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What changed in Sarepta Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sarepta Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+363 added−347 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in Sarepta Therapeutics, Inc.'s 2024 10-K

363 paragraphs added · 347 removed · 260 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

157 edited+78 added−65 removed275 unchanged
Biggest changeIf our study data do not consistently or sufficiently demonstrate the safety or efficacy of any of our product candidates, the regulatory approvals for such product candidates could be significantly delayed as we work to meet approval requirements, or, if we are not able to meet these requirements, such approvals could be withheld or withdrawn. - 48 - Fast track product, breakthrough therapy, priority review, or Regenerative Medicine Advanced Therapy (“RMAT”) designation by the FDA, or access to the Priority Medicine scheme (“PRIME”) by the EMA, for our product candidates, if granted, may not lead to faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
Biggest changeFast track product, breakthrough therapy, priority review, or Regenerative Medicine Advanced Therapy (“RMAT”) designation by the FDA, or access to the Priority Medicine scheme (“PRIME”) by the EMA, for our product candidates, if granted, may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
The degree of market acceptance of our products depends on a number of factors, including: • our ability to demonstrate to the medical and payor community, including specialists who may purchase or prescribe our products, the clinical efficacy, effectiveness and safety of our products as the prescription products of choice for their respective indications; • the effectiveness of our sales and marketing organizations and distribution networks; • the ability of patients or providers to be adequately reimbursed for our products in a timely manner from government and private payors; • the ability to timely demonstrate to the satisfaction of payors real world effectiveness and the economic, humanistic and societal benefits of our products; • the burden or efficiency of payer prior authorization processes and the ability of families and physicians to navigate them; • the actual and perceived efficacy and safety profile of our products, particularly if unanticipated adverse events related to our products’ treatment arise and create safety concerns among potential patients or prescribers or if new data and analyses we obtain for our products do not support, or are interpreted by some parties to not support, the efficacy of our products; and • the efficacy and safety of our other exon-skipping and gene therapy product candidates and third parties’ competitive therapies.
The degree of market acceptance of our products depends on a number of factors, including: • our ability to demonstrate to the medical and payor community, including specialists who may purchase or prescribe our products, the clinical efficacy, effectiveness and safety of our products as the prescription products of choice for their respective indications; • the effectiveness of our sales and marketing organizations and distribution networks; • the ability of patients or providers to be adequately reimbursed for our products in a timely manner from government and private payors; • the ability to timely demonstrate to the satisfaction of payors real world effectiveness and the economic, humanistic, societal and clinical benefits of our products; • the burden or efficiency of payer prior authorization processes and the ability of families and physicians to navigate them; • the actual and perceived efficacy and safety profile of our products, particularly if unanticipated adverse events related to our products’ treatment arise and create safety concerns among potential patients or prescribers or if new data and analyses we obtain for our products do not support, or are interpreted by some parties to not support, the efficacy of our products; and • the efficacy and safety of our other exon-skipping and gene therapy product candidates and third parties’ competitive therapies.
The research, testing, manufacturing, labeling, approval, commercialization, marketing, selling and distribution of drug products are subject to extensive regulation by applicable local, regional and national regulatory authorities and regulations may differ from jurisdiction to jurisdiction. In the U.S., approvals and oversight from federal (e.g., FDA), state and other regulatory authorities are required for these activities.
The research, testing, manufacturing, labeling, approval, commercialization, marketing, selling and distribution of drug products are subject to extensive regulation by applicable local, regional and national regulatory authorities and regulations may differ from jurisdiction to jurisdiction. In the U.S., approvals and oversight from federal (e.g., the FDA), state and other regulatory authorities are required for these activities.
Only a few gene therapy products have been approved in the U.S. and EU. If we are unable to show the safety and efficacy of these product candidates, experience delays in doing so or are unable to successfully commercialize at least one of these drugs, our business would be materially harmed.
Only a few gene therapy products have been approved in the U.S. and the EU. If we are unable to show the safety and efficacy of these product candidates, experience delays in doing so or are unable to successfully commercialize at least one of these drugs, our business would be materially harmed.
FDA also issued a draft guidance in December 2023 that provides recommendations for developing a potency assurance strategy for gene therapy products. In addition, the FDA can put an IND on hold if the information in an IND is not sufficient to assess the risks in pediatric patients.
The FDA also issued a draft guidance in December 2023 that provides recommendations for developing a potency assurance strategy for gene therapy products. In addition, the FDA can put an IND on hold if the information in an IND is not sufficient to assess the risks in pediatric patients.
Accordingly, the FDA or foreign regulatory authorities could interpret these data in different ways from us or our partners, which could delay, limit or prevent full or accelerated regulatory approval.
Accordingly, the FDA or foreign regulatory authorities could interpret these data in different ways from us or our partners, which could delay, limit or prevent full or accelerated regulatory approval.
We and our contract manufacturers are subject to periodic inspections by the FDA, EMA and corresponding state and foreign authorities to ensure strict compliance with cGMP and other applicable government regulations.
We and our contract manufacturers are subject to periodic inspections by the FDA, the EMA and corresponding state and foreign authorities to ensure strict compliance with cGMP and other applicable government regulations.
In September 2022, we issued $1,150.0 million aggregate principal amount of 2027 Notes, pursuant to that certain indenture dated as of September 16, 2022, between us, as issuer, and U.S. Bank National Association, as trustee, including $20.0 million of 2027 Notes issued to the Michael A. Chambers Living Trust in a private placement.
In September 2022, we issued $1,150.0 million aggregate principal amount of 2027 Notes, pursuant to that certain indenture dated as of September 16, 2022, between us, as issuer, and U.S. Bank National Association, as trustee, including $20.0 million of Notes issued to the Michael A. Chambers Living Trust in a private placement.
In addition, the GDPR and the UK GDPR increase the scrutiny that clinical trial sites located in the EEA and UK should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the U.S.
In addition, the GDPR and the UK GDPR increase the scrutiny that clinical trial sites located in the EEA and the UK should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the U.S.
We may not realize the anticipated benefits of such collaborations, and the anticipated benefits of any future collaborations or strategic relationships, each of which involves numerous risks, including: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our products or product candidates based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates, or otherwise undermine or devalue the efforts of our collaboration; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; - 41 - • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our products or product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated and, if terminated, may eliminate our rights to commercialize certain product candidates or may result in a need for additional capital; • failure to successfully develop the acquired or licensed drugs or technology or to achieve strategic objectives, including successfully developing and commercializing the drugs, drug candidates or technologies that we acquire or license; • entry into markets in which we have no or limited direct prior experience or where competitors in such markets have stronger market positions; • disruption of our ongoing business, distraction of our management and employees from other opportunities and challenges and retention of key employees; • potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company, or acquired or licensed product or technology, including but not limited to, problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, safety, accounting practices, employee, customer or third-party relations and other known and unknown liabilities; • liability for activities of the acquired company or licensor before the acquisition or license, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of an acquisition or license, including but not limited to, claims from terminated employees, customers, former equity holders or other third-parties; • difficulty in integrating the products, product candidates, technologies, business operations and personnel of an acquired asset or company; and • difficulties in the integration of the acquired company’s departments, systems, including accounting, human resource and other administrative systems, technologies, books and records, and procedures, as well as in maintaining uniform standards, controls, including internal control over financial reporting required by the Sarbanes-Oxley Act of 2002 and related procedures and policies.
We may not realize the anticipated benefits of such collaborations, and the anticipated benefits of any future collaborations or strategic relationships, each of which involves numerous risks, including: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our products or product candidates based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates, or otherwise undermine or devalue the efforts of our collaboration; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our products or product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated and, if terminated, may eliminate our rights to commercialize certain product candidates or may result in a need for additional capital; • failure to successfully develop the acquired or licensed drugs or technology or to achieve strategic objectives, including successfully developing and commercializing the drugs, drug candidates or technologies that we acquire or license; • entry into markets in which we have no or limited direct prior experience or where competitors in such markets have stronger market positions; • disruption of our ongoing business, distraction of our management and employees from other opportunities and challenges and retention of key employees; • potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company, or acquired or licensed product or technology, including but not limited to, problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, safety, accounting practices, employee, customer or third-party relations and other known and unknown liabilities; • liability for activities of the acquired company or licensor before the acquisition or license, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of an acquisition or license, including but not limited to, claims from terminated employees, customers, former equity holders or other third-parties; • difficulty in integrating the products, product candidates, technologies, business operations and personnel of an acquired asset or company; and • difficulties in the integration of the acquired company’s departments, systems, including accounting, human resource and other administrative systems, technologies, books and records, and procedures, as well as in maintaining uniform standards, controls, including internal control over financial reporting required by the Sarbanes-Oxley Act of 2002 and related procedures and policies.
The laws and regulations include: • federal healthcare anti-kickback law, which prohibit, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, information or claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent; • the Federal Food, Drug and Cosmetic Act, which among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; - 56 - • the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with teaching hospitals, physicians and certain non-physician practitioners as well as physician ownership interests to the federal government for re-disclosure to the public; and • state law equivalents of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third party payor, including commercial insurers, state laws regulating interactions between pharmaceutical manufactures and healthcare providers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
The laws and regulations include: • federal healthcare anti-kickback law, which prohibit, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid; • federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, information or claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent; • the Federal Food, Drug and Cosmetic Act, which among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs; • the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with teaching hospitals, physicians and certain non-physician practitioners as well as physician ownership interests to the federal government for re-disclosure to the public; and • state law equivalents of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third party payor, including commercial insurers, state laws regulating interactions between pharmaceutical manufactures and healthcare providers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
These provisions include: • when the board is comprised of six or more directors, classification of our board of directors into two classes, with one class elected each year; • directors may only be removed for cause by the affirmative vote of a majority of the voting power of all the then-outstanding shares of voting stock; • prohibition of cumulative voting of shares in the election of directors; • right of the board of directors to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death, disqualification or removal of a director; • express authorization of the board of directors to make, alter or repeal our bylaws; • prohibition on stockholder action by written consent; • advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings; • the ability of our board of directors to authorize the issuance of undesignated preferred stock, the terms and rights of which may be established and shares of which may be issued without stockholder approval, including rights superior to the rights of the holders of common stock; and • a super-majority (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock are required to amend, rescind, alter or repeal our bylaws and certain provisions of our certificate of incorporation.
These provisions include: • when the board is comprised of six or more directors, classification of our board of directors into two classes, with one class elected each year; • directors may only be removed for cause by the affirmative vote of a majority of the voting power of all the then-outstanding shares of voting stock; • prohibition of cumulative voting of shares in the election of directors; • right of the board of directors to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death, disqualification or removal of a director; • express authorization of the board of directors to make, alter or repeal our bylaws; - 63 - • prohibition on stockholder action by written consent; • advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings; • the ability of our board of directors to authorize the issuance of undesignated preferred stock, the terms and rights of which may be established and shares of which may be issued without stockholder approval, including rights superior to the rights of the holders of common stock; and • a super-majority (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock are required to amend, rescind, alter or repeal our bylaws and certain provisions of our certificate of incorporation.
Even if we meet FDA requirements and an advisory committee votes to recommend approval of an NDA or BLA submission, the FDA could still disagree with the advisory committee’s recommendation and deny approval of a product candidate based on their review. - 46 - • The regulatory approval process for product candidates targeting orphan diseases, such as Duchenne, that use new technologies and processes, such as antisense oligonucleotide therapies, gene therapy and other alternative approaches or endpoints for the determination of efficacy is uncertain due to, among other factors, evolving interpretations of a new therapeutic class, the broad discretion of regulatory authorities, lack of precedent, small safety databases, varying levels of applicable expertise of regulators or their advisory committees, scientific developments, changes in the competitor landscape, shifting political priorities and changes in applicable laws, rules or regulations and interpretations of the same.
Even if we meet FDA requirements and an advisory committee votes to recommend approval of an NDA or BLA submission, the FDA could still disagree with the advisory committee’s recommendation and deny approval of a product candidate based on their review. • The regulatory approval process for product candidates targeting orphan diseases, such as Duchenne, that use new technologies and processes, such as antisense oligonucleotide therapies, gene therapy and other alternative approaches or endpoints for the determination of efficacy is uncertain due to, among other factors, evolving interpretations of a new therapeutic class, the broad discretion of regulatory authorities, lack of precedent, small safety databases, varying levels of applicable expertise of regulators or their advisory committees, scientific developments, changes in the competitor landscape, shifting political priorities and changes in applicable laws, rules or regulations and interpretations of the same.
In addition, we are aware of many pharmaceutical and biotechnology companies that are actively engaged in research and development using platform technologies that may be viewed as competing with ours beyond and including those companies mentioned immediately above, such as Alnylam Pharmaceuticals, Inc., Arbutus (formerly Tekmira Pharmaceuticals Corp.), Deciphera Pharmaceuticals, Ionis Pharmaceuticals, Inc., Roche Innovation Center Copenhagen (formerly Santaris Pharma A/S), Shire plc (now Takeda), Biogen, Moderna Therapeutics, Avidity, Dyne Therapeutics, Stoke Therapeutics, Fulcrum Therapeutics, Ultragenyx, Sanofi and PepGen.
In addition, we are aware of many pharmaceutical and biotechnology companies that are actively engaged in research and development using platform technologies that may be viewed as competing with ours beyond and including those companies mentioned immediately above, such as Alnylam Pharmaceuticals, Inc., Arbutus (formerly Tekmira Pharmaceuticals Corp.), Deciphera Pharmaceuticals, Ionis Pharmaceuticals, Inc., Roche Innovation Center Copenhagen (formerly Santaris Pharma A/S), Shire plc (now Takeda), Biogen, Moderna Therapeutics, Avidity, Dyne Therapeutics, Stoke Therapeutics, Ultragenyx, Sanofi and PepGen.
Our competitors may, among other things, relative to our products or product candidates: • develop safer or more effective products; • implement more effective approaches to sales and marketing; • develop less costly products; • have lower cost of goods; • receive more favorable reimbursement coverage; • obtain preferred formulary status; • obtain regulatory approval more quickly; • have access to more manufacturing capacity; - 40 - • develop products that are more convenient and easier to administer; • form more advantageous strategic alliances; or • establish superior intellectual property positions.
Our competitors may, among other things, relative to our products or product candidates: • develop safer or more effective products; • implement more effective approaches to sales and marketing; • develop less costly products; • have lower cost of goods; • receive more favorable reimbursement coverage; • obtain preferred formulary status; • obtain regulatory approval more quickly; • have access to more manufacturing capacity; • develop products that are more convenient and easier to administer; • form more advantageous strategic alliances; or • establish superior intellectual property positions.
Our ability to obtain the government or regulatory approvals required to commercialize any of our product candidates in any jurisdiction, including in the U.S. or the EU, cannot be assured, may be significantly delayed or may never be achieved for various reasons including the following: • Our non-clinical, clinical, chemistry, manufacturing and controls and other data and analyses from past, current and future studies for any of our product candidates may not be sufficient to meet regulatory requirements for marketing application approvals.
Our ability to obtain the government or regulatory approvals required to commercialize any of our product candidates in any jurisdiction, including in the U.S. or the EU, cannot be assured, may be significantly delayed or may never be achieved for various reasons including the following: - 45 - • Our non-clinical, clinical, chemistry, manufacturing and controls and other data and analyses from past, current and future studies for any of our product candidates may not be sufficient to meet regulatory requirements for marketing application approvals.
Furthermore, any problems in our manufacturing process or the facilities with which we contract make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs. - 51 - We, through our third-party manufacturers, seek to produce or produce supply of our products and product candidates.
Furthermore, any problems in our manufacturing process or the facilities with which we contract make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs. We, through our third-party manufacturers, seek to produce or produce supply of our products and product candidates.
Litigation, interferences, oppositions, inter partes reviews, administrative challenges or other similar types of proceedings are, have been and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, enforceability, scope or non-infringement of certain patent rights claimed by third parties to be pertinent to the manufacture, use or sale of our product candidates or products.
