Sarepta and Amarin Make Citis Top 5 List of Small Biotech Stocks – Barron’s

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Countless small- and mid-cap public biotech firms compete for attention and investment dollars. Analysts at Citi Research anointed two of them as Top 5 Buys: Sarepta Therapeutics , which is coming off a difficult year, and Amarin , which is trading more than 500% higher than it did twelve months ago.

Other stocks named to the list earlier include Eloxx Pharmaceuticals (ticker: ELOXX) and PTC Therapeutics (PTCT).

Pullback overblown, Citis Joel Beatty wrote of Sarepta (SRPT). He urged investors to buy Amarin in advance of an coming meeting between the company and the Food and Drug Administration.

Shares of Amarin are up 26.7% so far this year, and 525% over the past 12 months. The company sells a drug called Vascepa that lowers high triglyceride levels in the blood, which can lead to various health problems.

Shares of Sarepta, meanwhile, are down 20.3% so far this year, and have fallen 43.3% over the past twelve months. The company sells a drug called Exondys 51 that treats Duchenne muscular dystrophy. It is among those competing to bring the first gene therapy to market for the disease.

In a note on Monday evening, Beatty wrote that the recent decline in Sareptas stock price is overblown.

He said he believes that the company will ultimately win the race to develop a gene therapy for Duchenne muscular dystrophy, and that the company will get more credit over the next year for gene therapies treating conditions other than Duchenne.

As for Amarin, Beatty wrote that while some investors have been worried about a November meeting between the company and the FDA, there is no reason for concern. The regulator called the meeting to discuss a supplemental new drug application that would allow Vascepa to be prescribed for more indications.

We like owning this stock into the November meeting, which we believe will be innocuous and lead to a risk reduction label for Vascepa, Beatty wrote.

Beatty removed The Medicines Company (MDC) and Minerva Neurosciences (NERV) from his top five list to make room for Amarin and Sarepta.

Shares of Sarepta were flat in early trading on Tuesday. Shares of Amarin were up 0.5%.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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Sarepta and Amarin Make Citis Top 5 List of Small Biotech Stocks - Barron's