Sarepta Therapeutics Downgraded to Sell Amid Elevidys Safety Concerns

Citi analyst Yigal Nochomovitz maintains a Sell rating for Sarepta Therapeutics with a $14.00 price target due to concerns over the safety profile of Elevidys, including a high hospitalization rate for Acute Liver Injury and two treatment-related fatalities. The analyst also cites limitations in the FAERS database and the absence of post-approval efficacy data from the EMBARK study, as well as the return of Vinay Prasad to the FDA, which could lead to regulatory challenges.

Sarepta Therapeutics (SRPT) continues to face significant challenges as analysts maintain a cautious stance on the company's stock. Citi analyst Yigal Nochomovitz recently issued a Sell rating on Sarepta Therapeutics, setting a price target of $14.00, due to a combination of factors related to the safety and risk profile of the company's Elevidys treatment [1].

Elevidys, intended for the treatment of Duchenne muscular dystrophy, has been the subject of considerable scrutiny. The hospitalization rate due to Acute Liver Injury (ALI) remains high, at approximately 5-6%, and there have been two treatment-related fatalities. These issues have raised concerns about the drug's safety profile [1]. Additionally, the Food and Drug Administration's Adverse Event Reporting System (FAERS) database has limitations in accurately reflecting Elevidys' safety profile, and the absence of post-approval efficacy data from the EMBARK study adds to the uncertainty [1].

Moreover, the return of Vinay Prasad to the FDA, who previously supported a marketing pause for the drug, has raised concerns about potential regulatory challenges [1]. These factors collectively suggest a high-risk environment for Sarepta Therapeutics' stock, leading to Nochomovitz's Sell recommendation.

On July 24, 2025, the European Medicines Agency (EMA) recommended the refusal of the marketing authorization for Elevidys, further exacerbating Sarepta's challenges. This decision followed a pivotal trial involving 125 children ages 4 to 7, which failed to demonstrate significant improvements in movement abilities with Elevidys compared to a placebo [2]. The EMA concluded that the differences in the change of North Star Ambulatory Assessment (NSAA) scores between the two groups were not statistically significant.

The regulatory setback comes amidst a securities class action lawsuit alleging that Sarepta made misleading statements about the prospects and development of Elevidys. The complaint alleges that Sarepta conditioned investors to believe the therapy was ready for wider use without disclosing several key facts, including significant safety risks and inadequate clinical trial protocols [2].

Sarepta Therapeutics is also facing a workforce reduction of approximately 36% (500 employees) and a restructuring aimed at saving about $400 million annually [2]. The company has agreed with the FDA to include a black box warning of acute liver injury and acute liver failure in Elevidys' label.

In another report, Deutsche Bank also maintained a Sell rating on Sarepta Therapeutics with a $12.00 price target, reflecting the ongoing concerns about the company's financial health and regulatory challenges [1].

The lead plaintiff deadline for the securities class action lawsuit is August 25, 2025, and national shareholders rights firm Hagens Berman is encouraging Sarepta investors with substantial losses to submit their claims [3].

References:
[1] https://www.tipranks.com/news/ratings/high-risk-concerns-lead-to-sell-rating-for-sarepta-therapeutics-due-to-elevidys-safety-profile-ratings
[2] https://www.globenewswire.com/news-release/2025/08/15/3134377/32716/en/Sarepta-Therapeutics-SRPT-Declines-Again-On-EMA-Recommendation-to-Refuse-ELEVIDYS-Marketing-Authorization-Securities-Class-Action-Pending-Hagens-Berman.html
[3] https://www.globenewswire.com/news-release/2025/08/18/3135187/32716/en/Sarepta-Therapeutics-SRPT-August-25-2025-Lead-Plaintiff-Deadline-Approaching-SRPT-Investors-with-Substantial-Losses-Encouraged-to-Contact-Hagens-Berman.html