Sarepta's Setback Deepens With Another Gene Therapy Fatality

Sarepta Therapeutics (NASDAQ:SRPT) shares plummeted on Friday following reports of a third patient death linked to its gene therapy pipeline this year, further clouding investor confidence despite the company’s recent efforts to provide clarity on its restructuring and FDA label plans.

The latest fatality, a 51-year-old man participating in a clinical trial for SRP-9004, the company’s gene therapy for the treatment of limb-girdle muscular dystrophy (LGMD) type 2D/R3, suffered acute liver failure, a cause of death also reported in two earlier fatalities associated with Sarepta’s approved Duchenne muscular dystrophy treatment, Elevidys.

The update was first reported by the BioCentury website on Thursday.

Also Read: Sarepta Therapeutics Stock Plummets Over 40% On Second Fatal Case Linked To Its Gene Therapy

Just a day before, the investors cheered as the company issued an update on ongoing label expansion efforts for Elevidys (delandistrogene moxeparvovec-rokl).

In response to these safety concerns, the U.S Food and Drug Administration (FDA) has requested that the label include a black box warning for acute liver injury (ALI) and acute liver failure (ALF), a change with which Sarepta has agreed.

This agreement appears to resolve any major issues with the label for the ambulant portion of the Elevidys patient population. In June, Sarepta temporarily suspended shipments of Elevidys for non-ambulatory patients. Both previous Elevidys-related deaths involved non-ambulatory teenage boys.

Notably, the company did not disclose the third patient death in its recent business update. However, Sarepta reported it planned to deprioritize the development of its LGMD franchise, with the exception of SRP-9003 for LGMD 2E/R4, suggesting the patient death could have played a role in the company’s pipeline reprioritization.

Sarepta reprioritized its pipeline and paused several programs, including gene therapies in development for limb-girdle muscular dystrophy (LGMD). Sarepta is expected to submit the Biologics License Application for SRP-9003 for LGMD type 2E/R4 later this year.

William Blair analysts, commenting on the situation, noted that the patient death is “unfortunate and concerning, particularly since it occurred with one of the company’s other gene therapies.”

They suggested that, given the patient’s age, the acute liver failure was likely also caused by high-dose, systemic adeno-associated virus (AAV) delivery, a common vector for gene therapies.

Analyst Sami Corwin emphasized the uncertainty surrounding whether Sarepta will release more information about this latest patient death or when the FDA might respond to the broader safety concerns.

Despite the halted development of SRP-9004, Corwin added in an investor note on Friday that this incident could still raise concerns about the safety of SRP-9003 as it progresses toward potential approval, potentially impacting its commercial appeal.

The death in the LGMD trial might also increase patient hesitancy to use the already approved Elevidys and could further diminish overall investor confidence in Sarepta.

Due to ongoing doubts about the long-term success of Sarepta’s gene therapy and PMO platform programs, William Blair sees limited short-term upside on the stock and maintains a Market Perform rating.

Bank of America Securities also remains Neutral on Sarepta Therapeutics, lowering its price target from $28 to $20. Oppenheimer, while maintaining an Outperform rating for Sarepta Therapeutics, has similarly lowered its price forecast from $45 to $41.

Price Action: SRPT stock is trading lower by 15.5% to $18.57 at last check Friday.

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