CAMBRIDGE, Mass. (TheStreet) -- Deutsche Bank biotech analyst Robyn Karnauskas picks up coverage of Sarepta Therapeutics (SRPT) today with a buy rating. What I like best about her initial note is that she's shrugging off the eteplirsen accelerated approval filing controversy that so many of us are fixated on currently (I'm as guilty as the next guy) and focusing instead on the stock's long-term value.
"Fundamentally, timing of approval does not matter in our view," Karnauskas writes, "but we do expect volatility around this decision. Clarity comes in March/April 2013... Bottom line: Sarepta looks effective & safer vs. its competition. There is tremendous upside to increased investor confidence in this technology, as well as expansion into other exons. This makes the company unique in small cap biotech space."
Sarepta could fall to $25 per share if FDA doesn't allow the company to file for accelerated approval of eteplirsen, Karnauskas forecasts. [The stock closed Monday at $33.] I try not to take analyst price targets too seriously. The directional trend is more significant. For Sarepta, what Karnauskas is telling clients (and I agree with her) is panic selling will be bought. If momentum investors and day traders want to pitch Sarepta overboard, there are plenty of fundamental healthcare investors who will gladly buy their shares on the cheap.
This is the same level-headed Sarepta bull thesis articulated earlier this month by healthcare investor and TheStreet contributor Dan Rosenblum:A lot of investors are obsessed with the question of "Will Sarepa Therapeutics receive accelerated approval for eteplirsen?" The focus on the outcome of this month's meeting between Sarepta and FDA is understandable but misses a broader point: Sarepta at its current stock price is undervalued even if eteplirsen accelerated approval is not granted. And what happens if FDA tells Sarepta to file for accelerated approval? No surprise, the stock goes higher. Karnauskas' prediction: $48-71 per share. That's a ridiculously wide price range but again, the direction is all that matters and it's to the upside, sharply. She's right. -- Reported by Adam Feuerstein in Boston. Follow Adam Feuerstein on Twitter.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV