Sarepta Therapeutics Announces Third Quarter 2024 Financial Results and Recent Corporate Developments

– Net product revenues for the third quarter 2024 totaled $429.8 million, a 39% increase over the same quarter of the prior year

– ELEVIDYS net product revenue for the quarter totaled $181.0 million; Royalty revenue from the sales of ELEVIDYS by Roche for the quarter totaled $9.5 million

– Achieved GAAP and non-GAAP net income of $33.6 million and $67.0 million for the third quarter 2024, respectively

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sarepta Therapeutics, Inc. (NASDAQ:SRPT), the leader in precision genetic medicine for rare diseases, today reported financial results for the third quarter 2024.

“I am pleased to report another strong quarter of performance, as we posted $429.8 million in net product revenue for the third quarter, a 39% increase over the same quarter of the prior year. Reflecting our detailed preparation and track record of commercial execution, the launch of ELEVIDYS is proceeding to plan. ELEVIDYS net product revenue was $181.0 million in the quarter, exceeding prior guidance. If one includes royalty revenue generated on Roche’s ex-US sales of ELEVIDYS, total ELEVIDYS performance was $190.5 million for the quarter. Likewise, net product revenue for our three PMOs -- EXONDYS 51, VYONDYS 53, and AMONDYS 45 – performed well, achieving approximately $248.8 million in the quarter and, as anticipated, reflecting a lack of near-term cannibalization from the launch of ELEVIDYS,” said Doug Ingram, president and chief executive officer, Sarepta Therapeutics. “At the same time, we have made important decisions regarding portfolio prioritization and have made great progress on our pipeline in the quarter. As examples, by mid-2025 we will have submitted a Biologics License Application for one and will be in clinical trials for two others of our Limb-girdle muscular dystrophy programs. Assuming success, these three therapeutic candidates will deliver our next wave of approved therapies as our multi-program platform advances productively.”

Third Quarter 2024 and Recent Developments:

• Sarepta has made the decision to discontinue the SRP-5051 (vesleteplirsen) development program. This decision was informed by information available to date, including the risk-benefit of the program, feedback from the FDA, and the evolving therapeutic landscape for Duchenne.
• Presented new data from its neuromuscular portfolio at 2024 World Muscle Society Congress (WMS 2024): Among the multiple presentations from Sarepta at WMS 2024 were new safety and efficacy results from several studies in the SRP-9001 clinical development program. These data included:
  • Skeletal muscle MRI data from Study 9001-301 EMBARK where multiple muscles from a subset of patients (n=39) were evaluated using MRI/MRS and MRI T2 signal prior to treatment and at 52 weeks post treatment. Across all measures, patients treated with SRP-9001 showed improvement over the placebo group with less accumulation of fat and fibrosis. The finding correlates with the functional outcomes in Part 1 of EMBARK which showed stabilization or slowing of disease progression in patients treated with SRP-9001 compared to placebo.
  • Cardiac MRI data from EMBARK where an assessment of a subgroup of patients (n=19), found no negative effects on cardiac safety compared to placebo at 52 weeks and no differences in cardiac measures in SRP-9001-treated patients compared to the placebo group at one year. Sarepta plans for future longitudinal cardiac MRI studies to evaluate the long-term protection of cardiac muscle.
  • Five-year functional results from Study SRP-9001-101, the longest-term data to date for a gene therapy in Duchenne. These patients, with an average age of 10 years at the time of the assessment, were stable or showed a slowing of disease progression with an increase in divergence from natural history over time as shown by an external control analysis. Notably this evaluation was conducted at an age when many Duchenne patients are entering the steep decline phase of the disease. The five-year results showed:
    • A 9.8 point (p=0.0127) increase in change from baseline in the North Star Ambulatory Assessment (NSAA) total score to five years.
    • At year five the sustained increase in NSAA total score was statistically significant and clinically meaningful when compared to an external control cohort.
    • An 8.8 second decrease (p=0.0198) in time to rise from floor, change from baseline to five years. The improvement was statistically significant and clinically meaningful when compared to an external control cohort.
    • Patients maintained their 10-meter walk test time throughout the five years.
    • No new safety signals.
• Results from EMBARK study of delandistrogene moxeparvovec published in Nature Medicine: In early October, efficacy and safety results from Part 1 of the EMBARK study of delandistrogene moxeparvovec-rokl for the treatment of Duchenne muscular dystrophy were published in Nature Medicine. These published results demonstrate a treatment benefit with delandistrogene moxeparvovec that is clinically meaningful and similar regardless of age and a favorable risk-benefit profile. EMBARK, also known as Study SRP-9001-301, is a global, randomized, double-blind, placebo-controlled, Phase 3 clinical study of delandistrogene moxeparvovec in patients with Duchenne muscular dystrophy between the ages of 4 through 7 years.

