Sarepta Therapeutics is laying off 500 staffers, or 36% of its workforce, as part of a strategic restructuring aiming to save $400 million annually.
The changes include a pipeline pivot that discontinues development of several programs, including most gene therapies in development for limb-girdle muscular dystrophy, according to a July 16 release posted after market close. Instead, the gene therapy specialist is now prioritizing siRNA programs stemming from its platform, which include investigational treatments for myotonic dystrophy type 1, idiopathic pulmonary fibrosis and Huntington’s disease.
Sarepta plans on looking for strategic alternatives, such as partnering, for deprioritized programs.
The company is also continuing its partnership with Arrowhead Pharmaceuticals to develop therapies for skeletal muscle diseases.
The restructure is designed to reduce operating expenses, improve financial flexibility and help the company meet its 2027 financial obligations.
Sarepta launched the reorganization as the FDA has requested a black box warning for acute liver injury on the label of Elevidys, the company’s flagship gene therapy product approved to treat Duchenne muscular dystrophy (DMD).
The federal scrutiny comes after two patient deaths were reported. Both were teenage boys who passed away after developing acute liver failure within two months after treatment with Sarepta’s one-time therapy.
After the second patient death was disclosed in June, the biopharma halted Elevidys administration to non-ambulatory patients in the commercial setting in the U.S. The company said it was seeking FDA approval of an enhanced risk mitigation measure involving the immunosuppressant sirolimus to manage liver toxicity.
At the same time, Sarepta voluntarily stopped dosing in a phase 3 DMD trial called ENVISION. The company is working to create a new protocol with an enhanced immunosuppressive regimen for non-ambulatory patients. FDA approval will be required before screening and dosing can start back up.
The black box warning was largely expected given the severity of the safety signal and precedent with Novartis’ spinal muscular atrophy gene therapy Zolgensma.
Alongside the organizational shake-up, Sarepta provided preliminary second-quarter financial results. The company expects to report $513 million in total net product revenue, including $282 million from Elevidys. Those were notable declines from $611.5 million and $375 million, respectively, in the first quarter.
“Over the course of 2025, Sarepta has been faced with various challenging, unexpected and impactful events,” CEO Douglas Ingram said on a Wednesday evening investor call. “Faced with these events in such a short period of time, it would be easy, and indeed it would be tempting, to simply stay the course without making significant change, all in the hope that things will still correct and be fine, but that complacency would be irresponsible for a mission-driven organization focused on patients.”
Failing to adapt to current circumstances would risk Sarepta’s “long term viability” and reduce the chances of bringing the greatest benefit to the most patients, Ingram continued.
“So, we have chosen not to be complacent,” the CEO said. “We are restructuring and making very significant changes to our strategy to ensure that we remain a vibrant, enduring, patient-centric organization focused on bringing a better life to those with rare genetic disease.”
In conjunction with the layoffs, the biopharma is shaking up its leadership team, with Chief Customer Officer Dallan Murray headed out the door. In his place will be Patrick Moss, formerly senior vice president of U.S. market access and sales and now chief commercial officer.
Several other leadership transitions were shared, with Ian Estepan becoming Sarepta’s chief operating officer; Louise Rodino-Klapac, Ph.D., was named president of R&D and technical operations; Ryan Wong will serve as chief financial officer; and Rachael Potter, Ph.D., previous SVP and head of research sciences, will step up as chief scientific officer.
Following Wednesday's update, Sarepta's stock price surged more than 30% during postmarket trading. For investors, the Elevidys black box warning avoided the worst-case scenario: market withdrawal.
The company's stock remains up as of Thursday morning, resting at $22.4 per share compared to $18.4 at market close yesterday.
Analysts with William Blair believe it is highly unlikely that Elevidys will be pulled from the market and that investors likely have more confidence in Sarepta's ability to pay off its long-term debts, according to a July 17 note.
"However, we still believe there will be near-term headwinds for Elevidys’ revenue due to increased hesitancy among the patient and physician communities, and we think investors will remain cautious on Elevidys’ long-term outlook until there is initial clinical evidence from ENDEAVOR showing the modified immunosuppression regimen is effective and sales among the ambulatory population rebound," analyst Sami Corwin, Ph.D., wrote, referring to Sarepta's phase 1b trial assessing safety and outcomes tied to the commercial Elevidys process.
The Sarepta confirmation came after almost a full day of rumors surrounding the layoffs, kicked off by a Reddit post widely cited by numerous industry players and journalists.
The Reddit post alleges that the layoffs were discovered by an employee who went to submit time off in the company system. The application wouldn’t complete the request and instead revealed that the person was “terminated” as of Friday.
“As efforts were underway to prepare severance packages, if an employee logged in to workday, they may have seen their vacation balance at zero (colleagues are paid out for unused vacation),” a Sarepta spokesperson explained to Fierce Biotech in an emailed statement. “We did clarify this with impacted colleagues earlier today—we sought to treat everyone with care and dignity and apologized if the impact from seeing that information caused additional anxiety or confusion.”
Numerous former employees took to LinkedIn to change their profile status to "open to work." Meanwhile, a leader at Stoke Therapeutics took to the professional networking site to say his RNA company was recruiting.
“Sarepta Therapeutics employees who are losing their jobs today, Stoke Therapeutics is hiring. Feel free to reach out,” Charles Achibiri, director of oligonucleotide drug substance for the RNA biotech, wrote in a July 16 post.
The Sarepta staff cuts rest at the intersection of two industry trends: declining interest in gene therapies and rising workforce reductions. In general, biotech is experiencing a yearslong bear market that has been compounded by current volatility occurring in the macroenvironment.
Editor's note: This story was updated at 5:30 p.m. ET on July 16 and at 9:45 a.m. ET on July 17 to include comment from an investor call and analyst insight.
Editor's note: Angus Liu contributed to this report.