Sarepta Therapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 30, 2026, were $381.4 million, a 5% decrease from $399.4 million in the same period of 2025.
• Net product revenues for the quarter totaled $323.8 million, comprising $240.3 million from PMO products and $83.5 million from ELEVIDYS.
• Total revenues for the nine months ended September 30, 2026, were $1,513.4 million, a 14% decrease from $1,755.3 million in the same period of 2025.
• GAAP operating loss for the quarter was $9.0 million, an improvement of $94.4 million compared to a $103.4 million loss in 2025.
• Non-GAAP operating income for the quarter was $22.9 million, a turnaround from a $35.7 million loss in 2025.
• GAAP net loss for the quarter was $28.5 million, an improvement of $22.1 million compared to a $50.6 million loss in 2025.
• Non-GAAP net income for the quarter was $15.6 million, a turnaround from a $12.9 million loss in 2025.
• GAAP operating income for the nine months ended September 30, 2026, was $362.7 million, compared to a $288.2 million loss in 2025.
• Non-GAAP operating income for the nine months ended September 30, 2026, was $507.1 million, compared to a $122.5 million loss in 2025.
• GAAP net income for the nine months ended September 30, 2026, was $297.6 million, compared to a $301.2 million loss in 2025.
• Non-GAAP net income for the nine months ended September 30, 2026, was $479.6 million, compared to a $130.2 million loss in 2025.
• Cash, cash equivalents, restricted cash, and investments totaled $998.7 million as of September 30, 2026, compared to $953.8 million as of December 31, 2025.
• Cost of sales (excluding amortization) increased to $188.5 million in Q3 2026 from $150.8 million in Q3 2025, driven by a $62.0 million take-or-pay charge related to Catalent manufacturing obligations.
• Research and development expenses decreased to $82.5 million in Q3 2026 from $218.9 million in Q3 2025, primarily due to a $100.0 million milestone payment to Arrowhead in 2025 with no similar activity in 2026.
• Selling, general, and administrative expenses increased to $118.6 million in Q3 2026 from $91.9 million in Q3 2025, primarily due to the reversal of restructuring-related expense accruals in 2025.
• A $39.0 million litigation settlement charge was recorded in the nine months ended September 30, 2026, with no similar activity in 2025.

Guidance and Future Outlook:

• The company raised the lower end of its 2026 total net product revenue guidance by $50.0 million to a range of $1.25 billion to $1.3 billion.
• The company narrowed its full-year combined non-GAAP R&D and SG&A expense guidance, lowering the high end by $25.0 million to a range of $800 million to $825 million.
• ELEVIDYS net product revenue in the fourth quarter of 2026 is expected to trend in line with the third quarter, consistent with previous guidance.
• The PMO franchise is expected to remain strong in 2026.
• Multiple ascending dose data for SRP-1003 (DM1) and SRP-1001 (FSHD) are expected by the end of 2026.
• The company is actively preparing for Phase 3 development in both the DM1 and FSHD programs, including beginning manufacturing of clinical supply.

Business Segments and Product Lines:

• PMO net product revenues were $240.3 million for the third quarter of 2026.
• ELEVIDYS net product revenue was $83.5 million for the third quarter of 2026.
• Contract manufacturing revenues increased by $31.4 million in the quarter and $72.5 million in the nine months, associated with increased commercial ELEVIDYS supply delivered to Roche.
• Collaboration revenues increased by $189.5 million in the nine months, including $365.0 million recognized related to Roche's declined option for certain program rights and a milestone for the first commercial dosing of ELEVIDYS in Japan.
• New preclinical data for SRP-1003 demonstrated robust nuclear DMPK knockdown in DM1, achieving comparable knockdown in both the nucleus and cytoplasm.
• Clinical data presented for ELEVIDYS in ambulatory patients ages 8 to 12 demonstrated durable and clinically meaningful benefit over two years.
• Data for ELEVIDYS in patients treated at ages 2 and 3 demonstrated robust dystrophin expression and sarcolemmal localization 12 weeks after infusion.
• Initial results from the Phase 4 ENDURE study provided preliminary real-world data evaluating approaches to liver safety risk mitigation.

Market and Competitive Landscape:

• The company maintains a leadership position in Duchenne muscular dystrophy (DMD) and is building a portfolio across muscle, central nervous system, and cardiac diseases.
• Updated labeling for ELEVIDYS restricts treatment to the ambulatory patient population, impacting sales volume.
• The company is preparing for both accelerated and traditional approval pathways for its DM1 and FSHD programs, with regulatory strategy to be informed by upcoming data and FDA discussions.

Risks and Challenges:

• ELEVIDYS carries a Boxed Warning for acute serious liver injury and acute liver failure, with risks higher for patients with preexisting liver impairment.
• ELEVIDYS is contraindicated in patients with deletions in exon 8 and/or exon 9 of the DMD gene.
• Safety concerns include myocarditis, serious infections due to corticosteroid regimens, and immune-mediated myositis.
• Preexisting immunity against AAVrh74 may impede transgene expression; administration is not recommended for patients with antibody titers ≥1:400.
• Kidney toxicity risks are associated with PMO products (VYONDYS 53 and AMONDYS 45), requiring monitoring of urine protein and serum cystatin C.
• The company faces manufacturing obligations with Catalent, including a $62.0 million take-or-pay charge for non-cancelable inventories.
• Patent infringement litigation was resolved via a $39.0 million settlement agreement with REGENXBIO, the University of Pennsylvania, and Catalent.

Management Commentary and Tone:

• CEO Michael Severino stated that fundamental strengths remain intact, citing a durable Duchenne franchise, a promising pipeline, and financial strength.
• Management highlighted continued strength in commercial execution and the ability to fund late-stage development through balance-sheet strength and commercial cash flows.
• The CEO emphasized a focus on execution and the intent to move efficiently to late-stage development if DM1 and FSHD data support advancement.
• Management noted the company is measured by execution and believes it has the foundation to deliver meaningful long-term value.

Other Key Points:

• The company sold its investment in Arrowhead in August 2025, contributing to a decrease in strategic investments.
• A partial refinancing of the 2027 Notes occurred in 2025, exchanging $700.0 million of 2027 Notes for $602.0 million of 2030 Notes, resulting in a $3.8 million gain on debt extinguishment in 2025.
• The 2030 Notes carry a higher interest rate than the 2027 Notes, contributing to increased interest expense in 2026.
• A restructuring plan announced in July 2025 resulted in decreased R&D and SG&A expenses in 2026 due to reduced manufacturing, clinical, and personnel costs, though some expense reversals occurred in Q3 2026.
• The company recognized a $50.0 million annual collaboration license fee paid to Arrowhead during the nine months ended September 30, 2026.