srpt-10q_20200630.htm
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Risks

 

 

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 June 30, 2020

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: (617274-4000

 

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

  

78,505,415

(Class)

  

(Outstanding as of July 31, 2020)

 

 

 

 


SAREPTA THERAPEUTICS, INC.

FORM 10-Q

INDEX

 

 

 

 

 

Page

PART I — FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets — As of June 30, 2020 and December 31, 2019

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss — For the Three and Six Months Ended June 30, 2020 and 2019

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity – For the Three and Six Months Ended June 30, 2020 and 2019

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows — For the Six Months Ended June 30, 2020
and 2019

 

6

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

7

 

 

 

 

 

Item 2.

 

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

 

20

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

35

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

35

 

 

 

 

 

PART II — OTHER INFORMATION

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

36

 

 

 

 

 

Item 1A.

 

Risk Factors

 

36

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

70

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

70

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

70

 

 

 

 

 

Item 5.

 

Other Information

 

70

 

 

 

 

 

Item 6.

 

Exhibits

 

70

 

 

 

 

 

Exhibits

 

71

 

 

 

 

 

Signatures

 

72

 

 

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

June 30, 2020

 

 

As of

December 31, 2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,639,959

 

 

$

835,080

 

Short-term investments

 

 

421,349

 

 

 

289,668

 

Accounts receivable

 

 

104,028

 

 

 

90,879

 

Inventory

 

 

179,650

 

 

 

171,379

 

Other current assets

 

 

114,435

 

 

 

81,907

 

Total current assets

 

 

2,459,421

 

 

 

1,468,913

 

Property and equipment, net

 

 

153,340

 

 

 

129,620

 

Intangible assets, net

 

 

13,105

 

 

 

12,497

 

Right of use assets

 

 

74,197

 

 

 

37,933

 

Other non-current assets

 

 

182,980

 

 

 

173,859

 

Total assets

 

$

2,883,043

 

 

$

1,822,822

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

91,660

 

 

$

68,094

 

Accrued expenses

 

 

159,088

 

 

 

185,527

 

Deferred revenue, current portion

 

 

89,311

 

 

 

3,303

 

Other current liabilities

 

 

14,837

 

 

 

7,843

 

Total current liabilities

 

 

354,896

 

 

 

264,767

 

Long-term debt

 

 

694,156

 

 

 

681,900

 

Lease liabilities

 

 

72,401

 

 

 

47,720

 

Deferred revenue, net of current portion

 

 

708,476

 

 

 

 

Other non-current liabilities

 

 

10,248

 

 

 

10,248

 

Total liabilities

 

 

1,840,177

 

 

 

1,004,635

 

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; 78,432,246

   and 75,184,863 issued and outstanding at June 30, 2020 and

   December 31, 2019, respectively

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

3,505,165

 

 

 

3,112,130

 

Accumulated other comprehensive income, net of tax

 

 

6

 

 

 

50

 

Accumulated deficit

 

 

(2,462,313

)

 

 

(2,294,001

)

Total stockholders’ equity

 

 

1,042,866

 

 

 

818,187

 

Total liabilities and stockholders’ equity

 

$

2,883,043

 

 

$

1,822,822

 

 

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

June 30,

 

 

For the Six Months Ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products, net

 

$

111,344

 

 

$

94,668

 

 

$

211,792

 

 

$

181,679

 

Collaboration

 

 

26,019

 

 

 

 

 

 

39,245

 

 

 

 

Total revenues

 

 

137,363

 

 

 

94,668

 

 

 

251,037

 

 

 

181,679

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

13,341

 

 

 

15,919

 

 

 

25,963

 

 

 

27,982

 

Research and development

 

 

188,522

 

 

 

113,266

 

 

 

324,666

 

 

 

203,819

 

Selling, general and administrative

 

 

73,688

 

 

 

67,393

 

 

 

156,456

 

 

 

127,959

 

Acquired in-process research and development

 

 

 

 

 

173,240

 

 

 

 

 

 

173,240

 

Amortization of in-licensed rights

 

 

165

 

 

 

217

 

 

 

331

 

 

 

433

 

Total cost and expenses

 

 

275,716

 

 

 

370,035

 

 

 

507,416

 

 

 

533,433

 

Operating loss

 

 

(138,353

)

 

 

(275,367

)

 

 

(256,379

)

 

 

(351,754

)

Other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from sale of Priority Review Voucher

 

 

 

 

 

 

 

 

108,069

 

 

 

 

Other expense, net

 

 

(12,447

)

 

 

(862

)

 

 

(19,867

)

 

 

(1,034

)

Total other (loss) income

 

 

(12,447

)

 

 

(862

)

 

 

88,202

 

 

 

(1,034

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense

 

 

(150,800

)

 

 

(276,229

)

 

 

(168,177

)

 

 

(352,788

)

Income tax expense

 

 

20

 

 

 

174

 

 

 

135

 

 

 

258

 

Net loss

 

 

(150,820

)

 