Litigation, interferences, oppositions, inter partes reviews, administrative challenges or other similar types of proceedings are, have been and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, enforceability, scope or non-infringement of certain patent rights claimed by - 54 - third parties to be pertinent to the manufacture, use or sale of our product candidates or products.
Legislation has been introduced to amend the Orphan Drug Act in a way that may prevent these effects of the Catalyst decision, but it is unclear if or when such legislation could be enacted. - 38 - In addition, we may face risks with maintaining regulatory exclusivities for our products, and our protection may be circumvented, even if maintained.
Legislation has been introduced to amend the Orphan Drug Act in a way that may prevent these effects of the Catalyst decision, but it is unclear if or when such legislation could be enacted. In addition, we may face risks with maintaining regulatory exclusivities for our products, and our protection may be circumvented, even if maintained.
We do not expect our business to be able to generate cash flow from operations in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and we may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
We do not expect our business to be able to generate cash flow from operations in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and we may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining - 64 - additional equity capital on terms that may be onerous or highly dilutive.
This application validation period typically adds approximately two months to the timeline for review and decision from the date of submission. RMAT designations will accelerate approval and will include all the benefits of fast track and breakthrough therapy designations, including early interactions with the FDA, but the exact mechanisms have not yet been announced by FDA.
This application validation period typically adds approximately two months to the timeline for review and decision from the date of submission. RMAT designations will accelerate approval and will include all the benefits of fast - 48 - track and breakthrough therapy designations, including early interactions with the FDA, but the exact mechanisms have not yet been announced by the FDA.
There has been, and we believe that there will continue to be, significant litigation in the biopharmaceutical and pharmaceutical industries regarding patent and other intellectual property rights. Risks Related to our Business Operations Failure to comply with healthcare and other regulations is subject to substantial penalties and our business, operations and financial condition could be adversely affected.
There has been, and we believe that there will continue to be, significant litigation in the biopharmaceutical and pharmaceutical industries regarding patent and other intellectual property rights. - 55 - Risks Related to our Business Operations Failure to comply with healthcare and other regulations is subject to substantial penalties and our business, operations and financial condition could be adversely affected.
For example, the exclusivity period for EXONDYS 51 ended September 2023. Orphan drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process. A recent decision in 2021 by the U.S. Court of Appeals for the Eleventh Circuit in Catalyst Pharmaceuticals, Inc. vs.
For example, the exclusivity period for EXONDYS 51 ended in September 2023. Orphan drug designation neither shortens the development time or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process. A decision in 2021 by the U.S. Court of Appeals for the Eleventh Circuit in Catalyst Pharmaceuticals, Inc. vs.
Turnover rates of key employees has varied substantially in recent years. Over the last few years, we have had several executive management changes. Leadership transitions can be inherently difficult to manage and may cause uncertainty or a disruption to our business or may increase the likelihood of turnover in other key officers and employees.
Turnover rates of key employees have varied substantially in recent years. Over the last few years, we have had several executive management changes. Leadership transitions can be inherently difficult to manage and may cause uncertainty or a disruption to our business or may increase the likelihood of turnover in other key officers and employees.
In complying with cGMP, we are obligated to expend time, money and effort in production, record keeping and quality control to seek to assure that the product meets applicable specifications and other requirements. We do not have direct operational control over a third-party manufacturer’s compliance with regulations and requirements.
In complying with cGMP, we are - 52 - obligated to expend time, money and effort in production, record keeping and quality control to seek to assure that the product meets applicable specifications and other requirements. We do not have direct operational control over a third-party manufacturer’s compliance with regulations and requirements.
Even if we receive the required regulatory clearance or approvals for certain diagnostic tests, the commercial success of any of our product candidates that require such tests will be dependent upon the continued availability of such tests. We are investing significant resources in the development of novel gene therapy product candidates.
Even if we receive the required regulatory clearance or approvals for certain diagnostic tests, the commercial success of any of our product candidates that require such tests will be dependent upon the continued availability of such tests. - 46 - We are investing significant resources in the development of novel gene therapy product candidates.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers, as well as personally identifiable information of the patients using our commercially - 67 - approved products, clinical trial participants and employees. Similarly, our third-party providers possess certain of our sensitive data.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers, as well as personally identifiable information of the patients using our commercially approved products, clinical trial participants and employees. Similarly, our third-party providers possess certain of our sensitive data.
The third parties are allowed to rely on the safety and efficacy data of - 54 - the innovator’s product, may not need to conduct clinical trials and can market a competing version of a product after the expiration or loss of patent exclusivity or the expiration or loss of regulatory exclusivity and often charge significantly lower prices.
The third parties are allowed to rely on the safety and efficacy data of the innovator’s product, may not need to conduct clinical trials and can market a competing version of a product after the expiration or loss of patent exclusivity or the expiration or loss of regulatory exclusivity and often charge significantly lower prices.
Our estimates of the size of these patient populations are based on limited number of published studies as well as internal analyses. Various factors may decrease the market size of our products and product candidates, including the severity of the disease, patient demographics and the response of patients’ immune systems to our products and product candidates.
Our estimates of the size of these patient populations are based on a limited number of published studies as well as internal analyses. Various factors may decrease the market size of our products and product candidates, including the severity of the disease, patient demographics and the response of patients’ immune systems to our products and product candidates.
Any failure on our part to respond to these requirements in a timely and satisfactory manner could significantly delay or negatively impact confirmatory study timelines and/or the development plans we have for PMO, PPMO, gene therapy-based product candidates or other product candidates.
Any failure on our part to respond to these requirements in a timely and satisfactory manner could significantly delay or negatively impact confirmatory study timelines and/or the development plans we have for PMO, gene therapy-based product candidates or other product candidates.
In any event, the receipt of such a designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional regulatory procedures and does not assure ultimate marketing approval by the agency.
In any event, the receipt of such a designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional regulatory procedures and does not assure ultimate marketing approval by the relevant agency.
Failure by Roche to meet its obligations under the collaboration agreement, to apply sufficient efforts at developing and commercializing collaboration products, or to comply with applicable legal or regulatory requirements, may materially adversely affect our business and our results of operations.
Failure by Roche to meet its obligations under the Roche Agreement, to apply sufficient efforts at developing and commercializing collaboration products, or to comply with applicable legal or regulatory requirements, may materially adversely affect our business and our results - 41 - of operations.
We have relied upon, and plan to continue to rely upon, third parties to conduct some aspects of our early stage research and pre-clinical and clinical development with respect to certain of our product candidates, including our follow-on exon-skipping product candidates, PPMO, gene therapy and gene editing product candidates.
We have relied upon, and plan to continue to rely upon, third parties to conduct some aspects of our early-stage research and pre-clinical and clinical development with respect to certain of our product candidates, including our follow-on exon-skipping product candidates, gene therapy and gene editing product candidates.
For example, in the past we have received clinical holds from the FDA. Although these holds have generally not materially affected our development timelines, there is no assurance that any future hold would not have a material adverse effect.
For example, in the past, we have received clinical holds from the FDA. Although these holds have generally not materially affected our - 44 - development timelines, there is no assurance that any future hold would not have a material adverse effect.
This activity may have an impact on the value of our common stock. General Risks Unfavorable global economic conditions could harm our business, financial condition or results of operations. Our results of operations could be harmed by general conditions in the global economy and in the global financial markets.
This activity may have an impact on the value of our common stock. General Risks Unfavorable and uncertain global economic conditions could harm our business, financial condition or results of operations. Our results of operations could be harmed by general conditions in the global economy and in the global financial markets.
The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements and condensed consolidated financial statements could prove inaccurate. Our consolidated financial statements and condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S.
The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements and condensed consolidated financial statements could prove inaccurate. Our consolidated financial statements and condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (the “U.S.
In the ordinary course of business we may, and in some cases have, become involved in lawsuits and other disputes such as securities claims, intellectual property challenges, including interferences declared by the USPTO, and employee matters.
In the ordinary course of business we may, and in some cases have, become involved in lawsuits and other disputes such as securities claims, intellectual property challenges, including interferences declared by the USPTO, contractual disputes, and employee matters.
Any cost containment measures, including those listed above, or other healthcare system reforms that are adopted, could significantly decrease the available coverage and the price we might establish for our products and product candidates, which would have an adverse effect on our net revenues and operating results. - 35 - Our products may not be widely adopted by patients, payors or healthcare providers, which would adversely impact our potential profitability and future business prospects.
Any cost containment measures, including those listed above, or other healthcare system reforms that are adopted, could significantly decrease the available coverage and the price we might establish for our products and product candidates, which would have an adverse effect on our net revenues and operating results. - 34 - Our products may not be widely adopted by patients, payors or healthcare providers, which would adversely impact our potential profitability and future business prospects.
Pricing and rebate calculations vary across products and programs, are complex, and are often subject to interpretation by us, governmental or regulatory agencies, and the courts, which can change and evolve over time. Requirements are subject to change.
Pricing and rebate calculations vary across products and programs, are complex, and are often subject to interpretation by us, governmental or regulatory agencies, and the courts, which can change and evolve over time. Requirements are subject to challenge and change.
Defense Production Act could impact the manufacturing, supply chain and distribution of our products and product candidates. Products intended for use in gene therapies are novel, complex and difficult to manufacture.
Defense Production Act could impact the manufacturing, supply chain and distribution of our products and product candidates. - 51 - Products intended for use in gene therapies are novel, complex and difficult to manufacture.
We do not know whether any of our clinical trials will begin or be completed, and results announced, as planned or expected, if at all, as the commencement and completion of clinical trials and announcement of results is often delayed or prevented for a number of reasons, including, among others: • denial by the regulatory agencies of permission to proceed with our planned clinical trials or any other clinical trials we may initiate, or placement of a clinical trial on hold; • delays in filing or receiving approvals of additional INDs that may be required; • negative and/or unanticipated results from our ongoing non-clinical trials or clinical trials; • challenges in identifying, recruiting, enrolling and retaining patients to participate in clinical trials; • challenges with subject compliance within clinical trials; • timely and effectively contract with (under reasonable terms), manage and work with investigators, institutions, hospitals and the CROs/ vendors involved in the clinical trial; • negotiate contracts and other related documents with clinical trial parties and institutional review boards, such as informed consents, CRO agreements and site agreements, which can be subject to extensive negotiations that could cause significant delays in the clinical trial process, with terms possibly varying significantly among different trial sites and CROs and possibly subjecting the Company to various risks; • inadequate quantity or quality of supplies of a product candidate or other materials necessary to conduct clinical trials, for example as a result of delays in defining and implementing the manufacturing process for materials used in pivotal trials or for the manufacture of larger quantities or other delays or issues arising in the manufacturing of sufficient supply of finished drug product; • difficulties obtaining institutional review board (“IRB”) approval, and equivalent (Ethics Committees or ECs) approval for sites outside the U.S., to conduct a clinical trial at a prospective site or sites; • ensure adherence to trial designs and protocols agreed upon and approved by regulatory authorities and applicable legal and regulatory guidelines; • delays or problems in analyzing data, or the need for additional analysis or data or the need to enroll additional patients; • the occurrence of serious adverse events or unexpected drug-related side effects experienced by patients in a clinical trial or unexpected results in ongoing non-clinical trials; • delays in validating endpoints utilized in a clinical trial; • delays in validating outcome assessments needed in a clinical trial; • our inability to have formal meetings with the regulatory agencies or to interact with them on a regular basis; • our inability to satisfy the requirements of the regulatory agencies to commence clinical trials, such as developing potency assays and lot release specifications that correlate with the activity or response of the product candidate or other CMC requirements; • the regulatory agencies disagreeing with our clinical trial design and our interpretation of data from clinical trials, or changing the requirements for approval even after the regulatory authority has reviewed and commented on the design for our clinical trials; • reports from non-clinical or clinical testing of competing therapies that raise safety or efficacy concerns; and • the recruitment and retention of employees, consultants or contractors with the required level of expertise.
We do not know whether any of our clinical trials, or those with our strategic partners, will begin or be completed, and results announced, as planned or expected, if at all, as the commencement and completion of clinical trials and announcement of results is often delayed or prevented for a number of reasons, including, among others: • denial by the regulatory agencies of permission to proceed with our planned clinical trials or any other clinical trials we may initiate, or placement of a clinical trial on hold; • delays in filing or receiving approvals of additional INDs that may be required; • negative and/or unanticipated results from our ongoing non-clinical trials or clinical trials; • challenges in identifying, recruiting, enrolling and retaining patients to participate in clinical trials; • challenges with subject compliance within clinical trials; • timely and effectively contract with (under reasonable terms), manage and work with investigators, institutions, hospitals and the CROs/ vendors involved in the clinical trial; • negotiate contracts and other related documents with clinical trial parties and institutional review boards, such as informed consents, CRO agreements and site agreements, which can be subject to extensive negotiations that could cause significant delays in the clinical trial process, with terms possibly varying significantly among different trial sites and CROs and possibly subjecting us to various risks; • inadequate quantity or quality of supplies of a product candidate or other materials necessary to conduct clinical trials, for example as a result of delays in defining and implementing the manufacturing process for materials used in pivotal trials or for the manufacture of larger quantities or other delays or issues arising in the manufacturing of sufficient supply of finished drug product; • difficulties obtaining IRB approval, and equivalent (Ethics Committees or ECs) approval for sites outside the U.S., to conduct a clinical trial at a prospective site or sites; • ensure adherence to trial designs and protocols agreed upon and approved by regulatory authorities and applicable legal and regulatory guidelines; • delays or problems in analyzing data, or the need for additional analysis or data or the need to enroll additional patients; - 43 - • the occurrence of serious adverse events or unexpected drug-related side effects experienced by patients in a clinical trial or unexpected results in ongoing non-clinical trials; • delays in validating endpoints utilized in a clinical trial; • delays in validating outcome assessments needed in a clinical trial; • our inability to have formal meetings with the regulatory agencies or to interact with them on a regular basis; • our inability to satisfy the requirements of the regulatory agencies to commence clinical trials, such as developing potency assays and lot release specifications that correlate with the activity or response of the product candidate or other CMC requirements; • the regulatory agencies disagreeing with our clinical trial design and our interpretation of data from clinical trials, or changing the requirements for approval even after the regulatory authority has reviewed and commented on the design for our clinical trials; • reports from non-clinical or clinical testing of competing therapies that raise safety or efficacy concerns; and • the recruitment and retention of employees, consultants or contractors with the required level of expertise.
These data are based on small patient samples, and, given the heterogeneity of Duchenne and LGMD patients and potential lot-to-lot variability, the data may not be predictive of future results.
These data are based on small patient samples, and, given the heterogeneity of LGMD patients and potential lot-to-lot variability, the data may not be predictive of future results.
If this option is exercised, Roche will have sole control over and decision-making authority with respect to the commercialization of such products outside the U.S. - 37 - Historical revenues from eteplirsen, golodirsen and casimersen through our EAP outside the U.S. may not continue and we may not be able to continue to distribute our products through our EAP.
If this option is exercised, Roche will have sole control over and decision-making authority with respect to the commercialization of such products outside the U.S. - 36 - Historical revenues from eteplirsen, golodirsen and casimersen through our EAP outside the U.S. may not continue and we may not be able to continue to distribute our products through our EAP.
Variations may result from one or more factors, including, without limitation: • timing of purchase orders; • changes in coverage and reimbursement policies of health plans and other health insurers, especially in relation to those products that are currently manufactured, under development or identified for future development by us; • re-authorizations processes that may be required for patients who initially obtained coverage by third parties, including government payors, managed care organizations and private health insurers; • transition from temporary billing codes established by the CMS to permanent medical codes; • timing of approval of applications filed with the FDA; - 63 - • timing of product launches and market acceptance of products launched; • changes in the amounts spent to research, develop, acquire, license or promote new and existing products; • results of clinical trial programs; • serious or unexpected health or safety concerns with our product or product candidates and any resulting clinical holds; • introduction of new products by others that render one or more of our products obsolete or noncompetitive; • the ability to maintain selling prices and gross margins on our products; • increases in the cost of raw materials contained within our products and product candidates; • manufacturing and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications; • timing of revenue recognition relating to our distribution agreements; • the ability to protect our intellectual property from being acquired by other entities; • the ability to avoid infringing the intellectual property of others; • the impact of COVID-19; and • the addition or loss of customers.
