Sarepta Therapeutics Announces Major Restructuring Amid Gene Therapy Setbacks

Sarepta Therapeutics, a leading biopharmaceutical company specializing in genetic medicines for rare diseases, has unveiled a significant restructuring plan following recent setbacks with its Duchenne muscular dystrophy (DMD) gene therapy, Elevidys. The company's decision to reduce its workforce and refocus its research efforts marks a pivotal moment in the evolving landscape of gene therapy development and commercialization.

Extensive Workforce Reduction and Cost-Cutting Measures

Sarepta has announced plans to lay off approximately 500 employees, representing about 36% of its total workforce. This dramatic reduction is part of a broader strategy to achieve over $400 million in annual cost savings by 2026. CEO Doug Ingram emphasized the necessity of these measures, stating that "failure to adapt" to recent challenges "would risk our long-term viability as an organization."

The restructuring extends beyond personnel cuts, with Sarepta also pausing research on several drug programs. This strategic realignment aims to concentrate resources on the company's most promising therapies and maintain financial stability in the face of recent setbacks.

Elevidys Challenges and Regulatory Developments

At the heart of Sarepta's restructuring decision lies the uncertain future of Elevidys, the company's gene therapy for DMD. Despite becoming the first FDA-approved gene therapy for DMD in 2023, Elevidys has faced significant hurdles:

1. Safety concerns emerged after two Elevidys-treated patients experienced fatal acute liver failure in March and June 2025.
2. In response, Sarepta halted sales to older, non-ambulatory patients and paused a confirmatory study in this population.
3. The FDA is adding a black box warning about the risk of liver failure or injury to Elevidys' label.

These developments have led to a substantial decline in Sarepta's stock price, which has fallen by more than 80% this year. The company is now working on a new regimen of immune-suppressing drugs to manage safety risks and plans to engage with the FDA to address concerns about the therapy's use in non-ambulatory patients.

Financial Outlook and Future Focus

Despite the challenges, Sarepta remains optimistic about its financial future. The company became profitable in 2024 and believes it can maintain profitability even with reduced Elevidys sales. Key financial highlights include:

• Q2 2025 Elevidys sales of approximately $282 million, down from $375 million in Q1.
• Projected annual Elevidys sales of at least $500 million through 2027 for ambulatory patients.
• Expected annual revenue of about $900 million from three other DMD drugs through 2027.

Looking ahead, Sarepta plans to focus on its RNA-based medicines being developed in collaboration with Arrowhead Pharmaceuticals. These include treatments for spinocerebellar ataxia, Huntington's disease, and facioscapulohumeral muscular dystrophy, which the company describes as having "tremendous near-term potential."

As the pharmaceutical industry continues to grapple with the complexities of gene therapy development and commercialization, Sarepta's restructuring serves as a stark reminder of the challenges and risks inherent in this cutting-edge field. The company's ability to navigate these turbulent waters will be closely watched by investors, patients, and industry observers alike in the coming months and years.