Sarepta Therapeutics Stock Drops on Patient Deaths in FDA Database, Says RBC Capital

Shares of Sarepta Therapeutics (NASDAQ: SRPT) took a hit on Friday morning, declining as much as 8% in early trading, following the revelation of patient deaths reported in the Food and Drug Administration's (FDA) Adverse Events Reporting System (FAERS) for the company's controversial Exondys 51 therapy. The FAERS database showed 13 serious events connected to the Duchenne muscular dystrophy therapy, including three patient deaths. However, analysts like Joseph Schwartz from Leerink Partners have stated that these reported issues are generally expected outcomes of a progressive fatal disease like DMD and are not necessarily due to any mechanistic or safety flaws of the drug itself. The reported deaths happened in patients late in the disease, towards the end of their lives, which aligns with the natural progression of DMD.



The market's reaction to the news was relatively muted compared to previous instances of adverse events reported for other biotechnology companies. On Friday, Sarepta Therapeutics' shares recovered and closed down only 2.9%. This reaction is in contrast to other instances where adverse events have led to more significant market reactions. For example, in 2017, shares of Biogen Inc. fell by more than 20% after the company announced that it would discontinue development of its experimental Alzheimer's drug, aducanumab, due to disappointing trial results. Similarly, in 2018, shares of Celgene Corporation fell by more than 10% after the company announced that it would discontinue development of its experimental multiple myeloma drug, ozanimod, due to safety concerns. In the case of Sarepta Therapeutics, the relatively mild market reaction may be due to the fact that the reported deaths happened in patients late in the disease, towards the end of their lives, and were generally expected outcomes of a progressive fatal disease like DMD.



RBC Capital Markets analyst Brian Abrahams recently downgraded Sarepta Therapeutics' stock rating from Outperform to Sector Perform, citing investor sentiment, communications from the company, and observations of the FDA's public statements. The analyst also revised the firm's price target for the biopharmaceutical company, setting it at $142, a decrease from the previous target of $157. Despite the downgrade, Abrahams acknowledged that holding Sarepta's stock is still advisable, suggesting that investors might want to consider seeking a more opportune moment to increase their positions in the company, particularly as the PDUFA date approaches.

In conclusion, while the recent news of patient deaths reported in the FDA's Adverse Events Reporting System (FAERS) for Sarepta Therapeutics' Exondys 51 therapy has raised concerns about the drug's safety, analysts like Joseph Schwartz from Leerink Partners believe these issues are generally expected outcomes of a progressive fatal disease like DMD and are not necessarily due to any mechanistic or safety flaws of the drug itself. The market's reaction to the news was relatively muted, and RBC Capital Markets analyst Brian Abrahams recently downgraded the company's stock rating but still advises holding the stock. As the company continues to develop and market its other products, such as VYONDYS 53 and AMONDYS 45, investors should monitor the situation closely and consider the potential long-term investment potential of Sarepta Therapeutics.