Sarepta Therapeutics, Inc. (NASDAQ:SRPT), the leader in precision
genetic medicine for rare diseases, today reported financial
results for the third quarter of 2020.
“Even as the pandemic created challenges
throughout the third quarter, I am pleased to report that the
Sarepta team was able to continue to serve the Duchenne muscular
dystrophy community with little interruption, achieving net product
revenue of $121.4 million for EXONDYS 51 (eteplirsen) and VYONDYS
53 (golodirsen), representing a 23% increase over the same quarter
last year,” said Doug Ingram, Sarepta’s president and CEO. “At the
same time, we advanced our RNA pipeline with a filing of and the
FDA’s acceptance of the NDA for our next PMO candidate, casimersen,
and prepared our next-generation candidate, the peptide-conjugated
PMO, SRP-5051 for a data readout by the end of 2020. We also
announced, at the World Muscle Society congress, positive data for
SRP-9001 and SRP-9003, two critical drivers of our first-in-class
gene therapy engine, and in support of these programs continued to
build our strength in manufacturing. As we reported in a separate
release today, the FDA has agreed on an approach for a potency
assay which should permit us to dose patients with commercial
process material in Study SRP-9001-103, an important milestone in
our goal of bringing a potentially profound therapy to a waiting
Duchenne community.”
Third Quarter 2020 and Recent Corporate
Developments:
- Announced positive 2-year functional data of SRP-9001
micro-dystrophin gene therapy in Duchenne muscular dystrophy (DMD)
patients: The clinical results, presented at the 25th
International Annual Congress of the World Muscle Society (WMS),
demonstrated that two years after a one-time infusion of SRP-9001,
trial participants exhibited a mean 7.0 point improvement on the
North Star Ambulatory Assessment (NSAA) compared to baseline (at
one year post treatment the mean increase was 5.5 points from
baseline). NSAA is a validated scale developed to measure
functional motor abilities in ambulant children with DMD. The data
were generated from four ambulatory participants, ages 4 to 7, in
Sarepta’s open-label trial, Study 101, and showed continued safety
and tolerability of a one-time infusion of SRP-9001 at a dose of
2x1014 vg/kg. All adverse events were considered mild or
moderate, and occurred within 90 days of treatment. There were no
serious adverse events or evidence of complement
activation.
- Reported positive results for SRP-9003, an
investigational gene therapy for limb-girdle muscular dystrophy
type 2E (LGMD2E): Results, presented at WMS, included
18-month functional data from three clinical trial participants in
the low-dose cohort and 6-month functional data from three
participants in the high-dose cohort.
Cohort 1 (low dose)
at 18 months:
-
-
-
All three participants continued to show improvements from baseline
across all functional measures, including the North Star Assessment
for Dysferlinopathies (NSAD), time-to-rise, four-stair climb,
100-meter walk test and 10-meter walk test.
-
The mean NSAD improvement from baseline was 3.0 points at 6 months
and 5.7 points at 18 months.
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There have been no new drug-related safety signals observed since
the one-year update in June 2020, and no decreases in platelet
counts outside of the normal range or signs of complement
activation were observed.
Cohort 2 (high dose)
at 6 months:
-
-
-
All three participants demonstrated improvements from baseline
across all functional measures, including the NSAD, time-to-rise,
four-stair climb, 100-meter walk test and 10-meter walk test.
-
The mean NSAD improvement from baseline was 3.7 points.
-
There have been no new drug-related safety signals observed since
expression results were shared in June 2020, and no decreases in
platelet counts outside of the normal range or signs of complement
activation were observed.
- U.S. Food and Drug Administration (FDA) accepted
casimersen (SRP-4045) new drug application (NDA) for patients with
DMD amenable to skipping exon 45; grants Priority Review
Status: The FDA accepted Sarepta’s NDA seeking accelerated
approval for casimersen (SRP-4045); regulatory action date set for
February 25, 2021. FDA also granted priority review status for
casimersen. The FDA has indicated it does not currently plan to
hold an advisory committee meeting to discuss the application.
Sarepta also received FDA's conditional approval of AMONDYS 45™ as
the brand name for casimersen, a phosphorodiamidate morpholino
oligomer (PMO) engineered to treat patients with DMD who have
genetic mutations that are amenable to skipping exon 45 of the
dystrophin gene.
- Invested $15.0 million in AavantiBio, Inc.:
Sarepta, along with Perceptive Advisors, Bain Capital Life
Sciences, and RA Capital Management participated in a $107.0
million Series A financing to fund AavantiBio, a gene therapy
company focused on Friedrich’s Ataxia. Bo Combo, most recently
Sarepta’s Chief Commercial Officer and Executive Vice President,
was appointed Chief Executive Officer and President of AavantiBio,
which was co-founded by renowned gene therapy researchers Barry
Byrne, M.D., Ph.D., and Manuela Corti, P.T., Ph.D., both from the
University of Florida’s Powell Gene Therapy Center.