Variations may result from one or more factors, including, without limitation: • timing of purchase orders; • changes in coverage and reimbursement policies of health plans and other health insurers, especially in relation to those products that are currently manufactured, under development or identified for future development by us; • re-authorizations processes that may be required for patients who initially obtained coverage by third parties, including government payors, managed care organizations and private health insurers; • transition from temporary billing codes established by the CMS to permanent medical codes; • timing of approval of applications filed with the FDA; • timing of product launches and market acceptance of products launched; • changes in the amounts spent to research, develop, acquire, license or promote new and existing products; • results of clinical trial programs; • serious or unexpected health or safety concerns with our product or product candidates and any resulting clinical holds; • introduction of new products by others that render one or more of our products obsolete or noncompetitive; • the ability to maintain selling prices and gross margins on our products; • increases in the cost of raw materials contained within our products and product candidates; • manufacturing and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications; • timing of revenue recognition relating to our distribution agreements; • changes in estimates or potential asset impairments; • the ability to protect our intellectual property from being acquired by other entities; • the ability to avoid infringing the intellectual property of others; • the impact of the COVID-19 or similar pandemics; and • the addition or loss of customers.
The GDPR and UK GDPR impose substantial fines for breaches of data protection requirements, which can be up to four percent of global revenue or 20 million Euros (£17.5 million in the U.K.), whichever is greater, and they also confer a private right of action on data subjects for breaches of data protection requirements.
The GDPR and the UK GDPR impose substantial fines for breaches of data protection requirements, which can be up to four percent of global revenue or 20 million Euros (£17.5 million in the UK), whichever is greater, and they also confer a private right of action on data subjects for breaches of data protection requirements.
When we enter into long-term manufacturing agreements that contain exclusivity provisions and /or substantial termination penalties, we constrain our operational flexibility. We also rely on a third party to design, manufacture, obtain and maintain regulatory approval for companion diagnostic tests for ELEVIDYS.
When we enter into long-term manufacturing agreements that contain exclusivity provisions and /or substantial termination penalties, we constrain our operational flexibility. We also rely on a third party to design, manufacture, obtain and maintain regulatory approval for necessary diagnostic tests for ELEVIDYS.
Any interruption of the development or operation of those facilities due to, among other reasons, events such as the ongoing COVID-19 pandemic, order delays for equipment or materials, equipment malfunctions, quality control and quality assurance issues, regulatory delays and possible negative effects of such delays on supply chains and expected timelines for product availability, production yield issues, shortages of qualified personnel, discontinuation of a facility or business or failure or damage to a facility by natural disasters, such as earthquakes or fires, could result in the cancellation of shipments, loss of product in the manufacturing process or a shortfall in supply of our products, product candidates or materials.
Any interruption of the development or operation of those facilities due to, among other reasons, events such as a future pandemic, order delays for equipment or materials, equipment malfunctions, quality control and quality assurance issues, regulatory delays and possible negative effects of such delays on supply chains and expected timelines for product availability, production yield issues, shortages of qualified personnel, discontinuation of a facility or business or failure or damage to a facility by natural disasters, such as earthquakes or fires, could result in the cancellation of shipments, loss of product in the manufacturing process or a shortfall in supply of our products, product candidates or materials.
If we are not successful in maintaining an effective commercial, sales and marketing infrastructure, we will encounter difficulty in achieving, maintaining or increasing projected sales of our products in the U.S., which would adversely affect our business and financial condition. The patient population suffering from Duchenne, LGMDs, and CMT 1A is small and has not been established with precision.
If we are not successful in maintaining an effective commercial, sales and marketing infrastructure, we will encounter difficulty in achieving, maintaining or increasing projected sales of our products in the U.S., which would adversely affect our business and financial condition. - 38 - The patient population suffering from Duchenne, LGMDs, CMT 1A, FSHD and DM1 is small and has not been established with precision.
A severe or prolonged economic downturn, including the impact of increased interest rates and inflation (such as the recent rise in inflation in the United States), could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.
A severe or prolonged economic downturn, including the impact of increased interest rates and inflation (such as the recent rise in inflation in the US), could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.
The United States and other nations have raised the possibility of sanctions on companies that do business with Russia or its allies, including Belarus. We also may be adversely impacted by sanctions imposed on third parties with which we do business, such as third-party distributors and service providers of our EAP.
The US and other nations have raised the possibility of sanctions on companies that do business with Russia or its allies, including Belarus. We also may be adversely impacted by sanctions imposed on third parties with which we do business, such as third-party distributors and service providers of our EAP.
We anticipate that the Biden Administration and Congress, state legislatures and the private sector will continue to consider and may adopt healthcare policies intended to curb rising healthcare costs, and specifically prescription drug costs.
We anticipate that the Trump Administration and Congress, state legislatures and the private sector will continue to consider and may adopt healthcare policies intended to curb rising healthcare costs, and specifically prescription drug costs.
We may issue additional shares to grant equity awards to our employees, officers, directors and consultants under our 2018 Equity Incentive Plan, our 2013 Employee Stock Purchase Plan or our 2014 Employment Commencement Incentive Plan.
We may issue additional shares to grant equity awards to our employees, officers, directors and consultants under our 2018 Equity Incentive Plan, our 2013 Employee Stock Purchase Plan or our 2024 Employment Commencement Incentive Plan.
Further, the potential commercial success of our product candidates, including ELEVIDYS, will depend on additional factors, including the capacity of any infusion centers responsible for the administration of our product candidates. ELEVIDYS and our gene therapy product candidates may be perceived as unsafe or may result in unforeseen adverse events.
Further, the potential commercial success of our product candidates as well as ELEVIDYS will depend on additional factors, including the capacity of any infusion centers responsible for the administration of our product candidates and ELEVIDYS. ELEVIDYS and our gene therapy product candidates may be perceived as insufficiently effective, unsafe or may result in unforeseen adverse events.
Accordingly, even if we believe one of our product candidates meets the criteria for designation as a fast track product, breakthrough therapy, RMAT, PRIME, or priority review product, the agency may disagree and instead determine not to make such designation.
Accordingly, even if we believe one of our product candidates meets the criteria for designation as a fast track product, breakthrough therapy, RMAT, PRIME, or priority review product, the FDA or the EMA may disagree and instead determine not to make such designation.
Our pipeline includes more than 40 programs in various stages of development for a broad range of diseases and disorders. We plan to expand our pipeline through internal research and development and through strategic transactions. Because we have limited resources, we may not be able to advance all of our programs.
Our pipeline includes programs in various stages of development for a broad range of diseases and disorders. We plan to expand our pipeline through internal research and development and through strategic transactions. Because we have limited resources, we may not be able to advance all of our programs.
Any delay or failure by us or our collaborators to develop or obtain regulatory approval of the companion diagnostic tests could harm our business, possibly materially.
Any delay or failure by us or our collaborators to develop or obtain regulatory approval of the necessary diagnostic tests could harm our business, possibly materially.
Compliance with these directives is a rigorous and time-intensive process that requires review and updates that may increase our cost - 66 - of doing business, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with our European and U.K. activities.
Compliance with these directives is a rigorous and time-intensive process that requires review and updates that may increase our cost of doing business, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation and reputational harm in connection with our European and UK activities.
Further, according to the guidance, the FDA generally intends to consider vectors from the same viral group (e.g., adeno-associated virus 2 (AAV2) vs. adeno-associated virus 5 (AAV5)) to be different, when the differences between the vectors impact factors such as tropism, immune response avoidance, or potential insertional mutagenesis. However, there is considerable uncertainty as to the interpretation of these guidelines.
Further, according to the guidance, the FDA generally intends to consider vectors from the same viral group (e.g., AAV2 vs. AAV5) to be different, when the differences between the vectors impact factors such as tropism, immune response avoidance, or potential insertional mutagenesis. However, there is considerable uncertainty as to the interpretation of these guidelines.
Due to the nature of our products and product candidate pipeline, in addition to new chemical entity (“NCE”) exclusivity and new biologic exclusivity, orphan drug exclusivity is especially important for our products that are eligible for orphan drug designation. For eligible products, we plan to rely on orphan drug exclusivity to maintain a competitive position.
Due to the nature of our products and product candidate pipeline, in addition to NCE exclusivity and new biologic exclusivity, orphan drug exclusivity is especially important for our products that are eligible for orphan drug designation. For eligible products, we plan to rely on orphan drug exclusivity to maintain a competitive position.
The current and future use of our product candidates by us and our collaborators in clinical trials, expanded access programs, the sale of our products, or the use of our products under emergency use vehicles may expose us to liability claims inherent to the manufacture, clinical testing, marketing and sale of medical products.
The current and future use of our product candidates by us and our collaborators in clinical trials, EAPs, the sale of our products, or the use of our products under emergency use vehicles may expose us to liability claims inherent to the manufacture, clinical testing, marketing and sale of medical products.
We have entered into multiple collaborations and strategic transactions, including our collaboration with Roche, and may seek or engage in future strategic collaborations, alliances, acquisitions or licensing agreements or other relationships that complement or expand our business.
We have entered into multiple collaborations and strategic transactions and may seek or engage in future strategic collaborations, alliances, acquisitions or licensing agreements or other relationships that complement or expand our business.
The FDA also issued a new guidance document in September 2021 describing the FDA’s approach for determining whether two gene therapy products were the same or different for the purpose of assessing orphan drug exclusivity, as well as a draft guidance document in March 2022 on human gene therapy product incorporating human genome editing.
The FDA also issued a new guidance document in September 2021 describing the FDA’s approach for determining whether two gene therapy products were the same or different for the purpose of assessing orphan drug exclusivity, as well as a final guidance document in January 2024 on human gene therapy product incorporating human genome editing.
Lack of efficacy and/or serious adverse events related to clinical trials we, our strategic partners or other companies conduct, even if such adverse events are not ultimately attributable to the relevant product candidates or products, and/or failed commercialization of gene therapy products may result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates. - 36 - We may not be able to expand the global footprint of our products outside of the U.S.
Lack of efficacy and/or serious adverse events related to clinical trials we, our strategic partners or other companies conduct, even if such adverse events are not ultimately attributable to the relevant product candidates or products, and/or failed commercialization of gene therapy products may result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our - 35 - product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.
If we lose the services of one or more of our senior management or key employees, or if one or more of them decides to join a competitor or otherwise to compete with us, our business could be harmed. - 60 - Risks Related to our Financial Condition and Capital Requirements We have incurred operating losses since our inception and we may not achieve or sustain profitability.
If we lose the services of one or more of our senior management or key employees, or if one or more of them decides to join a competitor or otherwise to compete with us, our business could be harmed. Risks Related to our Financial Condition and Capital Requirements We have previously incurred operating losses and we may not maintain profitability.
Item 1. Business – Government Regulation – Third Party Reimbursement and Pricing in the U.S. ” There is no assurance that federal or state health care reform will not adversely affect our future business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare policy will affect our business.
Item 1. Business – Government Regulation – U.S. Healthcare and Other Reform ” There is no assurance that federal or state health care reform will not adversely affect our future business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare policy will affect our business.
The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business. Item 1B. Un resolved Staff Comments.
The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.
We anticipate that our expenses will increase substantially if and/or as we: • continue the commercialization of our products in the U.S.; • expand the global footprint of our products outside of the U.S.; • establish our sales, marketing and distribution capabilities; • continue our research, pre-clinical and clinical development of our product candidates; • respond to and satisfy requests and requirements from regulatory authorities in connection with development and potential approval of our product candidates; • initiate additional clinical trials for our product candidates; • seek marketing approvals for our product candidates that successfully complete clinical trials; • acquire or in-license other product candidates; • maintain, expand and protect our intellectual property portfolio; • increase manufacturing capabilities, including capital expenditures related to our real estate facilities and entering into manufacturing agreements; • hire additional clinical, quality control and scientific personnel; and • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts.
We anticipate that our expenses will increase substantially if and/or as we: • continue the commercialization of our products in the U.S.; • expand the global footprint of our products outside of the U.S.; • establish our sales, marketing and distribution capabilities; • continue our research, pre-clinical and clinical development of our product candidates; • respond to and satisfy requests and requirements from regulatory authorities in connection with development and potential approval of our product candidates; • initiate additional clinical trials for our product candidates; • seek marketing approvals for our product candidates that successfully complete clinical trials; • acquire or in-license other product candidates; • maintain, expand and protect our intellectual property portfolio; • increase manufacturing capabilities, including capital expenditures related to our real estate facilities and entering into manufacturing agreements; • hire additional clinical, quality control and scientific personnel; and • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts. - 60 - Because of the numerous risks and uncertainties associated with developing biopharmaceutical products, we are unable to predict our ability to continue to generate profitability or the extent of it.
The competition for qualified personnel in the biotechnology field is intense, and our future success depends upon our ability to attract, retain, motivate and support such personnel. The COVID-19 pandemic has exacerbated workforce competition and workforce shortages. In order to develop and commercialize our products successfully, we will be required to retain key management and scientific employees.
The competition for qualified personnel in the biotechnology field is intense, and our future success depends upon our ability to attract, retain, motivate and support such personnel. In order to develop and commercialize our products successfully, we will be required to retain key management and scientific employees.
Any failure to maintain revenues from sales of our products through our EAP and/or to generate revenues from commercial sales of these products exceeding historical sales due to issues under our EAP or due to global instability, like that resulting from the ongoing conflict between Russia and Ukraine or the instability in the Middle-East, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Any failure to maintain revenues from sales of our products through our EAP and/or to generate revenues from commercial sales of these products exceeding historical sales due to geo-political challenges like those potentially resulting from the ongoing conflict between Russia and Ukraine or the instability in the Middle-East, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Additionally, as of December 31, 2023, there were approximately 5.1 million shares of common stock available for future issuance under our 2018 Equity Incentive Plan, approximately 0.3 million shares of common stock available for issuance under our Amended and Restated 2013 Employee Stock Purchase Plan, and approximately 0.6 million shares of common stock available for issuance under our 2014 Employment Commencement Incentive Plan.
Additionally, as of December 31, 2024, there were approximately 3.4 million shares of common stock available for future issuance under our 2018 Equity Incentive Plan, approximately 0.2 million shares of common stock available for issuance under our Amended and Restated 2013 Employee Stock Purchase Plan, and approximately 1.0 million shares of common stock available for issuance under our 2024 Employment Commencement Incentive Plan.
Additionally, we have scientific personnel with significant and unique expertise in RNA-targeted therapeutics and gene therapy technologies. The loss of the services of any one of the principal members of our managerial team or staff may prevent us from achieving our business objectives.
We are highly dependent on the efforts and abilities of the principal members of our senior management. Additionally, we have scientific personnel with significant and unique expertise in RNA-targeted therapeutics and gene therapy technologies. The loss of the services of any one of the principal members of our managerial team or staff may prevent us from achieving our business objectives.
For example, we face competition in the field of Duchenne by third parties who are developing or who had once developed: (i) exon skipping product candidates, such as Wave (notably for exons 51 and 53), Nippon Shinyaku (notably for exon 44 and exon 53, for which it has received FDA approval for its product Viltepso (viltolarsen)), Daiichi (notably for exon 45), Dyne Therapeutics pursuing antibody-oligonucleotide conjugates for exons 44, 45, 51, and 53, Avidity Biosciences pursuing antibody-oligonucleotide conjugates for exons 44, 45 and 51, PepGen (notably for exon 51), SQY Therapeutics and BioMarin (BMN-351 for exon 51); (ii) gene therapies, such as Pfizer and Solid (in partnership with Ultragenyx), and Regenxbio; (iii) gene editing, including CRISPR/Cas 9 approaches, such as Exonics Therapeutics (acquired by Vertex Pharmaceuticals), CRISPR Therapeutics, Editas Medicine, and Precision Biosciences (in partnership with Eli Lilly); (iv) other disease modifying approaches, such as PTC Therapeutics, which has a small molecule candidate, ataluren, that targets nonsense mutations; and (v) other approaches that may be palliative in nature or potentially complementary with our products and product candidates and that are or were once being developed by Santhera, Catabasis, Fibrogen, ReveraGen, Capricor Therapeutics (in partnership with Nippon Shinyaku), BioPhytis, Mallinckrodt, Antisense Therapeutics, Italfarmco, Dystrogen and Edgewise Therapeutics.
