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How to Play SRPT Stock After Patient Death Post DMD Therapy Infusion
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Shares of Sarepta Therapeutics (SRPT - Free Report) plunged nearly 24% last week after the company reported the death of a patient following treatment with Elevidys, its one-shot gene therapy for Duchenne muscular dystrophy (DMD).
Sarepta reported that the patient’s death was due to acute liver failure, a known but rare risk associated with the use of Elevidys. This marks the first reported fatality linked to the gene therapy. Despite the incident, the company maintained its stance on the therapy’s positive benefit-risk profile, emphasizing that more than 800 patients have received Elevidys to date. Additionally, Sarepta noted that the patient had a recent CMV infection, which might have contributed to the adverse outcome, as CMV is known to cause liver damage.
This announcement has raised negative sentiments around the stock — investors are concerned that Elevidys sales could be negatively impacted as the event could slow overall market adoption of the therapy or even lead to its withdrawal from the market. Under two years of its initial FDA approval, Elevidys has become a key revenue generator — Sarepta generated about $821 million from the therapy’s sales last year, accounting for more than 40% of its total 2024 revenues. The company expects net product revenues to be in the range of $2.9-$3.1 billion for 2025, two-thirds of which are expected to come from Elevidys’ sales. Any setback to the gene therapy’s sales could adversely impact both SRPT’s growth trajectory and stock performance.
Let’s analyze the company’s strengths and weaknesses to understand how to play the stock following the recent share price decline.
Sarepta’s Strong Commercial DMD Portfolio
Sarepta’s portfolio consists of four approved therapies, all targeting DMD indications.
Currently, Elevidys is the first and only one-shot gene therapy for DMD in the United States. A progressive and degenerative disorder, DMD leads to weakness and wasting away of the body’s muscles. Since its commercial launch in June 2023, the gene therapy has demonstrated blockbuster potential.
Though the therapy was initially approved in the country with a confined label for use in ambulatory DMD patients aged four to five years, it added more than $200 million to Sarepta’s top line in 2023. Last June, the FDA expanded Elevidys’ label to treat all DMD patients aged four years and older, regardless of ambulation status. This approval significantly expands the therapy’s targeted population. Sales of the therapy surged more than 300% in 2024, driven by this expanded label.
Sarepta has developed Elevidys in partnership with pharma big-wig Roche (RHHBY - Free Report) . Per a licensing deal signed in 2019, RHHBY has exclusive rights to launch and market Elevidys in ex-U.S. markets.
Apart from Elevidys, Sarepta has three other therapies in its commercial portfolio targeting the DMD patient population. Exondys 51 is the first approved disease-modifying therapy for DMD in the United States as well as the company’s first product to receive marketing approval. Exondys 51 has recorded impressive sales growth over the past few quarters despite the COVID-19 pandemic. Vyondys 53 and Amondys 45 have also seen strong demand since their launch. Per management, these three drugs have the potential to address nearly a third of all patients with DMD in the United States.
Sarepta’s Pipeline Beyond DMD Encouraging
Building on the success of Elevidys, Sarepta is now focusing on expanding its pipeline beyond the DMD space. To reinforce its leadership in gene therapies, management is currently prioritizing the advancement of multiple innovative gene therapies targeting a broader range of muscular dystrophies.
Last year, Sarepta started the late-stage EMERGENE study on gene therapy candidate SRP-9003 in patients with limb-girdle muscular dystrophy (LGMD) type 2E/R4 (LGMD2E/R4, or beta sarcoglycanopathy). Data from this study is expected in the first half of 2025. If the data is positive, Sarepta intends to submit a regulatory filing seeking accelerated approval for SRP-9003 in the given indication before this year’s end.
Sarepta is also evaluating another gene therapy candidate, SRP-6004, in the early-stage NAVIGENE study for treating ambulatory patients living with LGMD type 2B/R2 (LGMD2B/R2, or dysferlinopathy). In December, Sarepta announced that it has started a clinical study on gene therapy candidate SRP-9004 in LGMD type 2D. The company is also on track to start a clinical study on another gene therapy, SRP-9005, for LGMD type 2C in early 2025. Both studies are designed to support the FDA’s approval under the accelerated pathway.
Apart from LGMD, Sarepta also has several other pre-clinical and clinical-stage gene therapy candidates targeting indications, such as Rett Syndrome, cardiomyopathy, Emery-Dreifuss muscular dystrophy type 1, and multiple sclerosis.
