• ELEVIDYS net product revenues for the quarter totaled $69.1 million
• Total revenues, which consist of net product revenues and collaboration revenues, for the third quarter 2023 totaled $331.8 million
• Net product revenues for the third quarter 2023 totaled $309.3 million, a 49% increase over the same quarter of prior year

CAMBRIDGE, Mass.–(BUSINESS WIRE)–Sarepta Therapeutics, Inc. (NASDAQ:SRPT), the leader in precision genetic medicine for rare diseases, today reported financial results for the third quarter 2023.

“The third quarter was a defining moment for Sarepta. We launched ELEVIDYS, our fourth therapy and the first gene therapy for boys with Duchenne muscular dystrophy, we continued to drive great performance of our three PMOs and importantly, on a non-GAAP basis we have achieved profitability, placing us in ever more rarified territory in biotech,” said Doug Ingram, president and CEO, Sarepta Therapeutics. “Reflecting a superb launch, ELEVIDYS net product revenue came in at $69.1 million. Total net product revenue stands at $309.3 million, growing 49 percent over the same quarter last year. And non-GAAP earnings stood at approximately $38.0 million in the quarter, a major milestone for Sarepta.”

Third Quarter 2023 and Recent Development:

• Announced topline results from EMBARK, a global pivotal study of ELEVIDYS gene therapy for Duchenne muscular dystrophy: The topline results from EMBARK support the conclusion that ELEVIDYS modifies the course of the disease in patients with Duchenne. ELEVIDYS-treated patients showed an increase on the North Star Ambulatory Assessment, a measure of motor function, compared to placebo-treated patients at 52 weeks, although the primary endpoint was not met. Robust, statistically significant results on all key functional pre-specified secondary endpoints, including time to rise (p=0.0025), and 10-meter walk test (p=0.0048), demonstrated evidence of a clinically meaningful treatment benefit that was similar in magnitude and statistical significance across all age groups. No new safety signals were observed. Importantly, we have shared the EMBARK topline results with Food and Drug Administration (FDA) leadership and they have confirmed that, based on the totality of the evidence, they are open to such label expansion if supported by review of the data, and that they intend to proceed rapidly with consideration of the submission.

Conference Call

The event will be webcast live under the investor relations section of Sarepta’s website at https://investorrelations.sarepta.com/events-presentations and following the event a replay will be archived there for one year. Interested parties participating by phone will need to register using this online form. After registering for dial-in details, all phone participants will receive an auto-generated e-mail containing a link to the dial-in number along with a personal PIN number to use to access the event by phone.

Financial Results

For the three months ended September 30, 2023, the Company reported a GAAP net loss of $40.9 million, or $0.46 per basic and diluted share, compared to a GAAP net loss of $257.7 million reported for the same period of 2022, or $2.94 per basic and diluted share. The non-GAAP net income for the three months ended September 30, 2023 was $37.7 million, or $0.37 per diluted share, compared to a non-GAAP net loss of $70.0 million, or $0.80 per diluted share for the same period of 2022.

For the nine months ended September 30, 2023, the Company reported a GAAP net loss of $581.6 million, or $6.56 per basic and diluted share, compared to a GAAP net loss of $594.2 million reported for the same period of 2022, or $6.79 per basic and diluted share. The non-GAAP net loss for the nine months ended September 30, 2023 was $123.0 million, or $1.39 per diluted share, compared to a non-GAAP net loss of $221.7 million, or $2.53 per diluted share for the same period of 2022.

Revenues

For the three months ended September 30, 2023, the Company recorded total revenues of $331.8 million, which consist of net product revenues and collaboration revenues, compared to total revenues of $230.3 million for the same period of 2022, an increase of $101.5 million. For the nine months ended September 30, 2023, the Company recorded total revenues of $846.6 million, compared to total revenues of $674.6 million for the same period of 2022, an increase of $172.0 million. The increase primarily reflects increasing demand for EXONDYS 51, AMONDYS 45 and VYONDYS 53 (collectively, the “PMO Products”), as well as $69.1 million of net product revenues associated with sales of ELEVIDYS during the three and nine months ended September 30, 2023.

For the three months ended September 30, 2023, the Company recorded net product revenues of $309.3 million, compared to net product revenues of $207.8 million for the same period of 2022, an increase of $101.5 million. For the nine months ended September 30, 2023, the Company recorded net product revenues of $779.8 million, compared to net product revenues of $607.8 million for the same period of 2022, an increase of $172.0 million. The increase primarily reflects increasing demand for the PMO Products, as well as $69.1 million of net product revenues associated with sales of ELEVIDYS during the three and nine months ended September 30, 2023.

