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Panic Has Created Compelling Opportunities for Sarepta Therapeutics Inc (SRPT), bluebird bio Inc (BLUE), Cempra Inc (CEMP): Roth Capital

By Carly Forster

Roth Capital analyst Debjit Chattopadhyay issued a note to investors on August 25 highlighting the recent stock market drop. However, the analyst found several silver linings to the market drop and highlighted long-term opportunities for Sarepta Therapeutics Inc (NASDAQ:SRPT), bluebird bio Inc (NASDAQ:BLUE), Cempra Inc (NASDAQ:CEMP). On average, Chattopadhyay has a 53% success rate recommending stocks and a +17.8% average return per recommendation when measured over a one-year horizon and no benchmark.

Sarepta Therapeutics Inc

Sarepta Therapeutics develops RNA-based therapeutics for the treatment of rare, infectious, and other life threatening diseases.

Sarepta submitted a New Drug Application back in June for eterplirsen, its pipeline drug that treats Duchenne muscular dystrophy (DMD), a genetic degenerative muscle disease. The company was granted Rare Pediatric Disease Designation for eteplirsen on August 21. The FDA accepted Sarepta’s NDA for eterplirsen on August 25 and granted priority review for the drug with a deadline of February 26, 2016.

Debjit Chattopadhyay currently has a Buy rating on Sarepta Therapeutics, noting, “The FDA may have inadvertently signaled eteplirsen NDA acceptance with potential back-to-back panel meetings set prior to Thanksgiving. Sarepta will be initiating enrollment to its second pivotal (randomized study of exon’s 53 and 45) during 2H15 and multiple eteplirsen studies are underway, which puts it significantly ahead of completion.”

Debjit Chattopadhyay has rated Sarepta Therapeutics 23 times since 2014, earning an 87% success rate recommending the company and a +67.9% average return per recommendation when measured over a one-year horizon and no benchmark.

Out of seven analysts polled by TipRanks within the past three months, five analysts are bullish on Sarepta and two are neutral. The average 12-month price target for the company is $43.33, marking a 33% potential upside from where the stock last closed.

bluebird bio Inc

bluebird bio Inc develops gene therapies for severe genetic and rare diseases. The company is expected to announce updates from its immunotherapy program at the 2015 American Society of Hematology Annual Meeting in December.

Chattopadhyay has a Buy rating on bluebird bio, noting, “Based on the submission deadline (August 4th), the abstracts to be released in early October could highlight outcomes from up to 14 patients with follow up ranging from 20 months to four months. Since both -205 and -204 studies are fully enrolled and -206 study is 62% enrolled, additional data (N=34) could be available at the ASH.”

Debjit Chattopadhyay has rated bluebird bio 16 times total since 2014, earning a 63% success rate recommending the stock and a +44.8% average return per recommendation when measured over a one-year horizon and no benchmark.

Out of seven analysts polled by TipRanks within the past three months, all seven are bullish on bluebird bio. The average 12-month price target for the company is $211.10, marking a 68.87% potential upside from where the stock last closed.

Cempra Inc

Cempra develops antibiotics to treat bacterial infections. On August 19, the FDA granted Fast Track Designation to solithromycin intravenous (IV) and capsules, its pipeline drug intended to treat community acquired bacterial pneumonia. Solithromycin is currently in Phase 3 testing and Cempra plans to complete a New Drug Application for the treatment in 2016.

Chattopadhyay currently has a Buy rating on Cempra, citing the Phase 3 study of solithromycin as “a non-inferiority study vs. moxifloxacin. Primary endpoint: Early clinical response rate in the ITT population (72 [±12] hours). Study is fairly balanced: bio-availability; duration of therapy; and higher percentage (50%) PORT III and (25%) PORT IV patients favor solithromycin, in our view. Superiority over moxifloxacin, coupled with pricing strategy would position solithromycin as first-line therapy in CAP.”

Debjit Chattopadhyay has rated Cempra five times total this year, earning a 20% success rate recommending the stock and a -13.3% average loss per recommendation when measured over a one-year horizon and no benchmark.

Out of three analysts polled by TipRanks within the past three months, all three are bullish on Cempra. The average 12-month price target for Cempra is $53,67, marking a 59.26% potential upside from where the stock last closed.