This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33. ...

Sarepta Therapeutics Inc. SRPT reported on Tuesday that the first-quarter 2025 loss of $3.42 per share was missing the analyst consensus estimate of losses of 95 cents.Quarterly revenue came in at $744.86 million, beating the consensus estimate of $683.36 million.According to Sarepta CEO Doug Ingram, the company also faced headwinds in the quarter. “While we are taking a variety of actions to address and resolve these challenges, we have adjusted our guidance for 2025 to $2.3 billion to $2.6 billion,” Ingra ...

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures [1][2] Group 1 - There is no stock, option, or similar derivative position in any of the companies mentioned, nor are there plans to initiate such positions within the next 72 hours [1] - The article expresses personal opinions and is not receiving compensation from any company mentioned [1] - The views expressed may not reflect those of Seeking Alpha as a whole, and the analysts may not be licensed or certified [2]

Core Viewpoint - Sarepta Therapeutics reported a significant adjusted loss in Q1 2025, primarily due to a one-time charge related to a multi-billion-dollar deal with Arrowhead Pharmaceuticals, missing earnings expectations by a wide margin [1][2] Financial Performance - The company recorded total revenues of $744.9 million, an 80% increase year over year, driven by sales of Elevidys, surpassing the Zacks Consensus Estimate of $698.2 million [3] - Product revenues rose 70% year over year to $611.5 million, although this figure fell short of the Zacks Consensus Estimate of $664 million [4] - Elevidys sales generated $375 million, down from $384.2 million in the previous quarter, missing estimates due to safety concerns and site-related constraints [5] - Collaboration and other revenues associated with Elevidys supply to Roche amounted to approximately $133.3 million, significantly up from $54 million in the year-ago period [6] Operating Costs - Adjusted R&D expenses surged to $749.2 million from $178.1 million year over year, reflecting increased costs related to the Arrowhead deal [8] - Adjusted SG&A expenses totaled $107.1 million, a 7% increase year over year, driven by higher professional service expenses [9] Guidance and Market Reaction - Sarepta revised its full-year net product revenue guidance to between $2.3 billion and $2.6 billion, down from a previous forecast of $2.9-$3.1 billion, citing safety concerns and administrative complexities [10] - Following the revised guidance, shares of Sarepta fell 21% in after-hours trading, with a year-to-date decline of 62% compared to a 3% decline in the industry [11] Pipeline Developments - The company is advancing several investigational gene therapies, including SRP-9003 for Limb-girdle muscular dystrophy and SRP-6004 for LGMD type 2B/R2, with data expected in 2025 [17][18] - Sarepta's licensing agreement with Roche for Elevidys allows Roche exclusive rights to market the product in non-U.S. markets, which has implications for revenue generation [7]

Financial Performance & Guidance - Sarepta revised its FY 2025 total product revenue guidance to $23 billion - $26 billion[13] - Q1 2025 total revenues reached $745 million, an 80% increase compared to $413 million in Q1 2024[49] - Q1 2025 total product revenue was $612 million, a 70% increase from $359 million in Q1 2024[18, 49] - The company reported a GAAP operating loss of $300 million in Q1 2025, compared to an income of $35 million in Q1 2024[44, 49] - Non-GAAP operating loss for Q1 2025 was $250 million, compared to an income of $84 million in Q1 2024[44, 49] ELEVIDYS Performance - ELEVIDYS sales grew 180% year-over-year, but fell short of expectations[13] - Over 800 patients have been treated with ELEVIDYS in commercial settings and clinical studies[13, 25] R&D and Pipeline - The company is on track for BLA submission for SRP-9003 for LGMD2E/R4 in the second half of 2025[13] - Enrollment and dosing are completed in Study SRP-9004-102 for LGMD2D/R3[13] Arrowhead Collaboration - The company closed a global licensing and collaboration agreement with ARWR for multiple targets[12] - Q1 2025 GAAP and Non-GAAP R&D expenses include Arrowhead collaboration transaction costs of $584 million[49]

For the quarter ended March 2025, Sarepta Therapeutics (SRPT) reported revenue of $744.86 million, up 80.2% over the same period last year. EPS came in at -$3.42, compared to $0.73 in the year-ago quarter. The reported revenue represents a surprise of +6.68% over the Zacks Consensus Estimate of $698.2 million. With the consensus EPS estimate being $0.35, the EPS surprise was -1077.14%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to ...

Sarepta Therapeutics (SRPT) came out with a quarterly loss of $3.42 per share versus the Zacks Consensus Estimate of $0.35. This compares to earnings of $0.73 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1,077.14%. A quarter ago, it was expected that this biopharmaceutical company would post earnings of $1.87 per share when it actually produced earnings of $1.50, delivering a surprise of -19.79%.Over the last four quarters ...

