Sarepta (SRPT) Q4 Loss Widens Y/Y, Revenues Miss Estimates
Zacks Investment Research | Feb 26, 2020 10:47PM ET
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) incurred an adjusted loss of $1.57 per share in the fourth quarter of 2019, wider than the year-ago adjusted loss of 85 cents per share. The wider year-over-year loss can be primarily attributed to a significant rise in operating expenses.
Notably, the adjusted figure excludes one-time items, depreciation & amortization expenses, interest expenses, income tax benefit, stock-based compensation expense and other items. Including all these items, the company incurred a loss of $3.16 per share compared with a loss of $2.05 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.91.
Meanwhile, Sarepta’s Exondys 51 — approved for treating Duchenne muscular dystrophy (“DMD”) — continued with its strong performance. The company derived revenues solely from the sale of Exondys 51. Sarepta recorded total revenues of $100.1 million, up 18.6% year over year. However, revenues missed the Zacks Consensus Estimate of $100.25 million.
Shares of Sarepta have declined 25.1% in the past year compared with the industry ’s decrease of 9.3%.
Operating Expenses
Adjusted research and development (R&D) expenses totaled $135.4 million in the fourth quarter, up 75.8% year over year. The increase was primarily due to increased clinical activities and initiation of certain post-market studies for Exondys 51.
Adjusted selling, general & administrative (SG&A) expenses were $65.8 million, up 24.4% year over year. Higher costs related to the global commercial expansion of its products and increased personnel expenses increased SG&A expenses.
Full-Year Results
Sarepta reported full year revenues of $380.8 million, up 26.5% compared to year-ago period. Adjusted loss in the period was $4.30 per share compared to $2.14 per share in year-ago period. The significant increase in loss was mainly due to higher operating expenses.
2020 Outlook
Sarepta provided sales guidance for its key marketed drug, Exondys 51, for 2020. It expects the drug to generate $420 million to $430 million in sales. The launch of Vyondys 53 is in initial stage and hence the company plans to provide guidance on its sales later this year.
Pipeline Update
In December 2019, Sarepta’s second DMD drug, Vyondys 53 (golodirsen), received accelerated approval for treating patients with confirmed mutation amenable to exon 53 skipping. The company launched the drug in the same month. Currently, it is conducting a confirmatory study — ESSENCE — to gain continued approval for the drug.
The company has initiated a rolling submission of a new drug application seeking approval for its third exon-skipping DMD product, casimersen. It expects the submission to be completed in the second quarter of 2020.
Sarepta is progressing well with the development of the micro-dystrophin gene therapy candidate, SRP-9001, in a phase II study in DMD patients.
In February 2020, the company closed the previously announced licensing agreement with Roche (OTC:RHHBY) related to commercialization of Sarepta’s lead gene therapy candidate, SRP-9001, as DMD therapy in ex-U.S. markets, following a potential approval. Sarepta received $1.2 billion in upfront payment from Roche, which includes $750 million in cash and approximately $400 million in exchange of its common stock. The company is also eligible to receive additional $1.7 billion in regulatory and sales milestones along with royalties on net sales. The companies will equally share global development cost for SRP-9001.
Sarepta’s gene therapy pipeline includes candidates targeting LGMD, MPS IIIA and Charcot-Marie-Tooth disease type 1A (CMT1A), an inherited neurological disorder. In November 2019, Sarepta entered into collaboration with privately-held StrideBio, gaining an exclusive license to select gene therapy candidates targeting four CNS disorders, boosting its gene therapy pipeline.
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