- Announced collaboration with University of Florida (UF)
to accelerate the discovery and development of therapies for rare
genetic diseases: Sarepta will fund multiple research
programs at UF and will have an exclusive option to further develop
any new therapeutic compounds that result from the funded research
programs. Funding has been allocated for four innovative projects,
including: exploratory research in novel gene therapy vectors,
next-generation capsids and gene editing technologies, as well as
work in new therapeutic areas in degenerative genetic
diseases.
Conference CallThe Company will
be hosting a conference call at 4:30 p.m. Eastern Time to discuss
Sarepta’s financial results and provide a corporate update. The
conference call may be accessed by dialing (844) 534-7313 for
domestic callers and (574) 990-1451 for international callers. The
passcode for the call is 9452027. Please specify to the operator
that you would like to join the “Sarepta Third Quarter 2020
Earnings Call.” The conference call will be webcast live under the
investor relations section of Sarepta's website at www.sarepta.com
and will be archived there following the call for 90 days. Please
connect to Sarepta's website several minutes prior to the start of
the broadcast to ensure adequate time for any software download
that may be necessary.
Financial Results
On a GAAP basis, for the three months ended
September 30, 2020 and 2019, the Company reported a net loss of
$196.5 million and $126.3 million, or $2.50 and $1.70 per basic and
diluted share, respectively. On a non-GAAP basis, the net loss for
the three months ended September 30, 2020 and 2019 was $111.5
million and $84.4 million, or $1.42 and $1.14 per basic and diluted
share, respectively.
On a GAAP basis, for the nine months ended
September 30, 2020 and 2019, the Company reported a net loss of
$364.8 million and $479.4 million, or $4.70 and $6.54 per basic and
diluted share, respectively. On a non-GAAP basis, the net loss for
the nine months ended September 30, 2020 and 2019 was $309.2
million and $199.4 million, or $3.98 and $2.72 per basic and
diluted share, respectively.
Revenues
For the three months ended September 30, 2020,
the Company recorded net product revenues of $121.4 million,
compared to net product revenues of $99.0 million for the same
period of 2019, an increase of $22.4 million. For the nine months
ended September 30, 2020, the Company recorded net product revenues
of $333.2 million, compared to net product revenues of $280.7
million for nine months ended September 30, 2019, an increase of
$52.5 million. The increase primarily reflects the continuing
increase in demand for the Company’s products in the U.S.
For the three and nine months ended September
30, 2020, the Company recognized $22.5 million and $61.7 million of
collaboration revenue, respectively, which primarily relates to the
Company’s collaboration arrangement with F. Hoffman-La Roche Ltd.
(“Roche”). In February 2020, the Company received an aggregate of
approximately $1.2 billion in cash consideration from Roche,
consisting of an up-front payment and an equity investment in the
Company. Of that amount, $348.7 million is being recognized as
revenue on a straight-line basis over the performance period,
estimated to be through the fourth quarter of 2023.
Cost and Operating Expenses
Cost of sales (excluding amortization of
in-licensed rights)For the three months ended September 30, 2020,
cost of sales (excluding amortization of in-licensed rights) was
$15.0 million, compared to $13.0 million for the same period of
2019, an increase of $2.0 million. For the nine months ended
September 30, 2020 and 2019, cost of sales (excluding amortization
of in-licensed rights) was approximately $41.0 million. The
increase in cost of sales for the three months ended September 30,
2020 is primarily due to increasing demand for the Company’s
products, partially offset by write-offs of certain batches of
EXONDYS 51 not meeting the Company’s quality specifications for the
three months ended September 30, 2019, with no similar activity for
the three months ended September 30, 2020 and an increase in
royalty payments to BioMarin Pharmaceutical (“BioMarin”) and
University of Western Australia (“UWA”) as a result of increasing
demand for the Company’s products.
Research and development
Research and development expenses were $190.4
million for the three months ended September 30, 2020, compared to
$133.9 million for the same period of 2019, an increase of $56.5
million. The increase in research and development expenses
primarily reflects the following:
- $42.5 million increase in manufacturing expenses primarily due
to a continuing ramp-up of the Company’s gene therapy
programs;
- $11.2 million increase in clinical trial expenses primarily due
to increased patient enrollment for the Company’s ESSENCE program
as well as certain start-up activities for the Company’s
micro-dystrophin program;
- $5.6 million increase in collaboration cost sharing with
Genethon on its micro-dystrophin drug candidates and Lysogene on
its MPS IIIA drug candidate;
- $4.2 million increase in compensation and other personnel
expenses primarily due to a net increase in headcount;
- $3.7 million increase in stock-based compensation expense
primarily driven by increases in headcount and stock price;
- $3.2 million increase in up-front, milestone and other expenses
primarily due to $15.1 million of up-front payments as a result of
the execution of certain research, option, and license agreements
during the third quarter of 2020, offset primarily by $10.0 million
of similar activity during the third quarter of 2019;
- $2.2 million increase in facility- and technology-related
expenses due to the Company’s continuing global expansion
efforts;
- $1.0 million increase in pre-clinical expenses primarily due to
an increase of toxicology studies in the Company’s gene therapy
platforms during the third quarter of 2020, offset by the
completion of certain toxicology studies in the Company’s PPMO
platform;
- $2.1 million decrease in professional service expenses
primarily due to a decrease in reliance on third-party research and
development contractors as a result of an increase in hiring and
headcount; and
- $16.7 million offset to expense incurred in the third quarter
of 2020 associated with a collaboration reimbursement from
Roche.
