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Investing.com-- TD Cowen downgraded its rating on Sarepta Therapeutics Inc (NASDAQ:SRPT) and slashed its price target sharply, citing growing risks that the U.S. Food and Drug Administration (FDA) may withdraw approval for the company’s gene therapy drug Elevidys.
TD Cowen downgraded Sarepta to “Hold” from “Buy”, and reduced PT to $24 from $62.
TD Cowen analysts pointed to mounting safety concerns, particularly after a second non-ambulatory patient treated with Elevidys died from acute liver failure.
Analysts said the FDA could potentially revoke Elevidys’ accelerated approval for non-ambulatory patients and possibly even its full approval for ambulatory patients, especially if Sarepta loses critical support from the Duchenne muscular dystrophy (DMD) patient community.
“There is a small but real chance" that full approval could be reconsidered, analysts wrote.
TD Cowen noted that approximately 30% of patients experienced elevated liver function tests, and that Sarepta’s failure to adequately disclose real-world safety risks may have damaged trust with the DMD community.
The new $24 price target is based on a discounted cash flow model that factors in a potential market withdrawal, TD Cowen added.