April 25 Investment Digest Daily Alert
I hope you’re enjoying yesterday’s new Investment Digest issue. Today’s Daily Alert
brings a follow-up on a low-priced pharmaceutical company recommended in
the Digest in past years. Below, Chris Temple says it’s time to take profits on his
wildly successful recommendation.
Sell Alert: Sarepta Therapeutics (SRPT)
SRPT (then called AVI BioPharma, symbol AVII) was recommended by The National
Investor at $1.17 in Investment Digest issue 668, dated April 7, 2010.
“SELL Sarepta Therapeutics, Inc. (SRPT $30 Nasdaq). After spiking back up to
over $40 not long ago, the company’s shares have been weakened for a few reasons.
The F.D.A. has not jumped as fast as some would have liked to give fast-track
approval to Eteplirsen, despite continued good clinical news on the drug’s efficacy to
treat and possibly reverse the effects of Duchenne Muscular Dystrophy.
“Fair or not, this has caused some to begin to wonder what might go wrong with
this fascinating story. Will Sarepta be hobbled by cutbacks in government funding/
support for other of its treatments in the works? If things don’t accelerate, will the
company (which had no trouble selling a boatload of stock last year in the $25 per
share area) have to dilute itself at lower prices, and/or make a deal with a partner
that would likewise hit current equity holders?
“I still love this company; and hope for the sake of ‘Jerry’s kids’ and others that it is
successful. Looking at it today in light of the share price and what could be a longer
process to fruition, however, the odds have increased dramatically that we will
first see meaningfully lower share prices before a big upside. Hindsight being 20-
20 as always, I wish I’d acted on this growing hunch a bit earlier — the good thing is
that SRPT has rewarded all of us; and those who were in at a few bucks a share are
certainly happy!
“Needless to say, I’ll be keeping my eyes on Sarepta. If we get lucky, an overall
selloff for stocks will help take SRPT down to at least the $24 per share or so area
where it double-bottomed back in December and January. Don’t be surprised, if
down the road, I add this company back to my recommended list for a fourth time.”
- Chris Temple, The National Investor, April 24, 2013