With more than $1 billion in debt due in 2027, Sarepta Therapeutics said it’s “evaluating opportunities to enhance operational efficiency and adjust manufacturing commitments based on latest demand.”
The company is weighing steps to bolster its financial position as the future demand of its flagship Duchenne muscular dystrophy gene therapy Elevidys remains unclear after several patient deaths caused safety concerns and a period of regulatory chaos.
After a second Elevidys patient death from acute liver failure, Sarepta in July launched a major restructuring that involves a 36% mass layoff round and a pivot from gene therapy to small interfering RNA, all in hopes of reducing expenses by about $400 million per year starting in 2026.
The company is now on track to realize more than $100 million in cost savings through the end of 2025, Sarepta said Wednesday.
As of June 30, Sarepta has total noncancelable contract manufacturing payment commitments worth nearly $1.1 billion through 2028, according to its quarterly securities filing. These include $626 million for the second half of 2025 and about $320 million for 2026. For Elevidys manufacturing, the company has partnered with the CDMO Catalent, which was recently acquired by Novo Holdings.
The pipeline and cost cuts are designed to help Sarepta repay its 2027 convertible notes. Although the notes bore a fair value of $850 million as of the end of June, Sarepta will need to pay the aggregate principal value of $1.15 billion—plus any interest—when they are due Sep. 15, 2027, according to the securities filing. The company recorded $1.4 billion in total long-term debt as of the end of the second quarter.
Sarepta has been warning in its securities filings that it may not be able to generate enough cash flow from operations to meet its debt and may therefore need to “adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.”
Elevidys sales were $282 million in the second quarter, versus $375 million in the first three months of 2025. The numbers were the same as the preliminary results Sarepta posted alongside its major cost-cutting initiative on July 16. Back in May, Sarepta lowered its full-year Elevidys guidance to a range of $1.4 billion to $1.7 billion after the first patient death was reported in March.
The company has since suspended offering full-year guidance.
Sarepta underwent severe turmoil in the past few weeks amid a regulatory back-and-forth around Elevidys and its safety.
Since its first-quarter report in May, the company has held three conference calls in the span of about one month. First, it was about a second patient death from acute liver failure following Elevidys treatment. Then, it was the strategic restructuring, followed by another call just two days later about a death that had been recorded before the previous call in a limb-girdle muscular dystrophy (LGMD) patient who had received an investigational Sarepta gene therapy.
After news of the LGMD death surfaced July 17, the FDA initially forced Sarepta to halt all shipments of Elevidys but soon backed down to instead support the gene therapy for patients who can walk. In the middle of the chaos, another Elevidys patient death in an 8-year-old came to light but was quickly ruled to be unrelated to the Sarepta treatment.
Once the FDA removed its request for an Elevidys administration pause among ambulatory patients on July 28, Jefferies analyst Andrew Tsai suggested that the drug’s third-quarter sales “may be impacted only modestly” because the U.S. halt only lasted for a week starting at close of business on July 22. Instead, Tsai suggested the FDA’s move might re-accelerate Elevidys sales this year.
Sarepta is still working with the FDA to “define the path and develop the risk mitigation necessary to bring Elevidys back to the non-ambulatory community as well,” the company’s CEO Doug Ingram said in a Aug. 6 release.
Following the second death in a non-ambulatory patient, Sarepta said it would seek FDA approval of an enhanced risk mitigation measure involving the immunosuppressant sirolimus to manage liver toxicity.