Sarepta Therapeutics Announces Major Restructuring Amid Safety Concerns for Flagship Gene Therapy

Sarepta Therapeutics, a prominent player in the gene therapy space, has unveiled a significant restructuring plan that includes substantial workforce reductions and a strategic pivot in its research focus. This move comes as the company grapples with safety concerns surrounding its flagship product, Elevidys, and faces financial pressures in an increasingly challenging biotech market.

Workforce Reduction and Strategic Realignment

Sarepta has announced the layoff of 500 employees, representing 36% of its total workforce. This drastic measure is part of a broader restructuring effort aimed at reducing annual operating expenses by $400 million. The company's CEO, Douglas Ingram, emphasized the necessity of these changes to ensure Sarepta's "long term viability" and ability to serve patients effectively.

In conjunction with the workforce reduction, Sarepta is implementing leadership changes. Notable appointments include Patrick Moss as Chief Commercial Officer, Ian Estepan as Chief Operating Officer, and Louise Rodino-Klapac, Ph.D., as President of R&D and Technical Operations.

Shift in Research Focus

The restructuring plan marks a significant shift in Sarepta's research priorities. The company is pivoting away from several gene therapy programs, including most of its initiatives in limb-girdle muscular dystrophy (LGMD). Instead, Sarepta will concentrate on siRNA programs, with a focus on developing treatments for myotonic dystrophy type 1, idiopathic pulmonary fibrosis, and Huntington's disease.

This strategic realignment includes seeking partnerships or other alternatives for deprioritized programs. Sarepta will continue its collaboration with Arrowhead Pharmaceuticals to develop therapies for skeletal muscle diseases.

Safety Concerns and Regulatory Action for Elevidys

The restructuring announcement coincides with heightened scrutiny of Sarepta's gene therapy product, Elevidys, approved for the treatment of Duchenne muscular dystrophy (DMD). The U.S. Food and Drug Administration (FDA) has requested a black box warning for acute liver injury to be added to Elevidys' label. This action follows reports of two patient deaths - both teenage boys who developed acute liver failure within two months of treatment.

In response to these safety concerns, Sarepta has halted Elevidys administration to non-ambulatory patients in the U.S. commercial setting. The company is also working on enhanced risk mitigation measures, including the use of the immunosuppressant sirolimus to manage liver toxicity. Additionally, Sarepta has voluntarily paused dosing in its phase 3 ENVISION trial for DMD and is developing a new protocol with an enhanced immunosuppressive regimen for non-ambulatory patients.

Despite these challenges, investors reacted positively to the news, with Sarepta's stock price surging over 30% in postmarket trading. The implementation of a black box warning, rather than a market withdrawal, was seen as a favorable outcome given the severity of the safety signal.