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

All right. Great, everybody. We're going to get going with the next session. I'm Matthew Harrison, one of the Biotech Analysts here at Morgan Stanley. Very pleased to have Doug Ingram, the CEO of Sarepta with me for the next session. Just briefly before we get started, I have to read a disclosure statement. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at morganstanley.com/researchdisclosures. Doug has promised that he is going to read the FDA communication for us. That will entail the entire session. No, sorry.

So Doug, I mean, I guess, look, maybe the first place to start is you've obviously had a bunch of back and forth. I think you've been public about sort of the commentary. I guess, maybe just walk us through what the rest of the fall looks like leading up to the filing and what you need to do?

Sure. It's fairly straightforward. So yes, I mean, I think we have discussed the background, we spent some number of months having a dialogue with our colleagues at OTAT, including CDER leadership, then including Office of New Drugs and neuro and got to a place where we had written confirmation that gave us confidence that we could submit for a BLA. And it would be well received and there would be a substantive review. So the first thing we need to do is submit that BLA. That is not -- that's no mean feat. That's a significant amount of work. I said that we'll have that submitted by the fall, which is a fairly ambiguous statement. We are in the fall now. So it will be sometime late September to probably early October in that range when we'll submit the BLA. The FDA has 60 days to consider and accept it for filing. So that -- if all goes well, let's assume September 30 is the filing date somewhere around the end of November, to maybe the very beginning of December, we would have a filing. We'd certainly let the world know that, that was the case. Then that sort of through this year and then, of course, the review starts. And then if you want me to just kind of lead a little bit further, just have time lines. We don't have written confirmation from the FDA that we're going to get an AdCom, but I think it's reasonable to assume that we get an AdCom. And if you assume a priority review and AdCom on that basis, you would assume it will be some time in the April timeframe. And then we would have a PDUFA date in around May, depending on when we submit.

Okay, great. So then that leads to the, I guess, the probably 2 next questions that you get, which is, one, how should we think about the Phase 3 study? How should we think about EMBARK? How should we think about enrollment in EMBARK and what that means in terms of when you have that data relative to that timeline that you just laid out?

Yes. So EMBARK is fully enrolled, I'm happy to say. So EMBARK's fully enrolled. So we would assume a readout in EMBARK in the -- probably in the fourth quarter of next year. And that -- and EMBARK would form the basis of our confirmatory trial, assuming that we get a BLA on the base of accelerated approval next May. So that's [indiscernible] BLA would be submitted for the ambulatory population.

And then obviously, the other second follow-up question of that is an accelerated approval would likely be based on a surrogate endpoint, obviously. And maybe you could just give us a little bit more insight into what you think the debate may or may not be about use of the surrogate endpoint in this population, especially with gene therapy, presumably because you've had data on surrogate endpoint with your gene therapy for a while now. So what do you think has changed, at least from a regulatory standpoint and their willingness to maybe think about that now?

Well, this -- I think that it's the totality of evidence, including, of course, the data on Study 103, which is very important. The 103 cohort, which is 20 patients because again, I'm going to editorialize, fantastic data, that was the commercial process material. So that's the actual material we're going to launch with. So I think that was an important predicate. On the surrogacy of truncated dystrophin, and that's what this is. It's internally -- a form of internally truncated dystrophin, there's already plenty of precedents at the FDA on the use of internally truncated but functional dystrophin as a surrogate endpoint reasonably likely to predict clinical benefit. We've got that with EXONDYS and VYONDYS and AMONDYS and of course, VILTEPSO and as pharma therapy. And so -- and I would just -- I would argue that the data is extremely compelling in my view on that. So I think then that will be, I think, the primary discussion for the review will just be -- will be the sort of more of the discussion that we've had into the BLA submission and filing itself, which is the data that we have, how did we design this, what the background natural history looks like from these kind of highly truncated but functional forms of dystrophin. I think as everybody knows, this was all -- this all began with a case study of a 61-year-old ambulatory patient who had a very significant internal deletion and truncation where I think it was about 50% or so truncated. And then we look to all the -- we said that's how we designed it, then, of course, all the preclinical work and the animal work, all showing the functionality of this therapy, and then we go to the very significant, I would argue, amount of clinical data that we have even before EMBARK on the benefits of this therapy, which are consistent across functional endpoints, biomarkers, restoration of the DAPC, effect on the CK levels in these kids. I think it will -- that will be the basis of the review. We feel like we're in a great position to have that discussion, of course.

