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

Good morning, and welcome to the Sarepta Therapeutics, our latest label update call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to hand the call over to Mary Jenkins, Associate Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Tanya, and thank you all for joining today's call. I'd like to note that during this call, we will be making a number of forward-looking statements. Please take a moment to review our slide on the webcast, which contains our forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements, and any such risks can materially and adversely affect the business, the results of operations and trading prices for Sarepta's common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent annual report on Form 10-Q filed with the SEC as well as the company's other SEC filings. The company does not undertake any obligation to publicly update its forward-looking statements provided today based on subsequent events or circumstances. And now I'll turn the call over to our President and CEO, Doug Ingram. Doug?

Thank you, Mary, and good morning, everybody, and thank you all for joining us to discuss the FDA's decision to expand the availability of our Duchenne gene therapy, ELEVIDYS to cover the vast majority of those with Duchenne muscular dystrophy in the United States. After a thorough scientific review that critically considered all of the available evidence across multiple studies, the FDA concluded the following: The clinical benefits of ELEVIDYS in ambulatory patients has been confirmed by our double-blind, placebo-controlled study EMBARK and related studies and thus, traditional approval is granted to all ambulatory Duchenne patients 4-years and older. Second, the ELEVIDYS dystrophin expressed by our therapy is reasonably likely to confer clinical benefit in nonambulatory patients. As a result, accelerated approval has been granted for the treatment of nonambulatory patients. In summary, all age restrictions for individuals aged 4 and above are removed as are restrictions related to ambulation that previously existed in the label. The accelerated approval for nonambulatory patients comes with a post-marketing commitment to confirm the clinical benefit, which we intend to address our nonambulatory, late ambulatory study 303, also known as ENVISION. In the interest of time, I will not review all of the data supporting the expanded label, and I would direct those interested to the FDA's decisional memo, but allow me to linger for a moment on the amount of evidence supporting the FDA's approval. Confirming the strong biological rationale and preclinical evidence for ELEVIDYS are 4 studies, covering 218 patients spanning the broadest range of both weights and ages of any Duchenne therapy approved to date. In fact, we have dosed more nonambulatory patients to support our approval than the trials for all other approved Duchenne therapies to date. In our most recent randomized double-blind placebo-controlled study EMBARK in a short 52-week period, those treated with ELEVIDYS exhibited a remarkable arrest of decline with ELEVIDYS treated boys performing substantially better than untreated boys on key timed tests, including time to rise from floor, 10-meter walk run, 4-stair climb. For instance, the benefit observed on rise from floor is associated with more than a 90% reduction in the risk of early loss of ambulation. Treated boys also performed significantly better on SV95C, an endpoint already endorsed by the European Medicines Agency and associated with the very first wearable used in a Duchenne pivotal trial. Our prespecified global statistical analysis, which considers the primary and all secondary endpoints as a whole, also supported the benefit of treatment. Those treated with ELEVIDYS also showed impressive benefits on biomarkers, including a reduction in CK and enzyme associated with muscle damage, and on MRI of muscle versus fat fraction, an important marker of muscle health despite the modest time on therapy. We look forward to presenting the biomarker data and an upcoming scientific conference. Now the importance of this expansion to the lives of Duchenne patients can hardly be overstated. This represents the most significant advancement yet in our fight to bring a longer, better life to Duchenne patients. It also represents a major moment for the field of gene therapy, reflecting the transformative potential of gene therapy to address life-limiting and life-ending rare genetic disease. I am confident that all honorable and scientifically minded people will join me in a moment of celebration, both for the Duchenne community who have been waiting far too long for a therapy like this and for the triumph of science. With this expansion, ELEVIDYS is potentially available to approximately 80% or more of all diagnosed Duchenne patients. This is a fantastic moment but we will still continue our work to generate the data to satisfy our post-marketing commitments but also to generate the evidence necessary to evaluate extending the benefits of ELEVIDYS to that minority of patients ineligible for therapy today. So first, to potentially address the 15% or so in patients who are screened out for pre-existing antibodies, we have commenced the study to knock down antibodies with imlifidase, and we're going to commence a study to clear antibodies with plasmapheresis soon. To confirm the results necessary to transform a nonambulatory approval from accelerated to traditional we have already commenced ENVISION. We have completed enrollment in the United States and we're on track to completing enrollment outside of the United States as well. Our current approval covers all patients 4 years and older. Today, few boys are diagnosed below the age of 4, so that lower limit does not represent a meaningful and practical restriction. However, we do believe that boys below the age of 4 may safely benefit from early intervention and we are working on a newborn screening project that could someday make this important and possible. So to support this, we have already dosed patients as young as 2 years old and with our partner, Roche, we are executing Study 302 to gain experience dosing patients as young as 3 months, with an eye to updating the label assuming the evidence supports it. And finally, ELEVIDYS cannot currently be made available to that very rare number of patients who have DMD gene mutations that span exon 8 and 9 as those exons are associated with a risk of an innate immune response. We continue to do the work in an effort to better characterize this risk with the hope of further narrowing the exclusion if possible in the future. Turning