Sarepta Stock Plunges as Elevidys Sales Fall Short
Shares tumbled nearly 12% after initial revenue from the company's cornerstone gene therapy for Duchenne muscular dystrophy disappointed investors.
Sarepta Therapeutics (NASDAQ: SRPT) shares plunged in trading on Monday, shedding nearly 12% of their value after the initial sales figures for its much-anticipated gene therapy, Elevidys, failed to meet market expectations. The sell-off highlights investor concern over the commercial uptake of a treatment considered crucial to the company's long-term growth.
The stock fell $2.75, or 11.56%, to close at $21.075, wiping out hundreds of millions in market capitalization. The drop pulls the Cambridge, Massachusetts-based biotech firm's stock further from its 52-week high of over $127 and closer to its yearly low, reflecting deep disappointment in the launch of its cornerstone drug.
Elevidys, a one-time gene therapy for Duchenne muscular dystrophy (DMD), a rare and fatal genetic disorder, is the centerpiece of Sarepta’s pipeline and a focal point for the entire gene therapy sector. The therapy's commercial launch has been one of the most closely watched events in biotech this year. According to a report from Bloomberg, the early revenue numbers missed analyst estimates, fueling doubts about the drug's adoption rate among physicians and payers.
Duchenne muscular dystrophy is a progressive muscle-wasting disease that affects boys, and Elevidys was developed to address the underlying genetic cause of the condition. Its approval by the U.S. Food and Drug Administration (FDA) was seen as a landmark achievement, not just for Sarepta but for the potential of gene therapy to treat rare diseases. However, the path from regulatory approval to commercial success is fraught with challenges, including complex logistics, high treatment costs, and navigating insurance reimbursement.
The reported sales miss raises critical questions for Sarepta's management. Investors are now looking for clarity on whether the shortfall is a result of temporary launch hurdles—such as identifying eligible patients or securing hospital administration approvals—or if it signals a more fundamental challenge with physician prescribing habits, the therapy's perceived value, or its competitive positioning.
The market reaction underscores the immense pressure on Sarepta, which has staked its future on the success of its DMD franchise. The company has a negative earnings per share of -$2.83, typical for a development-stage biotech firm, but the Eleivdys launch was meant to pave a clear path toward profitability.
Wall Street's confidence in the stock was already fractured heading into the report. Of the analysts covering Sarepta, 14 currently rate the stock a 'Hold,' compared to just seven with a 'Buy' rating. The average analyst price target sits at $20.70, suggesting that the new, lower share price is more in line with the street's tempered expectations. Monday's news appeared to validate the caution expressed by a significant portion of analysts.
Looking ahead, Sarepta's leadership will be under intense scrutiny to provide a detailed roadmap for accelerating Elevidys's revenue growth. The company's next earnings call will be a critical event, with investors and analysts expecting a thorough explanation of the initial sales performance and a convincing strategy to overcome existing barriers to adoption. The results will not only determine the fate of Sarepta's stock but could also have broader implications for investor sentiment toward the entire gene therapy industry.