Sarepta Therapeutics Inc

Previous wording

our expectation that our partnerships with manufacturers will support our clinical and commercial manufacturing capacity for our Duchenne muscular dystrophy gene therapy programs and Limb-girdle muscular dystrophy programs, while also acting as a manufacturing platform for potential future gene therapy programs, and our belief that our current network of manufacturing partners is able to fulfill the requirements of our commercial plan;

Current wording

our expectation that our partnerships with manufacturers will support our clinical and commercial manufacturing capacity for our Duchenne muscular dystrophy (“Duchenne”) gene therapy programs and Limb-girdle muscular dystrophy (“LGMD”) programs, while also acting as a manufacturing platform for potential future gene therapy programs, and our belief that our current network of manufacturing partners is able to fulfill the requirements of our commercial plan;

Previous wording

our expectation that our partnerships with Thermo Fisher Scientific Inc. (“Thermo”) and Catalent, Inc. (“Catalent”) will support our clinical and commercial manufacturing demand for our SRP-9001 Duchenne program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

Current wording

our expectation that our partnerships with Catalent, Inc. (“Catalent”) will support our clinical and commercial manufacturing demand for our SRP-9001 Duchenne program and LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs;

Previous wording

estimated timelines and milestones for the remainder of 2024 and beyond, including meeting with the FDA in the second half of 2024 with respect to SRP-5051, and the efficacy supplement review goal date of June 21, 2024 for ELEVIDYS;

Current wording

estimated timelines and milestones for the remainder of 2024 and beyond, including meeting with the FDA in the second half of 2024 with respect to SRP-5051;

Previous wording

our engagement with regulatory authorities outside of the U.S. including the European Medicines Agency (“EMA”);

Current wording

our engagement with regulatory authorities outside of the U.S. including the European Medicines Agency (the “EMA”);

Previous wording

our beliefs and expectations regarding milestone, royalty or other payments that could be due to third parties under existing agreements.

Current wording

our expectation regarding the impact of environmental laws and regulations on our business; and our beliefs and expectations regarding milestone, royalty or other payments that could be due to third parties under existing agreements.

Previous wording

We are a commercial-stage biopharmaceutical company focused on helping patients through the discovery and development of unique RNA-targeted therapeutics, gene therapy and other genetic therapeutic modalities for the treatment of rare diseases. Applying our proprietary, highly differentiated and innovative technologies, and through collaborations with our strategic partners, we have developed multiple approved products for the treatment of Duchenne muscular dystrophy (“Duchenne”) and are developing potential therapeutic candidates for a broad range of diseases and disorders, including Duchenne, Limb-girdle muscular dystrophies (“LGMDs”), and other neuromuscular and central nervous system related disorders.

Current wording

We are a commercial-stage biopharmaceutical company focused on helping patients through the discovery and development of unique RNA-targeted therapeutics, gene therapy and other genetic therapeutic modalities for the treatment of rare diseases. Applying our proprietary, highly differentiated and innovative technologies, and through collaborations with our strategic partners, we have developed multiple approved products for the treatment of Duchenne and are developing potential therapeutic candidates for a broad range of diseases and disorders, including Duchenne, LGMDs, and other neuromuscular and central nervous system related disorders.

Previous wording

We commercialized four products, all of which were granted accelerated approval by the FDA:

Current wording

We commercialized four products, all of which were granted accelerated approval or traditional approval by the FDA:

Previous wording

EXONDYS 51 (eteplirsen) Injection (“EXONDYS 51”), approved by the FDA on September 19, 2016, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 skipping. EXONDYS 51 uses our phosphorodiamidate morpholino oligomer (“PMO”) chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene.

Current wording

EXONDYS 51 (eteplirsen) Injection (“EXONDYS 51”), granted accelerated approval by the FDA on September 19, 2016, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 skipping. EXONDYS 51 uses our phosphorodiamidate morpholino oligomer (“PMO”) chemistry and exon-skipping technology to skip exon 51 of the dystrophin gene.

Previous wording

VYONDYS 53 (golodirsen) Injection (“VYONDYS 53”), approved by the FDA on December 12, 2019, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 53 skipping. VYONDYS 53 uses our PMO chemistry and exon-skipping technology to skip exon 53 of the dystrophin gene.

