Sarepta Therapeutics, Inc.

Previous wording

our expectation that Aldevron LLC (“Aldevron”) will provide Good Manufacturing Processes (“GMP”)-grade plasmid for our Duchenne gene therapy program and LGMD programs, as well as plasmid source material for future gene therapy programs;

Current wording

our expectation that Aldevron LLC (“Aldevron”) will provide Good Manufacturing Processes (“GMP”)-grade plasmid for our Duchenne gene therapy program and our SRP-9003 LGMD program, as well as plasmid source material for any future gene therapy programs;

Previous wording

the possible impact of regulations and regulatory decisions by the Food and Drug Administration (the “FDA”) and other regulatory agencies on our business as well as the development of our product candidates and our financial and contractual obligations;

Current wording

the possible impact of regulations and regulatory decisions by the FDA and other regulatory agencies on our business as well as the development of our product candidates and our financial and contractual obligations;

Previous wording

estimated timelines and milestones for the remainder of 2025 and beyond, including submitting a SRP-9003 BLA in the second half of 2025;

Current wording

estimated timelines and milestones for the remainder of 2025 and beyond, including seeking to discuss with the FDA in 2025 a SRP-9003 biologics license application (“BLA");

Previous wording

the possible impact of any legislation and competing products on the commercial success of our products and our product candidates and our ability to compete against such products;

Current wording

the possible impact of any executive, legislative or regulatory action and competing products on the commercial success of our products and our product candidates and our ability to compete against such products;

Previous wording

our expectations regarding the potential benefits of the partnership, licensing and/or collaboration arrangements and other strategic arrangements and transactions we have entered into or may enter into in the future; our plans and ability to file and progress to issue additional patent applications to enhance and protect our new and existing technologies and programs;

Current wording

our expectations regarding the potential benefits of the partnership, licensing and/or collaboration arrangements and other strategic arrangements and transactions we have entered into or may enter into in the future;

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 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.

Current wording

We are a commercial-stage biopharmaceutical company focused on helping patients through the discovery and development of unique RNA-targeted therapeutics, siRNA knockdown therapies, 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 and LGMD, as well as those through our partnered programs with Arrowhead Therapeutics Inc. (“Arrowhead”), including Facioscapulohumeral muscular dystrophy ("FSHD"), myotonic dystrophy type 1 ("DM1"), Spinocerebellar ataxia type 2 ("SCA2"), Idiopathic Pulmonary Fibrosis ("IPF"), Huntington's disease and other neuromuscular and skeletal diseases.

Previous wording

ELEVIDYS (delandistrogene moxeparvovec-rokl), an AAV-based gene therapy, was approved by the FDA on June 20, 2024 for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene as well as 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 patients aged four through five 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), an AAV-based gene therapy, was approved by the FDA on June 20, 2024 for the treatment of ambulatory patients at least four years old with Duchenne with a confirmed mutation in the Duchenne gene as well as 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 patients aged four through five 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. In response to safety events announced in March and June 2025, in June 2025, we suspended all shipments of ELEVIDYS to non-ambulatory patients in the U.S. In response to a request from FDA that we voluntarily stop all shipments of ELEVIDYS in the U.S., we temporarily suspended all shipments of ELEVIDYS in the U.S., effective July 22, 2025, to allow us the necessary time to respond to FDA's requests for information and complete a labeling supplement process (the "ELEVIDYS Suspension"). On July 28, 2025, the FDA informed us that it recommended the removal of the voluntary hold for ambulatory patients. As of the date of this Quarterly Report, we have resumed shipments of ELEVIDYS for ambulatory patients in the U.S. We remain in ongoing discussions with FDA regarding the labeling supplement process for ELEVIDYS, including a boxed warning for acute liver injury ("ALI") and acute liver failure ("ALF").

