By Josh Nathan-Kazis and Elsa Ohlen

Wall Street was fuming at Sarepta Therapeutics on Friday, after the company said that it had chosen not to disclose the death of a third patient this year on one of its gene therapies while announcing a major restructuring late Wednesday.

Shares of the biotech had risen 19.5% Thursday after the company had said it would slash staff and trim its pipeline.

But late Thursday and early Friday, biotech-focused news outlets, including Endpoints News and STAT, revealed for the first time that a 51-year-old patient died a month ago in a trial of an experimental Sarepta treatment for a condition called limb girdle muscular dystrophy.

The stock was plunging on Friday, and was down 16.5% at midmorning to $18.35 per share. On a hastily organized investor call on Friday morning, Sarepta CEO Doug Ingram defended his decision to hold back information about the patient death amid Wednesday's restructuring announcement.

"We did not discuss the matter on our call on Wednesday because it was neither material nor central to the topics at hand on Wednesday," Ingram said. "This wasn't salient to our discussions," he said later.

Ingram said the company had planned to disclose the death at a medical conference, as part of a full scientific report on the trial.

Analysts on the call weren't buying it, and some made no effort to hide their frustration at Ingram. Baird analyst Brian Skorney told Ingram that it "seems very clearly that this was a material event."

Gene therapy safety has emerged as a major issue for Sarepta. Two young patients have died this year after receiving its Duchenne muscular dystrophy gene therapy Elevidys, and this week the company said that the Food and Drug Administration will add a warning to Elevidy's label signaling a risk of acute liver failure.

Sarepta shares are down more than 80% this year, as the deaths of the Elevidys patients have pushed down estimates as to how widely the treatment will be used, and the company has faced a financial crunch .

Faith in the company's executive team, some members of which received raises on Wednesday even as the company announced the layoffs of 500 workers, seemed shaken on Friday.

"They could have shed light on this and didn't," Mizuho healthcare equity strategist Jared Holz told Barron's Friday, shortly before the call. "It's just going to result in the Street continuing to question management credibility."

Sarepta told Barron's on Friday that the latest had death ocurred in an early-stage trial of SRP-9004, a treatment for limb girdle muscular dystrophy. The company had said Wednesday it would stop developing most of the gene therapies it was testing for limb girdle muscular dystrophy, including SRP-9004.

Ingram insisted on the Friday call that the decision to stop the SRP-9004 program was unrelated to the latest patient death, and that the death hadn't changed the scientific understanding of the risks of Elevidys.

"The decision to cease the limb girdle programs didn't relate to this or another event," Ingram said. "If there was a material change in the safety signal of one of our marketed therapies we would disclose that publicly."

Elevidys and the experimental SRP-9004 use the same virus, called AAVrh74, to deliver a gene to the patient's cells, though the two medicines are manufactured differently.

Ingram said that the risks of Elevidys in more advanced patients is already known. "As we know, and as has been communicated to the patient community, to the physician community, and to the FDA, there is a rare risk of [acute liver injury] becoming a fatal acute liver failure in more debilitated, non-ambulatory patients receiving Elevidys," Ingram said. That's not changed, he said, by the death of a "late-stage non-ambulatory patient" who received a different gene therapy.

Frustration at Sarepta had been building all morning ahead of the 10:30 a.m. call.

"This news will likely diminish any remaining goodwill management had," Leerink Partners analyst Joseph Schwartz wrote in an early Friday note.

In a note published after the Friday call, Cantor Fitzgerald analyst Kristen Kluska wrote she was "appalled" by Sarepta's decision not to disclose the death earlier. We "don't agree that it was nonmaterial," she wrote, and that the company "owes it to the patients, investors, the field, etc. to be more open around very significant" adverse events.

Analysts had asked Ingram about the safety of the limb girdle muscular dystrophy gene therapies on Sarepta's Wednesday night call. One analyst had asked whether the reason Sarepta was stopping the limb girdle program had anything to do with "safety risk." Ingram, at the time, said that it was a "cost issue," and didn't mention the death.

Another analyst had asked about the "overall situation" of patients hospitalized due to liver injury. Ingram's response, in retrospect, seems lawyerly. "We've seen two [acute liver failures] resulting in death than we've reported, and there haven't been any others with respect to Elevidys," Ingram said, notable not mentioning the death from the experimental limb girdle gene therapy.

"Management's answer not only seems selective, but also raises questions about whether they are tracking [acute liver failure] cases and taking them seriously," said Schwartz wrote in his note early Friday.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com and Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 18, 2025 12:19 ET (16:19 GMT)

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