BofA keeps Sarepta stock Buy rating, $210 target despite patient death

On Tuesday, Sarepta Therapeutics (NASDAQ:SRPT), a biotechnology company with a market capitalization of $7.29 billion and impressive revenue growth of 53% over the last twelve months, faced a critical development as BofA Securities maintained its Buy rating and $210.00 price target for the company. This decision came after Sarepta reported the death of a patient with Duchenne muscular dystrophy (DMD) treated with its drug Elevidys, which led to acute liver failure. The company sent out a communication to the physician community via a "Dear Doctor" letter the previous night, detailing the incident and the possible contributing factors. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 4.2, suggesting robust financial stability during this challenging period.

The patient who passed away had recently been infected with cytomegalovirus (CMV), which can impact liver function and was considered a potential contributing factor to the liver failure. Sarepta’s management has pointed out that acute liver failure is a recognized side effect of AAV-mediated gene therapies, such as Elevidys, and this risk is already included on the drug’s label. Despite this tragic event, the company emphasized that over 800 patients have been treated with Elevidys to date without any previous reports of acute liver failure.

Sarepta is considering updating the Elevidys label to include the risk of death and is planning to introduce CMV infection testing as a precautionary measure to mitigate this risk. BofA Securities analysts believe that the risk-benefit profile of Elevidys remains positive, viewing the incident as isolated given the large number of patients treated without safety concerns.

The analysts are closely monitoring the situation and seeking further details to understand how this event may influence the medical community’s perception of Elevidys’s safety and its potential market uptake in the near term. They anticipate that this news might lead to a temporary decline in Sarepta’s stock price, which they regard as an attractive buying opportunity.

BofA Securities has included a peak sales projection of $4.2 billion for Elevidys in its valuation, contributing $146 per share to its price objective. With the stock currently trading near its 52-week low and showing a P/E ratio of 41.35, InvestingPro analysis suggests the company is currently undervalued. Sarepta Therapeutics continues to be one of BofA’s top picks for 2025, maintaining a Buy rating and a $210 price target. For deeper insights into Sarepta’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.

In other recent news, Sarepta Therapeutics has been in the spotlight following a patient death associated with its gene therapy product, ELEVIDYS. This incident involved acute liver failure in a patient with Duchenne muscular dystrophy and has raised safety concerns, prompting Sarepta to report the event to health authorities and update the therapy’s prescribing information. In response, Scotiabank (TSX:BNS) initiated coverage on Sarepta with a Sector Perform rating and a price target of $105, noting the strong market launch of ELEVIDYS but highlighting potential risks from competitors and market dynamics. Cantor Fitzgerald maintained an Overweight rating with a $163 price target, reflecting updated revenue and expense estimates based on Sarepta’s guidance.

RBC Capital Markets adjusted its price target for Sarepta to $161 while maintaining an Outperform rating, citing potential for the company to exceed sales forecasts for ELEVIDYS. The analyst emphasized the company’s underappreciated pipeline, particularly in limb-girdle muscular dystrophy treatments. Mizuho (NYSE:MFG) Securities also reduced its price target to $190, maintaining an Outperform rating, after Sarepta’s fourth-quarter revenues surpassed estimates. Mizuho highlighted the growth potential for ELEVIDYS, noting that less than 5% of eligible patients have been treated, and expressed confidence in Sarepta’s broader therapeutic platforms. These developments provide a varied outlook on Sarepta’s financial and market position amid recent challenges and opportunities.

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