Sarepta Therapeutics (SRPT) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We are highly dependent on the commercial success of our products. We may not be able to meet expectations with respect to sales of our products or maintain profitability and positive cash-flow from operations
2. 02Even though EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS have received accelerated approval from the FDA, they face future post-approval development and regulatory requirements, which present additional challenges for us to successfully navigate
3. 03We are subject to uncertainty relating to reimbursement policies which, if not favorable, could hinder or prevent the commercial success of our products and/or product candidates
4. 04Healthcare policy reform and other governmental and private payor initiatives may have an adverse effect upon, and could prevent commercial success of our products and product candidates
5. 05prohibition on direct-to-consumer advertising or drug marketing practices
6. 06Our products may not be widely adopted by patients, payors or healthcare providers, which would adversely impact our potential profitability and future business prospects
7. 07Further, the potential commercial success of our product candidates as well as ELEVIDYS will depend on additional factors, including the capacity of any infusion centers responsible for the administration of our product candidates and ELEVIDYS
8. 08We may not be able to expand the global footprint of our products outside of the U.S
9. 09regulatory authorities outside the U.S. may adopt new or revised approval policies and regulations
10. 10Historical revenues from eteplirsen, golodirsen and casimersen through our EAP outside the U.S. may not continue and we may not be able to continue to distribute our products through our EAP
11. 11on how the Catalyst decision is ultimately implemented. Legislation has been introduced to amend the Orphan Drug Act in a way that may prevent these effects of the Catalyst decision, but it is unclear if or when such legislation could be enacted
12. 12If we are unable to successfully maintain and further develop internal commercialization capabilities, sales of our products may be negatively impacted
13. 13The patient population suffering from Duchenne, LGMDs, CMT 1A, FSHD and DM1 is small and has not been established with precision. If the actual number of patients is smaller than we estimate, our revenue and ability to achieve profitability may be adversely affected
14. 14We face intense competition and rapid technological change, which may result in other companies discovering, developing or commercializing competitive products
15. 15establish superior intellectual property positions
16. 16Future sales of ELEVIDYS may decrease sales growth, or reduce sales, of our PMO products, which could negatively impact our operating results, including through potential inventory write-offs
17. 17of operations. In addition, to the extent we rely on Roche to commercialize any products for which we obtain regulatory approval, we will receive less revenues than if we commercialized these products ourselves

Risks Related to the Development of our Product Candidates

1. 18We may find it difficult to enroll patients in our clinical trials, which could delay or prevent clinical trials of our product candidates
2. 19severity of the disease under investigation
3. 20If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay, limit or terminate ongoing or planned clinical trials, any of which would have an adverse effect on our business and on our ability to maintain our accelerated approval in the U.S
4. 21the recruitment and retention of employees, consultants or contractors with the required level of expertise
5. 22Clinical development is lengthy and uncertain. Clinical trials of our product candidates may be delayed, and certain programs may never advance in the clinic or may be more costly to conduct than we anticipate, any of which could have a material adverse impact on our business
6. 23development timelines, there is no assurance that any future hold would not have a material adverse effect. A clinical hold, or any of the above factors, may be out of our control and could materially impair our development timelines, expenses and results of operations
7. 24Our product candidates may cause undesirable side effects or have other properties that could delay or prevent regulatory approval of product candidates, limit the commercial potential or result in significant negative consequences following any potential marketing approval
8. 25If there are significant delays in obtaining, or if we are unable to obtain or maintain required regulatory approvals, we will not be able to commercialize our product candidates in a timely manner or at all
9. 26We may not have the resources required to meet regulatory requirements and successfully navigate what is generally a lengthy, expensive and extensive approval process for commercialization of drug product candidates
10. 27track and breakthrough therapy designations, including early interactions with the FDA, but the exact mechanisms have not yet been announced by the FDA
11. 28We may not be able to advance all of our programs, and we may use our financial and human resources to pursue particular programs and fail to capitalize on programs that may be more profitable or for which there is a greater likelihood of success

Risks Related to Third Parties

1. 29If we are unable to maintain our agreements with third parties to distribute our products to patients, our results of operations and business could be adversely affected
2. 30Any such events may result in decreased product sales, lower product revenue, loss of revenue, and/or reputational damage, which would harm our results of operations and business
3. 31We rely on third parties to conduct some aspects of our early-stage research and pre-clinical and clinical development. The inadequate performance by or loss of any of these third parties could affect the development and commercialization of our product candidate development
4. 32Our reliance on third parties requires us to share our proprietary information, which increases the possibility that a competitor will discover them or that our proprietary information will be misappropriated or inadvertently disclosed

