Sarepta Plunges 18.43%: Can This Biotech Giant Survive the Storm?

Summary
• Sarepta (SRPT) trades at $10.865, down 18.43% from $13.32 at the previous close.
• Intraday range hits $12.97 (high) to $10.415 (low), the 52-week low.
• FDA demands new trials for Elevidys, while a securities class action lawsuit looms.
• Options volatility surges, with 20 contracts trading over 16,000 shares. Sarepta’s collapse reflects a perfect storm of regulatory scrutiny, safety concerns, and legal fallout. The stock’s freefall from $150.48 to $10.415 in a year underscores the gravity of its challenges.

Regulatory Reckoning and Legal Fallout
Sarepta’s 18.43% intraday plunge stems from a confluence of critical developments. The FDA’s demand for new trials for Elevidys, its flagship gene therapy for Duchenne muscular dystrophy, has compounded existing safety concerns. Three patient deaths linked to Elevidys and investigational therapies like SRP-9004 have triggered clinical holds and regulatory skepticism. Meanwhile, a securities class action lawsuit alleges the company misrepresented the risks of its therapies, with investors claiming they were misled about the safety profile of Elevidys. These events have eroded investor confidence, triggering a liquidity crunch as short-sellers and panic-driven sellers flood the market.

Biotech Sector Volatility Amid Safety Scrutiny
Bearish Plays in a High-Volatility Environment
• MACD: -3.87 (below signal line -4.14), RSI: 37.37 (oversold), Bollinger Bands: $12.91 (lower band) < $10.87 (price) < $21.90 (upper band).
• 200D MA: $84.19 (far above price), 52W Low: $10.415 (near current price).
• Options Volatility: Implied volatility (IV) spikes to 155–202.87%, with leveraged puts dominating the chain.
• Top Put: SRPT20250815P10
- Code: SRPT20250815P10, Strike: $10, Expiry: 2025-08-15, IV: 202.87% (extreme volatility), Delta: -0.348, Theta: -0.024, Gamma: 0.067, Turnover: $115,762. Payoff at 5% downside ($10.32): $0.68.
- Leverage: 4.30% (high), IV: 202.87% (extreme), Gamma: 0.067 (moderate sensitivity).
- This put offers aggressive bearish exposure with high leverage and liquidity, ideal for a continuation of the downtrend.
• Top Put: SRPT20250815P11
- Code: SRPT20250815P11, Strike: $11, Expiry: 2025-08-15, IV: 166.01% (high), Delta: -0.436, Theta: -0.026, Gamma: 0.088, Turnover: $18,744. Payoff at 5% downside ($10.32): $0.68.
- Leverage: 5.66% (high), IV: 166.01% (high), Gamma: 0.088 (strong sensitivity).
- This strike balances leverage and liquidity, offering a safer entry for bearish bets amid elevated volatility. Aggressive bears should prioritize SRPT20250815P10 into a breakdown below $10.415.

Backtest Sarepta Stock Performance
The backtest of SRPT's performance after a -18% intraday plunge shows mixed results. While the 3-day win rate is 47.75%, indicating a higher probability of recovery in the short term, the 10-day and 30-day win rates are lower at 49.42% and 45.26%, respectively. This suggests that while SRPT may bounce back in the immediate aftermath of a significant drop, its longer-term performance is more uncertain.

A Critical Juncture: Watch for Legal and Regulatory Catalysts
Sarepta’s freefall reflects a dire crossroads: regulatory skepticism, legal exposure, and a product safety crisis. The stock’s technical profile suggests a continuation of the downtrend, with the 52-week low at $10.415 acting as a critical floor. Investors should monitor the FDA’s response to new trial requests and the outcome of the class-action lawsuit, which could trigger further volatility. Meanwhile, sector leader Amgen (AMGN), down -0.14%, offers a relative safe haven in biotech. For SRPT, the path forward hinges on resolving safety concerns and legal liabilities—until then, the bearish case remains compelling.