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Sarepta (SRPT) Q2 Loss Narrower Than Expected, Sales Miss
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Sarepta Therapeutics, Inc. (SRPT - Free Report) reported a loss of 27 cents per share in the second quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of $1.89.
However, the loss included depreciation and amortization expenses, stock-based compensation expenses and one-time gains from the sale of priority review voucher. The adjusted loss for the quarter was 85 cents per share, narrower than the year-ago period’s adjusted loss of $1.18 per share.
Sarepta recorded total revenues of $261.2 million, up 12% year over year. The year-over-year increase in revenues was driven by sales of Sarepta’s three currently-approved RNA-based PMO therapies for Duchenne muscular dystrophy (DMD).The reported revenues missed the Zacks Consensus Estimate of $264.5 million.
In the year so far, Sarepta’s shares have declined 18.8% compared with the industry’s 12.3% fall.
Image Source: Zacks Investment Research
Quarter in Detail
Sarepta’s commercial portfolio includes three approved PMO therapies for treating Duchenne muscular dystrophy (“DMD”) — Exondys 51, Vyondys 53 and Amondys 45.
The company’s product revenues were up 13% year over year at $239.0 million, entirely derived from the sale of the above three DMD drugs. The upside was driven by an increase in demand for DMD products. The reported product sales beat our model estimates of $235 million.
The company recorded $22.3 million in collaboration revenues, primarily from its licensing agreement with Roche (RHHBY - Free Report) . In the year-ago period, management recorded $22.0 million as collaboration revenues, which were also received from Roche.
Sarepta and Roche entered into a licensing agreement in 2019 to develop Elevidys (delandistrogene moxeparvovec, or SRP-9001), a one-shot gene therapy for DMD which recently received accelerated approval from the FDA. Per the agreement, Roche has exclusive rights to launch and commercialize Elevidys in ex-U.S. markets.
During the quarter, Sarepta did not generate any revenues from Elevidys.
Adjusted research and development (R&D) expenses totaled $212.2 million in the second quarter, down 8% year over year. This downside is attributable to a decline in manufacturing expenses incurred during the quarter, partially offset by an increase in clinical study expenses.
Adjusted selling, general & administrative (SG&A) expenses were $90.3 million, up 42% year over year. The upside was driven primarily by an increase in professional service expenses incurred by the company for Elevidys’ launch.
2023 Guidance
Sarepta reiterated its previously issued product revenue guidance for the three approved PMO drugs, which are expected to generate more than $925 million in 2023. Management did not issue a guidance on Elevidys sales stating that it will continue to evaluate the gene-therapy’s demand to provide accurate guidance.
Pipeline Updates
In June, Sarepta announced that the FDA granted accelerated approval to Elevidys. Following this approval, Elevidys is the first and currently the only one-shot gene therapy approved for treating DMD. Alongside second-quarter results, Sarepta announced that the first patient received the commercially reimbursed Elevidys on Aug 2.
Though the FDA has restricted the use of Elevidys in ambulatory DMD patients aged between four and five years, it has stated that it will grant a non-age-restricted expansion to the gene therapy provided the phase III EMBARK study achieves its objectives. The EMBARK study is the proposed confirmatory study that will seek full approval for Elevidys in DMD indication. Top-line results from the EMBARK study are expected before this year’s end.
To satisfy regulatory requirements for Elevidys’ approval outside the United States, Sarepta recently initiated the phase III ENVISION study to evaluate the safety and efficacy of gene therapy in non-ambulatory and ambulatory DMD patients.
During the second quarter, Sarepta successfully dosed the first patient in the phase I NAVIGENE study, which is evaluating SRP-6004, an investigational gene therapy candidate for treating ambulatory patients living with LGMD2B/R2 (dysferlinopathy).
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 3.8% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimate for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.89 and $7.28 to $7.45, respectively. Shares of Novartis are up 13.3% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.
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Sarepta (SRPT) Q2 Loss Narrower Than Expected, Sales Miss
Sarepta Therapeutics, Inc. (SRPT - Free Report) reported a loss of 27 cents per share in the second quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of $1.89.