For both the three and nine months ended September 30, 2023 and 2022, the Company recognized $22.5 million and $66.8 million of collaboration revenue, respectively. For all periods presented, collaboration revenue primarily relates to the F. Hoffman-La Roche Ltd. (Roche) collaboration arrangement.

Cost and Expenses

Cost of sales (excluding amortization of in-licensed rights)

For the three months ended September 30, 2023, cost of sales (excluding amortization of in-licensed rights) was $37.0 million, compared to $40.0 million for the same period of 2022, a decrease of $3.0 million. For the nine months ended September 30, 2023, cost of sales (excluding amortization of in-licensed rights) was $106.2 million, compared to $109.2 million for the same period of 2022, a decrease of $3.0 million. The decrease in the three months ended September 30, 2023 primarily reflects write-offs of certain batches of the Company’s products not meeting the Company’s quality specifications in the three months ended September 30, 2022, with no similar activity for the same period of 2023, partially offset by an increasing demand for the Company’s PMO Products. The change for the nine months ended September 30, 2023 primarily reflects a decrease in royalty payments during the nine months ended September 30, 2023 due to changes in the BioMarin Pharmaceuticals, Inc. (BioMarin) royalty terms and a decrease in write-offs of certain batches of the Company’s products not meeting the Company’s quality specifications for the nine months ended September 30, 2023, as compared to the same period of 2022, partially offset by an increasing demand for the Company’s PMO Products.

Research and development

Research and development expenses were $194.3 million for the three months ended September 30, 2023, compared to $216.7 million for the same period of 2022, a decrease of $22.4 million. The decrease in research and development expenses primarily reflects the following:

• $50.5 million decrease in manufacturing expenses primarily due to lower purchases of raw material consumables in the three months ended September 30, 2023, compared to the same period of 2022, as well as the capitalization of commercial batches of ELEVIDYS manufactured after its approval in June 2023;
• $1.7 million decrease in up-front, milestone and other expenses primarily due to $5.0 million of up-front payments as a result of the execution of certain research and license agreements and $0.5 million of expense incurred as a result of milestone achievements in certain research and license agreements in the three months ended September 30, 2022, partially offset by $3.8 million of expense incurred as a result of the milestone achievements in certain research and license agreements in the same period of 2023;
• $1.2 million increase in pre-clinical expenses primarily due to an increase in toxicology study activity across multiple gene therapy and RNA platforms;
• $1.9 million increase in research and other expenses primarily driven by an increase in sponsored research with academic institutions during the three months ended September 30, 2023 and an increase in lab-related expenses as a result of changes in headcount;
• $2.4 million increase in professional service expenses primarily due to an increase in reliance on third-party research and development contractors for clinical programs;
• $2.4 million increase in collaboration cost-sharing expenses primarily due to the timing of expense incurred related to Genethon’s micro-dystrophin drug candidate;
• $5.7 million increase in facility- and technology-related expenses primarily due to the Company’s continuing expansion efforts;
• $6.3 million increase in compensation and other personnel expenses primarily due to changes in headcount;
• $7.5 million increase in stock-based compensation expense primarily due to the achievement of performance conditions related to certain shares with performance conditions (PSUs), as well as changes in headcount and the value of stock awards;
• $15.3 million increase in clinical trial expenses primarily due to an increased patient enrollment and site activation for the Company’s MIS51ON, MOMENTUM and ENVISION programs; and
• $12.9 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to continuing development of the Company’s SRP-9001 gene therapy programs.

Research and development expenses were $681.9 million for the nine months ended September 30, 2023, compared to $663.3 million for the same period of 2022, an increase of $18.6 million. The increase in research and development expenses primarily reflects the following:

