Sarepta stock crashed Tuesday after a patient who received its approved gene therapy, Elevidys, died due to acute liver failure.
Elevidys treats Duchenne muscular dystrophy, a devastating disorder that causes progressive muscle deterioration. According to Sarepta Therapeutics, the patient developed acute liver failure following treatment with Elevidys. He also had a recent cytomegalovirus infection, or CMV, which could have been a contributing factor. CMV can injure the liver.
This is the "event people had feared," said RBC Capital Markets analyst Brian Abrahams. But it "shouldn't spell the end for Elevidys."
"The news is certainly not good, but given the known liver toxicities associated with Elevidys and all gene therapies, the fragile nature of the patients with this deadly illness being treated and the growing use of the agent, it is perhaps not altogether surprising that a fatal (adverse event) could potentially be observed occasionally," he said in a note.
Still on today's stock market, Sarepta stock toppled 27.4%, closing at 73.54.
'Very Unique' Case
Sarepta didn't provide any identifying characteristics about the patient other than to describe him as a "young man."
William Blair analyst Sami Corwin said the patient was a 16-year-old boy. Analysts noted older and non-ambulatory patients would typically weigh more and require a larger dose of Elevidys. Further, older patients have a higher morbidity, Leerink Partners analyst Joseph Schwartz said in a report.
This is the first fatality among Elevidys recipients. Sarepta says it has treated north of 800 patients weighing up to 300 pounds with Elevidys in testing and following approval. Sarepta believes this case is "very unique," Schwartz said.
"Although we acknowledge that such severe side effects associated with mortality can certainly be alarming and cause the community to question the risk/benefit of treating older patients, we believe that the very low overall incidence which we estimate at less than 0.125% based on aggregate exposure to date is encouraging," he said.
He reiterated his outperform rating on Sarepta stock.
Well-Known Side Effect
Liver toxicity is associated with AAV-based gene therapies. These drugs use non-harmful viruses known as adeno-associated viruses, or AAV, to deliver therapeutic genes to the cells. In this case, the drug tells the body how to make a shortened version of the dystrophin protein that's missing in Duchenne patients. Dystrophin helps keep muscles intact and functional.
William Blair's Corwin noted two patients died following treatment with Novartis' Zolgensma, a treatment for spinal muscular atrophy.
"Overall, we see this event as unlikely to affect patient/physician interest in Elevidys in the near term or Sarepta's full year 2025 product revenue guidance of $2.9 billion to $3.1 billion," she said in a report.
Analysts called the sell-off "overblown," "overdone" and "overly bearish."
"Thus we think this is an overreaction and presents a buying opportunity ahead of a continued strong Elevidys launch," Leerink's Schwartz said.
Meanwhile, shares of Regenxbio, which is working on Duchenne gene therapies, rose 11.6% to 7.81. Solid Bio, another gene therapy competitor, saw shares shrink 4.9%, trading down at 5.10.
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