UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14895 SAREPTA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 93-0797222 (State or other ...

Sarepta Therapeutics, Inc. (NASDAQ:SRPT) Q2 2023 Earnings Conference Call August 2, 2023 4:30 PM ET Company Participants Francesca Nolan - IR Director Doug Ingram - President and CEO Louise Rodino-Klapac - EEVP, Chief Scientific Officer and Head of Research & Development Dallan Murray - EVP & Chief Customer Officer Ian Estepan - EVP & CFO Conference Call Participants Colin Bristow - UBS Brian Abrahams - RBC Capital Markets Tazeen Ahmad - Bank of America Gena Wang - Barclays Salveen Richter - Goldman Sa ...

```markdown [PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents Sarepta Therapeutics' unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Sarepta Therapeutics' unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, collaboration agreements, fair value measurements, and commitments [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%94%20As%20of%20June%2030%2C%202023%20and%20December%2031%2C%202022) This section details the company's financial position, including assets, liabilities, and stockholders' equity | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $3,125,890 | $3,128,366 | | Total Liabilities | $2,384,479 | $2,743,416 | | Total Stockholders' Equity | $741,411 | $384,950 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20%E2%80%94%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section presents the company's financial performance, including revenues, expenses, and net loss over specific periods | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $261,238 | $233,487 | $514,738 | $444,317 | | Operating Loss | $(133,519) | $(211,132) | $(271,607) | $(298,013) | | Gain from sale of Priority Review Voucher | $102,000 | — | $102,000 | — | | Loss on debt extinguishment | — | — | $(387,329) | — | | Net Loss | $(23,940) | $(231,481) | $(540,695) | $(336,506) | | Net Loss per Share - basic and diluted | $(0.27) | $(2.65) | $(6.11) | $(3.85) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20%E2%80%94%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section outlines changes in the company's equity, reflecting transactions with owners and comprehensive loss | Metric | December 31, 2022 (in thousands) | June 30, 2023 (in thousands) | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Total Stockholders' Equity | $384,950 | $741,411 | | Issuance of common stock for exchange of 2024 Notes | — | $693,377 | | Partial settlement of capped call share options for 2024 Notes | — | $80,645 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%94%20For%20the%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section details the company's cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(331,630) | $(167,990) | | Net cash provided by (used in) investing activities | $109,126 | $(1,075,798) | | Net cash provided by financing activities | $107,656 | $5,329 | | Decrease in cash, cash equivalents and restricted cash | $(114,848) | $(1,238,459) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Nature of Business](index=7&type=section&id=1.%20ORGANIZATION%20AND%20NATURE%20OF%20BUSINESS) This note describes Sarepta Therapeutics' corporate structure, business focus, and therapeutic areas of operation - **Sarepta Therapeutics** is a commercial-stage biopharmaceutical company focused on discovering and developing **RNA-targeted therapeutics**, **gene therapy**, and other genetic therapeutic modalities for rare diseases, including **Duchenne muscular dystrophy (Duchenne)**, Limb-girdle muscular dystrophies (LGMDs), and other neuromuscular and central nervous system (CNS) disorders[16](index=16&type=chunk) - The company has **four FDA-approved products** for Duchenne: **EXONDYS 51**, **VYONDYS 53**, **AMONDYS 45**, and **ELEVIDYS**, with **ELEVIDYS** receiving accelerated approval on **June 22, 2023**[17](index=17&type=chunk) | Metric | Amount (as of June 30, 2023, in millions) | | :-------------------------- | :--------------------------------------- | | Cash and cash equivalents | $851.9 | | Short-term investments | $1,008.8 | | Long-term restricted cash | $19.0 | | Total Cash, Cash Equivalents, Restricted Cash and Investments | $1,879.7 | [2. Summary of Significant Accounting Policies](index=7&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing the condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** and reflect Sarepta and its wholly-owned subsidiaries, operating in one segment focused on rare disease therapies[19](index=19&type=chunk) - No material changes to accounting policies occurred through **June 30, 2023**, except for the removal of stock-based compensation as a critical accounting policy as of **January 1, 2023**[25](index=25&type=chunk)[101](index=101&type=chunk) - The company's cash is concentrated at **three financial institutions**, but management does not believe there is significant credit risk[22](index=22&type=chunk)[23](index=23&type=chunk) [3. License and Collaboration Agreements](index=8&type=section&id=3.%20LICENSE%20AND%20COLLABORATION%20AGREEMENTS) This note details the financial implications and terms of the company's various licensing and collaboration agreements | Metric | Three Months Ended June 30, 2023 (in millions) | Six Months Ended June 30, 2023 (in millions) | | :------------------- | :--------------------------------------------- | :-------------------------------------------- | | Collaboration Revenue | $22.3 | $44.3 | | Costs Reimbursable by Roche | $28.2 | $48.5 | - As of **June 30, 2023**, total deferred revenue associated with the **Roche Agreement** was **$530.0 million**, with **$485.0 million** related to separate material rights for ex-U.S. Duchenne-specific programs[26](index=26&type=chunk) - Upon FDA approval of **ELEVIDYS** in **June 2023**, the company recorded a **$10.0 million** milestone payment to **Nationwide Children's Hospital** as an in-licensed right intangible asset[28](index=28&type=chunk) - The company may be obligated to make up to **$3.2 billion** in future development, regulatory, commercial, and up-front royalty payments associated with its collaboration and license agreements[30](index=30&type=chunk) [4. Gain from Sale of Priority Review Voucher](index=9&type=section&id=4.%20GAIN%20FROM%20SALE%20OF%20PRIORITY%20REVIEW%20VOUCHER) This note explains the recognition of income from the sale of a Priority Review Voucher during the reporting period - In **June 2023**, Sarepta sold the **ELEVIDYS Priority Review Voucher (PRV)** for **$102.0 million**, which was recorded as a gain from sale as it had no carrying value[31](index=31&type=chunk) [5. Fair Value Measurements](index=9&type=section&id=5.%20FAIR%20VALUE%20MEASUREMENTS) This note provides information on the fair value of financial assets and liabilities, categorized by valuation inputs | Asset/Liability | Fair Value as of June 30, 2023 (in thousands) | Fair Value as of December 31, 2022 (in thousands) | | :-------------------------- | :-------------------------------------------- | :---------------------------------------------- | | Total Assets at Fair Value | $1,494,429 | $1,686,269 | | Money market funds (Level 1) | $404,863 | $467,553 | | Commercial paper (Level 2) | $169,866 | $211,369 | | Government and agency bonds (Level 2) | $859,532 | $807,540 | | Corporate bonds (Level 2) | $21,207 | $125,741 | | Strategic investments (Level 3) | $31,000 | $31,000 | | Certificates of deposit (Level 2) | $7,961 | $42,745 | | Contingent consideration (Level 3 Liability) | $36,100 | $36,900 | - A decrease of **$0.8 million** was recorded during the **three and six months ended June 30, 2023**, for the change in fair value of contingent consideration liabilities, due to the termination of a license agreement[38](index=38&type=chunk) [6. Cash, Cash Equivalents and Marketable Securities](index=11&type=section&id=6.%20CASH%2C%20CASH%20EQUIVALENTS%20AND%20MARKETABLE%20SECURITIES) This note details the composition and management of the company's liquid assets and investment portfolio | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Total Cash, Cash Equivalents and Investments | $1,860,715 | $1,989,374 | | Cash and cash equivalents | $851,929 | $966,777 | | Short-term investments | $1,008,786 | $1,022,597 | - The weighted average maturity of the company's available-for-sale securities was approximately **four months** as of both **June 30, 2023**, and **December 31, 2022**[40](index=40&type=chunk) - The company's policy is to mitigate credit risk by maintaining a well-diversified portfolio that limits exposure to maturity and investment type[40](index=40&type=chunk) [7. Product Revenues, Net, Accounts Receivable and Reserves for Product Revenues](index=12&type=section&id=7.%20PRODUCT%20REVENUES%2C%20NET%2C%20ACCOUNTS%20RECEIVABLE%20AND%20RESERVES%20FOR%20PRODUCT%20REVENUES) This note breaks down product sales, related receivables, and provisions for discounts and allowances | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Products, net | $238,988 | $211,237 | $470,483 | $400,062 | | EXONDYS 51 | $134,688 | $126,377 | $267,259 | $243,510 | | AMONDYS 45 | $71,653 | $54,676 | $137,565 | $98,290 | | VYONDYS 53 | $32,647 | $30,184 | $65,659 | $58,262 | | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Accounts receivable | $236,808 | $214,628 | | Total reserves for discounts and allowances | $113,998 | $94,698 | - **Three individual customers** accounted for **47%**, **33%**, and **7%** of product revenues, net, for the three months ended **June 30, 2023**, and **35%**, **34%**, and **12%** of accounts receivable from product sales as of **June 30, 2023**[42](index=42&type=chunk)[43](index=43&type=chunk) [8. Inventory](index=13&type=section&id=8.%20INVENTORY) This note provides a detailed breakdown of the company's inventory components and their valuation | Inventory Component | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------ | :----------------------------- | :------------------------------- | | Raw materials | $102,838 | $59,181 | | Work in progress | $243,061 | $269,185 | | Finished goods | $47,612 | $38,147 | | Total inventory | $393,511 | $366,513 | | Non-current inventory | $166,635 | $162,545 | [9. Other Assets](index=13&type=section&id=9.