Sarepta Therapeutics, Inc. SRPT reported a loss of $1.25 per share in the third quarter of 2015, much wider than the Zacks Consensus Estimate of a loss of $1.19 and the year-ago loss of 82 cents. Sarepta’s shares were down 3.1% following the release of third-quarter results.
The company did not generate any revenue in the third quarter of 2015 while the year-ago period generated revenues of $1.1 million. The lack of revenues in the reported quarter reflects the Jul 2014 expiration of the Marburg U.S. government contract.
Other Details
Research and development expenses shot up 67.8% year over year to $36.7 million. General and administrative expenses climbed 17.1% year over year to $15.1 million.
Sarepta’s lead pipeline candidate, eteplirsen, is currently under the FDA’s priority review for the treatment of Duchenne muscular dystrophy (DMD). A response is expected by Feb 26, 2016. But before that, eteplirsen will most likely be reviewed by the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee, tentatively on Jan 22, 2016.
In addition, Sarepta plans to seek approval for eteplirsen in the EU next year pending discussions with the European Medicines Agency scheduled before year end.
In Aug 2015, eteplirsen also received the rare pediatric disease designation from the FDA for DMD.
Meanwhile, Sarepta continues to progress with its confirmatory studies – PROMOVI (enrolment ongoing) 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 (enrolment completed) and Study 4658-203 (enrolment ongoing). 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.
The company continues enrolling patients in part II of the European dose titration Study 4053-101, which includes both additional patients with mutations amenable to exon-53 skipping as well as untreated control group with mutations not amenable to exon-53 skipping. Enrolment in this study is expected to be completed by year end.
Sarepta also initiated Study 4045-101, which is a randomized, dose titration study in the U.S. for patients 7 to 21 years of age with limited or no ambulation and mutations amenable to skipping-exon-45.
Our Take
Sarepta’s third-quarter results were disappointing with the company reporting a wider-than-expected loss. Nevertheless, 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 Pharmaceutical Inc. BMRN are working on bringing DMD treatments to the market. BioMarin's DMD candidate, drisapersen, will be reviewed by the FDA’s panel on Nov 24, 2015. BioMarin could have a two-month head start if approval comes by Dec 27, 2015.
We expect investor focus to remain on the outcome of the upcoming advisory panel meetings.
Sarepta is a Zacks Rank #4 (Sell) stock. A couple of better-ranked stocks in the health care sector are Actelion Ltd. ALIOF and Baxalta Incorporated BXLT. Both hold a Zacks Rank #1 (Strong Buy).
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