-- Achieved net revenue of $35 million for the
second quarter 2017 --
Sarepta Therapeutics, Inc. (NASDAQ:SRPT), a U.S. commercial-stage
biopharmaceutical company focused on the discovery and development
of unique RNA-targeted therapeutics for the treatment of rare
neuromuscular diseases, today reported financial results for the
second quarter of 2017.
“We are pleased with the progress made in the
second quarter and anticipate continued momentum for the remainder
of the year. In an effort to become a global pharmaceutical
company, we settled our patent dispute with BioMarin, which gave us
the ability to launch our Managed Access Program and reach patients
around the world,” said Douglas Ingram, Sarepta’s president and
chief executive officer. “We are particularly excited with the
continued success of the EXONDYS 51® (eteplirsen) launch, the
progress with our internal pipeline and strategic partnerships, all
toward the goal of maintaining our leadership position in DMD. We
look forward to numerous catalysts between now and the end of the
year. Specifically, announcing the results of our 4053-101
dystrophin data and potentially having up to seven experimental DMD
therapies in the clinic.”
Financial Results For the
second quarter of 2017, Sarepta reported a GAAP net loss of $63.0
million, or $1.15 per diluted share, compared to a net loss of
$62.3 million for the same period of 2016, or $1.35 per diluted
share. The increase in loss for the quarter was primarily driven by
increased operating expenses offset by net revenue. Non-GAAP net
loss for the second quarter of 2017 was $25.3 million, or $0.46 per
share, compared to a non-GAAP net loss of $54.8 million for the
same period of 2016, or $1.19 per share.
Net Revenues For the second
quarter of 2017, the Company recognized net revenues of $35.0
million from product sales. No revenue was recognized for the same
period of 2016.
Operating
Expenses Research and development expenses were $58.9
million for the second quarter of 2017, compared to $44.3 million
for the same period of 2016, an increase of $14.6 million. The
increase was primarily due to a one-time milestone payment to
Summit Therapeutics for $22.0 million, increased preclinical
expenses due to a ramp up of preclinical studies for the Company’s
PPMO platform and other follow-on exons, and increased patient
enrollment in our clinical trials, offset in part by lower
manufacturing expenses due to the capitalization of inventory
following the approval of EXONDYS 51 by the U.S. Food and Drug
Administration (FDA). Non-GAAP research and development expenses
were $34.6 million for the second quarter of 2017, compared to
$41.4 million for the same period of 2016, a decrease of $6.8
million.
Selling, general and administrative expenses
were $36.1 million for the second quarter of 2017, compared to
$17.8 million for the same period of 2016, an increase of $18.3
million, which was primarily driven by increases in professional
services due to increased legal fees and commercial initiatives,
restructuring charges, compensation and other personnel expenses.
Non-GAAP selling, general and administrative expenses were $25.4
million for the second quarter of 2017, compared to $13.2 million
for the same period of 2016, an increase of $12.2 million.
Cash, Cash Equivalents, Restricted Cash
and Investments The Company had $301.7 million in
cash, cash equivalents, restricted cash and investments as of June
30, 2017 compared to $329.3 million as of December 31, 2016, a
decrease of $27.6 million. The decrease is primarily due to a
one-time milestone payment to Summit Therapeutics for $22 million
and the use of cash to fund the Company’s ongoing operations,
offset by the proceeds received from the sale of the Company’s
PRV.
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: non-GAAP research and development expenses,
non-GAAP selling, general and administrative expenses, non-GAAP
other income adjustments, non-GAAP income tax expense, non-GAAP net
loss, and non-GAAP basic and diluted net loss per share, which
present operating results on a basis adjusted for stock-based
compensation, restructuring expenses, and other items.
1. 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, management
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
management's control. Therefore, management believes that excluding
these charges facilitates comparisons of the Company’s operational
performance in different periods.
2. Restructuring expenses
Restructuring expenses have been excluded as the
Company believes that adjusting for these items more closely
represents the Company’s ongoing operating performance and
financial results.
3. Other items
Management 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 relates 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 the aforementioned gain from the sale of the Company’s PRV
and associated income taxes, upfront license and milestone payments
to Summit, and EXONDYS 51 litigation and license charges.
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
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 to Non-GAAP Net Loss.”
Recent Corporate
Developments
-- Sarepta Therapeutics and Clinigen Launch a
Managed Access Program to Treat Patients with Duchenne Muscular
Dystrophy Amenable to Exon 51 Skipping
-- Sarepta Therapeutics Secures $100 Million in
Debt Financing
-- Sarepta Therapeutics and BioMarin
Pharmaceutical Inc. Announce Execution of a Global Settlement and a
License Agreement Resolving Exon Skipping Patent Litigation
-- Sarepta Therapeutics Appoints Douglas S.
