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

Good afternoon, and thank you for joining Guggenheim Genomic Medicines and Rare Disease Conference. I'm Debjit. I'm one of the analysts representing the Guggenheim Therapeutics team. My privilege to host Sarepta's President and CEO; Doug Ingram; and Executive Vice President and CFO, Ian Estepan. Thank you for your time today, gentlemen.

And with that, Doug, let me start with a broad question. 5 years since you started at Sarepta. How do you feel about the progress to date? And if there is anything you could have done differently, what's that?

I'm sure there's a lot of things I could have done differently. It's interesting, people who know me will say that I am perennially unsatisfied with everything. I think I said something the other day, I'm joyfully discontent. But objectively, if you look objectively over the last 5 years, I think the progress that the team has made has been extremely impressive. We have 3 platforms today. We went from nascency, really almost nonexistent to becoming the, I think, the world leader and the bellwether in gene therapy. And we are one of the top couple of companies that have made a success of RNA, which, of course, is exciting. We have 3 approved therapies today. We have 21 quarters of sustained growth. It's been a 40% CAGR over the last 5 years. I think when I joined the company, we had a couple of million dollars in sales. We'll do over $800 million this year, a lot closer to the magic $1 billion number, that $500 million. So we're clearly moving in the right direction. And we can augment all of that with $2 billion on the balance sheet. We not only have 1 of the largest pipelines in genetic medicine, but more than that, we're very advanced. We've got a pivotal trial for SRP-5051, our next-generation PPMO. And we're in our pivotal trial in dosing for SRP-9001, as you know. And if we're successful with that, that means by the end of '24, we'll be profitable, and we'll have billions in revenue in 2025. And more than that we'll, I think, have improved the lives of thousands of children. We've got a great reputation with our regulators today. That is not a small thing. I think that's been an enormous thing for all of us. And while we're -- I would say we're woefully undervalued as an organization, our CAGR on our stock price actually since I joined, is one of the highest in biotech so far over the last 5 years, not to suggest that I'm happy with it. I want it to be -- I want to be obviously fairly valued. And I think finally, the thing I'd say is that, I think, more than anything else, we've got what I believe to be one of the most expert teams in all of biotech. I'm really proud to work with them, and we're growing. We're in an environment where many are finding themselves constrained. We put ourselves in a position where we can continue with our success to grow, and we're going to grow significantly this year as well with new scientists and professionals and the like. So I think we're doing very well as much as I would love everything to have gone perfectly brilliantly at every step.

Got it. The -- let's address the elephant in the room kind of question, right, the integrated analysis which you put out during your full year update of the ambulant patients who received the right titer dose. That seems to be the strategy to engage with the FDA on SRP-9001. Are there other data sets you could complement this with?

Yes, there is. So let me say this. First, before I discuss the data sets, let me make sure I remind us all that the base case and the most likely case is that EMBARK, which is enrolling even as we speak right now is our pathway to approval, and it's well powered, and we're going to have a readout in the middle of next year. and we'll be launching in 2024 successful, and I have an enormous amount of conviction in the success of EMBARK. That's right around the quarter. We are, as you rightly point out, going to have a conversation or more than one conversation potentially with the FDA over the course of this year about the state of our data and the possibility of filing a BLA for an accelerated approval. And with respect to that, we have a lot of data to share with them. We've got -- the totality of evidence includes obviously all the biomarkers, the preclinical work. And clinically, we've dosed across 3 studies now. We have results, functional expression and safety results in 84 kids without even thinking about EMBARK, the largest kids, the smallest kids, the youngest kids, the oldest kids. And on top of all of that, we'll have this integrated analysis to your point as well where we've taken all of the children that received the target dose, and then we look at them against this propensity matched cohort, which is probably one of the most sophisticated ways of coming up with a synthetic placebo arm as possible. And so we'll have a lot to talk about with the division. I still want to remind us all that the base case assumption is that EMBARK is going to be our pathway to an approval.

