Sarepta Therapeutics Announces Fourth Quarter and Full-Year 2016 Financial Results and Recent Corporate Developments
Tuesday, February 28, 2017 4:03:00 PM ET Sarepta Therapeutics, Inc. (SRPT ), a commercial-stage
biopharmaceutical company focused on the discovery and development of
unique RNA-targeted therapeutics for the treatment of rare neuromuscular
diseases, today reported financial results for the three and twelve
months ended December 31, 2016.
"2016 was a transformative year, with the FDA accelerated approval of
EXONDYS 51. In 2017, we are focused on our strategy to build shareholder
value by executing a successful launch of EXONDYS 51 in the US, reaching
more patients through global expansion, and rapidly advancing our
pipeline through internal and external development efforts," said Edward
Kaye, Sarepta’s chief executive officer. "We are pleased with the
interest from the patient and physician community for EXONDYS 51, and
with the progress we have made in discussions with payers. We believe
this positions us well for potential growth and towards our goal at
Sarepta Therapeutics to help all boys with Duchenne muscular dystrophy."
Financial Results
For the fourth quarter of 2016, Sarepta reported a net loss of $88.5
million, or $1.62 per share, compared to a net loss of $64.7 million for
the same period of 2015, or $1.44 per share. The incremental loss of
$23.8 million was primarily driven by expense recorded in connection
with an up-front payment of $40.0 million related to an exclusive
license agreement with Summit Therapeutics plc. ("Summit") offset by
lower manufacturing expenses that were previously captured as research
and development expenses, which are now capitalized as inventory because
of the approval of EXONDYS 51 by the Food and Drug Administration
("FDA"). Non-GAAP net loss for the fourth quarter of 2016 was $38.7
million, or $0.71 per share, compared to a non-GAAP net loss of $58.3
million for the fourth quarter of 2015, or $1.30 per share. The
reduction of $19.7 million in Non-GAAP net loss was primarily driven by
the capitalization of inventory upon the approval of EXONDYS 51 by the
FDA.
For the year ended December 31, 2016, Sarepta reported a net loss of
$267.3 million, or $5.49 per share, compared to a net loss of $220.0
million for the prior year, or $5.20 per share. The incremental loss of
$47.2 million was primarily driven by $47.9 million of research and
development expenses recorded in connection with up-front license and
milestone payments related to certain license and collaboration
agreements and increased costs for our on-going clinical trials
primarily due to increased patient enrollment, partially offset by lower
manufacturing expenses because of the capitalization of inventory upon
the approval of EXONDYS 51 by the FDA. Non-GAAP net loss for the year
ended December 31, 2016 was $192.0 million, or $3.94 per share, compared
to a non-GAAP net loss of $187.9 million for the prior year, or $4.44
per share. The incremental loss of $4.0 million was primarily driven by
increased costs for our on-going clinical trials primarily due to
increased patient enrollment partially offset by lower manufacturing
expenses because of the capitalization of inventory upon the approval of
EXONDYS 51 by the FDA.
Net revenues
The Company commenced shipments of EXONDYS 51 to customers at the end of
the third quarter of 2016 following the accelerated approval by the FDA
on September 19, 2016. For both the fourth quarter and full-year of
2016, the Company recognized net revenues of $5.4 million. For the same
periods of 2015, the Company recognized $1.3 million of revenue from the
contract finalization of the Ebola portion of the July 2010 Department
of Defense contract.
Operating expenses
Research and development expenses were $70.7 million for the fourth
quarter of 2016, compared to $41.4 million for the same period of 2015,
an increase of $29.4 million, which was primarily driven by expense
recorded in connection with an up-front payment of $40.0 million related
to the exclusive license agreement with Summit offset by lower
manufacturing expenses because of the capitalization of inventory upon
the approval of EXONDYS 51 by the FDA. Non-GAAP research and development
expenses were $27.8 million for the fourth quarter of 2016, compared to
$38.6 million for the same period of 2015, a decrease of $10.8 million,
which was primarily driven by lower manufacturing expense because of the
capitalization of inventory upon the approval of EXONDYS 51 by the FDA.
Research and development expenses were $188.3 million for the year ended
December 31, 2016, compared to $146.4 million for the prior year, an
increase of $41.9 million, which was primarily driven by $47.9 million
of expenses recorded in connection with up-front license and milestone
payments related to certain license and collaboration agreements and
increased clinical trial costs, partially offset by lower manufacturing
expenses because of the capitalization of inventory upon the approval of
EXONDYS 51 by the FDA. Non-GAAP research and development expenses were
$136.0 million for both the year ended December 31, 2016, and the prior
year.
Selling, general and administrative expenses were $22.9 million for the
fourth quarter of 2016, compared to $24.3 million for the same period of
2015, a decrease of $1.4 million, which was primarily driven by
decreased external professional services due to lower litigation
activities partially offset by increases in restructuring expense and
stock-based compensation expense. Non-GAAP selling, general and
administrative expenses were $16.1 million for the fourth quarter of
2016, compared to $20.7 million for the same period of 2015, a decrease
of $4.6 million, which was primarily driven by decreased external
professional fees due to lower litigation activities.
