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* Janney cuts Sarepta price target to $41 from $45
* Piper Jaffray raises price target to $50 from $35
* Shares fall as much as 16 percent (Adds another analyst comment; updates share movement)
April 16 (Reuters) - Sarepta Therapeutics Inc's shares fell nearly 16 percent on Tuesday after U.S. healthregulators asked for more data to consider its rare disease drugfor a faster approval track, but analysts were divided onwhether 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 onTuesday, citing the possibility that the drug will take longerto reach the market.
"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.
Schwartz said this would mean that drisapersen would have apermanently higher uptake in U.S. patients since switching costsare higher in such a progressive disease. Schwartz said he nowexpects 53 percent of DMD patients to eventually be ondrisapersen versus 32 percent on eteplirsen.
Drisapersen is being developed by GlaxoSmithKline Plc and privately held Dutch drugmaker Prosensa to treatDMD, but has shown some safety issues.
WBB Securities' Steve Brozak, who until Monday was the onlyone of ten analysts to rate the stock a "sell" rather than a"buy," said the FDA's comments indicated there was no clearregulatory pathway for eteplirsen at this point.
"Obviously, (DMD) patients and the parents of patients wanthope, but the reality is the regulatory agency is not simplygoing to back down," said Brozak, adding that the FDA was likelyto be concerned with the drug's safety given that it has beentested on only 12 patients so far.
He also questioned Sarepta's $1.25 billion market valuation,saying the stock was overvalued.
SOME OPTIMISM PERSISTS
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 down 14 percent at $33.61 in earlytrading on the Nasdaq. (Reporting by Zeba Siddiqui in Bangalore; Editing by SupriyaKurane)