And maybe just specifically on 103, what do you think -- or maybe it's everything, but was there anything specifically on 103 that you think really made the regulators take notice?

Well, I think it was the totality of evidence. And I really think it was the totality of all of this evidence. You see a very consistent impact of this therapy on patients. And you see it in a very -- if you think about it, 52 weeks or in the case of our earlier studies, 48 weeks, is a very early timeframe to be looking for a functional benefit and to be able to sort of profoundly see that functional benefit in that short period of time is pretty impressive. And then you see it on NSAA, you see the subparts of NSAA, you see it in the time test. And then you see that it grows over time. You saw the 2-year data, you see a 2 to 3-plus points. In one year, you go out; 2 years, you see 5 points, you go out to these small cohort though it is, you get out to 4 years with these kids and Study 101, which I think is very compelling. These kids are now 4 years out there, on average, 9.2 years, they are -- as you would expect from a disease-modifying therapy, they're just doing brilliant compared to their own baseline, just 7 points above their own baselines. They're nearly 10 points above natural history when you use a propensity match natural history cohort. And they have been -- they're in what -- which should be one of the most significant decline phases of Duchenne and they've been rock solid, stable for the last few years. So I think if you look at all of that together, then you look at all the other ancillary, additional benefit, you look at the restoration of the dystrophin associated protein complex, the consistent impact and reduction on CK levels. And then you look at the natural history, I think that it's all very compelling.

I guess there are probably 2 natural follow-ups. The first is, when you outlined the timeline, so let's say, we get Phase 3 EMBARK data, 6 months round numbers, right, 6, 7 months after a potential PDUFA date. So one of the questions that I get asked a lot is, well, gosh, that sounds pretty close to granting an accelerated approval, and then you're going to have definitive evidence one way or the other, pretty quick from them. Why does the regulator take that risk or how do they think about that risk? Why don't they just ask you to wait 6 months?

Well, first things first, these kids can't wait. So let's start with that. So I think there's probably a number of different things to think about. The first thing, of course, is these kids can't wait. Every single day, they get up, there's 10,000 kids or more in the United States that have Duchenne Muscular Dystrophy. They're going to lose muscle. The 9001 is not going to bring back. That's not what it does. So there is a compelling need, 6 months may seem like a short time, but it's a lifetime in the lives of these kids. The second thing, of course, is that we have a -- we deserve it. I mean the data in my view, is compelling. The precedent makes it compelling as well. And so I think we deserve it. The next thing I'd say is that this is exactly what everybody says they want. This is -- if you think about it, right, one of the unnecessary controversies that's occurred around accelerated approval recently is this idea that you need to make sure that people are going to complete their confirmatory trial certainly. And that there's even been this sort of move afoot to try to ensure that companies have their confirmatory trial underway at the time of their BLA. We're more than underway. We have our confirmatory trial fully enrolled by right now. So I would argue this is exactly what the FDA and others should want from an accelerated approval. It's kind of a quintessential accelerated approval in that regard. And then the final thing I might say is that this isn't -- gene therapy is probably -- although there's never been an accelerated approval for gene therapy yet or even an entertainment of accelerated approval, it's a really, I would argue, a good place to have an accelerated approval because it's a onetime therapy. So in the event that you wanted to make some decision later, I do not at all believe this is within the realm of possibility. But theoretically, you had to make some decision to pull a therapy because of the non-confirmation of benefits. It's not -- it's much easier to do with a onetime therapy. You're not pulling patients who believe they're getting a benefit off of an existing chronic therapy or just informing the company to stop dosing kids in the future. So to my mind, this is a brilliant opportunity to reinforce the value of accelerated approval and a really, I would argue, compelling way. And we need that because accelerated approvals has saved a lot of lives. I mean think about HIV and think about cancer and think about Duchenne with our PMOs.

Okay, great. Can we briefly just talk about Europe? What does the path look like in Europe? And obviously, I know you have a partner in Roche, and they're sort of leading efforts there. But given that you have some path forward in the U.S. for an accelerated filing, is it something to consider that, that could happen in Europe as well?

I know our colleague. So Roche is going to drive this, and I want to be careful not to step on their toes or put words in their mouth. I am quite confident that our colleagues at Roche want to move as fast as reasonably possible. They, I suspect, will need the EMBARK data, if not for approval for HTA purposes, right, in Europe and some other places around the world, the approval of the start, not the end. You've got to also get the right pricing and access and those sorts of issues. So I'm going to let them lead that, but I'm sure they're going to think as creatively as possible, but I'm confident they're going to want the EMBARK data in hand. It's the time that they're talking to HTAs.