For example, we face competition in the field of Duchenne by third parties who are developing or who had once developed: (i) exon skipping product candidates, such as Wave (targeting various exons, including 53 and 51), Nippon Shinyaku (targeting various exons, including 51 and 45, and notably for exon 53 for which it has received accelerated FDA approval for its product Viltepso (viltolarsen)), Dyne Therapeutics pursuing antibody-oligonucleotide conjugates for exons 44, 45, 51, and 53, Avidity Biosciences pursuing antibody-oligonucleotide conjugates for exons 44, 45 and 51, PepGen (notably for exon 51), SQY Therapeutics and BioMarin (BMN-351 for exon 51), Entrada; (ii) gene therapies, such as Genethon and Solid (also in partnership with Ultragenyx), and Regenxbio; (iii) gene editing, including CRISPR/Cas 9 approaches, such as Exonics Therapeutics (acquired by Vertex Pharmaceuticals), GenAssist, CRISPR Therapeutics, and Precision Biosciences; (iv) other disease modifying approaches, such as PTC Therapeutics and Satellos, which has a small molecule candidate, ataluren, that targets nonsense mutations; and (v) other approaches that may be palliative in nature or potentially complementary with our products and product candidates and that are or were once being developed including but not limited to, Santhera (Reveragen), Fibrogen, Capricor Therapeutics (in partnership with Nippon Shinyaku), BioPhytis, Italfarmaco (approved product Givinostat), Dystrogen and Edgewise Therapeutics.
It is possible that we may not prevail in claims made against us in such disputes even after expending significant amounts of money and company resources in defending our positions in such lawsuits and disputes. The outcome of such lawsuits and disputes is inherently uncertain and may have a negative impact on our business, financial condition and results of operations.
We may expend significant amounts of money and company resources in connection with these disputes and it is possible that we may not prevail in claims made against us in such disputes. The outcome of such lawsuits and disputes is inherently uncertain and may have a negative impact on our business, financial condition and results of operations.
Risks Related to Our Convertible Senior Notes Servicing our 1.50% notes due 2024 (the “2024 Notes”) and 1.25% notes due 2027 (the “2027 Notes”, and together with the 2024 Notes, the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.
Risks Related to Our Convertible Senior Notes Servicing our 1.25% notes due 2027 (the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.
We are increasing our presence in international markets, including emerging markets, subjecting us to many risks that could adversely affect our business and revenues, such as: • the inability to obtain necessary foreign regulatory or pricing approvals of products in a timely manner; • uncertainties regarding the collectability of accounts receivable; • fluctuations in foreign currency exchange rates that may adversely impact our revenues, net income and value of certain of our investments; • difficulties in staffing and managing international operations; • the imposition of governmental controls; • less favorable intellectual property or other applicable laws; • increasingly complex standards for complying with foreign laws and regulations that may differ substantially from country to country and may conflict with corresponding U.S. laws and regulations; • the far-reaching anti-bribery and anti-corruption legislation in the U.K., including the U.K.
We are increasing our presence in international markets, including emerging markets, subjecting us to many risks that could adversely affect our business and revenues, such as: • the inability to obtain necessary foreign regulatory or pricing approvals of products in a timely manner; • uncertainties regarding the collectability of accounts receivable; • fluctuations in foreign currency exchange rates that may adversely impact our revenues, net income and value of certain of our investments; • difficulties in staffing and managing international operations; • the imposition of governmental controls; • less favorable intellectual property or other applicable laws; • increasingly complex standards for complying with foreign laws and regulations that may differ substantially from country to country and may conflict with corresponding U.S. laws and regulations; • the far-reaching anti-bribery and anti-corruption legislation in the UK, including the UK Bribery Act 2010, and elsewhere and escalation of investigations and prosecutions pursuant to such laws; • compliance with complex import and export control laws; • restrictions on direct investments by foreign entities and trade restrictions; and • changes in tax laws and tariffs.
In addition, the use of third parties involves certain risks, including, but not limited to, risks that these organizations will: • not provide us with accurate or timely information regarding their inventories, the number of patients who are using our products or serious adverse events and/or product complaints regarding our products; • not effectively sell or support our products; • reduce or discontinue their efforts to sell or support our products; • not devote the resources necessary to sell our products in the volumes and within the time frame we expect; • be unable to satisfy financial obligations to us or others; or • cease operations.
In addition, the use of third parties involves certain risks, including, but not limited to, risks that these organizations will: • not provide us with accurate or timely information regarding their inventories, the number of patients who are using our products or serious adverse events and/or product complaints regarding our products; • not effectively sell or support our products; • reduce or discontinue their efforts to sell or support our products; • not devote the resources necessary to sell our products in the volumes and within the time frame we expect; • be unable to satisfy financial obligations to us or others; or • cease operations. - 49 - Any such events may result in decreased product sales, lower product revenue, loss of revenue, and/or reputational damage, which would harm our results of operations and business.
Our focus remains on optimizing manufacturing for our follow-on exon skipping product candidates and other programs, including PPMO and gene therapy.
Our focus remains on optimizing manufacturing, including for our product candidates, gene therapy and other programs.
Reimbursement through national EAPs may cease to be available if authorization for an EAP expires or is terminated.
Reimbursement of aforementioned products through our EAPs may cease to be available if authorization for an EAP expires or is terminated.
We participate in the Medicaid Drug Rebate Program, the PHS 340B drug pricing program, the U.S. Department of Veterans Affairs, Federal Supply Schedule, or FSS, pricing program, and the Tricare Retail Pharmacy program, and have obligations to report the average sales price for certain drug products to the Medicare program.
We participate in the Medicaid Drug Rebate Program, the Public Health Services (“PHS”) 340B drug pricing program, the U.S. Department of Veterans Affairs, Federal Supply Schedule pricing program, and the Tricare Retail Pharmacy program, and have obligations to report the average sales price for certain drug products to the Medicare program. Compliance is challenging.
Indeed, BioMarin has announced it is pursuing IND enabling studies for BMN-351, an oligonucleotide therapy. In addition, while Wave announced its intention to discontinue development of suvodirsen and suspend development of WVE-N531, it has announced that it commenced clinical development for its exon 53 oligonucleotide, WVE-N531.
Indeed, BioMarin is conducting clinical trials for BMN-351, an oligonucleotide therapy. In addition, while Wave announced its intention to discontinue development of suvodirsen and suspend development of WVE-N531, it is conducting clinical trials for its exon 53 oligonucleotide, WVE-N531.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe accelerated approval for ELEVIDYS granted by the FDA was based on an effect on the surrogate endpoint of expression of the protein produced by ELEVIDYS. These products are subject to ongoing FDA requirements governing labeling, packaging, storage, advertising, promotion and recordkeeping, and we are required to submit additional safety, efficacy and other post-marketing information to the FDA.
Biggest changeThese products are subject to ongoing FDA requirements governing labeling, packaging, storage, advertising, promotion and recordkeeping, and we are required to submit additional safety, efficacy and other post-marketing information to the FDA. Under the accelerated approval pathway, continued approval may be contingent upon verification of a clinical benefit in confirmatory trials.
Third party payors are increasingly challenging the effectiveness of and prices charged for medical products and services. We may not be able to obtain or maintain adequate third-party coverage or reimbursement for our products, and/or we may be required to provide discounts or rebates on our products in order to obtain or maintain adequate coverage.
Third party payors are increasingly challenging the effectiveness of, and the prices charged for medical products and services. We may not be able to obtain or maintain adequate third-party coverage or reimbursement for our products, and/or we may be required to provide discounts or rebates on our products in order to obtain or maintain adequate coverage.
Our business could also be adversely affected if government health programs, private health insurers, including managed care organizations, or other reimbursement bodies or payors limit the indications for which our products will be reimbursed or fail to recognize accelerated approval and surrogate endpoints as clinically meaningful.
Our business could also be adversely affected if government health programs, private health insurers, including managed care organizations, or other reimbursement bodies or payors limit the indications for which our products will be reimbursed or fail to recognize approval or accelerated approval and surrogate endpoints as clinically meaningful.
If we or the manufacturing facilities for our products fail to comply with applicable regulatory requirements, a regulatory agency may: • issue warning letters or untitled letters; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw or alter the conditions of our marketing approval; - 33 - • mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners; • suspend any ongoing clinical trials; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; • refuse to approve pending applications or supplements to applications submitted by us; • suspend or impose restrictions on operations, including costly new manufacturing requirements; • seize or detain products, refuse to permit the import or export of products or require us to initiate a product recall; or • refuse to allow us to enter into supply contracts, including government contracts.
If we or the manufacturing facilities for our products fail to comply with applicable regulatory requirements, a regulatory agency may: • issue warning letters or untitled letters; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw or alter the conditions of our marketing approval; • mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners; • suspend any ongoing clinical trials; • require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; - 32 - • refuse to approve pending applications or supplements to applications submitted by us; • suspend or impose restrictions on operations, including costly new manufacturing requirements; • seize or detain products, refuse to permit the import or export of products or require us to initiate a product recall; or • refuse to allow us to enter into supply contracts, including government contracts.
Delays in the process prior to first infusion could negatively impact the sales of our products, including any future gene therapy products; and • the exercise by Roche of its option to obtain an exclusive license to commercialize one or more of our Duchenne products beyond ELEVIDYS outside of the U.S. and Roche’s subsequent commercialization efforts.
Delays in the process prior to infusion could negatively impact the sales of our products, including any future gene therapy products; and • the exercise by Roche of its option to obtain an exclusive license to commercialize one or more of our Duchenne products beyond ELEVIDYS outside of the U.S. and Roche’s subsequent commercialization efforts.
The downward pressure on healthcare costs in general has become intense. As a result, increasingly high barriers are being erected to the entry of new products. If we are unable to obtain adequate levels of reimbursement, our ability to successfully market and sell our products and product candidates will be harmed.
The downward pressure on healthcare costs in general has become intense. As a result, increasingly high barriers are being erected to the entry of new products. If we are unable to obtain adequate levels of reimbursement, our ability to successfully market - 33 - and sell our products and product candidates will be harmed.
The commercial success of our products continues to depend on, and the commercial success of any future products would depend on, a number of factors attributable to one of our products or the products of our competitors, including, but not limited to: • the effectiveness of our sales, managed markets, marketing efforts and support for our products; • the generation and dissemination of new data analyses and the consistency of any new data with prior results, whether they support a favorable safety, efficacy and effectiveness profile of our products and any potential impact on our FDA accelerated approval status and/or FDA package insert for our products; • the effectiveness of our ongoing commercialization activities, including negotiating and entering into any additional commercial, supply and distribution contracts, ongoing manufacturing efforts and hiring any additional personnel as needed to support commercial efforts; • our ability to timely comply with FDA post-marketing requirements and commitments, including through successfully conducting additional studies that confirm clinical efficacy, effectiveness and safety of our products and acceptance of the same by the FDA and medical community since continued approval may be contingent upon verification of a clinical benefit in confirmatory trials, particularly in light of FDA's expanded expedited withdrawal procedures as set forth in FDORA; • the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas; • the generation of evidence describing payers, patients and/or societal value of our products; • whether we can consistently manufacture our products and product candidates at acceptable costs; • the rate and consistency with which our products are prescribed by physicians, which depends on physicians’ views on the safety, effectiveness and efficacy of our products; • our ability to secure and maintain adequate reimbursement for our products, including the duration of the prior-authorization as well as the number and duration of re-authorization processes required for patients who initially obtained coverage by third parties, including by government payors, managed care organizations and private health insurers; • our ability to obtain and maintain patent protection for our products, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and to operate without infringing on the proprietary rights of third parties; • the development, commercialization or pricing of competing products or therapies for the treatment of Duchenne, or its symptoms, and the existence of competing clinical trials; • our ability to increase awareness of the importance of genetic testing and knowing/understanding Duchenne mutations, and identifying and addressing procedural barriers to obtaining therapy; • our ability to remain compliant with laws and regulations that apply to us and our commercial activities; - 32 - • the actual market-size, ability to identify patients and the demographics of patients eligible for our products, which may be different than expected; • the sufficiency of our drug supply to meet commercial and clinical demands and standards, which are negatively impacted by various factors, including when our projections on the potential number of amenable patients and their average weight are inaccurate; the potential impacts of the COVID-19 pandemic; if regulatory requirements increase our drug supply needs; if our current drug supply is destroyed or negatively impacted at our manufacturing sites, storage sites or in transit; failure to meet cGMP requirements; or if we encounter delays expanding the number of patients on our products and portions of our products’ supply expire before sale; • our ability to obtain regulatory approvals to commercialize our product candidates, and to commercialize our products in markets outside of the U.S.; • the process leading to a patient’s first infusion of our products and any future commercial products may be slower for certain patients.
The commercial success of our products continues to depend on, and the commercial success of any future products would depend on, a number of factors attributable to one of our products or the products of our competitors, including, but not limited to: • the effectiveness of our sales, managed markets, marketing efforts and support for our products; • the generation and dissemination of new data analyses and the consistency of any new data with prior results, whether they support a favorable safety, efficacy and effectiveness profile of our products and any potential impact on our FDA accelerated approval status and/or FDA package insert for our products; • the effectiveness of our ongoing commercialization activities, including negotiating and entering into any additional commercial, supply and distribution contracts, ongoing manufacturing efforts and hiring any additional personnel as needed to support commercial efforts; • our ability to timely comply with FDA post-marketing requirements and commitments, including through successfully conducting additional studies that confirm clinical efficacy, effectiveness and safety of our products and acceptance of the same by the FDA and medical community since continued approval may be contingent upon verification of a clinical benefit in confirmatory trials, particularly in light of FDA's expanded expedited withdrawal procedures as set forth in FDORA; • the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas; • the generation of evidence describing payers, patients and/or societal value of our products; • whether we can consistently manufacture our products and product candidates at acceptable costs; • the rate and consistency with which our products are prescribed by physicians, which depends on physicians’ views on the safety, effectiveness and efficacy of our products; • our ability to secure and maintain adequate reimbursement for our products, including the duration of the prior-authorization as well as the number and duration of re-authorization processes required for patients who initially obtained coverage by third parties, including by government payors, managed care organizations and private health insurers; • our ability to obtain and maintain patent protection for our products, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and to operate without infringing on the proprietary rights of third parties; • the development, commercialization or pricing of competing products or therapies for the treatment of Duchenne, or its symptoms, and the existence of competing clinical trials; • our ability to increase awareness of the importance of genetic testing and knowing/understanding Duchenne mutations, and identifying and addressing procedural barriers to obtaining therapy; • our ability to remain compliant with evolving laws and regulations that apply to us and our commercial activities; • the actual market-size, ability to identify patients and the demographics of patients eligible for our products, which may be different than expected; • the sufficiency of our drug supply to meet commercial and clinical demands and standards, which are negatively impacted by various factors, including when our projections on the potential number of amenable patients and their average weight are inaccurate; the potential impacts of future pandemics; if regulatory requirements increase our drug supply needs; if our current drug supply is destroyed or negatively impacted at our manufacturing sites, storage sites or - 31 - in transit; failure to meet cGMP requirements; or if we encounter delays expanding the number of patients on our products and portions of our products’ supply expire before sale; • our ability to obtain regulatory approvals to commercialize our product candidates, and to commercialize our products in markets outside of the U.S.; • the process leading to a patient’s first infusion of our products and any future commercial products may be slower for certain patients.
Other events that we do not currently anticipate or that we currently deem immaterial also affect our results of operations and financial condition. Risks Related to Our Business We are highly dependent on the commercial success of our products in the U.S.
Other events that we do not currently anticipate or that we currently deem immaterial also affect our results of operations and financial condition. Risks Related to Our Business We are highly dependent on the commercial success of our products.