to commercial performance. I do not intend to update our forecast today but we will discuss our forecast and commercial performance at our upcoming second quarter earnings call. As you may recall, at the launch of ELEVIDYS last year, we noted that the patient journey from START Form to infusion is typically 3 months or more. However, addressing the need to dose before the age out of a very narrow label, Sarepta physicians and payers worked together to ensure we left no child behind and our average time from START Form to infusion was unusually short after our initial approval. With an expanded label and the removal of tight age restriction, we anticipate physicians and others will be moving out of crisis mode and the time from START Form to infusion should become more standard and consistent with our prior guidance. Now as noted, we will provide more insight on our commercial performance in our upcoming earnings call. But what will come as no surprise to anyone, I would assume, is that with this label expansion, the opportunity to do good for patients is immense and also the commercial opportunity is absolutely immense. It should also not surprise anyone that Sarepta is well prepared and uniquely positioned to make this expanded launch a success. With 4 successful launches and compounded annual revenue growth of 115% from the beginning of 2017, there is simply no organization, better suited to execute on this opportunity than Sarepta. All of our plans have been built with this broad label, frankly, as our base case in all regards from site-readiness to field-readiness, to supply chain, to manufacturing to manufacturing capacity, to access and reimbursement, we are very well prepared for this launch. Now as you know, we set the price for ELEVIDYS in June of 2023. And certainly, with an expanded label and the overall increase in patient weights, one could have imagined that you would consider a price increase to cover that increased cost of goods. We have rejected that option and we have no intention of modifying our price. As you will recall, we have gone much further than most in supporting ELEVIDYS with a thoughtful cost-effectiveness model. In fact, in May of 2023, the ELEVIDYS cost-effectiveness analysis was published in the highly respected peer-reviewed Journal of Market Access & Health Policy in an article that's entitled Assessing The Value Of Delandistrogene moxeparvovec gene therapy in patients with Duchenne muscular dystrophy in the United States, a detailed cost-effectiveness model for SRP-9001. The published cost-effectiveness analysis employed an evidence-based pharmacoeconomic model to project long-term health outcomes by extrapolating clinical trial data, leveraging clinical and health economic expertise and employing peer-reviewed scientific literature to assess the value of ELEVIDYS. That evaluation predicts that compared to corticosteroids and medical management alone, treatment with ELEVIDYS would result in 26.4 undiscounted equal value of life years gained or 10.3% discounted equal value of life years gained to individuals with Duchenne. The publication concludes that ELEVIDYS is cost effective at a price of $5 million and as much as $13 million when accounting for the severity of Duchenne and the innovation of single administration gene therapies. And of course, as you know, we priced ELEVIDYS substantially below the bottom of that analysis, and we remain very confident in that decision. Additionally, we have conducted a detailed budget impact analysis. And with an expanded label, the budgetary impact of ELEVIDYS will be quite modest. The per member per month cost of ELEVIDYS is significantly less than $1 in the short run. It decreases to $0.03 in the midterm and then becomes a net cost savings in the out years. And you should know this is a feature of gene therapy. This is an inverse budgetary situation in contrast the chronic therapy costs, which typically increase over time. Physician and patient interest and demand will be significant. And we are ready to serve the community in the United States immediately as our partner, Roche, prepares to serve the community outside of the United States. So let me summarize. For Sarepta and for me personally, this moment represents a long nonlinear 7-year journey, one that commenced with a lofty ambition to become the leaders in gene therapy and to make this therapy available to the majority of those who are living with and being harmed by Duchenne daily. That journey involved many moments of triumph but also many setbacks to overcome, and we did overcome. But this journey actually started long before that. Dr. Louise Rodino-Klapac and Jerry Mendell at Nationwide Children's Hospital, began the long process of designing, testing, redesigning, testing, optimizing what eventually became ELEVIDYS literally 20 or so years ago. The unique therapy that we have today, one that is different in nearly every regard from capsid, to promoter to gene cassette from any other therapy and 1 that enjoys a unique and laudable safety and efficacy profile, all came down to this multi-decade commitment to getting this one-of-a-kind therapy right. On behalf of all who have participated and all who will benefit from this work, I would like to give a huge thank you to Dr. Louise Rodino-Klapac and Jerry Mendell. Working with you both has been one of the greatest honors of my professional career, and I know that I am not alone in feeling that way. I would also like to thank the extraordinary cross-functional team of Sarepta professionals. I am proud not only of your results but of the special Sarepta culture you represent, one that speaks of courage, end of tenacity and the patient focus, and the brilliant signs. We often say that Sarepta is not for everyone. And that is true. One has to be pretty special to be part of this trial. So thank you. I would also like to thank all of our external advisers and clinical investigators for their hard work and dedication. But finally, I would like to end with a very special thank you to the Duchenne community and the courageous families who chose to participate in our studies that support this approval. Your dedication benefits the broader Duchenne community. And I would also like to thank the broader Duchenne community. You have had to wait a very long time for this moment. And I want to thank you all for your perseverance and for your support and for your guidance and for your insight. And let me reaffirm to you a commitment I made nearly 7 years ago, regardless of obstacles Sarepta will drag tomorrow into today for you. And this concludes my prepared remarks. So operator, I would ask that you open the line for some Q&A.

[Operator Instructions] And our first question will be coming from Tazeen Ahmad of Bank of America.

Congratulations on the extended label approval. I know this has been a long time coming. I wanted to get a better sense, Doug, if you could, about supply, so you got -- pretty much brought a label that most would have thought you can't get. And you have, in recent past, been talking about setting expectations for supply constraints, I don't know if that's the right word. But could you give us a sense as of today, you've treated a number of patients already based on the trail that you're on and what you would expect to see going forward? How much of an impact is supply going to have on the trends of uptake going forward?

Yes. Tazeen, thank you very much for your questions and for your support. First of all, I understand this. We have been planning for this moment for a very long time. And even -- and to the frustration sometimes of a lot of folks internally, we have demanded them ourselves that we'd be prepared for the broadest possible opportunities so that we would not leave patients waiting in the event that we had the success that we received yesterday. So we are in great shape to launch this therapy. We do not anticipate any near-term supply constraint, and we'll be able to robustly launch this. Over the longer term, one will look to things like the capacity, site capacity and manufacturing capacity in the outer years. But as it stands right now at launch, there will be no constraints. This will -- we're in great shape to launch this therapy, doing well. Talking about manufacturing, this isn't exactly your question, but just I'll say note, we're very excited about the eventual transition to suspension. We're working on a suspension process. We've already done engineering runs up to 2,000 liters. And out in the outer years, we're very excited about that as we move outside of the United States to a broader and broader population. That will give us not only more material down the road years from now but it will also significantly reduce the cost of goods, which will be very helpful as we move to certain places around the world. So we're in great shape. We're in great shape for this launch, there's nothing -- we're not caught unawares. This has been our plan. I mean, I'd tell you, just again, not to sort of [ ramp ] for a second. Like we had a some -- maybe a month ago, we had our sales meeting to prepare ourselves, our educational meeting, and we prepared for the broadest possible success that we were never caught out by success. So we're in good shape for this launch.

And our next question will be coming from Gena Wang of Barclays.

I will also ask 1 question regarding the manufacturing capacity. I think, Doug, before you switch to suspension system, right now, you are using iCELLis 500 and our calculation roughly 100 patients from each iCELLis 500 machine for 1 year. So just wondering, if only focusing on iCELLis 500, like what is your goal of the maximum capacity? And how do you prioritize patient population?

So there is information that we haven't provided. We're using as a metric revenue over time, so we're not providing any detail on the number of iCELLis units we have and the like but I can assure you that we are not only well prepared for this launch but well prepared to serve the community with the manufacturing capacity that we have. That will not be a constraint at our launch. We're very comfortable with where we are. So we're in good shape.

Our next question will be coming from Salveen Richter of Goldman Sachs.

Let me add my congratulations here on the approval. Can you help us understand how many patients can be treated at a given site and the natural constraints in place there as you look to launch this drug in the broader population?

Yes. I mean, it's a tough question to fully answer because you have to remember, every site has potentially multiple infusing physicians. So there's always some level of constraint by site but some sites maybe have a few physicians, some site can maybe more. And so it's not sort of a 1 site answer. The good news is, just to give you the broadest of strokes, is, as you may recall, when we were sort of thinking aspirationally about the launch of this therapy a few years ago, in fact, really starting in 2018, we had this ambition. And the ambition, which was a pretty significant one at the time was we wanted to have at launch 50 sites that could be infusing. And that was a big ambition because that was more than any other gene therapy launch it ever had at launch was that number of sites that were fully prepared and well educated and ready to give great outcomes and infuse. And in fact, we didn't have 50. We have -- as we stand here right now, well over 70 in and we feel very comfortable about where we are, in fact. We're very willing to add additional sites reactively but we're not looking to grandly increase that capacity. So we're in very good shape from a site capacity perspective. We have outperformed our own goals. And in fact, I think over half of those sites have already infused patients. And then the other sites are in great shape to either infuse or be referring site. So Again, we are in very good shape from a manufacturing perspective and a manufacturing capacity perspective but also from a site education perspective and a site readiness perspective, we really focused fairly early on, on the proper preparation and education of sites to ensure that we're going to get brilliant outcomes, and I think it's all in near to the benefit of our launch last year, and it will near to the benefit of our launch that we're going to have now. I mean one of the reasons we have been so successful, and to remind everyone, we launched this therapy last year in June with a very narrow label, 4 to 5 years old and narrow even than that because half of those kids aren't even diagnosed. And yet in a short 6-month period, we did better than all of the other gene therapies approved in the last few years combined, in fact, almost double how all the other therapies did in last few years combined. And the reason for that was because of our obsessive focus on preparation in detail. I mean we started, Dallan and his team started this concept of site preparation literally in 2018. We started manufacturing literally on our first biopsy in 2018. We started talking to payers about access and reimbursement issues in 2018, years before we would ever have a therapy to provide to these patients. So that when we sit here right now, we're ready to make the most of this launch. And there's a good reason for that. Again, as you know, Duchenne patients every day are being damaged by this disease. And we realized early on that it would be a travesty to be able to get a therapy approved but not having done the work at risk in advance to be able to serve those patients at launch. And so we obsessively focused on being in a position where we could make the most good of a launch, first of last year and now of this year. And so we're in great. We're in great shape from a capacity perspective, both site capacity and manufacturing, we've done great work with access and reimbursement. We've done all the right work to support the appropriate price for this therapy. We did a really thoughtful cost-effectiveness analysis. We did a budget impact analysis. We showed our work. People don't typically do that. We showed our work. We had it published in a peer reviewed, very highly respected journal, so we're just in very good shape to make the most of this. And the reason for that goes beyond the commercial benefits of this, and there will be enormous commercial benefits of this but it goes through the fundamental issue, which is patients have been waiting far too long for a therapy like this, and we want to make sure we can benefit them.

And our next question will be coming from Ry Forseth of Guggenham Partners Securities.

This is Ry Forseth on from Debjit's team. If you do expand supply manufacturing, will you need an equivalent study for a process change?

So 2 answers there. First, we don't need any expansion of supply for our launch. We're in good shape. So that's not an issue. The reason we're thinking about suspension is it's just a brilliant concept down the road. We could get -- and again, there's a lot of dips in here between this and success. But we eventually moved us to suspension. You could get multiples better, maybe even aspirationally in order of magnitude, more efficiency and then you get a much greater cost of goods, and that would be really valuable as you get to places in the world that are going to be challenged to get to and make a difference in. So we don't need -- I just want to be very clear, we don't need new capacity for this launch in the United States or initially around the world given our current plans in Roche's current plans. If we move to suspension, then of course, you will need bridging data, and we have that all baked into our plans and we have a very thoughtful process for that. So we're in good shape with that as well. And as I shared, we're going to focus for a moment on sort of the future and suspension, which we're excited about. For the midterm out there, we've done a lot of great work. We're already -- we 250 -- we have 500 network, 2,000-liter scale. So we're doing quite well there.

