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Investing.com - Citi has opened a 90-day downside catalyst watch on Sarepta Therapeutics (NASDAQ:SRPT) stock, citing concerns about the company’s gene therapy programs. The stock has already fallen nearly 90% over the past year, with InvestingPro data showing the shares currently trading significantly below their 52-week high of $150.48.
The investment bank’s downside view centers on emerging questions regarding Elevidys™ marketing approval in ambulatory Duchenne patients and potential safety issues with the company’s AAVrh74 gene therapy.
Citi specifically highlighted the possibility of additional liver-related fatalities with the therapy and raised concerns about transparency issues at the company.
With Sarepta expected to meet with the FDA soon, Citi envisions scenarios where regulators might disagree with the Elevidys™ safety dataset on ambulatory patients, potentially leading to requests for additional clinical data or even revocation of market authorization.
Given the FDA’s Center for Biologics Evaluation and Research leadership’s historical skepticism toward Elevidys, Citi expects thorough examination of safety datasets across Sarepta’s gene therapy portfolio, potentially creating headwinds for both Elevidys and the company’s limb-girdle muscular dystrophy programs.
In other recent news, Sarepta Therapeutics has announced a voluntary suspension of all U.S. shipments of Elevidys, its treatment for Duchenne muscular dystrophy. This pause is intended to allow Sarepta to update the Elevidys label with the FDA, which is expected to include a black box warning for acute liver injury and acute liver failure. Analysts have responded to this development with several downgrades and price target reductions. Citi initiated coverage on Sarepta with a Sell rating, citing significant forward risks, including potential withdrawal of Elevidys approval. Freedom Broker downgraded the stock from Buy to Hold, reducing its price target to $14 due to safety concerns and a late disclosure of a patient’s death during a study. BMO Capital lowered its price target to $25 while maintaining a Market Perform rating, and Piper Sandler cut its price target to $11, maintaining a Neutral rating. These recent developments have raised investor concerns regarding the company’s management and future prospects.
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