SRPT Plummets 13% Amidst Clinical Trial Fallout: A Biotech Storm Unfolds

Summary
• Sarepta Therapeutics (SRPT) plummets 13.43% intraday, trading at $19.02 as of 15:28 ET
• Intraday range: $16.86 low to $19.08 high, marking a 204 million turnover
• Third patient death in Elevidys trial sparks regulatory scrutiny and investor panic
• Restructuring efforts and cost-cutting boosted shares 20% on Thursday, now undone by bearish news

Shares of Sarepta Therapeutics (SRPT) are in freefall after a third patient death linked to its gene therapy Elevidys triggered regulatory alarm and investor exodus. The stock’s intraday collapse—its worst in over a decade—highlights mounting risks in gene therapy development and regulatory uncertainty. With the biotech sector already volatile, SRPT’s sharp drop raises questions about the long-term viability of its flagship drug and the broader implications for gene therapy pipelines.

Third Patient Death in Elevidys Trial Sparks Regulatory Scrutiny and Investor Panic
The collapse in SRPT’s stock price follows a Bloomberg report revealing a third patient death in a clinical trial for Elevidys, Sarepta’s gene therapy for muscular dystrophy. The latest fatality—a 51-year-old man who died from acute liver failure—has intensified regulatory scrutiny and cast doubt on the drug’s safety profile. Earlier this year, two teenage boys died from liver failure after receiving Elevidys, prompting the company to add a liver failure warning label and halt development of several gene therapies. Despite a restructuring plan to cut $400 million in costs and a 20% intraday rally on Thursday, the latest news has overwhelmed investor sentiment, erasing recent gains and sending the stock to its lowest level since 2016.

Biotech Sector Volatility Intensifies as SRPT Dives
The biotech sector, already grappling with regulatory headwinds, saw heightened volatility as SRPT’s collapse amplified sector-wide jitters. Amgen (AMGN), the sector’s leading performer, edged down 0.29%, reflecting broader caution. While SRPT’s drop is driven by specific clinical trial risks, the sector’s mixed performance underscores investor concerns over gene therapy safety and regulatory scrutiny. The biotech ETF (XBI) remains a key barometer for sector resilience amid such shocks.

Options Playbook: Navigating SRPT’s Volatility with Strategic Contracts
• RSI: 71.01 (overbought) • MACD: -3.44 (bearish divergence) • 200D MA: $86.39 (far above current price) • Bollinger Bands: $16.09–$21.16 (price near lower band) • Implied Volatility: 100%+ (elevated)

SRPT’s technicals and options chain signal a high-risk, high-reward environment. With the stock near its 52W low and Bollinger Bands tightening, short-term volatility is likely to persist. The key support level at $16.86 (intraday low) and resistance at $19.08 (intraday high) frame a narrow trading range. Aggressive short-term traders may consider options strategies to capitalize on continued volatility.

• SRPT20250725P18 (Put): Strike $18, Expiration 7/25, IV 109.59%, Delta -0.32, Theta -0.03, Gamma 0.116, Turnover $35,508
High leverage (26.53%) and elevated IV make this put contract ideal for a 5% downside scenario. Projected payoff: $1.02 per share (1100% gain).
• SRPT20250725P19.5 (Put): Strike $19.5, Expiration 7/25, IV 132.26%, Delta -0.50, Theta -0.03, Gamma 0.107, Turnover $1,420
Strong theta decay and moderate gamma position this put for a sharp drop. Projected payoff: $0.47 per share (385% gain).

Given SRPT’s technical breakdown and regulatory risks, the SRPT20250725P18 put offers a compelling short-term play. If $16.86 support fails, aggressive bears may consider the SRPT20250725P19.5 for a deeper decline. However, traders should monitor Amgen’s (AMGN) -0.29% move as a sector barometer.

Backtest Sarepta Stock Performance
The backtest of SRPT's performance after a -13% intraday plunge shows mixed results. The 3-day win rate is 49.68%, the 10-day win rate is 48.05%, and the 30-day win rate is 45.78%. While there is a higher probability of a positive return in the short term, the overall performance is slightly negative, with a maximum return of only 0.22% over 30 days.

SRPT at Critical Juncture: Watch for Regulatory Clarity and Strategic Entry Points
Sarepta’s freefall underscores the fragility of gene therapy pipelines amid safety concerns. The stock’s technical breakdown and regulatory scrutiny suggest further near-term weakness, but a rebound could follow if the company navigates the crisis with transparent updates. Investors should monitor Amgen’s (AMGN) -0.29% dip for sector clues. For now, the SRPT20250725P18 put offers a high-leverage, high-IV bet on a 5% downside. Traders are advised to brace for regulatory updates or mid-stage data releases, which could reset the stock’s trajectory.