Sarepta Therapeutics Announces First Quarter 2018 Financial Results and Recent Corporate Developments

CAMBRIDGE, Mass., May 03, 2018 (GLOBE NEWSWIRE) -- Sarepta Therapeutics, Inc.(NASDAQ:SRPT), a commercial-stage biopharmaceutical company focused on the discovery and development of precision genetic medicine to treat rare neuromuscular diseases, today reported financial results for the three months ended March 31, 2018.

-- First quarter 2017 EXONDYS 51^® (eteplirsen) total net revenues of $64.6 million --

-- Sarepta signs exclusive partnership and buy-out option with Myonexus Therapeutics; pipeline expands from 16 to 21 programs --

-- Company announces date of first R&D day, at which clinical data from gene therapy micro-dystrophin program will be announced --

-- Company receives negative trend vote following its CHMP oral explanation; will request re-examination and Scientific Advisory Group to be convened --

“In the first quarter, we continued our successful launch of EXONDYS 51 and advanced our pipeline to bring life-enhancing therapies to those suffering from rare disease around the world,” said Doug Ingram, Sarepta’s president and chief executive officer. “We accelerated our gene therapy and RNA platform, and in that regard are excited to announce that our first R&D day will take place on June 19 to showcase the breadth, depth and progress of our pipeline. Significantly, at this event we will report preliminary safety and gene expression data from at least two patients from our micro-dystrophin gene therapy trial underway with Nationwide Children’s Hospital.”

Mr. Ingram continued, “Aligned with our stated goal of leveraging our expertise beyond DMD, we announced today a collaboration with Myonexus Therapeutics for the development of five potentially transformative gene therapies to treat a debilitating set of diseases, all under the umbrella of Limb-girdle muscular dystrophy. Through this collaboration, we have expanded our pipeline to 21 therapies in development. Our confidence in the Myonexus collaboration comes from the similarities between the Myonexus and Sarepta approaches to gene therapy.  Both are seeking to treat rare neuromuscular disease through the AAVrh.74 vector; and both rely upon the unparalleled expertise of Dr. Louise Rodino-Klapac in developing and executing gene therapy constructs. This partnership with Myonexus enables us to expand our efforts beyond DMD while maintaining our unwavering commitment to those suffering from DMD.”

Mr. Ingram concluded, “Unfortunately, in addition to our successes in the first quarter, we also have had a delay in our effort to bring eteplirsen to patients in Europe who could potentially benefit from it. I could not be prouder of our Sarepta team and the team of experts who spoke on behalf of eteplirsen at the CHMP oral explanation last week. The rigorous work that was done to prepare for the hearing only strengthened our resolve that eteplirsen should urgently be made available to those waiting in Europe. Unfortunately, the CHMP’s trend vote was negative. Based on discussions with CHMP representatives, it is our understanding that the CHMP did not conclude that eteplirsen is ineffective for exon 51 amenable patients, but rather that Sarepta has not yet met the regulatory threshold for conditional approval, in part due to the use of external controls as comparators in the studies. Sarepta plans to file for re-examination and will request that a Scientific Advisory Group (SAG), which is made up of DMD and neuromuscular specialists, be convened to provide expert guidance and insight into, among other things, the validity of the external controls used and the importance of slowing pulmonary decline in patients with DMD.”

Financial Results

For the first quarter of 2018, on a GAAP basis, Sarepta reported a net loss of $35.4 million, or $0.55 per basic and diluted share, compared to net income of $84.1 million reported for the same period of 2017, or $1.53 per basic share and $1.50 per diluted share. On a non-GAAP basis, the net loss for the first quarter of 2018 was $17.9 million, or $0.28 per share, compared to a net loss of $31.4 million for the same period of 2017, or $0.57 per share.

Net Revenues

For the three months ended March 31, 2018, the Company recorded net product revenues of $64.6 million, compared to net revenues of $16.3 million for first quarter of 2017. The increase primarily reflects increasing demand for EXONDYS 51 in the U.S.

Cost and Operating Expenses

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

For the three months ended March 31, 2018, cost of sales (excluding amortization of in-licensed rights) was $5.6 million, compared to $0.2 million for the same period of 2017. The increase primarily reflects royalty payments to BioMarin Pharmaceuticals (BioMarin) as a result of the execution of the settlement and license agreements with BioMarin in July 2017 as well as higher inventory costs related to increasing demand for EXONDYS 51 during 2018. Prior to the approval of EXONDYS 51, the Company expensed related manufacturing and material costs as research and development expenses.

Research and development

Research and development expenses were $46.2 million for the first quarter of 2018, compared to $29.1 million for the same period of 2017, an increase of $17.1 million. The increase in research and development expenses primarily reflects the following:

• $4.4 million increase in clinical and manufacturing expenses primarily due to increased patient enrollment in the Company’s ongoing clinical trials in golodirsen and casimersen, as well as a ramp-up of manufacturing activities for the Company’s PPMO platform. These increases were partially offset by a ramp-down of clinical trials in eteplirsen primarily because the PROMOVI trial has been fully enrolled;
• $3.2 million increase in collaboration cost sharing with Summit on its utrophin platform;
• $2.7 million increase in compensation and other personnel expenses primarily due to a net increase in headcount;
• $2.4 million increase in professional services primarily due to an expansion of the Company’s research and development pipeline; and
• $1.6 million increase in preclinical expenses primarily due to the continuing ramp-up of toxicology studies in the Company’s PPMO platform as well as golodirsen and casimersen.

