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Investing.com - BofA Securities lowered its price target on Sarepta Therapeutics (NASDAQ:SRPT) to $16.00 from $17.00 on Thursday, while maintaining an Underperform rating on the biopharmaceutical company. The stock, currently trading around $19.27, has seen its market capitalization decline to $1.86 billion following an 85% drop over the past year. According to InvestingPro analysis, the stock appears to be undervalued at current levels.
The price target reduction follows Sarepta’s announcement of a debt refinancing transaction involving approximately $700 million of 1.25% 2027 convertible notes. The company is replacing these with approximately $602 million of 4.875% 2030 convertible notes, up to 6.7 million shares of common stock, and $123.3 million in cash.
BofA Securities noted that $450 million of the original 1.25% 2027 convertible debt remains outstanding. Sarepta also announced a private placement expected to generate approximately $20 million in gross proceeds.
The research firm acknowledged the transaction helps address near-term concerns about Sarepta’s ability to meet financial obligations and provides flexibility as the company navigates recent setbacks with its Elevidys product launch.
BofA Securities continues to seek clarity on Elevidys uptake and expressed concern about revenue risks from the company’s exon skipping franchise ahead of post-marketing trial results expected in 2026.
In other recent news, Sarepta Therapeutics has announced significant financial maneuvers. The company disclosed a refinancing initiative involving approximately $700 million of its 1.25% Convertible Senior Notes due 2027. This initiative includes exchanging these notes for around $602 million in new 4.875% Convertible Senior Notes due 2030, up to approximately 6.7 million shares of common stock, and about $123.3 million in cash. Additionally, Sarepta has entered into a $20 million private placement agreement. In a related development, the company sold over 9.2 million shares of Arrowhead Pharmaceuticals (NASDAQ:ARWR) in a privately negotiated block trade, expecting to generate at least $174 million in gross proceeds. Sarepta will also transfer approximately 2.66 million Arrowhead shares to fulfill $50 million of a previously announced $100 million milestone payment obligation. These actions reflect the company’s strategic financial restructuring and ongoing commitments to its clinical programs.
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