Earlier this week, Sarepta Therapeutics, Inc SRPT provided a safety update regarding Elevidys (delandistrogene moxeparvovec-rokl), the only approved gene therapy for patients with Duchenne muscular dystrophy, and steps the company is taking to strengthen the safety profile in non-ambulatory patients.
These steps follow a second reported case of acute liver failure (ALF), resulting in death.
William Blair says, “One key factor leading to investor hesitancy is the lack of clarity over how many additional non-ambulatory patients have been treated and are still within the time frame to potentially develop acute liver failure, creating uncertainty over the risk of another fatality in the near term.”
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On Friday, analyst Sami Corwin downgraded Sarepta from Outperform to Market Perform.
Corwin said, “In addition, significant penetration of the non-ambulatory population was a key consideration of prior peak revenue estimates, and it is unlikely that penetration will be as robust in this subgroup in the future, in our opinion.”
Peak revenue estimates might decline further if other AAV gene therapies for Duchenne muscular dystrophy hit the market as soon as 2027. Notably, early clinical data suggests that some of these therapies — such as Solid Biosciences Inc’s SLDB SGT-003 — could have a safer profile, with fewer signs of liver-related side effects.
“While we continue to think that there will be strong interest among commercial ambulatory patients in Elevidys and that a higher share price is therefore justified based on our sum-of-the parts analysis, at this time, we think the reduction in peak revenue opportunity and growing number of uncertain variables will be a deterrent for investors,” William Blair wrote in the investor note on Friday.
SRPT Price Action: Sarepta Therapeutics stock is down 3.18% at $20.11 at publication on Friday.
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