Sarepta Therapeutics, Inc. (NASDAQ:SRPT), the leader in precision
genetic medicine for rare diseases, today reported financial
results for the three and twelve months ended December 31, 2019.
“The Sarepta team made great progress in service
of our vision to be one of the world’s most meaningful leaders in
precision genetic medicine in 2019, and profoundly so in the fourth
quarter,” stated Doug Ingram, Sarepta’s President and Chief
Executive Officer. “We continued to serve the Duchenne community
with EXONDYS 51, achieving revenue of $100 million in the fourth
quarter and $381 million for full year 2019, a 26% increase over
prior year. With our RNA platform, we also received approval
and launched our second RNA therapy, VYONDYS 53, advanced our third
RNA therapy, casimersen, to a rolling submission, and continued our
multi-ascending dose study for our next-generation RNA technology,
PPMO.”
Mr. Ingram continued, “We progressed our gene
therapy programs such as LGMD2E and MPS IIIA, and significantly
advanced our lead gene therapy program, SRP-9001, intended to use
micro-dystrophin to treat Duchenne muscular dystrophy. We
have now dosed all patients in our blinded, placebo-controlled
trial, Study 102, and are preparing to commence Study 301, our next
placebo-controlled trial using commercial process material.
And importantly, in the fourth quarter we entered into our alliance
with Roche, which not only gives us a very strong balance sheet to
execute our plans but also, assuming the success of SRP-9001,
accelerates our mission to bring a potentially life-enhancing
therapy to Duchenne patients around the world.”
Fourth Quarter 2019 and Recent Corporate
Developments:
- Received FDA Approval of
VYONDYS 53 (golodirsen) Injections for the Treatment of Duchenne
Muscular Dystrophy (DMD) in Patients Amenable to Skipping Exon
53: VYONDYS 53 is an antisense oligonucleotide from
Sarepta’s phosphorodiamidate morpholino oligomer (PMO) platform,
indicated for the treatment of DMD in patients with a confirmed
mutation amenable to exon 53 skipping. This indication is based on
a statistically significant increase in dystrophin production in
skeletal muscle observed in patients treated with VYONDYS 53, which
is reasonably likely to predict clinical benefit for those patients
who are exon 53 amenable. Consistent with the accelerated approval
pathway, the continued approval of VYONDYS 53 may be contingent on
confirmation of a clinical benefit in this post-marketing
confirmatory trial. Sarepta’s placebo-controlled, post-marketing
confirmatory trial to support the VYONDYS 53 accelerated approval –
titled ESSENCE – is currently enrolling and expected to conclude by
2024. VYONDYS 53 is the Company’s second RNA exon-skipping
treatment for DMD approved in the U.S.
- Closed Licensing
Transaction with Roche in Territories Outside the United States for
Investigational Micro-dystrophin Gene Therapy for Duchenne Muscular
Dystrophy (DMD), SRP-9001: On February 14, 2020, Sarepta
and Roche closed the License, Collaboration, and Option Agreement
(the “Collaboration Agreement”) and the Stock Purchase Agreement
announced on December 23, 2019. The Collaboration Agreement
provides Roche exclusive commercial rights to SRP-9001
(AAVrh74.MHCK7.micro-dystrophin), Sarepta’s investigational gene
therapy for DMD, outside the U.S. At closing, Sarepta received $1.2
billion in an up-front payment comprised of $750.0 million in cash
and approximately $400.0 million in exchange for Sarepta stock
priced at $158.29 per share of common stock. The Company is also
eligible to receive up to $1.7 billion in regulatory and sales
milestones plus royalties on net sales, anticipated to be in the
mid-teens. In addition, Roche and Sarepta will equally share joint
global development expenses. Sarepta retains all rights to SRP-9001
in the United States. The collaboration combines Sarepta’s leading
gene therapy candidate for DMD with Roche’s global reach,
commercial presence and regulatory expertise to accelerate access
to SRP-9001 for patients outside the U.S. As part of the agreement,
the Company will continue to be responsible for performing the
joint global development plan and manufacturing build out for
SRP-9001. Through its leading hybrid manufacturing platform,
Sarepta will remain responsible for manufacturing of clinical and
commercial supplies. The Company has also granted Roche an option
to acquire ex-U.S. rights to certain future programs in DMD, in
exchange for separate, up-front milestone and royalty
considerations, and cost sharing.
