Sarepta Therapeutics, Inc. (SRPT) Earnings Call Transcript & Summary

Hi, good afternoon everyone. I'm Brian Abrahams, Senior Biotech Analyst at RBC Capital Markets. I'm really pleased to have with us our next presenting company, Sarepta Therapeutics, represented by their CFO, Ian Estepan. Ian, thanks for joining us.

Thank so much. Doug should be on his way. It seems like he's having technical difficulties, but I'm sure he'll figure it out in a little bit.

Well, let's get started in the meantime because, obviously, a lot to cover on what's been a very exciting day. So I guess, first off, congratulations on the Study 103 results you shared this morning. What have you learned from the -- overall from the performance of the scaled up material in terms of similarity of the product to the clinical-grade material? And how do the results compare with what you were hoping to achieve?

Yes. So I mean, this is a landmark moment for us that going back maybe 2, 3 years ago, the question we got the most was, are you going to be able to scale this up? Are you going to have the same efficacy? Are you going to have the same safety? And so telling was really important because we were able to achieve that. And the results specifically were almost identical. We did show a comparison this morning for the placebo crossover patients from the 102 study and then the data from the 103 study. The placebo crossover patients were obviously from our clinical manufacturing process material and then the 103 results were from our commercial manufacturing process material, and they were essentially identical. If you looked at VCN number, if you looked at Western blot and immunofluorescence, they were completely identical. And the good thing about this, too, it goes to one of your earlier points is that this makes perfect sense from a scientific standpoint because with all of our manufacturing assays and the like, we're seeing pretty much the exact same concordance, right? So if you look at our purity, our potency, our empty to full, all the important release assays we saw that, if you look at our preclinical data, it lined up identically. And so we had strong confidence that the data today would result in very similar expression levels and same safety profile and then bore out. So we're really, really pleased with the results. And certainly, this gives us good momentum going into the meeting that we're going to have with the agency to start Study 301 just because the materials do seem so similar.

Got it. And then would love to dive into a little bit more detail on the data. Can you talk more about like the degree of variation and expression that you observed among the 11 patients? And maybe some of the challenges that biopsies might have in picking these up consistently? How did the variability compare versus Study 102 and Study 101 with the clinical-grade material?

Yes. So it was actually spot on from a variability perspective. We didn't provide the standard deviations for the placebo crossover patients for 102. But if we have it, obviously, they were essentially identical to what you saw with Study 103. So the materials are behaving, like I said, very similarly. And then as it relates to the -- our observance, if you -- in terms of kind of -- if you kind of looked at it from a waterfall plot perspective, all the patients were pretty much bunched together. If you take out the highest expresser and the lowest expresser, we essentially had 50% expression. And so we're really pleased to see that all patients responded with really high expression and just like we saw with the placebo crossover patients from 102. So now Doug has now joined us. He's figured out his technical difficulties. So this was quite fun that I got to step in for this, but I'm sure he wants to take over now.

To be entirely honest, I had no baby sitters. I was in a breakout guys, and apologies, I wasn't pulled off stage. So I was just continuing breakout. So apologies. I'm really sorry about that.

That's okay. We're happy to have you now. So we were just talking about Study 103. And I guess another question we had was that the majority of patients in that study were 6- to 7-year olds, which is the population in which, of course, you were less able to discern functional benefits in Part 1 of your prior study, Study 102. What are the patterns of expression, the biomarker changes and even any functional improvement you're seeing at of Study 103 tell you about the potential for microdystrophin's activity in these older patients?