So the pushback that we very often get is you're going to be enrolling EMBARK by the middle of this year. So why should the FDA even consider a BLA submission when that data set is going to probably read out at the back end of 2023, right? If you play out the time lines, it saves you maybe 6 to 8 months overall. So -- and the hemophilia experience seems to suggest that FDA really wants sort of a durable or large datasets there. And so the pushback is why would the FDA consider the integrated analysis?

Well, first things first, they may not, right? I want to be very clear about that. They may not. We'll have to have those conversations. I would note that Duchenne is very different than hemophilia. There is a desperate need for a therapy. This is a ferociously degenerative disease, which means literally every day, thousands of children will lose muscle that we cannot bring back. SRP-9001, as fabulous as it is, doesn't bring back lost muscle. It protects muscle that you have. That means that every single day in the United States, some kids are going to lose ambulation, some kids are going to lose the use of their upper limbs, some kids are going to go on event, and then at least one kid every single solitary day is going to die. So while, again, I think the base case assumption is EMBARK, I think there is a compelling reason to at least have a conversation with the division about the benefit that would accrue to patients in the United States if we could get this therapy to these kids, even before EMBARK reads out.

Got it. And you talked about the propensity score matched cohorts that you sort of put out very recently. People seem to scoff at the p-value derived from that. So what's that disconnect between your regulatory side and the way the propensity score matching was done versus the general ambivalence to that pretty interesting p-value?

I think there's a number of things. I think we put this data out in January. And so the first question I would ask, is there anything anyone could have done to make anyone excited about anything in January of this year in biotech? I remember another biotech came out right around the same time as us and came off clinical hold, and the Street reacted by actually trading down their stock enormously. The fact is that the propensity matched approach that we've taken, I think with certainty, is the most rigorous approach that has been taken to building a synthetic placebo arm for a Duchenne trial. It was all prespecified, so we're very clear. It was -- while we haven't had discussions with the division about it, it's all submitted to the agency in advance and I'm making it clear that it was prespecified before we unblind it. And then those results are fabulous, To your very good point, the p-value is 0.0009. If you saw something that was only coming from the propensity-matched cohort, maybe you could ask questions about it. But what you actually saw is that this group, given the advanced age of these kids, these kids were dosed on mean over 7 years old and the last visit was over 8 years old, would have been predicted by that propensity-matched score to have been declining. It would have been extraordinary if those kids were not declining. And they not only were not, but they actually were going up, so that we had a 2-point delta between those 2. So I think one of the biggest disconnects that seems to exist if you just ignore the fact that there's one disconnect, which is just simply that the market's been sort of dealing with fear and loathing over the last couple of quarters, is that people seem to imagine that the result that you see in 48 weeks defines the results, and that's not the way to look at this therapy. SRP-9001, its goal is to insert a gene the codes for structural proteins. So if it works, and certainly the data so far says it does, it's a disease-modifying therapy, which means the question went on to ask, is have you changed the trajectory of these kids? And the answer to that is unequivocally yes. So as an example, I said we saw in these kids with a p-value -- a tremendous p-value, we saw a 2-point difference between these kids and what we would have seen in the same kids matched, remember, matched with a number of different to covariates. It's age. It's baseline. It's NSA. It was, I think, time to rise, it's that -- we saw a 2-point difference from these kids where they were going up where the other kids were declining. Looking out 5 years from now, if these kids remain stable, imagine what benefit they're seeing. And that's exactly what we see in Study 101. These kids out 3 years are almost 9 points different than natural history would predict for these kids. Some of the kids are over 9 years old and just look fabulous. So it's funny. Like somebody -- sort of the suggestion that some people had that 2 points is all right, I would have been thrilled with -- what of 2.5 points? The fact is it is -- that those are the same in 5 years. If, in fact, as is clear from the study results we have so far, we've actually modified this disease and modified the trajectory of this otherwise ferociously degenerative Duchenne Muscular Dystrophy.

Got it. Any interactions with the FDA prior to or post unblinding the propensity-matched scoring? I just want to see what their feedback has been either before or after if you haven't had the discussion after, that's separate, but before the -- when you set this up.