Current wording

VYONDYS 53 (golodirsen) Injection (“VYONDYS 53”), granted accelerated approval by the FDA on December 12, 2019, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 53 skipping. VYONDYS 53 uses our PMO chemistry and exon-skipping technology to skip exon 53 of the dystrophin gene.

Previous wording

AMONDYS 45 (casimersen) Injection (“AMONDYS 45”), approved by the FDA on February 25, 2021, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 45 skipping. AMONDYS 45 uses our PMO chemistry and exon-skipping technology to skip exon 45 of the dystrophin gene.

Current wording

AMONDYS 45 (casimersen) Injection (“AMONDYS 45”), granted accelerated approval by the FDA on February 25, 2021, is indicated for the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 45 skipping. AMONDYS 45 uses our PMO chemistry and exon-skipping technology to skip exon 45 of the dystrophin gene.

Previous wording

ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 22, 2023, is an adeno-associated virus based gene therapy for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene.

Current wording

ELEVIDYS (delandistrogene moxeparvovec-rokl), approved by the FDA on June 20, 2024, is an adeno-associated virus-based gene therapy for the treatment of ambulatory pediatric patients at least 4 years old with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is also approved for non-ambulatory patients under the accelerated approval pathway. ELEVIDYS was previously granted accelerated approval by the FDA on June 22, 2023 for the treatment of ambulatory pediatric patients aged 4 through 5 years with Duchenne with a confirmed mutation in the Duchenne gene. ELEVIDYS is contraindicated in patients with any deletion in exon 8 and/or exon 9 in the Duchenne gene.

Previous wording

SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PPMO, and our exon-skipping technology to skip exon 51 of the dystrophin gene. SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. Exon skipping is intended to promote the production of an internally truncated but functional dystrophin protein. In the fourth quarter of 2017, we commenced a first-in-human, single ascending dose, study for the treatment of Duchenne in patients who are amenable to exon 51 skipping. In 2019, we commenced Study 5051-201. In December 2020, we announced an interim analysis on clinical results from the 10 mg/kg and 20 mg/kg dose cohorts of Part A of Study 5051-201. In May 2021, we announced results from the 30 mg/kg cohort of Part A of Study 5051-201. We initiated Part B of Study 5051-201 in the fourth quarter of 2021. In July 2022, the FDA placed Study 5051-201 on clinical hold following a serious adverse event of hypomagnesemia. The clinical hold was lifted in August 2022. We completed enrollment of Part B of Study 5051-201 in the first quarter of 2023. In

Current wording

SRP-5051 uses our next-generation chemistry platform, cell-penetrating peptide-conjugated PPMO, and our exon-skipping technology to skip exon 51 of the dystrophin gene. SRP-5051, a peptide conjugated PMO, is designed to bind to exon 51 of dystrophin pre-mRNA, resulting in exclusion of this exon during mRNA processing in patients with genetic mutations that are amenable to exon 51 skipping. Exon skipping is intended to promote the production of an internally truncated but functional dystrophin protein. In the fourth quarter of 2017, we commenced a first-in-human, single ascending dose, study for the treatment of Duchenne in patients who are amenable to exon 51 skipping. In 2019, we commenced Study 5051-201. In December 2020, we announced an interim analysis on clinical results from the 10 mg/kg and 20 mg/kg dose cohorts of Part A of Study 5051-201. In May 2021, we announced results from the 30 mg/kg cohort of Part A of Study 5051-201. We initiated Part B of Study 5051-201 in the fourth quarter of 2021. In July 2022, the FDA placed Study 5051-201 on clinical hold following a serious adverse event of hypomagnesemia. The clinical hold was lifted in August 2022. We completed enrollment of Part B of Study 5051-201 in the first quarter of 2023. In January 2024, we announced results from Part B of Study 5051-201. We plan to meet with FDA to discuss next steps in the second half of 2024.

Previous wording

We have developed proprietary state-of-the-art Chemistry, Manufacturing and Controls (“CMC”) capabilities that allow manufacturing and testing of our products and product candidates to support both clinical development as well as commercialization. We continue to refine and optimize our manufacturing processes and test methods. We have entered into certain manufacturing and supply arrangements with third-party suppliers which will in part utilize these capabilities to support production of certain of our product candidates and their components. We have also opened facilities over the past several years that significantly enhanced our internal research and development capabilities. However, we currently do not have internal Good Manufacturing Practices (“GMP”) manufacturing capabilities to produce our products and product candidates for commercial and/or clinical use. For our current and future manufacturing needs, we have entered into supply agreements with specialized contract manufacturing organizations (each a “CMO”) to produce custom raw materials, the active pharmaceutical ingredients (“APIs”), drug product and finished goods for our products and product candidates for both commercial and clinical use. All of our CMO partners have extensive technical expertise, GMP experience and experience manufacturing our specific technology.

