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Investing.com - Baird downgraded Sarepta Therapeutics (NASDAQ:SRPT) from Outperform to Neutral on Friday, slashing its price target to $15.00 from $25.00 amid growing concerns about the company’s Duchenne muscular dystrophy treatment. The stock, which has fallen over 80% in the past year, is currently trading near its 52-week low of $16.88.
The downgrade comes after reports that the FDA will request Sarepta voluntarily halt all shipments of Elevidys, its gene therapy treatment for Duchenne muscular dystrophy. According to InvestingPro data, six analysts have recently revised their earnings expectations downward, with the company expected to remain unprofitable this year.
Baird cited "broad, existential uncertainty" surrounding the company, pointing to transparency issues from management and questions about whether Elevidys can survive safety concerns under the current FDA administration.
The research firm expressed particular concern about the lack of disclosure regarding the most recent gene therapy patient death, suggesting this contributed to their decision to downgrade the stock.
Baird analysts now believe the risks of the FDA completely removing Elevidys from the market "are greatly amplified," representing a significant threat to one of Sarepta’s key products.
In other recent news, Sarepta Therapeutics has faced significant developments in its gene therapy programs. The company reported a preliminary second-quarter revenue of $282 million for its Elevidys treatment, marking a 25% decline from the previous quarter. Sarepta announced a restructuring plan, including a 36% workforce reduction, to achieve $400 million in annual cost savings by 2026. Following a third patient death related to its gene therapy, BofA Securities lowered its price target for Sarepta to $20, citing concerns over acute liver failure in older patients. Similarly, BMO Capital reduced its price target to $50 after a patient death in the LGMD trial, though it maintained a Market Perform rating. Morgan Stanley (NYSE:MS) reiterated its Equalweight rating and a $40 price target, noting increased uncertainty for Elevidys due to the recent deaths. Goldman Sachs confirmed that Sarepta agreed to add a black box warning for Elevidys, maintaining a Neutral rating and a $27 price target. William Blair also reiterated a Market Perform rating, expressing concerns about potential scrutiny of Sarepta’s SRP-9003 safety profile ahead of its license application.
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