Research and development expenses were $515.1
million for the nine months ended September 30, 2020, compared to
$337.8 million for the same period of 2019, an increase of $177.3
million. The increase in research and development expenses
primarily reflects the following:
- $165.8 million increase in manufacturing expenses primarily due
to a continuing ramp-up of the Company’s gene therapy
programs;
- $15.3 million increase in compensation and other personnel
expenses primarily due to a net increase in headcount;
- $12.1 million increase in stock-based compensation expense
primarily driven by increases in headcount and stock price;
- $9.5 million increase in collaboration cost sharing with
Genethon on its micro-dystrophin drug candidates and Lysogene on
its MPS IIIA drug candidate;
- $8.3 million increase in up-front, milestone and other expenses
primarily due to $9.3 million of milestone expense related to
payments accrued to an academic institution and $27.1 million of
up-front payments as a result of the execution of certain research,
option and license agreements during the nine months ended
September 30, 2020, offset primarily by $25.5 million of up-front
payments as a result of license agreements executed during the same
period of 2019;
- $6.3 million increase in clinical trial expenses primarily due
to increased patient enrollment for the Company’s ESSENCE program
as well as certain start-up activities for the Company’s
micro-dystrophin program;
- $6.2 million increase in facility- and technology-related
expenses due to the Company’s continuing global expansion
efforts;
- $2.7 million increase in research and other primarily driven by
an increase in sponsored research with academic institutions during
the nine months ended September 30, 2020;
- $3.2 million decrease in professional service expenses
primarily due to a decrease in reliance on third-party research and
development contractors as a result of an increase in hiring and
headcount;
- $3.8 million decrease in pre-clinical expenses primarily due to
completion of certain toxicology studies in the Company’s PPMO
platform, offset by an increase of toxicology studies in the
Company’s gene therapy platforms; and
- $41.9 million offset to expense associated with a collaboration
reimbursement from Roche during the nine months ended September 30,
2020.
Non-GAAP research and development expenses were
$159.9 million and $110.5 million for the three months ended
September 30, 2020 and 2019, respectively, an increase of $49.4
million. Non-GAAP research and development expenses were $434.5
million and $279.4 million for the nine months ended September 30,
2020 and 2019, respectively, an increase of $155.1 million.
Selling, general and administrationSelling
general and administrative expenses were approximately $75.4
million for both the three months ended September 30, 2020 and
2019. The changes in selling, general and administrative expenses
primarily reflect the following:
- $3.0 million decrease in professional services primarily due to
a decrease in reliance on third-party contractors as a result of an
increase in hiring and headcount; and
- $2.6 million increase in stock-based compensation primarily due
to increases in headcount and stock price.
Selling general and administrative expenses were
$231.8 million for the nine months ended September 30, 2020,
compared to $203.4 million for the same period of 2019, an increase
of $28.4 million. The increase in selling, general and
administrative expenses primarily reflects the following:
- $11.3 million increase in professional services primarily due
to a transaction fee for the Roche transaction;
- $10.0 million increase in stock-based compensation primarily
due to increases in headcount and stock price;
- $2.8 million increase in compensation and other personnel
expenses primarily due to a net increase in headcount; and
- $1.3 million increase in facility- and technology-related
expense primarily due to continuing global expansion.
Non-GAAP selling, general and administrative
expenses were $57.2 million and $59.6 million for the three months
ended September 30, 2020 and 2019, respectively, a decrease of $2.4
million. Non-GAAP selling, general and administrative expenses were
$166.8 million and $159.7 million for the nine months ended
September 30, 2020 and 2019, respectively, an increase of $7.1
million.
Acquired in-process research and development
As a result of the Myonexus acquisition, the
Company recorded acquired in-process research and development
expense of approximately $173.2 million during the nine months
ended September 30, 2019. There was no such transaction during the
nine months ended September 30, 2020.
Amortization of in-licensed rights
For both the three months ended September 30,
2020 and 2019, the Company recorded amortization of in-licensed
rights of approximately $0.2 million. For the nine months ended
September 30, 2020 and 2019, the Company recorded amortization of
in-licensed rights of approximately $0.5 million and $0.6 million,
respectively. This is related to the amortization of the
in-licensed right assets recognized as a result of agreements the
Company entered into with BioMarin and UWA upon the first
commercial sale of EXONDYS 51 and VYONDYS 53.
Gain from Sale of Priority Review Voucher
In February 2020, the Company entered into an
agreement with Vifor (International) Ltd. to sell the rare
pediatric disease Priority Review Voucher (“PRV”) it received from
the FDA in connection with the approval of VYONDYS 53. Following
the early termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
in March 2020, the Company completed its sale of the PRV and
received proceeds of $108.1 million, net of commission, which was
recorded as a gain from sale of the PRV as it did not have a
carrying value at the time of the sale. There was no similar
activity during the nine months ended September 30, 2019.
