Sarepta Therapeutics (NASDAQ: SRPT) said Friday that the deaths of two patients taking its marketed gene therapy Elevidys® (delandistrogene moxeparvovec-rokl), posted on a public FDA database and reported this past week in an analyst’s research note, were unrelated to their use of the Duchenne muscular dystrophy (DMD) treatment.
“The deaths were not related to treatment,” Sarepta spokeswoman Tracy Sorrentino told GEN.
She said those deaths do not impact the shipment status of Elevidys, which Sarepta resumed shipping to ambulant patients late last month, but has paused shipping to non-ambulant patients.
Sarepta’s comments came after a research note by Brian Abrahams, MD, a managing director and co-head of biotechnology research with RBC Capital Markets, disclosed the presence of the deaths on the FDA Adverse Event Reporting System (FAERS) database, without stating whether the deaths were treatment-related.
Citing an analysis of data and discussion with Sarepta, RBC reported that one patient was a 25-year-old who died of a pneumothorax about three months following Elevidys treatment, while the other was a 19-year-old with a low ejection fraction who had experienced a viral infection.
Neither of these recently reported deaths was attributed to acute liver failure, the cause cited for two deaths tied to Elevidys that became public earlier this year.
FAERS lists four deaths among 168 reports associated with Elevidys as of June 30—88 filed so far this year, 75 in all of 2024, and five in 2023. Of the 168 Elevidys reports, 105 are deemed “serious.” A report is considered serious where it documents one or more of the following patient outcomes: death, life-threatening events, hospitalization (initial or prolonged), disability or permanent damage, a congenital anomaly/birth defect, or other important medical events that may jeopardize a patient.
FAERS does not include whether deaths are considered treatment-related or not in the public dashboard, though the FDA is provided with complete information that includes cause of death and whether it was considered related to treatment, Sorrentino added.
Information about the deaths contained in the research note was paraphrased in a report by the stock news website TheFly.com that was copied and shared on X by at least one stock market-focused user in recent days.
According to the report, Abrahams concluded that the two additional deaths, while not related to treatment with Elevidys, may “further reinforce skepticism” about treating non-ambulant patients with the DMD gene therapy.
At deadline, RBC Capital said it was processing GEN’s request for a copy of the research note.
Abrahams downgraded RBC’s rating on Sarepta shares from “Outperform” to “Sector Perform” in March after the company disclosed the first patient death tied to Sarepta.
Stock climbs 15%
News of the two latest-disclosed deaths appeared less of a factor for investors than Sarepta’s stronger-than-expected second-quarter results, as the company’s stock finished this past week with a roughly 15% gain.
Sarepta shares rose after the company beat analyst expectations by finishing the second quarter with $611.091 million in combined total product, collaboration, contract manufacturing, and royalty revenue, 15% ahead of a $532 million analyst consensus estimate cited by William Blair. Total revenue was 42% ahead of the $362.931 million reported a year ago.
Elevidys finished the first half of this year with product sales of $281.851 million—a figure 132% or $160.13 million above the $121.721 million reported a year ago, but all but matching Blair’s Q2 revenue forecast of $282 million, and ahead of the $272.8 million analyst consensus.
Elevidys also drew an additional $63.5 million in collaboration revenue for Sarepta during Q2 because of a regulatory milestone payment made to the company by Roche, which markets the DMD gene therapy outside the United States, namely approval of Elevidys in Japan.
Elevidys accounted for more than half (55%) of Sarepta’s total Q2 product revenue. That revenue helped propel Sarepta to finish the quarter with $196.892 million in net income, vs. just $6.46 million in Q2 2024.
The net income and sales numbers were enough to send investors on a slow but steady buying surge that sent Sarepta shares reviving this past week. After dipping 3% from $16.75 to $16.26 on Wednesday before the Q2 results came out, Sarepta shares climbed 10.5% to $17.96 on Thursday, the first trading day after the Q2 results. The climb continued the rest of the week as Sarepta shares rose another 1.5% to $18.23 on Friday.
Sarepta’s product sales increase largely reflects a more than doubling of sales for Elevidys between June 2024, when its prescribing label was expanded, and this past June, a month before the company’s voluntary week-long pause on shipments of the DMD gene therapy.
Q3 revenue “lumpiness” forecast
That pause will show in the results Sarepta shares for the third quarter, Sami Corwin, PhD, a biotechnology-focused healthcare analyst with William Blair, cautioned in a research note.
