Sarepta Therapeutics Announces Third Quarter 2013 Financial Results and Recent Corporate Developments
Date : 11/12/2013 @ 7:00AM
Source : Marketwired
Stock : Sarepta Therapeutics, Inc. (MM) (SRPT)
Quote : 36.55 0.55 (1.53%) @ 7:38AM
Sarepta Therapeutics Announces Third Quarter 2013 Financial Results and Recent Corporate Developments
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Sarepta Therapeutics, Inc. (MM) (NASDAQ:SRPT)
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Sarepta Therapeutics Announces Third Quarter 2013 Financial Results and Recent Corporate Developments
Ongoing Discussions With FDA Remain a Priority to Advance Eteplirsen Program in Duchenne Muscular Dystrophy; Updated Guidance Lowers Full-Year Operating Loss to $80-90 Million Range; Strong Financial Position With Approximately $281 Million in Cash and Other Investments at Quarter End
CAMBRIDGE, MA--(Marketwired - Nov 12, 2013) - Sarepta Therapeutics, Inc. (NASDAQ: SRPT), a developer of innovative RNA-based therapeutics, today reported financial results for the three and nine months ended September 30, 2013, and provided an update of recent corporate developments.
"We look forward to continuing to work with the FDA to keep the eteplirsen program moving forward," said Chris Garabedian, president and chief executive officer of Sarepta. "Our cash position is strong as we continue to scale up manufacturing and advance our follow-on DMD drug candidates toward clinical development."
Financial Results
For the third quarter of 2013, Sarepta reported a non-GAAP net loss of $21.3 million, or $0.63 per share, compared to a non-GAAP net loss of $6.1 million for the third quarter of 2012, or $0.27 per share. The incremental loss is primarily the result of a $3.4 million decrease in contract revenues as well as an $11.8 million increase in non-GAAP operating expenses, excluding the effects of stock-based compensation and restructuring expenses.
On a GAAP basis, the net loss for the third quarter of 2013 was $42.0 million, or $1.24 per share (including $3.5 million of stock-based compensation expense and restructuring expense), compared with a net loss of $49.6 million for the third quarter of 2012, or $2.17 per share (including $0.7 million of stock-based compensation expense). The decrease in net loss is the result of a $25.6 million decrease in expense incurred due to the change in valuation of our outstanding warrants offset by a $3.4 million decrease in contract revenues and a $14.6 million increase in operating expenses.
Revenue for the third quarter of 2013 was $4.2 million, down from $7.6 million for the third quarter of 2012. The $3.4 million decrease was primarily due to the August 2012 stop-work-order and subsequent termination for convenience of the Ebola portion of the Ebola-Marburg U.S. government contract due to a lack of available U.S. government funding. The termination of the Ebola portion did not impact the Marburg portion of the contract. Revenues from the Marburg portion of the contract also decreased during the third quarter of 2013 due to the timing of activities throughout the normal progression of the contract. These decreases were partially offset by revenue from the intramuscular administration (IM) contract with the U.S. government for the Marburg virus and two other research agreements.
Non-GAAP research and development expenses were $19.9 million for the third quarter of 2013, compared to $10.6 million for the third quarter of 2012, an increase of $9.3 million. GAAP research and development expenses were $21.1 million for the third quarter of 2013 (including $1.2 million of stock-based compensation expense and restructuring expense), compared to $10.9 million for the third quarter of 2012 (including $0.3 million of stock-based compensation expense), an increase of $10.2 million.
Non-GAAP general and administrative expenses were $5.7 million for the third quarter of 2013, compared to $3.1 million for the third quarter of 2012, an increase of $2.6 million. GAAP general and administrative expenses were $8.0 million for the third quarter of 2013 (including $2.3 million of stock-based compensation expense), compared to $3.6 million for the third quarter of 2012 (including $0.4 million of stock-based compensation expense), an increase of $4.4 million.
The increased operating expenses were primarily caused by corporate growth as the Company continues the development of its programs in Duchenne Muscular Dystrophy (DMD).
The company had cash, cash equivalents and restricted investments related to our letters of credit of $281.4 million as of September 30, 2013 compared to $187.7 million as of December 31, 2012, an increase of $93.7 million. The increase in cash and cash equivalents was primarily due to $125 million in proceeds from the issuance of approximately 3.4 million shares of common stock under the At-the-Market (ATM) equity financing that was put in place in July 2013 and $18.9 million in proceeds from the exercise of warrants and stock options, offset by cash used to fund our ongoing operations.
The warrant liability is primarily affected by changes in the company's stock price. In the third quarter of 2013, the appreciation in the company's stock price caused the warrant valuation to increase, which resulted in a non-cash warrant valuation expense of $17.2 million. In the third quarter of 2012, the company's stock price increase resulted in a non-cash warrant valuation expense of $42.7 million. All remaining warrants outstanding at September 30, 2013, if not exercised, will expire no later than August of 2014.
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
-- Announced data through Week 96 from the Phase IIb open-label extension study of eteplirsen in patients with DMD. Results through nearly two years showed a continued stabilization of walking ability in eteplirsen-treated patients evaluable on the 6-minute walk test (6MWT). Eteplirsen was well tolerated and there were no reported clinically significant treatment-related adverse events, no treatment-related serious adverse events, hospitalizations or discontinuations through 96 weeks. These data were presented at the 18th International Congress of the World Muscle Society on October 3.
-- Announced a new nationwide program from Parent Project Muscular Dystrophy (PPMD) to assist individuals with DMD in accessing genetic testing. Through the new program, called Decode Duchenne, PPMD will offer genetic testing at no cost to eligible patients who are unable to access testing due to barriers such as a lack of or insufficient insurance coverage. Sarepta will provide support for the initiative.
-- Announced Let's Skip Ahead, a new online resource center for families affected by DMD and their healthcare providers. The new website, available at www.skipahead.com, provides information and educational resources about exon skipping and upcoming Sarepta clinical trials.
Conference Call
The conference call may be accessed by dialing 888.895.5271 for domestic callers and 847.619.6547 for international callers. The passcode for the call is 35957586. Please specify to the operator that you would like to join the "Sarepta Third Quarter Earnings Call." The conference call will be webcast live under the investor relations section of Sarepta's website at www.sarepta.com and will be archived there following the call for 90 days. Please connect to Sarepta's website several minutes prior to the start of the broadcast to ensure adequate time for any software download that may be necessary. An audio replay will be available through November 26, 2013 by calling 888.843.7419 or 630.652.3042 and entering access code 35957586.
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