Previous wording

A summary description of our key product candidates, including those in collaboration with our strategic partners, is as follows:

Current wording

In July 2025, we announced a strategic restructuring plan designed to enhance financial flexibility and meet our 2027 financial obligations, including a revised program portfolio that prioritizes our siRNA platform assets. A summary description of our key product candidates, including those in collaboration with our strategic partners, is as follows:

Previous wording

SRP-9003 (LGMD, gene therapy program). We are developing gene therapy programs for various forms of LGMD. The most advanced of our LGMD product candidates, SRP-9003, aims to treat LGMD2E, also known as beta-sarcoglycanopathy, a severe and debilitating form of LGMD characterized by progressive muscle fiber loss, inflammation and muscle fiber replacement with fat and fibrotic tissue. SRP-9003 is designed to transfect a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex. SRP-9003 has generated positive pre-clinical safety and efficacy data utilizing the AAVrh.74 vector, the same vector used in our SRP-9001 gene therapy program. A Phase 1/2a trial of SRP-9003 commenced in the fourth quarter of 2018. In June 2020, we announced safety and expression results from three clinical trial participants in the high-dose cohort measured at 60 days, and one-year functional data from three clinical trial participants in the low-dose cohort. In March 2022, we announced 36-month functional data from three clinical trial participants in the low-dose cohort and 24-month functional data from two clinical trial participants in the high-dose cohort. In December 2024, we announced that we had completed enrollment and dosing in EMERGENE (Study SRP-9003-301), a Phase 3 clinical trial of SRP-9003 (bidridistrogene xeboparvovec). We expect to file a BLA in the second half of 2025.

Current wording

SRP-9003 (LGMD, gene therapy program). We are developing gene therapy programs for various forms of LGMD. The most advanced of our LGMD product candidates, SRP-9003, aims to treat LGMD2E, also known as beta-sarcoglycanopathy, a severe and debilitating form of LGMD characterized by progressive muscle fiber loss, inflammation and muscle fiber replacement with fat and fibrotic tissue. SRP-9003 is designed to transfect a gene that codes for and restores beta-sarcoglycan protein with the goal of restoring the dystrophin associated protein complex. SRP-9003 has generated positive pre-clinical safety and efficacy data utilizing the AAVrh.74 vector, the same vector used in our SRP-9001 gene therapy program. A Phase 1/2a trial of SRP-9003 commenced in the fourth quarter of 2018. In June 2020, we announced safety and expression results from three clinical trial participants in the high-dose cohort measured at 60 days, and one-year functional data from three clinical trial participants in the low-dose cohort. In March 2022, we announced 36-month functional data from three clinical trial participants in the low-dose cohort and 24-month functional data from two clinical trial participants in the high-dose cohort. In December 2024, we announced that we had completed enrollment and dosing in EMERGENE (Study SRP-9003-301), a Phase 3 clinical trial of SRP-9003 (bidridistrogene xeboparvovec).

Previous wording

Our gene therapy manufacturing capabilities have been greatly enhanced through partnerships with Aldevron and Catalent Inc. (“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.

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, 2025, we had $647.5 million of cash, cash equivalents, restricted cash and investments, consisting of $240.9 million of cash and cash equivalents, $391.0 million of investments and $15.6 million of non-current restricted cash. We believe that our balance of cash, cash equivalents and investments, along with cash inflows from operations and availability under our Revolving Credit Facility (defined below), is sufficient to fund our current operational plan for at least the next twelve months.

Current wording

As of June 30, 2025, we had $850.3 million of cash, cash equivalents, restricted cash and investments, consisting of $510.6 million of cash and cash equivalents, $324.1 million of investments and $15.6 million of non-current restricted cash. We believe that our balance of cash, cash equivalents and investments, along with cash inflows from operations 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, 2025 and 2024

Current wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Previous wording

The following tables set forth selected unaudited condensed consolidated statements of (loss) income data for each of the periods indicated:

Current wording

The following tables set forth selected unaudited condensed consolidated statements of income (loss) data for each of the periods indicated:

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, 2025 increased by $252.0 million compared with the three months ended March 31, 2024. The increase primarily reflects an increase in net product revenues of ELEVIDYS of $241.0 million in the three months ended March 31, 2025 as a result of its expanded label approval in June 2024.

Current wording

Net product revenues for our products for the three and six months ended June 30, 2025 increased by $152.6 million and $404.6 million compared with the three and six months ended June 30, 2024. The increase primarily reflects an increase in net product revenues of ELEVIDYS of $160.1 million and $401.2 million in the three and six months ended June 30, 2025 as a result of its expanded label approval in June 2024.