And our next question will be coming from Brian Abrahams of RBC Capital Markets.

My congratulations as well on the label expansion. How might we think about the expected adoption in the nonambulatory population versus ambulatory patients just given the differences in stage of disease, the full versus accelerated approval, any extent of safety and efficacy data available to date? And are there differences in just the proportion of patients in each of those subpopulations that you think would be eligible for therapy, such as in the proportion of nonambulatory patients who don't have meaningful left ventricular ejection fraction compromised?

So I think it's -- again, I think the opportunity is roughly equal across both groups, it's about 50-50 between the 2 groups. How physicians prioritize the patients in front of something -- in front of them, of course, is physician decision in consent with the family decision, and we're going to leave it to them to make those decisions for themselves. We're well prepared for serving the community. And there's -- there are lots of ways to look at this. On the one hand, you can prioritize the young kids because the earlier you intervene, the less damage that will have occurred and the more muscle you'll have protected, then of course, the alternative argument exists for the older patient, which is they have -- the muscle they have left, which is far less than a very young kids is precious to them, and that value to them of protecting what's left is extraordinarily valuable, and so we're going to have to think about that. And then there's the family dynamic as well and what the family's perspective on this is. So I guess, I would say in the broadest of strokes, we're going to launch this therapy. We're well prepared to support the launch. We're great from a capacity perspective. And the demand, both across physicians, but also across families, both in the younger and ambulatory boys but also in the older and nonambulatory boys, I think is going to be equally ferocious frankly, and we're prepared to support that.

And our next question will be coming from Kostas Biliouris of BMO Capital Markets.

Congrats on the great outcomes here. A follow-up question here based on, again, nonambulatory patients. Can you talk a little bit about the reinvestment discussions for this group of patients given that the data you have generated are not as much as the ambulatory patients, would payers be fine with reinvestment nonambulatory patients or they would maybe need more trial data before they do so?

Well, let me say, we've had a lot of discussions with payers on access and reimbursement. Generally, of course, we haven't addressed the specific question of this particular individual who's nonambulatory because we have the label only now. But I would remind you of a couple of things. The first I would remind you of is that while we have less clinical data on nonambulatory patients versus ambulatory patients. We have, I believe, more nonambulatory data to support the approval in the nonambulatory population than any other Duchenne therapy that's been approved in the nonambulatory population historically, and I believe every therapy that's been approved so far for Duchenne has been -- has included in the nonambulatory population. And the second thing, while it is -- there's nonambulatory patients, and we have accelerated approval, I would remind people that we've been dealing with those issues and addressing those issues with payers and having those conversations, with respect to our other therapies because remember, we have 3 other therapies for Duchenne all that have been approved on the accelerated basis. We've been doing that for the last 7 years, and that plays a significant role in the success we've had over the last 7 years, including our compounded annual growth rate of about 115%. So there are going to be lots of really thoughtful discussions that support it but there is no organization, better prepared, more experienced, and more passionate about executing on behalf of these patients than Sarepta is. So while there will be lots of discussions to be had, and Dallan and his team will be having them, and we've got great patient services and access and reimbursement, personnel that will do that. I think we're in very good shape and have very good discussions on behalf of families that have been waiting a very long time and can't wait much longer for therapy.

And our next question will be coming from Gil Blum of Needham & Company.

Allow me add my congratulations as well. Maybe a more open-ended forward-looking question. So clinical benefit still looks pretty variable in patients. What are you guys thinking on strategies to enhance benefit in more DMD patients?

Well, I apologize, I respectfully disagree with that perspective. I think one, the amount of data that supports the benefit, the safety and the efficacy of this therapy is enormous. I would argue greater than any other approved therapy for Duchenne today. And I would point folks to the decisional memo for a very exceptional recitation of the benefit. I would remind folks that we had -- look, first of all, ELEVIDYS did the very best it could do. I want to be very clear. The goal of a therapy like ELEVIDYS is to intervene, provide back to patients a form of shock-absorbing dystrophin that can stop the damage to their muscles and therefore, slow or arrest the decline. That's the goal, slow or arrest the decline by intervening and stopping additional damage. And in our trials, that's exactly what it did, and it did it across endpoints. And if you look at those time tests, which are very sensitive, very thoughtful time test and form the basis of other approvals, we did a brilliant job. I mean just look at the time to rise alone. In a very short period of time, remember, when you're dealing with the placebo-trial, we're doing a 52-week trial. And why are we doing a 52-week trial? Because ethically, you can't do much longer than that because you're letting a subset of kids to generate while other kids are on treatment. So unless you're allowed to do an open-label or a natural history study, you have to do these -- naturally you have to do these very narrow studies. And in the short 52-weeks, these kids were doing much better on these time tests than the untreated kids, which we're starting to fall off a cliff. And on the time to rise alone, that data in 52-weeks, changed the hazard risk of early loss of ambulation by just over 90%. And then you'll see some additional data, just to give you a broadest qualitative preview, we're going to have the biomarker data that will have an upcoming scientific meeting because we haven't disclosed yet. But you'll see the biomarker data, it is just wonderful. I mean the CK levels are dropping like a rock in these kids that are treated with ELEVIDYS, and what that mean CK or creatine kinase is an enzyme that is released by muscles when it's damage, so seeing those reductions enormously important. We also have something that no one's ever had before. We have muscle MRI, were we done in a subset of patients MRI of muscle versus fat fraction. And frankly, a big question, really, would you see a difference like that in 52-weeks? And the answer is yes. So I would not accept the idea that the data isn't compelling. The decision memo itself makes the point. The data that supports this approval and the breadth of this approval is compelling. And I would argue that it is very compelling. We've dosed hundreds of kids in clinical trials. And now between clinical trials and commercial, we've dosed many hundreds of kids, over 400 kids and young man. We've dosed the broadest range of patients from very, very young to -- in the context of Duchenne, very, very old. And unfortunately, that isn't very old for the average person but that is Duchenne muscular dystrophy, but we've dosed kids in their late 20s, and we've dosed the heaviest kids and the lightest kid, we've dosed kids over 80 kilograms. And so I would argue that the consistent data that supports this broad approval is exceptionally compelling. And I think that we're going to bring this to the broadest possible group of patients in the United States. And I think we're going to potentially give a better life to a lot of patients as a result of this new approval and is enormously gratified and excited by that. And that's what we're in this for, by the way.