- Appointed Biotech Executive
John C. Martin, Ph.D. to Board of Directors: Dr. Martin
brings decades of executive leadership to Sarepta’s board, having
played an instrumental role in building Gilead Sciences into one of
the world’s foremost biotechnology companies. During his 20-year
tenure as chief executive officer at Gilead, he oversaw the growth
of the company and development of its scientific portfolio into 24
marketed products.
- Announced Multi-target
Strategic Collaboration with StrideBio to Advance Novel Gene
Therapies: Sarepta and StrideBio Inc. (“StrideBio”) signed
a collaboration and license agreement to develop in vivo AAV-based
therapies for up to eight central nervous system (CNS) and
neuromuscular targets. Pursuant to the agreement, Sarepta was
granted an exclusive license on selected targets to leverage
StrideBio’s novel, structure-driven capsid technology, intended to
enhance specific tropism to tissues of interest and evade
neutralizing antibodies. The parties also plan to focus on
strategies intended to address re-dosing challenges in patients who
have received AAV-delivered gene therapy. StrideBio will
conduct all investigational new drug enabling research, development
and manufacturing for the first four CNS targets, which are MECP2
(Rett syndrome), SCN1A (Dravet syndrome), UBE3A (Angelman
syndrome), and NPC1 (Niemann-Pick). Additionally, Sarepta has an
exclusive option to four additional targets based on StrideBio’s
capsid technology.
Conference Call
The 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 4749068. Please
specify to the operator that you would like to join the “Sarepta
Fourth Quarter and Full-Year 2019 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, the Company reported a net loss
of $235.7 million and $140.9 million, or $3.16 and $2.05 per basic
and diluted share for the fourth quarter of 2019 and 2018,
respectively. On a non-GAAP basis, the net loss for the fourth
quarter of 2019 was $116.9 million, or $1.57 per basic and diluted
share, compared to a net loss of $58.7 million, or $0.85 per basic
and diluted share for the same period of 2018.
On a GAAP basis, for the twelve months ended
December 31, 2019, the Company reported a net loss of $715.1
million, or $9.71 per basic and diluted share, compared to a net
loss of $361.9 million, or $5.46 per basic and diluted share for
the same period of 2018. On a non-GAAP basis, the net loss for the
twelve months ended December 31, 2019 was $316.3 million, or $4.30
per basic and diluted share, compared to a net loss of $141.7
million, or $2.14 per basic and diluted share for the same period
of 2018.
Net Revenues
For the three months ended December 31, 2019,
the Company recorded net revenues of $100.1 million, compared to
net revenues of $84.4 million for the same period of 2018, an
increase of $15.7 million. For the twelve months ended December 31,
2019, the Company recorded net revenues of $380.8 million, compared
to net revenues of $301.0 million for the same period of 2018, an
increase of $79.8 million. The increases primarily reflect the
continuing increase in demand for EXONDYS 51 in the U.S.
Cost and Operating Expenses
Cost of sales (excluding amortization of
in-licensed rights)
For the fourth quarter of 2019, cost of sales
(excluding amortization of in-licensed rights) was $15.6 million,
compared to $13.1 million for the same period of 2018, an increase
of $2.5 million. For the twelve months ended December 31, 2019,
cost of sales (excluding amortization of in-licensed rights) was
$56.6 million, compared to $34.2 million for the same period of
2018, an increase of $22.4 million. The increases primarily reflect
royalty payments to BioMarin Pharmaceuticals (“BioMarin”) and
University of Western Australia (“UWA”), and higher product costs
as a result of increasing demand for EXONDYS 51.
