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Investing.com - H.C. Wainwright has reiterated its Sell rating on Sarepta Therapeutics (NASDAQ:SRPT) and dramatically lowered its price target to $0 from $10 following the FDA’s request for the company to voluntarily withdraw its ELEVIDYS drug from the market. The stock has already fallen over 90% in the past year, with InvestingPro data showing the current price at $14.08, down from its 52-week high of $150.48.
The FDA’s request comes after a third reported liver-related death across Sarepta’s gene therapy portfolio, with two deaths linked to ELEVIDYS and one in a clinical trial for a different LGMD subtype. According to H.C. Wainwright, Sarepta has declined to comply with the FDA’s withdrawal request. InvestingPro analysis shows the company’s financial health score is currently rated as "FAIR," with 13 key investment factors identified for investors to consider.
The research firm notes that Sarepta’s non-ELEVIDYS commercial franchise is expected to continue declining, with 2025 guidance of approximately $900 million representing a 6% year-over-year decrease. The company’s LGMD2E asset, despite being pursued for commercialization, represents an extremely small market opportunity with an estimated 250 cases annually.
H.C. Wainwright highlighted Sarepta’s financial challenges, pointing to $1.1 billion in outstanding convertible debt due in 2027 against cash totaling only $850 million. The lack of an immediate revenue driver to replace ELEVIDYS creates significant medium-term financial pressure for the company. Financial metrics from InvestingPro reveal a debt-to-equity ratio of 1.19, though the company maintains a strong current ratio of 4.02, indicating sufficient liquid assets to meet short-term obligations.
The firm has removed all future ELEVIDYS revenues from its financial model, reducing its intrinsic valuation of Sarepta to zero, while maintaining its Sell rating on the stock. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, though investors should note the company’s negative EBITDA of -$78.25 million and rapidly declining cash position.
In other recent news, Sarepta Therapeutics reported significant regulatory developments concerning its gene therapy, Elevidys. The FDA has informally requested a halt to shipments following reports of acute liver failure, leading to three patient deaths. Despite these concerns, Sarepta plans to continue shipments to ambulatory patients while pausing for non-ambulatory ones, as they evaluate a new immunosuppressive regimen. Analysts from BofA Securities maintained a Neutral rating with a $20 price target, while Wells Fargo (NYSE:WFC) retained an Overweight rating with a $65 target, citing resilience in the ambulatory market. JPMorgan lowered its price target from $28 to $20 but maintained an Overweight rating, emphasizing potential upside if Elevidys remains available. William Blair reiterated a Market Perform rating, noting delays in Sarepta’s limb-girdle muscular dystrophy treatment submission. BMO Capital’s survey revealed significant investor concerns, with skepticism about management credibility and financial stability. These developments highlight ongoing challenges for Sarepta as it navigates regulatory and market pressures.
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