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total net product revenue of $612 million, representing a 70% growth year-over-year [7][40] - Elevitus sales reached $375 million, marking a 180% increase compared to the same quarter last year [7][40] - The PMO franchise generated $237 million in revenue, up 5% year-over-year [7][40] - Total revenues for Q1 were $745 million, an increase of $331 million or 80% year-over-year [41] Business Line Data and Key Metrics Changes - The PMO franchise revenue grew by 5%, while Elevitus saw a significant increase of 180% [7][40] - The company reported a GAAP operating loss of $448 million and a non-GAAP operating loss of $332 million for Q1 2025 [43][44] - R&D expenses on a GAAP basis were $773 million, a year-over-year increase of $573 million, primarily due to the Arrowhead collaboration [42] Market Data and Key Metrics Changes - The company is revising its net product revenue guidance for 2025 to a range of $2.3 billion to $2.6 billion, reflecting a 37% increase from 2024 at the midpoint [8][44] - The company anticipates Q2 revenue could be as much as 20% lower than Q1 due to various factors including a safety event and administrative delays [19][20] Company Strategy and Development Direction - The company is focused on addressing administrative complexities and enhancing site capacity to improve patient access to Elevitus [22][23] - A comprehensive promotional campaign for Elevitus has been launched to increase awareness and understanding among healthcare providers and patients [23] - The company plans to expand its LGMD portfolio and continue advancing its siRNA platform, with significant data expected to be shared later in the year [30][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment in biotech but emphasized the company's strong position due to approved therapies and revenue generation [6][7] - The tragic safety event involving a patient infused with Elevitus has led to a more cautious outlook, but management remains confident in the therapy's overall safety profile [8][9] - Management expects a recovery in demand starting in the summer, with a significant uptick anticipated in the second half of the year [64] Other Important Information - The company has a strong cash position with $647 million in cash and equivalents, and an additional $600 million available through a revolving credit facility [39][44] - The FDA has confirmed receipt of a labeling supplement that includes the recent patient death, with a target review date set for no later than Q4 2025 [78] Q&A Session Summary Question: What has been the biggest driver of potential downside pressure leading to revised guidance? - Management indicated that it is a mix of all three factors: cycle times, administrative processes, and the safety event, with cycle times being the most mechanically impactful [48][49] Question: How does the company plan to direct patients to sites with more capacity? - Management stated that the issue is more about focus rather than the number of sites, emphasizing the need for increased education and outreach to secondary sites [58][59] Question: What percentage of sales does Elevitus represent in the new guidance? - Management confirmed that the revision in total net product revenue was exclusively related to Elevitus, which is the primary driver of the guidance change [66] Question: What are the expectations regarding the potential label update for Elevitus? - Management indicated that a labeling supplement was submitted in April, and the FDA has set a target completion date for the review by Q4 2025 [78] Question: How is the company interacting with the FDA regarding the limb girdle programs? - Management reported that interactions with the FDA have remained positive, with confirmation of the accelerated approval pathway for the limb girdle programs [84]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved total net product revenue of $612 million, representing a 70% growth year-over-year [6][38] - Elevitus sales reached $375 million, marking a 180% increase compared to the same quarter last year [6][38] - The PMO franchise generated $237 million, up 5% year-over-year [6][38] - The company revised its net product revenue guidance for 2025 to a range of $2.3 billion to $2.6 billion, reflecting a 37% increase from 2024 at the midpoint [7][42] Business Line Data and Key Metrics Changes - The PMO franchise grew by 5%, while Elevitus saw a significant increase of 180% in sales [6][38] - Collaboration and other revenues amounted to $133 million, primarily from Roche [38] Market Data and Key Metrics Changes - The company noted that 60% of current revenue comes from top sites, which are experiencing high demand and long wait times for appointments [12] - The administrative process for gene therapy has become more complex, leading to longer turnaround times for infusions [10][18] Company Strategy and Development Direction - The company is focusing on addressing administrative challenges and enhancing site capacity to improve patient access to Elevitus [19] - A comprehensive promotional campaign for Elevitus was launched to increase awareness and understanding among healthcare providers and patients [20] - The company aims to expand its treatment network by engaging more community sites to alleviate capacity issues at top centers [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q1 2025, including a severe flu season and a tragic safety event that impacted patient infusions [5][16] - The company remains optimistic about long-term demand for Elevitus, expecting a recovery in sales starting in the summer [17][64] - Management emphasized the importance of education and communication to address concerns stemming from the recent safety event [52][60] Other Important Information - The company reported a GAAP net loss of $448 million for Q1 2025, primarily due to increased R&D expenses related to a collaboration with Arrowhead [41] - The company has a strong cash position with $647 million in cash and equivalents, plus an additional $600 million available through a revolving credit facility [36][42] Q&A Session Summary Question: What has been the biggest driver of potential downside pressure leading to revised guidance? - Management indicated that it is a mix of all three factors: cycle times, administrative processes, and the safety event, with cycle times being the most mechanically impactful [47][48] Question: How does the company direct patients to sites with more capacity? - Management clarified that it is more about focus and education rather than the number of sites, emphasizing the need to engage secondary sites more effectively [57][58] Question: What percentage of sales does Elevitus represent in the new guidance? - Management confirmed that the revision in total net product revenue was exclusively related to Elevitus, which is the primary driver of the guidance change [66] Question: What are the expectations regarding the potential label update for Elevitus? - Management stated that a labeling supplement was submitted in April, with a target review date set for no later than Q4 2025 [76]