Loss on contingent consideration
The loss on contingent consideration relates to
the fair value adjustment of the Company’s contingent consideration
liability related to regulatory-related contingent payments to
Myonexus selling shareholders as well as to an academic institution
under separate license agreements that meet the definition of a
derivative. During the three months ended September 30, 2020, the
Company recognized $45.0 million of expense to adjust the fair
value of the contingent consideration based on the most current
assumptions relating to the achievement of the milestone. There was
no similar activity during the three or nine months ended September
30, 2019.
Other expense, net
For the three months and nine months ended
September 30, 2020, other expense, net was approximately $14.3
million and $34.2 million, respectively. For the three and nine
months ended September 30, 2019, other expense, net was
approximately $2.5 million and $3.5 million, respectively. The
increase primarily reflects the interest expense on the Company’s
debt facility entered into in December 2019 as well as a decrease
in interest income and the amortization of investment discounts due
to the investment mix of the Company’s investment portfolio.
Cash, Cash Equivalents,
Investments and Restricted
Cash and
Investments
The Company had approximately $1.8 billion in
cash, cash equivalents and investments as of September 30, 2020
compared to $1.1 billion as of December 31, 2019. The increase is
primarily driven by the $1.2 billion up-front payments received
from the Roche as a result of the execution of the collaboration
and equity investment agreements offset by cash used to fund the
Company’s ongoing operations during 2020.
Use of Non-GAAP Measures
In addition to the GAAP financial measures set
forth in this press release, the Company has included certain
non-GAAP measurements. The non-GAAP loss is defined by the Company
as GAAP net loss excluding interest expense/(income), income tax
expense/(benefit), depreciation and amortization expense,
stock-based compensation expense and other items. Non-GAAP research
and development expenses are defined by the Company as GAAP
research and development expenses excluding depreciation and
amortization expense, stock-based compensation expense and other
items. Non-GAAP selling, general and administrative expenses are
defined by the Company as GAAP selling, general and administrative
expenses excluding depreciation and amortization expense,
stock-based compensation expense and other items.
1. Interest, tax, depreciation and
amortization
Interest income and expense amounts can vary
substantially from period to period due to changes in cash and debt
balances and interest rates driven by market conditions outside of
the Company’s operations. Tax amounts can vary substantially from
period to period due to tax adjustments that are not directly
related to underlying operating performance. Depreciation expense
can vary substantially from period to period as the purchases of
property and equipment may vary significantly from period to period
and without any direct correlation to the Company’s operating
performance. Amortization expense associated with in-licensed
rights as well as patent costs are amortized over a period of
several years after acquisition or patent application or renewal
and generally cannot be changed or influenced by management.
2. Stock-based compensation expenses
Stock-based compensation expenses represent
non-cash charges related to equity awards granted by Sarepta.
Although these are recurring charges to operations, the Company
believes the measurement of these amounts can vary substantially
from period to period and depend significantly on factors that are
not a direct consequence of operating performance that is within
the Company’s control. Therefore, the Company believes that
excluding these charges facilitates comparisons of the Company’s
operational performance in different periods.
3. Other items
The Company evaluates other items of expense and
income on an individual basis. It takes into consideration
quantitative and qualitative characteristics of each item,
including (a) nature, (b) whether the items relate to the Company’s
ongoing business operations, and (c) whether the Company expects
the items to continue on a regular basis. These other items include
collaboration revenue and transaction cost related to the Roche
transaction, up-front and milestone payments, acquired in-process
research and development expense, gain from sale of PRV and loss on
contingent consideration.
The Company excludes collaboration revenue and
transaction cost associated with the Roche transaction from its
non-GAAP results. While collaboration revenue is recurring, as the
Company’s ordinary activities do not include contracting with third
parties to provide them with research and development services,
collaboration revenue is treated as a non-GAAP adjustment item.
Additionally, the transaction fee related to the Roche transaction
is non-recurring and is excluded from its non-GAAP results.
However, the Company does not exclude reimbursement of costs by
Roche from its non-GAAP results.
The Company excludes up-front, milestone, and
acquired in-process research and development expenses associated
with its license and collaboration agreements from its non-GAAP
results and research and development expenses because the Company
does not consider them to be normal operating expenses due to their
nature, variability of amounts, and lack of predictability as to
occurrence and/or timing. Up-front payments are made at the
commencement of a collaborative relationship or a license agreement
anticipated to continue for a multi-year period and provide the
Company with intellectual property rights, option rights and other
rights with respect to particular programs. Milestone payments are
made when certain development, regulatory and sales milestone
events are achieved. The variability of amounts and lack of
predictability of collaboration- and license-related up-front and
milestone payment makes the identification of trends in the
Company’s ongoing research and development activities more
difficult.
As a result of the Myonexus acquisition, the
Company recorded acquired in-process research and development
expense, which represents a non-recurring expense and, therefore,
was treated as a non-GAAP adjustment item. The Company believes the
presentation of adjusted research and development, which does not
include license- and collaboration-related up-front and milestone
expenses, provides useful and meaningful information about its
ongoing research and development activities by enhancing investors’
understanding of the Company’s normal, recurring operating research
and development expenses and facilitates comparisons between
periods and with respect to projected performance.