Current wording

We have developed proprietary state-of-the-art Chemistry, Manufacturing and Controls (“CMC”) capabilities that allow manufacturing and testing of our products and product candidates to support both clinical development as well as commercialization. We continue to refine and optimize our manufacturing processes and test methods. We have entered into certain manufacturing and supply arrangements with third-party suppliers which will in part utilize these capabilities to support production of certain of our product candidates and their components. We have also opened facilities over the past several years that significantly enhanced our internal research and development capabilities. However, we currently do not have internal GMP manufacturing capabilities to produce our products and product candidates for commercial and/or clinical use. For our current and future manufacturing needs, we have entered into supply agreements with specialized contract manufacturing organizations (each a “CMO”) to produce custom raw materials, the active pharmaceutical ingredients (“APIs”), drug product and finished goods for our products and product candidates for both commercial and clinical use. All of our CMO partners have extensive technical expertise, GMP experience and experience manufacturing our specific technology.

Previous wording

Our gene therapy manufacturing capabilities have been greatly enhanced through partnerships with Thermo Fisher Scientific Inc. (“Thermo”), Catalent, Inc. (“Catalent”) and Aldevron LLC (“Aldevron”). We have adopted a hybrid development and manufacturing strategy in which we have built internal expertise relative to all aspects of AAV-based manufacturing, including gene therapy and gene editing, while closely partnering with experienced manufacturing partners to expedite development and commercialization of our gene therapy programs. We have secured manufacturing capacity at Thermo and Catalent to support our clinical and commercial manufacturing demand for ELEVIDYS and our LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs. The collaboration integrates process development, clinical and commercial production and testing. Aldevron provides GMP-grade plasmid for ELEVIDYS and is expected to provide plasmid source material for our LGMD programs and future gene therapy programs.

Current wording

Our gene therapy manufacturing capabilities have been greatly enhanced through partnerships with Aldevron and Catalent. We have adopted a hybrid development and manufacturing strategy in which we have built internal expertise relative to all aspects of AAV-based manufacturing, including gene therapy and gene editing, while closely partnering with experienced manufacturing partners to expedite development and commercialization of our gene therapy programs. We have secured manufacturing capacity at Catalent to support our clinical and commercial manufacturing demand for ELEVIDYS and our LGMD programs, while also acting as a manufacturing platform for potential future gene therapy programs. The collaboration integrates process development, clinical and commercial production and testing. Aldevron provides GMP-grade plasmid for ELEVIDYS and is expected to provide plasmid source material for our LGMD programs and future gene therapy programs.

Previous wording

As of March 31, 2024, we had approximately $1,440.3 million of cash, cash equivalents, restricted cash and investments, consisting of $427.3 million of cash and cash equivalents, $963.5 million of short-term investments, $33.9 million of non-current investments and $15.6 million of non-current restricted cash. We believe that our balance of cash, cash equivalents and investments is sufficient to fund our current operational plan for at least the next twelve months.

Current wording

As of June 30, 2024, we had approximately $1,476.1 million of cash, cash equivalents, restricted cash and investments, consisting of $383.6 million of cash and cash equivalents, $1,076.9 million of short-term investments and $15.6 million of non-current restricted cash. We believe that our balance of cash, cash equivalents and investments is sufficient to fund our current operational plan for at least the next twelve months.

Previous wording

Results of Operations for the Three Months Ended March 31, 2024 and 2023

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

The following table summarizes the components of our net product revenues, by product, for each of the periods indicated:

Current wording

The following tables summarize the components of our net product revenues, by product, for each of the periods indicated:

Previous wording

Net product revenues for our products for the three months ended March 31, 2024 increased by $128.0 million compared with the three months ended March 31, 2023. The increase primarily reflects $133.9 million of net product revenues associated with sales of ELEVIDYS during the three months ended March 31, 2024 after its launch in June 2023.