However, the loss included depreciation and amortization expenses, stock-based compensation expenses and one-time gains from the sale of priority review voucher. The adjusted loss for the quarter was 85 cents per share, narrower than the year-ago period’s adjusted loss of $1.18 per share.
Sarepta recorded total revenues of $261.2 million, up 12% year over year. The year-over-year increase in revenues was driven by sales of Sarepta’s three currently-approved RNA-based PMO therapies for Duchenne muscular dystrophy (DMD).The reported revenues missed the Zacks Consensus Estimate of $264.5 million.
In the year so far, Sarepta’s shares have declined 18.8% compared with the industry’s 12.3% fall.
Image Source: Zacks Investment Research
Quarter in Detail
Sarepta’s commercial portfolio includes three approved PMO therapies for treating Duchenne muscular dystrophy (“DMD”) — Exondys 51, Vyondys 53 and Amondys 45.
The company’s product revenues were up 13% year over year at $239.0 million, entirely derived from the sale of the above three DMD drugs. The upside was driven by an increase in demand for DMD products. The reported product sales beat our model estimates of $235 million.
The company recorded $22.3 million in collaboration revenues, primarily from its licensing agreement with Roche (RHHBY - Free Report) . In the year-ago period, management recorded $22.0 million as collaboration revenues, which were also received from Roche.
Sarepta and Roche entered into a licensing agreement in 2019 to develop Elevidys (delandistrogene moxeparvovec, or SRP-9001), a one-shot gene therapy for DMD which recently received accelerated approval from the FDA. Per the agreement, Roche has exclusive rights to launch and commercialize Elevidys in ex-U.S. markets.
During the quarter, Sarepta did not generate any revenues from Elevidys.
Adjusted research and development (R&D) expenses totaled $212.2 million in the second quarter, down 8% year over year. This downside is attributable to a decline in manufacturing expenses incurred during the quarter, partially offset by an increase in clinical study expenses.
Adjusted selling, general & administrative (SG&A) expenses were $90.3 million, up 42% year over year. The upside was driven primarily by an increase in professional service expenses incurred by the company for Elevidys’ launch.
2023 Guidance
Sarepta reiterated its previously issued product revenue guidance for the three approved PMO drugs, which are expected to generate more than $925 million in 2023. Management did not issue a guidance on Elevidys sales stating that it will continue to evaluate the gene-therapy’s demand to provide accurate guidance.
Pipeline Updates
In June, Sarepta announced that the FDA granted accelerated approval to Elevidys. Following this approval, Elevidys is the first and currently the only one-shot gene therapy approved for treating DMD. Alongside second-quarter results, Sarepta announced that the first patient received the commercially reimbursed Elevidys on Aug 2.
Though the FDA has restricted the use of Elevidys in ambulatory DMD patients aged between four and five years, it has stated that it will grant a non-age-restricted expansion to the gene therapy provided the phase III EMBARK study achieves its objectives. The EMBARK study is the proposed confirmatory study that will seek full approval for Elevidys in DMD indication. Top-line results from the EMBARK study are expected before this year’s end.
To satisfy regulatory requirements for Elevidys’ approval outside the United States, Sarepta recently initiated the phase III ENVISION study to evaluate the safety and efficacy of gene therapy in non-ambulatory and ambulatory DMD patients.
During the second quarter, Sarepta successfully dosed the first patient in the phase I NAVIGENE study, which is evaluating SRP-6004, an investigational gene therapy candidate for treating ambulatory patients living with LGMD2B/R2 (dysferlinopathy).
Sarepta Therapeutics, Inc. Price
Sarepta Therapeutics, Inc. price | Sarepta Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Sarepta currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the healthcare sector include Johnson & Johnson (JNJ - Free Report) and Novartis (NVS - Free Report) , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 3.8% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimate for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.89 and $7.28 to $7.45, respectively. Shares of Novartis are up 13.3% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.