10-Q 1 srpt-20220930.htm 10-Q 10-Q
http://fasb.org/us-gaap/2022#ProductMemberhttp://fasb.org/us-gaap/2022#ProductMember0000873303Sarepta Therapeutics, 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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, 2022

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

 

87,782,576

(Class)

 

(Outstanding as of October 28, 2022)

 

 


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, 2022 and December 31, 2021

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three and Nine Months Ended September 30, 2022 and 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity For the Three and Nine Months Ended September 30, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows — For the Nine Months Ended September 30, 2022 and 2021

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

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

 

24

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

40

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

40

 

 

 

 

 

PART II — OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

41

 

 

 

 

 

Item 1A.

 

Risk Factors

 

41

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

77

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

77

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

77

 

 

 

 

 

Item 5.

 

Other Information

 

77

 

 

 

 

 

Item 6.

 

Exhibits

 

77

 

 

 

 

 

Exhibits

 

78

 

 

 

 

 

Signatures

 

80

 

 

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, 2022

 

 

As of
December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,038,624

 

 

$

2,115,869

 

Short-term investments

 

 

1,033,860

 

 

 

 

Accounts receivable

 

 

201,509

 

 

 

152,990

 

Inventory

 

 

221,192

 

 

 

186,212

 

Other current assets

 

 

130,744

 

 

 

149,028

 

Total current assets

 

 

2,625,929

 

 

 

2,604,099

 

Property and equipment, net

 

 

181,005

 

 

 

191,156

 

Intangible assets, net

 

 

13,057

 

 

 

14,239

 

Right of use assets

 

 

43,034

 

 

 

45,531

 

Other non-current assets

 

 

293,124

 

 

 

292,949

 

Total assets

 

$

3,156,149

 

 

$

3,147,974

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

118,461

 

 

$

76,741

 

Accrued expenses

 

 

368,998

 

 

 

271,697

 

Deferred revenue, current portion

 

 

89,244

 

 

 

89,244

 

Other current liabilities

 

 

26,213

 

 

 

15,051

 

Total current liabilities

 

 

602,916

 

 

 

452,733

 

Long-term debt

 

 

1,542,770

 

 

 

1,096,876

 

Lease liabilities, net of current portion

 

 

35,229

 

 

 

41,512

 

Deferred revenue, net of current portion

 

 

507,494

 

 

 

574,244

 

Contingent consideration

 

 

36,900

 

 

 

43,600

 

Other non-current liabilities

 

 

 

 

 

11,000

 

Total liabilities

 

 

2,725,309

 

 

 

2,219,965

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

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; 87,766,199
   and
87,126,974 issued and outstanding at September 30, 2022, and
   December 31, 2021, respectively

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

4,235,028

 

 

 

4,134,768

 

Accumulated other comprehensive loss, net of tax

 

 

(3,205

)

 

 

(20

)

Accumulated deficit

 

 

(3,800,992

)

 

 

(3,206,748

)

Total stockholders’ equity

 

 

430,840

 

 

 

928,009

 

Total liabilities and stockholders’ equity

 

$

3,156,149

 

 

$

3,147,974

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Products, net

 

$

207,774

 

 

$

166,911

 

 

$

607,836

 

 

$

433,676

 

Collaboration

 

 

22,495

 

 

 

22,495

 

 

 

66,750

 

 

 

66,750

 

Total revenues

 

 

230,269

 

 

 

189,406

 

 

 

674,586

 

 

 

500,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

39,952

 

 

 

23,444

 

 

 

109,190

 

 

 

65,305

 

Research and development

 

 

216,707

 

 

 

139,115

 

 

 

663,286

 

 

 

573,886

 

Selling, general and administrative

 

 

104,787

 

 

 

61,127

 

 

 

330,943

 

 

 

204,605

 

Settlement and license charges

 

 

 

 

 

 

 

 

 

 

 

10,000

 

Amortization of in-licensed rights

 

 

178

 

 

 

178

 

 

 

535

 

 

 

527

 

Total cost and expenses

 

 

361,624

 

 

 

223,864

 

 

 

1,103,954

 

 

 

854,323

 

Operating loss

 

 

(131,355

)

 

 

(34,458

)

 

 

(429,368

)

 

 

(353,897

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (loss) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on contingent consideration, net

