Sarepta Therapeutics Announces First Quarter 2018 Financial Results and Recent Corporate Developments
-- First quarter 2017 EXONDYS 51® (eteplirsen) total net revenues of
-- Sarepta signs exclusive partnership and buy-out option with Myonexus Therapeutics; pipeline expands from 16 to 21 programs --
-- Company announces date of first R&D day, at which clinical data from gene therapy micro-dystrophin program will be announced --
-- Company receives negative trend vote following its CHMP oral explanation; will request re-examination and
“In the first quarter, we continued our successful launch of EXONDYS 51 and advanced our pipeline to bring life-enhancing therapies to those suffering from rare disease around the world,” said
Mr. Ingram continued, “Aligned with our stated goal of leveraging our expertise beyond DMD, we announced today a collaboration with Myonexus Therapeutics for the development of five potentially transformative gene therapies to treat a debilitating set of diseases, all under the umbrella of Limb-girdle muscular dystrophy. Through this collaboration, we have expanded our pipeline to 21 therapies in development. Our confidence in the Myonexus collaboration comes from the similarities between the Myonexus and Sarepta approaches to gene therapy. Both are seeking to treat rare neuromuscular disease through the AAVrh.74 vector; and both rely upon the unparalleled expertise of Dr.
Mr. Ingram concluded, “Unfortunately, in addition to our successes in the first quarter, we also have had a delay in our effort to bring eteplirsen to patients in
For the first quarter of 2018, on a GAAP basis, Sarepta reported a net loss of
For the three months ended
Cost and Operating Expenses
Cost of sales (excluding amortization of in-licensed rights)
For the three months ended
Research and development
Research and development expenses were
$4.4 millionincrease in clinical and manufacturing expenses primarily due to increased patient enrollment in the Company’s ongoing clinical trials in golodirsen and casimersen, as well as a ramp-up of manufacturing activities for the Company’s PPMO platform. These increases were partially offset by a ramp-down of clinical trials in eteplirsen primarily because the PROMOVI trial has been fully enrolled;
$3.2 millionincrease in collaboration cost sharing with Summit on its utrophin platform;
$2.7 millionincrease in compensation and other personnel expenses primarily due to a net increase in headcount;
$2.4 millionincrease in professional services primarily due to an expansion of the Company’s research and development pipeline; and
$1.6 millionincrease in preclinical expenses primarily due to the continuing ramp-up of toxicology studies in the Company’s PPMO platform as well as golodirsen and casimersen.
Non-GAAP research and development expenses were
Selling, general and administration
Selling general and administrative expenses were
$6.4 millionincrease in professional services primarily due to continuing global expansion as well as preparation for a potential product launch in the EU should the Company’s Marketing Authorization Application be approved by the European Medicines Agency;
$5.3 millionincrease in compensation and other personnel expenses primarily due to a net increase in headcount; and
$4.6 millionincrease in stock-based compensation primarily due to the impact of revising the forfeiture rate assumption for officers and Board of Directors as well as an increase in stock price.
Non-GAAP selling, general and administrative expenses were
Amortization of in-licensed rights
Amortization of in-licensed rights was
Other (loss) Income
Gain from sale of Priority Review Voucher
In connection with the completion of the sale of the Priority Review Voucher (PRV) in
Interest (expense) income and other, net
For the three months ended
Cash, Cash Equivalents, Restricted Cash and Investments
The Company had
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, restructuring 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, restructuring 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, restructuring 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. Restructuring expenses
The Company believes that adjusting for these items more closely represents the Company’s ongoing operating performance and financial results.
4. 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 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.
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.”
First Quarter and Recent Corporate Developments
- Golodirsen (SRP-4053): Based on Sarepta’s Type C meeting with the FDA’s Division of Neurology Products to solicit the Division's guidance on the development pathway for golodirsen, the Company remains on track to complete a rolling NDA submission by year-end 2018, seeking accelerated approval based on an increase in dystrophin protein as a surrogate endpoint.
