Sarepta Therapeutics Announces Second Quarter 2013 Financial Results and Recent Corporate Developments

Sarepta Therapeutics Announces Second Quarter 2013 Financial Results and Recent 
Corporate Developments 
Submission of New Drug Application for Eteplirsen Planned for First
Half of 2014; Preparations for Confirmatory Eteplirsen Study and
Manufacturing Scale Up Remain on Track; Well Capitalized With $164.0
Million in Cash and Other Investments With an Additional $37.9
Million Raised Post-Quarter End 
CAMBRIDGE, MA -- (Marketwired) -- 08/08/13 --  Sarepta Therapeutics,
Inc. (NASDAQ: SRPT), a developer of innovative RNA-based
therapeutics, today reported financial results for the three months
and six months ended June 30, 2013, and provided an update of recent
corporate developments. 
"We are excited that the FDA is open to an NDA filing for our drug
eteplirsen for the treatment of Duchenne muscular dystrophy and the
organization is focused on all of the activities necessary for a
successful NDA submission in the first half of next year," said Chris
Garabedian, president and chief executive officer of Sarepta
Therapeutics. "The Sarepta team is planning for success as we
continue activities related to our eteplirsen confirmatory study and
our manufacturing scale up, while we begin pre-commercial activities
to prepare for the potential approval of eteplirsen." 
Financial Results 
For the second quarter of 2013, Sarepta reported a Non-GAAP net loss
of $14.6 million, or $0.46 per share, compared to a Non-GAAP net loss
of $5.0 million for the second quarter of 2012, or $0.22 per share.
The incremental loss is primarily the result of an $8.3 million
decrease in government contract revenues as well as a $1.2 million
increase in Non-GAAP operating expenses. 
On a GAAP basis, the net loss for the second quarter of 2013 was
$19.1 million, or $0.60 per share (including $2.5 million of
stock-based employee compensation expense and restructuring expense),
compared with a net income of $8.0 million for the second quarter of
2012, or $0.35 per diluted share (including $0.4 million of
stock-based employee compensation expense). The incremental loss is
the result of a $15.4 million change in warrant valuation, an $8.3
million decrease in government contract revenues and a $3.3 million
increase in operating expenses. 
Revenue for the second quarter of 2013 was $3.0 million, down from
$11.2 million for the second quarter of 2012. The $8.3 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 second 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 that started in August 2012.  
Non-GAAP research and development expenses were $12.2 million for the
second quarter of 2013, compared to $13.6 million for the second
quarter of 2012, a decrease of $1.4 million. GAAP research and
development expenses were $13.0 million for the second quarter of
2013 (including $0.8 million of stock-based employee compensation
expense and restructuring expense), compared to $13.8 million for the
second quarter of 2012 (including $0.3 million of stock-based
employee compensation expense), a decrease of $0.8 million. 
Non-GAAP general and administrative expenses were $5.3 million for
the second quarter of 2013, compared to $2.7 million for the second
quarter of 2012, an increase of $2.6 million. GAAP general and
administrative expenses were $7.1 million for the second quarter of
2013 (including $1.7 million of stock-based employee compensation
expense and restructuring expense), compared to $2.9 million for the
second quarter of 2012 (including $0.2 million of stock-based
employee compensation expense), an increase of $4.2 million. 
The increased operating expenses were primarily caused by corporate
growth as the Company continues the development of its programs in
Duchenne muscular dystrophy and infectious diseases. 
Sarepta had cash, cash equivalents and restricted investments related
to our letters of credit of $164.0 million as of June 30, 2013
compared to $187.7 million as of December 31, 2012, a decrease of
$23.7 million. The cash was used to fund our ongoing operations in
2013. Subsequent to second quarter end and up to August 7, the
Company raised $37.9 million in proceeds and issued approximately 1.0
million shares of common stock under the At-The-Market (ATM) equity
financing that was put in place in July 2013.  
In connection with prior equity financings, Sarepta issued warrants
that are classified as current liabilities and are adjusted to fair
value on a quarterly basis with the change in fair value being
included in net loss. The amount included in net loss is a non-cash
item as Sarepta is not required to expend any cash to settle the
warrant liability. The warrant liability is primarily affected by
changes in Sarepta's stock price. In the second quarter of 2013, the
appreciation in Sarepta's stock price caused the warrant valuation to
increase, which resulted in other expense of $1.9 million. In the
second quarter of 2012, a decrease in Sarepta's stock price resulted
in other income of $13.5 million. In the first six months of 2013,
the change in the warrant liability resulted in a $28.9 million
non-cash charge to other non-operating loss and resulted in a $2.6
million non-cash increase in other non-operating income in the
comparable period in 2012. The warrant valuation gain or losses as
well as stock-based employee compensation expense and restructuring
costs related to our corporate move to Cambridge, are excluded from
our Non-GAAP results. 
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 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. We also believe these non-GAAP measures
provide our investors with useful information regarding our
historical operating results. These non-GAAP measures are not
intended to replace the presentation of our financial results in
accordance with GAAP. Use of the terms non-GAAP research and
