Overnight, Sarepta became more dependent on its Duchenne muscular dystrophy gene therapy project.

The Food and Drug Administration on Monday rejected Vyondys 53 — and potentially set back another experimental drug called casimersen —​ on safety worries, an action that calls into question lofty revenue forecasts.

Of course, the importance of gene therapy SRP-9001 to Sarepta’s valuation has been clear ever since the company revealed the first data from its trial at an investor R&D day in 2018. But with increased scrutiny of its near-market products, investors will not welcome any setbacks in this project. The company’s shares fell Tuesday morning to a 14-month low of near $100, and Cantor Fitzgerald analyst Alethia Young estimates gene therapy accounts for about $50 of that.

“With Sarepta, it’s always about gene therapy,” Young said in an interview with BioPharma Dive. “Ultimately the long story here is in gene therapy and being able to treat all of these patients.”

The rejection of Vyondys 53, formerly known as golodirsen, surprised investors and analysts alike, given the similarities with the company’s lone approved product, Exondys 51. By modulating genetic expression, both treatments stimulate production of a key muscle-building protein called dystrophin that is absent in DMD patients.

Exondys 51 won accelerated approval on data from a trial that did not include traditional placebo controls, and Vyondys 53’s application was poised to do the same. In fact, the therapies’ only key differences is in how they spur protein production, with Exondys encouraging the “skipping” of faulty exon 51 and Vyondys skipping exon 53. The pipeline project casimersen is an exon 45-skipping agent.

Thus, rejection of Vyondys is a break with precedent. The FDA’s citing of kidney toxicity in this drug class, called antisense oligonucleotides, is a sign Sarepta might need to do more safety studies for casimersen.

In a statement, a spokesperson for Sarepta said the company’s meeting with the FDA would inform its plans for filing casimersen for approval.

Young estimated revenue of $325 million in 2025 for each of Vyondys 53 and casimersen. Following the complete response letter notifying Sarepta of the rejection, she put the probability for both programs to succeed at 40%.

While the investment community is valuing the gene therapy more than the exon-skipping agents, they still view Vyondys 53 and casimersen as important parts of the long-term strategy.

RBC Capital Markets’ Brian Abrahams, for example, noted in an Aug. 20 note to clients that Vyondys was a lower-risk part of Sarepta’s valuation, and a potential cash flow contributor helping support the biotech’s higher-upside but less-sure bet on gene therapy.

The Vyondys 53 rejection also spurred claims the FDA’s decision was politically motivated, given the controversy that surrounded the agency’s 2016 decision Exondys 51. Then, the FDA overruled its own advisory panel to approve the therapy in a decision that sharply divided agency staff.

“I think the pervading discussion on Wall Street today is whether there is some sort of backlash from the events that have happened over the years with Exondys 51,” Young said.

The FDA rejects that claim. “The FDA’s decision on any drug product, in any disease area, is based on an assessment of whether the benefits of the drug outweigh its risks,” agency spokesperson Sandy Walsh wrote in an emailed statement. “This assessment is informed by science, medicine, policy and judgment, in accordance with applicable legal and regulatory standards. Each product application is reviewed independently.”

Taken together, sales for the three exon-skipping agents would have reached a peak of $1.7 billion if all were launched on schedule, according to analysts from SVB Leerink, after which revenue from gene therapy SRP-9001 was forecast to eclipse them.

That scenario in which Exondys 51, Vyondys 53 and casimersen carry Sarepta until gene therapy begins to shoulder the weight now needs to be reviewed.

In Sarepta’s favor, SRP-9001 has shown progress with few hiccups — notwithstanding the unusual reporting of an adverse event to the FDA’s database for marketed products, an event that dented its valuation last week.

Rival therapies from Solid Biosciences and Pfizer have also struggled to keep up with SRP-9001, which leaves Sarepta in the envious position of being able to take its time in initiating pivotal trials.

The company announced a longer timeline for the start of Phase 3 trials in order to optimize processes for the commercial-scale product to be used in that trial, as well as increase the size of a placebo-controlled Phase 2 trial from 24 to 40 patients.

But this near-flawless record needs to continue. Unexpected delays, adverse events or signs of waning SRP-9001 durability in the clinical trials will not be taken well, and the Vyondys 53 setback only increases the focus on execution.

“Now that they had a setback like this it always makes people re-appreciate the risks of a company like this,” said Brad Loncar, CEO of Loncar Investments, who has no position in Sarepta.

SRP-9001’s trials are in “a small group of patients (treated with) an entirely new therapy at the cutting edge of medicine. Things do go wrong all the time.”