Sarepta Q1 2025 slides: revenue grows 70% but guidance cut amid ELEVIDYS challenges

Introduction & Market Context

Sarepta Therapeutics (NASDAQ:SRPT) presented its first quarter 2025 financial results on May 6, revealing a complex picture of strong revenue growth overshadowed by operational challenges and a significant guidance reduction. The company’s stock plummeted 26.56% in after-hours trading following the announcement, reflecting investor concerns despite the 70% year-over-year revenue growth.

The gene therapy developer reported total revenues of $745 million, exceeding analyst expectations of $695.9 million, but posted a surprising non-GAAP loss of $3.42 per share against a forecasted profit of $1.96. This significant earnings miss, coupled with a reduced full-year revenue guidance, sent shares tumbling to $37.10 in extended trading, far below the company’s 52-week high of $173.25.

Quarterly Performance Highlights

Sarepta’s product revenue reached $612 million in Q1 2025, representing a 70% increase compared to the same period last year. This growth was primarily driven by ELEVIDYS, the company’s gene therapy for Duchenne muscular dystrophy, which generated $375 million in revenue, up 180% year-over-year. The company’s PMO franchise contributed a steady $237 million.

As shown in the following chart of quarterly revenue performance:

Despite the impressive top-line growth, Sarepta reported a GAAP operating loss of $300 million and a non-GAAP operating loss of $250 million. The company noted that excluding the $584 million in transaction costs related to the Arrowhead collaboration, it would have reported another sequential quarter of operating profit.

The detailed financial breakdown reveals the significant impact of these transaction costs:

ELEVIDYS Challenges and Strategic Response

While ELEVIDYS sales grew substantially year-over-year, the company identified several factors affecting its performance in Q1 2025, leading to the guidance reduction. These factors include a severe flu season, site-specific administrative issues, and the impact of a recently reported safety event.

The company outlined these challenges and its strategic response:

To address these issues, Sarepta is implementing a comprehensive strategy focused on education, shortening turnaround times, optimizing site capacity, and enhancing promotional efforts. The company emphasized its commitment to disseminating biomarker safety data and new 2-year EMBARK data across the treating and referring physician landscape.

Sarepta also presented safety data showing no observed correlation between liver function and age, weight, dose, and total viral load, supporting the safety profile of weight-based dosing across the labeled population of Duchenne patients. Over 800 patients have been treated with ELEVIDYS in commercial settings and clinical studies to date.

R&D Pipeline Progress

Despite the financial challenges, Sarepta continues to advance its robust R&D pipeline, particularly in Limb-Girdle Muscular Dystrophy (LGMD) and siRNA therapies. The company highlighted its market-leading gene therapy portfolio in LGMD:

Sarepta also provided an update on its R&D progress and future milestones, demonstrating continued advancement across multiple programs:

The company’s siRNA platform, enhanced through its collaboration with Arrowhead, aims to deliver potential best-in-class therapies with effective target knock-down, improved durability, superior tissue targeting, and a favorable safety profile.

Financial Analysis and Revised Guidance

In response to the ELEVIDYS performance challenges, Sarepta has significantly revised its full-year 2025 revenue guidance:

The updated guidance range of $2.3-$2.6 billion represents a substantial reduction from the previous $2.9-$3.1 billion forecast, though it still reflects approximately 37% year-over-year growth at the midpoint. The company maintained its commitment to disciplined expense management while acknowledging the impact of the Arrowhead transaction costs.

Sarepta’s financial position remains relatively strong with $647 million in cash and investments, supplemented by an undrawn $600 million revolving credit facility:

Forward-Looking Statements

Looking ahead, Sarepta remains focused on strengthening ELEVIDYS’s profile, advancing its LGMD portfolio, and building potentially best-in-class siRNA therapies. Key upcoming milestones include the completion of ENVISION enrollment for ELEVIDYS, expression data from multiple studies, and BLA filings.

CEO Doug Ingram emphasized the company’s mission beyond revenue generation during the earnings call, stating, "We are about changing the trajectory of a devastating disease." Meanwhile, Chief Customer Officer Dallin Murray highlighted operational improvements, noting, "Time is muscle and we will ultimately result in more patients gaining access to our therapy faster."

Despite the current challenges, Sarepta’s pipeline progress and continued revenue growth suggest potential for recovery, though investors will likely remain cautious until the company demonstrates its ability to address the operational issues affecting ELEVIDYS adoption and improve its bottom-line performance. Analyst consensus remains bullish with price targets ranging from $70 to $209 per share, suggesting significant upside potential from current levels if the company can execute on its strategic priorities.

Full presentation:

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