Research and development
Research and development expenses were $223.1
million for the fourth quarter of 2019, compared to $146.2 million
for the same period of 2018, an increase of $76.9 million. The
increase in research and development expenses primarily reflects
the following:
- $40.0 million increase in clinical
and manufacturing expenses primarily due to a ramp-up of
manufacturing activities for the Company’s gene therapy programs
(including its micro-dystrophin program), increased patient
enrollment in the Company’s ongoing ESSENCE trial, initiation of
certain post-market studies for EXONDYS 51 and its PPMO platform.
These increases were partially offset by a ramp-down of clinical
trials in EXONDYS 51, including the PROMOVI trial, and the Phase
1/2 trial in VYONDYS 53;
- $10.8 million increase in
compensation and other personnel expenses primarily due to a net
increase in headcount;
- $10.4 million increase in up-front,
milestone, and other expenses, primarily due to $46.9 million
up-front payment to StrideBio as a result of the execution of a
collaboration and license agreement in November 2019, $28.0 million
up-front payment to Genethon as a result of the execution of a
collaboration agreement with Genethon in November 2019, as compared
to $44.8 million up-front and milestone payments to Lysogene S.A.
(“Lysogene”) as a result of the execution of the collaboration and
license agreement with Lysogene in October 2018 as well as certain
development milestones becoming probable of being achieved and
$15.0 million milestone payments to Myonexus Therapeutics, Inc.
(“Myonexus”) as a result of certain development milestones being
achieved or becoming probable of being achieved;
- $8.0 million increase in
collaboration cost-sharing expense primarily driven by
collaboration cost sharing with Genethon on its microdystrophin
platform;
- $7.1 million increase in facility-
and technology-related expenses due to the Company’s continuing
global expansion efforts as well as a change in methodology in
allocation of technology expense;
- $4.9 million increase in
stock-based compensation expense primarily driven by increases in
headcount and stock price;
- $0.8 million increase in
professional services primarily due to continuing accelerated
company growth as a result of expansion of the Company’s research
and development pipeline;
- $0.7 million increase in research
and other primarily driven by an increase in lab supplies as a
result of an increase in headcount as well as sponsored research
with academic institutions; and
- $5.9 million decrease in
pre-clinical expenses primarily due to completion of certain
toxicology studies in the Company’s PPMO platform.
Research and development expenses were $560.9
million for the twelve months ended December 31, 2019, compared to
$401.8 million for the same period of 2018, an increase of $159.1
million. The increase in research and development expenses
primarily reflects the following:
- $111.1 million increase in clinical
and manufacturing expenses primarily due to a ramp-up of
manufacturing activities for the Company’s gene therapy programs
(including its micro-dystrophin program), increased patient
enrollment in the Company’s ESSENCE trial, and initiation of
certain post-market studies for EXONDYS 51. These increases were
partially offset by a ramp-down of clinical trials in EXONDYS 51,
including the PROMOVI trial and the Phase 1/2 trial in VYONDYS
53;
- $39.9 million increase in
compensation and other personnel expenses primarily due to a net
increase in headcount;
- $30.0 million increase in facility-
and technology-related expenses due to the Company’s continuing
global expansion efforts as well as a change in methodology in
allocation of technology expense;
- $13.5 million increase in
stock-based compensation expense primarily driven by increases in
headcount and stock price;
- $9.2 million increase in research
and other primarily driven by a $7.1 million increase in lab
supplies as a result of an increase in headcount as well as a $3.0
million increase in sponsored research with academic institutions,
partially offset by a reduction of $3.8 million in loss due to
impairment of certain patents from 2018;
- $5.0 million increase in
professional services primarily due to continuing accelerated
company growth as a result of expansion of the Company’s research
and development pipeline;
- $0.8 million increase in
collaboration cost-sharing driven by collaboration cost-sharing
with Genethon on its microdystrophin platform, offset by a decrease
in collaboration cost-sharing with Summit (Oxford) Ltd. as it wound
down activities on its Utrophin platform;
- $39.3 million decrease in up-front,
milestone, and other expenses, primarily due to $46.9 million of
up-front cash and equity payments to StrideBio as a result of the
execution of a license and collaboration agreement in November
2019, a $28.0 million up-front payment to Genethon as a result of
the execution of a license and collaboration agreement in November
2019, and $25.6 million of up-front and milestone payments made to
various academic institutions throughout 2019, as compared with
$85.0 million up-front and milestone payments to Myonexus as a
result of the execution of a warrant agreement in May 2018 as well
as certain development milestones being achieved, $44.8 million
up-front and milestone payments to Lysogene as a result of the
execution of a collaboration and license agreement in October 2018
as well as certain development milestones becoming probable of
being achieved, and $8.0 million related to the purchase of a
license to develop, manufacture and commercialize a pre-clinical
Pompe product candidate under a license agreement with Lacerta in
August 2018; and
- $11.3 million decrease in
pre-clinical expenses primarily due to the completion of certain
toxicology studies in the Company’s PPMO platform.
