Sarepta Therapeutics, Inc. ($SRPT)

Great. Good morning, everyone. It's my pleasure to introduce the Sarepta team. With us, we have Doug Ingram, CEO, Ian Estepan, President and COO; Ryan Wong, CFO; and Louise Rodino-Klapac, President of R&D. Thank you for joining us. Maybe we'll start here, Doug, with a question for you. You've announced your retirement as CEO by the end of the year. How are you thinking about working through the transition in the overall succession plan?

You can ask these folks if I've been winding -- I think the surprise my intensity level has been going up. Right now, we're not transitioning anything. We got a lot to do as an organization. I did announce that by the end of this year, I will retire. There's an active process ongoing. When the Board makes its final decision on that, then I will obviously do everything in my power to ensure that, that individual is maximally successful those for the company and its investors and for patients as well. So I stand ready to do whatever they want for as long as that successor would like to ensure that we're successful. And I'm very confident that we'll be right.

You have laid out your priorities for 2026, notably stabilizing ELEVIDYS, advancing the pipeline and strengthening the financial setup. To start here, can you lay out the progress towards these priorities and what the key milestones for the company will be over the next 12 to 18 months?

Sure. Right. So you're a very good point. The strategy at Sarepta is quite straightforward. Let us start first with our 4 approved therapies. We have 3 PMOs, as you know, and our gene therapy ELEVIDYS. The goal there is to maximize that opportunity. Really, first and foremost, for the patients who benefit from that therapy because even in our base case, we're going to do quite fine. But we would like to exceed that base case because that means even more children and young man with Duchenne Muscular dystrophy you're going to live better 3-year lives because of it. That -- and we're doing real very well there. We'll come back and talk about that. Let me just talk about each pillar that really leads to the state of player in the company from a financial perspective, we're in a really strong financial perspective. Just consider that we're cash flow positive, and we were a little over $800 million, I believe. What was at the last quarter, maybe we were...

$770 something will be [indiscernible] plus.

Yes. So we'll be significantly over $900 million. So we're cash flow positive. We're profitable. Usually on a GAAP and a non-GAAP basis. That will continue to be the case over the course of the intervening years even as we fully invest in our pipeline, just consider our sales forecast. We've said that we will do somewhere between $1.2 billion and $1.4 billion. Even if you assumed we were at the very bottom of our guidance, our cost structure is somewhere in the hunt of a little over $800 million. So we're just a comfortably cash flow positive organization. That isn't thank goodness in the -- given where our stock price is today, which, if I can editorialize certainly holistically guffy in a one sense, other than employee morale, it really doesn't matter because we are not slaves to the equity markets to get our stuff done. And then, of course, where are we going in the future? We have a really exciting pipeline, our siRNA pipeline is exciting. We have 5 therapies that are in the clinic dosing patients right now. We have a few more that are heading to the clinic soon. We have 6 research programs on top of that with our -- really exciting period of time. I was talking about success in each one, and I'll do it real quickly and then we can usually get to Q&A. So I'm not sure. Okay. I don't think this we are -- they were taking bets on whether any of them would have a chance to talk today. So I'll be brief. From a sales perspective, the delta between 1.2 and 1.4 is really entirely ELEVIDYS and ELEVIDYS success. We've always said for the course of this year, you should really be modeling towards the lower part of the $1.2 billion to $1.4 billion for the simple reason that the actions that we're taking and the activities we're doing are going to be successful, but this is a very long cycle of process. It's going to take some time. We've done great there. We more than doubled our sales force out and being very productive, both from a reach perspective and a call perspective, that's going well. Our promotional campaigns themselves are really powerful right now. We have a contract sales force in the field, and we have a group of what we call the patient education liaisons whose goal it is to really educate patients and make sure they're prepared to have thoughtful discussions of their physician about the journey for particularly for ELEVIDYS. That's going tons of green shoots of success there. I can give you interesting stats on that. That's going well. We're doing great financially. And from an sIRNA perspective, you saw that with DM1 and FSHD we had very encouraging results from our SAD study that we announced a couple of months ago. We're really excited about getting a look at the next set of data, which is going to be even more robust. It will be multi-ascending dose. It will be more patients and more biopsies and the like. And that will happen in the second half of this year. We've already started dosing our Huntington's program, which we're excited about. IPF is dosing, SCA2 is dosing as well. So we've made a lot of progress across that portfolio as well.

Can you touch on the leadership changes at the FDA and how -- and whether there's any risk to you from that dynamic? .

