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

All right. Welcome, everyone. This is Gavin Clark-Gartner from the Evercore ISI Biotech Research team, and I'm very happy to be here with Doug Ingram, the President and CEO of Sarepta Therapeutics. Doug, thanks for joining us.

Only have 20 minutes for this fireside, so we're going to dive straight into the Q&A. Your first question, focusing on 9001, micro-dystrophin gene therapy for LGMD, starting on the regulatory and clinical aspects, especially with the Study 102, with the initial cohort that was underdosed, have you done any post-hoc analyses to correlate micro-dystrophin expression to functional benefit?

We have done a number of analytics. So first of all, we've done a number of analytics to look broadly at the association of dystrophin production from 9001 generally and then function in other biomarkers and the like, it all looks extraordinarily positive. To attempt to get direct correlations between the amount of expression and function is itself difficult to do for 2 separate reasons. One is just the N this is across the studies, the N comes small enough that is really easy to get that correlation. But the second is that even with respect to 102 Part 1 and the fact that in that first cohort, the percentage of the kids got less than the target dose, still the expression that it got was significant relative broadly to what you would need to see a functional benefit. So they really all were getting above the minimum necessary to see a functional benefit. But broadly speaking, you do see an association between the dystrophin production from 9001 and function. And, of course, if you step back and look across the population versus natural history cohorts or in the case of the 4- and 5-year-olds against placebo, you every single time see a really strongly statistically significant benefit, even in a short 52 week period.

Yes, got it. And then across all of the studies, how consistent was the NSAA benefit across the different items on the scale?

It's good. So 2 different, I think, answers to that. One, broadly across all of the studies, it's all very consistent in that you get a strong and statistically significant benefit. You get that at 1 year. When you tracked 2 years, of course, as the natural history cohort begins to decline away and disease progression would occur naturally, you get this broadening of benefit and then you look at these 101 kids out at 4 years, we're just seeing this stark benefit literally between 9 and 10 points on a 34-point scale. And then if you look inside of the NSAA, since it's a composite score and that may be the question that you're posing, you see a very consistent benefit. What you don't see is like a single domain that drives the issue. You see a broad benefit across the domains.

Great. And then saw this week that your BLA was accepted with priority review. When do you think you'll hear about a potential AdComm and where are you in the preparations for that?

Yes. So first, as we said, we don't know if we'll get an AdComm officially yet. We still haven't gotten the official word on that yet. I'm sure in the cycles along this way, we will find that out. And of course, when it's appropriate, we'll provide that information to the external world. I would say, notwithstanding the fact that we don't have an official word from the FDA about an AdComm, for planning purposes, we're assuming and I think the external world should assume with a high degree of confidence that we're going to get an AdComm. And so we're actually beginning the preparation for an AdComm right now.

Yes, that makes sense. So thinking then about your PDUFA, at least in theory, could there be any situation where the FDA tries to kick the can down the road to get a little bit closer to Phase III top line, maybe they request some additional information that constitutes a major amendment, or I'm just thinking of any other procedural processes that they could play out to wait to see what the Phase III data looks like.

That's then I think a concern or suspicion that at least some external investors have had for quite some time, and we have never had a hint of that intention from the FDA in any of our communications. I think the fact that we announced on Monday that we didn't get the typical review cycle, but we got priority review, should bolster in the minds of our investors the idea that the FDA is not looking essentially to kick the can down the road and take a peek, in EMBARK as an example, before they would grant accelerated approval. And I would also argue that that would -- it would be inconsistent with what both FDA and Congress has been saying within the last year or so about the accelerated approval pathway, which is that in a perfect world Congress has suggested this and FDA has made some comments about this recently, they would love to see companies actually by the time of a BLA approval, having commenced their confirmatory trial. And we've gone one step further. By the time we filed or submitted our BLA for review, we had already commenced our presumed confirmatory trial and had fully dosed it since it's a one-time therapy. And so I think consistent with that and consistent with the goals for accelerated approval both the FDA and Congress and others, I think it would be inconsistent for them to want to wait for the outcome of the confirmatory trial when what they really wanted was for us to start that confirmatory trial at or before the BLA acceptance and review.

Yes. I think that's reasonable. So also looking forward to the future, hypothetically, if you were granted accelerated approval and then the Phase III trial goes on to fail, let's say that the primary endpoint is a P above 0.05 [indiscernible], what data do you think would be kind of the bar to consider removing the drug from the market? I'll phrase it differently. Like if P were 0.1, [ given the government ] are still very supportive especially across those studies, how would you answer this one?