In November, Sarepta signed a multi-billion dollar deal with Arrowhead Pharmaceuticals , acquiring the latter’s seven pipeline programs. The ARWR deal not only complements the company’s existing pipeline of muscular dystrophies but also expands into new indications across the central nervous system and rare pulmonary disorders.
Competition in the DMD Space: A Woe
Before the FDA approved Nippon Shinyaku’s DMD drug Viltepso in 2020, Sarepta was the only company to market DMD drugs in the country. In the last few years, the agency has approved new drugs for this indication, including PTC Therapeutics’ (PTCT - Free Report) Emflaza and Catalyst Pharmaceuticals’ Agamree. Several companies like Avidity Biosciences, Dyne Therapeutics, Regenxbio, Solid Biosciences and Wave Life Sciences, among others, are involved in developing therapies as potential treatments for DMD.
SRPT Stock Performance, Valuation & Estimates
In the past year, shares of Sarepta have plunged 42% compared with the industry’s 5% decline, as shown in the chart below. During this timeframe, the stock has also underperformed the broader Medical sector and the S&P 500 Index. SRPT’s shares are trading below the 50-day and 200-day moving averages.
SRPT Stock Performance
Image Source: Zacks Investment Research
From a valuation standpoint, the company is trading at a premium to the industry. Going by the price/sales ratio, the stock currently trades at 4.23 trailing 12-month sales value, higher than 2.17 for the industry.
Image Source: Zacks Investment Research
Estimates for Sarepta Therapeutics’ 2025 earnings per share (EPS) have declined from $10.87 to $10.52 in the past seven days. Over the same timeframe, EPS estimates for 2026 have declined from $15.40 to $15.02.
Image Source: Zacks Investment Research
How to Play the Stock?
While the stock’s sell-off over the last week seems excessive in our opinion, short-term investors should consider holding off on any immediate positions in Sarepta until its first-quarter earnings release. The upcoming results will provide a clear picture of how the Elevidys-related incident has impacted demand and whether management foresees any material changes to its sales trajectory. The consistently declining earnings estimates highlight analysts’ pessimistic outlook for the stock. Sarepta’s shares are also currently trading at a premium to the industry.
We advise investors with a long-term horizon to remain invested in this Zacks Rank #3 (Hold) company, given its encouraging commercial portfolio and robust pipeline potential. Although this portfolio is currently targeting only one segment, which might seem concerning to some investors, Sarepta’s plans to diversify beyond DMD seem encouraging.
Image: Bigstock
How to Play SRPT Stock After Patient Death Post DMD Therapy Infusion
Shares of Sarepta Therapeutics (SRPT - Free Report) plunged nearly 24% last week after the company reported the death of a patient following treatment with Elevidys, its one-shot gene therapy for Duchenne muscular dystrophy (DMD).
Sarepta reported that the patient’s death was due to acute liver failure, a known but rare risk associated with the use of Elevidys. This marks the first reported fatality linked to the gene therapy. Despite the incident, the company maintained its stance on the therapy’s positive benefit-risk profile, emphasizing that more than 800 patients have received Elevidys to date. Additionally, Sarepta noted that the patient had a recent CMV infection, which might have contributed to the adverse outcome, as CMV is known to cause liver damage.
This announcement has raised negative sentiments around the stock — investors are concerned that Elevidys sales could be negatively impacted as the event could slow overall market adoption of the therapy or even lead to its withdrawal from the market. Under two years of its initial FDA approval, Elevidys has become a key revenue generator — Sarepta generated about $821 million from the therapy’s sales last year, accounting for more than 40% of its total 2024 revenues. The company expects net product revenues to be in the range of $2.9-$3.1 billion for 2025, two-thirds of which are expected to come from Elevidys’ sales. Any setback to the gene therapy’s sales could adversely impact both SRPT’s growth trajectory and stock performance.
Let’s analyze the company’s strengths and weaknesses to understand how to play the stock following the recent share price decline.
Sarepta’s Strong Commercial DMD Portfolio
Sarepta’s portfolio consists of four approved therapies, all targeting DMD indications.
Currently, Elevidys is the first and only one-shot gene therapy for DMD in the United States. A progressive and degenerative disorder, DMD leads to weakness and wasting away of the body’s muscles. Since its commercial launch in June 2023, the gene therapy has demonstrated blockbuster potential.
Though the therapy was initially approved in the country with a confined label for use in ambulatory DMD patients aged four to five years, it added more than $200 million to Sarepta’s top line in 2023. Last June, the FDA expanded Elevidys’ label to treat all DMD patients aged four years and older, regardless of ambulation status. This approval significantly expands the therapy’s targeted population. Sales of the therapy surged more than 300% in 2024, driven by this expanded label.