We -- as we sit here today, we see no risk at all from changes at the FDA for 3 reasons. Let's first of all, let's think about where we are with ELEVIDYS. We had a bunch of risk last year for abandoning our stock in the summer of last year, we had a really strange interaction with the FDA where they're pressuring this therapy off the market, notwithstanding the fact that we were able to get that therapy back on the market within 5 business days. I would suggest it would be very difficult for someone to replicate that success. It was understandable that we were more worried about that relationship. But from there, they just got very good for us. We negotiated the label, the negotiated label update with the FDA that got out there to the physicians. We negotiated and got their blessings on cohort 8, which is our [indiscernible] role of this, which will be the pathway back for the nonambulatory population. So there really aren't any open extent significant risks in the ELEVIDYS. So even the change, it doesn't matter. On the PMO side, that really didn't exist as an organic risk anyways. And I think that what we're seeing so far in the changes at the FDA have been very positive. I think the acting commissioner have not interacted with him directly myself, but really universally, people are saying very good things about him. He comes from the food division, so he may not be steeped in the drug development process, but he understands how to run large organizations. He's apparently very rational and very reasonable and everybody that's interacting with them so far has come away saying he's a good steady hand at the FDA. I think the same thing has been said about the cedar side as well and that change, and I don't know much about the spur side. So I think there's a lot of hope for a stable FDA. And that's what we need. We just I have been a big proponent for many years over the idea of really trying to modernize the FDA and get more thoughtful and near the FDA today with the current state of science and certainly in genetic medicine in rare disease. What we really need more than anything else right now at the FDA is a stable and predictable [indiscernible] so we, for one, are very excited...

[indiscernible] important point. It didn't seem like the market is really fully discounted both the risk that I think were happening previously and now I think a very strong tailwind now because of that exact point that you're making in terms of predictability. I think they're making dramatic improvements in trying to make sure that goalpost don't get moved reviewing applications that previously have gone against what the agency had communicated previously and now actually factoring that in. And hopefully, we'll see, we'll see in the next few months what happens with some of those applications that are getting rereviewed. But I think that stability and that the ability to be able to predict what's going to happen should be really important for the investment community. So I think it's a much better backdrop.

In the end let's be very clear, this is what we want as an organization. We want the FDA to apply the standards that exist in the FDA and to review therapies and the totality of the evidence and to support those therapies where it makes sense to, but not to support therapies where it does it. So we're not looking for some towboy country. We want an organization that applies standard and rigor. And I think there is some hope for that given some of the new leadership at the FDA on an interim basis.

And that standard part is incredibly important because if you don't have a standard, then payers start weighing and other factors start contributing to whether a drug gets utilized or not. And so making sure that the standards are met and safe and effective therapies are going to patients is just critically important.

Starting with ELEVIDYS here. You've spoken about the information gap regarding ELEVIDYS and your initiatives to drive penetration in the ambulatory patients. What are priorities for the expanded field team? And what leading indicators are you seeing with physician engagement that suggests a return to growth? .

So the #1 overarching thing was to rebalance the discussion if there was even a discussion. Remember, 2025, we had 2 surprising and unfortunate fatalities associated with nonambulatory more advanced patients and we spent the entire year focusing only on that, not talking about the benefits and the risk of the therapy and contextualizing those risks because it could really -- I would remind you, it's horrible for those families, but 2 out of nearly 1,400, I mean this is less than 1, whatever it is [indiscernible] 0.1% -- and so that's the big thing to get the promotional material in the right place where we can have smart, thoughtful discussions about that. That's what they're doing right now. That's the main sales force is doing. And then we have a contract sales force that's really trying to expand that reach in the places around the country that are not the top centers but have opportunities for referral, have opportunities for neuromuscular physicians to get educated that maybe have never been educated before so they can have thoughtful discussions. And that's the big focus there. Some of the -- there's lots of interesting look Patrick Moss, our Head of Commercial likes to call the greenshoots of success, quite apart from the numbers, the people in the field. You'll see something like 50% of start forms are coming from sites where a sales rep had visited that site within the last 60 days, you're seeing a significant percentage of sites, I think it's over 30% of sites that had either paused back last year or had never dosed the patients starting to send in start forms without getting into too much detail because I don't violate it, but like there's one site that has enormous opportunity, but it's been very slow and they've actually put in multiple start forms over the course of the last couple of weeks. So that doesn't show up immediately in sales. Remember, it's a 6 month process to go from start form to infusion, and it could take even longer with the kinds of appointments you need to have and testing you to have antibody testing but it's a great sign for the future and the great sign for 2027.