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Sarepta Therapeutics, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of comprehensive (loss) income, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, collaboration agreements, fair value measurements, and other financial details for the periods ended March 31, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (Unaudited, in thousands) | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $240.87 | $1,103.01 | | Total current assets | $2,432.53 | $3,073.46 | | Total assets | $3,465.39 | $3,963.17 | | Total current liabilities | $605.59 | $731.68 | | Total liabilities | $2,322.66 | $2,435.43 | | Total stockholders' equity | $1,142.72 | $1,527.74 | - Cash and cash equivalents decreased significantly from **$1,103.01 million** at **December 31, 2024**, to **$240.87 million** at **March 31, 2025**[8](index=8&type=chunk) - Total assets decreased by approximately **$497.8 million**, and total stockholders' equity decreased by approximately **$385 million** from **December 31, 2024**, to **March 31, 2025**[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) This section presents the company's financial performance, including revenues, expenses, and net loss or income over a period Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited, in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Products, net revenue | $611.52 | $359.48 | | Collaboration and other revenue | $133.33 | $53.98 | | Total revenues | $744.86 | $413.46 | | Total cost and expenses | $1,045.24 | $378.56 | | Operating (loss) income | $(300.39) | $34.91 | | Net (loss) income | $(447.51) | $36.12 | | Basic (loss) earnings per share (per share) | $(4.60) | $0.38 | | Diluted (loss) earnings per share (per share) | $(4.60) | $0.37 | - Total revenues increased by **80%** year-over-year, from **$413.5 million** in **Q1 2024** to **$744.9 million** in **Q1 2025**[9](index=9&type=chunk) - The company reported a significant net loss of **$447.5 million** in **Q1 2025**, compared to a net income of **$36.1 million** in **Q1 2024**, primarily due to a substantial increase in research and development expenses[9](index=9&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity, reflecting net income or loss, stock-based compensation, and other equity transactions Changes in Stockholders' Equity (Unaudited, in thousands) | Item | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Balance at December 31 | $1,527.74 | $859.34 | | Stock-based compensation | $46.56 | $45.21 | | Net (loss) income | $(447.51) | $36.12 | | Balance at March 31 | $1,142.72 | $961.19 | - Total stockholders' equity decreased from **$1,527.7 million** at **December 31, 2024**, to **$1,142.7 million** at **March 31, 2025**, primarily driven by the net loss[11](index=11&type=chunk) - Stock-based compensation expense contributed **$46.6 million** and **$45.2 million** to additional paid-in capital for the three months ended **March 31, 2025** and **2024**, respectively[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the inflows and outflows of cash from operating, investing, and financing activities over a period Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | Activity | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(583.44) | $(242.08) | | Net cash (used in) provided by investing activities | $(291.18) | $218.80 | | Net cash provided by financing activities | $12.47 | $22.14 | | Decrease in cash, cash equivalents and restricted cash | $(862.14) | $(1.14) | | Cash, cash equivalents and restricted cash, end of period | $256.45 | $442.87 | - Net cash used in operating activities increased significantly to **$583.4 million** in **Q1 2025** from **$242.1 million** in **Q1 2024**[14](index=14&type=chunk) - Investing activities shifted from providing **$218.8 million** in **Q1 2024** to using **$291.2 million** in **Q1 2025**, primarily due to a strategic investment acquisition[14](index=14&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of significant accounting policies, collaboration agreements, fair value measurements, and other financial details [Note 1. Organization and Nature of Business](index=8&type=section&id=1.%20ORGANIZATION%20AND%20NATURE%20OF%20BUSINESS) This note provides detailed accounting information related to Organization and Nature of Business - **Sarepta Therapeutics, Inc.** is a commercial-stage biopharmaceutical company focused on **RNA-targeted therapeutics, gene therapy, and other genetic modalities** for rare diseases, including **Duchenne muscular dystrophy (Duchenne)** and **Limb-girdle muscular dystrophies (LGMDs)**[17](index=17&type=chunk) - The company has multiple **FDA-approved products** for **Duchenne**: **EXONDYS 51 (2016)**, **VYONDYS 53 (2019)**, **AMONDYS 45 (2021)**, and **ELEVIDYS (June 2024** for ambulatory patients at least four years old, and non-ambulatory patients under accelerated approval)[18](index=18&type=chunk)[19](index=19&type=chunk) - As of **March 31, 2025**, the company had **$647.5 million** in **cash, cash equivalents, restricted cash, and investments**, which it believes is sufficient to fund operations for at least the **next twelve months**[20](index=20&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note provides detailed accounting information related to Summary of Significant Accounting Policies - The **unaudited condensed consolidated financial statements** are prepared in accordance with **U.S. GAAP**, reflecting **Sarepta** and its **wholly-owned subsidiaries**, with all **intercompany transactions eliminated**[21](index=21&type=chunk) - Management operates in a **single segment**: **discovering, developing, manufacturing, and delivering therapies for rare diseases**[21](index=21&type=chunk) - The company's financial instruments are subject to **credit risk**, with cash concentrated at **three financial institutions** and **accounts receivable concentrated with three entities (56%, 17%, and 13%** as of **March 31, 2025**)[24](index=24&type=chunk) [Note 3. License and Collaboration Agreements](index=10&type=section&id=3.%20LICENSE%20AND%20COLLABORATION%20AGREEMENTS) This note provides detailed accounting information related to License and Collaboration Agreements - **Sarepta** entered into an **exclusive global license and collaboration agreement** with **Arrowhead Pharmaceuticals, Inc.