Yes. So no, I want to be very clear. We haven't had any detailed discussions with the division about the approach itself. It's not as if we had sort of an SPA on the approach in advance. This is -- but what we did do is submit it to them. So essentially to ensure that there was never a question that the approach we were taking was a prespecified analysis, we provided to the FDA late last year in advance of unblinding the propensity-matched approach and the statistical analysis plan that would be used, and that will serve us well as we have conversations with the division. But what their view on that is and what their view on accelerated approval is will remain to be seen.

Got it. So as you start thinking about the eventual commercialization, is there sort of a benchmark for how many centers are adequately prepared for a commercial launch? Should you get accelerated approval ahead of the EMBARK study?

Yes. That is a great question. It's a question that keeps my Chief Customer Officer, Dallan Murray,, up all the time. But the short answer is, in the United States, there are about 50 centers of excellence that treat about 75% of Duchenne muscular dystrophy. And we do benefit from the fact that Zolgensma has led the way with a lot of these centers. So the vast majority of those 50 centers already have some experience with gene therapy, and now our goal is to ensure that they have -- that they're well trained and well informed about SRP-9001 in advance. So I'd say our base assumption is about 50%, and then we'll see if we need more than that as we go. But we are going to prioritize education and quality over simply making this available to everyone that wants it, if that makes sense.

Got it. I just recently listened to the EAHAD update on hemophilia, happened just 2 days ago, where the entire focus was creating the hub-and-spoke model there. That's why I was sort of asking about this one. I mean, yes, you've got the -- it's a very complex therapy and the patient follow-up, especially if you start taking older patients, it could be very different. So...

We're doing a lot of work right now. We were just -- I just had an Advisory Board meeting a few weeks ago that touched on some of these exact issues about how we educate, how do we leverage the experience of the very, very sophisticated thought leaders in Duchenne muscular dystrophy and how do we ensure that we have an enormous amount of support for perhaps the newer infuser so that he or she is well aware of exactly what they need to do, and we'll have resources available to them in the event they need consultation. So I think we'll be in good shape even with accelerated approval as much as it will keep Dallan and his team up with some late nights if we're able to get an accelerated approval.

And then the same question for EU then. Clearly, that EU does not have experience with treating patients with SRP-9001. What's the strategy there? And where does Roche fit into that equation?

Roche will be commercializing these therapies. So they are going to play an intimate role and probably a lead role -- the lead role in the commercialization of the therapy. There will be a significant amount of experience with SRP-9001 at launch in Europe because we have a lot of sites across Europe. Many of the world's thought leaders in Duchenne muscular dystrophy are -- they're obviously around the globe, but there are many of them in Europe. And I think the -- probably all of them, all of the big thought leaders in Duchenne will be clinical investigation sites, I think, or the vast majority of them are. So they'll have a great experience. And then, of course, Roche will be responsible for the launch of the therapy across Europe.

Got it. Just I want to go back to the crossover patient data that you guys put out in January. There has been a lot of handwringing about this 1-point, 2-point increase in North Star Ambulatory Assessment. I mean, people were looking for some miracle number, ignoring the age at which they were treated and ages which the outcome was measured. Is there -- what's the feedback that you've received from docs who actually deal with these patients on a daily basis?

