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Sarepta shares jump 13%, extending Monday's surge on drug approval

Pharmaceutical lab tech
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Shares of Sarepta Therapeutics surged another 13 percent in Tuesday trade after closing nearly 74 percent higher Monday on government approval of its muscular dystrophy drug eteplirsen.

The drug was granted accelerated approval by the Food and Drug Administration and it treats patients with Duchenne muscular dystrophy, a rare, genetic muscle-wasting disease.

Late Monday, the pharmaceutical firm announced in a conference call that the net annual price of the drug will be $300,000.

Edward Tenthoff, senior research analyst at Piper Jaffray, estimated the gross annual price of the drug is about $666,000 a year. While he said it wasn't clear what customer response to the drug pricing would be, Tenthoff said he expected "there will be pushback."

Sarepta did not immediately return CNBC's request for comment.

Tenthoff maintained an "overweight" rating and $64 price target, which would represent a more than 30 percent upside from Monday's close. With the gains of the week so far, Sarepta shares are trading more than 40 percent higher year-to-date.

Sarepta Therapeutics 5-day performance


Analysts cited continued positive momentum, short covering, and commercial opportunity as factors behind Tuesday's intraday share price gain of 13 percent.

According to FactSet, about a third of shares outstanding were sold short, or in speculation of a share price decline.

"I expect continued short covering in the stock in the coming weeks and months. ... If the drug lives up to its expectations I think (the company) gets taken out," said Debjit Chattopadhyay, managing director at Janney Montgomery Scott, which has a "buy" rating on the stock.