“We expect lumpiness in Elevidys revenue in the third quarter, given the pausing and resumption of shipments for the ambulatory population,” Corwin predicted. “We continue to believe the news headlines regarding the patient deaths will affect commercial interest in the near term, and we expect to see some hesitancy from patients and physicians once shipments resume. Therefore, we think investors will be hesitant to reenter the stock until the company is able to provide updated Elevidys revenue guidance for the coming quarters.”
Corwin reiterated William Blair’s rating on the stock as “Market Perform,” saying the firm “continues to view the stock’s near-term upside potential as limited. Corwin and Blair are now forecasting that Sarepta will finish 2025 with a net loss of $268 million.
Joseph P. Schwartz, senior managing director, rare diseases, and a senior research analyst with Leerink Partners, also predicted a sales decline during Q3 in a research note, but added “it remains difficult to know” how sales will trend beyond then.
“Considering the several deaths, combined with the drawn-out drama between the company and the FDA, with Elevidys voluntarily pulled and then put back on the market, we believe there could be some significant hesitancy following recent events,” Schwartz observed. “On the other hand, these patients have limited other options and next-generation therapies are not yet available.”
Andrew Tsai, equity research analyst at Jefferies, wrote in a research note that his firm projects as much as a 50% sales decline in the third quarter, with estimates ranging from a conservative $121 million to a high-end $130 million, before stabilizing higher.
“The key question is how Elevidys sales (gene therapy) will trend in H2:25 and 2026,” Tsai wrote, citing the fact that Sarepta has more than $1 billion in convertible notes due for repayment in 2027. The resumption of shipments for ambulatory DMD patients, which accounts for about half of Sarepta’s market, “significantly improves Elevidys’ sales outlook in the near-term” over recent estimates that assumed minimal sales.
“The Street could have greater confidence in SRPT’s ability to pay off the $1.1B+ converts [convertible notes]” if Sarepta achieves the $1.4 billion low end of its revised sales forecast range for both Elevidys and three RNA-based phosphorodiamidate morpholino oligomer (PMO) treatments also indicated for DMD (the high end is $1.7 billion), as revised downward by the company in May.
To achieve $1.4 billion, Elevidys would be expected to generate about $500 million in annual sales, while the PMO treatments would rack up $900 million.
During the first quarter, Elevidys generated $374.985 million in net product sales, up 180% year over year from $133.896 million in Q1 2024. For all of 2024, Elevidys racked up $820.791 million in net product revenue last year, more than quadruple the $200.356 million of 2023 with its initial, more limited label.
Outside the United States, rights to Elevidys are held by Roche, which generated $8.9 million in royalty revenue so far this year—$5.1 million in Q2, the rest in Q1—and $16.8 million in 2024.
Raising price targets
Despite the caution shown by Schwartz and Corwin, two other analysts took more positive views of Sarepta (albeit varying widely) by raising their 12-month price target projections on the company’s stock:
- Goldman Sachs (Salveen Richter)—Up 90% from $10 to $19, maintaining “Neutral” rating
- Wells Fargo (Yanan Zhu, PhD)—Up 4% from $48 to $50, maintaining “Overweight” rating
While Sarepta’s 15% weekly stock price gain this past week may not seem momentous, it is still significant in light of recent weeks’ events.
Those events included the deaths of three patients taking Elevidys. Sarepta acknowledged the death of a 16-year-old young man with DMD following treatment with Elevidys in March, and announced in June a second patient death tied to Elevidys, whose age has not been disclosed. After the June death, Sarepta voluntarily paused shipments to non-ambulant DMD patients.
Last month, news emerged of the death of an 8-year-old boy in Brazil. Following that death, the FDA requested that Sarepta pause shipments of Elevidys to ambulant patients. The company initially balked, then agreed to the request three days later. The pause on shipments to ambulant patients lasted only a week after the FDA sided with Sarepta by recommending that the company resume the shipments.
After the end of the pause, in light of the agency’s not pulling Elevidys off the market, Barclays Capital analyst Gena Wang, PhD, upgraded Sarepta from “Underweight” to “Equal Weight” and more than doubled her firm’s price target on the stock, raising it 120% from $10 to $22. Abrahams raised his firm’s price target on Sarepta as well, but from $10 to $14, a 40% increase.
The FDA publicly explained its shift by citing Brazilian authorities who ruled out treatment with Elevidys as a factor in the boy’s death—though news reports said the about-face followed pleas to Congress, the FDA, and President Donald Trump by conservative leaders and DMD patient advocates, who launched a Change.org petition that drew 931 signatures as of 12:30 pm ET Saturday.
“We know that the patient community likely had a hand in getting Elevidys back on the market, so it seems reasonable to assume there is still some demand out there [but how much remains to be seen],” Schwartz added.
