SEC Filing | Sarepta Therapeutics, Inc.

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10-Q

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 June 30, 2022


☐	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: (617) 274-4000

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:

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		87,567,857
(Class)		(Outstanding as of July 29, 2022)

SAREPTA THERAPEUTICS, INC.

FORM 10-Q

INDEX


		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets — As of June 30, 2022 and December 31, 2021	3

	Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three and Six Months Ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Stockholders’ Equity — For the Three and Six Months Ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Cash Flows — For the Six Months Ended June 30, 2022 and 2021	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

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	71

Item 3.	Defaults Upon Senior Securities	71

Item 4.	Mine Safety Disclosures	72

Item 5.	Other Information	72

Item 6.	Exhibits	72

Exhibits		73

Signatures		74

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 June 30, 2022			As of December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	868,565		$	2,115,869
Short-term investments		1,059,454			—
Accounts receivable		203,854			152,990
Inventory		208,095			186,212
Other current assets		129,332			149,028
Total current assets		2,469,300			2,604,099
Property and equipment, net		183,292			191,156
Intangible assets, net		13,062			14,239
Right of use assets		46,999			45,531
Other non-current assets		284,200			292,949
Total assets	$	2,996,853		$	3,147,974

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	56,207		$	76,741
Accrued expenses		383,699			271,697
Deferred revenue, current portion		89,244			89,244
Other current liabilities		16,416			15,051
Total current liabilities		545,566			452,733
Long-term debt		1,100,873			1,096,876
Lease liabilities, net of current portion		39,368			41,512
Deferred revenue, net of current portion		529,989			574,244
Contingent consideration		43,600			43,600
Other non-current liabilities		11,000			11,000
Total liabilities		2,270,396			2,219,965
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, 198,000,000 shares authorized; 87,535,299 and 87,126,974 issued and outstanding at June 30, 2022, and December 31, 2021, respectively		9			9
Additional paid-in capital		4,272,187			4,134,768
Accumulated other comprehensive loss, net of tax		(2,485	)		(20	)
Accumulated deficit		(3,543,254	)		(3,206,748	)
Total stockholders’ equity		726,457			928,009
Total liabilities and stockholders’ equity	$	2,996,853		$	3,147,974

See accompanying notes to unaudited condensed consolidated financial statements.

SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except per share amounts)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021
Revenues:
Products, net	$	211,237		$	141,839		$	400,062		$	266,765
Collaboration		22,250			22,250			44,255			44,255
Total revenues		233,487			164,089			444,317			311,020

Cost and expenses:
Cost of sales (excluding amortization of in-licensed rights)		37,795			19,515			69,238			41,861
Research and development		252,329			239,622			446,579			434,771
Selling, general and administrative		154,316			72,347			226,156			143,478
Settlement and license charges		—			—			—			10,000
Amortization of in-licensed rights		179			179			357			349
Total cost and expenses		444,619			331,663			742,330			630,459
Operating loss		(211,132	)		(167,574	)		(298,013	)		(319,439	)

Other (loss) income, net:
Other expense, net		(16,961	)		(16,185	)		(34,226	)		(31,713	)
Gain from sale of Priority Review Voucher		—			102,000			—			102,000
Total other (loss) income, net		(16,961	)		85,815			(34,226	)		70,287

Loss before income tax expense (benefit)		(228,093	)		(81,759	)		(332,239	)		(249,152	)
Income tax expense (benefit)		3,388			(354	)		4,267			(497	)
Net loss		(231,481	)		(81,405	)		(336,506	)		(248,655	)

Other comprehensive loss:
Unrealized (losses) gains on investments, net of tax		(2,179	)		5			(2,465	)		(1	)
Total other comprehensive loss		(2,179	)		5			(2,465	)		(1	)
Comprehensive loss	$	(233,660	)	$	(81,400	)	$	(338,971	)	$	(248,656	)

Net loss per share - basic and diluted	$	(2.65	)	$	(1.02	)	$	(3.85	)	$	(3.12	)

Weighted average number of shares of common stock used in computing basic and diluted net loss per share		87,511			79,746			87,383			79,601

See accompanying notes to unaudited condensed consolidated financial statements.

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			Deficit			Equity
Balance at December 31, 2021		87,127	$	9	$	4,134,768	$	(20	)	$	(3,206,748	)	$	928,009
Exercise of options for common stock		18		—		997		—			—			997
Vest of restricted stock units/awards		289		—		—		—			—			—
Issuance of common stock under employee stock purchase plan		62		—		3,993		—			—			3,993
Stock-based compensation		—		—		29,198		—			—			29,198
Unrealized losses from available-for-sale securities, net of tax		—		—		—		(286	)		—			(286	)
Net loss		—		—		—		—			(105,025	)		(105,025	)
Balance at March 31, 2022		87,496	$	9	$	4,168,956	$	(306	)	$	(3,311,773	)	$	856,886
Exercise of options for common stock		11		—		339		—			—			339
Vest of restricted stock units/awards		28		—		—		—			—			—
Stock-based compensation		—		—		102,892		—			—			102,892
Unrealized losses from available-for-sale securities, net of tax		—		—		—		(2,179	)		—			(2,179	)
Net loss		—		—		—		—			(231,481	)		(231,481	)
Balance at June 30, 2022		87,535	$	9	$	4,272,187	$	(2,485	)	$	(3,543,254	)	$	726,457


									Accumulated
						Additional			Other						Total
	Common Stock					Paid-In			Comprehensive			Accumulated			Stockholders'
	Shares			Amount		Capital			Gain (Loss)			Deficit			Equity
Balance at December 31, 2020		79,374		$	8	$	3,609,877		$	3		$	(2,848,129	)	$	761,759
Cumulative effect of accounting change to adopt ASU 2020-06		—			—		(156,953	)		—			60,161			(96,792	)
Exercise of options for common stock		108			—		4,683			—			—			4,683
Vest of restricted stock units/awards		204			—		—			—			—			—
Issuance of common stock under employee stock purchase plan		62			—		4,543			—			—			4,543
Stock-based compensation		—			—		28,508			—			—			28,508
Unrealized losses from available-for-sale securities, net of tax		—			—		—			(6	)		—			(6	)
Net loss		—			—		—			—			(167,250	)		(167,250	)
Balance at March 31, 2021		79,748		$	8	$	3,490,658		$	(3	)	$	(2,955,218	)	$	535,445
Exercise of options for common stock		72			—		3,526			—			—			3,526
Vest of restricted stock units/awards		28			—		—			—			—			—
Shares withheld for taxes		(18	)		—		(1,432	)		—			—			(1,432	)
Stock-based compensation		—			—		28,969			—			—