What Happened?

Shares of biotech company Sarepta Therapeutics (NASDAQ: SRPT) fell 44.4% in the afternoon session after the company reported a second death linked to its Duchenne muscular dystrophy gene therapy,. Elevidys, after a patient succumbed to acute liver failure. 

In response, the company temporarily halted shipments of Elevidys for patients who are unable to walk and paused an associated clinical trial.

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What The Market Is Telling Us

Sarepta Therapeutics’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for Sarepta Therapeutics and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 24.9% on the news that the company reported the death of a Duchenne muscular dystrophy patient following treatment with its gene therapy, ELEVIDYS. The patient reportedly suffered acute liver failure, a known risk of AAV-mediated gene therapies. 

However, Sarepta suggested that a recent cytomegalovirus (CMV) infection might have worsened the condition. Despite this, the company maintained that ELEVIDYS still had a favorable benefit-risk profile. It planned to update the prescribing information and inform regulators, clinical investigators, and prescribing physicians of the incident. 

Markets were likely reacting negatively due to concerns that the event could increase regulatory scrutiny, make doctors more hesitant to prescribe the therapy, or slow adoption overall. ELEVIDYS had been a big piece of Sarepta's growth story as it contributed more than 50% of sales in the Q4'2024 quarter. Any threat to its continued adoption could put pressure on the stock.

Sarepta Therapeutics is down 84.1% since the beginning of the year, and at $19.70 per share, it is trading 88% below its 52-week high of $163.85 from June 2024. Investors who bought $1,000 worth of Sarepta Therapeutics’s shares 5 years ago would now be looking at an investment worth $122.96.

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