Executive Summary

Q3 2025 beat consensus on revenue and EPS despite operational headwinds: Total revenues were $399.4M vs S&P Global consensus $337.0M*, and non-GAAP diluted EPS was ($0.13) vs ($0.93)*. Net product revenue was $370.0M, comprised of $238.5M PMO and $131.5M ELEVIDYS .
ESSENCE confirmatory study for AMONDYS 45 and VYONDYS 53 missed the primary endpoint (p=0.309), but post-hoc COVID-free and prognostic-score analyses showed clinically meaningful trends; Sarepta will meet FDA to discuss a path to traditional approval supported by real-world evidence .
ELEVIDYS label discussions expected to conclude “soon,” with a boxed warning and removal of non-ambulatory from the Indications and Usage; Sarepta plans a sirolimus-based regimen study to potentially re-include non-ambulatory patients .
Liquidity and cost actions: management reported Q3 positive cash flow; cash and investments were $865.2M; completed a convertible debt exchange (recognized $138.6M loss on debt extinguishment) and recorded $40.5M restructuring charges .
Near-term setup: management expects Q4 ELEVIDYS infusions to be flat to slightly down vs Q3 (seasonality and restart frictions) but reiterated the ambulant ELEVIDYS annual revenue “floor” near $500M, framing 2026 as a re-acceleration year pending safety-label resolution and non-ambulatory pathway .

What Went Well and What Went Wrong

What Went Well
- Revenue/EPS beats versus consensus amid a disrupted quarter: total revenues $399.4M and non-GAAP EPS ($0.13) vs S&P Global estimates of $337.0M and ($0.93)*; “In Q3, we were cash flow positive” – CFO .
- PMO franchise resilience and supportive evidence: Q3 PMO revenue $238.5M; ESSENCE showed favorable trends in COVID-free and high-risk subgroups; “These topline findings reinforce the potential impact of these therapies to slow muscle weakness” – Dr. Rodino‑Klapac .
- Coverage and execution: “~220M lives have a path to coverage” for ambulatory ELEVIDYS, with no permanent coverage denials; 11 of 14 paused infusions were rescheduled in August – CCO .
What Went Wrong
- Year-over-year revenue decline and gross cost uptick: Q3 revenues fell 15% YoY to $399.4M, primarily from a $49.5M decline in ELEVIDYS due to suspending non-ambulatory shipments; cost of sales rose by ~$59.1M on inventory transitions, write-offs, and manufacturing deposits impairment .
- ESSENCE primary endpoint not met (p=0.309), elevating regulatory uncertainty; while management cites totality-of-evidence and RWE, conversion to traditional approval is not yet secured .
- One-time charges weighed on GAAP: $40.5M restructuring expense and $138.6M loss on debt extinguishment tied to refinancing 2027 notes .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($M)	$744.9	$611.1	$399.4
Net Product Revenues ($M)	$611.5	$513.1	$370.0
Collaboration & Other Revenues ($M)	$133.3	$98.0	$29.3
GAAP Operating Income (Loss) ($M)	($300.4)	$115.6	($103.4)
Non-GAAP Operating Income (Loss) ($M)	($249.6)	$162.8	($35.7)
GAAP Net Income (Loss) ($M)	($447.5)	$196.9	($179.9)
Non-GAAP Net Income (Loss) ($M)	($332.5)	$215.2	($12.9)
Non-GAAP Diluted EPS ($)	($3.42)	$2.02	($0.13)

Segment/KPI detail:

Q3 net product revenue mix: PMO $238.5M; ELEVIDYS $131.5M .
Cost of sales (ex amortization): Q1 $137.6M; Q2 $152.6M; Q3 $150.8M .
Cash, cash equivalents, restricted cash and investments: Q1 $647.5M (as of 3/31/25); Q2 $850.3M (6/30/25); Q3 $865.2M (9/30/25) .
Q3 one-offs: Restructuring charge $40.5M; loss on debt extinguishment $138.6M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Net Product Revenues	FY 2025	$2.3B–$2.6B (5/6/25)	No update provided in Q3 (implies unchanged)	Maintained
Combined Non-GAAP R&D + SG&A	FY 2025	$1.784B–$2.184B (incl. Arrowhead costs) (5/6/25)	≈$1.86B (Q3 call)	Narrowed/updated run-rate
Combined Non-GAAP R&D + SG&A	Q4 2025	N/A	$420M–$430M	New
ELEVIDYS ambulant annual “floor”	Ongoing	Prior commentary at ~$500M (reiterated)	~$500M reiterated	Maintained
Q4 ELEVIDYS infusion volumes	Q4 2025	N/A	Flat to slightly down vs Q3	New qualitative color

Estimates Context

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue – Consensus ($M)	684.1*	531.0*	337.0*
Revenue – Actual ($M)	744.9	611.1	399.4
Primary EPS – Consensus ( $ )	(1.53)*	0.67*	(0.93)*
Non-GAAP Diluted EPS – Actual ( $ )	(3.42)	2.02	(0.13)

Values marked with an asterisk (*) retrieved from S&P Global.

Implications: Q3 posted clear beats on revenue and EPS versus consensus; Q2 was a sizable beat; Q1 missed on EPS due to Arrowhead transaction costs and elevated R&D, despite a top-line beat .