And our next question will be coming from Ellie Merle of UBS.

Congrats on the approval. In terms of the site capacity, I think you mentioned over half of the 70 infusion sites were infusing. What's your expectation for the timing for when the rest of the sites will come online? And do you expect the rest of the sites to start infusing this year? And then just a quick follow-up on the suspension manufacturing. I think you mentioned a goal of having this process online in 2026. Is that still the latest thinking on timing there?

Yes. So on the site capacity, I mean, we don't need every site to be infusing. So this is -- the goal of having over 70 sites educated and prepared is that in the event that a patient needs a site in a particular area that they will always get it. The patients are not very far away from an infusing site, and the fact that over half of them are already infused, infusing patients is brilliant. So there may be sites that will always be referring sites, and sites that will be coming on and infusing in the future. But we're -- we have great coverage. We're in really good shape from a coverage perspective. It's much better than were our plans. In fact, I can tell you, Dallan spoke for years to try to moderate my expectation because 50 sites was an enormously ambitious goal to be in a position. And the reason it's -- just so we're clear, why is that so ambitious because we do site readiness correctly, okay? It's not -- I just got an update from Dallan. Actually, I was wrong, it's 75% of sites that have been dosed, it's not 50%. I was wrong on my data before. But one of the reasons that that's so impressive is that we do site readiness, right. We do education, right. We ensure that people are in a great position. One of our big goals is to ensure that we get brilliant outcomes, the kinds of outcomes that we're getting in clinical trials remain that way in the commercial setting. So again, we're in great shape there. And from a suspension perspective, our aspiration is sometime in late '26, probably won't need it by then. Probably we'll need -- probably would really benefit from it from a capacity perspective a few years later as we really start getting into the biggest bolus of patients but our aspiration is to try to be in a position where by late '26, we could have suspension.

And one moment for our next question. Anupam Rama of JPMorgan.

Congratulations on the label expansion here. With the breadth of the ELEVIDYS label, can you remind us of your cash position and if you are funded to sort of meet the market go forward with your manufacturing needs and plan as well as the ongoing pipeline initiatives?

Yes. The short answer is we're in very good shape. One of the things we said some time ago is that we are in a position where we wouldn't -- to run our current operations and our current plans, intrinsic plans, we're not in a position where we need to raise additional money for instance. And in fact, we're -- as you know, we're on a non-GAAP basis profitable, often on an EBITDA GAAP basis, profitable, and we're tracking towards to the cash flow positive. So we're in good shape there. Ian, if there's anything in that I missed, please let me know.

No, that was perfect. That's exactly right. We're always looking at liability management, but if your real question is are you going to employ the biotech playbook and we're not going to be making an announcement at the call today. So we're in good shape.

And our next question will be coming from Ritu Baral of TD Cowen.

I wanted to just follow-up on post-approval commitments. Doug, you mentioned and the letter mentioned that ENVISION should answer the requirements that FDA has laid out. One, are there -- can you briefly describe what ENVISION now needs to prove for nonambulatory and what potential scale? Are you envisioning, forgot the time, any changes to the trial design to address the questions that came up in the review? And just very quick overnight KOL feedback that I've gotten is, how are they going to answer our durability questions? Will that also be addressed in ENVISION? Or is that going to be a natural history study thing? Because you mentioned that study but didn't give us details.

Yes. Thank you very, very much for that. A couple of things. First of all, the primary is pull, which is performance of upper limb for that study. They have -- there were no changes in connection with the review ENVISION is the post-approval commitment for the nonambulatory population. It's well powered, placebo-controlled, 18-month study. So we're executing that well. And to remind folks about that, that's not a study that we're starting. That's a study that we have already started. We've actually already fully enrolled the U.S. part of that study, and we're enrolling outside of the U.S., even as we speak and working as fast as we can and our ultimate goal is to have 11 countries outside of the United States. So we're executing very well on ENVISION. And then on long-term durability, look, we already have great hits of durability already both preclinically, of course, where you've seen great durability in all of our models. And even in our early studies, we have kids now, as you've seen, we published already our first small cohort of children got out to 4 years, and we saw brilliant durability out to 4 years and beyond. How -- the long-term durability is literally going to be long term. We'll watch this together over the next few decades and look at durability over the next 10, 20, hopefully, 30 years. But we have a long-term post-approval commitment to look at kids over the next decade as well. So we have great signals of long-term durability. Our early -- already been dosing kids since early 2018. We've seen great durability so far and we'll continue to watch these kids and monitor them, hopefully, for decades to come look at durability over the long term.

And our next question will be coming from Joseph Schwartz of Leerink Partners.