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

In addition, in accordance with the Roche Collaboration Agreement, the parties agreed to enter into a supply agreement in order for us to supply Roche with clinical and commercial batches of ELEVIDYS (the “Roche Supply Agreement”). Roche utilizes the supply for sales of ELEVIDYS in territories outside of the U.S. where Roche has received certain approvals for ELEVIDYS. We are eligible to receive royalties on these sales. While the Roche Supply Agreement is in the process of being negotiated, we delivered commercial ELEVIDYS supply to Roche that was agreed upon on a purchase order-by-purchase order basis. For the three months ended March 31, 2025 and 2024, we recognized $17.4 million and $5.8 million of contract manufacturing revenue, respectively, which is related to these Roche shipments. In addition, we recognized $4.0 million and approximately $0.2 million of royalty revenue from sales of ELEVIDYS by Roche for the three months ended March 31, 2025 and 2024, respectively.

Current wording

For the three months ended June 30, 2025 and 2024, we recognized $98.0 million and $2.4 million of collaboration and other revenues, respectively. The increase is primarily due to $63.5 million of collaboration revenue recognized in the three months ended June 30, 2025 related to milestone payments received under the Roche Collaboration Agreement from the regulatory approval of ELEVIDYS in Japan for individuals ages 3- to less than 8-years-old, who do not have any deletions in exon 8 and/or exon 9 in the Duchenne gene and who are negative for anti-AAVrh74 antibodies (the “Japan Approval Milestone”). Please refer to Note 3, License and Collaboration Agreements for further discussion of the Roche Collaboration Agreement. While the Roche 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 June 30, 2025, we recognized $27.0 million of contract manufacturing revenue, which is related to these shipments, with no similar activity for the three months ended June 30, 2024. In addition, we recognized $7.4 million and $2.4 million of royalty revenue from sales of ELEVIDYS by Roche outside of the U.S. for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Collaboration and other revenues primarily relate to our collaboration arrangement (the “Roche Collaboration Agreement”) with F. Hoffman-La Roche Ltd. (“Roche”). For the three months ended March 31, 2025 and 2024, we recognized $133.3 million and $54.0 million of collaboration and other revenues, respectively. The increase is primarily due to the $112.0 million of collaboration revenue recognized in the three months ended March 31, 2025 related to the expiration of an option for a certain program, as compared to $48.0 million collaboration revenue in 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 Roche Collaboration Agreement.

Current wording

For the six months ended June 30, 2025 and 2024, we recognized $231.3 million and $56.4 million of collaboration and other revenues, respectively. The increase is primarily due to $112.0 million of collaboration revenue recognized in the six months ended June 30, 2025 related to the expiration of an option for a certain program previously recorded as deferred revenue and the Japan Approval Milestone payment of $63.5 million under the Roche Collaboration Agreement, as compared to $48.0 million of collaboration revenue recognized in the six months ended June 30, 2024 related to Roche’s declined option to acquire the rights to a certain external, early stage Duchenne development program previously recorded as deferred revenue. For the six months ended June 30, 2025 and 2024, we recognized $44.4 million and $5.8 million of contract manufacturing revenue related to shipments of ELEVIDYS to Roche, respectively. In addition, we recognized $11.4 million and $2.6 million of royalty revenue from sales of ELEVIDYS by Roche outside of the U.S. for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products 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 our products, we expensed 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, 2025 and 2024. For ELEVIDYS sold in the three months ended March 31, 2025, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses. 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 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 Roche Collaboration Agreement, would have been $13.7 million and $23.8 million higher for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Our cost of sales (excluding amortization of in-licensed rights) consists of inventory costs that relate to sales of our products 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 our products, we expensed 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, 2025 and 2024. For ELEVIDYS sold in the three and six months ended June 30, 2025, a portion of related manufacturing costs incurred had previously been expensed as research and development expenses. 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 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 Roche Collaboration Agreement, would have been $4.5 million and $18.2 million higher for the three and six months ended June 30, 2025, respectively, as compared to $15.9 million and $39.7 million for the three and six months ended June 30, 2024, respectively.