There will be no difference between the 2. And then that -- one of the interesting aspects of 103, that was just the vagaries of recruitment was that we do have a preponderance of 6- and 7-year olds in 103. And that's a value ironically because there was, I think, from -- there was a little bit of mythology that grew up over the Part 1 of 102 results. And one of the concerns that people had was maybe the kids that are older are not getting as much expression as the kids who are younger and maybe that explains. And then the short answer is no. The kids that are 6 and 7, the kids at are 4 and 5 are both getting very, very robust expression, and we've seen that. We see it when we hit the target dose in Part 1 of 102. We see it in Part 1 -- we see it 101 when we hit the target dose. We saw it in the 102 crossover kids, both 6 to 7 and 4 to 5 for the same. And of course, we're seeing it here as well. So if you look at the -- and that gets to the other issue, which is the Part 1 of 102 results and the fact that we hit strongly stat sig in the 4- to 5-year olds and clinically meaningful benefits in the 4- to 5-year olds, but we didn't hit stat sigs in the 6- to 7-year olds is entirely explained by the baseline characteristics. I really want to focus on that for just a second and really reemphasize something. This is not closed for -- by random chance, kids in the 6- to 7-year-old cohort were very severe. And all of the kids that were on the placebo were much milder, and that alone explains those differences. Now as we think about going forward, there were 2 things that came out of Part 1 of 102. One is the baseline characteristics, and that's problem. That solved. We stratified for baseline characteristics, we will not have that issue again. So we don't have to worry about a risk continuing. Small risk though it might have been, it's not going to be a risk going forward. The second issue that comes out of Part 1 in broad stroke is we had expected all of us out of the 101 results that we would see even more robust expression than we saw on Part 1 of 102. I will note that 28.1% that we saw in Part 1 was sufficient for all of the kids that had properly matched baseline to show really significant benefit, but we had expected even more expression than that. That's been solved. So now we see -- when we get the target dose, when we actually use the Sarepta titering, which is this linear qPCR approach, we have a very tight range. We have a very confident dosing of -- at the target dose, and we see a very consistent approach to expression. We see the very consistent expression out of 101. Out of those kids, you got the target dose in Part 1 of 102, out of the crossover kids in 102 and now extremely importantly in 103 with the commercial process material.

Got it. And there were some very subtle differences in the Study 103 data versus the Study 102 crossover. You saw higher vector copies per nucleus, higher intensity, but slightly lower percent of positive fibers. Does that, I guess, inform at all about just maybe any differences in either the commercial-grade material or how the effects in older patients in terms of the potential for maybe fewer cells to express the transgene, but those that do maybe express it more strongly?

Age-related issue in 103. We're seeing very concordant results across 103 and then Part 2 of 102. And I think it would be easy for us to say that the therapy of anything looks even better with the commercial process. I think the fairest thing to say is that they're very comparable. Yes, we see -- we saw very robust genome copies for nucleus in Part 2 of 102. We see even more robust genome copies with the commercial process 103. I mean we're approaching 4 genome copies per nucleus. But I think broadly speaking, we would say both are in the same hands. Similarly, we saw -- Western blot quantification looks nearly identical, 55%. And I think 51% in Part 2 of 102. And then on the IS side, both of them were over 100%. One was significantly over 100% on intensity, important measure. But also on both of them, the vast majority of the fibers are benefiting from the dystrophin and its protective quality. So I wouldn't look at this in broader strokes and say we're seeing very comparable results as we move over to commercial.

Got it. Makes sense. And what's your sense as to exactly what the bar is for comparability that the FDA is going to want to see in order to bridge from clinical to commercial material and enable initiation of the Study 301 pivotal? Is it primarily expression-driven, Western, positive fibers intensity to show the comparability on? Or is it -- you had mentioned other elements like purity, empty/full ratio. I guess, what are all the things that sort of go into the package you'll be presenting to the FDA to -- and what's your level of confidence that you've hit the bar for comparability of the -- across the materials?

The constant comparability, and it's sort of strictest sense, was a creature of the idea of bridging between 102 and a rapid approval based on some biomarkers. For the commencement of our next Study 301 and in the broadest of strokes, what we really need to simply show is that we have a very well characterized therapy -- we have a characterized process, characterized therapy that's showing very good expression and a very reasonable safety profile. And I think in all of those measures, we have achieved or overachieved to our goal. So I think we should have -- and again, I don't want to be [Audio Gap] about this in advance of having a discussion with the agency, but I think we're going to have a very good discussion with the agency. We feel very strongly about our CMC data. And you can imagine, we feel very, very good about our 103 [Audio Gap] on safety as well. There are a lot of things that people could have been concerned about back in -- when we think about moving from clinical supply to commercial supply. You've seen it in the past, I won't mention names, but we've seen situations where people evolved over to a new process for commercial supply, and they lose expression as an example. And of course, we haven't done that at all here or you insert some safety signal that you didn't anticipate in the clinical supplier at small scale. The good news, this is large scale. We can serve the community with the process we have and the capacity we have and of course, we've seen no new safety signals and a very stable safety profile with a lack of concerning things than some of the other full-body infusion gene therapy we've had to wrestle with.