**, effective **February 7, 2025**, for **DUX4, DMPK, ATXN2, MMP7, ATXN1, ATXN3, and HTT programs**[28](index=28&type=chunk)[29](index=29&type=chunk) - Under the **Arrowhead Agreement**, **Sarepta** made an **upfront payment** of **$500.0 million** and **invested $325.0 million in Arrowhead's common stock**. **$583.6 million** was recorded as **R&D expense for the upfront license fee**[35](index=35&type=chunk) - **Sarepta** recognized **$112.0 million** and **$48.0 million** in **collaboration revenue from Roche** in **Q1 2025** and **Q1 2024**, respectively, primarily due to the **expiration of options for certain Duchenne development programs**[37](index=37&type=chunk) Roche Collaboration Agreement Revenue and Costs (in thousands) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Contract manufacturing revenue | $17.38 | $5.81 | | Royalty revenue | $3.95 | $0.17 | | Cost of sales (inventory costs related to products sold to Roche) | $(12.14) | $(1.65) | | Costs reimbursable by Roche (reduction to operating expenses) | $28.50 | $21.70 | - As of **March 31, 2025**, **Sarepta** may be obligated to make up to **$12.6 billion** in **future development, regulatory, commercial, and upfront royalty payments** associated with its **collaboration and license agreements**[40](index=40&type=chunk) [Note 4. Fair Value Measurements](index=13&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) This note provides detailed accounting information related to Fair Value Measurements - The company classifies **financial assets and liabilities** into **Level 1 (quoted prices in active markets)**, **Level 2 (observable market inputs)**, and **Level 3 (unobservable inputs)** within the **fair value hierarchy**[41](index=41&type=chunk) Fair Value Measurement of Assets and Liabilities (in thousands) | Category | Total (March 31, 2025) (in millions) | Level 1 (March 31, 2025) (in millions) | Level 2 (March 31, 2025) (in millions) | Level 3 (March 31, 2025) (in millions) | | :-------------------------- | :--------------------- | :----------------------- | :----------------------- | :----------------------- | | Total Assets | $612.27 | $195.27 | $416.00 | $1.00 | | Total Liabilities | $47.40 | $0.00 | $0.00 | $47.40 | | Category | Total (December 31, 2024) (in millions) | Level 1 (December 31, 2024) (in millions) | Level 2 (December 31, 2024) (in millions) | Level 3 (December 31, 2024) (in millions) | | :-------------------------- | :---------------------- | :------------------------ | :------------------------ | :------------------------ | | Total Assets | $844.19 | $458.25 | $384.95 | $1.00 | | Total Liabilities | $47.40 | $0.00 | $0.00 | $47.40 | - **Strategic investments, including Arrowhead common stock**, are primarily classified as **Level 1**, while **government and corporate bonds** are **Level 2**. **Contingent consideration** is classified as **Level 3**[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) [Note 5. Cash, Cash Equivalents and Marketable Securities](index=16&type=section&id=5.%20CASH,%20CASH%20EQUIVALENTS%20AND%20MARKETABLE%20SECURITIES) This note provides detailed accounting information related to Cash, Cash Equivalents and Marketable Securities Cash, Cash Equivalents, Short-term and Non-current Investments (in thousands) | Category | March 31, 2025 Fair Value (in millions) | December 31, 2024 Fair Value (in millions) | | :------------------------------------ | :-------------------------- | :--------------------------- | | Cash and cash equivalents | $240.87 | $1,103.01 | | Short-term investments | $281.90 | $251.78 | | Non-current investments | $109.13 | $133.16 | | Total cash, cash equivalents and investments | $631.89 | $1,487.96 | - The company's **investment portfolio is diversified** across **money market funds, commercial paper, government and government agency bonds, corporate bonds, and certificates of deposit**[49](index=49&type=chunk)[50](index=50&type=chunk) - The **weighted average maturity of available-for-sale securities** was approximately **eight months** as of **March 31, 2025**, down from **eleven months** at **December 31, 2024**[49](index=49&type=chunk) [Note 6. Product Revenues, Net, Accounts Receivable, Net, and Reserves for Product Revenues](index=17&type=section&id=6.%20PRODUCT%20REVENUES,%20NET,%20ACCOUNTS%20RECEIVABLE,%20NET,%20AND%20RESERVES%20FOR%20PRODUCT%20REVENUES) This note provides detailed accounting information related to Product Revenues, Net, Accounts Receivable, Net, and Reserves for Product Revenues Net Product Revenues by Product (in thousands) | Product | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | PMO Products | $236.54 | $225.55 | | ELEVIDYS | $374.99 | $133.94 | | Total product revenues, net | $611.52 | $359.48 | - **Total net product revenues increased by $252.0 million (70%) year-over-year**, primarily driven by a **$241.0 million** increase in **ELEVIDYS net product revenues** due to its **expanded label approval** in **June 2024**[51](index=51&type=chunk)[109](index=109&type=chunk) Accounts Receivable, Net and Total Reserves (in thousands) | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------- | :------------- | :---------------- | | Accounts receivable, net | $659.37 | $601.99 | | Total reserves | $235.58 | $194.30 | [Note 7. Inventory](index=18&type=section&id=7.%20INVENTORY) This note provides detailed accounting information related to Inventory Inventory Components (in thousands) | Component | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :---------------- | :------------- | :---------------- | | Raw materials | $298.98 | $280.05 | | Work in progress | $762.23 | $610.69 | | Finished goods | $61.37 | $47.21 | | Total inventory | $1,122.59 | $937.95 | - **Total inventory increased by $184.6 million** from **December 31, 2024**, to **March 31, 2025**, primarily in **work in progress**[54](index=54&type=chunk) - **Non-current inventory, primarily raw materials and work in progress for PMO Products**, is classified when consumption is expected beyond the **two-year normal operating cycle**[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 8. Other Assets](index=20&type=section&id=8.%20OTHER%20ASSETS) This note provides detailed accounting information related to Other Assets Other Current Assets (in thousands) | Component | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------- | :---------------- | | Collaboration and other receivables | $55.22 | $34.61 | | Total other current assets | $105.48 | $90.46 | Other Non-Current Assets (in thousands) | Component | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :------------------------------------ | :------------- | :---------------- | | Manufacturing-related deposits and prepaids | $27.60 | $25.96 | | Intangible assets, net | $26.20 | $26.89 | | Restricted cash | $15.58 | $15.58 | | Total other non-current assets | $80.55 | $76.21 | [Note 9. Accrued Expenses](index=21&type=section&id=9.