Failure to meet post-approval commitments and requirements, including completion of enrollment and in particular, any failure to obtain positive safety and efficacy data from our ongoing and planned studies of our products, would lead to negative regulatory action from the FDA and/or withdrawal of regulatory approval of EXONDYS 51, VYONDYS 53, AMONDYS 45 or ELEVIDYS.
Failure to meet post-approval commitments and requirements, including completion of enrollment and in particular, any failure to obtain safety and efficacy data that supports clinical benefits from our ongoing and planned studies of our products, could lead to negative regulatory action from the FDA and/or withdrawal of regulatory approval of EXONDYS 51, VYONDYS 53, AMONDYS 45 or ELEVIDYS.
If we or a regulatory agency discover previously unknown adverse events or events of unanticipated severity or frequency, a regulatory agency may require labeling changes, implementation of risk evaluation and mitigation strategy program, or additional post-marketing studies or clinical trials.
If we or a regulatory agency discover previously unknown adverse events or events of unanticipated severity or frequency, a regulatory agency may establish additional regulatory requirement including, among other things, labeling changes, implementation of risk evaluation and mitigation strategy program, or additional post-marketing studies or clinical trials.
For example, the time to first infusion may take longer if a patient chooses to put in an intravenous port, which eases access to the vein.
For example, the time to first infusion may take longer if a patient chooses to put in an intravenous port, which eases access to the vein. In addition, the capacity of any infusion centers responsible for the administration of ELEVIDYS may impact timing.
These healthcare reform efforts or any future legislation or regulatory actions aimed at controlling and reducing healthcare costs, including through measures designed to limit reimbursement, restrict access or impose unfavorable pricing modifications on pharmaceutical products, could impact our and our partners’ ability to obtain or maintain reimbursement for our products at satisfactory levels, or at all, which could materially harm our business and financial results. - 34 - Additionally, ELEVIDYS and our gene therapy product candidates represent novel approaches to treatment that will call for new levels of innovation in both pricing, reimbursement, payment and drug access strategies.
These healthcare reform efforts or any future legislation or regulatory actions aimed at controlling and reducing healthcare costs, including through measures designed to limit reimbursement, restrict access or impose unfavorable pricing modifications on pharmaceutical products, could impact our and our partners’ ability to obtain or maintain reimbursement for our products at satisfactory levels, or at all, which could materially harm our business and financial results.
Under the accelerated approval pathway, continued approval may be contingent upon verification of a clinical benefit in confirmatory trials. These post-approval requirements and commitments may not be feasible and/or could impose significant burdens and costs on us; could negatively impact our development, manufacturing and supply of our products; and could negatively impact our financial results.
These post-approval requirements and commitments may not be feasible and/or could impose significant burdens and costs on us; could negatively impact our development, manufacturing and supply of our products; and could negatively impact our financial results.
The recently enacted FDORA has expanded FDA's expedited withdrawal procedures for drugs approved via the accelerated approval pathway if a sponsor fails to conduct any required post-approval study with due diligence. Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP regulations.
The recently enacted FDORA has expanded FDA's expedited withdrawal procedures for drugs approved via the accelerated approval pathway if a sponsor fails to conduct any required post-approval study with due diligence.
Drug product manufacturers are required to continuously monitor and report adverse events from clinical trials and commercial use of the product.
Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with FDA requirements, including cGMP regulations. Drug product manufacturers are required to continuously monitor and report adverse events from clinical trials and commercial use of the product.
Removed
The FDA granted accelerated approval for EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS, respectively, as therapeutic treatments for Duchenne in patients who have a confirmed mutation in the dystrophin gene that is amenable to exon 51, exon 53, exon 45 skipping, and ambulatory pediatric patients aged four through five years with Duchenne with a confirmed mutation in the Duchenne gene, respectively.
Added
The accelerated approval for ELEVIDYS in non-ambulatory patients granted by the FDA was based on an effect on the surrogate endpoint of expression of ELEVIDYS micro-dystrophin, the protein produced by ELEVIDYS.
Removed
EXONDYS 51 has been approved for marketing in the U.S., Israel and Kuwait, AMONDYS 45 in the U.S. and Kuwait, and VYONDYS 53 and ELEVIDYS have been approved for marketing only in the U.S. Our commercial PMO products are also available in additional countries through our EAP.
Added
Additionally, ELEVIDYS and our gene therapy product candidates represent novel approaches to treatment that will call for new levels of innovation in both pricing, reimbursement, payment and drug access strategies.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity program is managed by our dedicated Chief Information Security Officer (CISO), reporting directly to the Company’s Chief Information Officer (the “CIO”), whose team is responsible for leading the Company’s cybersecurity policies and procedures. - 69 - Our CIO has over 25 years of experience and has served in a variety of information systems leadership roles in the life sciences industry supporting research and development, commercial sales and marketing, finance, human resources and other corporate functions, and IT architecture, strategy, and planning.
Biggest changeOur CIO has over 25 years of experience and has served in a variety of information systems leadership roles in the life sciences industry supporting research and development, commercial sales and marketing, finance, human resources and other corporate functions, and IT architecture, strategy, and planning.
The results of these evaluations are regularly shared with senior management and the Audit Committee of the Board of Directors (the “Audit Committee”), where appropriate. We have developed and implemented a cybersecurity risk management program intended to protect the Confidentiality, Integrity, and Availability (CIA) of our critical systems and information.
The results of these evaluations are regularly shared with senior management and the Audit Committee of the Board of Directors (the “Audit Committee”), where appropriate. We have developed and implemented a cybersecurity risk management program intended to protect the Confidentiality, Integrity, and Availability (“CIA”) of our critical systems and information.
The CIO also provides regular updates to members of the Company’s senior management team regarding cyber risks, threats and assessments and material cybersecurity developments of the Company’s program. - 70 -
The CIO also provides regular updates to members of the Company’s senior management team regarding cyber risks, threats and assessments and material cybersecurity developments of the Company’s program . - 68 -
Added
Our cybersecurity program is managed by our dedicated Chief Information Security Officer (the “ CISO”), reporting directly to the Company’s Chief Information Officer (the “CIO”), whose team is responsible for leading the Company’s cybersecurity policies and procedures.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation of Property Square Footage Lease Expiration Date Purpose Other Information 215 First Street, Cambridge, MA 149,589 September 2025 Laboratory and office space Corporate headquarters 600 Federal Street, Andover, MA 11,832 December 2026 Laboratory and office space Laboratory and office space 100 Federal Street, Andover, MA 65,589 N/A- facility is owned Laboratory and office space Primarily laboratory space 300 Federal Street, Andover, MA 23,102 December 2024 Office space Office space 55 Network Drive, Burlington, MA 44,740 December 2024 Laboratory and office space Primarily laboratory space 50-52 Crosby Drive, Bedford, MA 288,000 January 2038 Laboratory and office space Primarily laboratory space 5200 Blazer Parkway, Dublin, OH 3rd Floor 22,600 October 2024 Laboratory and office space Primarily laboratory space 3435 Stelzer Road, Columbus, OH 151,661 December 2036 Laboratory and office space Primarily laboratory space 701 West Main Street, Suite 102, Durham, NC 4,346 March 2025 Laboratory and office space Primarily laboratory space
Biggest changeLocation of Property Square Footage Lease Expiration Date Purpose Other Information 215 First Street, Cambridge, MA - 1st & 2nd Floor 32,314 September 2025 Laboratory and office space Corporate headquarters 215 First Street, Cambridge, MA - 4th Floor & Basement 79,048 May 2031 Laboratory and office space Corporate headquarters 600 Federal Street, Andover, MA 11,832 December 2026 Laboratory and office space Laboratory and office space 100 Federal Street, Andover, MA 65,589 N/A- facility is owned Laboratory and office space Primarily laboratory space 300 Federal Street, Andover, MA 23,102 December 2025 Office space Office space 55 Network Drive, Burlington, MA 44,740 June 2025 Laboratory and office space Primarily laboratory space 50-52 Crosby Drive, Bedford, MA 288,000 January 2038 Laboratory and office space Primarily laboratory space 3435 Stelzer Road, Columbus, OH 151,661 December 2036 Laboratory and office space Primarily laboratory space 701 West Main Street, Suite 102, Durham, NC 4,346 March 2025 Laboratory and office space Primarily laboratory space 701 West Main Street, Suite Lab 2806 & 2802, Durham, NC 840 March 2025 Laboratory and office space Primarily laboratory space
Item 2. Properties. A description of the facilities we own and/or occupy is included in the following table. We believe that our current facilities in Cambridge, Andover, Burlington and Bedford, Massachusetts, Dublin and Columbus, Ohio and Durham, North Carolina are suitable and will provide sufficient capacity to meet the projected needs of our business for the next 12 months.
Item 2. Properties. A description of the facilities we own and/or occupy is included in the following table. We believe that our current facilities in Cambridge, Andover, Burlington and Bedford, Massachusetts, Columbus, Ohio and Durham, North Carolina are suitable and will provide sufficient capacity to meet the projected needs of our business for the next 12 months.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Lega l Proceedings. For material legal proceedings, please read Note 21, Commitments and Contingencies - Litigation to our consolidated financial statements included in this Annual Report. Item 4. Mine Sa fety Disclosures. Not applicable. - 71 - PART II
Biggest changeItem 3. Lega l Proceedings. For material legal proceedings, please read Note 22, Commitments and Contingencies - Litigation to our consolidated financial statements included in this Annual Report. Item 4. Mine Sa fety Disclosures. Not applicable. - 69 - PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities. None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. None. Item 6. Reserved - 72 -
Biggest changeRecent Sales of Unregistered Securities. None. - 70 - Purchases of Equity Securities by the Issuer and Affiliated Purchasers. None. Item 6. Reserved
This graph assumes an investment of $100 after the market closed December 31, 2018 in each of our common stock, the NASDAQ Composite Index, NASDAQ Biotechnology Index and the NYSE ARCA Biotechnology Index, and assumes reinvestment of dividends, if any. The stock price performance shown on the graph below is not necessarily indicative of future stock price performance.
This graph assumes an investment of $100 after the market closed December 31, 2019 in each of our common stock, the NASDAQ Composite Index, NASDAQ Biotechnology Index and the NYSE ARCA Biotechnology Index, and assumes reinvestment of dividends, if any. The stock price performance shown on the graph below is not necessarily indicative of future stock price performance.
Dividends We did not declare or pay cash dividends on our common stock in 2023, 2022 or 2021. We currently expect to retain future earnings, if any, to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
Dividends We did not declare or pay cash dividends on our common stock in 2024, 2023 or 2022. We currently expect to retain future earnings, if any, to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
Item 5. Market for Registrant’s Common Equity, Related St ockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is quoted on the Nasdaq Global Select Market under the same symbol “SRPT”. Holders As of February 23, 2024, we had 157 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related St ockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is quoted on the Nasdaq Global Select Market under the same symbol “SRPT”. Holders As of February 24, 2025, we had 144 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

73 edited+22 added−20 removed19 unchanged
Biggest changeThe increase was primarily driven by the following: • $143.7 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured after its approval in June 2023 and a decrease of $54.0 million related to the minimum purchase requirements under a gene therapy manufacturing and supply agreement with Thermo (the “Thermo Agreement”) in 2022, with no similar activity in 2023; • $51.5 million increase in clinical trial expenses primarily due to an increased patient enrollment and site activation for our MIS51ON, MOMENTUM, ENVISION, EMERGENE and EXPEDITION programs, as well as additional PPMO clinical trials; • $38.8 million increase in compensation and other personnel expenses primarily due to changes in headcount; • $18.3 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; - 78 - • $21.2 million increase in stock-based compensation expense primarily due to changes in headcount and the value of stock awards, as well as the achievement of performance conditions related to certain shares with performance conditions (“PSUs”) in 2023 with continuing vesting requirements related to a service condition; • $9.7 million increase in professional service expenses primarily related to the launch of ELEVIDYS prior to its regulatory approval in June 2023; • $21.9 million decrease in up-front, milestone and other expenses, primarily due to timing and costs related to the execution of certain research and license agreements and achievement of certain milestones year over year; • $3.1 million increase in pre-clinical expenses primarily due to an increase in toxicology study activity across multiple gene therapy and PPMO platforms; • $12.0 million increase in research and other expenses primarily driven by an increase in sponsored research with academic institutions during 2023 and an increase in collaboration cost-sharing expenses related to Genethon's micro-dystrophin drug candidate; and • $11.3 million decrease in the offset to expense associated with a collaboration reimbursement from Roche primarily due to a decrease in reimbursed cost related to the minimum purchase requirements under the Thermo Agreement for 2022, with no similar activity in 2023, partially offset by the continuing development of our SRP-9001 gene therapy programs.
Biggest changePlease refer to Note 22, Commitments and Contingencies for further discussion of the Thermo Agreement; • $2.6 million increase in compensation and other personnel expenses primarily due to changes in headcount, partially offset by an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023; • $23.7 million decrease in clinical trial expenses primarily due to a decrease in activity for our PPMO platform and our decision to discontinue our PPMO programs in November 2024, as well as a ramp-down of the ESSENCE studies for AMONDYS 45 and VYONDYS 53; • $3.4 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts, partially offset by an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023; • $8.5 million decrease in stock-based compensation expense primarily due to an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023, partially offset by the achievement of performance conditions related to certain restricted stock units with performance conditions (“PSUs”) during 2024; • $3.9 million increase in professional services primarily due to an increase in reliance on third-party research and development contractors for clinical programs, partially offset by an increase in indirect manufacturing costs absorption offset as a result of ELEVIDYS approval in June 2023; • $5.5 million decrease in pre-clinical expenses primarily due to a decrease in activity in our PPMO platform and decision to discontinue our PPMO programs in November 2024; • $8.5 million decrease in research and other expenses primarily due to timing of achievement of certain up-front and milestone payments, partially offset by an increase in sponsored research with academic institutions during 2024; and • $19.7 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to reimbursable costs associated with the termination of the Thermo Agreement during 2024, with no similar activity during 2023.
Cost of sales (excluding amortization of in-licensed rights) Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin and UWA for the PMO Products and to Nationwide for ELEVIDYS.
Cost of sales (excluding amortization of in-licensed rights) Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin and UWA for our PMO Products and to Nationwide for ELEVIDYS.
For products and product candidates that are currently approved or are in various research and development stages, we may be obligated to make up to $3.2 billion of future development, regulatory, up-front royalty and sales milestone payments associated with our collaboration and license agreements.
For products and product candidates that are currently approved or are in various research and development stages, we may be obligated to make up to $2.3 billion of future development, regulatory, up-front royalty and sales milestone payments associated with our license and collaboration agreements.
Cash used in investing activities in 2023 primarily consisted of purchases of available-for-sale securities, property and equipment and intangible assets of $2,044.9 million, $76.1 million and $11.2 million, respectively, partially offset by $102.0 million of net proceeds related to the sale of the ELEVIDYS PRV and $1,868.5 million from the maturity and sales of available-for-sale securities.
Cash used in investing activities in 2023 primarily consisted of purchases of available-for-sale securities, property and equipment and intangible assets of $2,044.9 million, $76.1 million and $11.2 million, respectively, partially offset by $1,868.5 million from the maturity and sales of available-for-sale securities and $102.0 million of net proceeds related to the sale of the ELEVIDYS PRV.
Direct research and development expenses associated with our programs include clinical trial site costs, clinical manufacturing costs, costs incurred for consultants, up-front fees and milestones paid to third parties in connection with technologies that have not reached technological feasibility and do not have an alternative future use, and other external services, such as data management and statistical analysis - 77 - support, and materials and supplies used in support of clinical programs.
Direct research and development expenses associated with our programs include clinical trial site costs, clinical manufacturing costs, costs incurred for consultants, up-front fees and milestones paid to third parties in connection with technologies that have not reached technological feasibility and do not have an alternative future use, and other external services, such as data management and statistical analysis support, and materials and supplies used in support of clinical programs.
