Sarepta Therapeutics (SRPT) is seeing a new strategic focus under its recently appointed CEO, with more attention shifting to experimental RNA therapies, drugs designed to modify genetic instructions, for two muscle-wasting diseases, RBC Capital Markets said Wednesday in a report.

RBC said it remains unclear how much upcoming early-stage data from Sarepta's siRNA programs for facioscapulohumeral muscular dystrophy and myotonic dystrophy type 1 can reduce long-term revenue risk. The readouts expected later this year are meaningful, though management has cautioned that showing clear functional improvement at this early stage may be difficult, the report said.

Sarepta also faces rising competitive pressure in its core Duchenne muscular dystrophy franchise, anchored by its gene therapy Elevidys and its older PMO RNA drugs Exondys, Vyondys and Amondys.

Elevidys revenue is expected to decline in H2 before potentially stabilizing and improving in 2027, RBC said. Competition for Sarepta's PMO drugs is set to intensify as rival DMD programs from Dyne Therapeutics (DYN), Novartis (NVS) and Wave Life Sciences (WVE) advance toward regulatory milestones, the report said.

Last month, Sarepta named Michael Severino as CEO, succeeding Doug Ingram, who is retiring. Severino was previously CEO of Tessera Therapeutics and former vice chairman and president at AbbVie (ABBV).

RBC maintained its sector perform, speculative risk rating on Sarepta stock and its $19 price target.

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