%20ACCRUED%20EXPENSES) This note provides detailed accounting information related to Accrued Expenses Accrued Expenses (in thousands) | Component | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :------------------------------ | :------------- | :---------------- | | Product revenue related reserves | $118.35 | $109.16 | | Accrued income taxes | $79.86 | $17.39 | | Accrued contract manufacturing costs | $66.85 | $77.84 | | Accrued employee compensation costs | $35.30 | $91.12 | | Total accrued expenses | $391.65 | $373.51 | - **Accrued income taxes increased significantly from $17.4 million to $79.9 million**, while **accrued employee compensation costs decreased from $91.1 million to $35.3 million**[58](index=58&type=chunk) [Note 10. Stock-Based Compensation](index=21&type=section&id=10.%20STOCK-BASED%20COMPENSATION) This note provides detailed accounting information related to Stock-Based Compensation Stock Awards Granted (Weighted Average Grant Date Fair Value) | Award Type | Q1 2025 Grants (units) | Q1 2025 Avg. Fair Value (per share) | Q1 2024 Grants (units) | Q1 2024 Avg. Fair Value (per share) | | :-------------------- | :------------- | :---------------------- | :------------- | :---------------------- | | Stock options | 466,176 | $48.49 | 316,378 | $67.56 | | Restricted stock units | 1,498,184 | $97.84 | 1,161,985 | $128.58 | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Stock options | $12.89 | $16.28 | | Restricted stock units | $31.54 | $27.53 | | Employee stock purchase plan | $2.12 | $1.40 | | Total stock-based compensation expense | $41.43 | $40.69 | | Allocated to Research and development | $17.32 | $16.27 | | Allocated to Selling, general and administrative | $24.11 | $24.42 | - **Total stock-based compensation expense increased slightly to $41.4 million in Q1 2025 from $40.7 million in Q1 2024**[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 11. Other (Loss) Income, Net](index=22&type=section&id=11.%20OTHER%20(LOSS)%20INCOME,%20NET) This note provides detailed accounting information related to Other (Loss) Income, Net Other (Loss) Income, Net (in thousands) | Component | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Interest income | $10.19 | $7.09 | | (Loss) gain on strategic investments | $(90.73) | $0.93 | | Interest expense | $(4.50) | $(4.17) | | Change in fair value of derivatives | $0.00 | $(10.10) | | Total other (loss) income, net | $(83.13) | $6.54 | - **Other (loss) income, net, significantly decreased by $89.7 million**, primarily due to a **$91.7 million** increase in the **loss on strategic investments** in **Q1 2025**[63](index=63&type=chunk)[126](index=126&type=chunk) [Note 12. Income Taxes](index=22&type=section&id=12.%20INCOME%20TAXES) This note provides detailed accounting information related to Income Taxes - The company recorded an **income tax provision of $64.0 million in Q1 2025, with an effective tax rate of (16.7)%**, primarily due to **current tax on taxable profits in certain states and capitalization of R&D costs for tax purposes**[64](index=64&type=chunk) - A **full valuation allowance of approximately $989.6 million** is maintained against **net deferred tax assets** as of **March 31, 2025**, due to uncertainty regarding their realization[65](index=65&type=chunk) - The **Tax Cuts and Jobs Act of 2017 requires capitalization and amortization of R&D expenses for tax purposes**, contributing to taxable profits and tax expense[66](index=66&type=chunk)[67](index=67&type=chunk) [Note 13. Revolving Credit Facility](index=23&type=section&id=13.%20REVOLVING%20CREDIT%20FACILITY) This note provides detailed accounting information related to Revolving Credit Facility - On **February 13, 2025**, **Sarepta** entered into a **five-year, $600.0 million senior secured revolving credit facility** with **JPMorgan Chase Bank, N.A.**[68](index=68&type=chunk) - The facility's interest rates are **variable (Adjusted SOFR plus a margin or a base reference rate plus a margin)**, and an **unused commitment fee applies**[69](index=69&type=chunk) - As of **March 31, 2025**, there were **no outstanding amounts under the Revolving Credit Facility**, and the company was in **compliance with all covenants**[71](index=71&type=chunk) [Note 14. (Loss) Earnings Per Share](index=23&type=section&id=14.%20(LOSS)%20EARNINGS%20PER%20SHARE) This note provides detailed accounting information related to (Loss) Earnings Per Share Basic and Diluted (Loss) Earnings Per Common Share (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :-------------------------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net (loss) income - basic | $(447.51) | $36.12 | | Weighted-average common shares outstanding, basic | 97,362 | 93,991 | | (Loss) earnings per common share, basic (per share) | $(4.60) | $0.38 | | (Loss) earnings per common share, diluted (per share) | $(4.60) | $0.37 | - For **Q1 2025**, **basic and diluted net loss per share were both $(4.60)** due to the **net loss, making common stock equivalents anti-dilutive**[72](index=72&type=chunk)[73](index=73&type=chunk) - **Approximately 20.5 million potential common shares were excluded from diluted EPS computation in Q1 2025 as they were anti-dilutive**, including **12.4 million from equity incentive plans and 8.1 million from convertible debt**[74](index=74&type=chunk) [Note 15. Segment Information](index=24&type=section&id=15.%20SEGMENT%20INFORMATION) This note provides detailed accounting information related to Segment Information - **Sarepta** operates in a **single segment**, with the **CEO using consolidated net (loss) income to allocate resources and assess performance**[21](index=21&type=chunk)[76](index=76&type=chunk) Segment Net (Loss) Income (in thousands) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Total revenues | $744.86 | $413.46 | | Up-front and milestone expenses | $583.79 | $0.00 | | Research and development- other (excluding non-cash items) | $28.47 | $28.85 | | Selling, general and administrative- other (excluding non-cash items) | $51.14 | $48.96 | | Roche collaboration reimbursement | $(28.48) | $(21.66) | | Loss (gain) on strategic investments | $90.73 | $(0.93) | | Income tax expense | $63.99 | $5.33 | | Stock-based compensation expense | $41.43 | $40.69 | | Segment net (loss) income | $(447.51) | $36.12 | [Note 16. Commitments and Contingencies](index=25&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This