Okay. Okay. Obviously, one of the other key components of approval time lines is CMC, something we have less visibility into than maybe you do. So maybe just a broad question to start us off is just where are you with CMC? Where are you with what you need from a CMC perspective to file? And then maybe we can sort of talk some of the other issues there?

Yes. Well, we're obviously, we're in a good place from having a sufficient CMC to file because we're going to submit very, very soon in the next few weeks maximum. To remind everyone, summer before last, we engaged with the FDA about the commencement of our study EMBARK, which is the Phase 3 study and now will form the basis of our confirmatory trial. And the requirement in connection with the commencement of that trial is that the CMC was in a very advanced phase. So frankly, by the time we started to EMBARK, we were in great shape. We already had our cell-based potency assay. It was performing very well. All of the other assays were performing very well. So we're in a -- I'm sure that CMC will be a big part of the review as of course, it always is with biologics and with gene therapy, but we're in very good shape from a CMC perspective.

And from a facility standpoint, have any of those facilities been recently inspected? I'm just trying to think about if you think broadly about gene therapy approvals to the extent there have been some CMC, even if the clinical stuff is okay, CMC can tend to delay coming to market sometime substantially. So what do we know about the facilities and their readiness?

Well, our primary supplier -- our sole supplier at time of launch will be Catalent. I think they're doing a wonderful job right now. They have -- to the best of my knowledge we haven't had a pre-approval inspection yet. Presumably, we'll have that during the pendency under the BLA, but I'm confident about where we're going to be, and we're very close with Catalent. It's not -- this is not a typical CDMO concept where you essentially -- there's not a small molecule. They're not throwing something over a wallet as and giving us supply. We're intimately involved. In fact, we play an intimate role in process development and analytical development. So I think we're in good shape. And again, the interesting thing is that we were in good shape at the commencement of EMBARK. So I think we should be in very good shape for our BLA review and discussions with the agency on the CMC side.

Okay. And do we know -- sorry to stay on this issue. But the Catalent facility, do you know if the facility has recently been inspected for other issues?

I don't.

Okay. That's okay. And then remind us -- so Catalent's first Brammer comes on at what point in the?

So Catalent will -- so at launch, we're going to be solely Catalent for just the practical reasons, which is we don't want the idea of trying to get -- getting equivalency at a second site would just be too much uncertainty at the time of launch, and we didn't want to create any delay. So we've built ourselves in a position where you just -- we can ignore our other colleagues over Thermo Fisher now, ignore Thermo Fisher. We can launch and fully serve the launch in the U.S. and Europe and other select countries in Japan out of the Catalent facilities, we've taken enough suites. We have facilities in Lexington with Thermo and we'll work on that post approval. So we have -- we're not creating risk for the launch or for the BLA review or the like, then we'll work on getting that facility up and running and supporting us.

And when you talk about being able to meet launch demand, are you willing to give us any sort of sense of what that means?

All I'll say is this, I don't want to give details on it. I mean, we feel very comfortable about where we are and our ability to -- we're going to build a bunch of inventory between now and this year and the launch. I think our launch plans and our sort of strategic plan and assumptions for the steepness of this launch are probably on the high side, probably higher -- maybe even higher than would be reasonable. And we did that on purpose so that we didn't find ourselves in a position where we were unable to serve the community if indeed, the launch was extraordinarily robust. So I think we'll be in good shape both for us and for our partner, Roche.

Okay. I guess I mean, it is a little bit far field, but I think something people are starting to think about, which is then what's the -- so let's just assume you're approved, we talked about launch capacity. What's the actual throughput of the system itself? How many patient physicians actually be able to dose? And what are some of the limitations to that? Because this obviously, to your point, it's not a small molecule, right? There -- you can't just sort of hand it to someone and walk away.

