srpt-10q_20190930.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-14895

 

SAREPTA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

93-0797222

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

215 First Street, Suite 415

Cambridge, MA

 

02142

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (617274-4000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, $0.0001 par value per share

SRPT

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

☐  

  

Smaller Reporting Company

 

 

 

 

 

 

 

 

Emerging growth company

 

  

  

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes       No  

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Common Stock with $0.0001 par value

  

74,543,123

(Class)

  

(Outstanding as of November 4, 2019)

 

 

 

 


SAREPTA THERAPEUTICS, INC.

FORM 10-Q

INDEX

 

 

 

 

 

Page

PART I — FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets — As of September 30, 2019 and December 31, 2018

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three and Nine Months Ended September 30, 2019 and 2018

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity – For the Three and Nine Months Ended September 30, 2019 and 2018

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows — For the Nine Months Ended September 30, 2019
and 2018

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

34

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

34

 

 

 

 

 

PART II — OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

35

 

 

 

 

 

Item 1A.

 

Risk Factors

 

35

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

66

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

66

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

66

 

 

 

 

 

Item 5.

 

Other Information

 

66

 

 

 

 

 

Item 6.

 

Exhibits

 

66

 

 

 

 

 

Exhibits

 

67

 

 

 

 

 

Signatures

 

68

 

 

2


PART I — FINANCIAL INFORMATION

 

 

Item 1. Financial Statements

SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)

 

 

 

As of

September 30, 2019

 

 

As of

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

724,829

 

 

$

370,829

 

Short-term investments

 

 

324,063

 

 

 

803,083

 

Accounts receivable

 

 

68,032

 

 

 

49,044

 

Inventory

 

 

166,360

 

 

 

125,445

 

Other current assets

 

 

79,015

 

 

 

77,782

 

Total current assets

 

 

1,362,299

 

 

 

1,426,183

 

Property and equipment, net of accumulated depreciation of $44,701

   and $28,149 as of September 30, 2019, and December 31, 2018, respectively

 

 

119,532

 

 

 

97,024

 

Intangible assets, net of accumulated amortization of $5,091 and $3,852 as of

   September 30, 2019, and December 31, 2018, respectively

 

 

11,975

 

 

 

11,574

 

Right of use asset, net

 

 

39,493

 

 

 

 

Other assets

 

 

169,171

 

 

 

107,294

 

Total assets

 

$

1,702,470

 

 

$

1,642,075

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

81,946

 

 

$

33,829

 

Accrued expenses

 

 

121,663

 

 

 

134,095

 

Deferred revenue

 

 

3,303

 

 

 

3,303

 

Other current liabilities

 

 

8,944

 

 

 

2,463

 

Total current liabilities

 

 

215,856

 

 

 

173,690

 

Long-term debt

 

 

436,421

 

 

 

420,554

 

Lease liabilities

 

 

49,741

 

 

 

 

Deferred rent and other

 

 

5,248

 

 

 

15,555

 

Total liabilities

 

 

707,266

 

 

 

609,799

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 3,333,333 shares authorized; none issued and

   outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value, 99,000,000 shares authorized; 74,504,835

   and 71,071,887 issued and outstanding at September 30, 2019, and

   December 31, 2018, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

3,053,420

 

 

 

2,611,294

 

Accumulated other comprehensive income (loss)

 

 

75

 

 

 

(99

)

Accumulated deficit

 

 

(2,058,298

)

 

 

(1,578,926

)

Total stockholders’ equity

 

 

995,204

 

 

 

1,032,276

 

Total liabilities and stockholders’ equity

 

$

1,702,470

 

 

$

1,642,075

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except per share amounts)

 

 

 

For the Three Months Ended

September 30,

 

 

For the Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product, net

 

$

99,041

 

 

$

78,486

 

 

$

280,720

 

 

$

216,619

 

Total revenues

 

 

99,041

 

 

 

78,486

 

 

 

280,720

 

 

 

216,619

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

13,037

 

 

 

8,741

 

 

 

41,019

 

 

 

21,058

 

Research and development

 

 

133,949

 

 

 

86,584

 

 

 

337,768

 

 

 

255,636

 

Selling, general and administrative

 

 

75,429

 

 

 

53,044

 

 

 

203,388

 

 

 

143,541

 

Acquired in-process research and development

 

 

 

 

 

 

 

 

173,240

 

 

 

 

Amortization of in-licensed rights

 

 

216

 

 

 

216

 

 

 

649

 

 

 

649

 

Total cost and expenses

 

 

222,631

 

 

 

148,585

 

 

 

756,064

 

 

 

420,884

 

Operating loss

 

 

(123,590

)

 

 

(70,099

)

 

 

(475,344

)

 

 

(204,265

)

Other loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense, net

 

 

(2,510

)

 

 

(6,968

)

 

 

(3,544

)

 

 

(16,671

)

Other loss

 

 

(2,510

)

 

 

(6,968

)

 

 

(3,544

)

 

 

(16,671

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense

 

