Sarepta Restructures Debt, Plans to Sell Stake in Arrowhead Pharmaceuticals

Sarepta has reached agreements to remove $700 million from its debt pile due in 2027 by exchanging convertible notes for new notes, shares, and cash. The transactions will strengthen Sarepta's financial position and balance sheet flexibility, easing concerns about its ability to repay debt and meet obligations. The company's Elevidys gene therapy sales outlook remains uncertain following patient deaths and FDA requests.

Sarepta Therapeutics, Inc. (NASDAQ: SRPT) has taken significant steps to strengthen its financial position by announcing a series of transactions aimed at reducing its debt load. The company has entered into agreements to exchange approximately $700 million in aggregate principal amount of its 1.25% Convertible Senior Notes due 2027 for a combination of new 4.875% Convertible Senior Notes due 2030, shares of its common stock, and cash [1]. This debt restructuring is part of the company's strategy to manage its total debt load of $1.36 billion while maintaining healthy liquidity, with a current ratio of 2.89.

The new convertible notes, unsecured senior obligations set to mature on September 1, 2030, carry a 4.875% annual interest rate, payable semiannually beginning March 1, 2026. Holders of the existing notes will receive about $602 million in aggregate principal amount of the new convertible notes, along with shares of Sarepta’s common stock and approximately $123.3 million in cash [1]. The number of shares to be issued will be determined by dividing $110 million by the greater of either the five-day average volume-weighted average price of the stock following the agreement or $16.46 per share.

In addition to the debt restructuring, Sarepta has also announced a private placement agreement with J. Wood Capital Advisors LLC for $20 million in common stock, priced at the greater of the closing price on August 27, 2025, or $14.41 per share [1]. The transaction is expected to close on or about August 28, 2025, pending customary conditions.

These financial maneuvers are aimed at easing concerns about Sarepta's ability to repay its debt and meet its obligations. The company has been grappling with uncertainty surrounding its Elevidys gene therapy sales outlook following patient deaths and FDA requests to stop shipping the therapy [2]. Despite these challenges, Sarepta's CEO Doug Ingram stated that these transactions will significantly enhance the company's balance sheet flexibility and strengthen its financial position [2].

Investors and financial professionals should closely monitor Sarepta's progress in these transactions and their impact on the company's financial health. The company's ability to navigate its current challenges and maintain its pipeline of precision genetic medicines for rare diseases will be crucial in determining its future success.

References:
[1] https://www.investing.com/news/sec-filings/sarepta-therapeutics-announces-700-million-convertible-note-exchange-and-20-million-private-placement-93CH-4204279
[2] https://finance.yahoo.com/news/sarepta-pushes-off-debt-payments-105600419.html