It's very positive. So the Street -- I think the Street had -- look, let's be honest. January was a bad time to be putting out data on anything. So people were looking for reasons to be unhappy with data. There was no good basis to believe that, again, it was 1.3 points or versus baseline or 2 points versus natural history wasn't brilliant, and everyone should have looked at that plus the p-value. The sophisticated thought leaders fully understand this. I had a discussion, I won't name him because he didn't give permission, but he was wringing his hands over the same issue saying, "I don't think people understand what we're doing here." You're trying to modify a disease. These kids are going to go through a period the rest of their lives of this ferocious decline. And if you can arrest that decline, then you have done something tremendous. And what is clearly the case in 102 part 2 and we have confirmed it in EMBARK is that we did, in fact, arrest the decline. And in fact, notwithstanding the fact that these kids in this time frame, again, entering at about 7 and exiting about 8 and giving them all of their various baselines would have gone down. They actually went up over that period of time. In the long run, that isn't even our goal. In the long run, our goal can't be to assume that we're going to make kids higher and higher NSAs score year-over-year. It's not reasonable and realistic. What we really want to do and what is the closest thing to a perfect outcome, and I almost say a miracle, but it's not a miracle, it's science-driven, is arresting the decline of this therapy, so that the kids can continue to maintain the functions they have even as they get older and their compatriots that wouldn't be on the therapy would be declining and losing ambulation and then losing the use of their arms and then losing the ability to move their digits and then getting on a ventilator and eventually, we know what will happen to them. So I think that the question that some were asking was just was misinformed. The question really is, have you modified the trajectory of this disease? And the answer with a p-value of 0.009, is yes. Now the only question you might ask is, well, how confident should I be in this propensity weighted matching approach? And there are therapies that are approved on that basis with the FDA. This is not exotic or unusual. And it is very, very rigorous, and it was all prespecified. So I am very excited for what it means for the kids in the study. And I'm very -- I have a lot of conviction around EMBARK, and I see the 102 part 2 data.

You also have that Study 103, where you -- to your earlier point, Sarepta as a company has treated some of the oldest patients and heaviest patient from a dose perspective. What role does 103 play in this potential discussion with the FDA?

They are very significant. So -- because remember, 103 is the commercially representative material. So it gives us 2 benefits. One, of course, we get to look at it and confirm the safety profile and expression and the therapy acts the same way with the commercial process as it did with the clinical process. And of course, the answer to that is it did drive 18x, very similar in every metric, and we've shown some of that data in particular. And that's not overwhelmingly surprising because one of the approaches that we took from a risk mitigation perspective was to move from the clinical approach, which was these hyperstacks, which is something very similar but more scalable, which, of course, is the approach -- the seller's approach that we're taking now. And then we'll also have data from those patients. We'll have data from those patients at 1 year, and that will play a role as part of the large data set of the integrated analysis. Now we have not disclosed that information yet, and the reason for that is that our regulatory colleagues both for purposes of the United States and Europe strongly advised us to first share that with the FDA. And then later, we can share it externally. So we will do just that. But I think 103 is an important part of the package.

Got it. So let's talk about the long-term outlook that you provided during the full year '21 update, $4 billion and $10 billion aspirational targets. Can we sort of now think in terms of how EMBARK has been designed and everything that you have seen so far, what does that mean for the EMBARK study?

Well, at first, I think there's nothing that we've seen since powering EMBARK that does anything but give us more and more conviction around the powering of that study. It's a very well-powered study. It's the largest study of its kind as we all know. It's 120 patients. In fact, of the various choices that we all had in powering that study, 120 was the largest end that we could come up with, and we did that because it was becoming increasingly clear, at least to us, that the obligation was going to fall on Sarepta primarily to treat these kids commercially, and we had to really make sure that we had a study that was well powered. So we feel great about EMBARK right now. Now we just have to get that study fully enrolled, and we'll have the results next year. And at least, we're certainly very confident in what that means, which is that we should be able to file a BLA shortly thereafter and then launch the therapy in the United States and around the world.

So between the neutralizing antibody and the exclusion based on the exons, has that sort of slowed down the process a little bit from an enrollment perspective? Or do you think the enrollment is tracking exactly where you want it to be?