 

(126,100

)

 

 

(77,067

)

 

 

(478,888

)

 

 

(220,936

)

Income tax expense (benefit)

 

 

226

 

 

 

(674

)

 

 

484

 

 

 

87

 

Net loss

 

 

(126,326

)

 

 

(76,393

)

 

 

(479,372

)

 

 

(221,023

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on investments

 

 

(7

)

 

 

369

 

 

 

174

 

 

 

387

 

Total other comprehensive income (loss)

 

 

(7

)

 

 

369

 

 

 

174

 

 

 

387

 

Comprehensive loss

 

$

(126,333

)

 

$

(76,024

)

 

$

(479,198

)

 

$

(220,636

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(1.70

)

 

$

(1.15

)

 

$

(6.54

)

 

$

(3.38

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock used in

   computing basic and diluted net loss per share

 

 

74,177

 

 

 

66,209

 

 

 

73,298

 

 

 

65,454

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2018

 

71,072

 

 

$

7

 

 

$

2,611,294

 

 

$

(99

)

 

$

(1,578,926

)

 

$

1,032,276

 

Exercise of options for common stock

 

382

 

 

 

 

 

 

9,973

 

 

 

 

 

 

 

 

 

9,973

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for taxes

 

(7

)

 

 

 

 

 

(889

)

 

 

 

 

 

 

 

 

(889

)

Issuance of common stock for cash, net of

   offering costs

 

2,604

 

 

 

 

 

 

365,264

 

 

 

 

 

 

 

 

 

365,264

 

Issuance of common stock under employee

   stock purchase plan

 

48

 

 

 

 

 

 

2,326

 

 

 

 

 

 

 

 

 

2,326

 

Stock-based compensation

 

 

 

 

 

 

 

16,139

 

 

 

 

 

 

 

 

 

16,139

 

Unrealized gains from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

118

 

 

 

 

 

 

118

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(76,643

)

 

 

(76,643

)

Balance at March 31, 2019

 

74,134

 

 

$

7

 

 

$

3,004,107

 

 

$

19

 

 

$

(1,655,569

)

 

$

1,348,564

 

Exercise of options for common stock

 

176

 

 

 

 

 

 

7,092

 

 

 

 

 

 

 

 

 

7,092

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash, net of

   offering costs

 

 

 

 

 

 

 

89

 

 

 

 

 

 

 

 

 

89

 

Stock-based compensation

 

 

 

 

 

 

 

19,762

 

 

 

 

 

 

 

 

 

19,762

 

Unrealized gains from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

63

 

 

 

 

 

 

63

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(276,403

)

 

 

(276,403

)

Balance at June 30, 2019

 

74,328

 

 

$

7

 

 

$

3,031,050

 

 

$

82

 

 

$

(1,931,972

)

 

$

1,099,167

 

Exercise of options for common stock

 

166

 

 

 

 

 

 

2,428

 

 

 

 

 

 

 

 

 

2,428

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for taxes

 

(34

)

 

 

 

 

 

(3,448

)

 

 

 

 

 

 

 

 

(3,448

)

Issuance of common stock under employee

   stock purchase plan

 

44

 

 

 

 

 

 

2,753

 

 

 

 

 

 

 

 

 

2,753

 

Stock-based compensation

 

 

 

 

 

 

 

20,637

 

 

 

 

 

 

 

 

 

20,637

 

Unrealized losses from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

(7

)

 

 

 

 

 

(7

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(126,326

)

 

 

(126,326

)

Balance at September 30, 2019

 

74,505

 

 

$

7

 

 

$

3,053,420

 

 

$

75

 

 

$

(2,058,298

)

 

$

995,204

 

 

5


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - PRIOR FISCAL YEAR

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2017

 

64,792

 

 

$

6

 

 

$

2,006,598

 

 

$

(379

)

 

$

(1,217,008

)

 

$

789,217

 

Exercise of options for common stock

 

653

 

 

 

1

 

 

 

11,887

 

 

 

 

 

 

 

 

 

11,888

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee

   stock purchase plan

 

34

 

 

 

 

 

 

756

 

 

 

 

 

 

 

 

 

756

 

Stock-based compensation

 

 

 

 

 

 

 

10,526

 

 

 

 

 

 

 

 

 

10,526

 

Unrealized losses from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

(264

)

 

 

 

 

 

(264

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,363

)

 

 

(35,363

)

Balance at March 31, 2018

 

65,493

 

 

$

7

 

 

$

2,029,767

 

 

$

(643

)

 

$

(1,252,371

)

 

$

776,760

 

Exercise of options for common stock

 

872

 

 

 

 

 

 

21,743

 

 

 

 

 

 

 

 

 

21,743

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for taxes

 

(45

)

 

 

 

 

 

(5,750

)

 

 

 

 

 

 

 

 

(5,750

)

Issuance of common stock under employee

   stock purchase plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

15,279

 

 

 

 

 

 

 

 

 

15,279

 

Unrealized gains from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

282