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Investing.com - Citi initiated coverage on Sarepta Therapeutics (NASDAQ:SRPT) with a Sell rating and a $7.00 price target on Thursday. The stock currently trades at $13.32, down dramatically from its 52-week high of $150.48.
The research firm cited "persisting and substantial material forward risks" despite the stock’s year-to-date underperformance, which has seen shares decline 89%. According to InvestingPro data, the company is quickly burning through cash and maintains a Fair overall financial health score. Citi’s concerns include potential withdrawal of Elevidys approval and possible additional liver-related fatalities with the company’s AAVrh74 gene therapy.
Citi’s research, which includes analysis from the FDA Adverse Event Reporting System (FAERS) and statistical modeling of rare events, suggests more fatalities with AAVrh74 cannot be excluded, potentially resulting in further restrictions on Sarepta’s AAV products.
The firm’s model assigns approximately 15% probability of success to Sarepta’s early siRNA pipeline and forecasts consistent near-term revenue from the company’s PMO products, though these projections "may prove too optimistic" given emerging competition.
Citi recommended investors "seek opportunities elsewhere to flex a bullish long-term DMD thesis," specifically mentioning SLDB as an alternative.
In other recent news, Sarepta Therapeutics announced a temporary suspension of all U.S. shipments of its drug Elevidys. This decision was made to address regulatory concerns and provide necessary information to the FDA for a label update, which is expected to include a black box warning for liver risks. The suspension follows Sarepta’s voluntary pause in shipments, effective immediately, and comes after Children’s Hospital Los Angeles halted the drug’s use due to regulatory uncertainty. Additionally, Freedom Broker downgraded Sarepta Therapeutics from a Buy to a Hold rating, citing safety concerns and inconsistent statements about Elevidys sales. The firm also significantly reduced its price target from $110.00 to $14.00.
BMO Capital also lowered its price target on Sarepta to $25.00 from $50.00 while maintaining a Market Perform rating. Similarly, Piper Sandler reduced its price target to $11.00 from $18.00, maintaining a Neutral rating. These changes reflect the ongoing challenges the company faces with its Elevidys shipments and regulatory compliance.
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