Sarepta Therapeutics' Hold Rating Maintained Amid Regulatory Challenges and Clinical Concerns

J.P. Morgan analyst Anupam Rama maintains a Hold rating on Sarepta Therapeutics (SRPT) due to regulatory challenges and clinical concerns surrounding its key product, Elevidys. The analyst notes that while Elevidys has potential in the Duchenne Muscular Dystrophy market, the need to restore confidence among stakeholders and address liver enzyme elevations in some patients remain clinical challenges. BMO Capital also reiterated a Hold rating with a $50.00 price target on August 7.

Sarepta Therapeutics (SRPT) has been embroiled in a series of regulatory and legal challenges following revelations about its gene therapy drug, ELEVIDYS. The company is facing allegations of issuing false and misleading statements regarding the safety of ELEVIDYS, which posed significant risks to patients and had undetected severe side effects. These concerns led to a pause in clinical trials and a restructuring plan that includes a 36% workforce reduction and annual cost savings of approximately $400 million [1].

The company's troubles began with two patient deaths in clinical trials, one from acute liver failure and another from a non-ambulatory patient. These events prompted the FDA to add a black box warning for acute liver injury and failure, and the European Medicines Agency (EMA) subsequently rejected ELEVIDYS due to effectiveness concerns [2]. Sarepta is now facing a securities class action lawsuit, Dolgicer v. Sarepta Therapeutics, Inc., which alleges that Sarepta misled investors about the safety and efficacy of ELEVIDYS [1].

Despite these challenges, Sarepta announced the resumption of ELEVIDYS shipments for ambulatory Duchenne patients following FDA clearance. The company reported strong second-quarter results, with quarterly revenue of $611.09 million, a sharp increase over the prior year, supported by resuming ELEVIDYS sales. However, the company's ability to deliver on its investment outlook of $1.6 billion in revenue and $275.3 million in earnings by 2028 remains contingent on resolving the safety concerns and legal challenges surrounding ELEVIDYS [2].

Analysts have responded to these developments with mixed sentiment. J.P. Morgan analyst Anupam Rama maintains a Hold rating on Sarepta Therapeutics due to regulatory challenges and clinical concerns surrounding ELEVIDYS. BMO Capital also reiterated a Hold rating with a $50.00 price target on August 7 [3]. The ongoing regulatory and legal challenges highlight the intense scrutiny surrounding novel gene therapies and the material business risks associated with rapid clinical and commercial advancement.

References:
[1] https://www.globenewswire.com/news-release/2025/08/01/3126050/32716/en/Sarepta-Therapeutics-SRPT-Announces-Restructuring-and-ELEVIDYS-Black-Box-Warning-EMA-Recommends-Refusal-of-Marketing-Authorization-Securities-Class-Action-Pending-Hagens-Berman.html
[2] https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-srpt/sarepta-therapeutics/news/sarepta-therapeutics-srpt-faces-renewed-scrutiny-after-elevi
[3] https://www.benzinga.com/insights/analyst-ratings/25/08/46976862/what-43-analyst-ratings-have-to-say-about-sarepta-therapeutics