Sarepta Stock Soars Over 30% as FDA Clears Resumption of Gene Therapy Shipments
Analysts say the move significantly lowers the risk of market withdrawal for the muscular dystrophy treatment Elevidys, though concerns about patient confidence linger.
BOSTON, MA – Shares of Sarepta Therapeutics (SRPT.O) skyrocketed more than 30% in premarket trading Tuesday after the company announced it would resume U.S. shipments of its key gene therapy, Elevidys, for a specific group of patients. The decision follows a favorable recommendation from the U.S. Food and Drug Administration (FDA), signaling a major vote of confidence in the treatment and easing significant financial pressure on the company.
Sarepta confirmed on Monday that it is restarting shipments of Elevidys for patients with Duchenne muscular dystrophy (DMD) who are still able to walk. The move comes after a voluntary pause in shipments and heightened regulatory scrutiny following the deaths of two teenage boys who had received the therapy earlier this year. The halt had raised serious concerns among investors about the future of Elevidys, which is Sarepta’s largest source of revenue.
The green light from the FDA was given after an investigation determined that the death of an 8-year-old boy in Brazil was not related to the gene therapy. While shipments for non-ambulatory patients (those unable to walk independently) remain on hold, the resumption for ambulatory patients marks a critical turning point for Sarepta.
Wall Street analysts reacted positively to the news, noting that the decision virtually eliminates the immediate threat of a full market withdrawal for Elevidys.
“The FDA’s recommendation and the resumption of commercial treatment in the U.S. virtually eliminate the risk of Elevidys being formally withdrawn from the market,” said William Blair analyst Sami Corwin.
Financially, the resumption of sales is expected to stabilize Sarepta’s position, allowing the company to meet its near-term payment obligations to its partner, Arrowhead (ARWR.O), and maintain access to its debt facilities.
Despite the positive developments, analysts remain cautious about the near-term commercial outlook. The recent negative headlines could create hesitancy among patients and physicians considering the treatment.
“It remains to be seen how the news headlines regarding the patient deaths will affect commercial interest in the near term,” Corwin added.
The challenges for Elevidys have not been confined to the U.S. Sarepta’s international partner, Roche (ROG.S), had also paused shipments in certain countries outside the United States.
The market’s relief was palpable. Sarepta’s shares, which had plummeted over 80% since the first death was reported in March, surged 36% to $18.85 in premarket trading, reflecting renewed investor optimism in the therapy’s future.
