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Evercore ISI lowered its price target on Sarepta Therapeutics (NASDAQ:SRPT) stock to $28.00 from $50.00 on Tuesday, while maintaining an "In Line" rating following a second recent death related to the company’s Elevidys treatment. The stock, currently trading at $21.54, has fallen over 80% in the past year, though InvestingPro analysis suggests it may be undervalued at current levels.
The death, attributed to liver failure, has prompted Evercore to remove non-ambulatory sales from its projections and slightly lower ambulatory sales estimates. The firm now forecasts approximately $250 million in quarterly Elevidys sales for the remainder of the year. Despite recent challenges, Sarepta maintains strong liquidity with a current ratio of 4.02, indicating sufficient assets to meet short-term obligations.
Evercore maintained an 80% probability that Elevidys will keep its current ambulatory label, though the firm expressed uncertainty about whether strong sales would drive meaningful upside for the stock. The analysis did not adjust projections for Sarepta’s limb-girdle muscular dystrophy (LGMD) program but noted that safety database requirements for initial approval might increase.
The research firm believes most cash generated over the next few years will go toward paying off convertible debt, which it considers addressable despite limited room for additional setbacks. Beyond 2028, Evercore sees minimal cash generation from the business, necessitating a focus on earlier pipeline assets for long-term growth. With a debt-to-equity ratio of 1.19 and revenue of $2.23 billion in the last twelve months, InvestingPro subscribers can access detailed financial health metrics and 12 additional ProTips for deeper analysis of Sarepta’s outlook.
Sarepta’s ARWR assets, expected to produce single ascending dose data in the second half of 2025, may not drive significant upside given the preliminary nature of the data and absence of repeat dosing safety information, according to the Evercore analysis.
In other recent news, Sarepta Therapeutics is facing significant challenges following safety concerns related to its Elevidys treatment for Duchenne muscular dystrophy. The company has paused dosing and halted commercial shipments for non-ambulatory patients after a second reported death due to acute liver failure. This has prompted Goldman Sachs to downgrade Sarepta from Buy to Neutral, citing uncertainty about safety risks and regulatory feedback. Wolfe Research also initiated coverage with a peerperform rating, projecting Elevidys revenue recovery by 2025 but warning of ongoing downside risks due to safety issues.
TD Cowen has lowered its price target for Sarepta from $137 to $62, maintaining a Buy rating but acknowledging the risk of additional patient deaths and potential impairment to Elevidys’ sales. Morgan Stanley (NYSE:MS) has downgraded the stock from Overweight to Equalweight, reducing its price target to $40, citing the need for an enhanced immunosuppressive regimen to mitigate risks. UBS, however, reiterated its Buy rating with an $85 price target, despite regulatory concerns that could impact Elevidys’ market status. Sarepta is actively working on an enhanced immunosuppression regimen to address these safety concerns, which remains a critical focus for investors.
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