Sarepta stock dropped again Wednesday — extending a steep dive this year — after the Food and Drug Administration announced that it's investigating the deaths of two patients who received Sarepta Therapeutics' gene therapy, Elevidys.
Elevidys treats Duchenne muscular dystrophy, a devastating disease that generally affects boys and causes progressive muscle weakness. Following treatment with Elevidys, two teenagers ages 15 and 16 died of acute liver failure. Notably, both patients were considered non-ambulatory, meaning they couldn't walk.
Now, the FDA says it's investigating "the risk of acute liver failure with serious outcomes" and is "evaluating the need for further regulatory action."
Already on a downswing this year, Sarepta stock tumbled 8% to 17.46 on today's stock market. Sarepta shares plummeted more than 27% on March 18 after the first boy died, and north of 42% on June 16 following reports of the second death.
This year, shares have lost almost 86%, as of Wednesday's close.
Sarepta Stock Faces Off With Prasad
Sarepta is in a particularly tricky position.
The company won full approval for Elevidys last June. But that was a hard fought victory. Peter Marks, who at the time headed up the FDA's Center for Biologics Evaluation and Research, signed off on Elevidys despite misgivings from three review teams.
Now, Marks is out and, in his place, is Vinay Prasad. Prasad has been a vocal critic of Sarepta and Elevidys. Leerink Partners analyst Joseph Schwartz noted that investors have been concerned about how Prasad would approach Elevidys' approval.
"Now with two deaths reported in this segment of the market, it seems incrementally more possible that the FDA could step in and remove the therapy from the market in non-ambulatory patients (which represent ~50% of all DMD patients)," he said in a recent client note.
Elevidys is Sarepta's biggest moneymaker. This year, analysts expected the company to generate $2.31 billion in total sales, with Elevidys accounting for $1.21 billion of it — or about 52%.
Lowly Rated Biotech Stock
Since the patient deaths, Sarepta stock has been on a major downswing. Shares have spent most of this year trading below their key moving averages, according to MarketSurge.
Sarepta stock also has a worst-possible IBD Digital Relative Strength Rating of 1. This means shares have performed in the bottom 1% of all stocks over the past 12 months.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
