Shares of Sarepta Therapeutics fell close to 37% on Friday after reports emerged that the US Food and Drug Administration is considering whether to halt the distribution of Elevidys, the company’s flagship gene therapy for Duchenne Muscular Dystrophy (DMD).
The move comes amid an ongoing investigation into multiple patient deaths tied to Sarepta’s gene therapy programs.
A source familiar with the matter told CNBC that the FDA is preparing to request Sarepta voluntarily suspend shipments of Elevidys, though the agency has yet to formally contact the company.
Sarepta said it had not received any direct communication from the FDA as of Friday.
Separately, FDA Commissioner Marty Makary confirmed to Bloomberg News that the agency is reviewing whether Elevidys should remain on the market, raising fears that Sarepta’s primary commercial product could be withdrawn entirely.
Deaths reignite long-standing safety concerns
The FDA’s concerns follow the deaths of two teenage boys from liver failure earlier this year after receiving Elevidys.
A third patient, enrolled in a Phase 1 trial for a different Sarepta gene therapy, also died recently.
While the therapies differ in their targets, both use the same delivery mechanism, fueling broader safety concerns.
Elevidys has been controversial from the outset.
Initially granted conditional approval in 2023 for DMD patients aged 4 to 5 who could still walk, its approval was expanded in 2024 to include all ambulatory patients aged 4 and up, and conditionally for non-ambulatory patients.
The latter decision drew criticism, as clinical data showed weaker evidence of efficacy in this group.
Further concerns arose when Elevidys failed to meet its primary goal in a Phase 3 trial.
Nevertheless, former FDA official Peter Marks sided with Sarepta, citing secondary benefits in the trial to justify expanded approval, a move that has since come under renewed scrutiny.
Baird downgrades Sarepta stock; analysts warn of dire consequences if Elevidys approval revoked
The regulatory probe has dealt a blow to Sarepta, which relies heavily on Elevidys for its revenue.
The therapy accounted for more than half of Sarepta’s total net product revenue.
With the company’s shares now down more than 87% year-to-date, investors are bracing for the possibility that the FDA may revoke approval altogether.
Analyst Kostas Biliouris of BMO Capital Markets noted that while other gene therapies, such as Novartis’s Zolgensma, have also faced safety issues, the clear benefit of Zolgensma justifies the risk.
“That’s why deaths here matter so much versus Zolgensma, for example,” Biliouris said.
The company has stopped shipping Elevidys to non-ambulatory patients while it assesses alternative delivery methods.
Still, Sarepta executives insist the drug could bring in $500 million annually even if limited to treating ambulatory patients.
The company’s future now hinges on the FDA’s decision. “If the FDA pulls Elevidys from the market,” Biliouris warned, “Sarepta is done.”
“Although the development of SRP-9004 has been discontinued, we believe the death could lead to greater scrutiny of SRP-9003’s safety profile ahead of its BLA submission and could affect commercial interest, if approved,” brokerage William Blair said.
Baird downgraded Sarepta Therapeutics to Neutral from Outperform, with a $15 Price Target.
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