Pharmaceutical companies generally are involved in the lengthy process of getting their drug candidates to market through clinical trials. There is a fair amount of risk to a great amount of risk involved, as with biotech companies, should a study come back negative or should a candidate not be approved. Conversely, if a drug is approved or passes a clinical trial, there can be massive upside.
The long and short of the matter is that U.S. Food and Drug Administration (FDA) rulings can make or break these companies.
24/7 Wall St. has collected several big FDA decisions that should be coming up in the June quarter and added some color, along with the trading range and price target.
Note that, due to many outside and internal factors, there are no assurances that the dates will remain static. Some date changes are positive developments, and some can be disasters if a company is not deeply financed.
As a side note about the Prescription Drug User Fee Act (PDUFA): a Priority Review designation is granted to medicines that the FDA determines have the potential to provide significant improvements in the treatment, prevention or diagnosis of a disease.
Sarepta Therapeutics Inc. (NASDAQ: SRPT), despite facing setbacks earlier this month with an FDA panel, is still going forward with its PDUFA date later this month (May 26). This has the potential to make or break Sarepta. The problem that it faced earlier was that Sarepta did not live up to FDA guidelines in this trial, and the company was ultimately questioned over it.
The FDA panel voted against recommending it for approval, although the patients within the trial pleaded for its recommendation. With that said, this PDUFA date will signal if these pleas were heard, and should the decision go one way or the other, we can expect a massive move within the stock.
Jefferies recently issued a mere $7 price target. Its research call in the first week of May said:
We see likely a new eteplirsen Phase 3 study would be required for approval and low probability of accelerated approval & 55% probability of positive Phase 3 data and launch by year-end of 2020 for eteplirsen in DMD… Eteplirsen should take meaningful market share given good safety profile if approved.
Shares of Sarepta closed Friday at $17.70, with a consensus analyst price target of $17.92 and a 52-week trading range of $8.00 to $41.97.