Company: SRPT
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029973
Chunk: 308

Company: Sarepta Therapeutics, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 308
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, in a similar economic environment. Components of a lease are bifurcated between lease components and non-lease components. The fixed and in-substance fixed contract consideration identified is then allocated based on the relative standalone price to the lease and non-lease components. The Company adopted a practical expedient provided by ASC Topic 842, Leases, and elected to account for the lease and non-lease components together for existing classes of underlying assets and allocates the contract consideration to the lease component only. In contrast, the Company does not apply the practical expedient for leases embedded in manufacturing and supply agreements with certain of its contract manufacturing organizations and has instead allocated contract consideration between the lease and non-lease components based on their relative standalone price. Earnings (Loss) per ShareBasic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding. Diluted earnings per share is computed based on the treasury stock method for stock awards and if-converted method for convertible notes by dividing net income by the weighted-average number of shares of common stock and potentially dilutive common stock equivalents outstanding. Potential common equivalent shares are excluded if their effect is anti-dilutive. Embedded DerivativesThe Company evaluates certain of its financial and business development transactions to determine if embedded components of these contracts meet the definition of derivative under ASC 815. In general, embedded derivatives are required to be bifurcated from the host instrument if (i) the embedded feature is not clearly and closely related to the host contract and (ii) the embedded feature, if considered a freestanding instrument, meets the definition of a derivative. The embedded derivative is reported on the consolidated balance sheets at its fair value. Any change in fair value, as determined at each period, is recorded as a component of the consolidated statements of comprehensive income (loss). Contingent ConsiderationCertain of the Company’s license and collaboration agreements include future payments that are contingent upon the receipt, or receipt and subsequent sale, of a Priority Review Voucher (“PRV”). The Company has concluded that these contingent payments represent embedded derivatives. The Company records a liability for such contingent payments at fair value on the date the agreements are effective. The Company estimates the fair value of contingent consideration derivatives through a valuation model that includes an income approach based on the probability-weighted expected cash flows that incorporated industry-based probability-adjusted assumptions relating to the achievement of the milestone and thus the likelihood of making the payments. Changes in the fair value of the contingent