%20OTHER%20ASSETS) This note describes the various current and non-current assets not categorized elsewhere on the balance sheet | Other Current Assets | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Manufacturing-related deposits and prepaids | $79,007 | $66,455 | | Collaboration receivable | $28,635 | $41,758 | | Total other current assets | $148,215 | $149,891 | | Other Non-Current Assets | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------- | :----------------------------- | :------------------------------- | | Manufacturing-related deposits and prepaids | $83,479 | $97,409 | | Strategic investments | $31,000 | $31,321 | | Restricted cash | $19,024 | $19,024 | | Intangible assets, net | $18,018 | $7,578 | | Total other non-current assets | $163,039 | $162,969 | [10. Accrued Expenses](index=14&type=section&id=10.%20ACCURRED%20EXPENSES) This note details the company's short-term liabilities for expenses incurred but not yet paid | Accrued Expense Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------- | :----------------------------- | :------------------------------- | | Accrued contract manufacturing costs | $82,734 | $202,173 | | Product revenue related reserves | $80,424 | $68,784 | | Accrued employee compensation costs | $44,906 | $65,946 | | Total accrued expenses | $326,877 | $418,996 | [11. Indebtedness](index=14&type=section&id=11.%20INDEBTEDNESS) This note outlines the company's debt obligations, including convertible notes and their carrying and fair values | Debt Facility | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Principal amount of the 2024 Notes | $105,847 | $419,371 | | Principal amount of the 2027 Notes | $1,150,000 | $1,150,000 | | Total carrying value of debt facilities | $1,235,517 | $1,544,292 | | Fair value of 2024 Notes | $202,287 | $765,046 | | Fair value of 2027 Notes | $1,247,693 | $1,308,482 | - In **March 2023**, the company exchanged **$313.5 million** in aggregate principal value of **2024 Notes** for approximately **4.5 million shares** of common stock, resulting in a **$387.3 million loss on debt extinguishment**[51](index=51&type=chunk)[52](index=52&type=chunk) - The exchange also led to the termination of a portion of **2017 Capped Calls**, generating approximately **$80.6 million in cash**[53](index=53&type=chunk) [12. Stock-Based Compensation](index=15&type=section&id=12.%20STOCK-BASED%20COMPENSATION) This note explains the accounting for equity-settled compensation plans and their impact on expenses | Expense Category | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total stock-based compensation expense | $47,377 | $102,892 | $88,627 | $132,090 | | Research and development | $21,577 | $14,467 | $37,990 | $27,535 | | Selling, general and administrative | $25,800 | $88,425 | $50,637 | $104,555 | - The decrease in **stock-based compensation expense** for both periods was primarily due to the **Chief Executive Officer grant modification agreement executed in 2022**[123](index=123&type=chunk)[124](index=124&type=chunk) - In **June 2023**, **$7.4 million** of **stock-based compensation expense** was recognized for **394,975 performance-conditioned restricted stock units (PSUs)** due to the **regulatory approval of ELEVIDYS**[58](index=58&type=chunk) [13. Other Income (Loss), Net](index=18&type=section&id=13.%20OTHER%20INCOME%20(LOSS)%2C%20NET) This note details non-operating income and expenses, including interest, investment gains, and debt extinguishment losses | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Accretion of investment discount, net | $12,786 | $1,331 | $22,825 | $1,373 | | Interest income | $8,418 | $2,409 | $17,694 | $2,582 | | Interest expense | $(5,224) | $(16,028) | $(11,547) | $(31,824) | | Gain from sale of Priority Review Voucher | $102,000 | — | $102,000 | — | | Loss on debt extinguishment | — | — | $(387,329) | — | | Total other income (loss), net | $118,934 | $(16,961) | $(255,688) | $(34,226) | [14. Leases](index=18&type=section&id=14.%20LEASES) This note describes the company's lease arrangements, including right-of-use assets and lease liabilities - The **Bedford Lease** commenced in **May 2023**, resulting in the recording of a **$76.5 million lease liability** and a **$72.0 million right-of-use asset** on the balance sheet as of **June 30, 2023**[70](index=70&type=chunk) - The initial gross ROU assets and lease liabilities for the **Bedford Lease** were based on a discount rate of **9.5%** over a remaining lease term of **15.5 years**[71](index=71&type=chunk) [15. Net Loss Per Share](index=19&type=section&id=15.%20NET%20LOSS%20PER%20SHARE) This note presents the calculation of basic and diluted net loss per share for the reporting periods | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss per share - basic and diluted | $(0.27) | $(2.65) | $(6.11) | $(3.85) | | Weighted-average common shares outstanding - basic and diluted | 88,743 | 87,511 | 88,466 | 87,383 | - **Stock options, RSUs, employee stock purchase plan, and potential conversion of 2027 and 2024 Notes** were excluded from diluted net loss per share calculation as their effect would have been anti-dilutive[73](index=73&type=chunk) [16. Commitments and Contingencies](index=19&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's contractual obligations, legal proceedings, and potential future liabilities | Commitment Type | Total as of June 30, 2023 (in thousands) | Due in July-December 2023 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | | Total manufacturing commitments | $1,281,753 | $489,561 | - The **Thermo Agreement** was amended in **March 2023**, removing a **$54.7 million annual minimum batch purchase commitment** and implementing a fee of up to **$60.0 million**, with the second and third installments potentially waived if purchase thresholds are met[76](index=76&type=chunk)[77](index=77&type=chunk) - The company may be obligated to make up to **$3.2 billion** in future development, regulatory, commercial, and up-front royalty payments associated with its license and collaboration agreements, which are not yet recorded as liabilities[137](index=137&type=chunk) - Sarepta is involved in several patent infringement lawsuits, including two with **REGENXBIO INC.** and the **Trustees of the University of Pennsylvania** regarding **AAV gene therapy (ELEVIDYS)**, and one with **Nippon Shinyaku Co., Ltd.** concerning **exon 53 skipping technology (VYONDYS 53)**[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&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 performance, liquidity, and capital resources for the three and six months ended June 30, 2023, compared to the prior year. It covers revenue drivers, expense changes, and the company's outlook on funding future operations and development [Overview](index=23&type=section&id=Overview) This section provides a high-level summary of Sarepta's business, product pipeline, manufacturing strategy, and financial position - **Sarepta** is a commercial-stage biopharmaceutical company focused on **RNA-targeted therapeutics** and **gene therapy** for rare diseases, with **four FDA-approved products** for **Duchenne muscular dystrophy** and a pipeline of **over 40 programs**[89](index=89&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) - Key pipeline updates include anticipated top-line results from **Part B of Study 5051-201** in the **second half of 2023**, a planned meeting with the FDA in **2023** for **SRP-9003**, and top-line results from **Study 301 for ELEVIDYS label expansion in Q4 2023**[90](index=90&type=chunk)[92](index=92&type=chunk) - The company employs a hybrid manufacturing strategy, combining internal expertise with partnerships (**Thermo, Catalent, Aldevron**) to support clinical and commercial demand for gene therapy programs[94](index=94&type=chunk)[97](index=97&type=chunk) - As of **June 30, 2023**, **Sarepta** had approximately **$1,879.7 million** in cash, cash equivalents, restricted cash, and investments, which management believes is sufficient to fund its current operational plan for **at least the next twelve months**[99](index=99&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022](index=26&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section analyzes the company's financial performance, comparing revenues and expenses across reporting periods | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | :--------- | | Total Revenues | $261,238 | $233,487 | $27,751 | 12 % | | Operating Loss | $(133,519) | $(211,132) | $77,613 | 37 % | | Net Loss | $(23,940) | $(231,481) | $207,541 | 90 % | | Net Loss per Share - basic and diluted | $(0.27) | $(2.65) | $2.38 | (90)% | | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Total Revenues | $514,738 | $444,317 | $70,421 | 16 % | | Operating Loss | $(271,607) | $(298,013) | $26,406 | 9 % | | Net Loss | $(540,695) | $(336,506) | $(204,189) | (61)% | | Net Loss per Share - basic and diluted | $(6.11) | $(3.85) | $(2.26) | (59)% | - The **three-month net loss significantly decreased** due to a **$102.0 million gain from the sale of a Priority Review Voucher** and **improved operating loss**, while the **six-month net loss increased** due to a **$387.3 million loss on debt extinguishment**[103](index=103&type=chunk) [Revenues](index=28&type=section&id=Revenues) This section details the sources and changes in the company's total revenue, including product and collaboration revenues | Product | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (%) | | :---------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | EXONDYS 51 | $134,688 | $126,377 | 7 % | | AMONDYS 45 | $71,653 | $54,676 | 31 % | | VYONDYS 53 | $32,647 | $30,184 | 8 % | | Products, net | $238,988 | $211,237 | 13 % | | Product | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change (%) | | :---------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | EXONDYS 51 | $267,259 | $243,510 | 10 % | | AMONDYS 45 | $137,565 | $98,290 | 40 % | | VYONDYS 53 | $65,659 | $58,262 | 13 % | | Products, net | $470,483 | $400,062 | 18 % | - Collaboration revenue from the **Roche agreement** remained consistent at **$22.3 million** for the three months and **$44.3 