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Piper Sandler downgraded Sarepta Therapeutics (NASDAQ:SRPT) from Overweight to Neutral on Monday, slashing its price target to $36.00 from $70.00 following news of a second patient death related to the company’s Duchenne muscular dystrophy gene therapy. The stock, which has fallen over 71% in the past six months, is trading near its 52-week low of $34.10, with InvestingPro data showing oversold conditions.
Early Sunday, Sarepta announced a second non-ambulatory patient died due to acute liver failure after receiving Elevidys, prompting the company to suspend commercial shipments for non-ambulatory patients and pause dosing in the ENVISION trial until an enhanced immunosuppression regimen is approved. Despite these challenges, the company maintains a strong liquidity position with a current ratio of 4.02 and has achieved 59.15% revenue growth over the last twelve months.
The proposed new treatment protocol includes the immunosuppressant drug sirolimus and will undergo evaluation by a panel of experts before being submitted to the FDA for review and approval, according to the company’s announcement.
While the treatment approach for ambulatory patients remains unchanged, Piper Sandler expects sales in the ambulatory setting to be negatively impacted as well following this safety concern.
The research firm has reduced its Elevidys sales forecast, lowering projected peak sales to $1.7 billion from its previous estimate of $2.4 billion, citing the safety issues and resulting restrictions on the therapy’s use. According to InvestingPro analysis, the stock appears undervalued at current levels, with 12 additional exclusive insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, Sarepta Therapeutics reported promising results from its ENDEAVOR study, showing encouraging data for its Duchenne muscular dystrophy treatment, ELEVIDYS. The study demonstrated a mean protein expression of 93.87% of normal in a cohort of participants, with a safety profile consistent with previous findings. Additionally, Sarepta’s gene therapy vector received a platform technology designation from the FDA, highlighting its potential for reproducibility and adaptability across multiple therapeutic programs. In terms of analyst actions, Scotiabank (TSX:BNS) upgraded Sarepta’s stock rating to Sector Outperform, citing a favorable risk-reward scenario and potential upcoming catalysts. Goldman Sachs maintained a Buy rating with a $100 target, emphasizing the importance of Sarepta’s commercial execution and noting potential risks to Elevidys’ approval for non-ambulatory patients. Morgan Stanley (NYSE:MS) reiterated its Overweight rating with a $113 target following Elevidys’ approval in Japan, viewing it as a positive step despite challenges in Europe. Sarepta’s financial outlook remains robust, with projections of $13 billion in free cash flow by 2030 and continued efforts to diversify its pipeline. These developments reflect Sarepta’s ongoing progress in advancing treatments for rare genetic diseases.
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