The sale of the PRV obtained as a result of the
FDA approval of VYONDYS 53 in December 2019 is a non-recurring
event and excluded from the Company’s non-GAAP results.
The Company excludes from its non-GAAP results
loss on contingent consideration related to the Company’s
acquisition of Myonexus in 2019 as it is a non-cash item and is not
considered to be normal operating expenses due to its variability
of amounts and lack of predictability as to occurrence and/or
timing.
The Company uses these non-GAAP measures as key
performance measures for the purpose of evaluating operational
performance and cash requirements internally. The Company also
believes these non-GAAP measures increase comparability of
period-to-period results and are useful to investors as they
provide a similar basis for evaluating the Company’s performance as
is applied by management. These non-GAAP measures are not intended
to be considered in isolation or to replace the presentation of the
Company’s financial results in accordance with GAAP. Use of the
terms non-GAAP research and development expenses, non-GAAP selling,
general and administrative expenses, non-GAAP other income and loss
adjustments, non-GAAP income tax expense, non-GAAP net loss, and
non-GAAP basic and diluted net loss per share may differ from
similar measures reported by other companies, which may limit
comparability, and are not based on any comprehensive set of
accounting rules or principles. All relevant non-GAAP measures are
reconciled from their respective GAAP measures in the attached
table "Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures.”
About EXONDYS 51
EXONDYS 51 uses Sarepta’s proprietary
phosphorodiamidate morpholino oligomer (PMO) chemistry and
exon-skipping technology to bind to exon 51 of dystrophin pre-mRNA,
resulting in “skipping” of this exon during mRNA processing in
patients with genetic mutations that are amenable to exon 51
skipping. Exon skipping is intended to allow for production of an
internally truncated dystrophin protein.
EXONDYS 51 is indicated for the treatment of
Duchenne muscular dystrophy in patients who have a confirmed
mutation of the DMD gene that is amenable to exon 51 skipping.
This indication is approved under accelerated
approval based on an increase in dystrophin production in skeletal
muscle observed in some patients treated with EXONDYS 51. Continued
approval may be contingent upon verification of a clinical benefit
in confirmatory trials.
EXONDYS 51 has met the full statutory standards
for safety and effectiveness and as such is not considered
investigational or experimental.
Important Safety Information About
EXONDYS 51
Hypersensitivity reactions, including rash and
urticaria, pyrexia, flushing, cough, dyspnea, bronchospasm, and
hypotension, have occurred in patients who were treated with
EXONDYS 51. If a hypersensitivity reaction occurs, institute
appropriate medical treatment and consider slowing the infusion or
interrupting the EXONDYS 51 therapy.
Adverse reactions in DMD patients (N=8) treated
with EXONDYS 51 30 mg or 50 mg/kg/week by intravenous (IV) infusion
with an incidence of at least 25% more than placebo (N=4) (Study 1,
24 weeks) were (EXONDYS 51, placebo): balance disorder (38%, 0%),
vomiting (38%, 0%) and contact dermatitis (25%, 0%). The most
common adverse reactions were balance disorder and vomiting.
Because of the small numbers of patients, these represent crude
frequencies that may not reflect the frequencies observed in
practice. The 50 mg/kg once weekly dosing regimen of EXONDYS 51 is
not recommended.
In the 88 patients who received ≥30 mg/kg/week
of EXONDYS 51 for up to 208 weeks in clinical studies, the
following events were reported in ≥10% of patients and occurred
more frequently than on the same dose in Study 1: vomiting,
contusion, excoriation, arthralgia, rash, catheter site pain, and
upper respiratory tract infection.
For further information, please see the full
Prescribing Information.
About VYONDYS 53
VYONDYS 53 uses Sarepta’s proprietary
phosphorodiamidate morpholino oligomer (PMO) chemistry and
exon-skipping technology to bind to exon 53 of dystrophin pre-mRNA,
resulting in exclusion, or “skipping,” of this exon during mRNA
processing in patients with genetic mutations that are amenable to
exon 53 skipping. Exon skipping is intended to allow for production
of an internally truncated dystrophin protein.
VYONDYS 53 is indicated for the treatment of
Duchenne muscular dystrophy in patients who have a confirmed
mutation of the DMD gene that is amenable to exon 53 skipping.
This indication is approved under accelerated
approval based on an increase in dystrophin production in skeletal
muscle observed in patients treated with VYONDYS 53. Continued
approval may be contingent upon verification of a clinical benefit
in confirmatory trials.
VYONDYS 53 has met the full statutory standards
for safety and effectiveness and as such is not considered
investigational or experimental.
Important Safety Information for VYONDYS
53
Hypersensitivity reactions, including rash,
pyrexia, pruritus, urticaria, dermatitis, and skin exfoliation have
occurred in VYONDYS 53-treated patients, some requiring treatment.
If a hypersensitivity reaction occurs, institute appropriate
medical treatment and consider slowing the infusion or interrupting
the VYONDYS 53 therapy.