Previous wording

The following table summarizes the components of our cost of sales (excluding amortization of in-licensed rights) for each of the periods indicated:

Current wording

The following tables summarize the components of our cost of sales (excluding amortization of in-licensed rights) for each of the periods indicated:

Previous wording

ELEVIDYS as we consume previously expensed inventory, an increase in demand following ELEVIDYS’s expanded label approval in June 2024 as well as an increase in cost of sales related to products sold to Roche under the Roche Collaboration Agreement, partially offset by a decrease in the write-offs of certain batches of our products not meeting our quality specifications for the three months ended March 31, 2025, as compared to the same period of 2024.

Current wording

The cost of sales (excluding amortization of in-licensed rights) for the three months ended June 30, 2025 increased by $108.0 million, or 242%, compared with the same period in 2024. The cost of sales (excluding amortization of in-licensed rights) for the six months ended June 30, 2025 increased by $195.0 million, or 205%, compared with the same period in 2024. For both comparative periods, the changes primarily reflects (1) depletion of previously expensed ELEVIDYS inventory (2) increased demand following expanded label approval of ELEVIDYS in June 2024 (3) an increase in products sold to Roche under the Roche Collaboration Agreement and (4) an increase in the write-offs of certain batches of our products not meeting our quality specifications.

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

$11.0 million decrease in clinical trial expenses primarily due to our decision to discontinue our PPMO programs;

Current wording

$6.4 million decrease in clinical trial expenses primarily due to our decision to discontinue our PPMO programs, partially offset by increased activity in our LGMD programs;

Previous wording

$2.9 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts;

Current wording

$3.0 million increase in facility- and technology-related expenses primarily due to our continuing expansion efforts;

Previous wording

$1.0 million increase in stock-based compensation expense primarily due to changes in headcount;

Current wording

$4.5 million decrease in stock-based compensation expense primarily due to the achievement of performance conditions related to certain PSUs during the three months ended June 30, 2024 and fulfillment of remaining service conditions associated with certain PSUs in March 2025;

Previous wording

$3.0 million increase in professional services primarily due to an increase in reliance on third-party research and development contractors for clinical programs;

Current wording

$1.3 million increase in professional services primarily due to an increase in reliance on third-party research and development contractors for clinical programs;

Previous wording

$1.7 million decrease in research and other expenses primarily due to a decrease in collaboration cost-sharing expenses related to our license and collaboration agreement with Genethon, partially offset by $2.3 million of reimbursable development costs incurred by Arrowhead during the three months ended March 31, 2025; and

Current wording

$2.9 million increase in research and other expenses primary due to reimbursements to Arrowhead, with no similar activity for the three months ended June 30, 2024, partially offset by a decrease in collaboration cost-sharing expenses related to our license and collaboration agreement with Genethon; and

Previous wording

$6.8 million increase in the offset to expense associated with a collaboration reimbursement from Roche due to continuing development of our SRP-9001 gene therapy program.

Current wording

$7.8 million increase in the offset to expense associated with a collaboration reimbursement from Roche primarily due to an increase in ELEVIDYS clinical supply batch releases.

Previous wording

$583.8 million increase in up-front and milestone expenses primarily due to the $583.6 million in payments allocated to the up-front license fee associated with our exclusive global licensing and collaboration agreement and stock purchase agreement (collectively, the “Arrowhead Agreement”) with Arrowhead Pharmaceuticals, Inc. (“Arrowhead”);

Current wording

$583.8 million increase in up-front and milestone expenses primarily due to the $583.6 million in acquired in-process research and development expense associated with our exclusive global licensing and collaboration agreement and stock purchase agreement with Arrowhead (the "Arrowhead Agreement");

Previous wording

the timing and costs associated with our expansion efforts;

Current wording

$5.9 million increase in facility- and technology-related expenses primarily due to our expansion efforts;

Previous wording

$1.7 million decrease in pre-clinical expenses primarily due to decreased activity across our gene therapy programs;

Current wording

$1.7 million decrease in pre-clinical expenses primarily due to a decrease in capsid and toxicology studies across our gene therapy programs; and

Previous wording

Selling, general and administrative expenses consist of salaries, benefits, stock-based compensation and related costs for personnel in our executive, finance, legal, information technology, business development, human resources, commercial and other general and administrative functions. Other general and administrative expenses include an allocation of our facility- and technology-related costs and professional fees for legal, consulting and accounting services.

