Sarepta Therapeutics, Inc. (SRPT): A Bull Case Theory

Core Thesis - Sarepta Therapeutics, Inc. is facing significant challenges following a disappointing Phase 3 trial and safety concerns, leading to a decline in investor confidence despite some positive revenue figures [2][4][5] Financial Performance - The company reported $399.4 million in revenue for Q3 2025, which was above expectations, but this represented a 14.5% year-over-year decline due to halted shipments of Elevidys [3] - Sarepta incurred a GAAP loss of $179.9 million, influenced by restructuring charges and debt refinancing losses, indicating strain on its Duchenne muscular dystrophy (DMD) franchise [3] Regulatory and Market Challenges - The failure of the ESSENCE Phase 3 trial to meet its primary endpoint for exon-skipping therapies raised serious regulatory risks, including potential label restrictions or withdrawal [4] - Management's focus on secondary endpoints and pandemic-related disruptions did not alleviate market concerns, particularly with ongoing scrutiny of Elevidys following safety incidents [5] Cash Position and Future Outlook - Despite current challenges, Sarepta holds approximately $865 million in cash and generates nearly $2 billion in annualized revenue, with a restructuring plan aimed at cutting costs by about $400 million annually by 2026 [6] - The stock trades around $15 per share, below 0.5x sales, suggesting significant franchise impairment, but positive FDA outcomes could lead to a meaningful rerating [6]