Look, so first of all, we expect accelerated approval, of course. There is a commitment to perform post-approval confirmatory trials, and for us, that will presumably be EMBARK, that is certainly what we're proposing. That's a fairly large placebo-controlled trial and the outcome of that trial is important, and we're very confident about it. Now it's also the case that the benefits that one anticipate from accelerated approval must be eventually confirmed. Presumably that would occur during the confirmatory trial itself. And if they were not ultimately confirmed, then you would envision a scenario where you would pull a therapy off the market. But it isn't whether or not you hit, for instance, stat sig in a single study, the standards are broader standards than that. The real standard that we would be looking at, all of us, both the FDA and Sarepta, is whether at some point in the future, presumably after EMBARK, whether the totality of evidence, both from a safety and efficacy perspective, didn't continue to justify the ongoing distribution and marketing of that therapy. And if the answer to that question was no, it doesn't, then, of course, we shouldn't continue to market it. Do I think that's going to happen? Absolutely not. Do I think the data that we already have brilliantly justifies this therapy? I certainly do. So it would take quite a bit for us to imagine that differently. With respect to EMBARK, I will say, we have an enormous amount of conviction about the success of EMBARK in any event. The powering of that study is well informed by the rich amount of natural history we have, the long history we have with Duchenne and, of course, with the Study 101, Study 102 Part 1, and Study 102 Part 2, and then, of course, Study 103 and a number of cohorts there. And the powering for that study was informed by assumptions that were, generally speaking, very conservative and that powering is well over 90%. So we have an enormous amount of conviction in the outcome of EMBARK.

Have you given us any more details regarding the assumptions about the trial [indiscernible]?

No, we haven't. For competitive reasons, we haven't. I can tell you that it's well informed by our studies. I don't think anyone has the data that we have and the underlying understanding that we have in the natural history [ course ] for Duchenne generally. Certainly no one would have the kind of data we have on SRP-9001 out of Study 101 and 102 and the like. And generally speaking, we took relatively conservative views on that powering when we started the study. We got additional data out of study since the commencement of EMBARK. And they've only made those assumptions more conservative, not less conservative. So as we sit here right now, we'll all get a look at the EMBARK readout, probably right at the end of 2023. But all of us who are close to the study have an enormous amount of confidence and conviction around the outcome of EMBARK.

Yes, got it. Maybe we could just quickly frame the initial market size at launch for the gene therapy. So for the patients that were excluded based on their different exons, what percent of the population is that?

So let's start with the population for Duchenne in United States is somewhere -- prevalent population of somewhere between 12,000 to 15,000 or so. At launch we will be -- we're seeking an approval for the ambulatory patient population. So that's about 50% of all Duchenne patients. Now we have got to work fast to get the label to be expanded to the non-ambulatory population, and we have a plan to do that, start a non-ambulatory -- we've already dosed a number of non-ambulatory patients already and it's gone very well. We're going to start a separate study on non-ambulatory next year, hopefully very early next year. And then we're going to use data out of that to seek a label expansion once EMBARK continues to confirm the value of SRP-9001 with the goal of expanding this label as early into 2024 as possible. At launch, it'd be about 50% of the Duchenne population. Then you've got 2 other areas that one needs to consider from an exclusion perspective. So first is exclusion for preexisting neutralizing antibodies. The good news in the case of the rh74 is that our exclusion for those and the screen out rate for those relative to other vectors is very low, but relative to what we want is still too high. It's about 14%, so you'd have to reduce the initial population by about a 14% exclusion. We're working hard to get the broadest patient population. So we're going to start a study next year using imlifidase with our partner Hansa which we have very good data to give us confidence that we'll get to a place where we could knock down preexisting neutralizing antibodies and fairly rapidly be able to bring into frame kids that would otherwise be excluded. So that 14% or so hopefully will go away relatively rapidly. And then you have the exclusions for certain exons. Now there's 2 exclusions in the trial right now. One is exclusion for 45 deletions, exon 44 amenable kids with exon 45 deletions. That will not have an effect on their availability at launch. That is done because exon 45 deletions have a slightly less severe decline. It's still extraordinarily severe, of course, but a less severe than others. So for reduction in standard deviation and heterogenicity, we've excluded them. But they'll be in the actual label. There's no reason why they wouldn't be in the label. Now currently we have also exclusions from 1 through 17 because of concerns around a potential and native [ nuc ] response to some of the exons in the 1 through 17, but we're well aware that that is more than we actually need from an exclusion perspective. We have already -- when we did these exclusions, we had already dosed 9 children successfully in this range. So we knew there was an opportunity, and we've done a bunch of additional mapping to really narrow the view on what those exclusions ought to be. And then based on that, we've already started a study and are dosing patients inside that range to further reduce that. So if all goes well, by the time we get approved, those exclusions should be reduced to something that will be significantly below 5%. All of which is to say in the short term, we'll be dosing just about half the patients, and in the long-term -- midterm we'll be in a place where we ought to be dosing nearly 100% of the kids. That is at least our aspiration.

Got it. Do you know how strict the FDA will be, based on patient age as aligned with the clinical trials? Any reason to think they could actually allow for a broader age-based label and similarly maybe differently on the payer side, do you know how they may restrict access?

