Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Sarepta's Meaningless Q1 Results

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The words of the great big-band leader Duke Ellington came to mind after hearing the first quarter results from Sarepta Therapeutics (NASDAQ: SRPT  ) : "It don't mean a thing."  Here are the highlights from those results -- and why they're practically meaningless.

Sad trombone?
If you didn't know any better, you might think that the "sad trombone" riff needs to be played while reviewing Sarepta's financial results from the first quarter. The biotech reported a non-GAAP net loss more than double that of the same quarter last year. This time around, Sarepta's non-GAAP loss totaled $13.0 million, or $0.41 per share. During the same period last year, that loss was only $6.0 million, or $0.27 per share. 

The situation didn't look any better on a GAAP basis. Sarepta announced a GAAP loss in the first quarter of $15.4 million compared to a loss of $6.9 million in the first quarter of 2012.

Sarepta didn't find a happier tune on the top line, either. Revenue for the quarter came in at $4.5 million. That figure reflects a drop of almost 60% from 2012 first quarter revenue of $11.2 million.

There were positive notes in the results, though. Sarepta's net loss, while larger year-over-year, still handily beat the average analysts' estimate of a $0.62 per share loss. Also, the company reported a cash stockpile (including cash equivalents and short-term investments) of $175.2 million as of the end of first quarter. That total is down only $12.5 million from the balance announced at the end of 2012.

Strike up the band
Shares were up more than 8% in early trading on Thursday. It wasn't because of the financial results, though.

Investors are excited about the prospects of accelerated approval for eteplirsen, which targets treatment of rare Duchenne muscular dystrophy, or DMD. Sarepta CEO Chris Garabedian said that the company is "encouraged by [its] initial interactions with the U.S. Food and Drug Administration regarding a potential accelerated approval regulatory path for eteplirsen." 

Sarepta executives stated that the company plans to submit all documents needed for the FDA to consider eteplirsen for accelerated approval by the end of May. It will also move forward with submission of its Chemical, Manufacturing, and Controls, or CMC, package to the agency.

The company is unsure how long it will take for the FDA to respond. And no one knows what that response will be.

The FDA could take a cautious stance and opt against an accelerated pathway for eteplirsen. Another experimental DMD drug -- drisapersen from GlaxoSmithKline (NYSE: GSK  )  -- reportedly resulted in patients experiencing kidney toxicity. Last quarter, Garabedian alluded to possible FDA concerns about this safety issue, but he shrugged off any worries about eteplirsen producing similar effects.

However, the FDA could just as easily give the green light for an accelerated approval pathway for eteplirsen. While the number of patients involved in previous studies was small, the results were very positive and the need for some treatment for DMD patients is great. 

Sarepta's first-quarter results really are immaterial in the bigger scheme. What really matters is eteplirsen and how quickly it can get to market. Good news on that front would get Sarepta in full swing. Nothing else means a thing for now.

While you can certainly make huge gains in biotechs like Sarepta, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2420152, ~/Articles/ArticleHandler.aspx, 10/1/2016 11:39:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 14 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:00 PM
SRPT $61.41 Up +0.43 +0.71%
Sarepta Therapeuti… CAPS Rating: **
GSK $43.13 Up +0.23 +0.54%
GlaxoSmithKline CAPS Rating: ***