Shares of Sarepta Therapeutics (SRPT) surged 5.01% in after-hours trading on Monday, following a tumultuous regular session that saw the stock plummet over 40%. The dramatic swing comes as investors digest news of a second patient death related to the company's gene therapy treatment Elevidys, while also considering potential paths forward for the drug.

Earlier in the day, Sarepta announced it was temporarily suspending shipments of Elevidys for non-ambulatory patients with Duchenne muscular dystrophy (DMD) after a second reported case of acute liver failure resulting in death. This news initially sent the stock into a steep decline. However, after-hours gains suggest some investors may be betting on a potential turnaround, possibly driven by hopes that the company's proactive safety measures could lead to a resolution with regulators.

During an investor call, Sarepta executives outlined steps they are taking to address the safety concerns, including working with experts to develop an enhanced immunosuppressive regimen for non-ambulatory patients. The company also emphasized that there are no changes to the treatment protocol for ambulatory patients, who make up about 70% of Elevidys recipients. Sarepta indicated it would be discussing these enhanced safety protocols with the FDA, which could potentially lead to a path for resumed treatment in non-ambulatory patients.

While the safety issues present significant challenges, some analysts and investors appear to be cautiously optimistic about Sarepta's ability to address these concerns and potentially salvage the Elevidys program. The after-hours stock movement suggests that market participants are reassessing the long-term prospects for the company and its gene therapy platform, balancing the serious safety issues against the potential for enhanced safety protocols and the continued treatment of ambulatory DMD patients.