Cash used in operating activities in 2023 was primarily driven by the net loss of $536.0 million, adjusted for the following non-cash charges: • $387.3 million in loss on debt extinguishment of the 2024 Notes; • $182.5 million in stock-based compensation expense; • $44.4 million in depreciation and amortization expense; • $30.3 million in impairments associated with our strategic investments; and • $19.7 million in other non-cash items.
Cash used in operating activities in 2023 was primarily driven by the net loss of $536.0 million, adjusted for the following non-cash items: • $387.3 million in loss on debt extinguishment of the 2024 Notes; • $182.5 million in stock-based compensation expense; • $44.4 million in depreciation and amortization expense; • $30.3 million in impairments associated with our strategic investments; and • $19.7 million in other non-cash items.
We have developed proprietary state-of-the-art CMC and manufacturing capabilities that allow synthesis and purification of our products and product candidates to support both clinical development as well as commercialization. Our current main focus in manufacturing is to sustain large-scale production of our PMO-based therapies and optimizing manufacturing for PPMO and gene therapy-based product candidates.
We have developed proprietary state-of-the-art CMC and manufacturing capabilities that allow synthesis and purification of our products and product candidates to support both clinical development as well as commercialization. Our current main focus in manufacturing is to sustain large-scale production of our PMO-based therapies and optimizing manufacturing for gene therapy-based product candidates.
We cannot provide assurances that financing will be available when and as needed or that, if available, the financings will be on favorable or acceptable terms. If we are unable to obtain additional financing when and if we require, this would have a material - 81 - adverse effect on our business and results of operations.
We cannot provide assurances that financing will be available when and as needed or that, if available, the financings will be on favorable or acceptable terms. If we are unable to obtain additional financing when and if we require, this would have a material adverse effect on our business and the results of operations.
Beyond 2024, our cash requirements will depend extensively on our ability to advance our research, development and commercialization of product candidates. We may seek additional financings primarily from, but not limited to, the sale and issuance of equity and debt securities, the licensing or sale of our technologies, and entering into additional government contracts and/or funded research and development agreements.
Beyond 2025, our cash requirements will depend extensively on our ability to advance our research, development and commercialization of product candidates. We may seek additional financings primarily from, but not limited to, the sale and issuance of equity and debt securities, the licensing or sale of our technologies and entering into additional government contracts and/or funded research and development agreements.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 have been excluded from this Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 have been excluded from this Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Throughout this discussion, unless the context specifies or implies otherwise, the terms “Sarepta”, “we”, “us” and “our” refer to Sarepta Therapeutics, Inc. and its subsidiaries. This section discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Throughout this discussion, unless the context specifies or implies otherwise, the terms “Sarepta”, “we”, “us” and “our” refer to Sarepta Therapeutics, Inc. and its subsidiaries. This section discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Cash provided by financing activities in 2023 consisted of $80.6 million in partial settlement of capped call options for the 2024 Notes and $51.2 million in proceeds from exercise of options and purchase of stock under our employee stock purchase program, partially offset by $6.9 million in third-party debt conversion costs related to the 2024 Notes Exchange.
Cash provided by financing activities in 2023 consisted of $80.6 million in partial settlement the 2017 Capped Calls and $51.2 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program, partially offset by $6.9 million in third-party debt conversion costs related to the 2024 Notes Exchange.
Our pipeline includes more than 40 programs in various stages of pre-clinical and clinical development, reflecting our multifaceted approach and expertise in precision genetic medicine to make a profound difference in the lives of patients suffering from rare diseases.
Our pipeline includes programs in various stages of pre-clinical and clinical development, reflecting our multifaceted approach and expertise in precision genetic medicine to make a profound difference in the lives of patients suffering from rare diseases.
VYONDYS 53 uses our PMO chemistry and exon-skipping technology to skip exon 53 of the dystrophin gene. • AMONDYS 45 (casimersen) Injection (“AMONDYS 45”), approved by the FDA on February 25, 2021, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 45 skipping.
VYONDYS 53 uses our PMO chemistry and exon-skipping technology to skip exon 53 of the dystrophin gene. o AMONDYS 45 (casimersen) Injection (“AMONDYS 45”), granted accelerated approval by the FDA on February 25, 2021, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 45 skipping.
Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval or the first commercial sale of the applicable product. For 2023 and 2022, we recorded amortization of in-licensed rights of $1.6 million and $0.7 million, respectively.
Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval or the first commercial sale of the applicable product. For 2024 and 2023, we recorded amortization of in-licensed rights of $2.4 million and $1.6 million, respectively.
We commercialized four products, all of which were granted accelerated approval by the FDA: • EXONDYS 51 (eteplirsen) Injection (“EXONDYS 51”), approved by the FDA on September 19, 2016, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 skipping.
We commercialized four products that have been approved by the FDA: • The PMO Products: o EXONDYS 51 (eteplirsen) Injection (“EXONDYS 51”), granted accelerated approval by the FDA on September 19, 2016, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 skipping.
Other Funding Commitments We have several on-going clinical trials in various development stages. Our most significant clinical trial expenditures are to CROs. The CRO contracts are generally cancellable at our option. As of December 31, 2023, we had approximately $580.0 million in cancellable future commitments based on existing CRO contracts.
Other Funding Commitments We have several on-going clinical trials in various development stages. Our most significant clinical trial expenditures are to CROs. The CRO contracts are generally cancellable at our option. As of December 31, 2024, we had approximately $594.5 million in cancellable future commitments based on existing CRO contracts.
Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The preparation of our consolidated financial statements in accordance with U.S.
Additional information regarding our obligations under debt, lease, and manufacturing arrangements is provided in Note 13, Indebtedness, Note 19, Leases and Note 21, Commitments and Contingencies , respectively, to the consolidated financial statements.
Additional information regarding our obligations under debt, lease, and manufacturing arrangements is provided in Note 13, Indebtedness, Note 19, Leases, Note 22, Commitments and Contingencies and Note 23, Subsequent event, respectively, to the consolidated financial statements.
The likelihood of our long-term success must be considered in light of the expenses, difficulties and delays frequently encountered in the development and commercialization of new pharmaceutical products, competitive factors in the marketplace, the risks associated with government sponsored reimbursement programs and the complex regulatory environment in which we operate. We may never achieve significant revenue or profitable operations.
The likelihood of our long-term success must be considered in light of the expenses, difficulties and delays frequently encountered in the development and commercialization of new pharmaceutical products, competitive factors in the marketplace, the risks associated with government sponsored reimbursement programs and the complex regulatory environment in which we operate.
Applying our proprietary, highly differentiated and innovative technologies, and through collaborations with our strategic partners, we have developed multiple approved products for the treatment of Duchenne muscular dystrophy (“Duchenne”) and are developing potential therapeutic candidates for a broad range of diseases and disorders, including Duchenne, Limb-girdle muscular dystrophies (“LGMDs”), and other neuromuscular and central nervous system (“CNS”) related disorders.
Applying our proprietary, highly differentiated and innovative technologies, and through collaborations with our strategic partners, we have developed multiple approved products for the treatment of Duchenne and are developing potential therapeutic candidates for a broad range of diseases and disorders, including Duchenne, LGMDs, and other neuromuscular and central nervous system related disorders.
EXONDYS 51 uses our phosphorodiamidate morpholino oligomer (“PMO”) chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene. • VYONDYS 53 (golodirsen) Injection (“VYONDYS 53”), approved by the FDA on December 12, 2019, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 53 skipping.
EXONDYS 51 uses our PMO chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene. o VYONDYS 53 (golodirsen) Injection (“VYONDYS 53”), granted accelerated approval by the FDA on December 12, 2019, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 53 skipping.
For ELEVIDYS sold in 2023 and AMONDYS 45 sold in 2022, the majority of related manufacturing costs incurred had previously been expensed as research and development expense.
For ELEVIDYS sold in 2023, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses.
If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to our PMO Products sold would have been approximately $12.3 million higher for 2022 and those related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $33.9 million higher for 2023.
If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Roche Agreement, would have been approximately $100.8 million and $33.9 million higher for 2024 and 2023, respectively.
These amounts were partially offset by $10.7 million in accretion of investment discount, net.
These amounts were partially offset by $40.3 million in accretion of investment discount, net.
Any significant impact as a result of changes in underlying facts, law, tax rates, tax audit, or review could lead to adjustments to our deferred tax asset, income tax expense, our effective tax rate, and/or our cash flow.
Further, the calculation may involve the application of complex tax regulations in a foreign jurisdiction. Any significant impact as a result of changes in underlying facts, law, tax rates, tax audit, or review could lead to adjustments to our deferred tax asset, income tax expense, our effective tax rate, and/or our cash flow.
We have dosed one additional cohort of three patients at a higher dose per the study protocol. In June 2020, we announced safety and expression results from three clinical trial participants in the high dose cohort measured at 60 days, and one-year functional data from three clinical trial participants in the low-dose cohort.
In June 2020, we announced safety and expression results from three clinical trial participants in the high-dose cohort measured at 60 days, and one-year functional data from three clinical trial participants in the low-dose cohort.
Our future expenditures and long-term capital requirements may be substantial and will depend on many factors, including but not limited to the following: • our ability to continue to generate revenues from sales of commercial products and potential future products; • the timing and costs associated with our expansion efforts; • the timing and costs of building out our manufacturing capabilities; • the timing of payments related to our future inventory commitments and manufacturing obligations; • the timing and costs associated with our existing lease obligations and new obligations expected to be entered into in future years; • the timing and costs associated with our clinical trials and pre-clinical trials; • the attainment of milestones and our obligations to make milestone payments to Myonexus's selling shareholders, BioMarin, Nationwide, UWA and other institutions; • obligations to holders of our convertible notes; and • the costs of filing, prosecuting, defending and enforcing patent claims and our other intellectual property rights.
Our future expenditures and long-term capital requirements may be substantial and will depend on many factors, including but not limited to the following: • our ability to continue to generate revenues from sales of commercial products and potential future products; • the timing and costs associated with our expansion efforts; • the timing and costs associated with repurchases of our common stock under our $500.0 million share repurchase program, approved by our Board of Directors in November 2024 and effective for 18 months; • the timing and costs of building out our manufacturing capabilities; • the timing of payments related to our future inventory commitments and manufacturing obligations; - 79 - • the timing and costs associated with our existing lease obligations and new obligations expected to be entered into in future years; • the timing and costs associated with our clinical trials and pre-clinical trials; • the attainment of milestones and our obligations to make milestone payments to Arrowhead, Myonexus's selling shareholders, BioMarin, Nationwide, UWA and other institutions; • obligations to holders of our 1.25% convertible senior notes due on September 15, 2027 (“2027 Notes”); and • the costs of filing, prosecuting, defending and enforcing patent claims and our other intellectual property rights.
The following table summarizes the components of our collaboration and other revenues for the periods indicated: - 76 - For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Amortization of performance obligations** $ 89,244 $ 89,244 $ — (— )% Contract manufacturing 9,216 — 9,216 NM* Total collaboration and other $ 98,460 $ 89,244 $ 9,216 10 % * NM: not meaningful ** Related to the recognition of previously deferred revenue under the Roche collaboration agreement as the Company satisfies its performance obligations under the contract.
The following table summarizes the components of our collaboration and other revenues for the periods indicated: - 74 - For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Contract manufacturing $ 49,038 $ 9,216 $ 39,822 NM* Amortization of performance obligations** 48,000 89,244 (41,244 ) (46 )% Royalty revenue 16,981 — 16,981 NM* Total collaboration and other $ 114,019 $ 98,460 $ 15,559 16 % * NM: not meaningful ** Related to the recognition of previously deferred revenue under the Roche collaboration agreement as the Company satisfies its performance obligations under the contract.
To the extent we issue additional equity securities, our existing stockholders could experience substantial dilution. We have entered into long-term contractual arrangements from time to time for our facilities, the provision of goods and services, and issuance of debt securities, among others.
We have entered into long-term contractual arrangements from time to time for our facilities, the provision of goods and services, and issuance of debt securities, among others.
In March 2022, we announced 36-month functional data from three clinical trial participants in the low-dose cohort and 24-month functional data from two clinical trial participants in the high-dose cohort. In January 2024, we announced that we had begun screening in Study SRP-9003-301, a Phase 3, multi-national, open-label study of SRP-9003.
In March 2022, we announced 36-month functional data from three clinical trial participants in the low-dose cohort and 24-month functional data from two clinical trial participants in the high-dose cohort. In December 2024, we announced that we had completed enrollment and dosing in EMERGENE (Study SRP-9003-301), a Phase 3 clinical trial of SRP-9003 (bidridistrogene xeboparvovec).
AMONDYS 45 uses our PMO chemistry and exon-skipping technology to skip exon 45 of the dystrophin gene. • ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 22, 2023, is an adeno-associated virus based gene therapy for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne with a confirmed mutation in the Duchenne gene.
AMONDYS 45 uses our PMO chemistry and exon-skipping technology to skip exon 45 of the dystrophin gene. • ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 20, 2024, is an AAV-based gene therapy for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene.
These non-cash charges were partially offset by the gain of $102.0 million recorded from the sale of the ELEVIDYS PRV and $46.2 million in accretion of investment discount, net. - 82 - The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following: • $185.7 million increase in accounts receivable, net due to the launch of ELEVIDYS and an increase in the demand of our PMO Products; • $147.7 million increase in inventory primarily due to the addition of capitalized inventory corresponding to the regulatory approval of ELEVIDYS in June 2023; • $86.8 million decrease in deferred revenue primarily related to the collaboration with Roche; • $50.1 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the $54.0 million shortfall payment to Thermo and payments to Catalent for raw materials in 2023 and the overall timing and invoicing of payments; and • $10.7 million increase in other assets primarily due to the timing and consumption of manufacturing prepaids.
The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following: - 81 - • $185.7 million increase in accounts receivable due to the launch of ELEVIDYS and an increase in the demand of our PMO Products; • $147.7 million increase in inventory primarily due to capitalized inventory related to ELEVIDYS; • $86.8 million decrease in deferred revenue primarily related to the collaboration with Roche; • $50.1 million decrease in accounts payable, accrued expenses, lease liabilities and other liabilities, primarily due to the $54.0 million shortfall payment to Thermo and payments to Catalent for raw materials in 2023 and the overall timing and invoicing of payments; and • $12.5 million increase in manufacturing-related deposits and prepaids primarily due to the timing and usage of manufacturing prepaids.
The cost of sales (excluding amortization of in-licensed rights) for 2023 increased $10.4 million, or 7%, compared with 2022.
The cost of sales (excluding amortization of in-licensed rights) for 2024 increased by $168.8 million, or 112%, compared with 2023.
Selling, general and administrative expenses Selling, general and administrative expenses consist of salaries, benefits, stock-based compensation and related costs for personnel in our executive, finance, legal, information technology, business development, human resources, commercial and other general and administrative functions.
This was partially offset by a decrease in clinical supply costs due to timing for our SRP-9001 gene therapy programs. Selling, general and administrative expenses Selling, general and administrative expenses consist of salaries, benefits, stock-based compensation and related costs for personnel in our executive, finance, legal, information technology, business development, human resources, commercial and other general and administrative functions.
The exchange was not pursuant to the conversion privileges included in the terms of the debt at issuance and therefore was accounted for as a debt extinguishment.
The exchange was not pursuant to the conversion privileges included in the terms of the debt at issuance and, therefore, was accounted for as a debt extinguishment, resulting in a recognition of an extinguishment loss of $387.3 million for 2023. There was no similar activity in 2024.
Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones is not probable and payment is not required as of December 31, 2023, such contingencies have not been recorded in our consolidated financial statements.
Because the achievement of these milestones is not probable and payment is not required as of December 31, 2024, such contingencies have not been recorded in our consolidated financial statements.
The following table summarizes the components of our cost of sales for the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Inventory costs related to products sold (excluding products sold to Roche**) $ 108,988 $ 95,765 $ 13,223 14 % Royalty payments 39,537 44,224 (4,687 ) (11 )% Inventory costs related to products sold to Roche** 1,818 — 1,818 NM* Total cost of sales (excluding amortization of in-licensed rights) $ 150,343 $ 139,989 $ 10,354 7 % * NM: not meaningful ** See above for further details regarding product supply sold to Roche via contract manufacturing under our Collaboration Agreement.
