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Investing.com - Freedom Broker downgraded Sarepta Therapeutics (NASDAQ:SRPT) from Buy to Hold and slashed its price target from $110.00 to $14.00 on Wednesday. The stock, currently trading at $13.81, has fallen nearly 91% over the past year, with a particularly steep 26% decline in the past week alone.
The downgrade follows what the research firm described as a "late disclosure of a patient’s death" during the SRP-9004 study and "inconsistent statements" regarding the halt of ELEVIDYS sales, which it said has "significantly undermined investor confidence" in the company’s management.
Freedom Broker expressed concerns about the common viral platform shared between SRP-9004 and ELEVIDYS, noting it raises "systemic safety concerns" for Sarepta’s gene therapy platform.
The firm also highlighted financial challenges, warning that despite cost reductions, Sarepta risks violating covenants of its $600 million credit facility and "lacks a reliable source of funds" to repay over $1 billion in debt due in 2027.
The dramatic price target reduction of nearly 87% reflects Freedom Broker’s diminished outlook for the biotechnology company amid these mounting operational and financial challenges.
In other recent news, Sarepta Therapeutics has temporarily halted all U.S. shipments of its drug Elevidys to address regulatory concerns. This decision is part of efforts to update the drug’s label with a black box warning due to potential liver risks, including acute liver injury and failure. The pause in shipments follows an update from Children’s Hospital Los Angeles, which had already stopped using Elevidys over regulatory uncertainties. In light of these developments, Barclays (LON:BARC) downgraded Sarepta’s stock from Overweight to Equalweight, citing safety concerns linked to a third patient death related to the company’s AAVrh74 platform. Barclays also reduced its price target for the company to $18.00 from $32.00. Additionally, BMO Capital lowered its price target for Sarepta to $25.00, maintaining a Market Perform rating, while Piper Sandler adjusted its target to $11.00, keeping a Neutral rating. These analyst actions reflect the ongoing scrutiny and challenges facing Sarepta in the wake of its Elevidys shipment pause.
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