Non-GAAP research and development expenses were
$135.4 million and $77.0 million for the fourth quarter of 2019 and
2018, respectively, an increase of $58.4 million. Non-GAAP research
and development expenses were $414.8 million and $241.5 million for
the twelve months ended December 31, 2019 and 2018, respectively,
an increase of $173.3 million.
Selling, general and administration
Selling general and administrative expenses were
$81.4 million for the fourth quarter of 2019, compared to $64.2
million for the same period of 2018, an increase of $17.2 million.
The increase in selling, general and administrative expenses
primarily reflects the following:
- $8.6 million increase in facility-
and technology-related expense primarily due to continuing global
expansion offset by a decrease in technology expense due to a
change in allocation methodology;
- $6.3 million increase in
compensation and other personnel expenses primarily due to a net
increase in headcount;
- $4.4 million increase in
stock-based compensation primarily due to increases in headcount
and stock price; and
- $2.8 million increase in
professional services primarily due to continuing global expansion.
Selling, general and administrative expenses
were $284.8 million for the twelve months ended December 31, 2019,
compared to $207.8 million for the same period of 2018, an increase
of $77.0 million. The increase in selling, general and
administrative expenses primarily reflects the following:
- $34.0 million increase in
compensation and other personnel expenses primarily due to a net
increase in headcount;
- $16.5 million increase in facility-
and technology-related expense primarily due to continuing global
expansion offset by a decrease in technology expense due to a
change in allocation methodology;
- $15.0 million increase in
stock-based compensation primarily due to increases in headcount
and stock price;
- $12.5 million increase in
professional services primarily due to continuing global expansion;
and
- $2.2 million decrease in
restructuring credits due to the relief of cease-use liabilities as
a result of the termination of the rental agreement for the
Company’s Corvallis facility recorded during the second quarter of
2018.
Non-GAAP selling, general and administrative
expenses were $65.8 million and $52.9 million for the fourth
quarter of 2019 and 2018, respectively, an increase of $12.9
million. Non-GAAP selling, general and administrative expenses were
$225.5 million and $166.4 million for the twelve months ended
December 31, 2019 and 2018, respectively, an increase of $59.1
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 second quarter
of 2019. There was no such transaction during the same period of
2018.
Settlement and License Charges
In December 2019, the Company recognized a $10.0
million settlement charge related to contingent settlement payments
to BioMarin as a result of the approval of VYONDYS 53. This was a
result of a settlement and license agreement with BioMarin in July
2017. There was no such expense recognized during the same period
of 2018.
Amortization of in-licensed rights
For the three and twelve months ended December
31, 2019, the Company recorded amortization of in-licensed rights
of approximately $0.2 million and $0.8 million, respectively. For
the three and twelve months ended December 31, 2018, the Company
recorded amortization of in-licensed rights of approximately $0.2
million and $0.9 million, respectively. This is related to the
amortization of the in-licensed right assets recognized as a result
of agreements we entered into with BioMarin and UWA upon the first
commercial sale of EXYONDYS 51 and VYONDYS 53.
