SRPT Q1 Earnings Call: Sarepta Adjusts Guidance After Safety Event and Administrative Delays
Biotech company Sarepta Therapeutics (NASDAQ:SRPT) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 80.2% year on year to $744.9 million. Its non-GAAP loss of $3.42 per share was significantly below analysts' consensus estimates.
Is now the time to buy SRPT? Find out in our full research report (it's free).
Revenue: $744.9 million vs analyst estimates of $693.5 million (80.2% year-on-year growth, 7.4% beat)
Adjusted EPS: -$3.42 vs analyst estimates of -$0.65 (significant miss)
Adjusted EBITDA: -$239.6 million vs analyst estimates of -$371 million (-32.2% margin, 35.4% beat)
Operating Margin: -40.3%, down from 8.4% in the same quarter last year
Free Cash Flow was -$627.1 million compared to -$274.5 million in the same quarter last year
Market Capitalization: $3.58 billion
Sarepta Therapeutics' first quarter results were shaped by significant growth in its gene therapy and exon-skipping product lines, but management acknowledged that the period was marked by operational and clinical challenges. CEO Doug Ingram highlighted that while the company treated more patients with ELEVIDYS—its Duchenne muscular dystrophy gene therapy—than ever before, administrative hurdles, site imbalances, and a recent safety event led to a more cautious outlook for the rest of the year.
Looking ahead, management cited three main factors behind its revised annual guidance: the need for extensive educational outreach following a patient death related to ELEVIDYS, slower administrative processing times for gene therapy infusions, and a concentration of demand at top treatment sites nearing capacity. Ingram stated, 'We are changing our net product revenue guidance…driven by three factors,' emphasizing that these are expected to impact both timing and volume of infusions in 2025.
As Sarepta navigated a complex quarter, management detailed several operational and strategic developments tied to product performance and the company's evolving market approach. The quarter's results were primarily influenced by events in gene therapy delivery, site operations, and ongoing safety monitoring.
ELEVIDYS Uptake and Challenges: Management reported a sharp increase in ELEVIDYS usage, but noted that a patient death from acute liver failure led some families to delay infusions while seeking more information about the therapy's safety profile.
Administrative Process Delays: The company cited a longer-than-expected timeframe from patient enrollment to infusion, particularly due to complex paperwork, insurance agreements, and scheduling bottlenecks at certain centers. Specific issues, such as delays with Medi-Cal in California, have since been addressed.
Site Utilization Imbalance: Roughly 60% of ELEVIDYS revenue came from a handful of leading treatment sites, many now booked up to a year in advance. Sarepta aims to engage secondary sites to better distribute patient volume and reduce wait times.
Proactive Educational Outreach: Management launched comprehensive outreach efforts targeting both physicians and patients, including direct-to-consumer campaigns and digital resources, to address safety concerns and expedite access to therapy.
Pipeline and Research Momentum: Beyond ELEVIDYS, Sarepta advanced its limb-girdle muscular dystrophy (LGMD) and siRNA programs, with expectations to submit a biologics license application for its EMERGENE therapy in the second half of the year and share new data from ongoing studies.
Looking to the remainder of 2025, management's outlook centers on resolving operational hurdles and rebuilding momentum for ELEVIDYS, while expanding access and maintaining investment in R&D.
Broader Site Engagement: Sarepta plans to intensify support for secondary infusion centers, aiming to alleviate the backlog at top sites and improve overall patient access to ELEVIDYS.
Educational Initiatives: Management believes that ongoing education of both healthcare providers and patient families about the safety and efficacy data will be critical to restoring confidence and driving new treatment initiations.
Pipeline Readouts and Regulatory Milestones: Sarepta anticipates key data releases and regulatory filings, particularly in its LGMD and siRNA programs, which management expects will underpin future revenue and diversify the company's therapeutic base.
Tazeen Ahmad (Bank of America Securities): Asked which factor—site capacity, administrative complexity, or the safety event—most heavily influenced revised guidance. Management cited cycle times as the principal mechanical driver, with all three contributing.
Ritu Baral (TD Cowen): Inquired how Sarepta plans to direct patients to less-utilized centers and whether more sites might open. CEO Doug Ingram stated the focus will be on expanding engagement and education at existing secondary sites rather than increasing the total number.
Louise Chen (Scotiabank): Queried whether the guidance revision was entirely ELEVIDYS-related and about anticipated sales trends. Management confirmed the adjustment was due to ELEVIDYS and expects demand to recover in the summer and back half of the year.
Andrew Tsai (Jefferies): Questioned the risk of more severe regulatory actions, such as product withdrawal, following the safety event. Management emphasized ELEVIDYS' risk-benefit profile and ongoing regulatory support.
Eliana Merle (UBS): Sought clarity on potential label updates for ELEVIDYS after the patient death. Sarepta stated a supplement had been filed with the FDA, with a review expected by year-end.
In upcoming quarters, the StockStory team will monitor (1) Sarepta's progress in expanding ELEVIDYS capacity at secondary sites, (2) the impact of educational initiatives on therapy adoption following recent safety concerns, and (3) the timing and outcomes of key clinical and regulatory milestones in the LGMD and siRNA pipelines. Continued resolution of administrative bottlenecks will also be closely watched as an indicator of operational improvement.
Sarepta Therapeutics currently trades at a forward P/E ratio of 3.6×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report.
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