Conference Call

The event will be webcast live under the investor relations section of Sarepta’s website at https://investorrelations.sarepta.com/events-presentations and following the event a replay will be archived there for one year. Interested parties participating by phone will need to register using this online form. After registering for dial-in details, all phone participants will receive an auto-generated e-mail containing a link to the dial-in number along with a personal PIN number to use to access the event by phone.

Q3 2024 Financial Highlights¹

Revenues

Total revenues increased by $135.4 million for the three months ended September 30, 2024, compared to the same period of 2023. The increase primarily reflects the initial product launch of ELEVIDYS in June 2023 and expanded label in June 2024, partially offset by a $22.5 million decrease in the amortization of the single, combined performance obligation under our collaboration agreement with F. Hoffman-La Roche Ltd. (“Roche”), which was fully amortized as of December 31, 2023.

Total revenues increased by $397.0 million for the nine months ended September 30, 2024, compared to the same period of 2023. The increase primarily reflects the initial product launch of ELEVIDYS in June 2023 and expanded label in June 2024, as well as the $48.0 million of collaboration revenue recognized related to an option declined by Roche to acquire the ex-US rights to a certain external, early stage Duchenne-specific program, partially offset by a $66.8 million decrease in the amortization of the single, combined performance obligation under our collaboration agreement with Roche, which was fully amortized as of December 31, 2023.

Additionally, included in total revenues for the three and nine months ended September 30, 2024, is $37.4 million and $45.8 million, respectively, of contract manufacturing and other revenues associated with commercial ELEVIDYS supply delivered to Roche and royalty revenue received from Roche, with no similar activity for the same periods of 2023.

Cost of sales (excluding amortization of in-licensed rights)

Cost of sales (excluding amortization of in-license rights) increased by $54.7 million and $80.6 million for the three and nine months ended September 30, 2024, respectively, compared with the same periods of 2023. The increases in both periods primarily reflect the initial product launch of ELEVIDYS in June 2023 and expanded label in June 2024. For the three and nine months ended September 30, 2024, we recognized $13.7 million and $15.4 million of cost of sales related to products sold to Roche under our collaboration agreement, with no similar activity for the same periods of 2023.

Operating expenses and others

Research and development expenses increased by $30.2 million for the three months ended September 30, 2024, compared with the same period of 2023. The increase in research and development expense primarily reflects $55.4 million of costs associated with the termination of the development, commercial manufacturing and supply agreement (the “Thermo Agreement”) related to Brammer Bio MA, LLC, an affiliate of Thermo Fisher Scientific, Inc. in August 2024, net of the reimbursable termination costs by Roche, partially offset by a decrease in clinical and manufacturing activity for our PPMO platform and Eteplirsen program.

Research and development expenses decreased by $77.3 million for the nine months ended September 30, 2024, compared with the same period of 2023. The decrease in research and development expense primarily reflects capitalization of commercial batches of ELEVIDYS manufactured after its approval in June 2023, partially offset by $55.4 million of costs associated with the termination of the Thermo Agreement, net of the reimbursable termination costs by Roche.

Non-GAAP research and development expenses increased by $35.9 million for the three months ended September 30, 2024, compared with the same period of 2023. Non-GAAP research and development expenses decreased by $65.0 million for the nine months ended September 30, 2024, compared with the same period of 2023.

Selling, general and administrative expenses increased by $7.3 million and $43.8 million for the three and nine months ended September 30, 2024, compared with the same periods of 2023. The increase in selling, general and administrative expenses for both periods is primarily driven by professional services used to support the continued efforts to commercialize ELEVIDYS and ongoing litigation matters, the timing of charitable contributions, compensation due to changes in headcount, as well as the achievement of performance conditions related to certain Performance Stock Units. Non-GAAP selling, general and administrative expenses increased by $7.4 million and $40.3 million for the three and nine months ended September 30, 2024, respectively, compared with the same periods of 2023.

For the three months ended September 30, 2024, other income (loss), net increased by $24.1 million, compared with the same period of 2023, which primarily reflects an impairment of a strategic investment during the three months ended September 30, 2023, with no similar activity in 2024. For the nine months ended September 30, 2024, other income (loss), net increased by $300.6 million compared with the same period of 2023, which primarily reflects a $387.3 million loss on debt extinguishment offset by a $102.0 million gain on the sale of a Priority Review Voucher (“PRV”) during the nine months ended September 30, 2023, with no similar activities in 2024.