Risks Related to Manufacturing

1. 33Furthermore, any problems in our manufacturing process or the facilities with which we contract make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic research institutions, which could limit our access to additional attractive development programs
2. 34We also rely on a third party to design, manufacture, obtain and maintain regulatory approval for necessary diagnostic tests for ELEVIDYS. Any delay or failure by us or our collaborators to develop or obtain regulatory approval of the necessary diagnostic tests could harm our business, possibly materially
3. 35We also may encounter problems hiring and retaining the experienced scientific, quality control and manufacturing personnel needed to operate our manufacturing process which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements
4. 36The third parties we use in the manufacturing process for our products and product candidates may fail to comply with cGMP regulations
5. 37obligated to expend time, money and effort in production, record keeping and quality control to seek to assure that the product meets applicable specifications and other requirements

Risks Related to our Intellectual Property

1. 38Even when our patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect our products, product candidates or platform technologies or may be challenged in post-grant proceedings by third parties
2. 39Uncertainty over intellectual property in the pharmaceutical and biotechnology industry has been the source of litigation and other disputes, which is inherently costly and unpredictable
3. 40Our business prospects will be impaired if third parties successfully assert that our products, product candidates, or platform technologies infringe proprietary rights of such third parties
4. 41defend litigation or administrative proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of financial and management resources

Risks Related to our Business Operations

1. 42Failure to comply with healthcare and other regulations is subject to substantial penalties and our business, operations and financial condition could be adversely affected
2. 43Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business
3. 44If we, our collaborators, or any third-party manufacturers engaged by us or our collaborators fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business
4. 45Comprehensive tax reform in the U.S. and future guidance could adversely affect our business and financial condition
5. 46We continue to monitor changes in tax laws in the U.S. and the impact of proposed and enacted legislation in the international jurisdictions in which the company operates, which could materially impact our tax provision, cash tax liability and effective tax rate
6. 47Our employees, principal investigators, consultants and strategic partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
7. 48Failure to retain our key personnel or an inability to attract and retain additional qualified personnel would cause our future growth and our ability to compete to suffer

Risks Related to our Financial Condition and Capital Requirements

1. 49We have previously incurred operating losses and we may not maintain profitability
2. 50Our existing and any future indebtedness could adversely affect our ability to operate our business
3. 51Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights
4. 52The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements and condensed consolidated financial statements could prove inaccurate

Risks Related to Our Common Stock

1. 53Our stock price is volatile and may fluctuate due to factors beyond our control
2. 54general market conditions in our industry or in the economy as a whole
3. 55Our revenues and operating results could fluctuate significantly, which may adversely affect our stock price and our ability to maintain profitability
4. 56Provisions of our certificate of incorporation, bylaws and Delaware law might deter acquisition bids for us that might be considered favorable and prevent or frustrate any attempt to replace or remove the then-current management and board of directors
5. 57a super-majority (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock are required to amend, rescind, alter or repeal our bylaws and certain provisions of our certificate of incorporation
6. 58Future sales of our common stock in the public market could cause our share price to fall

Risks Related to Our Convertible Senior Notes

1. 59Servicing our 1.25% notes due 2027 (the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt
2. 60We may not have the ability to raise the funds necessary to repurchase the Notes as required upon a fundamental change, and our future debt may contain limitations on our ability to repurchase the Notes
3. 61In connection with the Notes, we entered into capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions are expected to generally reduce the potential dilution upon conversion of the Notes into shares of our common stock

General Risks

1. 62Unfavorable and uncertain global economic conditions could harm our business, financial condition or results of operations
2. 63We may be subject to product liability claims and our insurance may not be adequate to cover damages
3. 64We have expanded, and may continue to expand, our organization and may experience difficulties in managing this growth, which could disrupt our operations
4. 65Our sales and operations are subject to the risks of doing business internationally
5. 66changes in tax laws and tariffs
6. 67We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively
7. 68We may incur substantial costs in connection with litigation and other disputes
8. 69The increasing use of social media platforms and artificial intelligence tools presents new risks and challenges
9. 70We or the third parties upon whom we depend may be adversely affected by natural disasters and/or terrorism attacks, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster