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Sarepta Therapeutic shares waver amid concerns over 2017 guidance


Sarepta Therapeutics CEO, Ed Kaye
Source: Sarepta Therapeutics
Sarepta Therapeutics CEO, Ed Kaye

Shares of Sarepta Therapeutics pared losses during early afternoon trading Wednesday as Wall Street digested the biopharmaceutical company's updated guidance.

For 2017, Sarepta said it expects revenue to "exceed $80 million," which was notably below a FactSet consensus estimate of $114 million.

The stock slid sharply in morning trading before rebounding to climb about 1 percent higher Wednesday.

"It is clear that the Street found 2017 guidance to be underwhelming," William Blair analyst Tim Lugo wrote in a Tuesday note to investors. "While it is not standard to provide guidance at such an early stage of the launch, we believe the company is being conservative."

Cowen and Co. analyst Ritu Baral echoed Lugo's sentiment, writing to investors Tuesday, "We conclude that [$80 million] constitutes a floor to the true 2017 guidance range." Baral said he sees this "worst-case scenario" as "highly unlikely."

The muscular dystrophy drug developer reported a fourth-quarter loss of $1.62 per share on revenue of $5.42 million.

Sarepta said the loss for the quarter was primarily driven by an expense recorded in connection with Summit Therapeutics, to which Sarepta paid $40 million for a licensing agreement.

Summit and Sarepta entered into the collaboration agreement late last year, which granted Sarepta rights in Europe to Summit's drug pipeline, according to a news release.

As of Tuesday's close, shares of Sarepta were up more than 13 percent for the year and have climbed more than 123 percent over the past 12 months.

The stock has lately swung wildly on uncertainty over whether Sarepta's Duchenne muscular dystrophy therapy will receive approval from the Food and Drug Administration.

Sarepta year-to-date performance

Source: FactSet