I think the label is going to be very important on the payer side. So that's why we need to really make sure that we get that appropriate label. So first of all, there's a lot of reason to believe that we ought to be able to get what we're asking for, which is a broad label that covers all ambulatory patients. And there's a number of reasons to believe that. First of all, that's the regulations and the statutes provide for that. If there's a presumed mechanism of action that covers a broader patient population than the one you studied, because oftentimes you have to study a narrower patient population to reduce the standard deviation and actually see a treatment effect, you still get through extrapolation of broader patient population. And with respect to Duchenne muscular dystrophy and with respect to shorten the functional dystrophin, there's probably no better amount of precedent than that at the FDA because Exondys, Vyondys, Amondys and Viltepso, all studied a narrower patient population. In the case of our therapies, 8- to 12-year-olds and got a broad coverage for patients across the spectrum in all age groups. With respect to us, we're seeking ambulatory right now and that really was in concert with the discussions from the agency. The initial discussions was perhaps asking for a broad label that would cover all patients, including non-ambulatory patients. We, after some discussions with the agency, determined that we would seek ambulatory now but move very fast to expand that label to non-ambulatory as well. So we feel very confident about our strategy.

Okay. And what about those supply capacity from launch, again, like hypothetically speaking if the demand were there, will you have the capacity to treat 1,000 patients within the first year of launch?

So I won't give the numbers. I'll first say this, the demand is definitely going to be there, okay. This therapy is needed. There is very few diseases that are as ferocious as Duchenne muscular dystrophy and that are in desperate and urgent need of a therapy as quickly as possible as Duchenne. And I won't give exact numbers, I will say 2 things. One, we began our planning in 2018 to be in a position to launch this therapy next year and did all the process development work and analytical development work and got the right amount of capacity and are building inventory to be in a place where we can launch this therapy, even if we're launching alone and if we obviously launch next year, we'll be alone, and then fully service this community. And then on top of that, we made -- our assumptions were that the launch would be very rapid. In fact, we leaned to the rapid launch scenario to ensure that we built the right amount of capacity in the first instance and inventory in the second instance to be in a good position. So I think we're in a good position. We have a lot of work to do. We're building inventory even as we speak, but we should be in a good position to fully service the community if we get approved on our PDUFA date, which is May 29 next year.

Got it. So switching gears here and turning over to 9003 in LGMD2E, what's the current status? I know you're still working on the potency assays. What's the status of engaging with the FDA and when do you think you'll have that next conversation?

We want to engage with the FDA when we're in a position to commence the pivotal trial. We have a lot of experience now with FDA and OTAT with respect to gene therapy, and we're confident that the right approach is to be in a position where you can discuss the development pathway and the CMC at the same time, trying to discuss one in advance of the other is probably less productive. So we really need to get that assay work done, and to your very good point, we're continuing to work on that even as we speak. Our goal is to have all of that done next year to engage with the FDA next year and to commence our pivotal trial in 2023.

What's your latest thoughts on the pivotal trial design? You previously discussed, you may consider doing like a [indiscernible] trial with 2 different subtypes, or are you thinking of just doing a LGMD2E trial separately?

Given where SRP-9003 is, and SRP-9003 is our gene therapy for limb-girdle type 2E where these kids are missing beta-sarcoglycan. We are going to do a [indiscernible] trial. We're going to commence a pivotal trial for 9003, and we're going to propose it with a lot of conviction that the primary endpoint for that trial must be the safe expression of the beta-sarcoglycan protein, which I would remind us it is the sole -- absence of that is the sole reason that these children and young adults are degenerating and dying and that SRP-9003 codes for the native proteins. So we -- at least in our first 2 cohorts, we are with a very good safety profile, profile very similar to 9001, making a very significant amount of the native protein properly localized. So we feel confident that ought to be the pathway to an approval.

Got it. Maybe just one question on the PPMO program in our last couple minutes here. Can you explain how the dose titration was changed this year? So how the titration is done now? And with this new titration, roughly what percent of patients are making it onto the higher versus the lower doses?

Yes. Broadly speaking, so we're titrating them up. We start at 10 milligrams per kilogram for 4 weeks and then they're moved up to 20 milligrams per kilogram and then they're moved to 30 milligrams per kilogram. Between 20 milligrams per kilogram and 30 milligrams per kilogram, by the time -- as they're moved up from the 30 milligrams per kilogram, they're actually randomized, some of them stay at 20 milligrams per kilogram, some of them move up to 30 milligrams per kilogram. As you know, we've seen some instances of hypomagnesemia. If we saw significant hypomagnesemia or Grade 2 hypomagnesemia, they wouldn't move up. But our current assumption is that that's not going to happen very significantly. And so when the titration is over, we should be roughly 50:50 between 2 arms, one at 20 mg/kg, one at 30 mg/kg, and then, of course, we'll look for the safety and then we'll look for expression and see what the difference is between those 2 and make a decision about which of those 2 doses ought to be brought to approval.

Got it. It makes a lot of sense. I think we're just about at time here. So I'm going to call it. Doug, thank you so much for joining us and thanks everyone for listening in. Have a great rest of your day.

Thank you. Thanks for having us.