Sarepta to exchange $700 million in convertible notes due 2027

CAMBRIDGE, Mass. - Sarepta Therapeutics, Inc. (NASDAQ:SRPT), a biotechnology company with a market capitalization of $2.01 billion that has seen its stock decline over 85% in the past year, announced Thursday it has entered into privately negotiated exchange agreements with select holders of its 1.25% convertible senior notes due 2027. According to InvestingPro analysis, the company currently appears undervalued compared to its Fair Value.

Under the agreements, the biotechnology company will exchange approximately $700 million in aggregate principal amount of existing notes for about $602 million in new 4.875% convertible senior notes due 2030, up to 6.7 million shares of common stock, and approximately $123.3 million in cash. This restructuring comes as InvestingPro data shows the company maintaining a solid current ratio of 2.89, indicating sufficient liquid assets to meet short-term obligations.

The new convertible notes have an initial conversion rate of 16.6667 shares per $1,000 principal amount, equivalent to a conversion price of approximately $60.00 per share. This represents a 191.5% premium based on the $20.58 closing price of Sarepta’s stock on August 20, 2025.

Additionally, Sarepta entered into a subscription agreement with J. Wood Capital Advisors LLC for the private placement of up to approximately 1.4 million shares of common stock.

"This exchange marks important progress in our long-term financial strategy," said Doug Ingram, chief executive officer of Sarepta, in the press release announcing the transaction.

The transactions are expected to close on or about August 28, 2025, subject to customary closing conditions. Following the exchange, approximately $450 million in aggregate principal amount of the existing convertible notes will remain outstanding with terms unchanged.

J. Wood Capital Advisors LLC is acting as Sarepta’s financial advisor for the exchange.

Sarepta Therapeutics focuses on developing precision genetic medicine for rare diseases, with leadership positions in Duchenne muscular dystrophy. The company has demonstrated strong revenue growth of nearly 65% over the last twelve months, reaching $2.48 billion, though InvestingPro analysis reveals ongoing profitability challenges. For deeper insights into Sarepta’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The information in this article is based on a company press release statement.

In other recent news, Sarepta Therapeutics announced the sale of over 9.2 million shares of Arrowhead Pharmaceuticals in a privately negotiated block trade, expecting to generate at least $174 million in gross proceeds. This transaction is part of Sarepta’s strategy to fund a $100 million milestone payment, related to its SRP-1003 clinical program for type 1 myotonic dystrophy, by transferring an additional 2.66 million Arrowhead shares valued at $50 million. Additionally, Jefferies has reiterated its Buy rating for Sarepta, maintaining a $35 price target, following the resumption of shipments for its Duchenne muscular dystrophy drug, Elevidys. The FDA has confirmed that the death of an 8-year-old patient was not related to Elevidys, allowing the continuation of shipments with updated safety information. Meanwhile, Freedom Broker upgraded Sarepta’s stock from Hold to Buy, increasing the price target to $37, citing improved mid-term revenue prospects due to the resumed supply of Elevidys. TD Cowen has maintained its Hold rating with a $17 price target after Sarepta’s webinar on liver adverse events associated with Elevidys. The webinar highlighted similar risks of acute liver injury in both ambulatory and non-ambulatory patients, with higher hospitalization risks observed in commercial non-ambulatory patients. These developments reflect significant progress and adjustments in Sarepta’s strategic and clinical operations.

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