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Investing.com - Mizuho has reiterated an Outperform rating on Sarepta Therapeutics (NASDAQ:SRPT) with a price target of $26.00, despite the stock falling 6% on Thursday. Notably, this price target closely aligns with InvestingPro’s Fair Value assessment, suggesting the stock may be undervalued at current levels.
The decline in Sarepta ’s share price significantly outpaced the broader biotech sector, with the SPDR S&P Biotech ETF (XBI) dropping only 0.6% during the same session. The selloff was primarily triggered by investor concerns regarding new heart-safety risk warnings added to the label of the company’s Elevidys treatment.
According to Mizuho’s research note, Sarepta management clarified that the FDA included the additional language "out of an abundance of caution" to ensure clear delineation of all risks associated with the treatment. Importantly, the regulatory agency did not alter language regarding the frequency or duration of patient monitoring requirements.
Sarepta further indicated that the updated label language aligns with how physicians have already been describing Elevidys’ risk-benefit profile to patients and caregivers in clinical practice. This suggests the changes represent a formalization of existing understanding rather than new safety concerns.
Mizuho expressed confidence that the additional label language would not significantly impact adoption rates for Elevidys, and recommended investors purchase Sarepta shares during this period of weakness.
In other recent news, Sarepta Therapeutics reported its third-quarter 2025 earnings, surpassing expectations with an earnings per share of -$0.13, significantly better than the projected -$0.7. The company also exceeded revenue forecasts, achieving $399 million compared to the anticipated $337.91 million. These financial results come amidst updates to the prescribing information for Sarepta’s gene therapy, Elevidys, which now includes a boxed warning for acute serious liver injury and acute liver failure. Despite these safety concerns, the FDA maintained approval for Elevidys in ambulatory patients aged four years and older with Duchenne muscular dystrophy.
Mizuho upgraded Sarepta Therapeutics to Outperform, citing strong demand for Elevidys and favorable insurance coverage, raising its price target to $26.00. Conversely, Baird lowered its price target for the company to $15.00, following the failure of Sarepta’s ESSENCE trial, described as a significant study in Duchenne muscular dystrophy. These developments indicate a mixed outlook for Sarepta, with both positive earnings performance and challenges in its clinical trials.
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