Short Interest: 32%
Analyst Predicted Upside: 21%
A year ago, Sarepta Therapeutics (SRPT) was worth a mere 67 cents. Today, it’s trading for almost $40.
Welcome to the world of biotech.
Of course, the company’s Duchenne muscular dystrophy treatment eteplirsen — which is currently in phase 2b trials — can be thanked for the “outperform” and “buy” ratings SRPT has been showered with, including bullish coverage initiated by Robert W. Baird & Co. and Needham just a few months back.
Most recently, eteplirsen trials showed that patients demonstrated continued stabilization of walking ability and were able to walk longer distances than those taking a placebo.
On the flipside, the shorts are admittedly skeptical. And who can blame them? The company is not yet making money, and if one thing goes wrong with the drug’s trials, investors will flee as fast as they’ve piled in. Plus, the same optimistic analysts also have been preparing themselves for an even worse loss in the current quarter and full-year.
Then again, a stock like SRPT hardly trades on fundamentals such as earnings.