Sarepta Therapeutics Inc (NASDAQ:SRPT)

CAPS Rating: 3 out of 5

A biopharmaceutical company developing therapeutic products principally based on third-generation NEUGENE antisense technology.


Player Avatar zzlangerhans (99.85) Submitted: 10/18/2010 12:27:35 PM : Underperform Start Price: $12.09 SRPT Score: +11.19

The latest catalyst to propel the stock of perma-disappointer baby bio AVI BioPharma is a US DoD contract for development of antisense drugs AVI-6003 and AVI-6004 for hemorrhagic fevers. In their press release, the company emphasized the 291M limit of the contract as though they were going to be walking around downtown with the cash in their pocket that afternoon. But in fact, that funding will only be available for the hemorrhagic fever project, is not guaranteed past 80M over the first 18 months, and will be spread out over at least six years. Furthermore, it's far from certain that the project will ever lead to significant revenues for AVI outside of the contract itself. The DoD interest in hemorrhagic fevers is purely as protection from biologic weaponry, and it seems unlikely to me that they will feel the need to have a significant stockpile of a protective agent given the inherent disadvantages of using zoonotic viruses for bioterrorism.As I've mentioned previously, AVI is always breathless about their latest project or pipeline accomplishment that never seems to go anywhere. AVI-4658 looks to be years away from any kind of clinical benefit in muscular dystrophy, with the company still touting histologic success in early phase trials. Their former lead compound, AVI-5126 for stent restenosis, seems to have fizzled out after partner Cook Medical reported that it was ineffective in a clinical trial. The DoD contract is a solid accomplishment, but I believe enthusiasm will fade and AVI stock will sink back below 1.5.

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