Sarepta Plunges After Key DMD Drug Study Misses Endpoint
The failed confirmatory trial for two of its Duchenne therapies adds pressure as the company navigates safety concerns around its flagship gene therapy, Elevidys.
Sarepta Therapeutics (NASDAQ: SRPT) shares plummeted in after-hours trading on Monday after the biotechnology firm announced that a crucial confirmatory study for two of its approved Duchenne muscular dystrophy (DMD) therapies failed to meet its primary goal. The setback compounds challenges for the company, which has been navigating significant safety and regulatory scrutiny over its newer, more critical gene therapy, Elevidys.
The stock plunged sharply in extended trading after closing the regular session at $24.45. The sell-off was a direct reaction to news that the Phase 3 ESSENCE study, designed to confirm the clinical benefit of AMONDYS 45 (casimersen) and VYONDYS 53 (golodirsen), did not achieve statistical significance on its primary endpoint of improving muscle function.
Both drugs received accelerated approval from the U.S. Food and Drug Administration (FDA) based on their ability to increase the production of the dystrophin protein, which is deficient in patients with DMD, a progressive muscle-wasting disease. However, this type of approval is contingent upon success in subsequent confirmatory trials like ESSENCE to prove tangible clinical benefits. The failure to do so now casts a shadow over the long-term future of two of the company's four approved DMD treatments.
In a statement, Sarepta said it plans to meet with the FDA to discuss the results. The company noted that despite missing the primary endpoint, it would share the totality of the data, including real-world evidence, in its bid to convert the accelerated approvals to traditional ones. The news overshadowed a third-quarter financial report where the company beat both revenue and earnings estimates.
The trial failure hits an already vulnerable company. Sarepta's main growth driver, the gene therapy Elevidys, has faced its own severe headwinds. In July, the FDA requested Sarepta suspend distribution of Elevidys and placed several of its gene therapy trials on clinical hold following new safety concerns, including patient deaths that were potentially linked to the treatment.
While regulators partially reversed the halt in August, allowing shipments to resume for ambulatory DMD patients, it came with a significant caveat: a new black box warning for acute liver injury, the agency's most stringent safety alert. This ongoing scrutiny of Elevidys, once seen as a revolutionary treatment, makes the disappointing ESSENCE results particularly damaging.
With two of its older drugs now on uncertain regulatory footing, Sarepta faces intensified pressure to prove both the safety and efficacy of Elevidys, which is central to its future growth strategy. The latest clinical setback could lead investors to question the viability of the company's broader exon-skipping platform, which underpins both AMONDYS 45 and VYONDYS 53.
Wall Street's reaction to the Elevidys safety crisis over the summer was swift, with analysts at Bank of America, UBS, and Piper Sandler among those downgrading the stock. While some firms, such as Jefferies, reiterated their confidence after the partial lifting of the distribution halt, the overall sentiment has become markedly more cautious.
For investors, the path forward for Sarepta appears fraught with uncertainty. The upcoming FDA discussions on AMONDYS 45 and VYONDYS 53 will be a critical catalyst. Simultaneously, the company must successfully navigate the stringent safety monitoring for Elevidys while continuing to advance its broader pipeline. The confluence of a major clinical trial failure and persistent safety issues with its lead product creates a challenging environment for a company that has long been a pioneer in the difficult landscape of Duchenne muscular dystrophy.