Sarepta Stock Rises Despite Downgrade and FDA Probe. The Crisis Explained.

Sarepta stock has plummeted 90% this year amid questions about the drug maker’s experimental gene therapies. (Dreamstime)

Sarepta Therapeutics stock was rising on Monday, defying further bad news concerning the drug maker’s experimental gene therapies.

Shares climbed 1.3% to $12.08 in early trading. The S&P 500 were up 0.1%, losing steam after getting an earlier boost from President Donald Trump’s trade deal with the European Union.

Sarepta shares gained even though the U.S. Food and Drug Administration said late Friday that it was probing the death of an 8-year-old boy who received Elevidys, Sarepta’s gene therapy for Duchenne muscular dystrophy. Two other boys have died in recent months after taking the medicine.

Sarepta said that the death of the patient in Brazil was “unrelated to treatment with Elevidys.” Partner Roche Holding said that the boy wasn’t a clinical-trial participant and that the reporting physician had assessed his death as being unrelated to the gene therapy.

Created with Highcharts 9.0.1Sarepta Therapeutics stockSource: FactSet

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Sarepta shares tumbled after the FDA said it was investigating the death, then pared back their losses after the clarifying statement.

The latest headlines should still have investors on red alert. Barclays analyst Gena Wang said in a research note published Friday that there may be “liquidity concerns given current cash burn without substantial revenue from Elevidys,” adding that the company may struggle to repay its convertible notes if the drug can’t return to market.

Sarepta didn’t immediately respond to a Barron’s request for comment about its debt repayments.

Before the company reported the first patient death in mid-March, analysts had expected sales of the gene therapy, called Elevidys, to exceed $2 billion this year, and to account for the vast majority of what at the time was an estimated $3.1 billion in total 2025 revenue for the company, according to FactSet.

Since the first death was reported, Sarepta stock has plummeted by about 90%.

Write to George Glover at george.glover@dowjones.com