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Morgan Stanley (NYSE:MS) downgraded Sarepta Therapeutics (NASDAQ:SRPT) from Overweight to Equalweight on Monday, slashing its price target to $40.00 from $113.00 following safety concerns. The stock, which has fallen over 70% year-to-date, is currently trading at $20.74. According to InvestingPro data, 11 analysts have recently revised their earnings expectations downward.
The downgrade comes after a second patient death was reported in connection with the company’s therapy, raising significant safety concerns for the biotechnology firm.
Morgan Stanley noted that use of Sarepta’s treatment has been restricted in non-ambulatory patients in both commercial and clinical settings following the incidents.
The investment bank indicated that while the deaths appear to be specific to non-ambulatory patients, the near-term uncertainty warranted the rating reduction and substantial price target cut.
Morgan Stanley also mentioned that an enhanced immunosuppressive regimen currently in development could potentially mitigate the risk associated with the therapy.
In other recent news, Sarepta Therapeutics has faced significant developments, particularly concerning its Elevidys treatment for Duchenne muscular dystrophy. The company announced a suspension of shipments for non-ambulatory patients following a second death linked to acute liver failure. This has led to a series of analyst actions, including downgrades from H.C. Wainwright, BMO Capital, and Piper Sandler, all citing safety concerns and revising price targets downward. H.C. Wainwright downgraded the stock to sell and reduced its price target to $10.00, while BMO Capital adjusted its rating to Market Perform with a new target of $70.00. Piper Sandler moved its rating to Neutral, setting a price target of $36.00. Conversely, UBS reiterated its buy rating, maintaining an $85.00 price target, despite regulatory uncertainties. Scotiabank (TSX:BNS) upgraded Sarepta to Sector Outperform, highlighting a favorable risk-reward scenario and maintaining an $80.00 price target. These varied analyst perspectives reflect the complex situation surrounding Sarepta’s treatment and its potential implications for the company’s future.
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