- Myonexus Therapeutics Partnership: Sarepta and Myonexus Therapeutics entered into a partnership to advance multiple gene therapies for various forms of Limb-girdle muscular dystrophies (LGMDs). The lead program, MYO-101, has generated encouraging pre-clinical safety and efficacy data utilizing the AAVrh.74 vector system, the same vector used in the micro-dystrophin gene therapy program Sarepta is developing with Nationwide Children’s Hospital. A Phase 1/2a study of MYO-101 is scheduled to begin in mid-2018. The companies plan to report on 60-day biopsy data in late-2018 or early 2019. Additionally, Myonexus is advancing MYO-102 for LGMD2D, MYO-103 for LGMD2C, MYO-201 for LGMD2B, and MYO-301 for LGMD2L. Under the terms of the agreement, Sarepta will make an upfront payment of $60 million and additional development-related milestone payments to purchase an exclusive option to acquire Myonexus at a pre-negotiated, fixed price with sales-related contingent payments. If all development-related milestone payments are met, Sarepta will make payments of up to $45 million over an approximately two-year evaluation period. Sarepta has the option to purchase Myonexus at any time, including upon review of proof-of-concept data.
- Sarepta R&D Day (Tuesday, June 19, 2018): Sarepta management, along with several key-opinion leaders, will provide an in-depth look into the Company’s pipeline programs across several modalities, included RNA-targeted therapies, gene therapy and gene editing. Of particular note, we look forward to presenting our micro-dystrophin expression data from at least two patients enrolled in the Phase 1/2a gene therapy clinical trial underway with Drs. Jerry Mendell and Louise Rodino-Klapac of Nationwide Children’s Hospital. To date, the Company has enrolled four patients in this study and no significant adverse events have been reported. In addition, Dr. Rodino-Klapac, who is also chief scientific officer and co-founder of Myonexus, will present data from Myonexus’ entire LGMD program. For all to access, Sarepta’s R&D day will be webcast live under the investor relations section of the Company’s website at: www.sarepta.com and will be archived there following the event for 90 days.
The 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 2798939. Please specify to the operator that you would like to join the "Sarepta First Quarter 2018 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.
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 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 Sarepta Therapeutics
Sarepta Therapeutics is a commercial-stage biopharmaceutical company focused on the discovery and development of precision genetic medicine to treat rare neuromuscular diseases. The Company is primarily focused on rapidly advancing the development of its potentially disease-modifying DMD drug candidates. For more information, please visit www.sarepta.com.
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 future operations, financial performance and projections, business plans, priorities and development of product candidates including: Sarepta’s goal of leveraging its expertise beyond DMD; expected milestones, including reporting preliminary safety and gene expression data from at least two patients from our micro-dystrophin gene therapy trial on June 19, 2018, completing a rolling NDA submission for golodirsen by year-end 2018, which seeks accelerated approval based on an increase in dystrophin protein as a surrogate endpoint, initiatinga Phase 1/2a study of MYO-101 in mid-2018, and reporting on 60-day biopsy data in late-2018 or early 2019; Sarepta’s collaboration with Myonexus involving five potentially transformative gene therapies to treat LGMD; the partnership with Myonexus enabling Sarepta to expand its efforts beyond DMD while maintaining its unwavering commitment to those suffering from DMD;payments that Sarepta is expected to make under the agreement with Myonexus; and Sarepta’s plan to file for re-examination of its marketing authorization application (MAA) for eteplirsen and to request that a SAG be convened.
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, 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 granted a re-examinationof our MAA for eteplirsen, a SAG may not be convened, and even if a re-examination and a related SAG are granted, the CHMP may render a negative opinion and we may not be able to obtain regulatory approval for eteplirsen from the European Medicines Agency; our data for golodirsen may not be sufficient for a filing for or obtaining regulatory approval; the expected benefits and opportunities related to the agreement with Myonexus may not be realized or may take longer to realize than expected due to challenges and uncertainties inherent in product research and development; the partnership with Myonexus may not result in any viable treatments suitable for clinical research or commercialization due to a variety of reasons including 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 or may never become commercialized products due to other various reasons including any potential future inability of the parties to fulfill their commitments and obligations under the agreement, including any inability by us to fulfill our financial commitments to Myonexus; and even if the agreement results in new commercialized products, we may not achieve any significant revenues from the sale of such products; we may not be able to execute on our business plans, including meeting our expectations with respect to EXONDYS 51 sales, meeting our expected or planned regulatory milestones and timelines, research and 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 CHMP on eteplirsen or 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, 2017 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.