note provides detailed accounting information related to Commitments and Contingencies Aggregate Non-Cancelable Contractual Manufacturing Obligations (in thousands) | Year | Amount (in millions) | | :-------------------- | :------- | | 2025 (April-December) | $846.65 | | 2026 | $168.17 | | 2027 | $79.86 | | 2028 | $72.40 | | Total manufacturing commitments | $1,167.07 | - **Sarepta** is involved in several legal proceedings, including **patent infringement lawsuits with REGENXBIO INC. and the Trustees of the University of Pennsylvania regarding the '617 and '274 Patents related to ELEVIDYS**[82](index=82&type=chunk)[83](index=83&type=chunk) - A **lawsuit with Nippon Shinyaku Co., Ltd. regarding exon 53 skipping technology resulted in a jury award of approximately $115.2 million in damages to Sarepta for NS's infringement of the '851 Patent**[85](index=85&type=chunk) - **Genzyme Corporation filed a patent infringement lawsuit against Sarepta regarding ELEVIDYS, with a trial scheduled for January 25, 2027**[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Sarepta's financial condition, changes in financial condition, and results of operations, offering a detailed analysis of revenues, expenses, liquidity, and cash flows for the three months ended March 31, 2025, and 2024. It also includes an overview of the company's business, approved products, and pipeline [Overview](index=30&type=section&id=Overview) This section provides a high-level summary of the company's business, approved products, and development pipeline - **Sarepta** is a **commercial-stage biopharmaceutical company focused on RNA-targeted therapeutics and gene therapy for rare diseases, with multiple FDA-approved products for Duchenne muscular dystrophy**[90](index=90&type=chunk) - Approved products include **EXONDYS 51, VYONDYS 53, AMONDYS 45 (PMO Products), and ELEVIDYS (AAV-based gene therapy)**, all for **Duchenne**[94](index=94&type=chunk) - The pipeline includes **SRP-9003 for LGMD2E, which completed enrollment and dosing in a Phase 3 clinical trial (EMERGENE) in December 2024, with a BLA expected in H2 2025**[95](index=95&type=chunk) - The company relies on **third-party CMOs for GMP manufacturing of products and product candidates, with partnerships like Aldevron and Catalent enhancing gene therapy manufacturing capabilities**[96](index=96&type=chunk)[98](index=98&type=chunk) [Results of Operations for the Three Months Ended March 31, 2025 and 2024](index=35&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) This section analyzes the company's financial performance, including revenues, costs, and expenses for the reported periods Selected Unaudited Condensed Consolidated Statements of (Loss) Income Data (in thousands, except per share amounts) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :------------------------------------ | :-------- | :-------- | :--------- | :--------- | | Products, net revenue | $611.52 | $359.48 | $252.04 | 70% | | Collaboration and other revenue | $133.33 | $53.98 | $79.35 | 147% | | Total revenues | $744.86 | $413.46 | $331.39 | 80% | | Cost of sales (excluding amortization) | $137.56 | $50.56 | $87.01 | 172% | | Research and development | $773.45 | $200.40 | $573.05 | 286% | | Selling, general and administrative | $133.63 | $127.00 | $6.63 | 5% | | Operating (loss) income | $(300.39) | $34.91 | $(335.29) | NM* | | Net (loss) income | $(447.51) | $36.12 | $(483.63) | NM* | | Basic (loss) earnings per share (per share) | $(4.60) | $0.38 | $(4.98) | NM* | | Diluted (loss) earnings per share (per share) | $(4.60) | $0.37 | $(4.97) | NM* | [Revenues](index=35&type=section&id=Revenues) This section analyzes the company's revenue streams, including product sales and collaboration income, and their year-over-year changes Net Product Revenues by Product (in thousands) | Product | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :---------- | :-------- | :-------- | :--------- | :--------- | | ELEVIDYS | $374.99 | $133.94 | $241.05 | 180% | | PMO Products | $236.54 | $225.55 | $10.99 | 5% | | Products, net | $611.52 | $359.48 | $252.04 | 70% | - **Total net product revenues increased by $252.0 million (70%) year-over-year**, primarily driven by a **180%** increase in **ELEVIDYS net product revenues** due to its **expanded label approval** in **June 2024**[109](index=109&type=chunk) Collaboration and Other Revenues (in thousands) | Component | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :-------------------- | :-------- | :-------- | :--------- | :--------- | | Collaboration revenue | $112.00 | $48.00 | $64.00 | 133% | | Contract manufacturing | $17.38 | $5.81 | $11.57 | 199% | | Royalty revenue | $3.95 | $0.17 | $3.78 | NM* | | Total | $133.33 | $53.98 | $79.35 | 147% | - **Collaboration and other revenues increased by $79.4 million (147%)**, mainly due to **$112.0 million** in **collaboration revenue recognized from the expiration of a Roche option in Q1 2025**[111](index=111&type=chunk) [Cost of sales (excluding amortization of in-licensed rights)](index=37&type=section&id=Cost%20of%20sales%20(excluding%20amortization%20of%20in-licensed%20rights)) This section examines the direct costs associated with product sales, including inventory and royalty payments Cost of Sales (excluding amortization of in-licensed rights) (in thousands) | Component | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :-------------------------------------------------------------------------------- | :-------- | :-------- | :--------- | :--------- | | Inventory costs related to products sold (excluding products sold to Roche) | $109.76 | $37.70 | $72.06 | 191% | | Royalty payments | $15.66 | $11.21 | $4.46 | 40% | | Inventory costs related to products sold to Roche | $12.14 | $1.65 | $10.49 | NM* | | Total cost of sales (excluding amortization of in-licensed rights) | $137.56 | $50.56 | $87.01 | 172% | - **Cost of sales increased by $87.0 million (172%)**, driven by higher **ELEVIDYS** sales and increased costs for products sold to **Roche**, partially offset by fewer write-offs of batches not meeting quality specifications[115](index=115&type=chunk)[116](index=116&type=chunk) - If **ELEVIDYS** manufacturing costs had not been expensed as R&D prior to approval, incremental inventory costs would have been **$13.7 million** higher in **Q1 2025** and **$23.8 million** higher in **Q1 2024**[113](index=113&type=chunk) [Research and development expenses](index=39&type=section&id=Research%20and%20development%20expenses) This section details the company's investment in R&D, including upfront payments for collaborations and project-specific expenditures Research and Development Expenses by Project (in thousands) | Project | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :-------------------------- | :-------- | :-------- | :--------- | :--------- | | Up-front and milestone expenses | $583.79 | $0.00 | $583.79 | NM* | | SRP-9001 | $68.86 | $71.40 | $(2.54) | (4)% | | LGMD platform | $27.66 | $16.95 | $10.70 | 63% | | PPMO platform | $0.54 | $12.51 | $(11.98) | (96)% | | Total research and development expenses | $773.45 | $200.40 | $573.05 | 286% | - **Total R&D expenses increased by $573.1 million (286%)**, primarily due to a **$583.8 million** increase in upfront and milestone expenses related to the **Arrowhead Agreement**[119](index=119&type=chunk)[120](index=120&type=chunk)[122](index=122&type=chunk) - Clinical trial expenses decreased by **$11.0 million (25%)** due to the discontinuation of **PPMO programs**[119](index=119&type=chunk)[122](index=122&type=chunk) [Selling, general and administrative expenses](index=41&type=section&id=Selling,%20general%20and%20administrative%20expenses) This section reviews the company's operational overhead, encompassing compensation, professional services, and facility costs Selling, General and Administrative Expenses by Category (in thousands) | Category | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | :--------- | | Compensation and other personnel expenses | $45.79 | $42.05 | $3.73 | 9% | | Professional services | $42.23 | $39.67 | $2.57 | 6% | | Facility- and technology-related expenses | $12.81 | $11.76 | $1.06 | 9% | | Total selling, general and administrative expenses | $133.63 | $127.00 | $6.63 | 5% | - **SG&A expenses increased by $6.6 million (5%)**, driven by higher compensation and personnel expenses, professional services for **ELEVIDYS** commercialization, and facility-related expenses[121](index=121&type=chunk)[123](index=123&type=chunk) [Amortization of in-licensed rights](index=42&type=section&id=Amortization%20of%20in-licensed%20rights) This section explains the amortization of intangible assets related to in-licensed intellectual property over their useful lives - **Amortization of in-licensed rights remained consistent at approximately $0.6 million for both Q1 2025 and Q1 2024**[124](index=124&type=chunk) - These rights relate to agreements with **UWA, Nationwide, BioMarin, and Parent Project Muscular Dystrophy**, amortized straight-line over the relevant patent life from regulatory approval or first commercial sale[124](index=124&type=chunk) [Other (expense) income, net](index=42&type=section&id=Other%20(expense)%20income,%20net) This section covers non-operating financial items, including interest income, strategic investment gains or losses, and interest expenses - **Other (expense) income, net, decreased by $89.7 million, primarily due to a $91.7 million increase in the loss on strategic investments, including fair value adjustments of publicly-traded companies like Arrowhead**[125](index=125&type=chunk)[126](index=126&type=chunk) - Components include **unrealized gains/losses on strategic equity investments**, interest expense on **2027 Notes**, interest income on cash/investments, accretion of investment discount, and changes in fair value of **contingent consideration**[125](index=125&type=chunk) [Income tax expense](index=42&type=section&id=Income%20tax%20expense) This section discusses the company's income tax provisions, effective tax rates, and deferred tax asset valuation allowances - **Income tax expense increased to $64.0 million in Q1 2025 from $5.3 million in Q1 2024**, primarily due to state, federal, and foreign income taxes where tax losses or credits were unavailable[127](index=127&type=chunk) - The company maintains a **full valuation allowance** against deferred tax assets (except in certain foreign jurisdictions) and continues to monitor for potential future release, which could materially impact net earnings[127](index=127&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's financial flexibility, including cash position, working capital, and ability to meet short-term and long-term obligations Financial Condition (in thousands) | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | Change ($) (in millions) | Change (%) | | :------------------------------------ | :------------- | :---------------- | :--------- | :--------- | | Total cash, cash equivalents and investments | $647.47 | $1,503.53 | $(856.07) | (57)% | | Total borrowings (Convertible debt) | $1,138.29 | $1,137.12 | $1.16 | (—)% | | Total working capital | $1,826.95 | $2,341.78 | $(514.83) | (22)% | - **Total cash, cash equivalents, and investments decreased by $856.1 million (57%) from December 31, 2024, to March 31, 2025**[128](index=128&type=chunk) - Principal uses of cash included a **$583.6 million** upfront payment and a **$241.4 million** equity investment in **Arrowhead**, along with R&D, manufacturing, and SG&A expenses[129](index=129&type=chunk) - The company believes existing cash, cash equivalents, future cash from operations, and the **$600.0 million Revolving Credit Facility** are sufficient to meet capital requirements for at least the next 12 months[103](index=103&type=chunk)[131](index=131&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) This section analyzes the company's cash generation and usage across operating, investing, and financing activities Cash Flow Activity (in thousands) | Activity | Q1 2025 (in millions) | Q1 2024 (in millions) | Change ($) (in millions) | Change (%) | | :------------------------------------ | :---------- | :---------- | :---------- | :--------- | | Operating activities | $(583.44) | $(242.08) | $(341.36) | 141% | | Investing activities | $(291.18) | $218.80 | $(509.97) | NM* | | Financing activities | $12.47 | $22.14 | $(9.67) | (44)% | | Decrease in cash and cash equivalents | $(862.14) | $(1.14) | $(861.00) | NM* | - **Cash used in operating activities increased by $341.4 million**, primarily due to a net loss of **$447.5 million**, increased inventory, and higher accounts receivable, partially offset by a decrease in manufacturing-related deposits[136](index=136&type=chunk)[137](index=137&type=chunk) - **Cash used in investing activities was $291.2 million in Q1 2025**, a significant shift from **$218.8 million** provided in **Q1 2024**, mainly due to a **$241.4 million** acquisition of strategic investments (**Arrowhead**)[139](index=139&type=chunk) - **Cash provided by financing activities decreased by $9.7 million**, primarily due to **$3.2 million** in fees for the **Revolving Credit Facility**, partially offsetting proceeds from stock option exercises[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's exposure to market risks, specifically interest rate and market price risks, and assesses