By Bhanvi Satija and Siddhi Mahatole
(Reuters) -Sarepta Therapeutics shares snapped a three-day losing streak on Tuesday, as analysts said resumption of U.S. shipments for its muscular gene therapy soothes immediate concerns about liquidity and the therapy’s withdrawal from the market.
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.
Its partner Roche said on Tuesday it would also resume new orders and shipments of Elevidys for ambulatory patients in countries outside the U.S. where they were paused.
U.S. shipments to patients who cannot walk independently, however, are still halted, following the death of two teenage boys earlier this year, which brought heightened regulatory scrutiny to Sarepta in recent weeks.
The pause of shipments had raised concerns about the future of Elevidys — Sarepta’s largest revenue generator — and over the company’s balance sheet.
Sarepta’s decision came after the U.S. Food and Drug Administration okayed the resumption of Elevidys shipments, following an agency probe that found the death of an 8-year-old boy in Brazil was not related to the treatment.
“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and the resumption of commercial treatment in the U.S. virtually eliminate the risk of Elevidys being formally withdrawn from the market,” said William Blair analyst Sami Corwin.
Wall Street analysts said the move would allow Sarepta to fulfill its near-term payments to partner Arrowhead and maintain access to its debt facilities, for now.
But some analysts cautioned about skepticism towards the use of the therapy in light of the recent hit to reputation, and said they would wait for latest sales figures from Sarepta before completely discounting any risks to the company’s liquidity.
Shares of the company have declined more than 80% since the first Elevidys-related death was reported in March. They surged as much as 32% to $18.35 on Tuesday.
(Reporting by Bhanvi Satija and Siddhi Mahatole in Bengaluru; Editing by Shilpi Majumdar)
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