10-Q 1 srpt-20210930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-14895

 

SAREPTA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

93-0797222

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

215 First Street, Suite 415

Cambridge, MA

 

02142

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (617) 274-4000

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, $0.0001 par value per share

SRPT

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller Reporting Company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Common Stock with $0.0001 par value

 

87,076,918

(Class)

 

(Outstanding as of October 29, 2021)

 

 


SAREPTA THERAPEUTICS, INC.

FORM 10-Q

INDEX

 

 

 

 

 

Page

PART I — FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets — As of September 30, 2021 and December 31, 2020

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three and Nine Months Ended September 30, 2021 and 2020

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity For the Three and Nine Months Ended September 30, 2021 and 2020

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows — For the Nine Months Ended September 30, 2021 and 2020

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

36

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

37

 

 

 

 

 

PART II — OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

38

 

 

 

 

 

Item 1A.

 

Risk Factors

 

38

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

75

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

75

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

75

 

 

 

 

 

Item 5.

 

Other Information

 

75

 

 

 

 

 

Item 6.

 

Exhibits

 

75

 

 

 

 

 

Exhibits

 

76

 

 

 

 

 

Signatures

 

77

 

 

2


PART I — FINANCIAL INFORMATION

 

 

Item 1. Financial Statements

SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)

 

 

 

As of
September 30, 2021

 

 

As of
December 31, 2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,599,113

 

 

$

1,502,648

 

Short-term investments

 

 

 

 

 

435,923

 

Accounts receivable

 

 

149,787

 

 

 

101,340

 

Inventory

 

 

288,469

 

 

 

231,961

 

Other current assets

 

 

147,941

 

 

 

213,324

 

Total current assets

 

 

2,185,310

 

 

 

2,485,196

 

Property and equipment, net

 

 

199,249

 

 

 

190,430

 

Intangible assets, net

 

 

14,204

 

 

 

13,628

 

Right of use assets

 

 

72,663

 

 

 

91,761

 

Other non-current assets

 

 

190,792

 

 

 

203,703

 

Total assets

 

$

2,662,218

 

 

$

2,984,718

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

44,163

 

 

$

111,090

 

Accrued expenses

 

 

221,009

 

 

 

193,553

 

Deferred revenue, current portion

 

 

89,244

 

 

 

89,244

 

Other current liabilities

 

 

19,027

 

 

 

22,139

 

Total current liabilities

 

 

373,443

 

 

 

416,026

 

Long-term debt

 

 

1,094,912

 

 

 

992,493

 

Lease liabilities, net of current portion

 

 

63,428

 

 

 

80,367

 

Deferred revenue, net of current portion

 

 

596,738

 

 

 

663,488

 

Contingent consideration

 

 

43,600

 

 

 

50,800

 

Other non-current liabilities

 

 

20,569

 

 

 

19,785

 

Total liabilities

 

 

2,192,690

 

 

 

2,222,959

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value, 3,333,333 shares authorized; none issued and
   outstanding

 

 

 

 

 

 

Common stock, $0.0001 par value, 198,000,000 shares authorized; 79,958,527
   and
79,374,247 issued and outstanding at September 30, 2021, and
   December 31, 2020, respectively

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

3,554,307

 

 

 

3,609,877

 

Accumulated other comprehensive (loss) income, net of tax

 

 

(20

)

 

 

3

 

Accumulated deficit

 

 

(3,084,767

)

 

 

(2,848,129

)

Total stockholders’ equity

 

 

469,528

 

 

 

761,759

 

Total liabilities and stockholders’ equity

 

$

2,662,218

 

 

$

2,984,718

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

3


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except per share amounts)

 

 

 

For the Three Months Ended
 September 30,

 

 

For the Nine Months Ended
 September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Products, net

 

$

166,911

 

 

$

121,429

 

 

$

433,676

 

 

$

333,221

 

Collaboration

 

 

22,495

 

 

 

22,495

 

 

 

66,750

 

 

 

61,740

 

Total revenues

 

 

189,406

 

 

 

143,924

 

 

 

500,426

 

 

 

394,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

23,444

 

 

 

15,015

 

 

 

65,305

 

 

 

40,978

 

Research and development

 

 

139,115

 

 

 

190,438

 

 

 

573,886

 

 

 

515,104

 

Selling, general and administrative

 

 

61,127

 

 

 

75,373

 

 

 

204,605

 

 

 

231,829

 

Settlement and license charges

 

 

 

 

 

 

 

 

10,000

 

 

 

 

Amortization of in-licensed rights

 

 

178

 

 

 

166

 

 

 

527

 

 

 

497

 

Total cost and expenses

 

 

223,864

 

 

 

280,992

 

 

 

854,323

 

 

 

788,408

 

Operating loss

 

 

(34,458

)

 

 

(137,068

)

 

 

(353,897

)

 

 

(393,447

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on contingent consideration, net

 

 

7,200

 

 

 

(45,000

)

 

 

