(Reuters) -Sarepta Therapeutics shares surged more than 30% before the bell on Tuesday, as analysts said the resumption of U.S. shipments for its muscular gene therapy partially removes financial headwinds and decreases the risk of market withdrawal.
The company said on Monday it would resume shipments of Elevidys — approved in the U.S. to treat a rare condition called Duchenne muscular dystrophy — to patients who can walk. U.S. shipments to patients who cannot walk independently are still halted, following the death of two teenage boys earlier this year.
These incidents brought heightened regulatory scrutiny to Sarepta in recent weeks, while the pause of shipments raised concerns about the future of Elevidys — the company’s largest revenue generator.
Sarepta’s announcement followed the U.S. Food and Drug Administration’s recommendation that the voluntary hold on shipments be removed after a probe showed the death of an 8-year-old boy in Brazil was not related to Elevidys.
Wall Street analysts said the resumption of shipments would allow Sarepta to fulfill its near-term payments to partner Arrowhead and maintain access to its debt facilities.
“The FDA’s recommendation and the resumption of commercial treatment in the U.S. virtually eliminate the risk of Elevidys being formally withdrawn from the market,” said William Blair analyst Sami Corwin.
While the decision allows some patients to regain access to the treatment, analysts warned that patients and doctors could show hesitancy in light of the recent hit to reputation.
“It remains to be seen how the news headlines regarding the patient deaths will affect commercial interest in the near term,” Corwin said.
Sarepta’s partner Roche had also stopped Elevidys shipments in certain countries outside the U.S.
Shares of Sarepta surged 36% to $18.85 in premarket trading. They have fallen more than 80% since the first Elevidys-related death was reported in March.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Shilpi Majumdar)
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