Sarepta Shares Crash on Report That FDA Will Ask It to Stop Shipping Key Drug

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Sarepta Therapeutics shares were collapsing Friday following a Reuters report that the Food and Drug Administration will ask the company to stop shipments of Elevidys**,** its Duchenne muscular dystrophy gene therapy.

The stock was down 36.5% in the early afternoon to $13.95. Two patients died earlier this year after taking the drug, and Sarepta had already paused shipments of Elevidys to a subset of patients with more advanced disease.

Neither Sarepta nor the FDA immediately responded to requests for comment.

Earlier Friday, on a surprise investor call, the company’s CEO, Doug Ingram, acknowledged that he hadn’t disclosed the recent death of a patient in a trial of a different gene therapy while rolling out a major restructuring late Wednesday, to widespread indignation from analysts.

Shares of the biotech had risen almost 20% Thursday after the company had said it would slash staff and trim its pipeline.

But late Thursday and early Friday, biotech-focused news outlets, including Endpoints News and STAT, revealed for the first time that a 51-year-old patient died a month ago in a trial of an experimental Sarepta treatment for a condition called limb girdle muscular dystrophy.

By midmorning Friday, the stock had fallen almost 17% to $18.35. On a hastily organized investor call, Ingram defended his decision to hold back information about the patient death amid Wednesday’s restructuring announcement.

“We did not discuss the matter on our call on Wednesday because it was neither material nor central to the topics at hand on Wednesday,” Ingram said. “This wasn’t salient to our discussions,” he said later.

Ingram said the company had planned to disclose the death at a medical conference, as part of a full scientific report on the trial.

Analysts on the call weren’t buying it, and some made no effort to hide their frustration at Ingram. Baird analyst Brian Skorney told Ingram that it “seems very clearly that this was a material event.”

Gene-therapy safety has emerged as a major issue for Sarepta. After two young patients died this year after receiving its Duchenne muscular dystrophy gene therapy Elevidys, Sarepta said in June it would stop shipping the drug to patients who can no longer walk.

The FDA initially approved Elevidys in 2023 for younger patients, then expanded the approval to patients whose condition had progressed to the point they were no longer ambulatory in June of 2024.

The FDA approval, and later expansion, came despite data on the treatment’s efficacy that many found unconvincing. Still, the treatment was expected to be a blockbuster for Sarepta. Early this year, analysts expected Elevidys sales to account for two-thirds of what at the time was a $3.1 billion total estimate for Sarepta’s revenues in 2025, according to FactSet.

The two patient deaths had pushed down those estimates. This week, the company said that the Food and Drug Administration would add a warning to Elevidys’s label signaling a risk of acute liver failure.

Even after the patient deaths, however, analysts continued to predict at least some market for Elevidys. According to FactSet, analysts as of Friday were still counting on $1 billion in Elevidys sales next year, more than half of the $1.9 billion FactSet consensus estimate for Sarepta’s total sales.

A pause on all shipments of Elevidys could raise questions about all that. Sarepta has a $1.1 billion loan coming due in 2027, which the restructuring it announced Wednesday was designed to allow it to pay off.

The stock’s price on Friday afternoon was 86.2% down from its closing price on March 17, the day before the company reported the first death of an Elevidys patient. It’s a remarkable collapse for a stock that, as of December, had Buy or Overweight rating from 95% of the Wall Street analysts covering the stock tracked by FactSet.

Even before the reports Friday afternoon that the FDA would ask the company to pause all Elevidys shipments, faith in the company’s executive team, some members of which received raises on Wednesday even as the company announced the layoffs of 500 workers, seemed shaken.

“They could have shed light on this and didn’t,” Mizuho healthcare equity strategist Jared Holz told Barron’s early Friday, shortly before the morning investor call. “It’s just going to result in the Street continuing to question management credibility.”

Sarepta told Barron’s on Friday that the latest had death occurred in an early-stage trial of SRP-9004, a treatment for limb girdle muscular dystrophy. The company had said Wednesday it would stop developing most of the gene therapies it was testing for limb girdle muscular dystrophy, including SRP-9004.

Ingram said on the Friday call that the decision to stop the SRP-9004 program was unrelated to the latest patient death, and that the death hadn’t changed the scientific understanding of the risks of Elevidys.

“The decision to cease the limb girdle programs didn’t relate to this or another event,” Ingram said. “If there was a material change in the safety signal of one of our marketed therapies we would disclose that publicly.”

Elevidys and the experimental SRP-9004 use the same virus, called AAVrh74, to deliver a gene to the patient’s cells, though the two medicines are manufactured differently.

Ingram said that the risks of Elevidys in more advanced patients is already known. “As we know, and as has been communicated to the patient community, to the physician community, and to the FDA, there is a rare risk of [acute liver injury] becoming a fatal acute liver failure in more debilitated, non-ambulatory patients receiving Elevidys,” Ingram said. That’s not changed, he said, by the death of a “late-stage non-ambulatory patient” who received a different gene therapy.

Frustration at Sarepta had been building all morning ahead of the 10:30 a.m. call.

“This news will likely diminish any remaining goodwill management had,” Leerink Partners analyst Joseph Schwartz wrote in an early Friday note.

In a note published after the Friday call, Cantor Fitzgerald analyst Kristen Kluska wrote she was “appalled” by Sarepta’s decision not to disclose the death earlier. We “don’t agree that it was nonmaterial,” she wrote, and that the company “owes it to the patients, investors, the field, etc. to be more open around very significant” adverse events.

Analysts had asked Ingram about the safety of the limb girdle muscular dystrophy gene therapies on Sarepta’s Wednesday night call. One analyst had asked whether the reason Sarepta was stopping the limb girdle program had anything to do with “safety risk.” Ingram, at the time, said that it was a “cost issue,” and didn’t mention the death.

Another analyst had asked about the “overall situation” of patients hospitalized due to liver injury. “We’ve seen two [acute liver failures] resulting in death than we’ve reported, and there haven’t been any others with respect to Elevidys,” Ingram said, not mentioning the death from the experimental limb girdle gene therapy.

“Management’s answer not only seems selective, but also raises questions about whether they are tracking [acute liver failure] cases and taking them seriously,” Schwartz wrote in his note early Friday.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com and Elsa Ohlen at elsa.ohlen@barrons.com