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April 16 (Reuters) - Sarepta Therapeutics Inc's shares were set to open 11 percent lower on Tuesday after U.S.health regulators asked for more data to consider its raredisease drug for a faster approval track, but analysts weredivided on whether this was a setback.
Sarepta's stock has nearly tripled in value since lastSeptember, when its drug, eteplirsen, showed promise in treatingpatients with Duchenne Muscular Dystrophy (DMD), a geneticallytransferred muscle-wasting disorder that affects mostly boys.
Some investors were expecting that the U.S. Food and DrugAdministration would grant the drug a faster-than-usual pathwayto approval, possibly including skipping a late-stage trialaltogether, given that there is no existing treatment for thedisease.
At least two brokerages downgraded Sarepta's stock, citingthe possibility that the drug will take longer to reach themarket.
"Although the FDA did not require any additional new studiesat this time, we cannot rule out the possibility that thecurrent study of twelve drug-treated patients remains too smallfor accelerated approval," Janney Capital Markets analystKimberly Lee said.
Leerink analyst Joseph Schwartz said that it is 75 percentlikely that a competing drug, drisapersen, will hit the marketby the first quarter of 2015, earlier than eteplirsen, which hesaid is likely to require a late-stage study to win U.S.approval.
Drisapersen is being developed by GlaxoSmithKline Plc and privately held Dutch drugmaker Prosensa to treatDMD, but has shown some safety issues.
However, Piper Jaffray's Edward Tenthoff hiked his pricetarget on Sarepta's stock by $15 to $50, saying the regulator'srequest boded well for eteplirsen's accelerated approval.
"We now believe that this request indicates an effort by theFDA to find a path to accelerated approval and an increasedlikelihood that Sarepta will be able to file (for marketingapproval) for eteplirsen later this year," said Tenthoff, whobacked his "overweight" rating on the stock.
Edward Nash of Cowen & Co said he was "confident thateteplirsen has a superior clinical profile when compared to thedirect competitor drisapersen."
Janney downgraded Sarepta to "hold" from "neutral," whileLeerink cut it to "market perform" from "outperform." Cowenbacked its "outperform" rating on the stock saying its valuationnever factored in an accelerated approval and only considered itas a potential upside.
The company's shares were trading down 11 percent at $34.92before the bell on Tuesday. (Reporting by Zeba Siddiqui in Bangalore)
