Sarepta Therapeutics, Inc. (NASDAQ:SRPT) announced Monday it will voluntarily and temporarily pause all U.S. shipments of Elevidys, its gene therapy for Duchenne muscular dystrophy, effective July 22.
This reversal follows Sarepta’s initial refusal to halt distribution despite a Food and Drug Administration (FDA) request amid safety concerns linked to patient deaths.
The pause allows Sarepta and the FDA to complete a safety labeling update, including a black box warning for acute liver injury, and to respond to FDA inquiries.
Bank of America (BofA) Securities downgraded Sarepta from Neutral to Underperform, with a price target of $10 down from $20.
The stock has been volatile over the past week due to a series of rapid updates.
BofA analyst Tazeen Ahmad said the firm spoke with Sarepta's president and CFO, Ian Estepan, who mentioned that the company has requested a meeting with the FDA.
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Sarepta is awaiting a response to its updated label submission, which could provide more clarity on the duration of the current pause.
In the meantime, this situation could further hurt the Elevidys brand, especially after recent intense media coverage.
There’s also a growing risk that Elevidys could be pulled from the U.S. market. As a result, BofA has removed Elevidys (valued at $16 per share) from its financial model.
Sarepta wants to maintain a good working relationship with the FDA. Although it initially planned to keep shipping Elevidys to younger, walking patients after last Friday's informal FDA request, the company changed course and agreed to stop shipments to align with the agency's wishes. BofA believes this was the right move, but will monitor regulatory feedback and await further details on what to expect next.
How did other analysts react:
- UBS downgraded Sarepta from Buy to Neutral and lowered the price forecast from $45 to $12.
- Barclays downgraded Sarepta from Overweight to Equal-Weight, lowering the price forecast from $32 to $18.
- Piper Sandler maintains Sarepta with a Neutral rating, lowering the price forecast from $18 to $11.
- BMO Capital maintains Sarepta Therapeutics with a Market Perform, lowering the price forecast from $50 to $25.
SRPT Price Action: Sarepta Therapeutics shares were up 0.92% at $13.74 at the time of publication on Wednesday, according to Benzinga Pro.
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