discovery and development of ribonucleic acid (RNA)-targeted therapeutics, gene therapy, and other genetic therapeutic modalities for the treatment of rare diseases, to advance the field of gene therapy and provide meaningful treatments for patients with rare genetic disorders.
The company focuses on two key treatments for Duchenne muscular dystrophy: Elevidys and phosphorodiamidate morpholino oligomer (PMO) therapies. As one of the few companies developing proprietary exon-skipping technology, it is positioned to expand its valuation by addressing other diseases as well. If Elevidys maintains strong sales and PMO continues to broaden treatment options, the company could experience significant growth.
In June, it obtained approval to make ELEVIDYS available to over 80% of patients living with and dying from Duchenne muscular dystrophy in the US. In the same month, its partner, Roche, announced that the European Medicines Agency had accepted the ELEVIDYS submission for review.
In the second quarter of 2024, it generated $362.93 million in revenue, which recorded a 38.93% year-over-year growth. The earnings per share came out exactly as Street estimates, with a value of $0.07. Net product revenues for ELEVIDYS remain at ~$122 million for the quarter. Net product revenues for the PMO franchise were ~$239 million.
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is poised for significant growth, having successfully launched multiple therapies and achieved cash flow positivity. It has grown at a compound annual growth rate of 150% since 2017. The company is set to expand its market reach and drive revenue growth, making it a top mid-cap stock to buy now.
Bronte Capital Amalthea Fund made the following comment about Sarepta Therapeutics, Inc. (NASDAQ:SRPT) in its Q3 2023 investor letter:
“The FDA is widely considered to be the world’s foremost regulator of drug products, with a stringent and rigorous process for evaluating new marketing applications. Disagreements between the FDA and regulators in other developed markets (such as the European Medicines Agency or the Australian Therapeutic Goods Administration (TGA)) are rare, and when they do occur, it is usually because the FDA has taken a more critical view of the applicant’s evidence.
For a drug to be approved in the US, it must meet the statutory requirement of “substantial evidence of effectiveness” under the Federal Food, Drug, and Cosmetic Act. There are essentially three ways to meet this requirement. Normally, the FDA expects the sponsor to succeed in two “adequate and well-controlled studies”. Alternatively, the sponsor can rely on success from a single study if the results from that study are “very persuasive”, or if they are combined with some sort of independent confirmatory evidence. For the most part lobbying from the cohort of patients, the “patient voice”, has played a relatively minor role in the FDA’s decision-making process and the agency has been prepared to make tough but rational decisions when the “substantial evidence” standard is clearly not met.
However, this was not the case in 2016 when the FDA famously overruled its own review team and external advisory committee to approve Sarepta Therapeutics, Inc.’s (NASDAQ:SRPT) controversial drug for Duchenne muscular dystrophy (Exondys 51). At the time, Sarepta had completed a single phase 2 trial in just 12 patients which, per the FDA Commissioner (Robert Califf) himself, had “major flaws” in both its design and conduct. Ellis Unger, director of the Office of Drug Evaluation at the FDA, declared that the drug was a “scientifically elegant placebo”, and that patients and their families were taking on unknown risks for likely non-existent benefits…” (Click here to read the full text)