million** for the six months ended **June 30, 2023** and **2022**[107](index=107&type=chunk) [Cost of sales (excluding amortization of in-licensed rights)](index=28&type=section&id=Cost%20of%20sales%20(excluding%20amortization%20of%20in-licensed%20rights)) This section analyzes the direct costs associated with product sales, excluding amortization of intangible assets | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (%) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Inventory costs related to products sold | $25,541 | $23,050 | 11 % | | Royalty payments | $8,583 | $14,745 | (42)% | | Total cost of sales (excluding amortization) | $34,124 | $37,795 | (10)% | | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Inventory costs related to products sold | $52,175 | $41,513 | 26 % | | Royalty payments | $16,966 | $27,725 | (39)% | | Total cost of sales (excluding amortization) | $69,141 | $69,238 | (—)% | - The **decrease in royalty payments** was primarily due to changes in **BioMarin royalty terms**[111](index=111&type=chunk)[112](index=112&type=chunk) [Research and development expenses](index=30&type=section&id=Research%20and%20development%20expenses) This section details the costs incurred for discovering, developing, and testing new product candidates | Expense Category | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (%) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Manufacturing expenses | $98,999 | $150,279 | (34)% | | Compensation and other personnel expenses | $45,132 | $34,450 | 31 % | | Clinical trial expenses | $42,508 | $28,817 | 48 % | | Stock-based compensation | $21,577 | $14,467 | 49 % | | Total research and development expenses | $241,890 | $252,329 | (4)% | | Expense Category | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Manufacturing expenses | $210,920 | $246,568 | (14)% | | Compensation and other personnel expenses | $91,318 | $66,646 | 37 % | | Clinical trial expenses | $83,400 | $59,255 | 41 % | | Stock-based compensation | $37,990 | $27,535 | 38 % | | Total research and development expenses | $487,569 | $446,579 | 9 % | - The **decrease in manufacturing expenses** for both periods was primarily due to **prior year shortfall payment accruals and termination charges**, partially offset by a **ramp-up of SRP-9001 manufacturing**[117](index=117&type=chunk)[120](index=120&type=chunk) [Selling, general and administrative expenses](index=32&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) This section outlines the costs related to marketing, sales, and overall corporate management | Expense Category | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Change (%) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------- | | Stock-based compensation | $25,800 | $88,425 | (71)% | | Professional services | $37,797 | $25,772 | 47 % | | Compensation and other personnel expenses | $38,329 | $28,622 | 34 % | | Total selling, general and administrative expenses | $118,564 | $154,316 | (23)% | | Expense Category | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change (%) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Stock-based compensation | $50,637 | $104,555 | (52)% | | Professional services | $72,888 | $43,066 | 69 % | | Compensation and other personnel expenses | $76,796 | $56,075 | 37 % | | Total selling, general and administrative expenses | $229,278 | $226,156 | 1 % | - The **significant decrease in stock-based compensation** was primarily related to the **Chief Executive Officer grant modification agreement executed in 2022**[123](index=123&type=chunk)[124](index=124&type=chunk) [Amortization of in-licensed rights](index=34&type=section&id=Amortization%20of%20in-licensed%20rights) This section details the expense recognized for the amortization of intangible assets acquired through licensing agreements - Amortization of in-licensed rights remained consistent at approximately **$0.2 million** for the three months and **$0.4 million** for the six months ended **June 30, 2023** and **2022**[125](index=125&type=chunk) [Gain from sale of Priority Review Voucher](index=34&type=section&id=Gain%20from%20sale%20of%20Priority%20Review%20Voucher) This section explains the non-operating income recognized from the sale of a Priority Review Voucher - A gain of **$102.0 million** was recognized in **June 2023** from the sale of the **ELEVIDYS Priority Review Voucher**, as it had no carrying value[126](index=126&type=chunk) [Loss on debt extinguishment](index=34&type=section&id=Loss%20on%20debt%20extinguishment) This section details the financial impact of extinguishing debt obligations during the reporting period - A loss of **$387.3 million** was incurred for the six months ended **June 30, 2023**, due to the exchange of **$313.5 million of 2024 Convertible Notes** for common stock[127](index=127&type=chunk) [Other income (expense), net](index=34&type=section&id=Other%20income%20(expense)%2C%20net) This section summarizes non-operating income and expenses, including interest and investment-related items | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Other income (expense), net | $16,934 | $(16,961) | $29,641 | $(34,226) | - The change was primarily driven by **increases in accretion of investment discount and interest income**, and a **reduction of interest expense** due to the **repayment of the December 2019 Term Loan in 2022**[129](index=129&type=chunk) [Income tax expense](index=34&type=section&id=Income%20tax%20expense) This section details the company's provision for income taxes, including federal, state, and foreign components | Metric | Three Months Ended June 30, 2023 (in thousands) | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :---------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Income tax expense | $9,355 | $3,388 | $13,400 | $4,267 | - **Income tax expense** for **2023** includes **state, foreign, and federal income taxes**, while **2022** only included **state and foreign income taxes**[130](index=130&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to generate and manage cash, fund operations, and meet financial obligations | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------ | :----------------------------- | :------------------------------- | :--------- | :--------- | | Total cash, cash equivalents and investments | $1,879,739 | $2,008,398 | $(128,659) | (6)% | | Total borrowings | $1,235,517 | $1,544,292 | $(308,775) | (20)% | | Total working capital | $1,973,960 | $1,938,257 | $35,703 | 2 % | - The company believes its current cash flows from operating activities and cash on hand are adequate to fund short-term financing needs and working capital requirements for **at least twelve months**[132](index=132&type=chunk) - Future cash requirements will depend on the advancement of R&D and commercialization of product candidates, with potential needs for additional financing through equity, debt, licensing, or collaborations[133](index=133&type=chunk) | Obligation Type | Total Obligations as of June 30, 2023 (in millions) | Due in less than one year (in millions) | Due in greater than one year (in millions) | | :---------------------- | :------------------------------------------ | :-------------------------------------- | :--------------------------------------- | | Debt | $1,300.0 | $15.9 | $1,307.0 | | Lease | $363.3 | $20.0 | $343.3 | | Manufacturing | $1,300.0 | $824.0 | $457.8 | [Operating Activities](index=36&type=section&id=Operating%20Activities) This section details cash flows generated from or used in the company's primary business operations | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change ($) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Cash used in operating activities | $(331,630) | $(167,990) | $(163,640) | 97 % | - **Cash used in operating activities** for the six months ended **June 30, 2023**, was primarily driven by a **net loss of $540.7 million**, adjusted for non-cash items like a **$387.3 million loss on debt extinguishment** and **$88.6 million in stock-based compensation**, partially offset by a **$102.0 million gain from the sale of the ELEVIDYS PRV**[139](index=139&type=chunk) - Net cash outflow from changes in operating assets and liabilities was driven by a **$93.7 million decrease in accounts payable/accrued expenses**, a **$44.3 million decrease in deferred revenue**, a **$27.0 million increase in inventory**, and a **$22.2 million increase in accounts receivable**[140](index=140&type=chunk) [Investing Activities](index=37&type=section&id=Investing%20Activities) This section outlines cash flows related to the purchase and sale of long-term assets and investments | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Cash provided by (used in) investing activities | $109,126 | $(1,075,798) | $1,184,924 | (110)% | - **Cash provided by investing activities** in **2023** primarily consisted of **$102.0 million from the sale of the ELEVIDYS PRV** and **$864.5 million from the maturity and sale of available-for-sale securities**, partially offset by **$829.8 million in purchases of available-for-sale securities**[142](index=142&type=chunk) [Financing Activities](index=37&type=section&id=Financing%20Activities) This section describes cash flows from debt, equity, and other financing transactions | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Change ($) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Cash provided by financing activities | $107,656 | $5,329 | $102,327 | NM* | - **Cash provided by financing activities** in **2023** was driven by **$80.6 million from the partial settlement of capped call share options for 2024 Notes** and **$33.9 million from stock option exercises and the Employee Stock Purchase Program**[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Sarepta's investment strategy focuses on a diversified portfolio of short-term, high-grade financial instruments to mitigate credit risk. The company assesses its exposure to interest rate fluctuations, estimating a minimal impact from hypothetical market movements - The company maintains a diversified investment portfolio consisting of money market investments, commercial paper, certificates of deposit, government and government agency bonds, and high-grade corporate bonds