Can we talk a little bit more about safety? Were there any differences relative to the prior material? And can you maybe talk about the SAEs in more detail in terms of the LFT changes, the nausea and vomiting? You also mentioned that there were no -- I guess, no meaningful complement or mediated changes. Did you see any signals at all of that?

Zero signals of any clinical or comparable manifestations at all. And that is consistent with all of our prior studies. So we've now dosed over 60 children with SRP-9001. We just have never seen this. We never saw it in preclinical, so we wouldn't have anticipated it anyways. But the good news is our preclinical work and our clinical work continues to bear out. We're just simply not seeing this. The safety profile that we have here is very consistent in the commercial supply, in the clinical supply and even over in the supply for limb-girdle to me, which is, again, a very similar process and the same capsid and the same promoter. And that is -- we're not seeing clinical or comparable manifestations. We've never seen any of the kidney tiny issues that others have seen or any of those -- we see elevated liver enzymes. Those elevated liver enzymes are transient. They respond to steroids and go back to baseline. We've never see any long-term liver issues associated with it. So it appears on its face to be very manageable. And of course, what we do see with these full-body infusions is nausea and vomiting at times. And when we get that, they are resolved with antiemetics. So it's in the context of the disease that we're treating. We are very pleased with the safety profile. And we're [Audio Gap] fact that our commercial safety profile is consistent with what we've seen clinically.

Great.

We talk often about the fact that -- these are full-body infusions, and that's a different order of complexity and viral load. And so the fact that we have a very manageable safety profile, I think, is...

Great. And I know you've talked in the past about the addition of more 4- to 5- year olds to Study 103 to balance the age range a bit more. Even though it's an open-label study, just in the context of the tight comparability you showed to the clinical-grade material, what's your latest view as to whether this could be used in conjunction with Study 102 data for filing in younger patients only? And is this something you've discussed with the FDA or would plan to discuss in your next meeting?

Discuss it in our next meeting. So I want to be very straightforward about that. I think we -- the goal of the next meeting is extraordinarily important but focused. Our goal for our next meeting with the agency is to review the CMC and review the results of 103, show them the protocol and then get their blessing and start that next trial because I think getting Study 301 commenced is extraordinarily important, not just to Sarepta, but for the patient communities that we serve in the U.S. and around the world. We will have a readout on 102 Part 2 early next year and that's going to be a 41-patient readout. And that's going to be very interesting. It's all blinded today. So all of the analysis that we'll do will be prespecified, half of those kids -- approximately, half of those kids will have been on therapy for 2 years. Another half of those kids will have been tracked for a year off of therapy and then we get to watch them after the intervention of therapy. And once we have all of that data in place, plus additional data from 103, perhaps some additional functional correlates from 103 then we can consider sitting down with the agency and talking about in the context of the data available to us, what is the art of the possible? But for purposes in the middle of this year and for the commencement of the next study, our goal is really acutely focused on getting 301 up and running as soon as possible.

Got it. And then maybe one more question on 103. Can you clarify, I guess, your plan to enroll older and nonambulatory patients? What are you expecting to see there? Is this an FDA requirement? What do you hope to learn?

Goal of all of this, remember, is to treat the broadest possible population who have Duchenne muscular dystrophy. We don't want to leave any children behind. One of the -- there's been a perennial challenge in Duchenne muscular dystrophy that oftentimes the nonambulatory kids are less behind in the clinical trials themselves for host of reasons. A lot of the normal functional endpoints that we all are using that are validated are not applicable to the nonambulatory population. And that's not acceptable anymore. We've got to get -- if our gene therapy bears out and ends up being the transformative therapy that we at least hope it will be when all the data is in, we've got to make sure that we can get that therapy to as many patients as possible as fast as possible. And the older nonambulatory kids need it as fast as possible as much as anyone or more than anyone else. So the goal of 103 is to get experience with therapy using our commercial process material across a broad age range. You've seen we've done this more to 7-year old, we've added additional 4 to 5s in that area and then we'll add the nonambulatory and older kids as well so we can get a full view on safety, biomarkers and the like out of the broadest possible set using our commercial material.

Got it. And then on Study 103, what's your latest thinking on how long it may take to enroll this study, and I guess, when this could get up and running? How should we think about overall time lines for the program?