7,200

 

 

 

(45,000

)

Other expense, net

 

 

(20,649

)

 

 

(14,335

)

 

 

(52,362

)

 

 

(34,202

)

Gain from sale of Priority Review Voucher

 

 

 

 

 

 

 

 

102,000

 

 

 

108,069

 

Total other (loss) income

 

 

(13,449

)

 

 

(59,335

)

 

 

56,838

 

 

 

28,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense (benefit)

 

 

(47,907

)

 

 

(196,403

)

 

 

(297,059

)

 

 

(364,580

)

Income tax expense (benefit)

 

 

237

 

 

 

96

 

 

 

(260

)

 

 

231

 

Net loss

 

 

(48,144

)

 

 

(196,499

)

 

 

(296,799

)

 

 

(364,811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on investments, net of tax

 

 

(22

)

 

 

(12

)

 

 

(23

)

 

 

(56

)

Total other comprehensive loss

 

 

(22

)

 

 

(12

)

 

 

(23

)

 

 

(56

)

Comprehensive loss

 

$

(48,166

)

 

$

(196,511

)

 

$

(296,822

)

 

$

(364,867

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(0.60

)

 

$

(2.50

)

 

$

(3.72

)

 

$

(4.70

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock used in
   computing basic and diluted net loss per share

 

 

79,880

 

 

 

78,501

 

 

 

79,695

 

 

 

77,637

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2020

 

79,374

 

 

$

8

 

 

$

3,609,877

 

 

$

3

 

 

$

(2,848,129

)

 

$

761,759

 

Cumulative effect of accounting change to
    adopt ASU 2020-06

 

 

 

 

 

 

 

(156,953

)

 

 

 

 

 

60,161

 

 

 

(96,792

)

Exercise of options for common stock

 

108

 

 

 

 

 

 

4,683

 

 

 

 

 

 

 

 

 

4,683

 

Vest of restricted stock units

 

204

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee
   stock purchase plan

 

62

 

 

 

 

 

 

4,543

 

 

 

 

 

 

 

 

 

4,543

 

Stock-based compensation

 

 

 

 

 

 

 

28,508

 

 

 

 

 

 

 

 

 

28,508

 

Unrealized losses from available-for-sale
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

(6

)

 

 

 

 

 

(6

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(167,250

)

 

 

(167,250

)

Balance at March 31, 2021

 

79,748

 

 

$

8

 

 

$

3,490,658

 

 

$

(3

)

 

$

(2,955,218

)

 

$

535,445

 

Exercise of options for common stock

 

72

 

 

 

 

 

 

3,526

 

 

 

 

 

 

 

 

 

3,526

 

Vest of restricted stock units

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for taxes

 

(18

)

 

 

 

 

 

(1,432

)

 

 

 

 

 

 

 

 

(1,432

)

Stock-based compensation

 

 

 

 

 

 

 

28,969

 

 

 

 

 

 

 

 

 

28,969

 

Unrealized gains from available-for-sale
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(81,405

)

 

 

(81,405

)

Balance at June 30, 2021

 

79,830

 

 

$

8

 

 

$

3,521,721

 

 

$

2

 

 

$

(3,036,623

)

 

$

485,108

 

Exercise of options for common stock

 

52

 

 

 

 

 

 

2,606

 

 

 

 

 

 

 

 

 

2,606

 

Vest of restricted stock units

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee
   stock purchase plan

 

50

 

 

 

 

 

 

3,296

 

 

 

 

 

 

 

 

 

3,296

 

Stock-based compensation

 

 

 

 

 

 

 

26,684

 

 

 

 

 

 

 

 

 

26,684

 

Unrealized losses from available-for-sale
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

(22

)

 

 

 

 

 

(22

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(48,144

)

 

 

(48,144

)

Balance at September 30, 2021

 

79,959

 

 

$

8

 

 

$

3,554,307

 

 

$

(20

)

 

$

(3,084,767

)

 

$

469,528

 

 

5


 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2019

 

75,185

 

 

$

8

 

 

$

3,112,130

 

 

$

50

 

 

$

(2,294,001

)

 

$

818,187

 

Exercise of options for common stock

 

97

 

 

 

 

 

 

3,687

 

 

 

 

 

 

 

 

 

3,687

 

Vest of restricted stock units

 

98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock to Roche, net of
   issuance costs

 

2,522

 

 

 

 

 

 

312,053

 

 

 

 

 

 

 

 

 

312,053

 

Issuance of common stock under employee
   stock purchase plan

 

56

 

 

 

 

 

 

3,795

 

 

 

 

 

 

 

 

 

3,795

 

Stock-based compensation

 

 

 

 

 

 

 

24,024

 

 

 

 

 

 

 

 

 

24,024

 

Unrealized gains from available-for-sale
   securities, net of tax

 

 

 

 

 

 

 

 

 

 

574

 

 

 

 

 

 

574

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,492

)

 

 

(17,492

)

Balance at March 31, 2020