Mizuho cuts Sarepta target, sees buying opportunity after selloff

Mizuho lowered the firm’s price target on Sarepta (SRPT) to $40 from $85 and keeps an Outperform rating on the shares. While the news of a second case of fatal acute liver failure due to Elevidys treatment is concerning, the shares trading down 42% “is a buying opportunity,” the analyst tells investors in a research note. At current levels, the firm believes the stock price has zero value for Elevidys or the pipeline and notes the stock trades below its $25 per share valuation for the exon-skipping business alone. Based on positive key opinion leader feedback, Mizuho believes Elevidys will still be used to treat ambulatory Duchenne muscular dystrophy patients. The firm did, however, cut its ambulatory sales forecast by 25% and now model zero sales, versus $400M annually previously, for the non-ambulatory setting as Sarepta suspended shipments for non-ambulatory commercial patients.