Ingram as President and Chief Executive Officer
-- Sarepta Therapeutics Announces Grand Opening
of its Research and Manufacturing Center at Andover
-- Sarepta Therapeutics and Genethon Announce a
Gene Therapy Research Collaboration for the Treatment of Duchenne
Muscular Dystrophy
Conference CallThe Company will
be hosting a conference call at 4:30 p.m. Eastern Time, to discuss
these financial results and provide a corporate update. The
conference call may be accessed by dialing 844-534-7313 for
domestic callers and +1-574-990-1451 for international callers. The
passcode for the call is 46830427. Please specify to the operator
that you would like to join the "Sarepta Second Quarter 2017
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.
About EXONDYS 51 EXONDYS
51 uses Sarepta’s proprietary phosphorodiamidate morpholino
oligomer (PMO) chemistry and exon-skipping technology to skip exon
51 of the dystrophin gene. EXONDYS 51 is designed to bind to exon
51 of dystrophin pre-mRNA, resulting in exclusion 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. Data
from clinical studies of EXONDYS 51 in a small number of DMD
patients have demonstrated a consistent safety and tolerability
profile. The pivotal trials were not designed to evaluate long-term
safety and a clinical benefit of EXONDYS 51 has not been
established.
Important Safety
Information Adverse reactions in DMD patients (N=8)
treated with EXONDYS 51 30 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 (EXON-DYS 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.
There have been reports of transient erythema,
facial flushing, and elevated temperature occurring on the day of
EXONDYS 51 infusion.
About Sarepta
Therapeutics Sarepta Therapeutics is a U.S.
commercial-stage biopharmaceutical company focused on the discovery
and development of unique RNA-targeted therapeutics for the
treatment of rare neuromuscular diseases. The Company is primarily
focused on rapidly advancing the development of its potentially
disease-modifying Duchenne muscular dystrophy (DMD) drug
candidates. For more information, please visit www.sarepta.com.
Forward-Looking StatementsIn
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
Sarepta’s future operations, financial performance and projections,
business plans, priorities and development of product candidates
including: Sarepta’s anticipated continued momentum for the
remainder of 2017; the impact of the agreements with BioMarin and
Sarepta’s efforts to become a global pharmaceutical company,
including Sarepta’s ability to reach patients around the world;
Sarepta’s goal of maintaining its leadership position in DMD by,
among other things, continuing the success of the EXONDYS 51 launch
and the progress of Sarepta’s internal pipeline and strategic
partnerships; the expectation for numerous catalysts between now
and the end of the year, including plans to announce the dystrophin
data results of Sarepta’s 4053-101 study and potentially having up
to seven experimental DMD therapies in the clinic; and Sarepta’s
anticipation that EXONDYS 51 net revenues for 2017 will be in the
range of $125 to $130 million.
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 meet expectations with respect to EXONDYS 51 sales or
attain the net revenues we anticipate for 2017, profitability or
positive cash-flow from operations; we may not be able to comply
with all FDA post-approval commitments and requirements with
respect to EXONDYS 51 in a timely manner or at all; we may not be
able to obtain regulatory approval for eteplirsen in jurisdictions
outside of the U.S. including from the European Medicines Agency;
we may not be able to complete clinical trials required by the FDA
or other regulatory authorities for approval of any of our product
candidates; the results of our ongoing research and development
efforts, including those with strategic partners, and clinical
trials for our product candidates may not be positive or consistent
with prior results or demonstrate a safe treatment benefit which
could negatively impact our business; our rights to commercialize
EXONDYS 51 and our follow-on exons across the world may not be
fully protected by our patents and/or third party agreements; we
may not be able to establish and successfully conduct a Managed
Access Program in one or more countries, and even if such
program(s) are successfully conducted in each country targeted, we
may not achieve any significant revenues from sales of eteplirsen
under these programs; we may not be able to execute on our business
plans, including meeting our expected or planned regulatory
milestones and timelines, clinical development plans, and bringing
our product candidates to market, for various reasons including
possible limitations of Company financial and other resources,