Other expense, net
For the three and twelve months ended December
31, 2019, other expense, net was approximately $4.8 million and
$8.3 million, respectively. For the three and twelve months ended
December 31, 2018, other expense, net was approximately $2.3
million and $19.0 million, respectively. The quarter- over- quarter
increase primarily reflects an increase in interest expense
recognized from a new term loan that was received by the Company in
December 2019. The year- over- year decrease primarily reflected
decreases in a previous term loan termination expense and an
increase in amortization of investment discount as a result of an
increase in interest rates.
Cash, Cash Equivalents,
Investments and Restricted
Cash and
Investments
The Company had approximately $1.1 billion in
cash, cash equivalents and investments as of December 31, 2019
compared to $1.2 billion as of December 31, 2018. The decrease is
primarily driven by cash used to fund the Company’s ongoing
operations during 2019 offset by the proceeds of the public
offering of common stock in March 2019, the debt offering in
December 2019, and proceeds from the sale of the Company’s
products.
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, 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.
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
up-front and milestone payments and acquired in-process research
and development expense. The Company excludes up-front, milestone,
and acquired in-process research and development expenses
associated with its license and collaboration agreements from its
financial 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 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 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.
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 is an antisense oligonucleotide
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. 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 approved under accelerated review
based on an increase in dystrophin production in skeletal muscle of
patients amenable to exon 53 skipping. 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 Sarepta’s vision to be one of the
world’s most meaningful leaders in precision genetic medicine;
Sarepta’s plan to commence its next placebo-controlled trial using
commercial process for SRPT-9001 (Study 301); the likelihood of
increase in dystrophin production in skeletal muscle observed in
patients treated with VYONDYS 53 to predict clinical benefit for
those patients who are exon 53 amenable; the expectation to
conclude Sarepta’s placebo-controlled, post-marketing confirmatory
trial to support the VYONDYS 53 accelerated approval (ESSENCE) by
2024; the expected benefits of the collaboration agreement with
Roche, including the acceleration of Sarepta’s mission to bring a
potentially life-enhancing therapy to Duchenne patients around the
world, and expected regulatory and sales milestones and royalties;
and the expected benefits of Sarepta’s collaboration with StrideBio
and the parties’ intention to focus on strategies intended to
address re-dosing challenges in patients who have received
AAV-delivered gene therapy.
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 sales of our products
or attain the net revenues we anticipate for 2020, 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 our products in a timely manner or at all; Sarepta’s
dependence on certain manufacturers to produce its products and
product candidates, including any inability on Sarepta’s 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 early results from a
clinical trial do not necessarily predict final results; our data
for casimersen, SRP-5051, SRP-9001, SRP-9003 and/or other programs
may not be sufficient for obtaining regulatory approval; if the
actual number of patients suffering from the diseases we aim to
treat is smaller than estimated, our revenue and ability to achieve