I think enrollment's tracking. One of the things that I have said is that the demand for this therapy is much greater than the actual number of slots in these trials to such an extent that we actually have had to dissuade families from moving from country to try to get into countries where sites will be up. So I don't think from a demand perspective, we're going to have a significant issue. So it's all site activation-related, and we're doing very nicely there. So I think we're on track. Let's go down the road. I thought you might be asking this question, that I might as well answer it, which is sort of what do those exclusions mean for the number of patients that can get this therapy at launch? And I think the answer to that is, right now, we've done both our own screening and then we did a seroprevalence study even though when we do something different than some other companies do, we screen for all binding antibodies. As you know, others in the Duchenne space and gene therapy have actually screened only for neutralizing antibodies. We screen for all binding antibodies, and our screen out rate is around 14% or so. Our seroprevalence even added a little tad small -- lighter than that, but let's assume 14% to 15%. Then we have an exclusion for some of these early mutations. We're being excessively -- likely being excessively conservative on the mutations because we've already dosed 9 children safely in those earlier mutations, so we are going to get a lot of those back in frame with some additional work. And so I think by the time we launch, we're probably talking exclusions between those 2 is probably in the 15% or 16% range of kids, and then the rest should be amenable to gene therapy, SRP-9001.

The BLA discussion with FDA whenever that happens, is there sort of a compromise look there if you go out with, say, a 4- and 5-year-olds until the EMBARK reads out?

Well, yes. I mean, certainly, it's all going to be subject to discussions. I think there is a -- again, I mean to keep saying, I know -- and it's important to remind us it's EMBARK. I really do think EMBARK is a very likely pathway to an approval. But I do believe that we have a very credible argument for accelerated approval, and I actually believe we also have a very credible argument for an accelerated approval of a broad patient population. That's certainly what precedent would have suggested your EXONDYS and Vyondys and AMANDUS are all therapies that restore dystrophin. And we tested them in a smaller subset, 8 to 12 year olds in that case for the purposes of proving out the thesis, but then the label we got was obviously very broad. With that said, it will come down to discussions with the division and whether they're interested in accelerated approval as a pathway and what particular patient population they think is most credibly served by an accelerated approval, I think we could have very productive discussions around that, but our going-in discussion is the thesis of getting all kids made available for accelerated approval. But we'll have to do additional -- a number of additional discussions before we know whether the agency aligns with us on that.

And outside of the propensity-matched, the population, what's more important here for unconditional approval? Is it NSA score? Or is it the expression? Or is it a combination of the 2? Because you can actually -- well, I mean, you can make a claim, but again, I don't know if you have that data, but patients who are underdosed or they clearly had lower expression versus the commercially manufactured batches. Could there be a claim made in terms of directional improvements expression correlating with outcomes?

There's some. Some of that's hard simply because of the small ends that you're going to have with some of that data. I think it's going to be the totality of all of this. So I think expression alone wouldn't be sufficient. I think we need functional -- the functional endpoints. But expression alone isn't the only biomarker that's relevant, either, I should know. So it's -- remember, we have a number of different biomarkers. We've got the expression itself, and there's a lot of different ways to look at expression, which, of course, on western blot, IF, intensity, dystrophin-positive fibers. We can see that it's all properly localized to the sarcolemma. And if the goal here is to support the thesis that this is reasonably likely to predict a clinical benefit, all of that's relevant. On top of that, of course, the dystrophin protein interacts with a thing called the dystrophin-associated protein complex, which is the entire anchoring mechanism at the membrane. The genes that code for those proteins are fine, but those proteins don't exist in abundance at the membrane because there's nowhere for them to attach themselves to. So when you -- as you would predict, if this was functional, when you -- when SRP-9001 is infused and when these kids start making this dystrophin, it not only localizes to the sarcolemma, but actually is associated with an upregulation and beta-Sarcoglycan, and another of the dystrophin-associated protein complex. I think all of that data is relevant, but there's no doubt that NSA is important as well. We wouldn't -- the NSA data is very important, part of the thesis as we talk to the agency.

And for the EMBARK study, from a physician or KOL perspective, is there a threshold for improvement that they would like to see? Or is it just a static signal, right? I mean you could have much bigger improvements in younger patients versus older patients. But what would they really like to see to broadly prescribe this?