• $39.4 million increase in clinical trial expenses primarily due to an increased patient enrollment and site activation for the Company’s MIS51ON, MOMENTUM, ENVISION programs, as well as additional PPMO and LGMD clinical trials;
• $31.0 million increase in compensation and other personnel expenses primarily due to changes in headcount;
• $18.0 million increase in stock-based compensation expense primarily due to changes in headcount and the value of stock awards, as well as the achievement of performance conditions related to certain PSUs as of the nine months ended September 30, 2023;
• $13.5 million increase in facility- and technology-related expenses primarily due to the Company’s continuing expansion efforts;
• $12.0 million increase in research and other expenses primarily driven by an increase in sponsored research with academic institutions during the nine months ended September 30, 2023 and an increase in lab-related expenses as a result of changes in headcount;
• $7.8 million increase in professional service expenses primarily due to an increase in reliance on third-party research and development contractors for the launch of ELEVIDYS prior to the ELEVIDYS approval in June 2023 and for clinical programs;
• $3.5 million increase in collaboration cost-sharing expenses primarily due to the timing of expense incurred related to Genethon’s micro-dystrophin drug candidate;
• $1.5 million increase in pre-clinical expenses primarily due to an increase in toxicology study activity across multiple gene therapy and PPMO platforms;
• $4.9 million decrease in up-front, milestone and other expenses primarily due to $7.8 million of up-front payments as a result of the execution of certain research and license agreements, $4.5 million of expense incurred as a result of milestone achievements in certain research and license agreements and $4.5 million of option and termination expenses in the nine months ended September 30, 2022, partially offset by $7.8 million of up-front payments as a result of the execution of certain research and license agreements and $3.9 million of expense incurred as a result of the milestone achievements in certain research and license agreements in the same period of 2023;
• $86.2 million decrease in manufacturing expenses primarily due to lower purchases of raw material consumables in the nine months ended September 30, 2023, compared to the same period of 2022, as well as the capitalization of commercial batches of ELEVIDYS, the $53.0 million shortfall payment accrual related to the gene therapy manufacturing and supply agreement with Thermo Fisher Scientific, Inc. and the $17.1 million termination charge related to the manufacturing and supply agreement with Henogen SA, both of which occurred in the nine months ended September 30, 2022, with no similar activity in the same period of 2023. These amounts were partially offset by a continuing ramp-up of SRP-9001 manufacturing prior to the ELEVIDYS approval in June 2023 and continued manufacturing of clinical batches of SRP-9001; and
• $17.0 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to continuing development of the Company’s SRP-9001 gene therapy programs.

Non-GAAP research and development expenses were $163.9 million and $193.7 million for the three months ended September 30, 2023 and 2022, respectively, a decrease of $29.8 million. Non-GAAP research and development expenses were $596.8 million and $597.3 million for the nine months ended September 30, 2023 and 2022, respectively, a decrease of $0.5 million.

Selling, general and administrative

Selling, general and administrative expenses were $120.9 million for the three months ended September 30, 2023, compared to $104.8 million for the same period in 2022, an increase of $16.1 million. The increase in selling, general and administrative expenses primarily reflects the following:

• $12.8 million increase in professional service expenses primarily due to an increase in reliance on third-party selling, general and administrative contractors for the launch of ELEVIDYS and ongoing litigation matters;
• $6.6 million increase in compensation and other personnel expenses primarily due to changes in headcount;
• $3.4 million increase in facility- and technology-related expenses primarily due to the Company’s continuing expansion efforts;
• $3.2 million increase in other expenses primarily due to changes in charitable contribution activity; and
• $9.9 million decrease in stock-based compensation expense primarily related to the Chief Executive Officer grant modification agreement executed in 2022, partially offset by the achievement of performance conditions related to certain PSUs, as well as changes in headcount and the value of stock awards.

Selling, general and administrative expenses were $350.2 million for the nine months ended September 30, 2023, compared to $330.9 million for the same period in 2022, an increase of $19.3 million. The increase in selling, general and administrative expenses primarily reflects the following:

• $42.6 million increase in professional service expenses primarily due to an increase in reliance on third-party selling, general and administrative contractors for the launch of ELEVIDYS and ongoing litigation matters;
• $27.3 million increase in compensation and other personnel expenses primarily due to changes in headcount;
• $7.3 million increase in facility- and technology-related expenses primarily due to the Company’s continuing expansion efforts;
• $6.1 million increase in other expenses primarily due to changes in charitable contribution activity; and
• $63.8 million decrease in stock-based compensation expense primarily related to the Chief Executive Officer grant modification agreement executed in 2022, partially offset by the achievement of performance conditions related to certain PSUs as of the nine months ended September 30, 2023, as well as changes in headcount and the value of stock awards.