 

 

6,700

 

 

 

7,200

 

 

 

6,700

 

 

 

7,200

 

Loss on debt extinguishment

 

 

(125,441

)

 

 

 

 

 

(125,441

)

 

 

 

Other expense, net

 

 

(6,322

)

 

 

(20,649

)

 

 

(40,548

)

 

 

(52,362

)

Gain from sale of Priority Review Voucher

 

 

 

 

 

 

 

 

 

 

 

102,000

 

Total other (loss) income, net

 

 

(125,063

)

 

 

(13,449

)

 

 

(159,289

)

 

 

56,838

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense (benefit)

 

 

(256,418

)

 

 

(47,907

)

 

 

(588,657

)

 

 

(297,059

)

Income tax expense (benefit)

 

 

1,320

 

 

 

237

 

 

 

5,587

 

 

 

(260

)

Net loss

 

 

(257,738

)

 

 

(48,144

)

 

 

(594,244

)

 

 

(296,799

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on investments, net of tax

 

 

(720

)

 

 

(22

)

 

 

(3,185

)

 

 

(23

)

Total other comprehensive loss

 

 

(720

)

 

 

(22

)

 

 

(3,185

)

 

 

(23

)

Comprehensive loss

 

$

(258,458

)

 

$

(48,166

)

 

$

(597,429

)

 

$

(296,822

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(2.94

)

 

$

(0.60

)

 

$

(6.79

)

 

$

(3.72

)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

87,628

 

 

 

79,880

 

 

 

87,465

 

 

 

79,695

 

 

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

 

 

Loss

 

 

Deficit

 

 

Equity

 

BALANCE AT DECEMBER 31, 2021

 

87,127

 

 

$

9

 

 

$

4,134,768

 

 

$

(20

)

 

$

(3,206,748

)

 

$

928,009

 

Exercise of options for common stock

 

18

 

 

 

 

 

 

997

 

 

 

 

 

 

 

 

 

997

 

Vest of restricted stock units/awards

 

289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee
   stock purchase plan

 

62

 

 

 

 

 

 

3,993

 

 

 

 

 

 

 

 

 

3,993

 

Stock-based compensation

 

 

 

 

 

 

 

29,198

 

 

 

 

 

 

 

 

 

29,198

 

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

 

 

 

 

 

 

 

 

 

 

(286

)

 

 

 

 

 

(286

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(105,025

)

 

 

(105,025

)

BALANCE AT MARCH 31, 2022

 

87,496

 

 

 

9

 

 

 

4,168,956

 

 

 

(306

)

 

 

(3,311,773

)

 

 

856,886

 

Exercise of options for common stock

 

11

 

 

 

 

 

 

339

 

 

 

 

 

 

 

 

 

339

 

Vest of restricted stock units/awards

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

102,892

 

 

 

 

 

 

 

 

 

102,892

 

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

 

 

 

 

 

 

 

 

 

 

(2,179

)

 

 

 

 

 

(2,179

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(231,481

)

 

 

(231,481

)

BALANCE AT JUNE 30, 2022

 

87,535

 

 

 

9

 

 

 

4,272,187

 

 

 

(2,485

)

 

 

(3,543,254

)

 

 

726,457

 

Exercise of options for common stock

 

144

 

 

 

 

 

 

9,934

 

 

 

 

 

 

 

 

 

9,934

 

Vest of restricted stock units/awards

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock under employee
   stock purchase plan

 

54

 

 

 

 

 

 

3,477

 

 

 

 

 

 

 

 

 

3,477

 

Stock-based compensation

 

 

 

 

 

 

 

50,418

 

 

 

 

 

 

 

 

 

50,418

 

Purchase of capped call share options
   for 2027 Notes

 

 

 

 

 

 

 

(127,305

)

 

 

 

 

 

 

 

 

(127,305

)

Partial settlement of capped call share
   options for 2024 Notes

 

 

 

 

 

 

 

26,317

 

 

 

 

 

 

 

 

 

26,317

 

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

 

 

 

 

 

 

 

 

 

 

(720

)

 

 

 

 

 

(720

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(257,738

)

 

 

(257,738

)

BALANCE AT SEPTEMBER 30, 2022

 

87,766

 

 

$

9

 

 

$

4,235,028