Sarepta Therapeutics (SRPT 6.09%) has taken investors on a roller-coaster ride so far in 2019. The stock has swung up and down multiple times -- and not always because of something the biotech itself did. For example, in June, Sarepta's share price soared due to Pfizer announcing disappointing results for its experimental Duchenne muscular dystrophy (DMD) drug.
Sarepta reported its second-quarter results after the market closed on Wednesday. Investors didn't seem very happy with those results, though, with shares falling over 2% in after-hours trading. Here are the highlights from the company's Q2 update.
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By the numbers
Sarepta announced Q2 revenue of $94.7 million, a 29% increase from the $73.5 million reported in the same quarter of the previous year. This result was higher than the average analysts' revenue estimate of $90.94 million.
The company reported a net loss in the second quarter of $276.4 million, or $3.74 per share, on a generally accepted accounting principles (GAAP) basis. This was significantly worse than the net loss of $109.3 million, or $1.67 per share, posted in the same period in 2018.
Sarepta announced a non-GAAP adjusted net loss in the second quarter of $61.2 million, or $0.83 per share, compared to the prior-year period adjusted net loss of $28 million, or $0.43 per share. Wall Street analysts estimated that Sarepta would post a net loss of $1.37 per share in the quarter.
Behind the numbers
Sarepta's Q2 revenue came solely from its DMD drug Exondys 51. The company reported continued increasing demand for the drug in the U.S.
Despite the better-than-expected sales growth for Exondys 51, Sarepta's bottom line deteriorated from the prior-year period. The company's cost of sales increased significantly. Sarepta paid higher royalty payments to BioMarin and the University of Western Australia. It also incurred an inventory write-off related to some batches of Exondys 51 failing to meet quality specifications.
Although Sarepta's research and development costs fell nearly 21% year over year to $203.8 million, its selling, general, and administrative (SG&A) expenses soared 43% to $67.4 million. This increase was due primarily to higher personnel, professional services, facility, and technology costs.
The company also recorded an expense of $173.2 million in the second quarter related to its acquisition of Myonexus Therapeutics. Sarepta announced in February that it planned to exercise its option to acquire the clinical-stage biotech focused on developing gene therapies.
Looking ahead
Sarepta Therapeutics CEO Doug Ingram said that the company has "much to do in the second half of 2019." He's right.
The U.S. Food and Drug Administration (FDA) is scheduled to announce its approval decision for Vyondys 53 (golodirsen) by Aug. 19. Sarepta is planning to launch the drug pending its approval. It also is preparing to submit casimersen for FDA approval in hopes of getting a green light for the drug in the first half of 2020.
