Sarepta Submits Huntington's Disease Trial Application While Core Business Remains Under Siege

What happened

Sarepta Therapeutics announced the submission of a clinical trial application for SRP-1005, its investigational treatment for Huntington's Disease, to New Zealand's Medsafe, targeting a first-in-human trial start in Q2 2026. This move occurs against a backdrop of severe distress, with Sarepta's stock down ~82% over 12 months due to ELEVIDYS safety issues, PMO franchise weakness, and a $431M net loss in 9M 2025. SRP-1005, formerly ARO-HTT, stems from the Arrowhead collaboration and represents an attempt to diversify beyond the troubled DMD franchise into neurological diseases. However, this early-stage initiative is a long-shot that does not address immediate existential threats like pending FDA decisions on ELEVIDYS liver safety or PMO label changes. Given Sarepta's strained liquidity ($865M cash vs. $1.0B converts) and volatile cash flow, this submission risks further capital diversion without near-term payoff.

Implication

For investors, the SRP-1005 submission offers no relief from the binary risks around ELEVIDYS safety studies and PMO label stability that dominate the investment case. It underscores management's push to broaden the pipeline, yet Huntington's Disease is a new, competitive area with uncertain outcomes that could strain already tight resources. The company's focus must remain on executing cost cuts and navigating regulatory hurdles in DMD to preserve cash and avoid dilution. Any positive read-through is limited by the program's preclinical stage and the lack of near-term catalysts, meaning it does not alter the distressed equity profile. Ultimately, investors should see this as a non-event for valuation until SRP-1005 demonstrates clinical proof-of-concept and Sarepta stabilizes its core business.

Thesis delta

The submission of SRP-1005 for Huntington's Disease does not shift the core investment thesis, which remains a 'WAIT' due to binary risks in DMD. It adds a speculative long-term optionality but is overshadowed by immediate concerns over ELEVIDYS safety, PMO regulatory outcomes, and financial sustainability. No material de-risking occurs until this program advances significantly or core issues are resolved.