Sarepta Therapeutics Inc (NASDAQ:SRPT), a leader in precision genetic medicines for rare diseases, reported its fourth quarter and full-year 2025 financial results, presenting a complex picture of robust revenue growth overshadowed by significant financial losses and substantial operational charges. The market's initial reaction in after-hours trading was negative, with shares declining over 4%.
Earnings Snapshot: Revenue Beat Amidst Deep Losses
The company's top-line performance for the quarter exceeded analyst expectations, but bottom-line results were markedly worse than anticipated.
- Q4 2025 Revenue: $442.9 million, surpassing the consensus estimate of approximately $399.8 million.
- Q4 2025 Non-GAAP EPS: A loss of $3.58 per share, significantly wider than the estimated loss of $1.34 per share.
For the full year 2025, total revenues grew 16% to $2.20 billion. However, the company reported a GAAP net loss of $713.4 million and a non-GAAP net loss of $505.6 million. These substantial losses were driven by several major factors outlined in the earnings release.
Dissecting the Financial Results
The quarter was heavily impacted by one-time charges and strategic investments that dramatically affected profitability.
- Elevated Costs: Cost of sales surged to $398.7 million for Q4, up from $132.3 million in the prior-year period. This increase was primarily due to a $165.3 million inventory valuation reserve for excess ELEVIDYS and PMO (exon-skipping therapy) inventory, alongside write-offs for batches that did not meet quality specifications.
- Strategic Pipeline Investment: Research and development expenses jumped to $325.3 million, driven largely by a $200 million milestone payment to Arrowhead Pharmaceuticals related to the progression of the DM1 (myotonic dystrophy type 1) program.
- Balance Sheet & Debt Management: The company ended the year with a strong cash position of $953.8 million. It also executed two debt exchange transactions, refinancing nearly $1 billion of 2027 convertible notes into new 2030 notes, which management stated removes "any significant debt overhang this decade."
Key Corporate and Clinical Developments
Beyond the financials, Sarepta highlighted several important operational milestones that shape its future trajectory.
- ELEVIDYS Gene Therapy: The company reported positive three-year data from the EMBARK study, showing durable slowing of disease progression in Duchenne muscular dystrophy patients. However, the therapy faced challenges in 2025, including a U.S. label update that added a boxed warning for liver injury and removed the non-ambulatory patient indication. A new cohort (ENDEAVOR Cohort 8) has been approved to evaluate an enhanced immunosuppression regimen for non-ambulatory patients.
- International Expansion: Partner Chugai Pharmaceutical launched ELEVIDYS in Japan in February 2026, triggering a $40 million milestone payment to Sarepta.
- Pipeline Advancement: The RNAi (siRNA) pipeline saw progress, with SRP-1003 for DM1 advancing in clinical trials and a Phase 1 trial for SRP-1005 in Huntington's disease approved to begin in Q2 2026.
Market Reaction and Forward Outlook
The after-hours stock decline suggests investor focus on the steep quarterly loss and the significant charges, which tempered the positive news of the revenue beat and strong cash position. CEO Doug Ingram stated the company anticipates "remaining profitable and cash-flow positive in 2026," pointing to a streamlined cost structure following a 2025 restructuring.
Analyst estimates for the coming year project continued growth. The consensus sales estimate for full-year 2026 stands at $1.63 billion, with revenue estimated at $2.78 billion. For the first quarter of 2026, sales are estimated at $385.6 million. Sarepta's ability to meet these expectations will hinge on the commercial execution of ELEVIDYS, particularly in navigating its updated safety label, and the continued steady performance of its PMO therapies.
For a detailed breakdown of historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The data presented is based on publicly available information and analyst estimates, which are subject to change. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