development expenses, non-GAAP general and administrative 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 plans to submit a New Drug Application (NDA) for the
approval of eteplirsen for the treatment of Duchenne muscular
dystrophy (DMD) patients with genotypes amenable to skipping of exon
51. The decision to submit an NDA for eteplirsen was based on
productive interactions with the FDA including a meeting with the
agency in July. In pre-meeting comments, the FDA stated it was open
to considering an NDA based on results from the Phase IIb clinical
study of eteplirsen. Sarepta expects to submit the NDA to the FDA in
the first half of 2014. 
-- Announced updated data from Study 202, a Phase IIb open-label
extension study of eteplirsen in patients with DMD. Results at 84
weeks showed a continued stabilization of walking ability in
eteplirsen-treated patients evaluable on the 6-minute walk test
(6MWT). As previously reported, Study 202 met its primary endpoint of
increased novel dystrophin as assessed by muscle biopsy at week 48
and is now in the long-term extension phase in which patients
continue to be followed for safety and clinical outcomes. Eteplirsen
is Sarepta's lead exon-skipping compound in development for the
treatment of patients with DMD who have a genotype amenable to
skipping of exon 51.  
Corporate Update  
-- Entered into an At-the-Market (ATM) equity offering sales
agreement with Further Lane Securities, L.P., on July 3, 2013, under
which Sarepta may, from time to time, offer and sell shares of its
common stock having an aggregate value of up to $125 million through
Further Lane. Sarepta intends to use any proceeds from this offering
for general corporate purposes, including for manufacturing scale up
for eteplirsen, the planned confirmatory Phase III clinical study of
eteplirsen and early development activities related to follow-on
Duchenne muscular dystrophy drugs and other programs. 
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 35366636. Please specify to the operator
that you would like to join the "Sarepta Second 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 August 22, 2013
by calling 888.843.7419 or 630.652.3042 and entering access code
35366636. 
About Sarepta Therapeutics  
Sarepta Therapeutics is focused on developing first-in-class
RNA-based therapeutics to improve and save the lives of people
affected by serious and life-threatening rare and infectious
diseases. Sarepta's diverse pipeline includes its lead program
eteplirsen, for Duchenne muscular dystrophy, as well as potential
treatments for some of the world's most lethal infectious diseases.
Sarepta aims to build a leading, independent biotech company
dedicated to translating its RNA-based science into transformational
therapeutics for patients who face significant unmet medical needs.
For more information, please visit us at www.sarepta.com. 
Forward-Looking Statements and Information  
In order to provide Sarepta's investors with an understanding of its
current results and future prospects, this press release contains
statements that are forward-looking. Any statements contained in this
press release that are not statements of historical fact may be
deemed to be forward-looking statements. Words such as "believes,"
"anticipates," "plans," "expects," "will," "intends," "potential,"
"possible" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements include
statements about the potential for dystrophin as a surrogate marker,
the amount and type of data as well as our ability to provide the
data that will be necessary for the FDA's regulatory determinations
regarding eteplirsen, the safety, efficacy, development and potential
of Sarepta's product candidates, the potential and timing for
regulatory submissions and meetings, the potential and timing for
regulatory filings, review and approval of Sarepta's product
candidates (including potentially under Subpart H Accelerated
Approval), Sarepta's ability to establish and protect intellectual
property rights, Sarepta's timing and ability to manufacture product
candidates and Sarepta's estimates regarding its future revenue,
operating loss, cash reserves and expenses and expectations regarding
future success and funding from government and other sources.  
These forward-looking statements involve risks and uncertainties,
many of which are beyond Sarepta's control. Actual results could
materially differ from these forward-looking statements as a result
of such risks and uncertainties. Known risk factors include, among
others: clinical trials may not demonstrate safety and efficacy of
any of Sarepta's drug candidates and/or Sarepta's antisense-based
technology platform; development of any of Sarepta's drug candidates
may not result in funding from the U.S. government in the anticipated
amounts or on a timely basis, if at all; scale-up of manufacturing
may not be successful and any of Sarepta's drug candidates may fail
in development, may not receive required regulatory approvals
(including potentially under Subpart H Accelerated Approval), or be
delayed to a point where they do not become commercially viable;
Sarepta may need additional funds to conduct research and development
efforts; and those risks identified under the heading "Risk Factors"
in Sarepta's Quarterly Report on Form 10-Q for the quarter ended June
30, 2013, and filed with the Securities and Exchange Commission, as
well as the other information we file with the SEC.  
Any of the foregoing risks could materially and adversely affect
Sarepta's business, results of operations and the trading price of
Sarepta's common stock. For a detailed description of risks and
uncertainties Sarepta faces, you are encouraged to review the
official corporate documents filed with the Securities and Exchange
Commission. Sarepta does not undertake any obligation to publicly
update its forward-looking statements based on events or
circumstances after the date hereof. 


 
                                                                            
                         Sarepta Therapeutics, Inc.                         
                       (A Development-Stage Company)                        
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                  Three Months Ended     Six Months Ended   
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
Revenues from grants and                                                    
 research contracts              $   2,951  $  11,207  $   7,425  $  22,419 
Operating expenses:                                                         
  Research and development          12,984     13,849     26,746     28,654 
  General and administrative         7,054      2,915     13,181      6,196 
                                 ---------  ---------  ---------  --------- 
Operating loss                     (17,087)    (5,557)   (32,502)   (12,431)
                                                                            
Other non-operating income                                                  
 (loss):                                                                    
  Interest income and other, net       (19)       107        218        203 
  Income (loss) on change in                                                
   warrant liability                (1,945)    13,488    (28,851)     2,562 
                                 ---------  ---------  ---------  --------- 
Net income (loss)                $ (19,051) $   8,038  $ (61,135) $  (9,666)
                                 =========  =========  =========  ========= 
Net income (loss) per share -                                               
 basic                           $   (0.60) $    0.36  $   (1.92) $   (0.43)
                                 =========  =========  =========  ========= 
Net income (loss) per share -                                               
 diluted                         $   (0.60) $    0.35  $   (1.92) $   (0.43)
                                 =========  =========  =========  ========= 
Shares used in per share                                                    
 calculations - basic               31,984     22,624     31,899     22,624 
                                 =========  =========  =========  ========= 
Shares used in per share                                                    
 calculations - diluted             31,984     22,658     31,899     22,624 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                         Sarepta Therapeutics, Inc.                         
                       (A Development-Stage Company)                        
                Reconciliation of GAAP to Non-GAAP Net Loss                 
                  (in thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                  Three Months Ended     Six Months Ended   
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
Net income (loss) - GAAP         $ (19,051) $   8,038  $ (61,135) $  (9,666)
                                                                            
Research and development:                                                   
Stock-based compensation expense       724        259      1,254        512 
Restructuring expense                   78          0        342         16 
                                 ---------  ---------  ---------  --------- 
Total Research and development                                              
 Non-GAAP adjustments                  802        259      1,596        528 
                                                                            
General and administrative:                                                 
Stock-based compensation expense     1,593        181      2,734        636 
Restructuring expense                  131          0        329         37 
                                 ---------  ---------  ---------  --------- 
Total General and administrative                                            
 Non-GAAP adjustments                1,724        181      3,063        673 
                                                                            
Other non-operating income                                                  
 (loss):                                                                    
Adjust for change in warrant                                                
 liability                           1,945    (13,488)    28,851     (2,562)
                                 ---------  ---------  ---------  --------- 
Net loss - Non-GAAP(1)           $ (14,580) $  (5,010) $ (27,625) $ (11,027)
                                 =========  =========  =========  ========= 
Net loss per share - basic and                                              
 diluted                         $   (0.46) $   (0.22) $   (0.87) $   (0.49)
                                 =========  =========  =========  ========= 
Shares used in per share                                                    
 calculations - basic and                                                   
 diluted                            31,984     22,624     31,899     22,624 
                                 =========  =========  =========  ========= 

 
(1) Non-GAAP operating income (loss) differs from Non-GAAP net income
(loss) due to $19 of other expense, net, and $107 of net interest
income for the three months ended June 30, 2013 and June 30, 2012,
respectively, and due to $218 and $203 of net interest income for the
six months ended June 30, 2013 and June 30, 2012, respectively. 


 
                                                                            
                          BALANCE SHEET HIGHLIGHTS                          
                               (in thousands)                               
                                                     June 30,   December 31,
                                                       2013         2012    
                                                   ------------ ------------
Cash and cash equivalents                          $    156,185 $    187,661
Restricted Investments                                    7,807          ---
Total assets                                            183,633      204,993
Total liabilities                                        94,812       81,314
Total shareholders' equity                         $     88,821 $    123,679

  
Sarepta Investor Contact: 
Erin Cox
857.242.3714
ecox@sarepta.com 
Sarepta Media Contact: 
Jim Baker
857.242.3710
jbaker@sarepta.com 
 
 
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