In our checks, we've heard that some items have much higher -- so congrats as well. In our checks, we've heard that some centers have much higher infusion capacity than others. I was wondering if you could give us some insight into how this looks across the sites, which have been activated and whether you can discuss what the biggest reasons for the variations are and whether there's anything that you can do to support greater activity at the sites, which have lesser capacity?

Yes. I mean some sites have more capacity than others for a host of reasons, including the number of treating physicians at that site that are prepared to infuse. And of course, also infusion rooms and the like. But I do want to be clear. We don't need -- we don't have an effort ongoing to greatly expand capacity because we're in a great position from a capacity perspective. So we feel very comfortable with where we are with our external capacity and with our education process and the like. Dallan, do you have anything to add to that?

No, you're exactly right, Doug. And back to what you were saying earlier, 75% of the sites have already dosed. We expect higher throughput in those 75 -- that 75% of sites who have dosed, and then the other 25% who have not in that narrow label scenario are activated and can dose as soon as there's demand and patients coming through. And in addition to the sites that are activated, there are sites that we're working with that are referring into those activated sites that are approved and ready to dose. So as you have pointed out, more than enough capacity, and we know that capacity can be scaled up in the vast majority of sites, and that they're excited to support the demand.

And our next question will be coming from Uy Ear of Mizuho.

I want to add my congratulations as well. So Doug, maybe just help us understand the cadence of coverage, like how quickly you think you'll be able to get coverage for the older ambulatory patients as well as to nonambulatory patients? And secondly, if I may, you mentioned that after 2026, you will see a bolus of patients. Could you elaborate on what you mean by that? Is that in the U.S. or ex-U.S.?

So we'll give -- we're going to give you more -- a couple of things. We'll give you more updates on commercial performance and commercial forecast down the road that this is going to be a long journey with a significant amount of growth for probably a longer period than people understand. But we'll talk a bit about those things in the future. From a coverage perspective, just so you're clear, we have 7 years plus of experience working with payers, and we've been talking to payers about not only the label that we received last year but the broader concept. Since 2018, literally, right, Dallan brought me into meetings with payers as early as 2018 to start this conversation. So we'll update you all on commercial performance in our plans but we're in a great position to work with payers to give kids access both the broader label in the ambulatory population but also the broader label in the nonambulatory population as well, and we'll provide some get more guidance on that. But for those of you who wonder I just want to remind you that at the risk of sounding immodest that Sarepta knows how to work on behalf of Duchenne patients. We've been doing this for many years. This is our fourth therapy, we have become quite expert at working with payers, getting access for patients and having the kind of dialogue from a medical affairs perspective with payers to ensure that kids have a good shot of getting great access. So -- and just so you're clear, again, what a typical company would do, again, in a situation like this, where there's an uncertainty around the label and what look like as you get the label and then you train and then you adapt your capacity, and then maybe you bring some additional sites on. So there's a longer period of time. That's not Sarepta. So I've said before, a month ago about we had our -- all of our internal training to be ready for this launch. And what did we train to? We did not train to the multiple scenarios because we're not tepid. We trained to this label. We train to the broadest possible label. So we are -- everyone is ready to make this launch successful as accessible. On the capacity and manufacturing perspective, we did not build capacity and build material for a narrow label. And now we've got to think about this broader label. We have been for years, all out with manufacturing for this day. From an access and reimbursement perspective, we didn't have the conversations that were narrow in scope around 4- and 5-year olds. We've had broad discussions with payers from an access perspective for years now in anticipation of this moment. Not to suggest there's not a lot of work to do. I don't want to be arrogant. I think if we start -- we don't -- if we lose our sense of humanity, then we will have lots of risk. But we are obsessively detailed in being prepared for this moment, and we are in great shape to make this a success. And the reason for that is, of course, twofold. I mean, yes, we want to be commercially successful, and we will be commercially successful. But far more important than that, from my perspective, is this journey that we've been on. We have been -- we have a bond and a commitment to this Duchenne community. These families have been waiting years and years for the hope of a therapy like this one. And we are not going to get this opportunity in front of us and not fulfill our obligation and duty to these families. And that's why we've been working in parallel, a parallel effort and frankly, parallel risk for this moment for the last 6.5 years.

And our next question will be coming from Mike Ulz of Morgan Stanley.

Congrats on the label expansion as well. Maybe just a quick 1 probably for Ian. Now that you have sort of clarity on the label, are you guys considering providing ELEVIDYS sales guidance for the year?

We will discuss that at the upcoming earnings call. I sort of talk about -- we'll talk together about commercial performance, commercial plans, and we'll talk about what we're willing to provide in the way of future forecast for the rest of this year and then into next year. We'll provide you with more insight certainly on our next earnings call. Ian -- anything I said incorrectly there, Ian?

No, spot on. And we're not changing our strategy in terms of how we're going to be giving guidance. It's going to be consistent with what we've done previously.

Our next question will be coming from Tim Lugo of William Blair.

I would also like to pass on my congratulations. It sounds like you're going to give us some more granularity on the Q2 call but I'd just love to hear your thoughts on estimates for the curve -- the curve of adoption in the peak in 2028, which is where Street estimates currently have that peak from kind of all you know now, this doesn't have to be a long-term guidance but what are your thoughts that ELEVIDYS seeks in 2028 and then kind of start the gradual decline just given the one-and-done nature of the therapy?