profitability may be adversely affected; 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; Sarepta may not be able
to execute on its business plans, including meeting its expected or
planned regulatory milestones and timelines, research and clinical
development plans, and bringing its product candidates to market,
for various reasons, some of which may be outside of Sarepta’s
control, 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
Sarepta’s 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, 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 Ended |
|
|
For the
Twelve Months Ended |
|
December 31, |
December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product, net |
|
$ |
100,113 |
|
|
$ |
84,415 |
|
|
$ |
380,833 |
|
|
$ |
301,034 |
|
Total
revenues |
|
|
100,113 |
|
|
|
84,415 |
|
|
|
380,833 |
|
|
|
301,034 |
|
Cost and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excluding amortization of in-licensed |
|
|
15,567 |
|
|
|
13,135 |
|
|
|
56,586 |
|
|
|
34,193 |
|
rights) |
Research and development |
|
|
223,141 |
|
|
|
146,207 |
|
|
|
560,909 |
|
|
|
401,843 |
|
Selling, general and administrative |
|
|
81,424 |
|
|
|
64,220 |
|
|
|
284,812 |
|
|
|
207,761 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
— |
|
|
|
173,240 |
|
|
|
— |
|
Settlement and license charges |
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Amortization of in-licensed rights |
|
|
200 |
|
|
|
216 |
|
|
|
849 |
|
|
|
865 |
|
Total cost
and expenses |
|
|
330,332 |
|
|
|
223,778 |
|
|
|
1,086,396 |
|
|
|
644,662 |
|
Operating
loss |
|
|
(230,219 |
) |
|
|
(139,363 |
) |
|
|
(705,563 |
) |
|
|
(343,628 |
) |
Other (loss)
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net |
|
|
(4,773 |
) |
|
|
(2,311 |
) |
|
|
(8,317 |
) |
|
|
(18,982 |
) |
Total other
(loss) income |
|
|
(4,773 |
) |
|
|
(2,311 |
) |
|
|
(8,317 |
) |
|
|
(18,982 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
income tax expense (benefit) |
|
|
(234,992 |
) |
|
|
(141,674 |
) |
|
|
(713,880 |
) |
|
|
(362,610 |
) |
Income tax expense (benefit) |
|
|
711 |
|
|
|
(779 |
) |
|
|
1,195 |
|
|
|
(692 |
) |
Net
loss |
|
$ |
(235,703 |
) |
|
$ |
(140,895 |
) |
|
$ |
(715,075 |
) |
|
$ |
(361,918 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share - basic and diluted |
|
$ |
(3.16 |
) |
|
$ |
(2.05 |
) |
|
$ |
(9.71 |
) |
|
$ |
(5.46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares of common stock used in computing basic
and diluted net loss per share |
|
|
74,557 |
|
|
|
68,653 |
|
|
|
73,615 |
|
|
|
66,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sarepta
Therapeutics, Inc. |
|
Reconciliation of
GAAP Financial Measures to Non-GAAP Financial Measures |
|
(unaudited, in
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Twelve Months EndedDecember 31, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss |
|
$ |
(235,703 |
) |
|
$ |
(140,895 |
) |
|
$ |
(715,075 |
) |
|
$ |
(361,918 |
) |
Interest expense, net |
|
|
4,562 |
|
|
|
2,225 |
|
|
|
8,081 |
|
|
|
18,326 |
|
Income tax expense (benefit) |
|
|
711 |
|
|
|
(779 |
) |
|
|
1,195 |
|
|
|
(692 |
) |
Depreciation and amortization expense |
|
|
6,646 |
|
|
|
3,527 |
|
|
|
24,500 |
|
|
|
12,245 |
|
Stock-based compensation expense |
|
|
22,064 |
|
|
|
12,838 |
|
|
|
78,602 |
|
|
|
50,127 |
|
Restructuring benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,222 |
) |
Up-front, milestone, and other expenses |
|
|
74,816 |
|
|
|
64,413 |
|
|
|
103,162 |
|
|
|
142,413 |
|
Settlement and license charges |
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Acquired in-process research and development |
|
|
— |
|
|
|
— |
|
|
|
173,240 |
|
|
|
— |
|
Non-GAAP net
loss |
|
$ |
(116,904 |
) |
|
$ |
(58,671 |
) |
|
$ |
(316,295 |
) |
|
$ |
(141,721 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(1.57 |
) |
|
$ |
(0.85 |
) |
|
$ |
(4.30 |
) |
|
$ |
(2.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares of common stock outstanding for
computing: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