with maturities of **36 months or less**[146](index=146&type=chunk) | Metric | Amount (as of June 30, 2023, in millions) | | :------------------------------------------ | :--------------------------------------- | | Cash, cash equivalents, restricted cash and investments | $1,879.7 | - A hypothetical **10 basis point adverse movement** across all maturities would result in an estimated hypothetical loss in fair value of approximately **$0.3 million** to the company's interest rate sensitive instruments[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Sarepta's disclosure controls and procedures were effective as of June 30, 2023. No material changes in internal control over financial reporting occurred during the quarter - Management, including the **principal executive officer and principal financial officer**, concluded that the company's disclosure controls and procedures were effective as of **June 30, 2023**[147](index=147&type=chunk) - There were no changes in internal control over financial reporting during the quarterly period ended **June 30, 2023**, that materially affected or are reasonably likely to materially affect internal control over financial reporting[148](index=148&type=chunk) [PART II — OTHER INFORMATION](index=39&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16, Commitments and Contingencies, for details on material legal proceedings affecting Sarepta Therapeutics - Material legal proceedings are discussed in **Note 16, Commitments and Contingencies**, to the unaudited condensed consolidated financial statements[151](index=151&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks and uncertainties that could materially impact Sarepta's business, financial condition, and results of operations. These risks span commercial success, product development, reliance on third parties, manufacturing, intellectual property, business operations, financial health, common stock performance, and convertible senior notes [Risks Related to Our Business](index=39&type=section&id=Risks%20Related%20to%20Our%20Business) This section outlines risks associated with commercial success, regulatory approvals, market adoption, and intellectual property for existing products - **Sarepta** is highly dependent on the commercial success of its **FDA-approved products** (**EXONDYS 51, VYONDYS 53, AMONDYS 45, and ELEVIDYS**) in the U.S., facing risks from sales, marketing, and reimbursement challenges[153](index=153&type=chunk)[154](index=154&type=chunk) - Continued approval of products under the **accelerated pathway** is contingent upon verification of clinical benefit in confirmatory trials, and failure to meet post-approval commitments could lead to regulatory action or withdrawal[157](index=157&type=chunk) - Uncertainty regarding reimbursement policies from governmental authorities and private health insurers could hinder or prevent commercial success, potentially requiring discounts or rebates[159](index=159&type=chunk) - The commercial success of products depends on market adoption by patients, payors, and healthcare providers, which can be influenced by efficacy, safety, reimbursement, and distribution networks[171](index=171&type=chunk) - **Orphan drug exclusivity** is crucial for eligible products, but it may be challenged, invalidated, or rescinded under certain conditions, potentially impacting competitive position[185](index=185&type=chunk)[186](index=186&type=chunk) [Risks Related to the Development of our Product Candidates](index=46&type=section&id=Risks%20Related%20to%20the%20Development%20of%20our%20Product%20Candidates) This section details risks inherent in clinical trials, regulatory approvals, and potential side effects of pipeline products - Difficulties in identifying, recruiting, and enrolling sufficient eligible patients for clinical trials could delay or prevent the advancement of product candidates, increasing costs and impacting development timelines[204](index=204&type=chunk)[205](index=205&type=chunk) - Clinical development is lengthy, expensive, and uncertain, especially for novel gene therapy candidates, with early-stage results not always predictive of success in later, larger trials[213](index=213&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - Product candidates may cause undesirable side effects, which could lead to clinical holds (e.g., **hypomagnesemia** in **Study 5051-201**), delays, or termination of development programs[217](index=217&type=chunk) - Obtaining and maintaining regulatory approvals is a lengthy, expensive, and uncertain process, particularly for orphan diseases and new technologies, with risks of delays, rejections, or limited indications[218](index=218&type=chunk)[219](index=219&type=chunk) - **Fast track, breakthrough therapy, RMAT, or PRIME designations** do not guarantee faster development, review, or approval, nor do they increase the likelihood of marketing approval[231](index=231&type=chunk)[233](index=233&type=chunk) [Risks Related to Third Parties](index=56&type=section&id=Risks%20Related%20to%20Third%20Parties) This section covers risks arising from reliance on external partners for distribution, research, and clinical development - **Sarepta** relies on third parties for commercial distribution of its products in the U.S. and through **Early Access Programs (EAPs)** outside the U.S., and inadequate performance or loss of these partners could adversely affect sales and operations[235](index=235&type=chunk)[236](index=236&type=chunk)[239](index=239&type=chunk) - The company also depends on third-party collaborators and **Contract Research Organizations (CROs)** for early-stage research and clinical development, and their inadequate performance or failure to commit sufficient resources could delay or terminate programs[241](index=241&type=chunk)[242](index=242&type=chunk) - Reliance on third parties necessitates sharing proprietary information, increasing the risk of discovery by competitors or misappropriation, which could jeopardize intellectual property rights[244](index=244&type=chunk)[245](index=245&type=chunk) [Risks Related to Manufacturing](index=58&type=section&id=Risks%20Related%20to%20Manufacturing) This section addresses risks associated with the production of products, including supply chain, quality control, and regulatory compliance - **Sarepta** relies on a limited number of third-party manufacturers for materials, APIs, and drug products, creating risks of supply interruptions, quality control issues, and delays in commercialization or development[247](index=247&type=chunk)[248](index=248&type=chunk) - Manufacturing gene therapies is novel and complex, posing risks of production problems, facility contamination, raw material shortages, and lot failures, which could delay clinical trials or product launches[254](index=254&type=chunk)[255](index=255&type=chunk) - Contract manufacturers must comply with **cGMP regulations**, and any failure to adhere to these standards could result in product recalls, clinical holds, delayed approvals, and significant negative consequences[261](index=261&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - Challenges in optimizing manufacturing capacity and processes, including validating methods and demonstrating comparability, could negatively impact commercial availability and product development[265](index=265&type=chunk)[266](index=266&type=chunk) [Risks Related to our Intellectual Property](index=61&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) This section outlines risks concerning patent protection, infringement claims, and the defense of proprietary rights - **Sarepta's** success depends on obtaining, maintaining, and defending patent protection for its products, product candidates, and platform technologies, which is subject to numerous risks and uncertainties in the evolving patent landscape[268](index=268&type=chunk)[269](index=269&type=chunk) - The company faces significant litigation risks, including challenges to patent validity, scope, and enforceability, as well as claims of infringement by third parties, which can be costly and unpredictable[275](index=275&type=chunk) - Successful assertions by third parties that **Sarepta's** products or technologies infringe their proprietary rights could lead to substantial costs, the need for licenses (which may be unavailable or unfavorable), or the abandonment of product development[277](index=277&type=chunk)[280](index=280&type=chunk) - The **Leahy-Smith America Invents Act** and the **Hatch-Waxman Act** introduce complexities and potential challenges to patent prosecution and enforcement, including the risk of generic competition[272](index=272&type=chunk)[276](index=276&type=chunk) [Risks Related to our Business Operations](index=63&type=section&id=Risks%20Related%20to%20our%20Business%20Operations) This section details operational risks including regulatory compliance, tax implications, and dependence on key personnel - Failure to comply with complex federal and state healthcare laws and regulations (e.g., **anti-kickback, false claims, privacy laws**) could result in substantial penalties, fines, and operational disruptions[281](index=281&type=chunk)[282](index=282&type=chunk)[284](index=284&type=chunk) - Environmental, health, and safety laws and regulations, particularly concerning hazardous materials, pose compliance risks that could lead to fines, remediation costs, or cessation of operations[286](index=286&type=chunk) - Tax reforms in the U.S. (**TCJA, CARES Act, Inflation Reduction Act**) and international jurisdictions could materially impact the company's tax provision, cash tax liability, and effective tax rate[288](index=288&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk) - The **COVID-19 pandemic** has caused and may continue to cause disruptions to commercialization, clinical trials, manufacturing, and other business operations, negatively impacting revenues and cash flows[291](index=291&type=chunk) - The ability to use **net operating loss carryforwards** and other tax attributes to offset future taxable income may be limited by Internal Revenue Code provisions (e.g., **Section 382**), potentially accelerating tax payments[293](index=293&type=chunk)[294](index=294&type=chunk) - The