Current wording

Net product revenues for our products for the three and six months ended June 30, 2024 increased by $121.6 million and $249.5 million, respectively, compared with the three and six months ended June 30, 2023. The increase primarily reflects $121.7 million and $255.7 million, respectively, of net product revenues associated with sales of ELEVIDYS during the three and six months ended June 30, 2024, which was approved by the FDA and launched in June 2023.

Previous wording

The following table summarizes the components of our collaboration and other revenues for the periods indicated:

Current wording

The following tables summarize the components of our collaboration and other revenues for the periods indicated:

Previous wording

Collaboration and other revenues primarily relate to our collaboration arrangement with F. Hoffman-La Roche Ltd. (“Roche”). For the three months ended March 31, 2024 and 2023, we recognized $54.0 million and $22.0 million of collaboration and other revenues, respectively. The increase is primarily due to the $48.0 million of collaboration revenue recognized in the three months ended March 31, 2024 related to Roche’s declined option to acquire the ex-US rights to a certain external, early stage Duchenne development program. Please refer to Note 3, License and Collaboration Agreementsfor further discussion of the Collaboration Agreement with Roche (the “Collaboration Agreement”). In addition, in accordance with the Collaboration Agreement, the parties agreed to enter into a supply agreement in order for Sarepta to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the three months ended March 31, 2024, we recognized $6.0 million of contract manufacturing and other revenues, which is primarily related to these Roche shipments, with no similar activity for the three months ended March 31, 2023.

Current wording

For the six months ended June 30, 2024 and 2023, we recognized $56.4 million and $44.3 million of collaboration and other revenues, respectively. The increase is primarily due to the $48.0 million of collaboration revenue recognized in the six months ended June 30, 2024 related to Roche’s declined option to acquire the ex-US rights to a certain external, early stage Duchenne development program. This was partially offset by the amortization of the single, combined performance obligation under the Collaboration Agreement during the six months ended June 30, 2023, which was fully amortized as of December 31, 2023. In addition, in accordance with the Collaboration Agreement, the parties agreed to enter into a supply agreement in order for Sarepta to supply Roche with clinical and commercial batches of ELEVIDYS (the “Supply Agreement”). While the Supply Agreement is in the process of being negotiated, we delivered batches of commercial ELEVIDYS supply to Roche that were agreed upon on a purchase order-by-purchase order basis. For the six months ended June 30, 2024, we recognized $8.4 million of contract manufacturing and other revenues, which is primarily related to these Roche shipments and royalty revenue from Roche, with no similar activity for the six months ended June 30, 2023.

Previous wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin Pharmaceuticals, Inc. (“BioMarin”) and the University of Western Australia (“UWA”) for EXONDYS 51, AMONDYS 45 and VYONDYS 53 (collectively, the “PMO Products”) and to Nationwide Children’s Hospital (“Nationwide”) for ELEVIDYS. Prior to receiving regulatory approval for EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS by the FDA in September 2016, December 2019, February 2021 and June 2023, respectively, we expensed such manufacturing and material costs as research and development expenses. For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three months ended March 31, 2024 and 2023. For ELEVIDYS sold in the three months ended March 31, 2024, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to the FDA approval of the product. If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $23.8 million higher for the three months ended March 31, 2024.

Current wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products and the related overhead costs and royalty payments primarily to BioMarin Pharmaceuticals, Inc. (“BioMarin”) and the University of Western Australia (“UWA”) for our PMO Products and to Nationwide Children’s Hospital (“Nationwide”) for ELEVIDYS. Prior to receiving regulatory approval for EXONDYS 51, VYONDYS 53, AMONDYS 45 and ELEVIDYS by the FDA in September 2016, December 2019, February 2021 and June 2023, respectively, we expensed such manufacturing and material costs as research and development expenses. For the PMO Products, all previously expensed manufacturing costs had been fully consumed prior to the three and six months ended June 30, 2024 and 2023. For ELEVIDYS sold in the three and six months ended June 30, 2024, the majority of related manufacturing costs incurred had previously been expensed as research and development expenses, as such costs were incurred prior to the FDA approval of the product. If product related costs had not previously been expensed as research and development expenses prior to receiving FDA approval, the incremental inventory costs related to ELEVIDYS sold, including products sold to Roche under the Collaboration Agreement, would have been approximately $15.9 million and $39.7 million for the three and six months ended June 30, 2024, respectively.