Renal toxicity was observed in animals who
received golodirsen. Although renal toxicity was not observed in
the clinical studies with VYONDYS 53, renal toxicity, including
potentially fatal glomerulonephritis, has been observed after
administration of some antisense oligonucleotides. Renal function
should be monitored in patients taking VYONDYS 53. Because of the
effect of reduced skeletal muscle mass on creatinine measurements,
creatinine may not be a reliable measure of renal function in DMD
patients. Measurement of glomerular filtration rate (GFR) by
24-hour urine collection prior to initiation of therapy is
recommended. Monthly monitoring for proteinuria by dipstick
urinalysis and monitoring of serum cystatin C every three months is
recommended. In the case of a confirmed dipstick proteinuria of 2+
or greater or elevated serum cystatin C, a 24-hour urine collection
to quantify proteinuria and assess GFR should be performed.
Adverse reactions observed in at least 20% of
treated patients and greater than placebo were (VYONDYS 53,
placebo): headache (41%, 10%), pyrexia (41%, 14%), fall (29%, 19%),
abdominal pain (27%, 10%), nasopharyngitis (27%, 14%), cough (27%,
19%), vomiting (27%, 19%), and nausea (20%, 10%).
Other adverse reactions that occurred at a
frequency greater than 5% of VYONDYS 53-treated patients and at a
greater frequency than placebo were: administration site pain, back
pain, pain, diarrhea, dizziness, ligament sprain, contusion,
influenza, oropharyngeal pain, rhinitis, skin abrasion, ear
infection, seasonal allergy, tachycardia, catheter site related
reaction, constipation, and fracture.
For further information, please see the full
Prescribing Information.
About Sarepta Therapeutics
At Sarepta, we are leading a revolution in
precision genetic medicine and every day is an opportunity to
change the lives of people living with rare disease. The Company
has built an impressive position in Duchenne muscular dystrophy
(DMD) and in gene therapies for limb-girdle muscular dystrophies
(LGMDs), mucopolysaccharidosis type IIIA, Charcot-Marie-Tooth
(CMT), and other CNS-related disorders, with more than 40 programs
in various stages of development. The Company’s programs and
research focus span several therapeutic modalities, including RNA,
gene therapy and gene editing. For more information, please
visit www.sarepta.com or follow us on Twitter, LinkedIn,
Instagram and Facebook.
Forward-Looking Statements
In order to provide Sarepta’s investors with an
understanding of its current results and future prospects, this
press release contains statements that are forward-looking. Any
statements contained in this press release that are not statements
of historical fact may be deemed to be forward-looking statements.
Words such as “believes,” “anticipates,” “plans,” “expects,”
“will,” “may,” “intends,” “prepares,” “looks,” “potential,”
“possible” and similar expressions are intended to identify
forward-looking statements. These forward-looking statements
include statements relating to our future operations, financial
performance and projections, business plans, market opportunities,
priorities and research and development programs including the
potential of casimersen to treat patients with DMD who have genetic
mutations that are amenable to skipping exon 45 of the Duchenne
gene; the expected regulatory action date of February 25, 2021 for
casimersen; the expectation that the FDA will not hold an advisory
committee to discuss the casimersen application; the potential for
the collaboration with UF to accelerate the discovery and
development of therapies for rare genetic diseases; our goal of
bringing a potentially profound therapy to the DMD community; and
expected plans and milestones, including the expectation of a data
readout for SRP-5051 by the end of 2020 and our plan to commence
dosing patients with commercial process material in Study
SRP-9001-103.
These forward-looking statements involve risks
and uncertainties, many of which are beyond Sarepta’s control.
Actual results could materially differ from those stated or implied
by these forward-looking statements as a result of such risks and
uncertainties. Known risk factors include the following: we may not
be able to comply with all FDA post-approval commitments and
requirements with respect to our products in a timely manner or at
all; our dependence on certain manufacturers to produce our
products and product candidates, including any inability on our
part to accurately anticipate product demand and timely secure
manufacturing capacity to meet product demand, may impair the
availability of product to successfully support various programs;
success in preclinical testing and early clinical trials,
especially if based on a small patient sample, does not ensure that
later clinical trials will be successful, and the results of future
research may not be consistent with past positive results or may
fail to meet regulatory approval requirements for the safety and
efficacy of product candidates; the expected benefits and
opportunities related to our agreements with our strategic partners
may not be realized or may take longer to realize than expected due
to a variety of reasons, including any inability of the parties to
perform their commitments and obligations under the agreements,
challenges and uncertainties inherent in product research and
development and manufacturing limitations; we may not be able to
execute on our business plans, including meeting our expected or
planned regulatory milestones and timelines, research and clinical
development plans, and bringing our product candidates to market,
for various reasons, some of which may be outside of our control,
including possible limitations of company financial and other
resources, manufacturing limitations that may not be anticipated or
resolved for in a timely manner, the COVID-19 pandemic and
regulatory, court or agency decisions, such as decisions by the
United States Patent and Trademark Office with respect to patents
that cover our product candidates; and those risks identified under
the heading “Risk Factors” in our most recent Annual Report on Form
10-K for the year ended December 31, 2019 and most recent
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (SEC) as well as
other SEC filings made by the Company which you are
encouraged to review.