With regard to the total revenue guidance, you spoke to the $1.2 billion to $1.4 billion. We estimate about $300 million to $500 million of it coming from ELEVIDYS based on historical performance of PMOs, what are the factors that influence whether or not you fall in this range? .

It's all ELEVIDYS and it's all the impact of our external activities, right? And there's still more to do. So for instance, we have what I believe to be just absolutely would knock out 3-year data on ELEVIDYS. And if you look at the 3-year data, you're not thinking about getting your kid dose you just don't understand what you're looking at. That actually has to get into the promotional material. That's not even yet in the promotional material. When we do ad boards and we share it with physicians. The impact for there is just obvious. So we need to get that done. But it's all bad. And it's just the delta there is just that moving this up with such a long-cycle therapy is to use an absolutely worn out bromide just turning a tanker ship, so it's going to take some time. So I'd suggest a lot of the activity we're doing right now is going to go down to the benefit of 2027, not 2026.

And what does the FDA need to see from Cohort 8, is that right? But seroloma study to include ambulatory patients in the label. And what could the time line look the top line data here in the second half?

I'll turn to Louise, who can talk about the study itself and then we can chat about what we'd expect to see...

So cohort 8 endeavor is an open-label study in nonambulatory. So this is about the nonambulatory population. And so by definition, for the study, we're looking for a 50% reduction in the rates of ALI. That's what the FDA will be officially looking for as will we -- it's open label, so we're -- have the ability to look at the data throughout. And based on a mechanism action, all the tremendous real world evidence we have with physicians using in the field, we would predict that we would certainly predicted we would achieve that. So we'd go back to the FDA after the end of the year, talk to them about bringing the patients back from nonambulatory patients back to the label and what the mechanism would be to do so. .

It could. I think the -- if I'm not mistaken, I think success in the protocol is a deduction in the risk of ALI. -- every ALI, if you reduce ALI, you're going to dramatically reduce even the theoretical medical risk ALF, which is the ultimate thing we would worry about. I think it's by 50%. I'm not mistaken. That would be the goal. Now we'll see how this goes, and we'll get to launch this data over the course of the year. We do have data right now. We're thinking about the context with this we discuss it. We have something called [indiscernible] where we get to collect data on patients in a more formalized fashion as they roll out of the study and then as they're on commercial therapy and then on commercial therapy as well. And there have been somewhere in the hunt of 11 or so to 14 patients that have been prophylactically dosed with sirolimus. Now I don't want to suggest that this is the standard we have to meet. I don't want to have -- I don't want to create this too high standard for us. But so far, in all of those patients, there has not been any evidence of an increase in liver enzymes if one pretreat with siRNA. So it gives us a lot of conviction in this approach we're taking is this going to be a reasonable one to get nonambulatory patients back in the label. And for those who may wonder why we care so much about this. I mean, look, if you want to be just dollars event say the nonambulatory patient population represents 50% of Duchenne -- it is, in fact, an enormous opportunity. But there's a more important issue for us than that. And that is everybody abandons the nonambulatory patient. Everyone always has abandoned the nonambulatory population. Really, nobody has ever treated these folks or even care to treat these folks. And if we -- and it's going to get work, if we don't win with this. If we can't safely dose the kids and bring them a better life. I pause it, no one will ever do it. Everybody is going to walk away from it. Every current fair-in development right now is ignoring the heck out of these people. So -- so the good news is it's a nice synergy there. It's going to be great for investors if we're successful. It's going to be great financially, but it's going to really be great for people that desperately need help and shouldn't be left behind simply because they're in a wheelchair.

And I think it's important, we've seen about 20% to 25% of sites dosing ongoing patients with siRNA also. And obviously, this is something that's not in our label, so we can't promote to it, but this is how the field is evolving based on the experience that we're seeing, which I think is important to the investment community also because if you're able to just limit the risk in ambulant patients, I think that's obviously incredibly important from a patient perspective, but also from an investment perspective, if you're able to cut that risk. So hopefully, if the data continues to emerge and is very supportive, you continue to see that adoption.

And your partner Roche announced a new global Phase III trial here. Maybe talk about the read-through from that to your commercialization plan, but also why Roche has taken the viewpoint to kind of invest more in the program. .

