Sarepta Therapeutics shares jumped over 36% in premarket trading on Tuesday after the company said it had received US Food and Drug Administration (FDA) approval to restart shipments of its flagship gene therapy Elevidys in the United States.
The move provides the biotech company with some much-needed breathing room after coming under pressure for months following deaths in the patient group, raising questions about the future of its lead revenue-generating Duchenne muscular dystrophy (DMD) product, Elevidys.
Shipments restart following FDA review
Sarepta announced on Monday that it would restart distribution of Elevidys to ambulatory patients in the United States, following the FDA’s recommendation to lift the voluntary shipping hold.
The action came after an official probe into the death of an 8-year-old child in Brazil, which found no relation to the therapy.
Shipments to patients who are unable to walk independently have been halted while regulators and the firm review safety data following the deaths of two teens in the United States earlier this year.
Financial outlook improves
Wall Street responded strongly to the news. Analysts said the ability to continue limited shipments revives Sarepta’s near-term financial risk mitigation plans as it has a payment to its partner, Arrowhead Pharmaceuticals (ARWR.O), and maintains access to debt facilities.
“The FDA’s recommendation and the resumption of commercial treatment in the US virtually eliminate the risk of Elevidys being formally withdrawn from the market,” Sami Corwin, an analyst at William Blair, said.
That ruling is a major win for Sarepta, which saw its shares fall over 80% since March, after the initial death linked to Elevidys was reported. Shares climbed 36% to $18.85 in early Tuesday trading.
Lingering market concerns
Despite the quick turnaround, analysts warned that the deaths’ reputational harm could harm the company’s business momentum.
Elevidys uptake may be limited soon due to patient and physician hesitation, even if access improves for eligible persons.
“It remains to be seen how the news headlines regarding the patient deaths will affect commercial interest in the near term,” according to Corwin.
The drug, which was approved to treat DMD in walkable patients, faced growing uncertainty as Sarepta’s global operations were disrupted.
Partner Roche (ROG.S) had also delayed shipments to select areas outside the United States, raising concerns among investors about the drug’s long-term sustainability.
Path forward remains uncertain
While the FDA’s findings in the Brazil case provide some reassurance, Sarepta’s future route is still contingent on broader regulatory clarity and the results of ongoing safety reviews.
The company has not offered an update on when or whether shipments to non-ambulatory patients would resume.
For the time being, the restart of Elevidys shipments to a subset of patients is a key win for Sarepta, mitigating some of the most urgent market threats and stabilising its financial position.
However, with unanswered problems about perception and access, the company’s recovery remains a work in progress.
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