Yes. We will -- apologies for putting this question off. We'll provide more guidance and more discussion about issues like that going forward. The only thing I will say is that the opportunity in front of us is enormous. The growth -- the sales growth will be enormous. And the reason for that enormous sales growth is because we're going to do a lot of good for a lot of patients. And then we'll provide more detail on the that curve and this long-term growth, and then what that all means for us and for patients. I also -- there are a lot of other things to think about in there as well. So for instance, as you know, we're sitting here right now, this label covers over 80% of boys and men with Duchenne muscular dystrophy. And there really is no other therapy around us. So the obligation on us to do a great job is enormous, let's to be very clear. You can look at the fact that we're alone in this place today as an opportunity, and certainly, it is. But for us, it's also an enormous obligation to these patients. Another thing we're going to do is look at how we can expand that opportunity to patients who don't currently have an opportunity to get our therapy. We're not going to sit complacently and be happy with just 80-something percent is fantastic as that is. The fact is, we've said this before, I've heard from families directly that say the second most devastating day of their lives of the family is when -- the first is when they get this diagnosis of Duchenne. And the second is when they get the diagnosis or the answer back that they have neutralizing antibodies that therefore can't get this therapy. So we need to work on that. So one of the things you're going to think about long term is the fact that we are working hard to be in a position as fast as possible to bring into scope, that 15%, maybe 14% of patients who today can't get the therapy because they have neutralized antibodies. We're already in the study using imlifidase. We're going to start a study with plasmapheresis. We have a lot of conviction that we'll be able to do that. And so when we think about long-term plans, we have to include that. And there are other things to think about down the road. If you're really thinking long term, you have to think about concepts of redosing, which -- redosing is not a possibility today but we think it is a practical possibility in the future, and it's something that we're looking at as well.

And our next question will be coming from Kristen Kluska of Cantor Fitzgerald.

Congrats on your approval and it should be a great PPMD next week for everybody. Given your confidence in manufacturing capacity, how are you thinking about number of years to address the prevalence versus when this might switch to more of an incidence-based population?

Thank you for the question. As I said in the previous question. We'll provide more -- we'll provide broader views on that later. So we're going to provide update on forecast and the light down the road. All I will say is that there's an enormous opportunity in front of us, and we're going to make the most of it.

Next question will be coming from David Hoang of Citigroup.

Great. Let me also extend my congratulation. So maybe just following up on 1 of the recent comments you had made there, the 15% or so of patients with neutralizing antibodies. Could you just talk a little bit more about the data sets you're looking to generate for these patients? Are there any kind of time lines that you would be able to communicate as to when we could see data? And what would you need to sort of you expand the label to this subgroup?

So this will remind everybody, so we -- one of the good things about Rh74 relative to some other AAVs that we have relative to other AAVs, a relatively low screen-out rate for preexisting binding antibodies. So we have basically in our study, about 13.9%. So I just rounded up to 14% or 15%. Now that is a low number compared to a lot of other AAVs but for a family that has antibodies, it's devastating. So we need to get to them. The short answer is -- and why? Why can't you dose a person with these titers? The answer is because you're going to have an immediate immune response and therefore, from both a safety perspective and likely from an efficacy perspective and an expression perspective, it's just not going to be meaningful. So we've got to find an approach for these families, and we will. And so we are already -- there's 2 approaches that we're taking. And what do you have to prove? My view is we don't have to prove the efficacy part, you have to prove the safety part that you can dose it safely. And number 2, that you can get the same kind of expression that you get for patients who are naive to antibodies. And we're doing 2 things for that. One right now is we're already in the study that uses imlifidase. Imlifidase will cleave the antibodies so that we can get below the tighter necessary and we can dose. We've already been dosing patients with that. So we're in great shape there. And then the second is we want to use plasmapheresis. We actually have some publications that show that we have been -- that the Louise's team has been able to use plasmaphereses, even modestly, modest cycles of plasmapheresis in the nonhuman primate to safely dose and get great expression. In fact, they've even been able to redose with plasmapheresis in nonhuman primates. So we're excited about both of these approaches. As far as data availability, I'll turn this to Louise, I think -- but Louise, you correct me, I think we'll have data on imlifidase next year but can you tell me if I'm wrong about that.

Yes, that's correct. So first and foremost, we're looking at the safety and then expression, as Doug mentioned, to ensure that we're seeing the benefit of removing the antibodies consistent with patients that don't have antibodies. So we'll look forward to that next year.

Our next question will be coming from Gavin Clark-Gartner of Evercore ISI.

Congrats on the outcome. Just a quick clarification on the statement you made about the no intention to modify price. So I appreciate you're not increasing price right now but does this also mean you don't intend to take price increases over time in line with inflation?