company is highly dependent on **key personnel**, and the inability to retain or attract qualified employees could adversely affect business objectives and future growth[299](index=299&type=chunk)[302](index=302&type=chunk) [Risks Related to our Financial Condition and Capital Requirements](index=67&type=section&id=Risks%20Related%20to%20our%20Financial%20Condition%20and%20Capital%20Requirements) This section covers risks related to historical losses, future funding needs, and potential dilution from capital raising - **Sarepta** has incurred substantial operating losses since inception, with an accumulated deficit of **$4.5 billion** as of **June 30, 2023**, and expects to continue incurring significant losses, making profitability uncertain[303](index=303&type=chunk)[304](index=304&type=chunk) - The company may require additional funding to meet post-marketing approval requirements, develop product candidates, and expand operations, but there is no assurance that financing will be available on acceptable terms[305](index=305&type=chunk)[306](index=306&type=chunk) - Raising additional capital through equity or debt financings could dilute existing stockholders, increase fixed payment obligations, or require relinquishing valuable rights to technologies or product candidates[307](index=307&type=chunk)[309](index=309&type=chunk) - Inaccurate estimates and judgments in financial statements could lead to restatements, securities class action litigation, and significant financial and management resource diversion[310](index=310&type=chunk)[311](index=311&type=chunk) [Risks Related to Our Common Stock](index=69&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This section addresses risks concerning stock price volatility, anti-takeover provisions, and potential dilution from equity issuances - The market price of **Sarepta's common stock** is volatile and can fluctuate significantly due to factors such as commercial performance, regulatory decisions, clinical trial results, competition, and general market conditions[312](index=312&type=chunk)[313](index=313&type=chunk) - Provisions in the company's certificate of incorporation, bylaws, and Delaware law (**Section 203**) could deter acquisition bids or make it difficult for stockholders to effect changes in the board or management[315](index=315&type=chunk)[318](index=318&type=chunk) - The issuance of additional shares of common stock or warrants, including those from outstanding stock awards, could dilute the ownership interests of existing stockholders and depress the stock price[319](index=319&type=chunk)[321](index=321&type=chunk) [Risks Related to Our Convertible Senior Notes](index=71&type=section&id=Risks%20Related%20to%20Our%20Convertible%20Senior%20Notes) This section outlines risks associated with debt servicing, repurchase obligations, and hedging activities impacting stock value - Servicing the **2024 and 2027 Convertible Notes** requires significant cash, and the company may not generate sufficient cash flow from operations to meet these obligations, potentially leading to default or the need for dilutive financing[324](index=324&type=chunk) - **Sarepta** may not have the financial resources to repurchase the Notes upon a fundamental change, which could trigger a default under other indebtedness[325](index=325&type=chunk) - **Capped call transactions** entered into in connection with the Notes may impact the value of the common stock due to hedging activities by financial institutions[326](index=326&type=chunk)[327](index=327&type=chunk) [General Risks](index=72&type=section&id=General%20Risks) This section covers broad risks such as economic conditions, product liability, data security, and business interruptions - Unfavorable global economic conditions, including inflation and increased interest rates, could harm demand for products, capital raising efforts, and manufacturing operations[328](index=328&type=chunk) - The company is exposed to product liability claims from clinical trials and commercial sales, and its insurance coverage may not be adequate to cover potential damages[330](index=330&type=chunk) - Violations of data protection regulations like **GDPR, CCPA, and CPRA** could subject the company to significant fines, litigation, and reputational harm[331](index=331&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) - Reliance on **information technology** makes the company vulnerable to failures, security lapses, and **cyberattacks**, potentially leading to data breaches, operational disruptions, and legal claims[335](index=335&type=chunk) - **Natural disasters, terrorism attacks**, and other business interruptions could severely disrupt operations, and existing business continuity plans may be inadequate[340](index=340&type=chunk)[341](index=341&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&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 to report for the period - No unregistered sales of equity securities or use of proceeds were reported for the period[342](index=342&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported for the period[343](index=343&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section confirms that there were no mine safety disclosures to report for the period - No mine safety disclosures were reported for the period[344](index=344&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) This section reports that no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2023 - No director or officer adopted or terminated a "**Rule 10b5-1 trading arrangement**" or "**non-Rule 10b5-1 trading arrangement**" during the three months ended **June 30, 2023**[345](index=345&type=chunk) [Item 6. Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including corporate governance documents, key agreements, and certifications - The exhibit index includes corporate documents (e.g., Amended and Restated Certificate of Incorporation, Bylaws), key agreements (e.g., Manufacturing and Supply Agreements, Exclusive License Agreements), and certifications (e.g., Section 302 and 906 certifications)[348](index=348&type=chunk) [Signatures](index=78&type=section&id=Signatures) This section contains the official signatures of Sarepta Therapeutics, Inc.'s principal executive officer and principal financial and accounting officer, certifying 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 **August 2, 2023**[354](index=354&type=chunk) ```

Financial Data and Key Metrics Changes - Total revenue for Q1 2023 was $253.5 million, an increase from $210.8 million in Q1 2022, reflecting a growth of $42.7 million [52] - Net product revenue was $231.5 million, representing a 23% increase compared to the same quarter of the previous year [8][52] - The company reported a GAAP net loss of $516.8 million for Q1 2023, primarily due to a non-cash loss on debt extinguishment of $387.3 million [35][56] - Non-GAAP net loss was $85.5 million, compared to a loss of $48.6 million in Q1 2022 [36] Business Line Data and Key Metrics Changes - EXONDYS 51 generated $132.6 million in revenue, up over 13% from Q1 2022 [47] - VYONDYS 53 sales were $33 million, growing approximately 18% year-over-year [47] - AMONDYS 45 sales totaled $65.9 million, representing more than 50% growth compared to Q1 2022 [47] Market Data and Key Metrics Changes - Total ex-U.S. net product revenue was approximately $31 million, reflecting a decrease from the previous quarter, which was anticipated [46] - The U.S. market has reached a mature phase for all three products, leading to expectations of more modest growth in new patient starts [30] Company Strategy and Development Direction - The company is preparing for the potential launch of SRP-9001, a gene therapy for Duchenne muscular dystrophy, with a PDUFA date set for May 29, 2023 [9][22] - The focus is on expanding the label for SRP-9001 to include non-ambulatory patients and addressing preexisting neutralizing antibodies [66][83] - The company aims to ensure accessibility and reimbursement for SRP-9001 through engagement with payers [32][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming FDA advisory panel for SRP-9001, emphasizing the importance of the evidence supporting the therapy [7][9] - The company is committed to serving the Duchenne community and believes that SRP-9001 could significantly improve patient outcomes [9][14] - Management acknowledged the complexities of access and reimbursement for rare disease therapies but remains optimistic about payer engagement [70][125] Other Important Information - The company has completed all FDA inspections, including GMP and GCP inspections, and is ready for the potential launch of SRP-9001 [23][117] - The company has approximately $1.9 billion in cash and investments as of March 31, 2023, positioning it well for future operations [57] Q&A Session Summary Question: What is your estimate of patient numbers for the initial indication in the U.S.? - Management indicated that the addressable patient population is estimated to be between 10,000 to 15,000 patients in the U.S., with a focus on ambulatory patients [83] Question: Can you talk about your manufacturing capacity and any major expansions needed? - Management confirmed that no major capital expenditures or expansions are required to launch SRP-9001, and they are confident in their ability to meet demand [83] Question: How are preliminary conversations with payers going regarding SRP-9001? - Management reported constructive dialogues with payers, emphasizing that they have been engaging with them for several years and are optimistic about access for patients [87][88] Question: Will there be a difference in ramp for patients naive to RNA therapies versus those on PMOs? - Management does not anticipate a difference in ramp-up for patients, stating that the therapy will be important for all eligible patients [92] Question: What is the company's plan for capital deployment post-approval? - Management plans to focus on R&D while also aiming for profitability, with pricing for SRP-9001 being determined based on its value to patients [127]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14895 SAREPTA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 93-0797222 (State or other juri ...

