Sarepta Therapeutics Inc. (SRPT) stock jumped on Friday after the FDA issued updated labeling for Elevidys, the company's gene therapy for Duchenne muscular dystrophy (DMD). The new approval comes with significant restrictions following recent reports of fatal liver injury in non-ambulatory pediatric patients who received the treatment.

The FDA has added a Boxed Warning—the agency's most serious safety alert—to Elevidys and substantially narrowed who can receive the therapy. Elevidys can now only be administered to ambulatory patients aged four or older with a confirmed DMD gene mutation, according to the FDA. The restriction comes in response to reports of fatal acute liver failure in non-ambulatory patients.

Sarepta had already voluntarily halted use of Elevidys in non-ambulatory patients after the fatalities emerged. In the reported fatal cases, affected children experienced severely elevated liver enzymes and required hospitalization within two months of receiving the treatment.

The safety concerns extend beyond the fatal cases. Another non-fatal but serious liver injury case included severe complications like mesenteric vein thrombosis, bowel damage, tissue death, and portal hypertension.

What Changed in the Label

After reviewing all available safety data, the FDA approved several critical label modifications:

• Added a prominent Boxed Warning highlighting the risk of severe and potentially fatal liver damage
• Restricted eligibility to ambulatory patients aged four and older, explicitly excluding non-ambulatory patients
• Introduced new guidance on contraindications and appropriate use, with updates throughout the safety, dosing, adverse reaction, and patient counseling sections
• Released a new Medication Guide for patients and caregivers

The market reaction was surprisingly positive. Sarepta shares closed 5.56% higher at $18.81 on Friday. That said, the stock has been hammered over the past six months, falling nearly 50% according to market data. The Friday pop suggests investors may view the FDA's updated label as removing uncertainty around the drug's future, even if that future is now more limited in scope.