Any of the foregoing risks could materially and
adversely affect the Company’s business, results of operations and
the trading price of Sarepta’s common stock. You should not place
undue reliance on forward-looking statements. Sarepta does not
undertake any obligation to publicly update its forward-looking
statements based on events or circumstances after the date hereof,
except to the extent required by applicable law
or SEC rules.
Internet Posting of
Information
We routinely post information that may be important to investors
in the 'For Investors' section of our website
at www.sarepta.com. We encourage investors and potential
investors to consult our website regularly for important
information about us.
Sarepta Therapeutics, Inc.Condensed Consolidated
Statements of Operations(unaudited, in thousands, except per share
amounts)
|
|
For the Three Months EndedSeptember
30, |
|
|
For the Nine Months EndedSeptember
30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products, net |
|
$ |
121,429 |
|
|
$ |
99,041 |
|
|
$ |
333,221 |
|
|
$ |
280,720 |
|
Collaboration |
|
|
22,495 |
|
|
|
— |
|
|
|
61,740 |
|
|
|
— |
|
Total revenues |
|
|
143,924 |
|
|
|
99,041 |
|
|
|
394,961 |
|
|
|
280,720 |
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excluding amortization of in-licensed rights) |
|
|
15,015 |
|
|
|
13,037 |
|
|
|
40,978 |
|
|
|
41,019 |
|
Research and development |
|
|
190,438 |
|
|
|
133,949 |
|
|
|
515,104 |
|
|
|
337,768 |
|
Selling, general and administrative |
|
|
75,373 |
|
|
|
75,429 |
|
|
|
231,829 |
|
|
|
203,388 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
173,240 |
|
Amortization of in-licensed rights |
|
|
166 |
|
|
|
216 |
|
|
|
497 |
|
|
|
649 |
|
Total cost and expenses |
|
|
280,992 |
|
|
|
222,631 |
|
|
|
788,408 |
|
|
|
756,064 |
|
Operating loss |
|
|
(137,068 |
) |
|
|
(123,590 |
) |
|
|
(393,447 |
) |
|
|
(475,344 |
) |
Other (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from sale of Priority Review Voucher |
|
|
— |
|
|
|
— |
|
|
|
108,069 |
|
|
|
— |
|
Loss on contingent consideration |
|
|
(45,000 |
) |
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
Other expense, net |
|
|
(14,335 |
) |
|
|
(2,510 |
) |
|
|
(34,202 |
) |
|
|
(3,544 |
) |
Total other (loss) income |
|
|
(59,335 |
) |
|
|
(2,510 |
) |
|
|
28,867 |
|
|
|
(3,544 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
expense |
|
|
(196,403 |
) |
|
|
(126,100 |
) |
|
|
(364,580 |
) |
|
|
(478,888 |
) |
Income tax expense |
|
|
96 |
|
|
|
226 |
|
|
|
231 |
|
|
|
484 |
|
Net loss |
|
$ |
(196,499 |
) |
|
$ |
(126,326 |
) |
|
$ |
(364,811 |
) |
|
$ |
(479,372 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
|
$ |
(2.50 |
) |
|
$ |
(1.70 |
) |
|
$ |
(4.70 |
) |
|
$ |
(6.54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares of common stock used in computing basic and diluted net loss
per share |
|
|
78,501 |
|
|
|
74,177 |
|
|
|
77,637 |
|
|
|
73,298 |
|
Sarepta Therapeutics, Inc. |
|
Reconciliation of GAAP Financial Measures to Non-GAAP Financial
Measures |
|
(unaudited, in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months EndedSeptember
30, |
|
|
For the Nine Months EndedSeptember
30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(196,499 |
) |
|
$ |
(126,326 |
) |
|
$ |
(364,811 |
) |
|
$ |
(479,372 |
) |
Interest expense, net |
|
|
13,454 |
|
|
|
2,136 |
|
|
|
34,042 |
|
|
|
3,519 |
|
Income tax expense |
|
|
96 |
|
|
|
226 |
|
|
|
231 |
|
|
|
484 |
|
Gain from sale of Priority Review Voucher |
|
|
— |
|
|
|
— |
|
|
|
(108,069 |
) |
|
|
— |
|
Loss on contingent consideration |
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
|
|
— |
|
Collaboration revenue |
|
|
(22,495 |
) |
|
|
— |
|
|
|
(61,740 |
) |
|
|
— |
|
Depreciation and amortization expense |
|
|
6,619 |
|
|
|
6,740 |
|
|
|
19,623 |
|
|
|
17,853 |
|
Stock-based compensation expense |
|
|
26,903 |
|
|
|
20,637 |
|
|
|
78,543 |
|
|
|
56,538 |
|
Roche transaction costs |
|
|
— |
|
|
|
— |
|
|
|
11,292 |
|
|
|
— |
|
Up-front, milestone, and other expenses |
|
|
15,375 |
|
|
|
12,146 |
|
|
|
36,658 |
|
|
|
28,346 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
173,240 |
|
Non-GAAP net loss |
|
$ |
(111,547 |
) |
|
$ |
(84,441 |
) |
|
