Sarepta 2025 Q1 Earnings Misses Targets as Net Income Deteriorates 1339%

Sarepta Therapeutics (SRPT) reported its fiscal 2025 Q1 earnings on May 6th, 2025. The company missed market expectations with a significant net income deterioration of 1339%, resulting in a net loss of $447.51 million. Consequently, Sarepta revised its 2025 revenue guidance downward to a range of $2.3 billion to $2.6 billion, missing prior estimates. This cautious outlook comes amid challenges in patient infusions and administrative delays. Sarepta remains focused on leveraging its robust pipeline to navigate these hurdles and drive future growth.

Revenue
Sarepta reported total revenues of $744.86 million for the first quarter of 2025, marking an 80.2% increase from the $413.46 million recorded in the same period of 2024. This growth was largely driven by the ELEVIDYS gene therapy, which saw its net product revenue skyrocket by 180% year-over-year to $375.0 million. The PMO franchise also performed well, contributing $236.5 million to the total revenue, while collaboration and other revenues added $133.33 million.

Earnings/Net Income
Sarepta transitioned from a profit of $0.38 per share in 2024 Q1 to a loss of $4.60 per share in 2025 Q1, reflecting a 1310.5% negative change. The company reported a net loss of $447.51 million, a stark contrast to the net income of $36.12 million achieved in the prior year. The substantial decline in earnings per share signals a challenging quarter for Sarepta.

Price Action
The stock price of Sarepta has declined dramatically, dropping 25.71% during the latest trading day, 23.17% over the most recent full trading week, and 20.24% month-to-date.

Post-Earnings Price Action Review
Sarepta's historical strategy of buying shares after a revenue drop and holding for 30 days has delivered a 36.41% return over the past five years, underperforming a benchmark return of 83.12%. This strategy yielded a compound annual growth rate (CAGR) of 6.48%, with a maximum drawdown of -8.05% and a Sharpe ratio of 0.69, indicating a reasonable risk-adjusted return. The strategy exhibited moderate risk and volatility, with a volatility rate of 9.34%. Despite the recent sharp decline in Sarepta's stock price, this strategy has historically provided some return, albeit lower than the benchmark. Investors should consider these metrics in the context of Sarepta's revised guidance and challenging market conditions.

CEO Commentary
Doug Ingram, President and CEO of Sarepta Therapeutics, acknowledged the challenges faced in the first quarter of 2025 but emphasized that the company remains well-positioned due to its strong portfolio of approved therapies and significant revenue. He highlighted a 70% growth in total net product revenue, primarily driven by the ELEVIDYS gene therapy, which saw a remarkable 180% increase year-over-year. Despite a tragic safety event and logistical issues at top sites, Ingram expressed confidence in the long-term potential of their therapies.

Guidance
Sarepta has adjusted its net product revenue guidance for 2025 to a range of $2.3 billion to $2.6 billion, reflecting a cautious approach due to anticipated patient infusions and administrative delays. The company projects that Q2 revenue could be up to 20% lower than Q1. The PMO franchise guidance remains approximately $900 million, with non-GAAP R&D and SG&A expenses expected between $1.2 billion and $1.3 billion, leaning toward the lower end of that range.

Additional News
In the first quarter of 2025, Sarepta finalized a global licensing and collaboration agreement with Arrowhead Pharmaceuticals, Inc., enhancing its mid- and early-stage pipeline. This agreement grants Sarepta global rights to four clinical-stage and three preclinical-stage programs across various therapeutic areas, including potential best-in-class siRNA-based treatments for DM1 and FSHD1. Sarepta plans to share data from candidates in development for these programs later this year, further solidifying its leadership in genetic medicine for rare diseases. This strategic partnership aligns with Sarepta's mission to expand its capabilities and address unmet needs in neuromuscular and central nervous system disorders.