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Sarepta (SRPT) Q3 Loss Wider-Than-Expected, Sales Lag Estimates

Sarepta Therapeutics, Inc. SRPT reported a loss of $2.94 per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $1.21 per share. The loss was also wider than the year-ago quarter’s loss of 60 cents per share.

The company reported an adjusted loss of 80 cents per share against adjusted earnings of 3 cents in the year-ago quarter. The adjusted figure excludes one-time items, depreciation and amortization expenses, interest expenses, income tax benefit, stock-based compensation expenses and other items.

Sarepta recorded total revenues of $230.3 million, up 21.6% year over year. Revenues missed the Zacks Consensus Estimate of $235.8 million. The year-over-year increase in revenues was driven by the sales of Sarepta’s three currently approved RNA-based PMO therapies for DMD.

Shares of Sarepta were down 4.8% in after-hours trading on Nov 2, likely due to the wider loss reported during the quarter. Sarepta’s shares have moved up 26.0% this year against the industry’s 21.2% decline.

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Zacks Investment Research

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Quarter in Detail

Sarepta’s commercial portfolio includes three drugs approved for treating Duchenne muscular dystrophy (“DMD”) — Exondys 51, Vyondys 53 and Amondys 45.

The company derived product revenues of $207.8 million, up 24.5% year over year. The upside was driven by an increase in demand for its DMD products.

The company recorded $22.3 million in collaboration revenues, primarily from its licensing agreement with Roche RHHBY. Collaboration revenues were flat compared with the year-ago quarter’s levels.

Sarepta and Roche entered into a licensing agreement to develop SRP-9001, its investigational gene-therapy candidate for DMD, in 2019. Per the agreement, Roche has exclusive rights to launch and commercialize SRP-9001 in ex-U.S. markets.

Adjusted research and development (R&D) expenses totaled $193.7 million in the third quarter, up 61.9% year over year. This surge is attributable to the increase in manufacturing expenses for ramping up production for SRP-9001.

Adjusted selling, general & administrative (SG&A) expenses were $66.8 million, up 53.2% year over year.

2022 Guidance

Sarepta reiterated its revenue guidance for 2022. Management expects total revenues in 2022 to be in the range of $905-$920. The company expects net product revenues for the full year to be in the range of $825-$840 million.

Pipeline Updates

In September, Sarepta along with partner announced that they have submitted a biologic license application (BLA) to the FDA seeking accelerated approval for SRP-9001 in DMD. The BLA filing is supported by data from multiple studies from the clinical development program evaluating SRP-9001 in DMD, which show that treatment with SRP-9001 led to functional improvements in individuals suffering from DMD compared with a propensity-weighted external control group at multiple times. The time points vary from one-, two- and four years post-treatment.

Management expects the SRP-9001 BLA to be eligible for priority review. If the BLA were to be granted a priority review designation, the company expects an FDA decision by May 2023-end.

During the quarter, Sarepta also announced that the FDA removed the clinical hold placed on its next-generation exon-skipping pipeline candidate, SRP-5051 (vesleteplirsen), being evaluated for treating DMD patients with skipping exon 51. The hold was set in June following a report of a severe adverse event of hypomagnesemia in the ongoing phase II MOMENTUM study. Sarepta will modify the global protocols for clinical studies evaluating SRP-5051 to include expanded monitoring of urine biomarkers as part of the condition for removing the clinical hold.

Sarepta Therapeutics, Inc. Price


Sarepta Therapeutics, Inc. Price
Sarepta Therapeutics, Inc. Price

Sarepta Therapeutics, Inc. price | Sarepta Therapeutics, Inc. Quote


Zacks Rank & Other Stocks to Consider

Sarepta currently has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the overall healthcare sector include Angion Biomedica ANGN and Gilead Sciences GILD, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estimates for Angion Biomedica’s 2022 loss per share have narrowed from $1.64 to $1.53 in the past 60 days. Angion’s loss estimates for 2023 have narrowed from $1.54 to $1.43 in the past 60 days. Shares of Angion Biomedica have plunged 66.6% in the year-to-date period.

Earnings of Angion Biomedica beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 62.85%. In the last reported quarter, ANGN delivered an earnings surprise of 34.78%.

Gilead’s stock has increased 7.3% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $6.94 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.74 per share during the same period.

Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, GILD delivered an earnings surprise of 31.94%.

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