Well, I think a couple of things. Well, first, they have to do another study that they can scientific advice. So with EMA and CHMP they realize that is the pathway. And I would say the why they're doing it in investing is because they've seen the data that we've seen and I think our colleagues over at Roche are as confident as we are about the way that this therapy is changing of patients. They've done quite well ex U.S. that gives them a really on-the-ground opportunity to see these patients close to personal. And I think they realized the life-changing benefits of this therapy, and I give them kudos for understanding that and pleating that -- the study is [indiscernible] have any retro to us. It's a placebo-controlled blinded study. It will take some time to read out. It seems like they've been fairly thoughtful in the approach they've taken. They've learned a lot from the work that we've done, so were confident in their study and its outcome. It will just give additional evidence in support of this great therapy.

Maybe transitioning over to the Arrowhead platform here or the partner or your acquired Airhead platform. Regarding the Cerner programs, can you lay out how your constructs differ from the others here? So such as avidity and dine and how you see these differences play out in the early data in FSHD, but also DM1.

So focusing on DM1 and FSHD, which are 2 advanced programs. So we use a targeting like cold alpha-beta 6, and that's really the differentiator for these 2 programs, which are deliver an IV. And really, that gives us the ability -- I would do the deal in the first place to be most efficient and muscle getting into muscle, driving that siRNA in there. We know that siRNA itself is more potent in terms of the effect within the cell. You need 25x to 50x more molecules of an ASO versus an siRNA to have the same effect within the cell. We also had a large margins of 10x. And so what we've seen from our MAD data -- from our SAD data, and now going informative the ability to continue to dose up, which is important for getting maximal down and then downstream biological effects within the cell...

As you move to higher and multiple doses, how are you thinking about receptor saturation or potential for dose-limiting toxicities?

So preclinically, we've not seen any evidence of receptor saturation. Again, this is where the alpha B beta 6 comes in -- we don't have the same problems with the TFR that others have because of the use of that receptor or iron homeostasis. So we're not seeing things like anemia like others are seeing. So that really gives us the opportunity to continue to asset, and we haven't seen that saturation that others may have.

Our NOL is significantly above where we're actually looking at this -- so we feel confident about it too.

How much proof of concept do you think that initial data represented? And can you frame how to think about translation to the next data release and how the oral profile could ultimately land. And I think part of what I'm also getting at is did you show a selective group of patients here that we can that we can take that overall view. .

Yes. Selective sounds like cherrypicking in cherrypick. Let me be very clear. We are really excited about the data, and we'll talk about the limitations of it. We're very excited about that data. And the reason we were so particularly excited about this early read is that it was very confirming of what one sees in the preclinical data. That's exactly what we had hoped we would see, which is the ability to dose escalate when others can't. The ability to use the integrate receptor to drive significant muscle concentration even at equivalent doses and then the ability to continue to drive it up and then the resulting knockdown that we saw in the early side there was really nothing in that early data that didn't completely confirm what we saw in the preclinical models. Now we have to be thoughtful about that. It's early data. It's just the single ascended dose -- so it gave us a ton of confidence and now we need to see the mandate. We need to see it in multiple doses over time in a larger cohort of patients over other dose ranges. We'll have that in the second half of this year. Now that looks great, then we're really -- we are really heading toward the very strong possibility that we will be the best-in-class both for DM1 and FSHD. But I would say we need that. I wouldn't overinterpret the first one other than just say, it's really comforting that was exactly what the 3 clinical bodes predicted.

And with that second -- I guess, the 6-month update in the second half, could you just frame what you'll show in terms of patients at each dose biomarkers early functional data and what you see as relevant benchmarks?

Sure. So we expect to have, as you mentioned, 6 months data in both FSHD and DM1 and the timing of that, we'll see. So at our higher doses, as Doug mentioned, this is the MAD data. So again, we'll be looking for safety target engagement at PK, PD. In terms of FSHD, we'll be looking for the [indiscernible] target in circulating biomarkers early evidence of function, 6 months is not a long time in FSHD but we'll be looking at that. In DM1, then we will be looking at DMPK knockdown CAS22 splicing indices and then [indiscernible], which is we can see at an earlier time point. So we're excited to see the state, as Doug mentioned, having multiple doses at higher concentration, I think we'll be we're looking forward to seeing.

And good with this data release, you talked about starting a Phase III post. Maybe talk about those time lines. .