Financial Data and Key Metrics Changes - Fourth quarter total revenue was $258.4 million, with net product revenue at $235.9 million, representing a 32% increase year-over-year [6] - Full year total revenue reached $933 million, and net product revenue was $843.8 million, indicating a 38% year-over-year increase [6] - The company has maintained a consistent 40% compounded annual growth rate over the last five years, driven entirely by serving the Duchenne community without price increases [6] Business Line Data and Key Metrics Changes - For the fourth quarter of 2022, net product revenue for EXONDYS 51 was $146 million, reflecting a 22% growth compared to Q4 2021 [21] - VYONDYS 53 generated $28.5 million in net product revenue for Q4 2022, marking a 15% increase year-over-year [21] - AMONDYS 45 saw net product revenue of $61.4 million in Q4 2022, representing nearly 80% growth compared to the same quarter in 2021 [21] Market Data and Key Metrics Changes - Ex U.S. net product revenue was $96.3 million for the full year 2022, accounting for approximately 11% of overall net product revenues [42] - Fourth quarter 2022 ex U.S. sales were strong at $36.9 million, exceeding expectations for the quarter [43] Company Strategy and Development Direction - The company is focused on advancing the Biologics License Application (BLA) for gene therapy SRP-9001, which is seen as a pivotal moment for both the company and the Duchenne community [3][4] - Plans include addressing any remaining FDA questions, preparing for preapproval inspections, building inventory for launch, and ensuring launch readiness [5] - The company aims to commence studies to broaden the label for SRP-9001 and has initiated a pilot study for SRP-604 to treat limb-girdle muscular dystrophies [11][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the FDA's acceptance of the BLA for SRP-9001 via the Accelerated Approval pathway, highlighting the potential clinical benefits for patients [8] - The company is well-capitalized with approximately $2 billion in cash and equivalents, positioning it to execute its plans effectively [27] - Management emphasized the urgency of providing therapies to patients with Duchenne muscular dystrophy, indicating that families are unlikely to wait for additional data before seeking treatment [115] Other Important Information - The company reported a GAAP net loss of $109.2 million for Q4 2022, compared to a loss of $122 million in Q4 2021 [45] - R&D expenses for Q4 2022 were $213.8 million, an increase from $197.3 million in the same quarter of 2021, primarily due to higher upfront and milestone expenses [25] - SG&A expenses on a GAAP basis were approximately $120.5 million for Q4 2022, up from $78.1 million in Q4 2021, driven by increased stock-based compensation [26] Q&A Session Summary Question: What was the FDA's commentary on the mid-cycle review regarding the external control arm? - Management confirmed that the FDA saw no significant safety issues with the filing for SRP-9001 and did not identify any major deficiencies in the clinical data set [30][51] Question: How confident is the company regarding the manufacturing inspections? - Management expressed confidence in the timing of the preapproval inspections and stated that they are well-prepared for them [32][73] Question: What is the expected patient supply at launch? - The company aims to ensure that all patients can access the therapy without back orders, with plans to have around 50 sites operational at launch [35][39] Question: How does the company view the payer pathway for SRP-9001? - Management believes that their extensive experience with the payer community will facilitate productive discussions regarding access and reimbursement for SRP-9001 [103]

[PART I](index=7&type=section&id=PART%20I) [Business](index=7&type=section&id=Item%201.%20Business) Sarepta Therapeutics is a commercial-stage biopharmaceutical company focused on RNA-targeted and gene therapies for rare diseases, primarily Duchenne muscular dystrophy [Overview and Commercial Products](index=7&type=section&id=Overview%20and%20Commercial%20Products) This section details Sarepta's focus on RNA-targeted and gene therapies for rare diseases, particularly Duchenne, and its commercial products - Sarepta is a commercial-stage biopharmaceutical company focused on RNA-targeted therapeutics and gene therapy for rare diseases, with a primary focus on Duchenne muscular dystrophy (Duchenne)[14](index=14&type=chunk) - The company has three commercial products for Duchenne, all utilizing its proprietary phosphorodiamidate morpholino oligomer (PMO) chemistry and exon-skipping technology: EXONDYS 51 (for exon 51 skipping), VYONDYS 53 (for exon 53 skipping), and AMONDYS 45 (for exon 45 skipping)[19](index=19&type=chunk) Net Product Revenue (2020-2022) | Year | Net Revenue (in millions) | | :--- | :--- | | 2022 | $843.8 | | 2021 | $612.4 | | 2020 | $455.9 | - The company's technology platforms include PMO, next-generation PPMO (cell-penetrating peptide-conjugated PMO) designed for enhanced delivery, and AAV-based gene therapy (using the AAVrh.74 vector)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Pipeline – Key Programs](index=9&type=section&id=Pipeline%20%E2%80%93%20Key%20Programs) This section highlights Sarepta's key pipeline programs, including late-stage candidates for Duchenne and Limb-girdle muscular dystrophy - **SRP-5051 (Duchenne PPMO):** A next-generation PPMO chemistry for exon 51 skipping, designed for enhanced cell delivery and potentially less frequent dosing; Part B of Study 5051-201 is anticipated to be a potentially pivotal trial[31](index=31&type=chunk)[32](index=32&type=chunk) - **SRP-9001 (Duchenne Gene Therapy):** Aims to express a functional micro-dystrophin using the AAVrh.74 vector; a Biologics License Application (BLA) was submitted in September 2022 and accepted for Priority Review by the FDA, with a regulatory action date of May 29, 2023[33](index=33&type=chunk)[36](index=36&type=chunk) - **SRP-9003 (LGMD Gene Therapy):** The most advanced Limb-girdle muscular dystrophy candidate, designed to restore beta-sarcoglycan protein; the company plans to meet with the FDA in 2023 to discuss a potentially pivotal trial[37](index=37&type=chunk)[38](index=38&type=chunk) - The company's overall pipeline includes more than **40 programs** at various stages of discovery, pre-clinical, and clinical development[19](index=19&type=chunk) [Manufacturing and Material Agreements](index=12&type=section&id=Manufacturing%20and%20Material%20Agreements) This section describes Sarepta's hybrid manufacturing strategy and key material agreements, including collaborations with Roche, BioMarin, and UWA - Sarepta utilizes a hybrid manufacturing strategy, relying on third-party Contract Manufacturing Organizations (CMOs) for large-scale GMP production while developing internal expertise at its Andover, MA facility[41](index=41&type=chunk)[44](index=44&type=chunk) - **Roche Collaboration:** Sarepta granted Roche an exclusive license to commercialize SRP-9001 outside the U.S., receiving an upfront payment of approximately **$1.2 billion** and eligible for up to **$1.7 billion** in milestones, plus royalties, with shared global development costs[47](index=47&type=chunk)[55](index=55&type=chunk) - **BioMarin Agreement:** Sarepta has a co-exclusive worldwide license from BioMarin for patent rights related to its Duchenne program, including its three commercial products, with obligations to pay regulatory milestones and royalties of **4% in the U.S.** and **5% ex-U.S.