Consolidated Statements of Operations
(unaudited, in thousands, except share and per share amounts)
|For the Three Months Ended
|Costs and expenses:|
|Cost of sales (excluding amortization of in-licensed rights)||5,582||223|
|Research and development||46,204||29,119|
|Selling, general and administrative||43,341||26,216|
|Amortization of in-licensed rights||216||29|
|Total costs and expenses||95,343||55,587|
|Other (loss) income:|
|Gain from sale of Priority Review Voucher||—||125,000|
|Interest (expense) income and other, net||(4,485||)||335|
|Other (loss) income||(4,485||)||125,335|
|(Loss) income before income tax expense||(35,224||)||86,090|
|Income tax expense||139||2,000|
|Net (loss) income||(35,363||)||84,090|
|Net (loss) income per share|
|Basic (loss) earnings per share||$||(0.55||)||$||1.53|
|Diluted (loss) earnings per share||$||(0.55||)||$||1.50|
|Weighted average number of shares of common stock used in computing:|
|Basic (loss) earnings per share||64,631||54,850|
|Diluted (loss) earnings per share||64,631||56,012|
|Sarepta Therapeutics, Inc.|
|Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures|
|(in thousands, except share and per share amounts)|
|Three Months Ended March 31,|
|GAAP net (loss) income||$||(35,363||)||$||84,090|
|Interest expense (income), net||4,503||(29||)|
|Income tax expense||139||2,000|
|Depreciation and amortization expense||2,252||1,637|
|Stock-based compensation expense||10,526||5,712|
|Gain from sale of Priority Review Voucher||—||(125,000||)|
|Non-GAAP net loss (1)||$||(17,943||)||$||(31,354||)|
|Non GAAP net loss per share:|
|Basic and diluted||$||(0.28||)||$||(0.57||)|
|Weighted average number of shares of common stock outstanding
|Basic and diluted||64,631||54,850|
|Three Months Ended March 31,|
|GAAP research and development expenses||46,204||29,119|
|Stock-based compensation expense||(2,060||)||(1,874||)|
|Depreciation and amortization expense||(848||)||(512||)|
|Non-GAAP research and development expenses (1)||43,296||26,663|
|Three Months Ended March 31,|
|GAAP selling, general and administrative expenses||43,341||26,216|
|Stock-based compensation expense||(8,466||)||(3,838||)|
|Depreciation and amortization expense||(1,188||)||(1,125||)|
|Non-GAAP selling, general and administrative expenses (1)||33,687||21,087|
- Commencing in the first quarter of 2018, the Company has excluded interest expense (income), net, and depreciation and amortization expense from the computation of its non-GAAP financial measures. The Company has revised prior year presentation in the tables above in order to conform to the current year presentation.
Sarepta Therapeutics, Inc.
Consolidated Balance Sheets
(unaudited, in thousands, except share and per share data)
|Cash and cash equivalents||$||557,234||$||599,691|
|Other current assets||31,203||36,511|
|Total current assets||1,219,417||1,228,644|
|Property and equipment, net of accumulated depreciation of $19,817
and $18,022 as of March 31, 2018 and December 31, 2017, respectively
|Intangible assets, net of accumulated amortization of $4,659 and $4,145 as of
March 31, 2018 and December 31, 2017, respectively
|Liabilities and Stockholders’ Equity|
|Current portion of long-term debt||3,446||6,175|
|Other current liabilities||4,723||4,708|
|Total current liabilities||91,196||88,332|
|Deferred rent and other||4,962||5,539|
|Preferred stock, $0.0001 par value, 3,333,333 shares authorized; none issued and
|Common stock, $0.0001 par value, 99,000,000 shares authorized; 65,493,293
and 64,791,670 issued and outstanding at March 31, 2018 and
December 31, 2017, respectively
|Additional paid-in capital||2,029,767||2,006,598|
|Accumulated other comprehensive loss||(643||)||(379||)|
|Total stockholders’ equity||776,760||789,217|
|Total liabilities and stockholders’ equity||$||1,300,283||$||1,307,964|
Source: Sarepta Therapeutics, Inc.
Source: Sarepta Therapeutics, Inc.
Latest Annual Report( FY 2017 )
Sarepta IR Presentation (December 2017)