Sarepta Plunges 14.4%—Can This Biotech Giant Weather the FDA Storm?

Summary
• Sarepta’s (SRPT) stock crashed to an intraday low of $10.415, hitting a 9-year nadir.
• FDA scrutiny over Elevidys’ safety profile triggers a 36% freefall in recent sessions.
• A securities class action lawsuit accuses Sarepta of misleading investors on Elevidys risks.
• Turnover surged 24% as traders scramble to assess regulatory fallout.

Sarepta Therapeutics faces an existential crisis as the FDA demands additional trials for its flagship gene therapy, Elevidys. The stock’s 14.4% intraday plunge reflects investor panic over three patient deaths linked to the treatment, regulatory uncertainty, and a collapsing market valuation. With the biotech sector’s leader Amgen (AMGN) trading flat, Sarepta’s turmoil underscores the fragility of high-risk, high-reward gene therapy plays.

FDA Demands Additional Elevidys Trials, Sparking Sharp Downturn
Sarepta’s collapse stems from the FDA’s demand for additional clinical trials to validate Elevidys’ safety profile, following three patient deaths from acute liver failure. The agency’s scrutiny has paused shipments of the gene therapy, while a securities class action alleges Sarepta concealed risks. Analysts warn this could set a 'dangerous precedent' for gene therapy approvals, forcing companies to prove safety in large-scale trials—a costly and time-consuming hurdle. The stock’s freefall mirrors the broader biotech sector’s risk profile, where regulatory overreach can swiftly erase years of gains.

Options Volatility Soars: Strategic Plays Amid Regulatory Uncertainty
• MACD: -3.87 (negative momentum), RSI: 37.37 (oversold), Bollinger Bands: Lower band at $12.91 (current price near floor).
• 200D MA: $84.19 (far above current price), Support/Resistance: 30D at $17.95–18.47 (far out of reach).

Technical indicators signal a bearish breakdown. Sarepta’s price is trapped below its 30D and 200D moving averages, with RSI in oversold territory. The options chain reflects panic, with implied volatility ratios (IV) spiking to 166%–255%.

Top Option #1: SRPT20250801C12
• Code: SRPT20250801C12, Type: Call, Strike: $12, Exp: 2025-08-01
• IV: 166.61% (skyrocketing volatility), Leverage: 8.75%, Delta: 0.585 (moderate sensitivity), Theta: -0.0977 (rapid time decay), Gamma: 0.1216 (high sensitivity to price swings), Turnover: $101,170 (liquid).
• Payoff (5% downside): $10.83 → max(0, 10.83 - 12) = $0. This call is a speculative bet on a rebound, but time decay and volatility collapse could erase value.

Top Option #2: SRPT20250801P12
• Code: SRPT20250801P12, Type: Put, Strike: $12, Exp: 2025-08-01
• IV: 209.08% (extreme volatility), Leverage: 8.45%, Delta: -0.408 (moderate bearish exposure), Theta: -0.0553 (slow decay), Gamma: 0.0965 (moderate sensitivity), Turnover: $34,504 (liquid).
• Payoff (5% downside): $10.83 → max(0, 12 - 10.83) = $1.17. This put offers short-side exposure with a 10%+ potential return if Sarepta drops further.

If $12 breaks, SRPT20250801P12 offers short-side potential. Aggressive bulls may chase SRPT20250801C12 into a regulatory rebound.

Backtest Sarepta Stock Performance
The backtest of SRPT's performance after a -14% intraday plunge shows mixed results. The 3-day win rate is 48.05%, the 10-day win rate is 49.67%, and the 30-day win rate is 45.60%. However, the returns over these periods are negative, with a -0.56% return over 3 days, a -1.14% return over 10 days, and a -3.55% return over 30 days. The maximum return during the backtest was -0.12%, which occurred on day 30, indicating that the stock did not recover fully even in the longer term.

Sarepta at Critical Crossroads: Prepare for Regulatory Fallout
Sarepta’s collapse is far from over. The FDA’s demand for additional trials could delay Elevidys’ return for months or years, while the securities class action looms as a reputational and financial blow. Short-term, the stock is trapped in a bearish channel, with support at $10.41 (intraday low) and resistance at $12.91 (Bollinger lower band). Amgen’s flat performance as sector leader highlights Sarepta’s isolation. Investors should monitor FDA updates and Amgen’s stability as a sector proxy. Watch for $10.41 breakdown or regulatory clarity.