Sarepta Therapeutics Inc (NASDAQ:SRPT), a developer of innovative RNA-targeted therapeutics, today reported financial results for the three and six months ended June 30, 2015, and provided an update of recent corporate developments.
“We made significant achievements from both a regulatory and clinical perspective this quarter and look to build on this momentum as we continue through the regulatory process for eteplirsen, our lead product candidate,” said Edward Kaye, M.D., Sarepta’s interim chief executive officer and chief medical officer. “We believe the recently published FDA draft guidance for Duchenne muscular dystrophy illustrates that the FDA is being responsive to the needs of patients and is open to providing appropriate flexibility in cases of unmet medical need and serious and life threatening diseases, such as Duchenne muscular dystrophy.”
For the second quarter of 2015, Sarepta reported a non-GAAP net loss of $35.9 million, or$0.87 per share, compared to a non-GAAP net loss of $24.5 million for the second quarter of 2014, or $0.61 per share. The incremental loss of $11.4 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 second quarter of 2015 was $41.9 million, or $1.01 per share (including $5.9 million of stock-based compensation), compared to a net loss of $33.9 million, or $0.85 per share (including $5.6 million of stock-based compensation and restructuring expenses) for the second quarter of 2014. The increase in net loss was primarily due to a decrease of $2.6 million from government contract revenue and increases of $8.5 million from research and development expenses and $0.7 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 $3.8 million from a loss on change in warrant valuation as all warrants were exercised or expired during 2014.
Revenue for the second quarter of 2015 decreased by $2.6 million primarily due to the July 2014 expiration of the Marburg portion of the Company’s Ebola-Marburg U.S. government contract.
Non-GAAP research and development expenses were $26.6 million for the second quarter of 2015, compared to $18.3 million for the second quarter of 2014, an increase of $8.3 million. GAAP research and development expenses were $29.2 million for the second quarter of 2015 (including $2.6 million of stock-based compensation), compared to $20.6 million for the second quarter of 2014 (including $2.3 million of stock-based compensation and restructuring expenses), an increase of $8.5 million. Non-GAAP general and administrative expenses were$9.6 million for the second quarter of 2015, compared to $9.0 million for the second quarter of 2014, an increase of $0.6 million. GAAP general and administrative expenses were $12.9 millionfor the second quarter of 2015 (including $3.4 million of stock-based compensation expense), compared to $12.2 million for the second quarter of 2014 (including $3.2 million of stock-based compensation), an increase of $0.7 million.
The Company had cash, cash equivalents, short-term investments and restricted investments related to a letter of credit of $157.7 million as of June 30, 2015 compared to $211.1 million as of December 31, 2014, a decrease of $53.4 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 Completes NDA Submission to FDA for eteplirsen for the Treatment of Duchenne Muscular Dystrophy Amenable to Exon 51 Skipping.
— Data and Safety Monitoring Board (DSMB) recommends European Study 4053-101 to proceed to the Part 2, maintenance phase, of the study.
Infectious Diseases Program
— Sarepta Therapeutics Announces New England Journal of Medicine Publication of Phase I Clinical Data of Marburg Drug Candidate, AVI-7288, Supporting Safety of the PMOplus® platform.
— Sarepta Therapeutics appoints Henri Termeer as Advisor to the Company.
— Sarepta Therapeutics secures a $40 million senior secured term loan, $20 million of which has been drawn down and $20 million of which would be available upon acceptance of the NDA for eteplirsen by the FDA. (Original Source)
Shares of Sarepta Therapeutics Inc. closed yesterday at $32.73. SRPT has a 1-year high of $34.66 and a 1-year low of $11.33. The stock’s 50-day moving average is $31.33 and its 200-day moving average is $19.88.
On the ratings front, Sarepta has been the subject of a number of recent research reports. In a report issued on July 20, Roth Capital analyst Debjit Chattopadhyay maintained a Buy rating on SRPT, with a price target of $45, which represents a potential upside of 37.5% from where the stock is currently trading. Separately, on June 29, Oppenheimer’s Christopher Marai maintained a Buy rating on the stock and has a price target of $45.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Debjit Chattopadhyay and Christopher Marai have a total average return of 31.4% and 42.6% respectively. Chattopadhyay has a success rate of 64.9% and is ranked #17 out of 3727 analysts, while Marai has a success rate of 70.0% and is ranked #9.
The street is mostly Bullish on SRPT stock. Out of 11 analysts who cover the stock, 7 suggest a Buy rating and 4 recommend to Hold the stock. The 12-month average price target assigned to the stock is $35.00, which represents a potential upside of 6.9% 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.