Company Update (NASDAQ:SRPT): Sarepta Therapeutics Inc Announces First Quarter 2015 Financial Results and Recent Corporate Developments


Sarepta Therapeutics Inc (NASDAQ:SRPT), a developer of innovative RNA-targeted therapeutics, today reported financial results for the three months ended March 31, 2015, and provided an update of recent corporate developments.

“Our highest priority remains the compilation of the data requested in the FDA’s most recent guidance. We have scheduled a meeting with the agency to discuss our data package and to ensure our expectations regarding an NDA submission for eteplirsen mid-year are aligned,” said Edward Kaye, Sarepta’s interim chief executive officer and chief medical officer. “The team at Sarepta is highly focused on developing our technology and committed to the advancement of our pipeline and treatments for follow-on exons. We have a number of active trials in the clinic and are continuing to work toward reaching more families affected by Duchenne muscular dystrophy.”

Financial Results

For the first quarter of 2015, Sarepta reported a non-GAAP net loss of $47.4 million, or $1.15per share, compared to a non-GAAP net loss of $20.7 million for the first quarter of 2014, or$0.55 per share. The incremental loss of $26.7 million was primarily the result of increased operating expenses as well as a decrease in revenue from the Company’s government contracts.

On a GAAP basis, the net loss for the first quarter of 2015 was $61.6 million, or $1.49 per share (including $14.2 million of stock-based compensation expense), compared with a net loss of$28.3 million for the first quarter of 2014, or $0.75 per share (including $4.4 million of stock-based compensation and restructuring expenses). The increase in net loss was primarily due to a decrease of $6.1 million from government contract revenue and increases of $18.3 millionfrom research and development expenses and $12.4 million from general and administrative expenses. The increase in operating expenses was primarily due to the timing of manufacturing activities, including the purchase of raw materials, increased clinical activity in connection with our DMD programs, research and development personnel growth and increased stock compensation expense. These increases were offset by a decrease of $3.3 million from a loss on change in warrant valuation as all warrants were exercised or expired during 2014.

Revenue for the first quarter of 2015 decreased by $6.1 million primarily due to the July 2014expiration of the Marburg portion of the Company’s Ebola-Marburg U.S. government contract.

Non-GAAP research and development expenses were $36.7 million for the first quarter of 2015, compared to $19.0 million for the first quarter of 2014, an increase of $17.7 million. GAAP research and development expenses were $39.2 million for the first quarter of 2015 (including$2.4 million of stock-based compensation expense), compared to $20.9 million for the first quarter of 2014 (including $1.9 million of stock-based compensation and restructuring expenses), an increase of $18.3 million. Non-GAAP general and administrative expenses were$11.0 million for the first quarter of 2015, compared to $7.8 million for the first quarter of 2014, an increase of $3.2 million. GAAP general and administrative expenses were $22.7 millionfor the first quarter of 2015 (including $11.7 million of stock-based compensation expense), compared to $10.3 million for the first quarter of 2014 (including $2.5 million of stock-based compensation expense), an increase of $12.4 million.

The Company had cash, cash equivalents, short-term investments and restricted investments related to its letters of credit of $167.0 million as of March 31, 2015 compared to $211.1 million as of December 31, 2014, a decrease of $44.1 million. The decrease was primarily driven by the use of cash to fund the Company’s ongoing operations in the first quarter of 2015.

In addition to the GAAP financial measures set forth in this press release, the Company has included certain non-GAAP measurements: non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP basic and diluted net loss per share, which present operating results on a basis adjusted for certain items. The Company uses these non-GAAP measures as key performance measures for the purpose of evaluating performance internally. The Company also believes these non-GAAP measures provide the Company’s investors with useful information regarding the Company’s historical operating results. These non-GAAP measures are not intended 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 general and administrative expenses, non-GAAP operating expenses, non-GAAP net loss, and non-GAAP basic and diluted net loss per share may differ from similar measures reported by other companies. All relevant non-GAAP measures are reconciled from their respective GAAP measures in the attached table “Reconciliation of GAAP to non-GAAP Net Loss.”

Recent Corporate Developments

Duchenne Muscular Dystrophy Program

–Pre-NDA meeting with the FDA, to discuss the current guidance for eteplirsen, scheduled for second quarter, 2015.

–Sarepta remains on track in compiling the data requested by the FDA for a planned NDA submission for our lead drug candidate, eteplirsen, mid-year 2015.

Corporate Updates

–Sarepta Therapeutics appoints chief medical officer, Edward Kaye M.D., as interim chief executive officer. (Original Source)

Shares of Sarepta closed yesterday at $14.76 . SRPT has a 1-year high of $35.82 and a 1-year low of $11.33. The stock’s 50-day moving average is $13.57 and its 200-day moving average is $14.35.

On the ratings front, Sarepta has been the subject of a number of recent research reports. In a report released yesterday, Robert W. Baird analyst Brian Skorney upgraded SRPT to Buy, with a price target of $20, which implies an upside of 35.5% from current levels. Separately, on April 6, Roth Capital’s Debjit Chattopadhyay maintained a Buy rating on the stock and has a price target of $22.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian Skorney and Debjit Chattopadhyay have a total average return of 15.0% and 10.6% respectively. Skorney has a success rate of 58.6% and is ranked #308 out of 3594 analysts, while Chattopadhyay has a success rate of 42.6% and is ranked #452.

In total, 2 research analysts have assigned a Hold rating and 6 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $14.76 which is 91.7% above where the stock closed yesterday.

Sarepta Therapeutics Inc is a biopharmaceutical company focused on the discovery and development of unique RNA-targeted therapeutics for the treatment of rare, infectious and other diseases.