Current wording

Selling, general and administrative expenses consist of salaries, benefits, stock-based compensation and related costs for personnel in our executive, finance, legal, information technology, business development, human resources, commercial and other general and administrative functions. Other general and administrative expenses include professional fees for legal, consulting and accounting services and an allocation of our facility- and technology-related costs.

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, 2025 increased by $6.6 million, or 5%, compared with the three months ended March 31, 2024. This increase was primarily driven by the following:

Current wording

Selling, general and administrative expenses for the three months ended June 30, 2025 decreased by $0.9 million compared with the three months ended June 30, 2024. This decrease was primarily driven by the following:

Previous wording

$2.6 million increase in professional service expenses primarily related to our continuing efforts to commercialize ELEVIDYS, partially offset by a decrease in expenses related to ongoing litigation matters; and

Current wording

$9.0 million increase in professional service expenses primarily related to our continuing efforts to commercialize ELEVIDYS, partially offset by a decrease in expenses related to ongoing litigation matters;

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 both the three months ended March 31, 2025 and 2024, we recorded amortization of in-licensed rights of approximately $0.6 million.

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 or the first commercial sale of the applicable product. For the three and six months ended June 30, 2025, we recorded amortization of in-licensed rights of approximately $0.7 million and $1.3 million, respectively. 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.

Previous wording

Other (expense) income, net primarily consists of the unrealized gain or loss from our investments in our strategic equity investments, interest expense on our 1.25% convertible senior notes due on September 15, 2027 (the “2027 Notes”), interest income on our cash, cash equivalents and investments, accretion of investment discount and the change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability. 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 (expense), net primarily consists of the unrealized gain or loss from our investments in our strategic equity investments, interest expense on our 1.25% convertible senior notes due on September 15, 2027 (the “2027 Notes”), interest income on our cash, cash equivalents and investments, accretion of investment discount and the change in the fair value of contingent consideration related to regulatory-related contingent payments meeting the definition of a derivative liability. 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

For the three months ended March 31, 2025, other (expense) income, net decreased by $89.7 million compared with the three months ended March 31, 2024. The change is primarily due to a $91.7 million increase in the loss on our strategic investments, which includes the recurring fair value adjustments of investments in publicly-traded companies, including Arrowhead.

Current wording

For the three months ended June 30, 2025, other income, net increased by $23.8 million compared with the three months ended June 30, 2024. The change is primarily due to a $36.6 million increase in the fair value of our strategic investments, which includes the recurring fair value adjustments of investments in publicly-traded companies, including Arrowhead, offset by a decrease of $8.9 million in accretion of investment discount, net due to changes in the investment mix of our investment portfolio.

Previous wording

Income tax expense for the three months ended March 31, 2025 and 2024 was $64.0 million and $5.3 million, respectively. Income tax expense for both periods presented primarily relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset. As of March 31, 2025, we continued to maintain a full valuation allowance against our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions. We continue to monitor the available evidence relative to recovery of our deferred tax assets and whether such evidence would be sufficient to conclude that it is more likely than not that such deferred tax assets may be partially or fully recoverable. If we were to remove our valuation allowance in part or full, any such adjustment could have a material impact on our effective tax rate in the applicable period and beyond.

Current wording

Income tax (benefit) expense for the three and six months ended June 30, 2025 was $(43.3) million and $20.7 million, respectively. Income tax (benefit) expense for all periods presented primarily relates to state, federal and foreign income taxes for which available tax losses or credits were not available to offset. As of June 30, 2025, we continued to maintain a full valuation allowance against our deferred tax assets, with the exception of deferred tax assets in certain foreign jurisdictions. We continue to monitor the available evidence relative to recovery of our deferred tax assets and whether such evidence would be sufficient to conclude that it is more likely than not that such deferred tax assets may be partially or fully recoverable. If we were to remove our valuation allowance in part or full, any such adjustment could have a material impact on our effective tax rate in the applicable period and beyond.