Sarepta Therapeutics Faces Investor Fallout as Schall Law Firm Probes Alleged Fraud

The recent death of a patient undergoing treatment with Sarepta Therapeutics’ (NASDAQ: SRPT) drug ELEVIDYS has ignited a firestorm of legal and financial scrutiny, prompting the Schall Law Firm to launch an investigation into potential securities fraud. This development marks a critical turning point for investors, who now face decisions about whether to join the class action lawsuit or reassess their exposure to the biotech sector’s inherent risks.

The catalyst for the investigation stems from Sarepta’s March 18, 2025, disclosure of a fatal adverse event linked to ELEVIDYS, a treatment for Duchenne muscular dystrophy. The patient, a young individual, suffered acute liver failure following the therapy, a revelation that sent SRPT’s stock plummeting by 27.4%—the largest single-day drop in the company’s history. Closing at $73.54, the stock now trades at a fraction of its February 2025 high of $112.00, reflecting investor disillusionment.

The Schall Law Firm’s probe centers on whether Sarepta made materially misleading statements or withheld critical safety data prior to the incident. Such allegations are not unprecedented in the biotech sector, where companies often balance optimistic clinical trial results with the need to disclose risks that could deter investors. In this case, the firm argues that Sarepta’s failure to adequately disclose the drug’s risks may have artificially inflated its stock price, violating federal securities laws.

For investors, the stakes are twofold: first, the immediate financial loss from the stock’s collapse; and second, the long-term uncertainty surrounding ELEVIDYS’s regulatory and commercial viability. The U.S. Food and Drug Administration (FDA) has already placed a hold on Sarepta’s expanded access program for the drug, pending further review—a move that could delay revenue projections and erode investor confidence.

The legal landscape further complicates matters. Class action lawsuits, such as those being organized by Schall and other firms like Pomerantz LLP, aim to recover losses for shareholders who purchased SRPT stock during the alleged misrepresentation period. Historically, such cases have led to settlements averaging 10–30% of claimed losses, though outcomes depend on the strength of evidence and the company’s ability to defend its disclosures.

Investors must also weigh the broader implications for Sarepta’s pipeline. While ELEVIDYS’s troubles dominate headlines, the company’s other therapies, such as SRP-5003 for limb-girdle muscular dystrophy, remain in earlier stages of development. However, reputational damage from this incident could deter partnerships, funding, or regulatory approvals, compounding the financial strain.

In conclusion, Sarepta’s situation underscores the precarious balance between biotech innovation and investor protection. With a 27.4% single-day stock drop and ongoing legal battles, the company’s valuation now hinges on transparency, regulatory outcomes, and the success of its remaining pipeline. Shareholders who acted before the March 18 disclosure may have a valid claim for compensation, but future investors should approach the sector with heightened caution. The Schall Law Firm’s investigation serves as a reminder that in biotech, where risks are high and timelines unpredictable, vigilance and legal preparedness are essential. As the case unfolds, the precedent it sets could reshape how the industry navigates the fine line between hope and honesty.