No. So I'll give you -- I'm not going to give detailed numbers, but I'll give you sort of broad strokes. We need to be in a position. So what are the limitations? The limitations, I think, to this launch are -- first of all, it's not going to be demand. It's not going to be demand. I think any reasonable Duchenne patient is likely going to want to get on this therapy, and it's not going to be demand from a thought leader physician perspective, I think physicians are going to want to get their therapies. So it's going to be -- so obviously, access and reimbursement is a big issue, and we're doing a lot of work on that now. So we'll be in a position to fully support it. And then from a launch readiness perspective, and site readiness perspective, we want to have 70. So our goal right now is to have 70 sites expert and ready to go at launch to support the launch. And that would be a very robust launch and we can get that out. That would be the most significant number of sites thus far. Now certainly, our colleagues over at Novartis and Zolgensma has done a good job of helping us on that because a lot of these sites, there'll be more than, I think, Novartis and Zolgensma have today, but a lot of these sites already have an enormous amount of experience now because of Zolgensma so we'll just keep building on top of that. But our goal by the time of launch is to get 70 sites up and running an expert in this.

Okay. Is there an update to 102 that we should expect to see sometime this year? And I guess how does that -- because I think there's 2-year data there, how does that play into the sort of -- the regulators been interested in that? Is that going to be part of the filing or not? How should people think about 102 in the context of the filing?

We wanted the data on that, I don't think until next year. I'm sure if the data comes in during the pendency of BLA, we would provide it to the division, and they'll get everything. We're probably not focusing on our prioritizing public disclosures of additional data pools for the simple reason that we're now going to focus on getting this therapy approved and getting it launched and serving patients.

Okay. Okay, good. I guess maybe last question around this is just on EMBARK. And I think more about study powering. And I think broadly, just investors are still trying to assess the risk associated with EMBARK or how to think about the potential risk associated with EMBARK. So if you were in their shoes, what would be the factors that you would be thinking about or what would you encourage people to think about that's giving you a high degree of confidence here?

Well, we powered EMBARK conservatively. We -- the assumptions that go into empowering that's really the -- without getting detail on. We haven't provided the detail on it for competitive reasons. But the powering assumptions we made and the assumptions that align the powering were conservative. And in fact, we're not updated by the most recent data that we have. The most recent data we have would increase our power. So obviously, you know the broad things you look at, you're going to look at the standard deviation and you're going to look at the effect size and the like. And we were very conservative on both, our current results that we've seen most recently would suggest that EMBARK was actually the assumptions were actually modest. And under this modest approach, we were well above 90% powering. And now we're at the high 90s with the current data. So again, it's a clinical trial, and we'll get to see this at the end of next year, but we certainly have an enormous amount of confidence and conviction around the [indiscernible] advance study.

Okay. Okay, great. So I don't want to spend all the time here because you've got other stuff you're working on. Maybe we can talk about PPMO for a little bit. So obviously, you had a bit of a hiccup, but now hopefully back on track there. So just remind people about timelines because I think it's gotten a little bit lost in the context of everything else and what the path forward with PPMO looks like?

Yes. So just to remind everybody with respect to the PPMO so we had actually seen this in advance of the commencement of our current trial MOMENTUM. We'd seen cases of hypomagnesemia. We commenced MOMENTUM. We saw additional SAE around hypomagnesemia. The FDA placed us on clinical hold to ask questions about the monitoring and management of hypomagnesemia and that delayed dosing in the United States. At the same time, however, we were dosing outside of the United States. Our goal has always been to have MOMENTUM Part B fully dosed by the end of this year. Even in the absence of that clinical hold being resolved, we would have finished by the end of this year. But we just, as you know, recently announced that the FDA has taken us off of clinical hold. They put us on clinical hold, asked for a significant number of detailed questions about the monitoring program and the cases that we've seen. And then on that basis, asked for some additional biomarkers and otherwise took us off. So MOMENTUM Part B will fully enroll by the end of this year. Our goal and certainly consistent with the precedent that exists at the FDA, our goal would be to seek an accelerated approval on the basis of expression and safety in the event that as what we've seen in Part A of MOMENTUM bears out in Part B, and that should occur next year. Sometime we should be able to approach the agency about an accelerated approval filing in 2023. And just to remind everybody, what did we see in Part A? Again, relatively small cohort of patients, but what we saw was very, very encouraging. We saw versus EXONDYS, we saw 18x more exon-skipping. We saw nearly an order of magnitude about 8x more dystrophin production, and we saw it at 20% of the dose and half the time. So we have a lot of conviction around the 5051, which is our lead PPMO and we're doing a bunch of work on the rest of that portfolio as well.

What happens to the -- broadly speaking, the exon-skipping therapies assuming gene therapy is approved and launched and available?