Previous wording

The cost of sales (excluding amortization of in-licensed rights) for the three months ended March 31, 2024 increased by $15.5 million, or 44%, compared with the same period in 2023. The change primarily reflects increasing demand for our products and an increase in royalty payments related to ELEVIDYS sales, as well as an increase in the write-offs of certain batches of our products not meeting our quality specifications for the three months ended March 31, 2024, as compared to the same period of 2023.

Current wording

The cost of sales (excluding amortization of in-licensed rights) for the six months ended June 30, 2024 increased by $26.0 million, compared with the same period in 2023. The change primarily reflects cost of sales related to ELEVIDYS for the six months ended June 30, 2024, following its FDA approval and launch in June 2023, with no similar activity for the same period of 2023 and an increase in royalty payments related to ELEVIDYS sales.

Previous wording

The following table summarizes our research and development expenses by project for each of the periods indicated:

Current wording

The following tables summarize our research and development expenses by project for each of the periods indicated:

Previous wording

The following table summarizes our research and development expenses by category for each of the periods indicated:

Current wording

The following tables summarize our research and development expenses by category for each of the periods indicated:

Previous wording

*Beginning in the period ended March 31, 2024, we implemented an updated manufacturing absorption methodology that allocates the absorption of indirect manufacturing costs to their respective originating categories. Research and development expenses by category, specifically manufacturing expenses, compensation and other personnel expenses, facility- and technology-related expenses and professional services have been reclassified for the period ended March 31, 2023 for comparability. This reallocation has no impact to the total research and development expenses recognized.

Current wording

*Beginning in the period ended March 31, 2024, we implemented an updated manufacturing absorption methodology that allocates the absorption of indirect manufacturing costs to their respective originating categories. Research and development expenses by category, specifically, manufacturing expenses, compensation and other personnel expenses, facility- and technology-related expenses and professional services, have been reclassified for the period ended June 30, 2023 for comparability. This reallocation has no impact on the total research and development expenses recognized.

Previous wording

Research and development expenses for the three months ended March 31, 2024 decreased by $45.3 million, or 18%, compared with the three months ended March 31, 2023. The decrease was primarily driven by the following:

Current wording

Research and development expenses for the three months ended June 30, 2024 decreased by $62.2 million, or 26%, compared with the three months ended June 30, 2023. The decrease was primarily driven by the following:

Previous wording

$48.8 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured after its approval in June 2023;

Current wording

$58.0 million decrease in manufacturing expenses primarily due to the capitalization of commercial batches of ELEVIDYS manufactured upon its approval in June 2023;

Previous wording

$1.3 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to continuing development of our SRP-9001 gene therapy programs.

Current wording

$10.2 million decrease in the offset to expense associated with a collaboration reimbursement from Roche due to timing and frequency of clinical supply costs and engineering runs for our SRP-9001 gene therapy programs.

Previous wording

The following table summarizes our selling, general and administrative expenses by category for each of the periods indicated:

Current wording

The following tables summarize our selling, general and administrative expenses by category for each of the periods indicated:

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2024 increased by $16.3 million, or 15%, compared with the three months ended March 31, 2023. This increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses for the three months ended June 30, 2024 increased by $20.2 million, or 17%, compared with the three months ended June 30, 2023. This increase was primarily driven by the following:

Previous wording

$4.6 million increase in professional service expenses primarily related to ongoing litigation matters;

Current wording

$6.2 million increase in professional service expenses primarily related to the continued efforts to commercialize ELEVIDYS and ongoing litigation matters;

Previous wording

$3.6 million increase in compensation and other personnel expenses primarily due to changes in headcount;

Current wording

$1.8 million increase in compensation and other personnel expenses primarily due to changes in headcount;

Previous wording

$1.9 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and

Current wording

$2.3 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts; and

Previous wording

$6.7 million increase in other expenses primarily due to timing of charitable contribution activity.

Current wording

$4.9 million increase in other expenses primarily due to the timing of charitable contribution activity.

Previous wording

Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval or the first commercial sale of the applicable product. For the three months ended March 31, 2024 and 2023, we recorded amortization of in-licensed rights of approximately $0.6 million and $0.2 million, respectively.

Current wording

Amortization of in-licensed rights relates to the agreements we entered into with UWA, Nationwide, BioMarin, and Parent Project Muscular Dystrophy in April 2013, December 2016, July 2017 and May 2018, respectively. Each in-licensed right is being amortized on a straight-line basis over the remaining life of the relevant patent from the date the related fee was incurred, either the regulatory approval of or the first commercial sale of the applicable product. For the three and six months ended June 30, 2024, we recorded amortization of in-licensed rights of approximately $0.6 million and $1.2 million, respectively. For the three and six months ended June 30, 2023, we recorded amortization of in-licensed rights of approximately $0.2 million and $0.4 million, respectively.