 

(276,403

)

 

 

(168,312

)

 

 

(353,046

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on investments, net of tax

 

 

(618

)

 

 

63

 

 

 

(44

)

 

 

181

 

Total other comprehensive (loss) income

 

 

(618

)

 

 

63

 

 

 

(44

)

 

 

181

 

Comprehensive loss

 

$

(151,438

)

 

$

(276,340

)

 

$

(168,356

)

 

$

(352,865

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(1.93

)

 

$

(3.74

)

 

$

(2.18

)

 

$

(4.85

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock used in

   computing basic and diluted net loss per share

 

 

77,968

 

 

 

73,958

 

 

 

77,200

 

 

 

72,850

 

 

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, 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

 

77,958

 

 

$

8

 

 

$

3,455,689

 

 

$

624

 

 

$

(2,311,493

)

 

$

1,144,828

 

Exercise of options for common stock

 

449

 

 

 

 

 

 

21,860

 

 

 

 

 

 

 

 

 

 

21,860

 

Vest of restricted stock units, net of

   cancellations

 

25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

27,616

 

 

 

 

 

 

 

 

 

27,616

 

Unrealized losses from available-for-sale

   securities, net of tax

 

 

 

 

 

 

 

 

 

 

(618

)

 

 

 

 

 

(618

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(150,820

)

 

 

(150,820

)

Balance at June 30, 2020

 

78,432

 

 

$

8

 

 

$

3,505,165

 

 

$

6

 

 

$

(2,462,313

)

 

$

1,042,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Loss) Income

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2018

 

71,072

 

 

$

7

 

 

$

2,611,294

 

 

$

(99

)

 

$

(1,578,926

)

 

$

1,032,276

 

Exercise of options for common stock

 

382

 

 

 

 

 

 

9,973

 

 

 

 

 

 

 

 

 

9,973

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld for taxes

 

(7

)

 

 

 

 

 

(889

)

 

 

 

 

 

 

 

 

(889

)

Issuance of common stock for cash, net of

   offering costs

 

2,604

 

 

 

 

 

 

365,264

 

 

 

 

 

 

 

 

 

365,264

 

Issuance of common stock under employee

   stock purchase plan

 

48

 

 

 

 

 

 

2,326

 

 

 

 

 

 

 

 

 

2,326

 

Stock-based compensation

 

 

 

 

 

 

 

16,139

 

 

 

 

 

 

 

 

 

16,139

 

Unrealized gains from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

118

 

 

 

 

 

 

118

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(76,643

)

 

 

(76,643

)

Balance at March 31, 2019

 

74,134

 

 

$

7

 

 

$

3,004,107

 

 

$

19

 

 

$

(1,655,569

)

 

$

1,348,564

 

Exercise of options for common stock

 

176

 

 

 

 

 

 

7,092

 

 

 

 

 

 

 

 

 

7,092

 

Grant of restricted stock awards and vest of

   restricted stock units, net of cancellations

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash, net of

   offering costs

 

 

 

 

 

 

 

89

 

 

 

 

 

 

 

 

 

89

 

Stock-based compensation

 

 

 

 

 

 

 

19,762

 

 

 

 

 

 

 

 

 

19,762

 

Unrealized gains from available-for-sale

   securities

 

 

 

 

 

 

 

 

 

 

63

 

 

 

 

 

 

63

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(276,403

)

 

 

(276,403

)

Balance at June 30, 2019

 

74,328

 

 

$

7

 

 

$

3,031,050

 

 

$

82

 

 

$

(1,931,972

)

 

$

1,099,167

 

 

5


SAREPTA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

For the Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(168,312

)

 

$

(353,046

)

Adjustments to reconcile net loss to cash flows from operating activities:

 

 

 

 

 

 

 

 

Gain from sale of Priority Review Voucher, net of commission

 

 

(108,069

)

 

 

 

Acquired in-process research and development

 

 

 

 

 

173,240

 

Depreciation and amortization

 

 

13,004

 

 

 

11,113

 

Reduction in the carrying amounts of the right of use assets

 

 

5,389

 

 

 

2,951

 

Amortization of investment discount

 

 

(1,928

)

 

 

(5,800

)

Non-cash interest expense

 

 

12,217

 

 

 

10,513

 

Stock-based compensation

 

 

51,640

 

 

 

35,901

 

Other

 

 

(800

)

 

 

892

 

Changes in operating assets and liabilities, net:

 

 

 

 

 

 

 

 

Net increase in accounts receivable

 

 

(13,149

)

 

 

(7,937

)

Net increase in inventory

 

 

(8,271

)

 

 

(31,124

)

Net increase in other assets

 

 

(44,309

)

 

 

(87,708

)

Net increase in deferred revenue

 

 

794,484

 

 

 

 

Net (decrease) increase in accounts payable, accrued expenses and other liabilities

 

 

(11,709

)

 

 

25,768

 

Net cash provided by (used in) operating activities

 

 

520,187

 

 

 

(225,237

)