The following table summarizes the components of our cost of sales (excluding amortization of in-licensed rights) for the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Inventory costs related to products sold (excluding products sold to Roche**) $ 249,108 $ 108,988 $ 140,120 129 % Royalty payments 47,744 39,537 8,207 21 % Inventory costs related to products sold to Roche** 22,247 1,818 20,429 NM* Total cost of sales (excluding amortization of in-licensed rights) $ 319,099 $ 150,343 $ 168,756 112 % * NM: not meaningful ** See above for further details regarding product supply sold to Roche via contract manufacturing under the Roche Agreement.
In addition, in accordance with our Collaboration Agreement with Roche, the parties agreed to enter into a supply agreement in order for Sarepta to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”).
In accordance with the Roche Agreement, the parties agreed to enter into a supply agreement in order for us to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). Roche utilizes the supply for sales of ELEVIDYS in territories outside of the U.S where Roche has received certain approvals for ELEVIDYS.
For more information, please read Note 3, License and Collaboration Agreements . Collaboration and other revenues primarily relate to our collaboration arrangement with Roche. For both 2023 and 2022, we recognized $89.2 million of collaboration revenue, related to the amortization of performance obligations. For more information, please read Note 3, License and Collaboration Agreements .
For more information, please read Note 3, License and Collaboration Agreements . Collaboration and other revenues relate to our collaboration arrangement with Roche. For 2024 and 2023, we recognized $114.0 million and $98.5 million of collaboration and other revenues, respectively.
Expense incurred related to excess inventory, obsolete inventory, or inventories that do not meet our quality specifications is recorded as a component of cost of sales in the consolidated statements of operations. Income Tax We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination.
Expense incurred related to excess - 72 - inventory, obsolete inventory, or inventories that do not meet our quality specifications is recorded as a component of cost of sales in the consolidated statements of comprehensive income (loss).
(2) Lease obligations only include real estate leases that had commenced prior to December 31, 2023. (3) The leases embedded in a certain supply agreement are included in manufacturing obligations.
(2) Lease obligations only include real estate leases that had commenced prior to December 31, 2024. (3) The leases embedded in a certain supply agreement are included in manufacturing obligations. The increase in short-term manufacturing commitments is primarily driven by ramp-up of ELEVIDYS manufacturing activities as a result of anticipated increase in demand.
To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected. Although we believe that our judgments and estimates are appropriate, actual results may differ from these estimates.
We believe that the estimates and judgments upon which we rely are reasonable based upon historical experience and information available to us at the time that we make these estimates and judgments. To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected.
We capitalize inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized.
Inventory Valuation Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis. We capitalize inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized.
These amounts were partially offset by the following: • $147.6 million increase in accounts payable, accrued expenses, lease liabilities and other liabilities due to the timing and invoicing of payments; and • $14.6 million decrease in other assets primarily due to the release of manufacturing deposits and amortization of prepaids primarily related to SRP-9001 batch production.
These amounts were partially offset by a $110.6 million increase in accounts payable, accrued expenses, lease liabilities and other liabilities primarily due to the timing and invoicing of payments with our CROs and CMOs.
The most advanced of our LGMD product candidates, SRP-9003, is designed to transfer a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex. It utilizes the AAVrh.74 vector system, the same vector used in our SRP-9001 gene therapy program.
SRP-9003 is designed to transfect a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex. SRP-9003 has generated positive pre-clinical safety and efficacy data utilizing the AAVrh.74 vector, the same vector used in our SRP-9001 gene therapy program. A Phase 1/2a trial of SRP-9003 commenced in the fourth quarter of 2018.
While the Supply Agreement is in the process of being negotiated, we delivered several batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. In 2023, we recognized $9.2 million of contract manufacturing collaboration revenue related to these shipments, with no similar activity for 2022.
We are eligible to receive royalties on these sales. While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis.
ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene. We are in the process of conducting various clinical trials for our approved products, including studies that are required to comply with our post-marketing FDA requirements/commitments to verify and describe the clinical benefit of these products.
We are in the process of conducting various clinical trials for our approved products, including studies that are required to comply with our post-marketing FDA requirements/commitments to verify and describe the clinical benefit of these products. - 71 - A summary description of our key product candidates, including those in collaboration with our strategic partners, is as follows: • SRP-9003 (LGMD, gene therapy program) .
Other income (expense), net Other income (expense), net primarily consists of interest expense on our debt facilities, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gains or losses or an impairment of our strategic investments and gains or losses on contingent consideration, net related to regulatory-related contingent payments meeting the definition of a derivative.
Other income (expense), net Other income (expense), net primarily consists of interest expense on our debt instruments, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gain or loss from our investment in our strategic investments, the changes in the fair value of the derivative assets associated with the capped call options for our convertible senior notes due on November 15, 2024 (the “2024 Notes”) and the changes in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability.
The calculation of our tax liabilities (or amount of reduction in our deferred tax assets from net operating loss carryover and research credit carryover) resulting from uncertain tax positions can involve significant judgment. Further, the calculation may involve the application of complex tax regulations in a foreign jurisdiction.
We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination. The calculation of our tax liabilities (or amount of reduction in our deferred tax assets from net operating loss carryover and research credit carryover) resulting from uncertain tax positions can involve significant judgment.
Interest expense primarily includes interest accrued on our convertible notes. Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit. Other income (expense), net for 2023 increased by approximately $61.4 million compared to 2022.
Our cash equivalents and investments consist of money market funds, corporate bonds, government and government agency debt securities and certificates of deposit. Other income, net for 2024 increased by approximately $9.6 million compared to 2023. The change is primarily due to the impairment of a strategic investment during 2023, with no similar activity during 2024.
Income tax expense Income tax expense for 2023 and 2022 was approximately $15.9 million and $13.5 million, respectively. Income tax expense for 2023 relates to state, foreign and federal taxes, while income tax expense for 2022 relates to state and foreign income taxes.
There was no similar activity in 2024. Income tax expense - 78 - Income tax expense for 2024 and 2023 was approximately $25.5 million and $15.9 million, respectively. Income tax expense for 2024 and 2023 relates to state, foreign and federal taxes for which available tax losses or credits were not available to offset.
Cash used in investing activities in 2022 primarily consisted of purchases of available-for-sale securities and property and equipment of $1,936.9 million and $30.8 million, respectively, partially offset by proceeds of $923.2 million from the maturity of available-for-sale securities. Financing Activities Cash provided by financing activities was $125.0 million in 2023 compared to $232.5 million in 2022.
Cash provided by investing activities in 2024 consisted of $2,002.1 million from the maturity and sales of available-for-sale securities, partially offset by purchases of available-for-sale securities, property and equipment and intangible assets of $1,099.6 million, $137.0 million and $10.0 million, respectively.
We believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our consolidated financial statements: • inventory; and - 74 - • income tax. Inventory Valuation Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis.
Although we believe that our judgments and estimates are appropriate, actual results may differ from these estimates. We believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our consolidated financial statements: • inventory; and • income tax.
Please read Note 2, Summary of Significant Accounting Policies to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a further discussion of our critical accounting policies and estimates. - 75 - The following table sets forth selected consolidated statements of operations data for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands, except per share amounts) $ % Revenues: Products, net $ 1,144,876 $ 843,769 $ 301,107 36 % Collaboration and other 98,460 89,244 9,216 10 % Total revenues 1,243,336 933,013 310,323 33 % Cost and expenses: Cost of sales (excluding amortization of in-licensed rights) 150,343 139,989 10,354 7 % Research and development 877,387 877,090 297 (— )% Selling, general and administrative 481,871 451,421 30,450 7 % Amortization of in-licensed rights 1,559 714 845 118 % Total cost and expenses 1,511,160 1,469,214 41,946 3 % Operating loss (267,824 ) (536,201 ) 268,377 (50 )% Other loss, net: Loss on debt extinguishment (387,329 ) (125,441 ) (261,888 ) 209 % Gain from sale of Priority Review Voucher 102,000 — 102,000 NM* Other income (expense), net 33,055 (28,321 ) 61,376 217 % Total other loss, net (252,274 ) (153,762 ) (98,512 ) (64 )% Loss before income tax expense (520,098 ) (689,963 ) 169,865 25 % Income tax expense 15,879 13,525 2,354 17 % Net loss $ (535,977 ) $ (703,488 ) $ 167,511 24 % Net loss per share — basic and diluted $ (5.80 ) $ (8.03 ) $ 2.23 28 % * NM: not meaningful Revenues The following table summarizes the components of our net product revenues by product for the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % EXONDYS 51 $ 540,576 $ 511,749 $ 28,827 6 % AMONDYS 45 273,755 214,582 59,173 28 % ELEVIDYS 200,356 — 200,356 NM* VYONDYS 53 130,189 117,438 12,751 11 % Products, net $ 1,144,876 $ 843,769 $ 301,107 36 % * NM: not meaningful Net product revenues for our products for 2023 increased by $301.1 million compared with 2022.
Please read Note 2, Summary of Significant Accounting Policies and Recent Accounting Pronouncements to the consolidated financial statements, included elsewhere in this Annual Report on Form 10-K, for a further discussion of our critical accounting policies and estimates. - 73 - The following table sets forth selected consolidated statements of income (loss) data for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands, except per share amounts) $ % Revenues: Products, net $ 1,787,960 $ 1,144,876 $ 643,084 56 % Collaboration and other 114,019 98,460 15,559 16 % Total revenues 1,901,979 1,243,336 658,643 53 % Cost and expenses: Cost of sales (excluding amortization of in-licensed rights) 319,099 150,343 168,756 112 % Research and development 804,522 877,387 (72,865 ) (8 )% Selling, general and administrative 557,872 481,871 76,001 16 % Amortization of in-licensed rights 2,405 1,559 846 54 % Total cost and expenses 1,683,898 1,511,160 172,738 11 % Operating income (loss) 218,081 (267,824 ) 485,905 NM* Other income (loss), net: Other income, net 42,693 33,055 9,638 29 % Loss on debt extinguishment — (387,329 ) 387,329 (100 )% Gain from sale of Priority Review Voucher — 102,000 (102,000 ) (100 )% Total other income (loss), net 42,693 (252,274 ) 294,967 NM* Income (loss) before income tax expense 260,774 (520,098 ) 780,872 NM* Income tax expense 25,535 15,879 9,656 61 % Net income (loss) $ 235,239 $ (535,977 ) $ 771,216 NM* Earnings (loss) per share: Basic $ 2.47 $ (5.80 ) $ 8.27 NM* Diluted $ 2.34 $ (5.80 ) $ 8.14 NM* * NM: not meaningful Revenues The following table summarizes the components of our net product revenues, by product, for the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % PMO Products $ 967,169 $ 944,520 $ 22,649 2 % ELEVIDYS 820,791 200,356 620,435 NM* Products, net $ 1,787,960 $ 1,144,876 $ 643,084 56 % * NM: not meaningful Net product revenues for our products for 2024 increased by $643.1 million, or 56%, compared with 2023.
Research and development expenses Research and development expenses consist of costs associated with research activities as well as those associated with our product development efforts, conducting pre-clinical trials, clinical trials and manufacturing activities.
For 2024 and 2023, we recognized $22.2 million and $1.8 million, respectively, of cost of sales related to products sold to Roche under the Roche Agreement. - 75 - Research and development expenses Research and development expenses consist of costs associated with research activities as well as those associated with our product development efforts, conducting pre-clinical trials, clinical trials and manufacturing activities.
Refer to Note 18, Income Taxes for discussion of the key drivers impacting our effective tax rate. - 80 - Liquidity and Capital Resources The following table summarizes our financial condition for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Financial assets: Cash and cash equivalents $ 428,430 $ 966,777 $ (538,347 ) (56 )% Short-term investments 1,247,820 1,022,597 225,223 22 % Restricted cash 15,579 19,024 (3,445 ) (18 )% Total cash, cash equivalents and investments $ 1,691,829 $ 2,008,398 $ (316,569 ) (16 )% Borrowings: Convertible debt $ 1,237,998 $ 1,544,292 $ (306,294 ) (20 )% Total borrowings $ 1,237,998 $ 1,544,292 $ (306,294 ) (20 )% Working capital Current assets $ 2,579,331 $ 2,557,861 $ 21,470 1 % Current liabilities 653,659 619,604 34,055 5 % Total working capital $ 1,925,672 $ 1,938,257 $ (12,585 ) (1 )% For 2023 and 2022, our principal sources of liquidity were primarily derived from sales of our products, net proceeds from sale of the ELEVIDYS PRV, net proceeds from our offering of the 2027 Notes, proceeds from the partial settlement of capped call options associated with the 2024 Notes Exchange and our collaboration arrangement with Roche.
Liquidity and Capital Resources The following table summarizes our financial condition for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Financial assets: Cash and cash equivalents $ 1,103,010 $ 428,430 $ 674,580 157 % Short-term investments 251,782 1,247,820 (996,038 ) (80 )% Non-current investments 133,163 — 133,163 NM* Restricted cash 15,579 15,579 — (— )% Total cash, cash equivalents and investments $ 1,503,534 $ 1,691,829 $ (188,295 ) (11 )% Borrowings: Convertible debt $ 1,137,124 $ 1,237,998 $ (100,874 ) (8 )% Total borrowings $ 1,137,124 $ 1,237,998 $ (100,874 ) (8 )% Working capital Current assets $ 3,073,463 $ 2,579,331 $ 494,132 19 % Current liabilities 731,684 653,659 78,025 12 % Total working capital $ 2,341,779 $ 1,925,672 $ 416,107 22 % For 2024 and 2023, our principal sources of liquidity were primarily derived from sales of our products, net proceeds from sale of the ELEVIDYS PRV, proceeds from the settlement of capped call options associated with the 2024 Notes (the “2017 Capped Calls”) and our collaboration arrangement with Roche.
The Exchange Agreements resulted in an exchange of $313.5 million in aggregate principal value of the 2024 Notes for shares of our common stock (the “2024 Notes Exchange”). In connection with the 2024 Notes Exchange, we issued approximately 4.5 million shares of our common stock representing an agreed upon contractual exchange rate pursuant to the terms of each Exchange Agreement.
Loss on debt extinguishment On March 2, 2023, we entered into separate, privately negotiated exchange agreements with certain holders of the outstanding 2024 Notes, which resulted in an exchange of $313.5 million in aggregate principal value of the 2024 Notes for approximately 4.5 million shares of our common stock (the “2024 Notes Exchange”).
The changes in our working capital primarily reflect use of cash in operating activities.
The changes in our working capital primarily reflect the use of cash in operating activities, as well as an increase in inventory due to the capitalization of ELEVIDYS inventory after its approval in June 2023.
The following table summarizes our selling, general and administrative expenses by category for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Professional services $ 158,279 $ 97,330 $ 60,949 63 % Compensation and other personnel expenses 157,317 122,127 35,190 29 % Stock-based compensation 100,025 171,725 (71,700 ) (42 )% Facility- and technology-related expenses 44,090 33,156 10,934 33 % Other 23,031 27,618 (4,587 ) (17 )% Roche collaboration reimbursement (871 ) (535 ) (336 ) 63 % Total selling, general and administrative expenses $ 481,871 $ 451,421 $ 30,450 7 % Selling, general and administrative expenses for 2023 increased by $30.5 million, or 7%, compared with 2022.
The following table summarizes our selling, general and administrative expenses by category for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Professional services $ 183,505 $ 158,279 $ 25,226 16 % Compensation and other personnel expenses 171,508 157,317 14,191 9 % Stock-based compensation 110,290 100,025 10,265 10 % Facility- and technology-related expenses 50,903 44,090 6,813 15 % Other 43,093 23,031 20,062 87 % Roche collaboration reimbursement (1,427 ) (871 ) (556 ) 64 % Total selling, general and administrative expenses $ 557,872 $ 481,871 $ 76,001 16 % - 77 - Selling, general and administrative expenses for 2024 increased by $76.0 million, or 16%, compared with 2023.
