Sarepta shares quickly extend drop to 25%

Sarepta shares quickly extend drop to 25%

Sarepta Therapeutics (NASDAQ:SRPT) shares have plummeted further, extending their drop to 25% after the company disclosed another patient death linked to its gene therapy programs. This latest incident follows two previous fatalities involving acute liver failure, which have raised significant safety concerns around the company's products.

The company announced the death of a 51-year-old man with limb-girdle muscular dystrophy type 2D/R3 who died from liver failure after receiving SRP-9004 in the Phase 1 DISCOVERY trial [2]. The death occurred in mid-April 2025 and was disclosed to regulators and trial investigators in an appropriate and timely manner. This incident adds to the growing list of safety concerns surrounding Sarepta's gene therapies, particularly Elevidys (SRP-9001), which is approved for Duchenne muscular dystrophy.

Sarepta's stock has been under significant pressure, falling over 85% in the past year. The latest death has further eroded investor confidence, leading to a sharp decline in the stock price. The company has responded by announcing a significant restructuring, including a workforce reduction of approximately 36% and pausing several pipeline programs. These measures are expected to generate $400 million in annual cost savings by 2026 and beyond [1].

Despite these challenges, Leerink Partners has maintained its Outperform rating on Sarepta stock, citing the potential for generating discounted cash flows [2]. However, other analysts have expressed varied opinions. Cantor Fitzgerald maintained a Neutral rating, highlighting deep concerns about Elevidys’s safety and projecting rocky sales ahead. H.C. Wainwright maintained a Sell rating, noting a decline in Elevidys revenues and suggesting peak U.S. revenues might have already been reached [2].

Sarepta's financial position remains precarious. The company reported preliminary second-quarter Elevidys sales of $282 million, representing a 25% quarter-over-quarter decline. Additionally, the company's cash position has been rapidly depleting, with negative free cash flow of $695 million in the last twelve months [1].

Goldman Sachs maintains a Neutral rating and $27.00 price target on Sarepta, citing ongoing risks including demand uncertainty amid caregiver hesitancy, potential impacts on ambulatory patients, regulatory alignment on the proposed non-ambulatory study, competition from other companies, and upcoming confirmatory exon-skipper data next year [1].

In light of these developments, Sarepta Therapeutics faces an uphill battle to restore investor confidence and maintain its financial stability. The company must navigate a complex landscape of regulatory scrutiny, safety concerns, and financial challenges to ensure its long-term viability.

References:
[1] https://in.investing.com/news/analyst-ratings/sarepta-stock-faces-challenges-as-fda-adds-black-box-warning-for-elevidys-93CH-4918010
[2] https://ng.investing.com/news/analyst-ratings/leerink-partners-maintains-outperform-rating-on-sarepta-stock-despite-third-gene-therapy-death-93CH-2014430