Non-GAAP selling, general and administrative expenses were $92.8 million and $66.8 million for the three months ended September 30, 2023 and 2022, respectively, an increase of $26.0 million. Non-GAAP selling, general and administrative expenses were $266.4 million and $183.7 million for the nine months ended September 30, 2023 and 2022, respectively, an increase of $82.7 million.

Amortization of in-licensed rights

For the three and nine months ended September 30, 2023, the Company recorded amortization of in-licensed rights of approximately $0.4 million and $0.8 million, respectively. For the three and nine months ended September 30, 2022, the Company recorded amortization of in-licensed rights of approximately $0.2 million and $0.5 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 the University of Western Australia, Nationwide Children’s Hospital, BioMarin and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively.

Gain from Sale of Priority Review Voucher

In June 2023, the Company entered into an agreement to sell the rare pediatric disease Priority Review Voucher (ELEVIDYS PRV) it received from the FDA in connection with the approval of ELEVIDYS for consideration of $102.0 million, with no commission costs. The closing of the transaction was not subject to the conditions set forth under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and closed during June 2023. The net proceeds were recorded as a gain from sale of the ELEVIDYS PRV during the nine months ended September 30, 2023 as it did not have a carrying value at the time of the sale.

Loss on debt extinguishment

On November 14, 2017, the Company issued $570.0 million aggregate principal amount of senior convertible notes due on November 15, 2024 (2024 Notes). On March 2, 2023, the Company entered into separate, privately negotiated exchange agreements with certain holders of the outstanding 2024 Notes (Exchange Agreements). The Exchange Agreements resulted in a conversion of $313.5 million in aggregate principal value of the 2024 Notes held by the holders (2024 Notes Conversion). In connection with the 2024 Notes Conversion, the Company issued approximately 4.5 million shares of its common stock representing the agreed upon contractual conversion rate under the Exchange Agreements. The conversion was not pursuant to the conversion privileges included in the terms of the debt at issuance and therefore was accounted for as a debt extinguishment. The Company accounted for the debt extinguishment by recognizing the difference between the fair value of the shares of common stock transferred on the conversion date and the net carrying amount of the extinguished debt as a loss on debt extinguishment. The loss incurred on the extinguishment for the nine months ended September 30, 2023 was $387.3 million, inclusive of $6.9 million in third-party debt conversion costs.

Other income (expense), net

For the three months ended September 30, 2023 and 2022, other expense, net was $12.3 million and other income, net was $0.4 million, respectively. The change was primarily due to the impairment of equity investment and a loss on contingent consideration, net, partially offset by increases in accretion of investment discount, net and increases in interest income due to the investment mix of the Company’s investment portfolio, as well as a reductions of interest expense incurred as a result of the repayment of the Company’s December 2019 Term Loan in 2022. For the nine months ended September 30, 2023 and 2022, other income, net was $17.3 million and other expense, net was $33.8 million, respectively. The change was primarily due to increases in accretion of investment discount, net and interest income due to the investment mix of the Company’s investment portfolio, as well as a reductions of interest expense incurred as a result of the repayment of the Company’s December 2019 Term Loan in 2022, partially offset by the impairment of equity investment and a loss on contingent consideration, net incurred in the nine months ended September 30, 2023.

Income tax expense

Income tax expense for the three and nine months ended September 30, 2023 was approximately $7.8 million and $21.2 million, respectively. Income tax expense for the three and nine months ended September 30, 2022 was $1.3 million and $5.6 million, respectively. Income tax expense for the three and nine months ended September 30, 2023 relates to state, foreign and federal income taxes, while income tax expense for the three and nine months ended September 30, 2022 relates to state and foreign income taxes.

Cash, Cash Equivalents, Restricted Cash and Investments

The Company had approximately $1.8 billion in cash, cash equivalents, investments and long-term restricted cash as of September 30, 2023, compared to $2.0 billion as of December 31, 2022. This decrease is driven by cash used to fund the Company’s ongoing operations during 2023.

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 income (loss) is defined by the Company as GAAP net loss excluding interest (income) expense, net, income tax expense, 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) expense, net 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 primarily 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 the Company. 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.

Contacts

Investor Contact:
Ian Estepan, 617-274-4052

[email protected]

Media Contact:
Tracy Sorrentino, 617-301-8566

[email protected]

Read full story here

• SEO Powered Content & PR Distribution. Get Amplified Today.
• PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
• PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
• PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
• PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
• Source: https://www.fintechnews.org/sarepta-therapeutics-announces-third-quarter-2023-financial-results-and-recent-corporate-developments/