We have -- we don't have a firm rule on that, but I'll just give you our history, which probably will provide some guidance for us. So we launched our first therapy, eteplirsen, brand name EXONDYS in late 2016 pricing at that point. From that period, we've now had over 7 years of experience with EXONDYS. We have never taken a price increase with respect to EXONDYS, even in the face of, as everybody knows, an enormously inflationary period of time over the last few years. Likewise, when we launched VYONDYS and AMONDYS, those were brilliant opportunities to take a price increase on those therapies have priced them higher than EXONDYS. And I think the vast majority of biotech pharma companies would have done exactly that. It would have been very justifiable and I wouldn't have criticized them. But we didn't do that. We actually price them all at parity. And again, since that we have not yet taken a price increase with any of them. And likewise, with EXONDYS we launched it last year and we're not taking a price increase today. That doesn't mean we never take a pricing. So I want to be very clear. It does not mean that. And it doesn't mean that we don't try to keep up with inflation, and we'll certainly consider that in the future. The one thing I would say sort of from a philosophical perspective and us is that we will consider things like price increases when they can be objectively justified to address increasing costs, okay? You raised a very good point, like inflation. You could envision a world in which one would take a price increase to just keep up with inflation. So you're essentially keeping the price of the therapy the same or a change or an increase in cost of goods, you might take a price increase to do that so that the ultimate cost of the therapy is remaining basically the same. What we're not interested in doing, let's be very clear, I'm not interested in simply satisfying our earnings goals by just increasing price without justification. And that's not something that we, as a people do. So it doesn't mean we'll never take price increases, to be honest, they're not in our current thinking right now. But if we did, we would do them only if we had a really strong objective view to do it. And even in those situations, we do a lot of soul searching before we did it. That's our world view. In connection with this, we just set our price for our therapy last year. We supported that approach with what I would argue as one of the most thoughtful and objective cost-effective analyses. One can do. We showed our math. We had it published in a peer reviewed journal article. We did I think a really thoughtful budget impact statement where we looked at the per cost per member for this, which again, if you look at the per cost per member in the short run, it's less than $1, in the midterm, it's a $0.03, in the long term, it's actually positive to the system. This is not the place where a thoughtful intelligent payer is going to -- I think I may have misspoke about that, I meant per member per month if I said per [ infusion ] per month, I apologize. This is not the place we're a thoughtful payer out be denying therapy to dying children to save some money. There's no good reason for it. So with all of that grand work done, this is not the time when we would ever think about raising the price. So that's my answer is it's -- there are very good reasons why organizations have to take a price increase for therapy. But we would not do it without a very good reason. And the satisfying revenue goals isn't that reason. It has to be objectively related to something in our cost of goods or in overall CPI or inflation, and even then it hasn't been our history, and so we would do it with some reluctance. I wouldn't expect it anytime soon, I guess, is what I would say. We're ready for the next question.

Our next question will be coming from Biren Amin of Piper Sandler.

Congrats on the broad label. On ENVISION, when can we expect data from the trial? And I guess, based on your comments on the biomarker data that you've seen in nonambulatory, and I think we saw some of that in the label with 8 patients where we observed a microdystrophin expression, 48%, if that holds an ENVISION, how do you think that translates to the change in performance of upper limb in nonambulatory patients with ELEVIDYS?

I don't think -- Louise, you're going to correct me if I'm wrong, I don't think we're prepared at this point to give the exact readout date for ENVISION. The thing I will say is we're moving very rapidly to have that study enrolled, and it's an 18-month study. So we're working like mad to get that study enrolled and to your point, we do see great expression in the older and non-ambulatory patients, and we are very confident it will translate to clinical benefit. And we think we're well powered with this study. And as I mentioned, the primary endpoint that we're using is [ pull ] out performance of upper limb. We're ready for the next question.

Our next question will be coming from Brian Skorney of Baird.

This is Charlie on for Brian. Just wanted to ask if you see any meaningful differences in the patient journey for ambulatory versus nonambulatory patients? And whether the feedback you've gotten from sites and physicians regarding ELEVIDYS in nonambulatory differs much from what you hear about in the younger ambulatory patients?

So I would -- we have more experience with the ambulatory than nonambulatory. So in that regard, there's a difference in feedback just because of the number of patients. But what we've seen so far in the infusion is that we see a very similar -- the biggest first issue is safety. We see a very similar safety profile between nonambulatory and ambulatory patients. And we've heard the early indications for nonambulatory patients is very exciting for what we could see with the nonambulatory patient population. On the patient journey and do you mean the interaction with payers, again, we'll learn that together as we launch this therapy in the nonambulatory population, one could envision there's going to be more discussions with payers regarding nonambulatory. And then ambulatory given the amount of data between the 2 and the like, the only thing I would tell everyone in connection with that is that we are well prepared to have those discussions. We've been dealing with these issues and having these kinds of discussions and interactions with payers now for going on a decade. And I think the entire team has become quite competent and having those discussions. And it is a multidisciplinary team. It's access and reimbursement, it's distribution, it's our payer, it's our physician -- patient services group, which are just brilliant. It's our medical affairs group and the medical affairs interaction that we have, all will support a very good dialogue for those patients. So in one sense, we'll see in other sense, like we have a lot of experience to rely upon. And in another sense, every patient is a unique journey, and we are prepared down to the patient level to support physicians and patients, and have good dialogue with payers. So we feel very confident about this launch.

And our next question will be coming from Andreas Argyrides of Oppenheimer.

Congrats on the landmark approvals. Just a quick one here from us. Can you remind us what you plan to share from Part 2 of EMBARK later this year and how we should think of those results?

Louise, do you want to answer that?

We're obviously continuing to follow these patients, and we'll be comparing to external controls, as you know, not that all patients have been treated. So we'll be looking at both the longer-term data over the first year and then the comparison of the second year. And so we'll look to update that as soon as it becomes available.

Thank you. There are no further questions. Please proceed with any further remarks.

Thank you very much. Look, first of all, thanks, everyone, for joining us today, and thank you for your very insightful questions. Today is a good day. It's a good day for patients. It's a good day for hope. It's a great day for the science of gene therapy, extraordinarily excited about what stands in front of us. With that said, there is no doubt that with this broader label, we have an enormous obligation to the Duchenne patients and their families in the United States that depend on us. And we recognize that we are nearly alone in the requirement that we fulfill that obligation, and we take that obligation enormously seriously. The good news as well though, is that there is no organization in my humble opinion, better prepared to execute on this label, and to fulfill that obligation than Sarepta and we will do just that. We are well prepared for it. I look forward to speaking to you as we travel on this journey together, and I look forward to talking to everyone at the upcoming earnings call, which we can -- where we can provide more detail on our ongoing launch goals. And with that, have a wonderful day and have a wonderful weekend, everybody.

Thank you for your participation. This does conclude the program, and you may now disconnect. Good day.