Sarepta Therapeutics Inc (NASDAQ:SRPT), a developer of innovative RNA-targeted therapeutics, today reported financial results for the three months and year ended December 31, 2015, and provided an update of recent corporate developments.
“2015 marked a year of significant achievements for Sarepta, the most important being the filing of our New Drug Application for eteplirsen,” said Edward Kaye, M.D., Sarepta’s interim chief executive officer and chief medical officer. “2016 will be a pivotal year for the company as we prepare for an FDA advisory committee meeting and May 26th PDUFA date for eteplirsen.”
“Our 2015 year ending cash balance of $204 million well positions the company to focus on our 2016 business objectives,” said Sandy Mahatme, Sarepta’s chief financial officer. “The majority of the cash used in the quarter was related to pre-commercialization activities for eteplirsen, manufacturing, and R&D. The rate of future cash expenditures will be largely determined by the upcoming FDA decision regarding the approval of eteplirsen.”
For the fourth quarter of 2015, Sarepta reported a non-GAAP net loss of $58.3 million, or $1.30per share, compared to a non-GAAP net loss of $38.6 million for the fourth quarter of 2014, or$0.94 per share. The incremental loss of $19.7 million was primarily the result of increased operating expenses.
On a GAAP basis, the net loss for the fourth quarter of 2015 was $64.7 million, or $1.44 per share (including $6.3 million of stock-based compensation), compared to a net loss of $44.4 million, or $1.08 per share (including $5.8 million of stock-based compensation and restructuring expenses) for the fourth quarter of 2014. The increase in net loss is primarily the result of an increase of $21.0 million in operating expenses offset by an increase of $1.2 million in revenue from the Company’s government contracts. The increase in operating expenses was primarily caused by research and development personnel growth, increased clinical activity in connection with our DMD programs and increased consulting and professional fees in the normal course of business.
Revenue for the fourth quarter of 2015 increased by $1.2 million primarily due to the contract finalization of the Ebola portion of the Company’s Ebola-Marburg U.S. government contract.
Non-GAAP research and development expenses were $38.6 million for the fourth quarter of 2015, compared to $28.4 million for the fourth quarter of 2014, an increase of $10.2 million. GAAP research and development expenses were $41.4 million for the fourth quarter of 2015 (including $2.8 million of stock-based compensation), compared to $30.8 million for the fourth quarter of 2014 (including $2.4 million of stock-based compensation and restructuring expenses), an increase of $10.6 million.
Non-GAAP general and administrative expenses were $20.7 million for the fourth quarter of 2015, compared to $10.5 million for the fourth quarter of 2014, an increase of $10.2 million. GAAP general and administrative expenses were $24.3 million for the fourth quarter of 2015 (including $3.6 million of stock-based compensation expense), compared to $13.9 million for the fourth quarter of 2014 (including $3.4 million of stock-based compensation), an increase of$10.4 million.
For the year ended December 31, 2015, the operating loss was $220.2 million, compared to an operating loss of $133.8 million for the prior year. The $86.4 million increase was the result of a $52.2 million increase in research and development expenses and a $25.7 million increase in general and administrative expenses as well as an $8.5 million decrease in revenue from the Company’s government contracts.
Revenue for the year ended December 31, 2015 decreased by $8.5 million from $9.8 million for the year ended December 31, 2014 primarily due to the July 2010 expiration of the Marburg portion of the Company’s Ebola-Marburg U.S. government contract.
Research and development expenses were $146.4 million for the year ended December 31, 2015, compared to $94.2 million for the prior year, an increase of $52.2 million. The increase was primarily due to increases in clinical and manufacturing expenses, driven by increased enrollment in our ongoing clinical trials and timing of manufacturing activities (including raw material purchases) as well as expense incurred in connection with an amendment to a supply agreement, compensation expenses primarily driven by increases in headcount, stock-based compensation and facility-related expenses primarily driven by corporate growth.
General and administrative expenses for the year ended December 31, 2015 were $75.0 million, compared to $49.3 million for the prior year, an increase of $25.7 million. The increase was primarily due to professional services driven by preparation for the potential product launch for eteplirsen if marketing approval is granted and increased legal fees, severance expense, including stock-based compensation as a result of the resignation of our former CEO, and compensation expenses primarily driven by increases in headcount.
The Company had $204.0 million in cash, cash equivalents, short-term investments and restricted cash as of December 31, 2015 compared to $211.1 million as of December 31, 2014, a decrease of $7.1 million. The decrease was primarily driven by the use of cash to fund the Company’s ongoing operations, offset by the net proceeds received from the exercises of warrants and stock options and the Company’s public offering in October 2015. (Original Source)
Shares of Sarepta are down nearly one percent in after-hours trading. SRPT has a 1-year high of $41.97 and a 1-year low of $10.20. The stock’s 50-day moving average is $17.10 and its 200-day moving average is $29.54.
On the ratings front, Sarepta has been the subject of a number of recent research reports. In a report issued on February 9, Oppenheimer analyst Christopher Marai maintained a Buy rating on SRPT, with a price target of $45, which implies an upside of 212.5% from current levels. Separately, on February 8, Piper Jaffray’s Edward Tenthoff maintained a Hold rating on the stock and has a price target of $15.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Christopher Marai and Edward Tenthoff have a total average return of 7.6% and -10.6% respectively. Marai has a success rate of 48.6% and is ranked #176 out of 3666 analysts, while Tenthoff has a success rate of 27.3% and is ranked #3510.
Overall, 4 research analysts have assigned a Hold rating and 3 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 $45.00 which is 212.5% above where the stock opened today.
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.