Sarepta Therapeutics (SRPT) shares tumbled more than 37% on Friday, hitting their lowest level since 2016. The fall came after reports that the Food and Drug Administration (FDA) may ask the company to voluntarily stop shipping its Duchenne muscular dystrophy (DMD) gene therapy, Elevidys. The move follows three patient deaths linked to SRPT’s gene therapy programs.
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The latest death involved a 51-year-old man participating in a Phase 1 trial for limb-girdle muscular dystrophy. He died of acute liver failure, the same complication that claimed the lives of two teenage boys treated with Elevidys earlier this year.
Earlier this week, Sarepta confirmed it had agreed to add a liver failure warning to the Elevidys label, acknowledging the FDA’s concerns. The agency is now reportedly weighing whether to pull the therapy from the market entirely.
Importantly, the stakes are high for Sarepta, as Elevidys marks a significant portion of its revenues. However, higher scrutiny and shaking investor confidence make the future of Sarepta’s gene therapy uncertain.
Analysts Question SRPT’s Credibility
Investors and analysts are upset that SRPT’s management did not disclose this third death in its corporate update earlier this week. This lack of transparency has sparked concerns about how Sarepta is managing its clinical risks and communications.
However, Sarepta CEO Douglas Ingram defended the company, saying it has been transparent in the past. Also, he stated that the latest death was “neither material nor central” to the discussion in the previous call.
Following the news, several analysts either downgraded the rating on SRPT stock or lowered their price targets. Among them, Robert W. Baird analyst Brian Skorney downgraded Sarepta stock to Hold, citing major uncertainty, poor transparency, and rising risks that the FDA may pull Elevidys from the market.
What Is the Price Target for SRPT?
Turning to Wall Street, SRPT stock has a Hold consensus rating based on 12 Buys, 13 Holds, and one Sell assigned in the last three months. At $41.92, the average Sarepta price target implies a 199% upside potential.