I think a sophisticated physician wants to see that they changed the course of the disease, that the kids stabilized. In the long run, remember, like let's think about the entire population. Improvement really isn't even the big goal, the big goal is stopping decline. So one of the most remarkable things about 9001 and it probably is a result of the fact that you're getting these kids during a significant growth phase as well is that we not only see the arrest of decline, we actually see an improvement, which is pretty amazing. I think any of these more sophisticated physicians who really thought this through will be excited to see a strong p-value and a significant difference at 48 weeks because those who have been treating Duchenne for a long time know what that means. It means this kid is going to look very different over time than other kids, and that signal already exists. Again, I would remind us, a small dataset though it may be, the Study 101 kids are now out 4 years. And as I said, they're getting to -- they're starting -- getting in the pretty late single-digit years. I mean they're -- some of these kids are 9 years old and seeing the results that you see in those kids and how they've maintained those benefits out 3 years in 9 years old, gives you a lot of confidence about what this therapy is going to mean to these kids over the long haul.

Next year, you could have your PPMO exon 51 amenable patients readout and you'll have the EMBARK readout at the back end of the year. In the event that you see 5% or, whatever, a high single-digit percent expression, how do you think the commercial dynamics are going to play out for the exon 51 amenable patients versus the patients who might want a -- could also be commendable for gene therapy?

Well, so we don't know with precision yet. I mean I'm excited at the prospect of having this problem. Nothing would make me happier than having a really profound 50, 51, which the signals would suggest we have plus a very profound SRP-9001 and then how patients and physicians are going to think about their kids with respect to exon 51 amenable kids in particular is something we don't know the answer to. In the long run, I mean, there is at least a thesis that you might get maximal benefit by having a gene therapy followed with a long-term profound PPMO. But we have additional work. I think I've said this before. We have additional work to do there to sort of frame that out and at least in preclinical models confirm that there would be a synergistic benefit between having a gene therapy and a PPMO, and then we have the next thorny set of issues that we haven't resolved yet, which is that's all fine, but what does that mean for payers and do you have pharmacoeconomic model that would entice payers to consider both. The one thing I will say, interestingly enough, and this has been some years ago, it was pre-pandemic, is I've had payers approach me about that discussion. Because while I'm not suggesting for a minute they'd be thrilled without additional discussions to pay for 2 different therapies, they at least do like the idea that both of the therapies are controlled by a company that they can actually deal with as opposed to what they have now. So for instance, with respect to Biogen and Novartis, they've got 2 different modalities, but there's no way to talk across those 2 companies about the interaction of those 2 modalities since they're different organizations. So we've got a lot of thinking to do. But I'll say -- I'll end with what I said, which is I hope, I'm excited and I'm optimistic that we're going to have this exact problem, both with 5051 and 9001, 2 very profound therapies treating Duchenne muscular dystrophy.

BioMarin has had discussions with European payers on their hemophilia program. They're basically suggesting it's not going to be out onetime upfront but more sort of pay-as-you-go kind of an approach. How do you think you should -- or how should we think about SRP-9001?

I'm going to have to leave that -- so that -- those decisions are going to be made by our partner, Roche, as they're going to commercialize the therapy and have the payer discussions and HTA discussions, and I'm certainly sure we'll support them. But I'll have to leave it to Roche to sort of have views on that. So I think that really is in their valley width, not ours.

Got it. And have you had the discussion with EMA regarding 5051 for a threshold for -- as a truncated dystrophin expression, which might -- they might be willing to provide an accelerated consideration?

Not recently. And what I do have is by no means enforceable. But I can say, I was at the CHMP hearing on exon and eteplirsen back in 2018. And in the debrief, both with EMA and with our rapporteurs, they were very clear that, that was very close. It was a very close call on the approval of eteplirsen and had we made more dystrophin, and I think actually, the 5% figure was thrown out, again, maybe just informally that it would have been a very different discussion. So I do believe that there is a much greater probability that we could engage with EMA and then CHMP about approvals for our PPMOs, maybe even conditional approvals with our PPMOs if our PPMOs are making something like 5% or more of dystrophin. And as we know, again, early days, we're dosing our pivotal trial. One of the exciting things about Phase I of Momentum that we saw last year was that we saw in a very short period of time over 6% dystrophin. We saw about 8x more dystrophin than EXONDYS. We saw 18x more exon skipping we saw in half the time and at 20% of the dose. So I think there's a lot of reasons that -- a lot of reason to be excited about the PPMOs right now.