Selling, general and administrative expenses for the year ended December
31, 2016 were $83.7 million, compared to $75.0 million for the prior
year, an increase of $8.7 million, which was primarily driven by
increases in compensation expenses due to increases in commercial
headcount and restructuring expenses offset by decreases in severance
expense related to the resignation of our former CEO in March 2015 and
professional services primarily due to lower litigation activities.
Non-GAAP selling, general and administrative expenses were $60.7 million
for the year ended December 31, 2016, compared to $53.3 million for the
same period of 2015, an increase of $7.4 million, which was primarily
driven by increase in compensation expenses due to increased commercial
headcount offset by decreased external professional fees due to lower
litigation activities.
Cash, cash equivalents and restricted cash and investments
The Company had $329.3 million in cash, cash equivalents and restricted
cash and investments as of December 31, 2016 compared to $204.0 million
as of December 31, 2015, an increase of $125.4 million. The increase was
driven by the net proceeds received from the Company’s public offerings
in June and September 2016, offset by the use of cash to fund the
Company’s ongoing operations.
Use of Non-GAAP Measures
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 selling, general
and administrative expenses, non-GAAP operating expense adjustments,
non-GAAP net loss, and non-GAAP basic and diluted net loss per share,
which present operating results on a basis adjusted for stock-based
compensation and restructuring expenses and other items.
1. Stock-based compensation expenses
Stock-based compensation expenses represent non-cash charges related to
equity awards granted by Sarepta. Although these are recurring charges
to operations, management believes the measurement of these amounts can
vary substantially from period to period and depend significantly on
factors that are not a direct consequence of operating performance that
is within management’s control. Therefore, management believes that
excluding these charges from non-GAAP research and development expenses,
non-GAAP selling, general and administrative expenses, non-GAAP net loss
and non-GAAP net loss per share facilitates comparisons of the Company’s
operational performance in different periods.
2. Restructuring expenses
Restructuring expenses have been excluded from non-GAAP research and
development expenses, non-GAAP selling, general and administrative
expenses, non-GAAP net loss and non-GAAP net loss per share as the
Company believes that the adjustments for these items represent more
closely the sustainability of the Company’s operating performance and
financial results.
3. Other items
Management evaluates other items of expense and income on an individual
basis. It takes into consideration quantitative and qualitative
characteristics of each item, including (a) nature, (b) whether the
items relates to the Company’s ongoing business operations, and (c)
whether the Company expects the items to continue on a regular basis.
These other items include the up-front and options payments related to
existing collaboration and option agreements.
The Company uses these non-GAAP measures as key performance measures for
the purpose of evaluating operational performance and cash requirements
internally. The Company also believes these non-GAAP measures increase
comparability of period-to-period results and are useful to investors as
they provide a similar basis for evaluating the Company’s performance as
is applied by management. These non-GAAP measures are not intended to be
considered in isolation or 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 selling, general and
administrative expenses, non-GAAP operating expense adjustments,
non-GAAP net loss, and non-GAAP basic and diluted net loss per share may
differ from similar measures reported by other companies, which may
limit comparability, and are not based on any comprehensive set of
accounting rules or principles. 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
-Sarepta Therapeutics Agrees to Sale of Priority Review Voucher for $125M
-Sarepta Therapeutics Enters into Research Agreement and Option
Agreement with Nationwide Children’s Hospital for Microdystrophin Gene
Therapy Program
-Sarepta Therapeutics Enters into License Agreement with Nationwide
Children’s Hospital for Galgt2 Gene Therapy Program
-Sarepta Therapeutics Announces EMA Validation of Eteplirsen
Authorization Application for Treatment of Duchenne Muscular Dystrophy
Amenable to Exon Skipping 51
About Sarepta Therapeutics
Sarepta Therapeutics is a commercial-stage biopharmaceutical company
focused on the discovery and development of unique RNA-targeted
therapeutics for the treatment of rare neuromuscular diseases. The
Company is primarily focused on rapidly advancing the development of its
potentially disease-modifying Duchenne muscular dystrophy drug
candidates. For more information, please visit us at www.sarepta.com.
Forward-Looking Statements
In order to provide Sarepta’s investors with an understanding of its
current results and future prospects, this press release contains
statements that are forward-looking. Any statements contained in this
press release that are not statements of historical fact may be deemed
to be forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "will," "may," "intends," "prepares,"
"looks," "potential," "possible" and similar expressions are intended to
identify forward-looking statements. These forward-looking statements
include statements relating to Sarepta’s future operations, financial
performance and projections, business plans, priorities and development
of product candidates including: Sarepta’s plans for 2017, including
executing a successful launch of EXONDYS 51 in the US, reaching more
patients through global expansion and rapidly advancing Sarepta’s
pipeline through internal and external development efforts, and
Sarepta’s belief that it is well positioned for potential growth and
towards its goal to help all boys with Duchenne muscular dystrophy.