Previous wording

Other income, net primarily consists of interest expense on our debt facilities, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount and change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative. Interest expense primarily includes interest accrued on our convertible notes. Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit.

Current wording

Other income, net primarily consists of interest expense on our debt facilities, interest income on our cash, cash equivalents and investments, amortization of investment premium or accretion of investment discount, unrealized gain or loss from our investment in our strategic investments and change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative. Our cash equivalents and investments consist of money market funds, corporate bonds, commercial paper, government and government agency debt securities and certificates of deposit.

Previous wording

Income tax expense for the three months ended March 31, 2024 and 2023 was approximately $5.3 million and $4.0 million, respectively. Income tax expense for all periods presented primarily relates to federal and state income taxes.

Current wording

Income tax expense for the three and six months ended June 30, 2024 was approximately $7.1 million and $12.4 million, respectively. Income tax expense for the three and six months ended June 30, 2023 was approximately $9.4 million and $13.4 million, respectively. Income tax expense for the three and six months ended June 30, 2024 and 2023 relates to state, federal and foreign income taxes.

Previous wording

There have been no material changes to our obligations under lease or debt arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

There have been no material changes to our obligations under lease arrangements as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

For the periods ended March 31, 2024 and December 31, 2023, our principal sources of liquidity were primarily derived from sales of our products, net proceeds from sale of the ELEVIDYS priority review voucher, net proceeds from our offering of 1.25% convertible senior notes due on September 15, 2027 (“2027 Notes”), proceeds from the partial settlement of capped call options associated with the exchange of a portion of the 2024 Notes for shares of our common stock and our collaboration arrangement with Roche. Our principal uses of cash are research and development expenses, manufacturing costs, selling, general and administrative expenses, investments, capital expenditures, business development transactions, settlement of long-term debt and other working capital requirements. The changes in our working capital primarily reflect use of cash in operating activities. While our contractual obligations, commitments and debt service requirements over the next several years are significant, we intend to continue to fund our short-term financing needs and working capital requirements from cash flows of operating activities as well as cash on hand, and such sources are anticipated to be adequate to fund working capital requirements for at least twelve months from the date these unaudited condensed consolidated financial statements were issued.

Current wording

For the periods ended June 30, 2024 and December 31, 2023, our principal sources of liquidity were primarily derived from sales of our products, net proceeds from sale of the ELEVIDYS priority review voucher, net proceeds from our offering of 1.25% convertible senior notes due on September 15, 2027 (“2027 Notes”), proceeds from the partial settlement of capped call options associated with the exchange of a portion of the 2024 Notes for shares of our common stock and our collaboration arrangement with Roche. Our principal uses of cash are research and development expenses, manufacturing costs, selling, general and administrative expenses, investments, capital expenditures, business development transactions, settlement of long-term debt and other working capital requirements. The changes in our working capital primarily reflect the use of cash in operating activities. While our contractual obligations, commitments and debt service requirements over the next several years are significant, we intend to continue to fund our short-term financing needs and working capital requirements from cash flows of operating activities as well as cash on hand, and such sources are anticipated to be adequate to fund working capital requirements for at least twelve months from the date these unaudited condensed consolidated financial statements were issued.

Previous wording

We cannot provide assurances that financing will be available when and as needed or that, if available, the financings will be on favorable or acceptable terms. If we are unable to obtain additional financing when and if we require, this would have a material adverse effect on our business and results of operations. To the extent we issue additional equity securities, our existing stockholders could experience substantial dilution. We believe that existing cash and cash equivalents, along with future cash generated from operations will be sufficient to meet the capital requirements of our operations for the next 12 months and foreseeable future.

Current wording

We cannot provide assurances that financing will be available when and as needed or that, if available, the financings will be on favorable or acceptable terms. If we are unable to obtain additional financing when and if we require, this would have a material adverse effect on our business and the results of operations. To the extent we issue additional equity securities, our existing stockholders could experience substantial dilution. We believe that existing cash and cash equivalents, along with future cash generated from operations will be sufficient to meet the capital requirements of our operations for the next 12 months and foreseeable future.