The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities for the periods presented.
GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities for the periods presented. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates.
The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following: • $89.2 million decrease in deferred revenue related to the collaboration with Roche; • $61.6 million increase in accounts receivable, net due to an increase in demand for our PMO products; and • $50.8 million increase in inventory due to our continuing build-up of inventory purchased in 2022 as the demand for our PMO products increased.
The net cash outflow from changes in our operating assets and liabilities was primarily driven by the following: • $395.2 million increase in inventory primarily due to capitalized inventory related to ELEVIDYS; • $201.7 million increase in accounts receivable due to an increase in demand for ELEVIDYS following its initial FDA approval in June 2023 and subsequent expanded label approval in June 2024 and an increase in payment terms for product sales related to the PMO Products; • $188.6 million increase in manufacturing-related deposits and prepaids primarily due to an increase in prepaids for raw materials and batch fees with Catalent, partially offset by decreases in manufacturing-related deposits and prepaids at Thermo as a result of the termination of the Thermo Agreement during 2024; and • $32.2 million decrease in deferred revenue primarily related to the collaboration with Roche.
Cash Flows The following table summarizes our cash flow activity for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Cash (used in) provided by Operating activities $ (500,993 ) $ (325,346 ) $ (175,647 ) 54 % Investing activities (165,803 ) (1,046,883 ) 881,080 (84 )% Financing activities 125,004 232,507 (107,503 ) (46 )% Decrease in cash and cash equivalents $ (541,792 ) $ (1,139,722 ) $ 597,930 (52 )% Operating Activities Cash used in operating activities, which consists of our net loss adjusted for non-cash items and changes in net operating assets and liabilities, totaled $501.0 million in 2023.
Amounts related to contingent milestone payments are not yet considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones. - 80 - Cash Flows The following table summarizes our cash flow activity for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Cash (used in) provided by Operating activities $ (205,787 ) $ (500,993 ) $ 295,206 (59 )% Investing activities 755,561 (165,803 ) 921,364 NM* Financing activities 124,806 125,004 (198 ) (— )% Increase (decrease) in cash and cash equivalents $ 674,580 $ (541,792 ) $ 1,216,372 (225 )% * NM: not meaningful Operating Activities Cash used in operating activities, which consists of our net income (loss) adjusted for non-cash items and changes in net operating assets and liabilities, totaled $205.8 million and $501.0 million of cash in 2024 and 2023, respectively.
The following table summarizes our total obligations under debt, lease, and manufacturing arrangements: As of December 31, 2023 Due in less than one year Due in greater than one year Total (in thousands) Debt obligations (1) $ 121,810 $ 1,193,125 $ 1,314,935 Lease obligations (2) 26,432 336,011 362,443 Manufacturing obligations (3) 1,032,159 407,671 1,439,830 Total obligations under debt, lease and manufacturing arrangements $ 1,180,401 $ 1,936,807 $ 3,117,208 (1) Interest payments are included within the future debt obligations.
The following table summarizes our total obligations under debt, lease, and manufacturing arrangements: As of December 31, 2024 Due in less than one year Due in greater than one year Total (in thousands) Debt obligations (1) $ 14,375 $ 1,178,750 $ 1,193,125 Lease obligations (2) 24,396 328,762 353,158 Manufacturing obligations (3) 943,067 293,434 1,236,501 Total obligations under debt, lease and manufacturing arrangements $ 981,838 $ 1,800,946 $ 2,782,784 (1) Interest payments are included within the future debt obligations.
The increase is primarily due to a $38.5 million increase in accretion of investment discount, net and a $19.8 million increase in interest income due to the investment mix of our investment portfolio and an increase in interest rates, as well as a $31.2 million reduction of interest expense incurred as a result of the repayment of our December 2019 Term Loan in 2022, partially offset by a $27.7 million increase in the impairment of strategic investments and a $7.9 million decrease in gain (loss) on contingent consideration, net.
This change was partially offset by a decrease in interest income and accretion of investment discount, net as a result of lower interest rates and the investment mix of our investment portfolio and an increase in the fair value of derivatives, primarily related to contingent consideration.
This was primarily driven by the following: • $60.9 million increase in professional service expenses primarily related to the launch of ELEVIDYS and ongoing litigation matters; • $35.2 million increase in compensation and other personnel expenses primarily due to changes in headcount; • $71.7 million decrease in stock-based compensation expense primarily related to the execution of the Chief Executive Officer grant modification agreement in 2022, partially offset by the achievement of performance conditions related to certain PSUs in 2023 with continuing vesting requirements related to a service condition, as well as changes in headcount and the value of stock awards; • $10.9 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and • $4.6 million decrease in other expenses primarily related to timing of charitable contributions. - 79 - Amortization of in-licensed rights Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively.
The increase was primarily driven by the following: • $25.2 million increase in professional service expenses primarily related to ongoing litigation matters, our continuing expansion efforts and continuing efforts to commercialize ELEVIDYS; • $14.2 million increase in compensation and other personnel expenses primarily due to changes in headcount; • $10.3 million increase in stock-based compensation expense primarily related to the achievement of performance conditions related to certain PSUs during the year ended December 31, 2024 and changes in headcount; • $6.8 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and • $20.1 million increase in other expenses primarily due to the timing of charitable contribution activity.
The change primarily reflects increasing demand for our PMO products, partially offset by a decrease in write-offs of certain batches of our products not meeting our quality specifications in 2023, as compared to 2022, as well as a decrease in royalty payments due to changes in the BioMarin royalty terms.
The change primarily reflects an increase in cost of sales related to ELEVIDYS due to an increase in demand following its initial FDA approval in June 2023 and subsequent expanded label approval in June 2024, as well as increases in the write-offs of certain batches of our products not meeting our quality specifications.
The increase primarily reflects increasing demand for EXONDYS 51, AMONDYS 45 and VYONDYS 53 (collectively, the “PMO Products”), as well as $200.4 million of net product revenues associated with sales of ELEVIDYS for 2023 after its approval in June 2023.
The increase primarily reflects an increase in net product revenues of ELEVIDYS of $620.4 million in 2024 as a result of its initial FDA approval in June 2023 and subsequent expanded label approval in June 2024.
The following table summarizes our research and development expenses by project for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % SRP-9001 $ 282,207 $ 424,210 $ (142,003 ) (33 )% Eteplirsen (exon 51) 90,829 46,100 44,729 97 % PPMO platform 78,231 50,026 28,205 56 % LGMD platform 58,529 27,949 30,580 109 % Other gene therapies 29,411 53,834 (24,423 ) (45 )% Casimersen (exon 45) 21,264 31,850 (10,586 ) (33 )% Golodirsen (exon 53) 16,556 14,707 1,849 13 % Up-front, milestone, and other expenses 13,232 35,102 (21,870 ) (62 )% Gene editing 12,177 10,537 1,640 16 % Other projects 10,288 6,026 4,262 71 % Internal research and development expenses 370,677 294,021 76,656 26 % Roche collaboration reimbursement (106,014 ) (117,272 ) 11,258 (10 )% Total research and development expenses $ 877,387 $ 877,090 $ 297 (— )% The following table summarizes our research and development expenses by category for each of the periods indicated: For the Year Ended December 31, 2023 2022 Change Change (in thousands) $ % Manufacturing expenses $ 302,025 $ 445,758 $ (143,733 ) (32 )% Clinical trial expenses 187,289 135,838 51,451 38 % Compensation and other personnel expenses 187,224 148,385 38,839 26 % Facility- and technology-related expenses 103,434 85,093 18,341 22 % Stock-based compensation 82,489 61,293 21,196 35 % Professional services 28,962 19,264 9,698 50 % Up-front, milestone, and other expenses 13,232 35,102 (21,870 ) (62 )% Pre-clinical expenses 11,838 8,704 3,134 36 % Research and other 66,908 54,925 11,983 22 % Roche collaboration reimbursement (106,014 ) (117,272 ) 11,258 (10 )% Total research and development expenses $ 877,387 $ 877,090 $ 297 (— )% Research and development expenses for 2023 slightly increased by $0.3 million, compared with 2022.
The following table summarizes our research and development expenses, by project, for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % SRP-9001 $ 307,564 $ 282,207 $ 25,357 9 % LGMD platform 99,122 58,529 40,593 69 % Eteplirsen (exon 51) 70,213 90,829 (20,616 ) (23 )% Other gene therapies 33,272 29,411 3,861 13 % PPMO platform 31,926 78,231 (46,305 ) (59 )% Gene editing 14,853 12,177 2,676 22 % Casimersen (exon 45) 14,805 21,264 (6,459 ) (30 )% Golodirsen (exon 53) 10,062 16,556 (6,494 ) (39 )% Other projects 9,064 23,520 (14,456 ) (61 )% Internal research and development expenses 339,321 370,677 (31,356 ) (8 )% Roche collaboration reimbursement (125,680 ) (106,014 ) (19,666 ) 19 % Total research and development expenses $ 804,522 $ 877,387 $ (72,865 ) (8 )% The following table summarizes our research and development expenses by category for each of the periods indicated: For the Year Ended December 31, 2024 2023 Change Change (in thousands) $ % Manufacturing expenses* $ 329,011 $ 345,826 $ (16,815 ) (5 )% Compensation and other personnel expenses 164,322 161,763 2,559 2 % Clinical trial expenses 163,565 187,289 (23,724 ) (13 )% Facility- and technology-related expenses 90,697 87,307 3,390 4 % Stock-based compensation 74,010 82,489 (8,479 ) (10 )% Professional services 30,640 26,749 3,891 15 % Pre-clinical expenses 6,359 11,838 (5,479 ) (46 )% Research and other 71,598 80,140 (8,542 ) (11 )% Roche collaboration reimbursement (125,680 ) (106,014 ) (19,666 ) 19 % Total research and development expenses $ 804,522 $ 877,387 $ (72,865 ) (8 )% *Beginning in 2024, we implemented an updated manufacturing absorption methodology that allocates the absorption of indirect manufacturing costs to their respective originating categories.
Prior to receiving regulatory approval for EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS by the FDA in September 2016, December 2019, February 2021 and June 2023, respectively, we expensed such manufacturing and material costs as research and development expenses.
Prior to receiving regulatory approval for our products, we expensed manufacturing and material costs as research and development expenses. For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to 2023. For ELEVIDYS sold in 2024, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses.
Investing Activities Cash used in investing activities for 2023 and 2022 were $165.8 million and $1,046.9 million, respectively.
Investing Activities Cash provided by investing activities for 2024 was $755.6 million, while cash used by investing activities for 2023 was $165.8 million.
Cash used in operating activities in 2022 was primarily driven by the net loss of $703.5 million, adjusted for following: • $233.0 million in stock-based compensation expense; • $125.4 million in loss on debt extinguishment of the 2024 Notes and 2019 Term Loan; • $41.9 million in depreciation and amortization expense; and • $27.9 million in other non-cash items.
Cash used in operating activities in 2024 was primarily driven by the net income of $235.2 million, adjusted for the following non-cash items: • $184.3 million in stock-based compensation expense; • $62.7 million in non-cash termination charges as a result of the Thermo Agreement termination; • $37.7 million in depreciation and amortization expense; • $16.2 million reduction in the carrying amount of the right of use assets; • $7.8 million charge related to the change in the fair value of derivatives; and • $7.1 million in other non-cash items.
Cash provided by financing activities in 2022 primarily consisted of the following: • $1,127.4 million in proceeds from the 2027 Notes offering, net of commissions; • $30.0 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program; and • $26.3 million in partial settlement of capped call share options for the 2024 Notes. - 83 - These amounts were partially offset by the following items: • $550.0 million for the repayment of the 2019 Term Loan; • $247.9 million in the repurchase of a portion of the 2024 Notes; • $127.3 million purchase of capped call share options for the 2027 Notes; and • $25.4 million for payment on the debt extinguishment of the 2019 Term Loan.
Financing Activities Cash provided by financing activities was $124.8 million in 2024, compared to $125.0 million in 2023. Cash provided by financing activities in 2024 primarily consisted of $79.5 million in proceeds from exercise of options and purchase of stock under our Employee Stock Purchase Program and $45.3 million in proceeds from the settlement of the 2017 Capped Calls.
Removed
A summary description of our key product candidates, including those in collaboration with our strategic partners, is as follows: • SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PMO (“PPMO”), and our exon-skipping technology to skip exon 51 of the dystrophin gene.
Added
ELEVIDYS is also approved for non-ambulatory patients under the accelerated approval pathway. ELEVIDYS was previously granted accelerated approval by the FDA on June 22, 2023 for the treatment of ambulatory patients aged four through five years with Duchenne with a confirmed mutation in the Duchenne gene.
Removed
SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. Exon skipping is intended to promote the production of an internally truncated but functional dystrophin protein.
Added
ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene.
Removed
In the fourth quarter of 2017, we commenced a first-in-human, single ascending dose, study for the treatment of Duchenne in patients who are amenable to exon 51 skipping. In 2019, we commenced Study 5051-201. In December 2020, we announced an interim analysis on clinical results from the 10 mg/kg and 20 mg/kg dose cohorts of Part A of Study 5051-201.
Added
We are developing gene therapy programs for various forms of LGMD. The most advanced of our LGMD product candidates, SRP-9003, aims to treat LGMD2E, also known as beta-sarcoglycanopathy, a severe and debilitating form of LGMD characterized by progressive muscle fiber loss, inflammation and muscle fiber replacement with fat and fibrotic tissue.
Removed
In May 2021, we announced results from the 30 mg/kg cohort of Part A of Study 5051-201. We initiated Part B of Study 5051-201 in the fourth quarter of 2021. In July 2022, - 73 - the FDA placed Study 5051-201 on clinical hold following a serious adverse event of hypomagnesemia. The clinical hold was lifted in August 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed0 unchanged
Biggest changeOur $1,150.0 million aggregate principal amount of our 2027 Notes has a fixed interest rate of 1.25% per annum, payable semi-annually in cash on each March 15 and September 15 and our $105.8 million aggregate principal amount of our 2024 Notes has a fixed interest rate of 1.5% per annum, payable semi-annually in cash on each May 15 and November 15, and therefore are not subject to fluctuations in market interest rates.
Biggest changeOur $1,150.0 million aggregate principal amount of our 2027 Notes has a fixed interest rate of 1.25% per annum, payable semi-annually in cash on each March 15 and September 15, and therefore is not subject to fluctuations in market interest rates. - 82 -
The fair value of cash equivalents and short-term investments is subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 10 basis point adverse movement across all maturities.
The fair value of cash equivalents and investments is subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 10 basis point adverse movement across all maturities.
For the year ended December 31, 2023, we estimate that such hypothetical adverse 10 basis point movement would result in a hypothetical loss in fair value of approximately $0.5 million to our interest rate sensitive instruments.
As of December 31, 2024, we estimate that such hypothetical 10 basis point adverse movement would result in a hypothetical loss in fair value of approximately $0.3 million to our interest rate sensitive instruments.
Item 7A. Quantitative and Qualita tive Disclosures About Market Risk. Our current investment policy is to maintain a diversified investment portfolio consisting of money market investments, commercial paper, government and government agency bonds and high-grade corporate bonds with maturities of 36 months or less. Our cash is primarily deposited in and invested through highly rated financial institutions in the U.S.
Item 7A. Quantitative and Qualita tive Disclosures About Market Risk. Our current investment policy is to maintain 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 24 months or less.
As of December 31, 2023, we had $1,691.8 million of cash, cash equivalents and investments, comprised of $1,247.8 million of short-term investments, $428.4 million of cash and cash equivalents and $15.6 million of long-term restricted cash. The Company only holds debt securities classified as available-for-sale.
Our cash is primarily deposited in and invested through highly rated financial institutions in the U.S. As of December 31, 2024, we had $1,503.5 million of cash, cash equivalents, restricted cash and investments, comprised of $384.9 million of investments, $1,103.0 million of cash and cash equivalents and $15.6 million of restricted cash. All our debt securities are classified as available-for-sale.

Other SRPT 10-K year-over-year comparisons