The agency right around the middle of the year, we've got all the data now that we need for the meeting. So it's all about building a briefing book and getting the actual meeting in the calendar. And then once we get the blessing of the agency, we want to move as rapidly as possible to get that study started between all of the states work now so that we're in a good position to commence the study. We will, at least over time, have a very robust number of clinical sites, both in the U.S. and around the world. Last time we were looking and we were thinking of getting to over 30 sites around the world. And I think this therapy and this study will be in high demand, will be in high demand among patients and their families who have Duchenne muscular dystrophy, and it's also in high demand for investigators as well. We're very interested and excited about getting the study started, in fact, rightly pressured and has to get going and then surely will get moving. So I can't give you exact dates on enrollment. I am confident in advance that if we get this study started as soon as possible, it's going to recruit very rapidly. We're not going to have a problem with recruitment of the study.

Great. I know we've got less than 5 minutes left. So just maybe a couple of more questions on the PPMO program. You recently provided data on 5051 and talked about dose selection with a 30 mg per kg dose. You've also talked a lot about preclinical data supporting a nonlinear dose response with respect to exon skipping with this approach. I guess I'm curious, once you account for some of the baseline skipping levels, the duration of dosing for that outlier patients -- patient and the relative exposure in the muscle, I guess how confident are you that you've truly hit or surpassed that nonlinear point on the dose response curve that's sort of guiding your future dosing?

We're at the right place to get going on the Part B of the study. So as an example, the baseline characteristics are accounted for. And so when we look at the baseline, they don't play a role or correlate to the amount of exon skipping, the amount of exon skipping, the amount dystrophin production that we ultimately get. So that is -- we are seeing a very profound bump up from 20 mg to 30 mg and very -- one of the reasons that we're confident is that is all very consistent with what we were seeing in the non-human primate, right? The non-human primate instead you'd see a benefit of 20 mg per kg. When you move to 30 mg per kg, you'd see this very sharp increase, that's what we saw, as you know, versus we saw in the studies 18x more exon skipping in half the time and about 12% of the dose. Then what the nonhuman primate studies says, if you keep pushing, you can push to 40, but you won't see any real benefit. And you could keep pushing and pushing. And by the way, we may someday separately, down the road, do this very thing. But if you kept pushing up the dose and you got to, for instance, 60 mg per kg, so you double the dose from 30 again, you might be in another place where you get another steep ramp-up in exon skipping and dystrophin production. The problem with that, by the way, number one, I don't know that we'll ever -- we can ever get to me. It's an open question. We've got -- we got to worry about the safety margins and the likes as we move up. So the idea you can just double again the dose, not an inconsequential question that would need to be closed. The second is it would take a very long time to even investigate that process. And the fact is that this study has got to get going. And with the results that we've seen right now, we have a therapy that is confirmed in the next trial and confirmed safely in the next Part B of the trial will be a very substantial, in fact, I would argue, transformative benefit over the existing standard of care, which is [indiscernible] And so from our perspective, it just made the most sense. We are in a place now, we're at 18x more exon skipping, 4x more dystrophin production. We get it in half the time at 12% of the dose. Let's move to the Part B and confirm all this and get this therapy out, which is -- first is U.S. and then around the world.

Got it. One more question in the last minute we have remaining on the PPMO safety profile. You did see a few serious adverse events, including hypomagnesemia and hypokalemia. As you've had a chance to dive deeper into the data now with a little bit more time, have you found any additional correlates or potential predictive markers that would provide any more mechanistic insight into these AEs and have these been communicated with the FDA? Any particular monitoring requirements that you'll need to put in place for future studies?

[Audio Gap] future studies will have the -- we will want to, independent of our discussions with the agency, put in monitoring to make sure that we do all of this very safely. We have not seen any correlates to kidney function or kidney injury associated with hypomagnesemia. We've seen, in fact -- or at least based on what we've seen right now, it's manageable and monitorable. Both monitorable and manageable through the use of oral magnesium supplements has resolved that. We have hypotheses on what might be causing it. There might be some interference with the magnesium transport proteins in connection with the infusions themselves that can be resolved through magnesium supplementation. But the short answer is that as we go track to our discussions with the FDA about trying Part B, we [Audio Gap] monitorable from [Audio Gap]

Great. Well, unfortunately, we're out of time. It's much more we could discuss. But Doug, Ian, thank you guys so much for joining us. Congratulations, again, on the big data this morning. And thanks, everybody, for joining.

Appreciate it.

Really sorry for my tardiness. That's a first for me ever. Apologies for that.

Don't worry about it. We're glad you could can make it. Take care.

Bye.