By a News Reporter-Staff News Editor at Investment Weekly News -- Sarepta Therapeutics, Inc. (NASDAQ: SRPT), a developer of innovative RNA-based therapeutics, reported financial results for the three and six months ended June 30, 2014, and provided an update of recent corporate developments.
"We've made tremendous progress in advancing our eteplirsen clinical trials and are ready to begin our confirmatory ambulatory study this month, the first of three new studies with eteplirsen," said President and Chief Executive Office Chris Garabedian. "We continue to work on preparing our NDA submissions, while making progress on both our additional studies with eteplirsen and studies with follow-on exon-skipping drug candidates for Duchenne muscular dystrophy patients with other genotypes." Financial Results For the second quarter of 2014, Sarepta reported a non-GAAP net loss of $24.5 million, or $0.61 per share, compared to a non-GAAP net loss of $14.6 million for the second quarter of 2013, or $0.46 per share. The incremental loss of $9.9 million was primarily the result of increased research and development and general and administrative expenses as a result of corporate growth.
On a GAAP basis, the net loss for the second quarter of 2014 was $33.9 million, or $0.85 per share (including $5.6 million of stock-based compensation and restructuring expenses), compared to a net loss of $19.1 million, or $0.60 per share (including $2.5 million of stock-based compensation and restructuring expenses) for the second quarter of 2013. The increase in net loss is primarily due to an increase of $12.8 million in operating expenses, an increase of $1.8 million in loss on change in warrant valuation and a decrease of $0.4 million in contract revenue.
Revenue for the second quarter of 2014 was $2.6 million, down from $3.0 million for the second quarter of 2013. The $0.4 million decrease was primarily due to decreases in revenue from the Company's government contracts.
Non-GAAP research and development expenses were $18.3 million for the second quarter of 2014, compared to $12.2 million for the second quarter of 2013, an increase of $6.1 million. GAAP research and development expenses were $20.6 million for the second quarter of 2014 (including $2.3 million of stock-based compensation and restructuring expenses), compared to $13.0 million for the second quarter of 2013 (including $0.8 million of stock-based compensation and restructuring expenses), an increase of $7.6 million.
Non-GAAP general and administrative expenses were $9.0 million for the second quarter of 2014, compared to $5.3 million for the second quarter of 2013, an increase of $3.7 million. GAAP general and administrative expenses were $12.2 million for the second quarter of 2014 (including $3.2 million of stock-based compensation expense), compared to $7.1 million for the second quarter of 2013 (including $1.7 million of stock-based compensation and restructuring expenses), an increase of $5.1 million.
The increase in operating expenses was primarily caused by corporate growth, including an expansion of manufacturing, pre-commercial and medical affairs activities as the Company prepares for the possibility of a product approval next year. The company also continues to expand clinical and regulatory activities in support of the development of its programs in Duchenne muscular dystrophy (DMD).
The Company had cash, cash equivalents, short-term investments and restricted investments related to a letter of credit of $284.2 million as of June 30, 2014 compared to $264.9 million as of December 31, 2013, an increase of $19.3 million. The increase was primarily driven by the net proceeds received from the Company's public offering in April 2014, offset by the use of cash to fund the Company's ongoing operations in the first half of 2014.
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 operating 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. The Company also believes these non-GAAP measures provide the Company's investors with useful information regarding the Company's historical operating results. These non-GAAP measures are not intended to replace the presentation of the Company's financial results in accordance with GAAP. Use of the terms non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating 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." 2014 Guidance The Company now expects that Non-GAAP loss from operations will range from $135 to $145 million, as compared with its previous guidance of $110 to $120 million. In addition, The Company is anticipating capital investments of approximately $25 million for the remainder of 2014 in connection with its manufacturing facility in Andover and 2015 inventory commitments. The Company is not able to provide a reconciliation of this Non-GAAP guidance to its relevant GAAP measure because full year loss from operations could include incremental stock compensation expense related to the achievement of certain criteria for performance awards. Recent Corporate Developments Duchenne Muscular Dystrophy Program -- Announced updated data from Study 202, a Phase IIb open-label extension study of eteplirsen in patients with DMD. Results on the 6-minute walk test (6MWT) at 144 weeks showed a decline in walking ability at a rate slower than would be expected based on available DMD natural history data. In addition, a continued stabilization of respiratory muscle function was observed. 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. Corporate Updates -- Acquisition of the multifunctional manufacturing facility on 26 acres of land in Andover, Massachusetts supports large-scale manufacturing needs.
Keywords for this news article include: Muscular Dystrophies, Investment and Finance, Neuromuscular Diseases, Inborn Genetic Diseases, Nervous System Diseases, Sarepta Therapeutics Inc, Atrophic Muscular Disorders.
Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2014, NewsRx LLC