Sarepta Faces Setback as Third Patient Death Reported, Prompting Restructuring and Safety Concerns

Sarepta Therapeutics, a prominent player in the gene therapy space, has encountered a significant setback with the revelation of a third patient death linked to one of its investigational treatments. This development comes on the heels of a major corporate restructuring and has sparked renewed concerns about the safety of the company's gene therapy pipeline.

Patient Death and Safety Concerns

A 51-year-old man with limb-girdle muscular dystrophy (LGMD) type 2D/R3 died last month after receiving Sarepta's experimental gene therapy SRP-9004 in a Phase 1 trial. The cause of death was acute liver failure, mirroring the complications that led to two previously reported fatalities associated with Sarepta's Duchenne muscular dystrophy (DMD) treatment, Elevidys.

This latest incident has amplified safety concerns surrounding Sarepta's gene therapies, particularly those utilizing adeno-associated virus (AAV) vectors. The company has attributed the fatal liver complications to these viral vectors, which are used in both Elevidys and SRP-9004.

In response to the earlier deaths, Sarepta had already implemented several safety initiatives, including the formation of an independent expert panel to assess updated immunosuppressive regimens for patients. The company also paused Elevidys shipments for non-ambulatory patients and added a boxed warning to the drug's label for acute liver injury and acute liver failure.

Corporate Restructuring and Pipeline Shift

The news of the third patient death coincides with a significant corporate overhaul announced by Sarepta earlier this week. The restructuring involves:

1. Laying off approximately 500 employees, representing about 36% of its workforce
2. Deprioritizing most of its gene therapy assets in LGMD, including SRP-9004
3. Shifting focus to siRNA programs from its internal platform
4. Seeking strategic alternatives, such as partnerships, for deprioritized programs

Despite the restructuring, Sarepta still plans to submit an FDA approval application for another LGMD therapy, SRP-9003, in the second half of 2025. However, analysts warn that the recent death could lead to greater scrutiny of SRP-9003's safety profile and potentially affect its commercial prospects if approved.

Market Response and Analyst Reactions

The disclosure of the patient death has had a significant impact on Sarepta's stock price, which fell by more than 18% in Friday morning trading. This reversal comes after initial gains following the announcement of the corporate restructuring.

Analysts have expressed concern over the company's handling of the information, noting that the patient death was not disclosed during the investor call or press release about the restructuring. William Blair analysts speculated that the death might have played a role in the company's pipeline reprioritization, while Leerink Partners suggested that the news could "likely diminish any remaining goodwill management had."

Both analyst teams agree that this event will have implications for Sarepta's other gene therapies, potentially amplifying patient hesitancy to use Elevidys and increasing investor distrust. The incident also raises questions about the risk-benefit profile of SRP-9003 and the broader Elevidys program, given that these therapies use the same viral vector as SRP-9004.

As Sarepta navigates these challenges, the biopharmaceutical industry watches closely, recognizing the potential implications for the broader field of gene therapy development and patient safety.