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Nov)	Trend
ELEVIDYS safety/label	Focus on launch growth; no label change details	FDA lifted ambulatory pause; safety-label process underway	Boxed warning agreed; non-ambulatory removed; plan sirolimus regimen to revisit label	Tighter label with pathway to re-include non-ambulatory via risk mitigation
ELEVIDYS demand/coverage	ELEVIDYS revenue $375.0M	Strong ELEVIDYS contribution; Japan approval milestone	Restart disruptions; Q4 infusions flat-to-down; path to coverage ~220M lives; no permanent denials	Near-term air pocket; payer stance stable
PMO confirmatory (ESSENCE)	—	—	Missed primary; COVID-free and prognostic-score trends supportive; FDA meeting planned	Building totality-of-evidence case
siRNA pipeline	Arrowhead collaboration closed; initial readouts “later 2025”	DM1 milestone ($100M) and Arrowhead equity monetization	Initial SAD/MAD readouts shifted to Q1 2026; programs advancing (DM1, FSHD, HD)	Execution with timeline shift
Financial structure	2025 revenue guidance reset; investment in pipeline	Restructuring announced; cash up $203M QoQ	Positive cash flow; debt exchange executed; one-offs recognized	Strengthening balance sheet

Management Commentary

“In Q3, we were cash flow positive... we monetized strategic investments, completed a debt exchange... and significantly reduced our go-forward cost structure.” – CFO .
“We have agreed to a black box warning... and [to] remove non-ambulatory [from] Indications and Usage... we will discuss with FDA if data are sufficient to resume” – Dr. Rodino‑Klapac .
“ESSENCE... did not reach statistical significance on the primary endpoint... post-hoc COVID-free analysis showed ~30% reduction in disease progression; the totality of data and RWE support traditional approval.” – CEO/CSO .
“Approximately 220 million lives have a path to coverage [for] ambulatory [ELEVIDYS]... we’re not aware of a single permanent denial” – CCO .

Q&A Highlights

Regulatory path for PMOs: Management emphasized FDA’s prior written standard for continued authorization and believes totality-of-evidence (post-hoc analyses + RWE) supports conversion to traditional approval; risk of withdrawal seen as low by management .
ELEVIDYS trajectory: Expect Q4 infusions flat to slightly down due to restart frictions/seasonality; reiterated ~$500M ambulant floor; payer coverage stable; start forms rebuilding .
Safety mitigation strategy: Non-ambulatory re-introduction contingent on additional immunosuppression (sirolimus) data; ENDEAVOR Cohort 8 designed to demonstrate effectiveness; early external experience suggests acceptable safety, but formal data pending in 2026 .
EXONDYS (MISSION): Dose-ranging post-marketing commitment (not confirmatory) with readout expected in 2026; potential to adjust dose based on totality-of-benefit vs burden .
Opex cadence: Q4 combined non-GAAP R&D+SG&A guided to ~$420–$430M; FY non-GAAP ~$1.86B, reflecting Arrowhead milestones and cost restructuring .

Financial Detail and KPI Tables

Q3 2025 Product Mix and Selected KPIs

KPI	Q3 2025
Net Product Revenue – PMO ($M)	$238.5
Net Product Revenue – ELEVIDYS ($M)	$131.5
Collaboration & Other Revenue ($M)	$29.3
Cost of Sales ex-amort. ($M)	$150.8
Non-GAAP R&D ($M)	$206.5
Non-GAAP SG&A ($M)	$77.1
Cash & Investments ($M, 9/30/25)	$865.2
Restructuring Charges ($M)	$40.5
Loss on Debt Extinguishment ($M)	$138.6
ELEVIDYS treated (clinical+commercial, cumulative)	>1,100 patients (management statement)

Guidance Changes (Detail)

Q4 2025 combined non-GAAP R&D+SG&A: $420–$430M .
FY 2025 combined non-GAAP R&D+SG&A: ≈$1.86B (vs prior $1.784–$2.184B including Arrowhead costs) .
FY 2025 total net product revenues: no update vs prior $2.3–$2.6B (5/6/25) .
ELEVIDYS ambulant annual “floor” near $500M reiterated .

Key Takeaways for Investors

Core beat: Q3 handily beat on revenue and EPS despite non-ambulatory suspension; underlying demand and coverage support near-term stability with Q4 a seasonal/reset quarter .
Regulatory overhang manageable (per management): ESSENCE missed primary but supportive subgroup/COVID-free signals plus robust RWE underpin a path to maintain authorization and pursue traditional approval; watch for FDA meeting outcome in Q1 2026 timing window .
Label outcome imminent: Elevidys boxed warning and non-ambulatory removal expected “soon;” ENDEAVOR Cohort 8 sirolimus data in 2026 is the re-expansion catalyst .
2026 setup: Restart momentum (start forms building), stable payer stance, and siRNA pipeline readouts (now targeted Q1 2026) are the medium-term stock drivers .
Balance sheet improved: Positive Q3 cash flow, $865M cash/investments, extended debt profile; one-time charges depressed GAAP but underlying non-GAAP operations close to breakeven .
Watch list: FDA label decision, timing/feedback on ESSENCE sNDA strategy, Q4 infusion trajectory versus “flat-to-down” outlook, and early 2026 siRNA data points .

Footnote: Values marked with an asterisk (*) in the Estimates Context section were retrieved from S&P Global.

Sarepta Therapeutics, Inc. (SRPT)·Q3 2025 Earnings Summary