Sarepta shares crash as second patient dies after receiving its gene therapy

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By Bhanvi Satija and Christy Santhosh

(Reuters) -Shares of Sarepta Therapeutics closed down as much as 42% to hit a nine-year low of $18.30 on Monday after a second death of a male teenage patient who had received its gene therapy, Elevidys, raising doubts on the safety and future demand for the treatment.

Elevidys is the only gene therapy approved by the U.S. drug regulator for treating Duchenne muscular dystrophy (DMD), a rare form of the disease, in patients aged four and above. It is a one-time gene therapy with a known risk of liver damage.

The patient died of acute liver failure, the company said on Sunday.

During an investor call on Monday, Sarepta said the patients who died were a 16-year-old, weighing 70 kilograms, and a 15-year-old, weighing 50 kilograms. Both boys were non-ambulatory and their deaths occurred within 90 days after treatment, it said.

Sarepta said it was investigating both cases independently and in relation to each other to identify any common risk factors. The company suspended its Elevidys sales forecast for this year, and said it would provide an update with its second-quarter results.

“While these two deaths occurred in non-ambulatory patients, we view the risk profile as now heightened for all DMD patients,” H.C. Wainwright analyst Raghuram Selvaraju wrote in a note.

Elevidys gained full approval in 2024 to treat ambulatory DMD patients, or those who can walk, and were at least four years of age, despite failing to meet the main goal in a late-stage study.

It also received FDA’s conditional approval to treat those who could not move independently, or non-ambulatory patients.

Selvaraju said about 80% of the patients with DMD are non-ambulatory and that he expects very little use of the therapy by them. Studies have shown that most patients lose the ability to walk between 10 and 13 years of age.

Sarepta said on Sunday it had temporarily stopped shipments of Elevidys to non-ambulatory patients and was working with regulators to develop a new treatment plan for them.

It said it was planning to add a drug called sirolimus to the treatment plan, which it said would help suppress an overactive immune response seen with Elevidys. Sarepta also stopped a DMD trial and plans to add sirolimus to the treatment protocol.

“The FDA is aware of the second reported fatal case of severe liver failure and are treating this situation with the highest level of concern. The FDA will take all appropriate regulatory actions to protect patients during our review of gene therapy products,” the agency said in an emailed response.

Non-ambulatory patients face a greater risk with the treatment because they tend to be older boys who weigh more, which in turn requires higher dosing, Piper Sandler analyst Biren Amin said.

The analyst does not expect the therapy to be withdrawn from the market, based on Sarepta’s efforts to mitigate risk.

Sarepta may also face scrutiny over its effort to get the new treatment plan approved and future gene therapies for DMD would be expected to meet a higher bar, according to some analysts.

Vinay Prasad, who heads the FDA’s unit that regulates gene therapies and vaccines, has raised questions about the approval of Elevidys under former unit head Peter Marks, some analysts said.

“Given his previous historical comments online, people are worried that he may go against Sarepta and may try to pull the drug,” BMO Capital Markets analyst Kostas Biliouris said.

While the treatment may not be withdrawn for ambulatory patients, there is some risk of withdrawal for non-ambulatory patients due to the conditional approval, Biliouris said.

As of Friday’s close, Sarepta had a market value of $3.56 billion. On Monday, the company lost $1.5 billion in market valuation and closed at $20.94.

(Reporting by Rashika Singh, Christy Santhosh and Bhanvi Satija in Bengaluru; Editing by Shailesh Kuber, Arun Koyyur and Anil D’Silva)