** on net sales[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - **University of Western Australia (UWA) Agreement:** Sarepta has an exclusive license from UWA for compounds treating Duchenne via exon skipping, covering its three commercial products, including milestone payments and low-single-digit percentage royalties on net sales[70](index=70&type=chunk) [Patents and Government Regulation](index=16&type=section&id=Patents%20and%20Government%20Regulation) This section details Sarepta's intellectual property strategy, including patent protection and regulatory exclusivity, and its exposure to extensive government regulation - The company relies on a combination of patent protection, regulatory exclusivity, and trade secrets; key patents for its commercial products extend into the 2030s, though some foundational patents expire sooner[72](index=72&type=chunk)[77](index=77&type=chunk)[89](index=89&type=chunk) - EXONDYS 51 has Orphan Drug Exclusivity until September 2023; VYONDYS 53 has NCE exclusivity until December 2024 and Orphan Drug Exclusivity until December 2026; AMONDYS 45 has NCE exclusivity until February 2026 and Orphan Drug Exclusivity until February 2028[80](index=80&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The company utilizes FDA's expedited programs, including accelerated approval for its commercial products; the recently enacted FDORA gives the FDA expanded authority for expedited withdrawal of accelerated approvals if post-approval studies are not conducted with due diligence[102](index=102&type=chunk) - The business is subject to extensive regulation regarding pharmaceutical pricing and reimbursement, including Medicaid rebates, Medicare Part B ASP-based payments, and the PHS 340B drug pricing program; the Inflation Reduction Act (IRA) of 2022 introduces new drug pricing reforms that could impact the business[142](index=142&type=chunk)[143](index=143&type=chunk)[147](index=147&type=chunk) [Competition and Human Capital](index=31&type=section&id=Competition%20and%20Human%20Capital) This section outlines the intense competitive landscape in Duchenne muscular dystrophy and provides an overview of the company's human capital - Sarepta faces intense competition in the Duchenne space from companies developing exon-skipping therapies (Nippon Shinyaku, Wave Life Sciences), gene therapies (Pfizer), and gene editing technologies (Vertex, CRISPR Therapeutics)[156](index=156&type=chunk)[157](index=157&type=chunk)[214](index=214&type=chunk) - As of December 31, 2022, the company had **1,162 employees**, with **779 in research and development**; women comprise **57% of the workforce** and **52% of leadership roles** (Director and above)[163](index=163&type=chunk)[164](index=164&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant commercial, regulatory, pipeline, manufacturing, and financial risks, including dependence on approved products and potential operating losses - **Commercial and Regulatory Risks:** The company is highly dependent on its three products (EXONDYS 51, VYONDYS 53, AMONDYS 45), which received accelerated approval; continued approval is contingent upon verifying clinical benefit in confirmatory trials, and failure to do so could lead to withdrawal of approval, a risk heightened by the FDA's expanded powers under FDORA[175](index=175&type=chunk)[179](index=179&type=chunk) - **Pipeline and Development Risks:** Clinical development is lengthy and uncertain, particularly for novel gene therapies like SRP-9001; risks include difficulty enrolling patients in trials for rare diseases, potential for undesirable side effects, and the possibility that early-stage trial results may not be indicative of late-stage success[227](index=227&type=chunk)[234](index=234&type=chunk)[238](index=238&type=chunk) - **Manufacturing and Third-Party Reliance:** Sarepta relies on a limited number of third-party manufacturers for its products and candidates; any failure by these partners to comply with cGMP, or any production problems, could delay development, limit supply, and harm the business, particularly for complex gene therapy manufacturing[271](index=271&type=chunk)[279](index=279&type=chunk)[285](index=285&type=chunk) - **Financial Risks:** The company has a history of operating losses (**$536.2 million in 2022**) and an accumulated deficit of **$3.9 billion**; achieving profitability is not guaranteed and may require significant future funding, with stock price highly volatile based on clinical trial and regulatory news[324](index=324&type=chunk)[326](index=326&type=chunk)[332](index=332&type=chunk) [Properties](index=71&type=section&id=Item%202.%20Properties) Sarepta's principal facilities include corporate headquarters in Cambridge, MA, an owned lab in Andover, and leased spaces in MA, OH, and NC Key Company Facilities | Location | Type | Size (sq. ft.) | Status | | :--- | :--- | :--- | :--- | | Cambridge, MA | Laboratory and office | 149,589 | Leased (Corporate HQ) | | Andover, MA | Laboratory and office | 65,589 | Owned | | Columbus, OH | Laboratory and office | 131,926 | Leased | [Legal Proceedings](index=71&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in significant patent litigation with REGENXBIO over gene therapy technology and Nippon Shinyaku regarding exon 53 skipping products - **REGENXBIO Lawsuit:** REGENXBIO alleges that Sarepta's manufacture and use of its AAV gene therapy products, including SRP-9001, infringe on a REGENXBIO patent for cultured host cell technology; a trial is scheduled for January 2024[684](index=684&type=chunk) - **Nippon Shinyaku Lawsuit:** Sarepta and Nippon Shinyaku are in a legal dispute with mutual claims of patent infringement concerning their respective exon 53 skipping products; a trial is scheduled for May 2024[685](index=685&type=chunk)[687](index=687&type=chunk) [PART II](index=72&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Sarepta's common stock trades on Nasdaq under SRPT; the company retains earnings for operations and does not anticipate paying cash dividends - The company's common stock trades on the Nasdaq Global Select Market under the ticker symbol SRPT[372](index=372&type=chunk) - Sarepta has never declared or paid cash dividends and does not plan to in the foreseeable future, retaining any future earnings to finance operations[374](index=374&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=73&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Sarepta's revenues grew 33% to $933.0 million, but operating loss widened to $536.2 million due to increased R&D and SG&A, with $2.0 billion cash on hand [Results of Operations](index=76&type=section&id=Results%20of%20Operations) This section details Sarepta's 2022 financial performance, including revenue growth, increased operating loss due to higher R&D and SG&A expenses, and net loss Consolidated Statements of Operations Data (2022 vs 2021) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$933.0** | **$701.9** | **33%** | | Products, net | $843.8 | $612.4 | 38% | | Collaboration and other | $89.2 | $89.5 | (0)% | | **Total Cost and Expenses** | **$1,469.2** | **$1,161.6** | **26%** | | Cost of sales | $140.0 | $97.0 | 44% | | Research and development | $877.1 | $771.2 | 14% | | Selling, general and administrative | $451.4 | $282.7 | 60% | | **Operating Loss** | **($536.2)** | **($459.7)** | **17%** | | **Net Loss** | **($703.5)** | **($418.8)** | **68%** | | **Net Loss Per Share** | **($8.03)** | **($5.15)** | **56%** | Net Product Revenues by Product (2022 vs 2021) | Product | 2022 (in millions) | 2021 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | EXONDYS 51 | $511.7 | $454.4 | 13% | | AMONDYS 45 | $214.6 | $68.5 | 213% | | VYONDYS 53 | $117.4 | $89.5 | 31% | | **Total** | **$843.8** | **$612.4** | **38%** | - The **14% increase in R&D expenses** was primarily driven by higher manufacturing costs for the SRP-9001 gene therapy program, increased compensation from higher headcount, and rising clinical trial expenses for the EMBARK pivotal study[401](index=401&type=chunk)[402](index=402&type=chunk) - The **60% increase in SG&A expenses** was primarily due to a **$108.3 million increase in stock-based compensation**, largely from a modification to the CEO's 2017 grant[404](index=404&type=chunk)[406](index=406&type=chunk) - The company recorded a **$125.4 million loss on debt extinguishment** in 2022 related to the repurchase of a portion of its 2024 convertible notes and the full repayment of its 2019 term loan[408](index=408&type=chunk)[409](index=409&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Sarepta's financial position, including cash, investments, borrowings, working capital, and its ability to fund operations Financial Condition Summary (as of Dec 31) | Metric | 2022 (in millions) | 2021 (in millions) | | :--- | :--- | :--- | | Cash, cash equivalents and investments | $2,008.4 | $2,125.8 | | Total borrowings | $1,544.3 | $1,096.9 | | Working capital | $1,938.3 | $2,151.4 | - In September 2022, the company issued **$1.15 billion of 1.25% convertible senior notes due 2027**, receiving