China AI: Bernstein sees chipmakers benefiting from Nvidia scrutiny
Investing.com - Morgan Stanley (NYSE:MS) has reiterated its Equalweight rating and $40.00 price target on Sarepta Therapeutics (NASDAQ:SRPT), currently trading at $18.21, following reports of a third patient death in the company’s gene therapy program. The stock has fallen 84.7% over the past year, with InvestingPro analysis indicating the company is currently undervalued.
The death occurred in a 51-year-old male participant in the Phase 1 study of SRP-9004 for limb-girdle muscular dystrophy type E due to acute liver toxicity, according to Morgan Stanley. This follows two previously reported deaths in older patients receiving Elevidys, also attributed to acute liver failure. Despite these challenges, InvestingPro data shows the company maintains strong liquidity with a current ratio of 4.02, though it’s currently burning through cash rapidly.
Sarepta confirmed to Morgan Stanley that the patient followed a similar course to the previous cases and might have benefited from the enhanced immunosuppressive regimen currently under development. The company had already reported this death to the FDA prior to the recent label update that added a black box warning.
Earlier this week, Sarepta announced it was discontinuing further development of its limb-girdle program, which the company stated was due to financial reasons rather than safety concerns.
Morgan Stanley expects Sarepta shares to face pressure as the third death "further increases the near-term uncertainty for Elevidys, as challenges continue" despite indications that the deaths appear limited to older patients and could potentially be mitigated by enhanced immunosuppression protocols. With analyst targets ranging from $10 to $110, InvestingPro offers 8 additional exclusive insights and a comprehensive analysis of Sarepta’s financial health, which currently scores as "GOOD" despite recent challenges.
In other recent news, Sarepta Therapeutics reported preliminary second-quarter 2025 financial results, with net product revenues of approximately $513 million, slightly surpassing the consensus estimate of $509 million. However, Elevidys sales saw a 25% quarter-over-quarter decline, amounting to $282 million. The company has agreed to include a black box warning for Elevidys following safety concerns after two patient deaths. Sarepta announced a strategic reorganization, including a 36% workforce reduction and a focus on its siRNA programs, aiming for $400 million in annual cost savings by 2026. Despite these developments, analyst opinions vary, with Goldman Sachs maintaining a Neutral rating and Needham reiterating a Buy rating. William Blair expressed concern over the safety of Sarepta’s gene therapies, citing potential impacts on commercial interest. Leerink Partners maintained an Outperform rating, noting the company’s potential for discounted cash flows despite recent challenges. Cantor Fitzgerald also kept a Neutral rating, highlighting concerns about Elevidys’ safety and sales outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.