their potential impact on financial instruments - The company's investment policy maintains a diversified portfolio of **money market investments, commercial paper, certificates of deposit, government/agency bonds, and high-grade corporate bonds with maturities of 24 months or less**[143](index=143&type=chunk) - A hypothetical **10 basis point** adverse movement in interest rates is estimated to result in a **$0.2 million** loss in fair value for interest-rate-sensitive instruments as of **March 31, 2025**[143](index=143&type=chunk) - **Strategic equity investments, including publicly traded biotechnology companies**, expose the company to market price risk. A hypothetical **10.0%** adverse movement is estimated to result in a **$15.3 million** loss in fair value for market-price-sensitive instruments as of **March 31, 2025**[145](index=145&type=chunk)[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - Management concluded that the company's **disclosure controls and procedures were effective** as of **March 31, 2025**, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[148](index=148&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended **March 31, 2025**, that materially affected or are reasonably likely to materially affect the company's **internal control over financial reporting**[149](index=149&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 of the financial statements for details on material legal proceedings, which include ongoing patent infringement lawsuits and other litigation - **Material legal proceedings** are detailed in **Note 16, Commitments and Contingencies**, to the **unaudited condensed consolidated financial statements**[152](index=152&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks and uncertainties that could materially affect Sarepta's business, financial condition, and results of operations, covering aspects from product commercialization and regulatory compliance to intellectual property, manufacturing, and financial stability - The **commercial success of Sarepta's products is highly dependent on factors such as sales effectiveness, new data generation, regulatory compliance, reimbursement levels, and competition**[154](index=154&type=chunk) - **Accelerated approvals for products like EXONDYS 51, VYONDYS 53, AMONDYS 45, and ELEVIDYS are subject to ongoing post-approval development and regulatory requirements, including confirmatory trials, with potential for withdrawal if clinical benefits are not verified**[156](index=156&type=chunk)[157](index=157&type=chunk) - **Unfavorable reimbursement policies, healthcare policy reforms, and governmental/private payor initiatives could hinder commercial success and lead to pricing pressures for current and future products**[162](index=162&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk) - The company faces **intense competition and rapid technological change in the biotechnology and pharmaceutical industries, including from other companies developing exon skipping, gene therapies, and gene editing approaches for Duchenne**[202](index=202&type=chunk)[203](index=203&type=chunk) - **Reliance on third parties for manufacturing, distribution, and R&D activities poses risks, including potential supply interruptions, quality control issues, and non-compliance with cGMP regulations**[264](index=264&type=chunk)[266](index=266&type=chunk)[280](index=280&type=chunk) - The company's success depends on its ability to **obtain, maintain, and defend patent protection** for its products and technologies, with significant **litigation risks** in the biopharmaceutical industry[286](index=286&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) - **Failure to comply with healthcare and other regulations (e.g., anti-kickback, false claims, data privacy) could result in substantial penalties, fines, and adverse effects on business operations and financial condition**[298](index=298&type=chunk)[300](index=300&type=chunk)[303](index=303&type=chunk) - The company has incurred **operating losses** and may not maintain profitability, with expenses expected to increase substantially due to commercialization, R&D, and infrastructure expansion[323](index=323&type=chunk)[324](index=324&type=chunk) - The company's **stock price is volatile** and can fluctuate significantly due to factors such as **commercial performance, regulatory decisions, clinical trial results, and competitive developments**[332](index=332&type=chunk)[334](index=334&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=118&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds during the reporting period - **No unregistered sales of equity securities or use of proceeds occurred during the three months ended March 31, 2025**[363](index=363&type=chunk) [Item 3. Defaults Upon Senior Securities](index=120&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - **No defaults upon senior securities occurred during the three months ended March 31, 2025**[364](index=364&type=chunk) [Item 4. Mine Safety Disclosures](index=120&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - **No mine safety disclosures are applicable for the reporting period**[365](index=365&type=chunk) [Item 5. Other Information](index=120&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or officers adopted or terminated Rule 10b5-1(c) plans for securities trading during the quarter - **No director or officer adopted or terminated Rule 10b5-1(c) plans for the purchase or sale of company securities during the three months ended March 31, 2025**[366](index=366&type=chunk) [Item 6. Exhibits](index=120&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including corporate documents, the Credit Agreement, and certifications - The exhibits listed on the **Exhibit Index** are filed or furnished as part of this **Quarterly Report on Form 10-Q**[367](index=367&type=chunk) - Key exhibits include the **Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and the Credit Agreement dated February 13, 2025**[370](index=370&type=chunk) - **Certifications from the Principal Executive Officer and Principal Financial and Accounting Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act of 2002) are included**[370](index=370&type=chunk) [Signatures](index=122&type=section&id=Signatures) This section contains the official signatures of the company's President and Chief Executive Officer, Douglas S. Ingram, and Executive Vice President, Chief Financial Officer, Ian M. Estepan, certifying the filing of the report - The report is signed by **Douglas S. Ingram, President and Chief Executive Officer**, and **Ian M. Estepan, Executive Vice President, Chief Financial Officer**, on **May 6, 2025**[374](index=374&type=chunk)