Sarepta's Stock Rises on Positive Updates on DM1 Therapy

Shares of Sarepta Therapeutics SRPT rose 7% on Monday after the company announced its progress on a phase I/II study evaluating SRP-1003, an investigational small interfering RNA (siRNA) therapeutic for type 1 myotonic dystrophy (DM1).

While Sarepta has completed two cohorts of this study, it has completed enrolling patients in a third cohort. The company also announced a positive review from a pre-specified drug safety committee for this study, based on which it has decided to advance additional drug escalating cohorts. While Sarepta is currently dosing patients in a fourth cohort, it plans to start dosing patients in the final fifth cohort in the first quarter of 2026.

Initial readout from this study is also expected early next year.

SRPT’s Stock Performance

Post the above announcement, investors cheered the news. One Wall Street analyst viewed this update as positive, considering the safety issues experienced with investigational DM1 therapies being developed by companies like Avidity Biosciences RNA and PepGen PEPG.

Some investors also expressed optimism around the stock, which has been facing heat from investors since the start of this year due to a slew of negative updates centered around Sarepta’s Duchenne muscular dystrophy (DMD) therapies.

Year to date, the stock has plummeted nearly 85% against the industry’s 17% growth.

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Sarepta’s DM1 Update Triggers Milestone Payment

The above event triggered a milestone payment of $200 million to partner Arrowhead Pharmaceuticals ARWR. SRP-1003 was acquired by Sarepta earlier this year as part of a multi-billion-dollar licensing deal with Arrowhead.

This marks the second milestone payment triggered this year. In July, Arrowhead earned the first milestone payment of $100 million when it reached the first of two prespecified enrollment targets and received regulatory approval to start dose escalation in the above study. To fund this payment, Sarepta announced the sale of its equity stake worth $174 million in Arrowhead in August.

Apart from SRP-1003, Sarepta also acquired exclusive rights to Arrowhead’s three more clinical-stage programs, each being evaluated in separate phase I/II studies. These include SRP-1001 in facioscapulohumeral muscular dystrophy (FSHD), SRP-1002 in idiopathic pulmonary fibrosis (IPF) and SRP-1004 in spinocerebellar ataxia 2 (SCA2). Initial data on the FSHD program is expected in early 2026.

Sarepta Therapeutics, Inc. Price

Sarepta Therapeutics, Inc. price | Sarepta Therapeutics, Inc. Quote

SRPT’s Zacks Rank

Sarepta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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