Sarepta Therapeutics stated it should eradicate 36% of its workforce—roughly 500 jobs—in a restructuring that follows the deaths of two Duchenne muscular dystrophy (DMD) sufferers following remedy with the marketed gene remedy Elevidys® (delandistrogene moxeparvovec-rokl).
Below the restructuring, which was introduced Wednesday after the shut of the markets, Sarepta will pivot a lot of its analysis and growth towards therapies for 5 uncommon genetic ailments that have been developed by way of its silent RNA (siRNA) platform, and away from gene therapies resembling Elevidys.
Elevidys is the one gene remedy that has gained FDA approval as a remedy for DMD. Two sufferers who died after being handled with Elevidys succumbed to acute liver failure: A 16-year-old younger man who handed away in March, and a affected person of undisclosed age who died final month.
Following the June dying, Sarepta quickly suspended shipments of Elevidys for infusion in non-ambulatory sufferers and convened a committee of consultants in Duchenne and liver well being to contemplate an enhanced immunosuppression routine for Elevidys.
Sarepta disclosed that the FDA has requested that Elevidys’ label embody a black field warning for acute liver harm and acute liver failure (ALF), a request supported by Sarepta.
The committee has come to an settlement on an enhanced immunosuppressive routine with sirolimus in non-ambulant sufferers. Sarepta stated it should submit the panel’s findings and proposed protocol to the FDA “imminently” and can focus on its plan to collect information on the routine by way of a brand new eighth cohort in its Section I ENDEAVOR trial (SRP-9001-103; NCT04626674), with the objective of re-establishing dosing in non-ambulant sufferers.
“Confronted with environmental challenges, we have now determined to behave decisively, implementing a targeted technique to make sure Sarepta stays a vibrant, financially enduring, patient-centric group devoted to enhancing the lives of these with genetic ailments,” Sarepta CEO Doug Ingram stated in an announcement.
Ingram had additionally held the title of president till Monday, when the board named Ian Estepan as president and COO, who was promoted from government vice chairman, CFO. Succeeding Estapan as CFO is Ryan Wong, who since March has served as senior vice chairman, strategic finance, treasury, and investor relations. Wong’s appointment took impact Wednesday, as did the appointment of Louise Rodino-Klapac, PhD, as president, analysis and growth and technical operations.
Traders signaled approval of the restructuring—and obvious reduction that Elevidys was not withdrawn from the market—by sending Sarepta shares hovering 35% in after-hours buying and selling, to $24.75 from $18.38 on the closing bell.
Blocking and tackling
“SRPT is beginning to block and deal with on the business, regulatory, medical, and monetary fronts,” Jefferies fairness analyst Andrew Tsai wrote in a analysis notice. “Add[itional] updates at this time may assist reassure buyers on Elevidys’ gross sales outlook [and thus SRPT’s cost structure], however we acknowledge extra updates will likely be wanted for uncertainty to completely subside.”
Sarepta expects to generate greater than $100 million in price financial savings by way of the tip of 2025, internet of estimated severance and one-time prices projected to complete $32 million to $37 million.
“The corporate expects the discount in drive to be considerably accomplished by the tip of the third quarter of 2025,” Sarepta acknowledged in a regulatory submitting.
In line with that submitting, one of many Sarepta staffers dropping their jobs was Dallan Murray, government vice chairman, chief buyer officer, efficient July 18—although he’ll stay a marketing consultant to Sarepta by way of January 17, 2026.
The pipeline pivot is anticipated to ship roughly $300 million in annual non-personnel price financial savings beginning in 2026.
The pivot away from Elevidys and different gene therapies will focus sources on applications to develop chronically administered siRNA remedies for neurodegenerative and pulmonary ailments, together with facioscapulohumeral muscular dystrophy (FSHD), myotonic dystrophy kind 1 (DM1), spinocerebellar ataxia kind 2 (SCA2), idiopathic pulmonary fibrosis, and Huntington’s illness.
As well as, Sarepta is pursuing preclinical applications to develop therapies for spinocerebellar ataxia kind 1 (SCA1) and spinocerebellar ataxia kind 3 (SCA3). The corporate can be finishing up an unique collaboration with Arrowhead Prescribed drugs to develop therapies for skeletal muscle ailments, with plans to pursue as much as six discovery targets in muscle or central nervous system problems.
The corporate causes that the applications provide what it phrases “large” short-term potential, and handle areas of serious unmet medical want with remedy approaches that might show to be best-in-class.
Sarepta stated it should pause growth of most of its gene therapies in growth for limb-girdle muscular dystrophy (LGMD) and pursue partnerships amongst strategic options for applications it should not fund instantly. Nonetheless, Sarepta nonetheless expects to submit a Biologics License Software for SRP-9003 for LGMD kind 2E/R4 within the second half of this 12 months.
Persevering with help
Ingram acknowledged that Sarepta will proceed to market and help Elevidys and three RNA-based phosphorodiamidate morpholino oligomer or PMO remedies indicated for DMD.
In line with preliminary second-quarter outcomes launched by the corporate, Elevidys generated $282 million in internet product income, accounting for 55% of the $513 million in complete internet product revenues reported by Sarepta. The remaining $231 million was generated by Sarepta’s three PMOs
Sarepta tasks it should save roughly $400 million yearly because of the restructuring, which can decrease the corporate’s common annual non-GAAP R&D and promoting, basic, and administrative (SG&A) bills to between $800 million and $900 million beginning subsequent 12 months.
“With our monetary efficiency, we’ll advance our high-value, targeted pipeline of applications for uncommon genetic ailments, primarily counting on the siRNA platform, whereas guaranteeing we meet our monetary obligations,” Ingram added.
These obligations embody reimbursement of a convertible notice due in 2027. In guaranteeing that the notice may be repaid, Sarepta stated the restructuring was additionally designed to make sure the corporate retains entry to a $600 million revolving credit score facility and generates robust money circulate. Sarepta reported ending the second quarter with money, money equivalents, restricted money, and investments of roughly $850 million.
The corporate completed 2024 with $804.522 million in R&D prices, down 8% from $877.387 million a 12 months earlier. SG&A bills final 12 months have been $557.872 million, up almost 16% from $481.871 million in 2023.
