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Sarepta (SRPT) Stock Down Despite New $48M Gene Therapy Deal

Sarepta Therapeutics, Inc. SRPT announced a collaboration and license agreement with North Carolina-based biotech company, StrideBio, Inc., to develop vivo adeno-associated viral (AAV)-based therapies for up to eight central nervous system (CNS) and neuromuscular targets. StrideBio is an expert in AAV and capsids. 

Per the deal, Sarepta gains an exclusive license to four targets for CNS disorders for an upfront payment of $48 million in cash and Sarepta stock. StrideBio will also be entitled to some milestone payments as well as royalties on potential sales. StrideBio will lead investigational new drug (IND) enabling research, development and manufacturing for the first four CNS targets. Sarepta will not take care of the candidates’ preclinical development.

Additionally, Sarepta will have an exclusive option to expand the deal to include four additional neuromuscular and CNS targets for an upfront payment of up to $42.5 million plus milestones/royalties. Meanwhile, StrideBio has an option to obtain co-development and co-commercial rights to one of the collaboration targets. Further, Sarepta has committed to invest in StrideBio’s next financing round.

The deal strengthens Sarepta’s position in gene therapies to treat rare diseases.

Shares of Sarepta have lost 10.8% against the industry’s growth of 1.4%. Shares of the company fell 3.6% following the announcement, as investors were not very pleased with the deal.

 

Sarepta Therapeutics, Inc. Price, Consensus and EPS Surprise

 

Sarepta Therapeutics, Inc. Price, Consensus and EPS Surprise

Sarepta Therapeutics, Inc. price-consensus-eps-surprise-chart | Sarepta Therapeutics, Inc. Quote

Zacks Rank & Stocks to Consider

Sarepta currently has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the biotech sector are Alkermes Plc. ALKS, Anika Therapeutics Inc. ANIK and AVEO Pharmaceuticals Inc. AVEO, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’ earnings per share estimates have increased from 36 cents to 52 cents for 2019 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 236.80% on average.  

Anika’s earnings per share estimates have increased from $1.75 to $2.03 for 2019 and from $1.36 to $1.62 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 53.31% on average.

AVEO’s estimates have gone up from a loss of 6 cents to a profit of 1 cent for 2019 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters by 28.34% on average.    

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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