Sarepta Therapeutics, Inc. SRPT reported a loss of $1.01 per share in the second quarter of 2015, much narrower than the Zacks Consensus Estimate of a loss of $1.21 but wider than the year-ago loss of 75 cents. Sarepta’s shares gained 5.8% following the release of second-quarter results.
The company did not generate any revenue in the second quarter of 2015 while the year-ago period reflected revenues of $2.6 million. The lack of revenues in the reported quarter reflects the Jul 2014 expiration of the Marburg U.S. government contract. As per the Zacks Consensus Estimate, the company was expected to record revenues of $1.1 million.
Other Details
Research and development expenses climbed 41.4% year over year to $29.2 million. General and administrative expenses increased 5.8% year over year to $12.9 million.
Sarepta finished submitting a rolling new drug application for eteplirsen at the end of June this year. Eteplirsen will come up before the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee in late November this year. Priority review would mean a response from the FDA in late February.
In addition, Sarepta plans to seek approval for eteplirsen in the EU next year pending discussions with the European Medicines Agency scheduled for year end.
Eteplirsen is the company’s lead pipeline candidate, being evaluated for the treatment of Duchenne muscular dystrophy (DMD).
Meanwhile, Sarepta continues to progress with its confirmatory studies – PROMOVI (enrolment expected to be completed by the end of 2015) and Study 4045-301 (Essence – including both patients amenable to either exon 45 skipping or exon 53 skipping).
Other eteplirsen focused studies with mutations amenable to exon skipping 51 include Study 4658-204 (enrollment completed) and Study 4658-203 (dosing initiated). While Study 4658-204 is being conducted in primarily non-ambulatory boys up to 21 years of age, Study 4658-203 is being conducted in boys between 4-6 years of age.
With the first part of the European dose titration Study 4053-101 in patients with mutations amenable to skipping exon-53 been completed, the company has started enrolment in the second part which includes additional patients with mutations amenable to exon-53 skipping as well as untreated control group with mutations not amenable to exon-53 skipping. Enrollment in this study is expected to be completed by year end.
Sarepta also plans to initiate Study 4045-101, which will be a dose titration study in the U.S. for patients up to 21 years of age with mutations amenable to skipping-exon-45 and limited or no ambulation.
Our Take
Sarepta’s second-quarter results were encouraging with the company reporting a narrower-than-expected loss. We are encouraged by the company’s progress with eteplirsen. Eteplirsen, if developed successfully, would be able to capture a major share of this orphan disease market and its approval would be a huge boost for the company.
However, we note that several companies including BioMarin BMRN are working on bringing DMD treatments to the market. BioMarin completed filing for its DMD candidate, drisapersen, at the end of April and could gain approval by Dec 27. BioMarin could have a head start if approval comes on schedule.
Sarepta currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Actelion Ltd. ALIOF and Gilead Sciences Inc. GILD. Both hold a Zacks Rank #1 (Strong Buy).
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