$ |
(309,231 |
) |
|
$ |
(199,392 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(1.42 |
) |
|
$ |
(1.14 |
) |
|
$ |
(3.98 |
) |
|
$ |
(2.72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares of common stock used in computing basic and diluted net loss
per share |
|
|
78,501 |
|
|
|
74,177 |
|
|
|
77,637 |
|
|
|
73,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months EndedSeptember
30, |
|
|
For the Nine Months EndedSeptember
30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
GAAP research and development
expenses |
|
$ |
190,438 |
|
|
$ |
133,949 |
|
|
$ |
515,104 |
|
|
$ |
337,768 |
|
Up-front, milestone, and other expenses |
|
|
(15,375 |
) |
|
|
(12,146 |
) |
|
|
(36,658 |
) |
|
|
(28,346 |
) |
Stock-based compensation expense |
|
|
(10,645 |
) |
|
|
(6,972 |
) |
|
|
(31,034 |
) |
|
|
(18,982 |
) |
Depreciation and amortization expense |
|
|
(4,516 |
) |
|
|
(4,364 |
) |
|
|
(12,892 |
) |
|
|
(11,051 |
) |
Non-GAAP research and
development expenses |
|
$ |
159,902 |
|
|
$ |
110,467 |
|
|
$ |
434,520 |
|
|
$ |
279,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months EndedSeptember
30, |
|
|
For the Nine Months EndedSeptember
30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
GAAP selling, general and
administrative expenses |
|
$ |
75,373 |
|
|
$ |
75,429 |
|
|
$ |
231,829 |
|
|
$ |
203,388 |
|
Stock-based compensation expense |
|
|
(16,258 |
) |
|
|
(13,665 |
) |
|
|
(47,509 |
) |
|
|
(37,556 |
) |
Depreciation and amortization expense |
|
|
(1,937 |
) |
|
|
(2,160 |
) |
|
|
(6,234 |
) |
|
|
(6,153 |
) |
Roche transaction costs |
|
|
— |
|
|
|
— |
|
|
|
(11,292 |
) |
|
|
— |
|
Non-GAAP selling, general and
administrative expenses |
|
$ |
57,178 |
|
|
$ |
59,604 |
|
|
$ |
166,794 |
|
|
$ |
159,679 |
|
Sarepta Therapeutics, Inc.Condensed Consolidated
Balance Sheets(unaudited, in thousands, except share and per share
data)
|
|
As ofSeptember 30, 2020 |
|
|
As ofDecember 31, 2019 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,474,637 |
|
|
$ |
835,080 |
|
Short-term investments |
|
|
341,467 |
|
|
|
289,668 |
|
Accounts receivable |
|
|
121,827 |
|
|
|
90,879 |
|
Inventory |
|
|
220,118 |
|
|
|
171,379 |
|
Other current assets |
|
|
164,624 |
|
|
|
81,907 |
|
Total current assets |
|
|
2,322,673 |
|
|
|
1,468,913 |
|
Property and equipment,
net |
|
|
171,715 |
|
|
|
129,620 |
|
Intangible assets, net |
|
|
13,344 |
|
|
|
12,497 |
|
Right of use assets |
|
|
71,085 |
|
|
|
37,933 |
|
Other non-current assets |
|
|
201,847 |
|
|
|
173,859 |
|
Total assets |
|
$ |
2,780,664 |
|
|
$ |
1,822,822 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’
Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
74,528 |
|
|
$ |
68,094 |
|
Accrued expenses |
|
|
199,063 |
|
|
|
185,527 |
|
Deferred revenue, current portion |
|
|
89,244 |
|
|
|
3,303 |
|
Other current liabilities |
|
|
15,553 |
|
|
|
7,843 |
|
Total current liabilities |
|
|
378,388 |
|
|
|
264,767 |
|
Long-term debt |
|
|
700,470 |
|
|
|
681,900 |
|
Lease liabilities |
|
|
68,229 |
|
|
|
47,720 |
|
Deferred revenue, net of
current portion |
|
|
685,982 |
|
|
|
— |
|
Contingent consideration |
|
|
50,500 |
|
|
|
5,200 |
|
Other non-current
liabilities |
|
|
5,048 |
|
|
|
5,048 |
|
Total liabilities |
|
|
1,888,617 |
|
|
|
1,004,635 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par
value, 3,333,333 shares authorized; none issued and
outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $0.0001 par
value, 198,000,000 shares authorized; 78,789,760 and
75,184,863 issued and outstanding at September 30, 2020 and
December 31, 2019, respectively |
|
|
8 |
|
|
|
8 |
|
Additional paid-in
capital |
|
|
3,550,857 |
|
|
|
3,112,130 |
|
Accumulated other
comprehensive (loss) income, net of tax |
|
|
(6 |
) |
|
|
50 |
|
Accumulated deficit |
|
|
(2,658,812 |
) |
|
|
(2,294,001 |
) |
Total stockholders’ equity |
|
|
892,047 |
|
|
|
818,187 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,780,664 |
|
|
$ |
1,822,822 |
|
Source: Sarepta Therapeutics, Inc.
Sarepta Therapeutics, Inc.Investors: Ian Estepan, 617-274-4052,
iestepan@sarepta.com Media: Tracy Sorrentino, 617-301-8566,
tsorrentino@sarepta.com
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