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Investing.com - JPMorgan downgraded Sarepta Therapeutics (NASDAQ:SRPT), a $1.27 billion market cap biotech company, from Neutral to Underweight on Friday, removing its previous $16 price target. According to InvestingPro data, the stock has lost over 89% year-to-date.
The investment bank cited negative headlines surrounding Sarepta’s Elevidys therapy as the primary reason for the downgrade, noting that shares are currently trading on sentiment rather than fundamentals. This sentiment-driven trading comes despite the company maintaining a healthy current ratio of 4.02, indicating strong short-term liquidity.
JPMorgan highlighted several concerning news items from the past week, including headlines about regulatory stance on Elevidys, potential requirements for additional clinical trials, and a patient death in Brazil, though reports suggested the death was unrelated to the therapy.
One specific headline mentioned the possible need for additional safety studies in approximately 10-12 patients, with unknown scope and timelines that might require new dosing or manufacturing work.
The bank expressed concern about Sarepta’s financial outlook given its debt obligations and commitments to Arrowhead, stating that "persistent media headlines make it difficult to own SRPT shares at this point" and acknowledging the "unprecedented situation" facing the company.
In other recent news, Sarepta Therapeutics has been the focus of several significant developments. Jefferies has adjusted its price target for Sarepta Therapeutics, lowering it from $40 to $35, though it maintains a Buy rating. The adjustment follows Roche’s revised ex-US peak sales guidance for Elevidys, reducing it to 0.5-1 billion CHF from the previous 2-3 billion CHF range. Meanwhile, Citi has reiterated its Sell rating on Sarepta, maintaining a $7.00 price target, due to regulatory challenges faced by the company’s gene therapy. Reports indicate that FDA reviewers unanimously agreed that Elevidys should not return to the market without new studies. Citi has also placed Sarepta under a 90-day downside catalyst watch, highlighting concerns about the company’s gene therapy programs and potential safety issues. Additionally, Citi has initiated coverage on Sarepta with a Sell rating, citing ongoing risks and the potential withdrawal of Elevidys approval. These developments come amid broader concerns about Sarepta’s gene therapy efforts and safety considerations.
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