Non-GAAP research and development expenses were $43.3 million for the first quarter of 2018, compared to $26.7 million for the same period of 2017, an increase of $16.6 million.

Selling, general and administration

Selling general and administrative expenses were $43.3 million for the first quarter of 2018, compared to $26.2 million for the same period of 2017, an increase of $17.1 million. The increase in selling, general and administrative expenses primarily reflects the following:

• $6.4 million increase in professional services primarily due to continuing global expansion as well as preparation for a potential product launch in the EU should the Company’s Marketing Authorization Application be approved by the European Medicines Agency;
• $5.3 million increase in compensation and other personnel expenses primarily due to a net increase in headcount; and
• $4.6 million increase in stock-based compensation primarily due to the impact of revising the forfeiture rate assumption for officers and Board of Directors as well as an increase in stock price.

Non-GAAP selling, general and administrative expenses were $33.7 million for the first quarter of 2018, compared to $21.1 million for the same period of 2017, an increase of $12.6 million.

Research and development

Research and development expenses were $46.2 million for the first quarter of 2018, compared to $29.1 million for the same period of 2017, an increase of $17.1 million. The increase in research and development expenses primarily reflects the following:

• $4.4 million increase in clinical and manufacturing expenses primarily due to increased patient enrollment in the Company’s ongoing clinical trials in golodirsen and casimersen, as well as a ramp-up of manufacturing activities for the Company’s PPMO platform. These increases were partially offset by a ramp-down of clinical trials in eteplirsen primarily because the PROMOVI trial has been fully enrolled;
• $3.2 million increase in collaboration cost sharing with Summit on its utrophin platform;
• $2.7 million increase in compensation and other personnel expenses primarily due to a net increase in headcount;
• $2.4 million increase in professional services primarily due to an expansion of the Company’s research and development pipeline; and
• $1.6 million increase in preclinical expenses primarily due to the continuing ramp-up of toxicology studies in the Company’s PPMO platform as well as golodirsen and casimersen.

First Quarter and Recent Corporate Developments

• Golodirsen (SRP-4053): Based on Sarepta’s Type C meeting with the FDA’s Division of Neurology Products to solicit the Division's guidance on the development pathway for golodirsen, the Company remains on track to complete a rolling NDA submission by year-end 2018, seeking accelerated approval based on an increase in dystrophin protein as a surrogate endpoint.

• Myonexus Therapeutics Partnership: Sarepta and Myonexus Therapeutics entered into a partnership to advance multiple gene therapies for various forms of Limb-girdle muscular dystrophies (LGMDs). The lead program, MYO-101, has generated encouraging pre-clinical safety and efficacy data utilizing the AAVrh.74 vector system, the same vector used in the micro-dystrophin gene therapy program Sarepta is developing with Nationwide Children’s Hospital. A Phase 1/2a study of MYO-101 is scheduled to begin in mid-2018. The companies plan to report on 60-day biopsy data in late-2018 or early 2019. Additionally, Myonexus is advancing MYO-102 for LGMD2D, MYO-103 for LGMD2C, MYO-201 for LGMD2B, and MYO-301 for LGMD2L. Under the terms of the agreement, Sarepta will make an upfront payment of $60 million and additional development-related milestone payments to purchase an exclusive option to acquire Myonexus at a pre-negotiated, fixed price with sales-related contingent payments. If all development-related milestone payments are met, Sarepta will make payments of up to $45 million over an approximately two-year evaluation period. Sarepta has the option to purchase Myonexus at any time, including upon review of proof-of-concept data.

• Sarepta R&D Day (Tuesday, June 19, 2018): Sarepta management, along with several key-opinion leaders, will provide an in-depth look into the Company’s pipeline programs across several modalities, included RNA-targeted therapies, gene therapy and gene editing. Of particular note, we look forward to presenting our micro-dystrophin expression data from at least two patients enrolled in the Phase 1/2a gene therapy clinical trial underway with Drs. Jerry Mendell and Louise Rodino-Klapac of Nationwide Children’s Hospital. To date, the Company has enrolled four patients in this study and no significant adverse events have been reported. In addition, Dr. Rodino-Klapac, who is also chief scientific officer and co-founder of Myonexus, will present data from Myonexus’ entire LGMD program. For all to access, Sarepta’s R&D day will be webcast live under the investor relations section of the Company’s website at: www.sarepta.comand will be archived there following the event for 90 days.

About EXONDYS 51

EXONDYS 51 uses Sarepta’s proprietary phosphorodiamidate morpholino oligomer (PMO) chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene. EXONDYS 51 is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion 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.

About Sarepta Therapeutics

Sarepta Therapeutics is a commercial-stage biopharmaceutical company focused on the discovery and development of precision genetic medicine to treat rare neuromuscular diseases. The Company is primarily focused on rapidly advancing the development of its potentially disease-modifying DMD drug candidates.

http://investorrelations.sarepta.com/