Sarepta Stock Plunges 9.56% Amid FDA Gene Therapy Concerns

On July 21, 2025, Sarepta's stock experienced a significant drop of 9.56% in pre-market trading, reflecting the market's response to recent developments surrounding the company's gene therapy, Elevidys.

Sarepta Therapeutics has decided to continue shipping its gene therapy, Elevidys, for Duchenne muscular dystrophy despite an informal request from the Food and Drug Administration (FDA) to halt shipments following patient deaths. This decision has sparked investor concerns and regulatory scrutiny, as the FDA has expressed safety concerns and requested a voluntary halt to all shipments of Elevidys.

The FDA's actions have led to a strategic rift with Sarepta, as the company has refused to comply with the request. This stance has introduced uncertainty about the timeline for label expansion or new indications, as the phase 3 ENVISION trial has been paused to evaluate an enhanced immunosuppression regimen. Investors are closely monitoring the situation, as the FDA's potential to impose further restrictions could impact Sarepta's financial performance and market position.

Beyond the immediate regulatory hurdles, Sarepta faces long-term risks related to the credibility of its AAVrh74 platform. The revocation of the platform designation by the FDA signals potential safety concerns, which could force the company to pivot to alternative vectors or invest heavily in de-risking the AAVrh74 serotype. This situation has led to a restructuring plan, including a significant workforce reduction and cost savings target, to stabilize cash reserves and navigate the crisis.

Investors are advised to consider hedging their exposure through options or diversifying into biotech peers with more mature gene therapy platforms. The recent drop in Sarepta's stock price reflects market skepticism but also presents an entry point for contrarian investors who believe the company can navigate the crisis. The company's ability to execute its restructuring and pivot to its siRNA platform will be crucial in determining its long-term value.