So I mean there's a lot of uncertainty around exactly what's going to happen. I'll give you sort of -- I believe that there's going to be room for gene therapy and either the PMO or if it's successful, the PPMO. But I will also tell you because I'm also a very optimistic human being about the benefits of all these therapies. Our strategic plan assumes an enormous amount of cannibalization. So it's not unreasonable to envision that the gene therapy will significantly cannibalize PMO or if it's successful PPMO sales. How that will actually work is we're going to see as we kind of track forward with the therapy, why do I have some optimism that, that may not be -- that our strategic plan might be conservative in that regard. And there's a number of reasons. First, just scientifically, and we're doing the work on it now, there may very well be an enormous value of having these 2 therapies together. There's already data and there's already a literature -- peer-review literature out there independent of us, [ Dr. Voit ] over in London, did a study where he showed at least in a rat model that pre-treating with the PPMO would enhance the effects of gene therapy. So that's very interesting. And then the co-administration of these therapies may be very beneficial. We need to do more work on that before we even know whether there's something there. And then, of course, there's a separate question behind all that, which is access and reimbursement and the like. But if we look across, again, anecdotally, we look across over at SMA you do seem to see a fairly significant amount of co-administration of gene therapy and then a follow-up with the RNA therapy. So I think there is a possibility.

Differential tissue penetration into different cardiac tissue as an example or peripheral muscle or something like that for gene therapy compared to some of the exon skippers. Is that?

Yes. Probably the most significant -- so the great thing about gene therapy is it gets everywhere. Now we haven't been able to look at cardiac muscle for these kids, as you can well imagine, but we've looked at it in animal models, and we actually get even modestly greater expression in the cardiac muscle. That's brilliant. Where gene therapy doesn't go or even if it goes, it doesn't turn on, this promoter isn't specific to smooth muscle. So that's where you could envision in addition to maybe the combination at the muscle membrane of a striated muscle. In smooth muscle, there may be a value to having an ongoing PPMO or PMO treatment with a very successful gene therapy. Smooth muscle hasn't been the issue for DMD kids, but that's because to be direct, they die and they die before that becomes a major issue. But if we're able to greatly extend the lives of kids with Duchenne Muscular Dystrophy, we're not talking about kids with DMD anymore. We're talking about people with DMD and adults with DMD. In my world view, maybe seniors with DMD then I think the idea of worrying about smooth muscle is going to be particularly important.

Okay. Okay. Maybe in the last minute or 2, just update on limb-girdles, manufacturing and timeline updates there?

Yes. So very excited about the limb-girdles, frustrated that it takes so long, but it's all CMC. So we're working on all of our limb-girdle programs right now to remind you, limb-girdle is a big umbrella name for a bunch of different diseases, over 30 of them. We have -- the 6 that we have internally cover about 70% of all of limb-girdles. And we've got brilliant results out of our first therapy, which is 9003. We need to move it and the rest of our programs forward from a CMC perspective. So the delay right now is all analytical development, just trying to get -- it's not process development interestingly enough. It's analytical development and assay development. And then our goal is to start -- we're going to start -- we'll start at least one trial for 9003 before the end of this year, probably start another trial next year. And then with respect to dysferl and so dysferlinopathy is one of the largest limb-girdle muscular dystrophies. The dysferl also is a very large gene. And so we've taken a different approach with dysferl and it's actually a dual vector approach. You literally divide the gene in 2 in a very elegant way, comes together in situ and then creates a full-length wild-type gene that makes a wild-type protein. So we're going to do a proof-of-concept study on that at the end of this year using clinical material from Nationwide Children's Hospital. So a lot to do in limb-girdle, very excited about it. We've got to get a lot of CMC work done before we can get these clinical trials.

And maybe just in the last minute here, remind people what's the regulatory outlook there in terms of?

Well, we've got to have that discussion with the agency. We've got theoretical discussions with the agency. We have to have a real tangible discussion with the agency, but that requires a CMC to be in the right place. And at least from my perspective, that has to be an accelerated approval pathway, just has to be. And that's not simply for limb-girdle. That goes for rare and ultra-rare diseases generally. We've got -- when you're dealing with a native protein and a monogenic disease characterized by death associated with a missing protein. And you can restore the wild-type protein as robustly as we can, and we've seen that with 9003, I mean these -- we've got to get to a place where we can elegantly get to an accelerated approval with a follow-up registration or confirmatory trial, and that's got to be our goal. But we have to amp those discussions with the agency.

Great, Doug, thanks for being here. Appreciate it.

Thank you Matthew. Really appreciate it.