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Sarepta (SRPT) Q3 Loss Widens Y/Y, Revenues Beat Estimates
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Sarepta Therapeutics, Inc. (SRPT - Free Report) incurred an adjusted loss of $1.14 per share in the third quarter of 2019, wider than the year-ago loss of 56 cents per share. The wider year-over-year loss can be primarily attributed to a significant rise in operating expenses.
Notably, the adjusted figure excludes one-time items, depreciation & amortization expenses, interest expenses, and income tax benefit. Including all these items, the company incurred a loss of $1.70 per share compared with a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.34.
Meanwhile, Sarepta’s Exondys 51 — approved for treating Duchenne muscular dystrophy (“DMD”) — continued with its strong performance. The company derives revenues solely from the sale of Exondys 51. Sarepta recorded total revenues of $99 million, up 4.5% sequentially, which beat the Zacks Consensus Estimate of $97.5 million. In the prior-year quarter, Sarepta had earned revenues of $78.5 million.
Shares of Sarepta have declined 14.5% so far this year against the industry’s increase of 0.2%.
Operating Expenses
Adjusted research and development (R&D) expenses totaled $110.5 million in the third quarter, up 72.1% year over year. The increase was primarily due to the ramp-up of manufacturing activities for micro-dystrophin program, partially offset by lower cost due to winding down of activities on the Utrophin platform by Sarepta’s partner, Summit.
Adjusted selling, general & administrative (SG&A) expenses were $59.6 million, up 40.2% year over year. Higher costs related to the global commercial expansion of its products and increased personnel expenses increased SG&A expenses.
Sarepta’s cost of sales was also higher, reflecting higher product costs due to rising demand for Exondys 51. Royalty payments to BioMarin (BMRN - Free Report) per the terms of the 2017 settlement and license agreements related to the latter’s exon-skipping technology used in DMD therapies also drove cost of sales.
Pipeline Update
In August, the FDA issued a complete response letter ("CRL") to the new drug application (“NDA”) seeking accelerated approval for its most advanced DMD candidate, golodirsen. The regulatory authority cited two concerns — the risk of infections related to intravenous infusion ports and renal toxicity seen in pre-clinical models. Sarepta is working with the FDA to address the issues raised in the CRL and find a path to get the candidate approved as early as possible.
Moreover, Sarepta stated on its third-quarter earnings call that it will submit a NDA for its second DMD candidate, casimersen, after getting clarity on golodirsen NDA.
Meanwhile, the company is conducting a phase II study — MOMENTUM — on its next-generation PPMO platform candidate, SRP-5051, in DMD patient amenable to exon 51 skipping, an indication similar to Exondys 51.
Sarepta is progressing well with the development of the micro-dystrophin gene therapy candidate, SRP-9001, in a phase II study in DMD patients. Dosing of 24 patients has been completed.
Sarepta Therapeutics, Inc. Price, Consensus and EPS Surprise
Vertex’s earnings per share estimates have moved up from $4.58 to $4.81 for 2019 and from $6.03 to $6.62 for 2020 in the past 30 days. The company delivered a positive earnings surprise in all the trailing four quarters, with the average being 17.59%. Share price of the company has increased 18.2% so far this year.
Estimates for Alkermes have moved up from earnings of 36 cents to 52 cents for 2019 and from a loss of 11 cents to earnings of 42 cents for 2020 in the past 30 days. The company pulled off a positive earnings surprise in all the last four quarters, with the average being 236.8%.
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Sarepta (SRPT) Q3 Loss Widens Y/Y, Revenues Beat Estimates
Sarepta Therapeutics, Inc. (SRPT - Free Report) incurred an adjusted loss of $1.14 per share in the third quarter of 2019, wider than the year-ago loss of 56 cents per share. The wider year-over-year loss can be primarily attributed to a significant rise in operating expenses.
Notably, the adjusted figure excludes one-time items, depreciation & amortization expenses, interest expenses, and income tax benefit. Including all these items, the company incurred a loss of $1.70 per share compared with a loss of $1.15 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.34.
Meanwhile, Sarepta’s Exondys 51 — approved for treating Duchenne muscular dystrophy (“DMD”) — continued with its strong performance. The company derives revenues solely from the sale of Exondys 51. Sarepta recorded total revenues of $99 million, up 4.5% sequentially, which beat the Zacks Consensus Estimate of $97.5 million. In the prior-year quarter, Sarepta had earned revenues of $78.5 million.
Shares of Sarepta have declined 14.5% so far this year against the industry’s increase of 0.2%.
Operating Expenses
Adjusted research and development (R&D) expenses totaled $110.5 million in the third quarter, up 72.1% year over year. The increase was primarily due to the ramp-up of manufacturing activities for micro-dystrophin program, partially offset by lower cost due to winding down of activities on the Utrophin platform by Sarepta’s partner, Summit.
Adjusted selling, general & administrative (SG&A) expenses were $59.6 million, up 40.2% year over year. Higher costs related to the global commercial expansion of its products and increased personnel expenses increased SG&A expenses.
Sarepta’s cost of sales was also higher, reflecting higher product costs due to rising demand for Exondys 51. Royalty payments to BioMarin (BMRN - Free Report) per the terms of the 2017 settlement and license agreements related to the latter’s exon-skipping technology used in DMD therapies also drove cost of sales.
Pipeline Update
In August, the FDA issued a complete response letter ("CRL") to the new drug application (“NDA”) seeking accelerated approval for its most advanced DMD candidate, golodirsen. The regulatory authority cited two concerns — the risk of infections related to intravenous infusion ports and renal toxicity seen in pre-clinical models. Sarepta is working with the FDA to address the issues raised in the CRL and find a path to get the candidate approved as early as possible.
Moreover, Sarepta stated on its third-quarter earnings call that it will submit a NDA for its second DMD candidate, casimersen, after getting clarity on golodirsen NDA.
Meanwhile, the company is conducting a phase II study — MOMENTUM — on its next-generation PPMO platform candidate, SRP-5051, in DMD patient amenable to exon 51 skipping, an indication similar to Exondys 51.
Sarepta is progressing well with the development of the micro-dystrophin gene therapy candidate, SRP-9001, in a phase II study in DMD patients. Dosing of 24 patients has been completed.
Sarepta Therapeutics, Inc. Price, Consensus and EPS Surprise
Sarepta Therapeutics, Inc. price-consensus-eps-surprise-chart | Sarepta Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Sarepta currently carries a Zacks Rank #4 (Sell).
A couple of better-ranked stocks in the biotech sector are Vertex Pharmaceuticals Inc. (VRTX - Free Report) and Alkermes plc (ALKS - Free Report) . Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vertex’s earnings per share estimates have moved up from $4.58 to $4.81 for 2019 and from $6.03 to $6.62 for 2020 in the past 30 days. The company delivered a positive earnings surprise in all the trailing four quarters, with the average being 17.59%. Share price of the company has increased 18.2% so far this year.
Estimates for Alkermes have moved up from earnings of 36 cents to 52 cents for 2019 and from a loss of 11 cents to earnings of 42 cents for 2020 in the past 30 days. The company pulled off a positive earnings surprise in all the last four quarters, with the average being 236.8%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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