By Mackenzie Tatananni

Shares of Sarepta Therapeutics have come under pressure as its flagship gene therapy, Elevidys, remains mired in skepticism. First-quarter earnings reflected the price the company is paying for those doubts.

On the surface, quarterly results comfortably exceeded Wall Street's projections. Earnings of $2.88 a share blew past the 98-cent consensus among analysts polled by FactSet. Total revenue of $730.8 million beat the $474.2 million Wall Street had expected, though this marked a drop from $744.9 million in the same period last year.

But a top-line beat wasn't enough for investors. Shares fell 5.3% to $21.34 in after-hours trading Wednesday, reversing course after ending the regular session up 5.7%.

Collaboration revenue, tied largely to an agreement with Roche Holding, more than tripled to $400.3 million from $133.3 million last year. After Chugai Pharmaceutical launched Elevidys in Japan this March, Sarepta received a $40 million milestone payment as part of its pact with Roche.

However, product revenues were down sharply from last year, falling 46% to $330.5 million. The company attributed the drop to lower Elevidys demand. This follows safety events in 2025 and a label update that restricted treatment to ambulatory patients, significantly reducing the total addressable market.

Sarepta is still working to regain investor trust. Shares have fallen nearly 37% over the past year against a 31% gain for the S&P 500. While the stock is in the green for this year, partly due to the release of promising clinical data at the end of March, it has been volatile.

The company earlier this year reported its first clinical results from two programs for different types of muscular dystrophy. Shares popped on the news, providing a welcome distraction from the controversy around Elevidys, which came under fire following a string of patient deaths.

Sarepta currently has one gene therapy and three RNA-based therapies currently on the market, all targeting Duchenne muscular dystrophy. DMD is a debilitating condition that causes muscles in the body to break down over time. Most patients don't survive past their late twenties, even with treatment.

Management has frequently reminded investors of the inherent risks in treating DMD, noting the high stakes involved in a patient population with a significantly shortened life expectancy.

Two deaths occurred in patients treated with Elevidys, while the third occurred in a patient taking one of Sarepta's investigational treatments for limb-girdle muscular dystrophy. Roche, which markets Elevidys outside the U.S., clarified that the death of an eight-year-old patient in Brazil was unrelated to his treatment with Elevidys.

Following a regulatory crackdown that led to Sarepta voluntarily pausing shipments, Elevidys is back on the market, with changes in the way it is sold. The treatment is indicated only for ambulatory patients aged 4 and older, and carries a boxed warning -- the FDA's most serious safety notice -- highlighting the risk of fatal liver injury.

Still, CEO Doug Ingram stressed that the company's commercial profile had begun to stabilize, saying Elevidys was "positioned to return to growth." As of May 1, more than 1,300 patients had been treated with Elevidys across commercial settings and clinical studies, Sarepta said.

The company reiterated the outlook it provided in February, guiding for total product revenues in the range of $1.2 billion to $1.4 billion and combined adjusted research and development and selling, general, and administrative expenses of $800 million to $900 million.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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May 06, 2026 18:50 ET (22:50 GMT)

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