Sarepta Therapeutics stock price target lowered to $20 by BofA Securities

Investing.com - BofA Securities has lowered its price target on Sarepta Therapeutics (NASDAQ:SRPT) to $20.00 from $28.00 while maintaining a Neutral rating following a third patient death related to the company’s gene therapy. The stock, which has fallen over 80% in the past year, currently trades near its 52-week low of $16.88. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis.

The death occurred in a 51-year-old limb-girdle muscular dystrophy type 2D patient who experienced acute liver failure after treatment with SRP-9004 in June. On Wednesday, Sarepta announced a pause in development of additional LGMD programs without disclosing the death. Despite these challenges, the company maintains a strong liquidity position with a current ratio of 4.02, as reported by InvestingPro.

BofA Securities noted that acute liver failure appears to be a known risk with the rAAVrh74 vector used in Sarepta’s therapies, particularly in older individuals. The firm expects these reports will create additional hesitancy among physicians and patients.

Despite the setback, Sarepta plans to proceed with the biologics license application filing of SRP-9003 for LGMD-2E in the second half of the year. The company’s Elevidys treatment for Duchenne muscular dystrophy is expected to continue being used in younger patients.

BofA Securities anticipates more limited uptake of Elevidys going forward and awaits further information on the treatment’s launch progress.

In other recent news, Sarepta Therapeutics has faced significant developments impacting its operations and market position. The company reported preliminary second-quarter net product revenues of approximately $513 million, slightly surpassing consensus estimates of $509 million, as noted by Cantor Fitzgerald. However, Sarepta’s Elevidys treatment for Duchenne muscular dystrophy has come under scrutiny, with the FDA adding a black box warning following multiple patient deaths attributed to acute liver failure. As a result, Sarepta announced a strategic review aimed at achieving $400 million in cost savings through workforce reductions and pipeline prioritization, including its siRNA programs.

Despite these challenges, Leerink Partners maintained an Outperform rating on Sarepta, citing potential future cash flows, while Morgan Stanley (NYSE:MS) reiterated an Equalweight rating, highlighting the uncertainty surrounding Elevidys. Additionally, Sarepta discontinued further development of its limb-girdle muscular dystrophy program, citing financial reasons rather than safety concerns. Goldman Sachs retained a Neutral rating, pointing to ongoing risks such as demand uncertainty and regulatory alignment issues. William Blair also reiterated a Market Perform rating, expressing concerns about the safety profile of Sarepta’s gene therapies and their long-term commercial viability.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.