Sarepta Therapeutics Inc. shares (SRPT) dropped more than 40% premarket on Tuesday following disappointing news about its gene therapy trial for Duchenne muscular dystrophy. The therapy, known as Elevidys, showed some improvement in patients’ movement and walking ability but failed to reach the statistically significant improvement compared to the placebo in an ambulatory assessment after 52 weeks of treatment, as reported by Sarepta on Monday.
Impact on Duchenne Muscular Dystrophy Patients
Duchenne muscular dystrophy is a genetic disorder that leads to severe muscle weakness, with symptoms typically appearing in early childhood. The trial involved patients aged 4 to 7 years old. Despite not meeting the main goal of the trial, Sarepta stated it plans to seek a label expansion for Elevidys so that it can be used to treat all patients. Earlier this year, the U.S. Food and Drug Administration approved Elevidys for treatment in patients aged 4 to 5 years old. Doug Ingram, the president and CEO of Sarepta, stated that the trial results underscored the potential benefit of Elevidys in modifying the trajectory of Duchenne muscular dystrophy across different age groups.
Analysts’ Response and Sarepta’s Stock
Leerink Partners analysts expressed disappointment with the trial data in a note on Monday. However, they acknowledged the FDA’s historical flexibility regarding Duchenne muscular dystrophy and maintained an outperform rating on Sarepta shares. Nevertheless, they did reduce their price target from $185 to $130.
Sarepta’s stock has experienced a decline of 16.9% year-to-date, while the S&P 500 has gained 8.5%.