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Investing.com - Sarepta Therapeutics (NASDAQ:SRPT), whose stock has declined over 88% year-to-date according to InvestingPro data, faces new regulatory challenges after the FDA requested a halt to shipments of its gene therapy Elevidys following a patient death disclosure. The stock’s technical indicators suggest it’s currently in oversold territory.
Wells Fargo (NYSE:WFC) maintained its Overweight rating and $65.00 price target on Sarepta despite the FDA’s request to stop shipments. With analyst targets ranging from $9 to $110, the stock currently trades near its 52-week low of $12.81. The company notified the FDA on July 3 about a death in its limb-girdle muscular dystrophy (LGMD) program, after which the agency recommended adding a black box warning to the Duchenne muscular dystrophy (DMD) label.
Sarepta has refused the FDA’s request and will continue shipping Elevidys to ambulatory patients. The FDA responded that it will further investigate safety in ambulatory patients and take action if necessary, according to Wells Fargo.
The analyst believes revocation of Elevidys’ ambulatory indication is unlikely without multiple deaths in ambulatory patients. Wells Fargo notes there have been no deaths reported among the more than 750 ambulatory DMD patients treated with the therapy.
Wells Fargo expects "resilience" in Elevidys’ ambulatory indication based on the benefit-risk profile, though acknowledges potential challenges in other areas including the FDA’s review of upcoming confirmatory study data and possible reimbursement implications. InvestingPro analysis indicates the company is currently burning through cash with a negative free cash flow of $695 million, though it maintains strong liquidity with a current ratio of 4.02. For deeper insights into Sarepta’s financial health and 12 additional ProTips, consider accessing the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Sarepta Therapeutics has faced a series of significant developments. The company reported a notable downgrade from Mizuho (NYSE:MFG), which moved its rating from Outperform to Neutral and reduced the price target from $40.00 to $14.00, citing safety concerns related to Sarepta’s gene therapy platform. This follows an FDA request for Sarepta to halt all shipments of its Duchenne muscular dystrophy treatment, Elevidys, due to safety issues. Similarly, Leerink Partners downgraded Sarepta from Outperform to Market Perform, slashing the price target to $10.00 from $45.00, reflecting concerns over management credibility and regulatory challenges. William Blair reiterated a Market Perform rating amid these FDA concerns, projecting a net loss for the company in 2025. JPMorgan also adjusted its price target for Sarepta to $20.00 from $28.00 while maintaining an Overweight rating, highlighting regulatory uncertainties. Meanwhile, a BMO Capital survey revealed investor concerns about Sarepta’s financial stability and management credibility, with many investors skeptical about the company’s near-term recovery. These recent developments underscore the challenges Sarepta Therapeutics is facing in navigating regulatory hurdles and maintaining investor confidence.
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