As gene therapies continue to evolve as a promising frontier in medical treatment, regulatory scrutiny intensifies following safety concerns. Recent developments with Sarepta Therapeutics Inc (NASDAQ:SRPT) highlight the delicate balance between innovation and patient safety in the biopharmaceutical industry.
On Monday, the U.S. Food and Drug Administration (FDA) recommended lifting the voluntary hold on Sarepta’s gene therapy for Duchenne Muscular Dystrophy.
- SRPT stock spikes on heavy volume. Check the price action here.
The company said in a statement that the FDA notified it on Monday and plans to resume shipping Elevidys to sites of care for treatment of ambulatory patients with Duchenne “imminently. “
The FDA announced on Friday, after market close, that it is investigating the death of an 8-year-old boy who had received Elevidys, Sarepta’s gene therapy for Duchenne muscular dystrophy.
FDA’s Swift Action Sparks Market Optimism
This year, the company has reported three fatalities linked to acute liver failure in individuals who received either Elevidys or an investigational gene therapy using the same AAVrh74 platform. One of these deaths occurred during a clinical trial for limb girdle muscular dystrophy.
Last week, Sarepta voluntarily and temporarily paused all U.S. shipments of Elevidys.
Elevidys had received traditional approval in June 2024 for ambulatory Duchenne muscular dystrophy (DMD) patients aged four years and older with a confirmed DMD gene mutation. Previously, in June 2023, it secured accelerated, conditional approval for non-ambulatory DMD patients.
JPMorgan writes that the FDA recommendation is certainly “a clear win.”
The update came quickly (just a week after the voluntary pause) and should provide confidence in the company’s financial outlook.
Also Read: Analyst Downgrades Sarepta As Elevidys Safety Clouds Future Demand
Analyst Anupam Rama writes, “…in the near-term, the company will have to restore confidence in patients/parents/physicians.
Can Elevidys Overcome Recent Safety Concerns?
Rama upgraded its rating from Underweight to Neutral on Tuesday and reinstated a price forecast of $24 for December 2026.
The analyst writes, “Understanding the Elevidys launch curve post this unprecedented regulatory situation could take a couple quarters, and we worry about headline risk.”
In the near term, JPMorgan assumes Elevidys’ sales will be around $500 million to $600 million from 2026 to 2028.
Oppenheimer also upgraded Sarepta to Outperform from Perform and raised the price forecast to $37 from $30, citing the lifting of the regulatory cloud and Elevidys’s return to the market.
Analyst Andreas Argyrides sees sales of around $500 million for Elevidys in 2027E, in addition to $800 million—$900 million for the PMO franchise, as enough to meet the 2027 convertible debt obligation and maintain access to the $600 million revolving credit facility.
Projected Sales: What Analysts Are Forecasting
- Bernstein initiates coverage on Sarepta Therapeutics with a “Market Perform” rating and announces a price target of $13.
- BMO Capital maintains a Market Perform rating for Sarepta, raising the price forecast from $25 to $50.
- Piper Sandler maintains a Neutral rating for Sarepta, raising the price forecast from $11 to $15.
- Morgan Stanley maintains a Sarepta rating of Equal Weight, raising the price forecast from $15 to $20.
SRPT Price Action: Sarepta Therapeutics shares were up 19.67% at $16.58 at the time of publication on Tuesday, according to Benzinga Pro data.
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