So what's sort of the gating factor before you can discuss with CHMP? Do you wait until the study reads out? Or I think everybody wants to see this core franchise go to $1 billion. And the fastest way to get there would be Europe giving the nod at 5051.

Well, yes, I agree with you. I mean I don't know if that's the fast -- on this franchise, yes.

Yes, the core exon skipping franchise.

No doubt. I totally agree with you. We will likely wait until we have expression in hand from for Momentum Part B, which we'll have next year, and that would probably form the basis of our dialogue with the agency, and we'll take some scientific advice. At the same time, we've got to get the rest of the PPMOs moving, of course. One of the reasons we raised money last year was with the success of 5051 in Part A of Momentum, we wanted to get other exons moving as well.

Sorry. So the speed at which you can move with the other PPMOs, what's the gating factor there? I mean, do you have to tune the sequence of the peptides to the specific exon? Or that's a set template, it's just about figuring out other issues?

The good news is really just preclinical work. Preclinical tox work takes time. I mean it's an enormous amount of time. The great news is we already have the constructs built, a lot of them. So as an example, we will -- I think the most -- the nearest term exons that we have built and that we're in preclinical, be exon 45, 52 and 53. And then behind those, we're also still working on Exon 8, 35, 55, 44. So we've got a number of constructs already built, and we got a number of them, particularly 45, 52 and 53, in the process of the preclinical tox work, so we get an IND filed hopefully early next year.

Got it. And on the limb girdle side, it's just the gating factor being manufacturing on the 2E, the focus primarily being on getting DMD to the finish line?

It's really just the time that it takes to build assays. So the irony is it's not really even the manufacturing. We have SRP-9003 material manufacturing. You just can't release it until you have all of the assay work done. So it's really just the assay work. Now the good news is we know exactly what needs to be done. And if there's no sort of significant preventive step here that has to happen, but -- it's really just an engineering process, I mean probably underselling what we have to do. But the fact is it's just the time that it takes to build these assays and then to test them and then, if necessary, to tweak them and to test them again, and that's kind of the process we're in right now.

Got it. And then as we wrap up, gene therapy manufacturing itself is probably the biggest chunk of your R&D spend over the last few years. So when does the P&L stabilize for you guys?

Well, stabilized with the launch of 9001 because then the spend that we have on manufacturing won't go in the R&D line but will go into cost of goods. And obviously, it will be profitable. So it's really the launch of 9001, I think. Ian, do you have any other thoughts on that?

Yes. No, you're right. That's correct. Also, I think what Debjit's also trying to get to is that we will see a decrease in manufacturing in the '24 to '25 time frame. So it lines up with what Doug is saying also. However, because there's such a big ramp to prepare for the launch and all the process development and scale up work for limb girdle, once you get out of that time period, you'll see a tremendous decrease in our R&D spend related to the manufacturing charges.

Got it. Any final thoughts for the rest of us as we map out the second half of 2022?

I think for Sarepta right now, it's all execution. We're in great shape as an organization. I think morale is as great as it's ever been. We're a different company than a lot of biotechs right now, and I don't say that with any kind of schadenfreude. But where others are struggling, I think a lot of the work we've done to today has put us in a position where we're actually growing. For those people who are looking for a great place to work, by the way, anybody that's listening in, this is a great place to work, and we are hiring a lot of scientists, tech ops people. We just got a lot of executing to do. We've got a great pipeline to bring forward, and we're really excited about the therapies we're already serving the community with and the therapies that are in our pivotal trials, 9001 and 5051. So I think we're in good shape.

Awesome. I appreciate the time today, Doug and Ian. Good luck, and hoping to see you guys in person in June on a bus tour.

Thank you very much.

I appreciate it. Thank you so much. -- good afternoon.