Sarepta has developed Elevidys in partnership with pharma big-wig Roche (RHHBY - Free Report) . Per a licensing deal signed in 2019, RHHBY has exclusive rights to launch and market Elevidys in ex-U.S. markets.
Apart from Elevidys, Sarepta has three other therapies in its commercial portfolio targeting the DMD patient population. Exondys 51 is the first approved disease-modifying therapy for DMD in the United States as well as the company’s first product to receive marketing approval. Exondys 51 has recorded impressive sales growth over the past few quarters despite the COVID-19 pandemic. Vyondys 53 and Amondys 45 have also seen strong demand since their launch. Per management, these three drugs have the potential to address nearly a third of all patients with DMD in the United States.
Sarepta’s Pipeline Beyond DMD Encouraging
Building on the success of Elevidys, Sarepta is now focusing on expanding its pipeline beyond the DMD space. To reinforce its leadership in gene therapies, management is currently prioritizing the advancement of multiple innovative gene therapies targeting a broader range of muscular dystrophies.
Last year, Sarepta started the late-stage EMERGENE study on gene therapy candidate SRP-9003 in patients with limb-girdle muscular dystrophy (LGMD) type 2E/R4 (LGMD2E/R4, or beta sarcoglycanopathy). Data from this study is expected in the first half of 2025. If the data is positive, Sarepta intends to submit a regulatory filing seeking accelerated approval for SRP-9003 in the given indication before this year’s end.
Sarepta is also evaluating another gene therapy candidate, SRP-6004, in the early-stage NAVIGENE study for treating ambulatory patients living with LGMD type 2B/R2 (LGMD2B/R2, or dysferlinopathy). In December, Sarepta announced that it has started a clinical study on gene therapy candidate SRP-9004 in LGMD type 2D. The company is also on track to start a clinical study on another gene therapy, SRP-9005, for LGMD type 2C in early 2025. Both studies are designed to support the FDA’s approval under the accelerated pathway.
Apart from LGMD, Sarepta also has several other pre-clinical and clinical-stage gene therapy candidates targeting indications, such as Rett Syndrome, cardiomyopathy, Emery-Dreifuss muscular dystrophy type 1, and multiple sclerosis.
In November, Sarepta signed a multi-billion dollar deal with Arrowhead Pharmaceuticals , acquiring the latter’s seven pipeline programs. The ARWR deal not only complements the company’s existing pipeline of muscular dystrophies but also expands into new indications across the central nervous system and rare pulmonary disorders.
Competition in the DMD Space: A Woe
Before the FDA approved Nippon Shinyaku’s DMD drug Viltepso in 2020, Sarepta was the only company to market DMD drugs in the country. In the last few years, the agency has approved new drugs for this indication, including PTC Therapeutics’ (PTCT - Free Report) Emflaza and Catalyst Pharmaceuticals’ Agamree. Several companies like Avidity Biosciences, Dyne Therapeutics, Regenxbio, Solid Biosciences and Wave Life Sciences, among others, are involved in developing therapies as potential treatments for DMD.
SRPT Stock Performance, Valuation & Estimates
In the past year, shares of Sarepta have plunged 42% compared with the industry’s 5% decline, as shown in the chart below. During this timeframe, the stock has also underperformed the broader Medical sector and the S&P 500 Index. SRPT’s shares are trading below the 50-day and 200-day moving averages.
SRPT Stock Performance
From a valuation standpoint, the company is trading at a premium to the industry. Going by the price/sales ratio, the stock currently trades at 4.23 trailing 12-month sales value, higher than 2.17 for the industry.
Estimates for Sarepta Therapeutics’ 2025 earnings per share (EPS) have declined from $10.87 to $10.52 in the past seven days. Over the same timeframe, EPS estimates for 2026 have declined from $15.40 to $15.02.
How to Play the Stock?
While the stock’s sell-off over the last week seems excessive in our opinion, short-term investors should consider holding off on any immediate positions in Sarepta until its first-quarter earnings release. The upcoming results will provide a clear picture of how the Elevidys-related incident has impacted demand and whether management foresees any material changes to its sales trajectory. The consistently declining earnings estimates highlight analysts’ pessimistic outlook for the stock. Sarepta’s shares are also currently trading at a premium to the industry.
We advise investors with a long-term horizon to remain invested in this Zacks Rank #3 (Hold) company, given its encouraging commercial portfolio and robust pipeline potential. Although this portfolio is currently targeting only one segment, which might seem concerning to some investors, Sarepta’s plans to diversify beyond DMD seem encouraging.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.