Income tax expense for the three months ended September 30, 2024 and 2023, was approximately $0.4 million and $7.8 million, respectively. Income tax expense for the nine months ended September 30, 2024 and 2023, was approximately $12.8 million and $21.2 million, respectively. Income tax expense for all periods presented primarily relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset.

Use of Non-GAAP Measures

In addition to the GAAP financial measures set forth in this press release, we have included the following non-GAAP measurements:

1. Non-GAAP income (loss) is defined by us as GAAP net income (loss) excluding interest income, net, depreciation and amortization expense, stock-based compensation expense, the estimated income tax impact of each pre-tax non-GAAP adjustment and other items.
2. Non-GAAP earnings (loss) per share is defined by us as non-GAAP net income (loss), as defined previously, divided by the weighted-average number of shares of common stock and dilutive common stock equivalents outstanding. The non-GAAP earnings per share is calculated using diluted shares whereas the non-GAAP net loss per share is calculated using basic shares as all other instruments are anti-dilutive.
3. Non-GAAP operating income (loss) is defined by us as GAAP operating income (loss) excluding depreciation and amortization expense, stock-based compensation expense and other items.
4. Non-GAAP research and development expenses are defined by us as GAAP research and development expenses excluding depreciation and amortization expense, stock-based compensation expense and other items.
5. Non-GAAP selling, general and administrative expenses are defined by us as GAAP selling, general and administrative expenses excluding depreciation expense, stock-based compensation expense and other items.

The following components are used to adjust our GAAP financial measures into the previously defined non-GAAP measurements:

1. Interest, depreciation and amortization - Interest income, net amounts can vary substantially from period to period due to changes in cash and debt balances and interest rates driven by market conditions outside of our operations. Depreciation expense can vary substantially from period to period as the purchases of property and equipment may vary significantly from period to period and without any direct correlation to our operating performance. Amortization expense primarily associated with patent costs are amortized over a period of several years after acquisition or patent application or renewal.
2. Stock-based compensation expenses - Stock-based compensation expenses represent non-cash charges related to equity awards we have granted. Although these are recurring charges to operations, we believe 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 our control. Therefore, we believe that excluding these charges facilitates comparisons of our operational performance in different periods.
3. Other items - We evaluate other items of expense and income on an individual basis. We take into consideration quantitative and qualitative characteristics of each item, including (a) nature, (b) whether the items relate to our ongoing business operations, and (c) whether we expect the items to continue or occur on a regular basis. These other items include impairment of strategic investments, change in fair value of derivatives, gain from sale of the PRV and loss on debt extinguishment and may include other items that fit the above characteristics in the future. We exclude from our non-GAAP results:
   • The impairment of any strategic investments as it is a non-cash item and is not considered to be a normal operating expense due to the variability of amount and lack of predictability as to the occurrence and/or timing of such impairments.
   • The loss on debt extinguishment, which is considered to be an infrequent and non-cash event as it is associated with a distinct financing decision and is not indicative of the performance of our core operations, which accordingly, would make it difficult to compare our results to peer companies that also provide non-GAAP disclosures.
   • The gain from sale of the PRV obtained as a result of the FDA accelerated approval of ELEVIDYS in June 2023 as it is a non-recurring event.
   • The change in fair value of derivatives related to 1.) regulatory-related contingent payments meeting the definition of a derivative to Myonexus selling shareholders as well as to an academic institution under a separate license agreement and 2.) the derivative asset associated with capped call options for our $570.0 million aggregate principal amount of senior convertible notes due on November 15, 2024, as these are non-cash items and are not considered to be normal operating expenses due to the variability of amounts and lack of predictability as to occurrence and/or timing.
4. Beginning in the fourth quarter of 2023, amortization of in-licensed rights (formerly included within depreciation and amortization expense) and income tax (benefit) expense are no longer excluded from the non-GAAP results. We now include the income tax effect of adjustments, which represents the estimated income tax impact of each pre-tax non-GAAP adjustment based on the applicable effective income tax rate. Non-GAAP financial results for the for the three and nine months ended September 30, 2023 have been updated to reflect this change for comparability.