manufacturing limitations that may not be anticipated or resolved
for in a timely manner, 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
Sarepta’s most recent Annual Report on Form 10-K for the year ended
December 31, 2016 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 |
(in thousands, except per share amounts) |
(unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Product,
net |
|
|
35,011 |
|
|
|
- |
|
|
|
|
51,353 |
|
|
|
- |
|
Total revenues |
|
|
35,011 |
|
|
|
- |
|
|
|
|
51,353 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
534 |
|
|
|
- |
|
|
|
|
786 |
|
|
|
- |
|
Research
and development |
|
|
58,908 |
|
|
|
44,348 |
|
|
|
|
88,027 |
|
|
|
83,174 |
|
Selling,
general and administrative |
|
|
36,069 |
|
|
|
17,752 |
|
|
|
|
62,285 |
|
|
|
38,628 |
|
EXONDYS
51 litigation and license charges |
|
|
2,839 |
|
|
|
- |
|
|
|
|
2,839 |
|
|
|
- |
|
Total cost and
expenses |
|
|
98,350 |
|
|
|
62,100 |
|
|
|
|
153,937 |
|
|
|
121,802 |
|
Operating loss |
|
|
(63,339) |
|
|
|
(62,100) |
|
|
|
|
(102,584) |
|
|
|
(121,802) |
|
|
|
|
|
|
|
|
|
|
|
Other income
(loss): |
|
|
|
|
|
|
|
|
|
Gain from
sale of intangible asset |
|
|
- |
|
|
|
- |
|
|
|
|
125,000 |
|
|
|
- |
|
Interest
income (expense) and other, net |
|
|
184 |
|
|
|
(201) |
|
|
|
|
519 |
|
|
|
(269) |
|
Income (loss) before
income tax expense |
|
|
(63,155) |
|
|
|
(62,301) |
|
|
|
|
22,935 |
|
|
|
(122,071) |
|
Income
tax expense (benefit) |
|
|
(109) |
|
|
|
- |
|
|
|
|
1,891 |
|
|
|
- |
|
Net income (loss) |
|
$ |
(63,046) |
|
|
$ |
(62,301) |
|
|
|
$ |
21,044 |
|
|
$ |
(122,071) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share |
|
$ |
(1.15) |
|
|
$ |
(1.35) |
|
|
|
$ |
0.38 |
|
|
$ |
(2.66) |
|
Diluted
earnings (loss) per share |
|
$ |
(1.15) |
|
|
$ |
(1.35) |
|
|
|
$ |
0.37 |
|
|
$ |
(2.66) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares of common stock used in calculating: |
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share |
|
|
54,976 |
|
|
|
46,157 |
|
|
|
|
54,913 |
|
|
|
45,927 |
|
Diluted
earnings (loss) per share |
|
|
54,976 |
|
|
|
46,157 |
|
|
|
|
56,176 |
|
|
|
45,927 |
|
Sarepta Therapeutics, Inc. |
Reconciliation of GAAP to Non-GAAP Net Loss |
(in thousands, except per share amounts) |
(unaudited) |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) -
GAAP |
|
$ |
(63,046) |
|
|
$ |
(62,301) |
|
|
|
$ |
21,044 |
|
|
$ |
(122,071) |
|
|
|
|
|
|
|
|
|
|
|
Research and
development: |
|
|
|
|
|
|
|
|
|
Milestone
payments |
|
|
22,000 |
|
|
|
- |
|
|
|
|
22,000 |
|
|
|
- |
|
Stock-based compensation expense |
|
|
2,195 |
|
|
|
2,404 |
|
|
|
|
4,069 |
|
|
|
4,853 |
|
Restructuring expense |
|
|
104 |
|
|
|
511 |
|
|
|
|
174 |
|
|
|
1,013 |
|
Total research and
development non-GAAP adjustments |
|
|
24,299 |
|
|
|
2,915 |
|
|
|
|
26,243 |
|
|
|
5,866 |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative: |
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
8,270 |
|
|
|
4,426 |
|
|
|
|
12,108 |
|
|
|
8,667 |
|
Restructuring expense |
|
|
2,420 |
|
|
|
115 |
|
|
|
|
2,586 |
|
|
|
146 |
|
Total selling, general
and administrative non-GAAP adjustments |
|
|
10,690 |
|
|
|
4,541 |
|
|
|
|
14,694 |
|
|
|
8,813 |
|
|
|
|
|
|
|
|
|
|
|
EXONDYS 51 litigation
and license charges - non-GAAP adjustment |
|
|
2,839 |
|
|
|
- |
|
|
|
|
2,839 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Other income
(loss): |
|
|
|
|
|
|
|
|
|
(Gain)
from sale of intangible asset |
|
|
- |
|
|
|
- |
|
|
|
|
(125,000) |
|
|
|
- |
|
Total other income
(loss) non-GAAP adjustments |
|
|
- |
|
|
|
- |
|
|
|
|
(125,000) |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit) - non-GAAP adjustments |
|
|
(109) |
|
|
|
- |
|
|
|
|
1,891 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) -
non-GAAP |
|
$ |
(25,327) |
|
|
$ |
(54,845) |
|
|
|
$ |
(58,289) |
|
|
$ |
(107,392) |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share - basic and diluted |
|
$ |
(0.46) |
|
|
$ |
(1.19) |
|
|
|
$ |
(1.06) |
|
|
$ |
(2.34) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares of common stock outstanding for computing basic and
diluted net loss per share |
|
|
54,976 |
|
|
|
46,157 |
|
|
|
|
54,913 |
|
|
|
45,927 |
|
Sarepta Therapeutics, Inc. |
Balance Sheet Highlights |
(in thousands) |
(unaudited) |
|
|
|
As of June 30,
2017 |
|
As of December 31, 2016 |
|
|
|
|
|
Cash, cash equivalents,
restricted cash and investments |
|
$ |
301,730 |
|
$ |
329,324 |
Total assets |
|
|
450,139 |
|
|
424,104 |
Total liabilities |
|
|
72,367 |
|
|
87,413 |
Total stockholders'
equity |
|
$ |
377,772 |
|
$ |
336,691 |
Source: Sarepta Therapeutics, Inc.
Media and Investors:
Sarepta Therapeutics, Inc.
Ian Estepan, 617-274-4052
iestepan@sarepta.com
or
W2O Group
Brian Reid, 212-257-6725
breid@w2ogroup.com
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