Sarepta Therapeutics Inc (NASDAQ:SRPT), a developer of innovative RNA-targeted therapeutics, today reported financial results for the three and nine months ended September 30, 2015, and provided an update of recent corporate developments.
“We are encouraged by the established body of clinical, biochemical and safety data for eteplirsen, which we plan to present at the tentatively scheduled Advisory Committee meeting in January,” said Edward Kaye, M.D., Sarepta’s interim chief executive officer and chief medical officer. “As our understanding of exon-skipping continues to evolve based on the data from our eteplirsen program, we remain focused on advancing additional programs and making new therapies available to Duchenne patients.”
For the third quarter of 2015, Sarepta reported a non-GAAP net loss of $46.3 million, or $1.11per share, compared to a non-GAAP net loss of $28.8 million for the third quarter of 2014, or$0.70 per share. The incremental loss of $17.5 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 third quarter of 2015 was $51.9 million, or $1.25 per share (including $5.7 million of stock-based compensation), compared to a net loss of $29.2 million, or $0.71 per share (including $4.6 million of stock-based compensation) for the third quarter of 2014. The increase in net loss was primarily due to a decrease of $1.1 million from government contract revenue and increases of $14.8 million in research and development expenses and $2.2 million in 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. In addition, there was a gain of $4.3 million from a gain on change in warrant valuation as all warrants were exercised or expired during 2014.
Revenue for the third quarter of 2015 decreased by $1.1 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 $34.0 million for the third quarter of 2015, compared to $20.2 million for the third quarter of 2014, an increase of $13.8 million. GAAP research and development expenses were $36.7 million for the third quarter of 2015 (including $2.6 million of stock-based compensation), compared to $21.9 million for the third quarter of 2014 (including $1.7 million of stock-based compensation), an increase of $14.8 million. Non-GAAP general and administrative expenses were $12.0 million for the third quarter of 2015, compared to $9.9 million for the third quarter of 2014, an increase of $2.1 million. GAAP general and administrative expenses were $15.1 million for the third quarter of 2015 (including $3.1 million of stock-based compensation expense), compared to $12.9 millionfor the third quarter of 2014 (including $3.0 million of stock-based compensation), an increase of $2.2 million.
The Company had cash, cash equivalents, short-term investments and restricted investments of $111.4 million as of September 30, 2015 compared to $211.1 million as of December 31, 2014, a decrease of $99.7 million. The decrease was primarily driven by the use of cash to fund the Company’s ongoing operations.
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
–Sarepta Therapeutics Announces Tentative FDA Advisory Committee Meeting to Review Eteplirsen as a Treatment for Duchenne Muscular Dystrophy
–Sarepta Therapeutics Announces Additional Long-Term Efficacy and Safety Data from Phase IIb Program of Eteplirsen for the Treatment of Duchenne Muscular Dystrophy
–Sarepta Therapeutics Announces FDA Filing of Eteplirsen NDA for the Potential Treatment of Duchenne Muscular Dystrophy for Patients Amenable to Exon 51 Skipping
–Sarepta Therapeutics Receives Rare Pediatric Disease Designation from FDA for Eteplirsen for the Potential Treatment of Duchenne Muscular Dystrophy
–Sarepta Therapeutics Announces Public Offering of Common Stock
–Sarepta Therapeutics Announces Collaborative Research Agreement with Murdoch University Researchers Steve Wilton and Sue Fletcher
–Sarepta Therapeutics Appoints Jean-Paul Kress, M.D., to the Company’s Board of Directors
–Sarepta Therapeutics Announces USPTO Decision in Patent Interference Case with BioMarin Pharmaceutical
–Sarepta Therapeutics Announces Formation of Strategic and Scientific Advisory Board (Original Source)
Shares of Sarepta Therapeutics yesterday at $25.07. SRPT has a 1-year high of $41.97 and a 1-year low of $11.33. The stock’s 50-day moving average is $32.23 and its 200-day moving average is $28.90.
On the ratings front, Sarepta Therapeutics has been the subject of a number of recent research reports. In a report issued on October 23, Merrill Lynch analyst Steve Byrne assigned a Buy rating on SRPT, with a price target of $49, which implies an upside of 95.5% from current levels. Separately, on October 22, Piper Jaffray’s Edward Tenthoff reiterated a Buy rating on the stock and has a price target of $48.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Steve Byrne and Edward Tenthoff have a total average return of 1.8% and 10.1% respectively. Byrne has a success rate of 41.7% and is ranked #1829 out of 3824 analysts, while Tenthoff has a success rate of 46.7% and is ranked #584.
The street is mostly Bullish on SRPT stock. Out of 11 analysts who cover the stock, 10 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $47.67, which represents a potential upside of 90.1% from where the stock is currently trading.
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.