These forward-looking statements involve risks and uncertainties,
many of which are beyond Sarepta’s control. Actual results could
materially differ from those stated or implied by these forward-looking
statements as a result of such risks and uncertainties. Known risk
factors include the following: we may not be able to meet expectations
with respect to EXONDYS 51 sales or attain profitability and positive
cash-flow from operations; we may not be able to comply with
all FDA post-approval commitments and requirements with respect to
EXONDYS 51 in a timely manner or at all; we may not be able to complete
clinical trials required by the FDA for approval of our product
candidates; the results of our ongoing research and development efforts
and clinical trials for our product candidates may not be positive or
consistent with prior results or demonstrate a safe treatment benefit;
we may not be able to execute on our business plans, including meeting
our expected or planned regulatory milestones and timelines, clinical
development plans, bringing EXONDYS 51 to markets outside the United
States and bringing our product candidates to market, for various
reasons including possible limitations of Company financial and other
resources, manufacturing limitations that may not be anticipated or
resolved for in a timely manner, and regulatory, court or agency
decisions, such as decisions by the United States Patent and Trademark
Office with respect to patents that cover our product candidates; and
those risks identified under the heading "Risk Factors" in Sarepta’s
most recent Annual Report on Form 10-K for the year ended December 31,
2016 or Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission (SEC) as well as other SEC filings made by the
Company which you are encouraged to review.
Any of the foregoing risks could materially and adversely affect the
Company’s business, results of operations and the trading price of
Sarepta’s common stock. You should not place undue reliance on
forward-looking statements. Sarepta does not undertake any obligation to
publicly update its forward-looking statements based on events or
circumstances after the date hereof, except to the extent required by
applicable law or SEC rules.
Internet Posting of Information
We routinely post information that may be important to investors in
the ’For Investors’ section of our web site at www.sarepta.com.
We encourage investors and potential investors to consult our website
regularly for important information about us.
Sarepta Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------
2016 2015 2016 2015
------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------
Revenues:
Product, net $ 5,421 $ -- $ 5,421 $ --
Revenue from research contracts and other grants -- 1,253 -- 1,253
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Total revenues 5,421 1,253 5,421 1,253
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Cost and expenses:
Cost of sales 130 -- 130 --
Research and development 70,749 41,376 188,272 146,394
Selling, general and administrative 22,937 24,329 83,749 75,043
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Total cost and expenses 93,816 65,705 272,151 221,437
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Operating loss (88,395 ) (64,452 ) (266,730 ) (220,184 )
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Interest (expense) income and other, net (57 ) (229 ) (535 ) 154
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Net loss $ (88,452 ) $ (64,681 ) $ (267,265 ) $ (220,030 )
-------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- --------------
Net loss per share -- basic and diluted $ (1.62 ) $ (1.44 ) $ (5.49 ) $ (5.20 )
Weighted average number of shares of common stock outstanding for 54,619 44,882 48,697 42,290
computing basic and diluted net loss per share
Sarepta Therapeutics, Inc.
Reconciliation of GAAP to Non-GAAP Net Loss
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------
2016 2015 2016 2015
------------------------------------------ ------------------------------------------ ------------------------------------------ ------------------------------------------
Net loss - GAAP $ (88,452 ) $ (64,681 ) $ (267,265 ) $ (220,030 )
Research and development:
Up-front license and milestone payments 40,785 -- 40,785 --
Stock-based compensation expense 1,972 2,764 9,499 10,403
Restructuring expense 230 -- 2,013 --
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total research and development non-GAAP adjustments 42,987 2,764 52,297 10,403
Selling, general and administrative:
Stock-based compensation expense 4,897 3,584 20,463 21,714
Restructuring expense 1,909 -- 2,549 --
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total selling, general and administrative non-GAAP adjustments 6,806 3,584 23,012 21,714
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net loss - non-GAAP $ (38,659 ) $ (58,333 ) $ (191,956 ) $ (187,913 )
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-GAAP net loss per share - basic and diluted $ (0.71 ) $ (1.30 ) $ (3.94 ) $ (4.44 )
Weighted average number of shares of common stock outstanding for 54,619 44,882 48,697 42,290
computing basic and diluted net loss per share
Sarepta Therapeutics, Inc.
Balance Sheet Highlights
(in thousands)
(unaudited)
As of As of
December 31, 2016 December 31, 2015
---------------- ----------------------------
Cash, cash equivalents and short-term investments $ 317,845 $ 192,491
Restricted cash and investments 11,479 11,478
Total assets 424,104 273,782
Total liabilities 87,413 83,435
Total stockholders’ equity $ 336,691 $ 190,347
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170228006776r1&sid=cmtx6&distro=nx&lang=en
View source version on businesswire.com: http://www.businesswire.com/news/home/20170228006776/en/
SOURCE: Sarepta Therapeutics, Inc.
Media and Investors:
Sarepta Therapeutics, Inc.
Ian Estepan, 617-274-4052
iestepan@sarepta.com
or
W2O Group
Brian Reid, 212-257-6725
breid@w2ogroup.com
