10-Q
Q2--12-31http://fasb.org/us-gaap/2022#ProductMember0.013621Sarepta Therapeutics, 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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 June 30, 2022

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: (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:

 

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

 

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

 

 

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
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.

3


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.

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

 

 

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

 

 

 

 

 

 

 

 

 

28,969

 

Unrealized gains from available-for-sale
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Net loss