A day after the FDA shift, the architect of its get-tough policy on Sarepta, Vinayak (Vinay) Prasad, MD, suddenly departed as director of the FDA’s Center for Biologics Evaluation and Research (CBER)—though less than two weeks later, Prasad was reported to have returned to the FDA, back at the helm of CBER.
During the brief pause on Elevidys shipments, the FDA placed clinical holds on Sarepta’s clinical trials of its gene therapy candidates for limb-girdle muscular dystrophy (LGMD). A 51-year-old man with non-ambulant LGMD died in June after being dosed in the Phase I DISCOVERY trial (Study SRP-9004-102; NCT01976091) with one of the experimental LGMD gene therapies, SRP-9004.
Since then, Sarepta has paused development of all but one LGMD candidate. The company still plans to submit a Biologics License Application in the second half of this year for its furthest-along LGMD candidate, SRP-9003, a gene therapy designed to treat LGMD type 2E/R4.
“Protecting patient safety is our highest priority, and the FDA will not allow products whose harms are greater than benefits,” Prasad stated on July 18. “The FDA will halt any clinical trial of an investigational product if clinical trial participants would be exposed to an unreasonable and significant risk of illness or injury.”
Leaders and laggards
- Avidity Biosciences (NASDAQ: RNA) shares jumped 26% from $38.26 to $48.26 Wednesday after the Financial Times reported, citing unnamed sources, that the developer of a new class of RNA therapeutics, Antibody Oligonucleotide Conjugates (AOCs
), had been approached by Novartis (SIX Swiss: NOVN) expressing interest in an acquisition in recent weeks. Avidity is assessing its options with advisors, according to the report, which added that talks were at an early stage. The companies have declined to comment. The Avidity report also lifted shares of another developer of therapies for rare muscular diseases, Dyne Therapeutics (NASDAQ: DYN), which climbed nearly 11% from $10.47 to $11.59. - Eli Lilly (NYSE: LLY) shares skidded 16% over two days after the company reported topline results from the Phase III ATTAIN-1 trial assessing orforglipron. The oral glucagon-like peptide-1 (GLP-1) receptor agonist candidate met the trial’s primary endpoint by lowering weight by an average of 12.4% (27.3 lbs) vs. 0.9% (2.2 lbs) with placebo, at the highest dose of 36 mg. However, the result disappointed investors, who had expected to see about 15% weight loss. Shares slid 14% from $746.37 to $640.86 on Thursday, then fell another 2% Friday to $625.65. In what Lilly said was a key secondary endpoint, 59.6% of participants taking the 36 mg dose of orforglipron lost at least 10% of their body weight, while 39.6% lost at least 15% of their body weight.
- Myriad Genetics (NASDAQ: MYGN) shares soared 46.5% from $3.87 to $5.67 on Wednesday, after the molecular diagnostic testing and precision medicine company reported second-quarter results that exceeded analyst expectations, raised its full-year revenue guidance, and said it closed on a $200 million credit facility to fund future growth. While Myriad finished the second quarter with a GAAP net loss of $330.5 million, 96% of that amount ($316.7 million) reflected non-cash impairment charges of $316.7 million due primarily to a decline in Myriad’s market capitalization year-to-date. Revenue rose 1% from Q2 2024 from $211.5 million to $213.1 million, ahead of the $202 million consensus forecast offered by analysts. Myriad raised its 2025 revenue guidance to a range of $818 million-$828 million, from $807 million-$823 million.
- Sana Biotechnology (NASDAQ: SANA) shares nosedived 30% from $4.25 to $2.97 on Thursday after the developer of treatments based on engineered cells priced an underwritten public offering of 20,895,522 shares at $3.35 per share—21% below its Wednesday closing price. The offering also included pre-funded warrants to purchase 1,492,537 shares of stock at $3.3499 per pre-funded warrant. Morgan Stanley, Goldman Sachs, BofA Securities, and TD Cowen are joint book-running managers for the offering, which is expected to generate about $75 million in gross proceeds before deducting underwriting discounts, commissions, and other offering expenses. Sana also granted underwriters a 30-day option to buy up to an additional 3,358,208 shares of its stock, which, if exercised in full, would raise gross proceeds to $80.6 million, according to the offering prospectus. The offering was expected to close on or about Friday, subject to satisfying customary closing conditions.
The post StockWatch: Sarepta Says Deaths of Two Elevidys Patients Posted on FDA Database Unrelated to Treatment appeared first on GEN – Genetic Engineering and Biotechnology News.