74,557 |
|
|
|
68,653 |
|
|
|
73,615 |
|
|
|
66,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Twelve Months EndedDecember 31, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
GAAP
research and development expenses |
|
$ |
223,141 |
|
|
$ |
146,207 |
|
|
$ |
560,909 |
|
|
$ |
401,843 |
|
Up-front, milestone, and other expenses |
|
|
(74,816 |
) |
|
|
(64,413 |
) |
|
|
(103,162 |
) |
|
|
(142,413 |
) |
Stock-based compensation expense |
|
|
(8,699 |
) |
|
|
(3,865 |
) |
|
|
(27,681 |
) |
|
|
(14,214 |
) |
Depreciation and amortization expense |
|
|
(4,188 |
) |
|
|
(924 |
) |
|
|
(15,240 |
) |
|
|
(3,717 |
) |
Non-GAAP research and development expenses |
|
$ |
135,438 |
|
|
$ |
77,005 |
|
|
$ |
414,826 |
|
|
$ |
241,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Twelve Months EndedDecember 31, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
GAAP
selling, general and administrative expenses |
|
$ |
81,424 |
|
|
$ |
64,220 |
|
|
$ |
284,812 |
|
|
$ |
207,761 |
|
Stock-based compensation expense |
|
|
(13,365 |
) |
|
|
(8,973 |
) |
|
|
(50,921 |
) |
|
|
(35,913 |
) |
Depreciation and amortization expense |
|
|
(2,258 |
) |
|
|
(2,387 |
) |
|
|
(8,411 |
) |
|
|
(7,663 |
) |
Restructuring benefit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,222 |
|
Non-GAAP
selling, general and administrative expenses |
|
$ |
65,801 |
|
|
$ |
52,860 |
|
|
$ |
225,480 |
|
|
$ |
166,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sarepta Therapeutics, Inc.Condensed Consolidated
Balance Sheets(unaudited, in thousands, except share and per share
data)
|
|
As
of |
|
|
As
of |
|
December
31, |
December
31, |
2019 |
2018 |
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
835,080 |
|
|
$ |
370,829 |
|
Short-term investments |
|
|
289,668 |
|
|
|
803,083 |
|
Accounts receivable |
|
|
90,879 |
|
|
|
49,044 |
|
Inventory |
|
|
171,379 |
|
|
|
125,445 |
|
Other current assets |
|
|
81,907 |
|
|
|
77,782 |
|
Total current assets |
|
|
1,468,913 |
|
|
|
1,426,183 |
|
Property and
equipment, net |
|
|
129,620 |
|
|
|
97,024 |
|
Intangible
assets, net |
|
|
12,497 |
|
|
|
11,574 |
|
Right of use
assets, net (1) |
|
|
37,933 |
|
|
|
— |
|
Other
non-current assets |
|
|
173,859 |
|
|
|
107,294 |
|
Total assets |
|
$ |
1,822,822 |
|
|
$ |
1,642,075 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
68,094 |
|
|
$ |
33,829 |
|
Accrued expenses |
|
|
185,527 |
|
|
|
134,095 |
|
Other current liabilities |
|
|
11,146 |
|
|
|
5,766 |
|
Total current liabilities |
|
|
264,767 |
|
|
|
173,690 |
|
Long-term
debt |
|
|
681,900 |
|
|
|
420,554 |
|
Lease
liabilities (1) |
|
|
47,720 |
|
|
|
— |
|
Other
non-current liabilities |
|
|
10,248 |
|
|
|
15,555 |
|
Total liabilities |
|
|
1,004,635 |
|
|
|
609,799 |
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred
stock, $.0001 par value, 3,333,333 shares authorized; none
issued |
|
|
— |
|
|
|
— |
|
and
outstanding |
Common
stock, $.0001 par value, 99,000,000 shares authorized;
75,184,863 |
|
|
8 |
|
|
|
7 |
|
and
71,071,887 issued and outstanding at December 31, 2019 and
2018, |
respectively |
Additional
paid-in capital |
|
|
3,112,130 |
|
|
|
2,611,294 |
|
Accumulated
other comprehensive income (loss), net of tax |
|
|
50 |
|
|
|
(99 |
) |
Accumulated
deficit |
|
|
(2,294,001 |
) |
|
|
(1,578,926 |
) |
Total stockholders’ equity |
|
|
818,187 |
|
|
|
1,032,276 |
|
Total liabilities and stockholders’ equity |
|
$ |
1,822,822 |
|
|
$ |
1,642,075 |
|
|
|
|
|
|
|
|
|
|
(1) |
As of January 1, 2019, the Company adopted the requirements of
Accounting Standards Codification 842, Leases, using the modified
retrospective method as of the effective date, and as a result,
these captions are not comparable to the prior periods
presented. |
|
|
Source: Sarepta Therapeutics, Inc.
Sarepta Therapeutics, Inc.
Investors: Ian Estepan,
617-274-4052iestepan@sarepta.com
Media: Tracy Sorrentino,
617-301-8566tsorrentino@sarepta.com
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