We use these non-GAAP measures as key performance measures for the purpose of evaluating operational performance and cash requirements internally. We also believe these non-GAAP measures increase comparability of period-to-period results and are useful to investors as they provide a similar basis for evaluating our performance as is applied by management. These non-GAAP measures are not intended to be considered in isolation or to replace the presentation of our 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 other income and loss adjustments, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted net earnings (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 Financial Measures to Non-GAAP Financial Measures.”

About EXONDYS 51

EXONDYS 51 uses Sarepta’s proprietary phosphorodiamidate morpholino oligomer (PMO) chemistry and exon-skipping technology to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion, or “skipping”, of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. Exon skipping is intended to allow for production of an internally truncated dystrophin protein.

EXONDYS 51 is indicated for the treatment of Duchenne muscular dystrophy (DMD) in patients who have a confirmed mutation of the DMD gene that is amenable to exon 51 skipping. This indication is approved under accelerated approval based on an increase in dystrophin in skeletal muscle observed in some patients treated with EXONDYS 51. Continued approval for this indication may be contingent upon verification of a clinical benefit in confirmatory trials.

EXONDYS 51 has met the full statutory standards for safety and effectiveness and as such is not considered investigational or experimental.

Important Safety Information About EXONDYS 51

Hypersensitivity reactions, including bronchospasm, chest pain, cough, tachycardia, and urticaria have occurred in patients who were treated with EXONDYS 51. If a hypersensitivity reaction occurs, institute appropriate medical treatment and consider slowing the infusion or interrupting the EXONDYS 51 therapy.

Adverse reactions in DMD patients (N=8) treated with EXONDYS 51 30 mg or 50 mg/kg/week by intravenous (IV) infusion with an incidence of at least 25% more than placebo (N=4) (Study 1, 24 weeks) were (EXONDYS 51, placebo): balance disorder (38%, 0%), vomiting (38%, 0%) and contact dermatitis (25%, 0%). The most common adverse reactions were balance disorder and vomiting. Because of the small numbers of patients, these represent crude frequencies that may not reflect the frequencies observed in practice. The 50 mg/kg once weekly dosing regimen of EXONDYS 51 is not recommended.

The most common adverse reactions from observational clinical studies (N=163) seen in greater than 10% of patients were headache, cough, rash, and vomiting.

Other adverse events may occur.

To report SUSPECTED ADVERSE REACTIONS, contact Sarepta Therapeutics, Inc. at 1-888-SAREPTA (1-888-727-3782) or FDA at 1-800-FDA-1088 or www.fda.gov/medwatch.

For further information, please see the full Prescribing Information.

About VYONDYS 53

VYONDYS 53 (golodirsen) uses Sarepta’s proprietary phosphorodiamidate morpholino oligomer (PMO) chemistry and exon-skipping technology to bind to exon 53 of dystrophin pre-mRNA, resulting in exclusion, or “skipping,” of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 53 skipping. Exon skipping is intended to allow for production of an internally truncated dystrophin protein.

VYONDYS 53 is indicated for the treatment of Duchenne muscular dystrophy (DMD) in patients who have a confirmed mutation of the DMD gene that is amenable to exon 53 skipping. This indication is approved under accelerated approval based on an increase in dystrophin production in skeletal muscle observed in patients treated with VYONDYS 53. Continued approval for this indication may be contingent upon verification of a clinical benefit in confirmatory trials.

VYONDYS 53 has met the full statutory standards for safety and effectiveness and as such is not considered investigational or experimental.

Important Safety Information for VYONDYS 53

CONTRAINDICATIONS: VYONDYS 53 is contraindicated in patients with a serious hypersensitivity reaction to golodirsen or to any of the inactive ingredients in VYONDYS 53. Anaphylaxis has occurred in patients receiving VYONDYS 53.

WARNINGS AND PRECAUTIONS

Hypersensitivity Reactions: Hypersensitivity reactions, including anaphylaxis, rash, pyrexia, pruritus, urticaria, dermatitis, and skin exfoliation have occurred in VYONDYS 53-treated patients, some requiring treatment. If a hypersensitivity reaction occurs, institute appropriate medical treatment and consider slowing the infusion, interrupting, or discontinuing the VYONDYS 53 therapy and monitor until the condition resolves. VYONDYS 53 is contraindicated in patients with a history of a serious hypersensitivity reaction to golodirsen or to any of the inactive ingredients in VYONDYS 53.

Contacts

Investor Contact:
Ian Estepan, 617-274-4052
iestepan@sarepta.com

Media Contact:
Tracy Sorrentino, 617-301-8566
tsorrentino@sarepta.com

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