net proceeds of **$1.127 billion**[415](index=415&type=chunk) - Proceeds from the 2027 notes were used to repay the **$550.0 million 2019 Term Loan**, repurchase **$150.6 million of the 2024 convertible notes**, and pay for new capped call transactions[417](index=417&type=chunk) - Cash used in operating activities decreased to **$325.3 million in 2022** from **$443.2 million in 2021**, despite a larger net loss, primarily due to non-cash charges like the loss on debt extinguishment and higher stock-based compensation[424](index=424&type=chunk)[425](index=425&type=chunk) - The company believes its current cash, cash equivalents, and investments are sufficient to fund its operational plan for at least the next twelve months[418](index=418&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=86&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its investment portfolio, while its fixed-rate convertible notes are not subject to market rate changes - The company's investment portfolio is subject to interest rate risk; a hypothetical **10 basis point adverse change** in interest rates would result in an estimated loss in fair value of approximately **$0.4 million** as of December 31, 2022[433](index=433&type=chunk) - The company's convertible senior notes (2024 Notes and 2027 Notes) have fixed interest rates and are therefore not subject to fluctuations in market interest rates[434](index=434&type=chunk) [Financial Statements and Supplementary Data](index=86&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2022, including balance sheets, income statements, cash flows, and the independent auditor's report Key Consolidated Balance Sheet Data (as of Dec 31, 2022) | Metric | Amount (in thousands) | | :--- | :--- | | **Assets** | | | Cash, cash equivalents & short-term investments | $1,989,374 | | Total Assets | $3,128,366 | | **Liabilities & Equity** | | | Total Liabilities | $2,743,416 | | Total Stockholders' Equity | $384,950 | | **Total Liabilities & Stockholders' Equity** | **$3,128,366** | - The independent auditor, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting; a critical audit matter identified was the evaluation of the lower of cost or net realizable value of raw materials inventory, due to subjective judgment required to estimate future demand[485](index=485&type=chunk)[495](index=495&type=chunk) [Controls and Procedures](index=87&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and KPMG LLP concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[437](index=437&type=chunk) - Management assessed the effectiveness of internal control over financial reporting and concluded that it was effective as of December 31, 2022; this assessment was audited by KPMG LLP, which concurred[441](index=441&type=chunk) [PART III](index=90&type=section&id=PART%20III) [Directors, Executive Compensation, and Corporate Governance](index=90&type=section&id=Item%2010-14) Information on directors, executive compensation, corporate governance, and related matters is incorporated by reference from the company's 2023 proxy statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[447](index=447&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) [PART IV](index=91&type=section&id=PART%20IV) [Exhibits, Financial Statement Schedules](index=91&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, schedules, and a comprehensive set of exhibits filed as part of the Form 10-K - This section includes the consolidated financial statements of the company and the report of the independent registered public accounting firm[454](index=454&type=chunk) - A detailed list of exhibits is provided, including the company's certificate of incorporation, bylaws, indentures for its convertible notes, material contracts such as the collaboration agreement with Roche, and various equity incentive plans[457](index=457&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q3 2022 was approximately $230.3 million, with net product revenue of $207.8 million, representing nearly 25% growth compared to the same quarter last year [7][66] - The company maintained its full-year total revenue guidance of between $905 million and $920 million and net product revenue guidance of between $825 million and $840 million [8] - On a GAAP basis, the company reported a net loss of $257.7 million for Q3 2022, compared to a net loss of $48.1 million for the same period in 2021 [69] Business Line Data and Key Metrics Changes - Net product revenue for EXONDYS 51 was $122 million, for AMONDYS 45 was $55 million, and for VYONDYS 53 was $31 million in Q3 2022 [54][67] - EXONDYS 51 experienced nearly 6% growth year-over-year, while AMONDYS 45 and VYONDYS 53 grew significantly, with AMONDYS 45 impacted by a pull-forward effect [58][59] - The RNA-based PMO franchise continues to show strong performance, contributing to the overall revenue growth [54] Market Data and Key Metrics Changes - The company noted that ex-U.S. sales growth for EXONDYS 51 has become an important contributor to net product revenue growth, despite introducing some quarter-to-quarter fluctuations [56] - The company is focused on expanding access to the Duchenne population amenable to exon 45 skipping, indicating a strategic approach to market penetration [55] Company Strategy and Development Direction - The company is preparing for the launch of SRP-9001, a gene therapy for Duchenne muscular dystrophy, with plans for a mid-2023 launch following a BLA submission [9][10] - The company aims to expand the addressable population for SRP-9001 and is working on studies to include non-ambulatory patients and those with early exon mutations [16][17] - The company is committed to advancing its gene therapy platform and has announced collaborations to enhance its genetic medicine delivery systems [33] Management's Comments on Operating Environment and Future Outlook - Management emphasized the urgency of bringing therapies to patients with Duchenne muscular dystrophy, highlighting the critical need for accelerated approval pathways [11][12] - The management expressed confidence in the upcoming BLA submission and the potential for priority review by the FDA, with a PDUFA date anticipated in May 2023 [79][82] - The company is well-capitalized with approximately $2.1 billion in cash and investments as of September 30, 2022, to support the launch of SRP-9001 if approved [77] Other Important Information - The company announced a management transition with the retirement of Bill Ciambrone, who played a key role in the development and manufacturing processes for SRP-9001 [23][29] - The company presented significant real-world evidence at the World Muscle Society Conference, demonstrating the survival benefits associated with its therapies [35][36] Q&A Session Summary Question: Concerns about SRP-9001 review process - Management confirmed that they have requested a priority review for the BLA submission and are planning for a May 2023 PDUFA date, with no current indications from the FDA suggesting otherwise [79] Question: Manufacturing commitments for SRP-9001 - Management stated they are in good shape regarding manufacturing commitments and have completed significant CMC work ahead of the EMBARK study [82] Question: Potential impact of EMBARK study results - Management expressed confidence in the EMBARK study's design and power, indicating they would consider the totality of evidence if the study did not meet statistical significance [99][100] Question: Real-world data and primary endpoint timing - Management addressed concerns about variability in patient responses and reiterated confidence in the study design and powering for the EMBARK trial [104][106]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14895 SAREPTA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 93-0797222 (State or other ...

Sarepta Therapeutics, Inc. (NASDAQ:SRPT) Q2 2022 Earnings Conference Call August 2, 2022 4:30 PM ET Company Participants Mary Jenkins - Senior Manager of Investor Relations Doug Ingram - President & Chief Executive Officer Louise Rodino-Klapac - Executive Vice President, Chief Scientific Officer and Head of R&D Dallan Murray - Senior Vice President & Chief Customer Officer Ian Estepan - Executive Vice President & Chief Financial Officer Gilmore O'Neill - Chief Medical Officer & Executive Vice President Conf ...