Yes. I mean just let's be realistic about what we can and can't see with these heterogeneous diseases like you shouldn't overindex on some functional endpoint that relies upon degeneration. We need to be realistic. These are slowly to generating -- and I think we're also excited about seeing something as soon as possible that you want to look at something at 6 months, that would actually take a couple of years to see in the placebo arm [indiscernible]. So just to be thoughtful. That's the beauty of -- want to complaints that beyond may not be a great model for predicting other declines in a short period of time. But it's clearly a functional manifestation of benefit or lack thereof and it could be done very -- it's not a degenerative issue, right? It's myotonia degenerative in nature. So let's just -- so really, if you're going to focus on the future, what should you really care about? You should care about safety. You should care about the ability to dose escalate with safety secure out muscle concentration and knock down and downstream splice correction like those -- that's the big one I'm in going beyond that. There may be other biomarkers that will be fascinated, then there's [indiscernible]. And then I would say the rest of it is exploratory if that makes sense. I think with respect to what we're going to move as fast as possible. That's the short answer. We're going to move as fast as possible. I don't think that we have the time lines in front of us today because we've got to do more work. We are just the other day that I think our colleagues if I'm not mistaken.

No, Doug.

We're suggesting that they are going to go for an accelerated approval, at least in DM1. And I think it's a very interesting idea. And I think it is certainly not an irrational thing for them to be thinking about with these patients. So we're going to take on all of that thinking and we're going to fashion for ourselves the fastest possible approach. That will be our goal. But we need to get through some more of this. We are clearly going to start. As an example, we're going to start pivotal trials next year as soon as possible after we get the readout this year. And then what the exact pathway is to approval? Is it the end of those pivotals. Is it a interim accelerated approval on a well confirmed biomarker, those are things that we'll have to figure out and then we have to figure out in concert with our regulatory colleagues at the FDA.

So just one thing to follow up, which Doug alluded to it, but just to say more directly, knockdown is to that point, the most important thing to see because function will follow. You shouldn't have the toxic protein or toxic mRNA in either one in DM1 or FSHD in your body. If you're able to knock that down most significantly, that is eventually going to lead the best functional outcomes, right? So whether you're able to see it in a heterogeneous disease in a very short period of time, that's challenging however knowing that the best knockdown going to lead to the best function.

I mean not the personal, I have family members at FDM working. If I see in the multi-ascending dose confirmation of what I see in the singles -- I'm not sitting on waiting for 2 years of functional data, so I can confirm what is obvious from using [indiscernible] or a good scientific analysis. And I'm sure that's where other people would be, and I would hope that's where FDA colleagues would be -- that's why -- thinking on it is innovative, and I give them kudos for that.

Can you just speak to how you intend to leverage your teams and infrastructure from the PMOs and ELEVIDYS for a potential launch here? .

I don't think we -- I think we're going to have to do a lot more. Like we've got a great team, and there's tons of parts of our team. We are neuromuscular experts as an organization. So there's going to be a ton of leverage there from a margin perspective, promotional perspective, sales force perspective, MSL perspective. [indiscernible], there's going to be a ton of opportunity. But it would also be a mistake to be arrogant and imagine that there's no adaptation needed or no augmentation needed. So we're going to work those issues through as well, so that we are as prepared to launch in DM1 and FSHD and the unique elements of those diseases as we were in DMD.

For your PMO franchise speak to your confidence in the applications for the -- in the context of the confirmatory studies, but also how you strategically are thinking about the runway here in the context of competitors? .

Yes. I think first of all, we -- so as you all know, we've got sNDAs that have been filed or submitted on [indiscernible] transition them to traditional approval. We are at a minimum confident based on our own analysis that these therapies will continue to benefit patients long into the future. Just to remind you, we had signals in our confirmatory trial. We have great real-world evidence, and the beauty of having these therapies on the market from an accelerated approval perspective for so many years, you get to actually see not [indiscernible] short-term experiment, but over the long term, what's really happening here, and they are significantly benefiting patients, keeping them out of a wheelchair and ambulatory and off event and out of emerging zeros and out of the hospital and a great mortality benefit across all these modalities that's [indiscernible] -- so we think the data for it's really powerful. I would remind you, patients love them. We've been -- some of the -- been on for over 10 years, and they fight to stay on them. We have well over 95% compliance rate on those and physicians also love them. And they're safe. I mean they have a really notable safety profile over these many, many years. So it would be the irrational to deny these -- leave rational FDA would even be seeking a lot of. Now with respect to competition, the primary competitor that we have the -- a therapy that will compete with EXONDYS next year. They're going to seek accelerated approval in that context. So I think that's a rational for them to do that. And I think we'll be prepared for that competition. We have not focusing or never focusing on us. We have a lot of things to say about our EXONDYS therapy. Families have been on it for a long time. We have a 10-year safety record. We have great patient services. We don't how to get these kids on very big keep them on this therapy. We do infusion, so we make life easy for them on the therapy. And then, of course, Dine will have its arguments and it will be a very credible, I think, competitor as well.

Great. And with that, thank you so much.

And we made forward-looking statements, so please just look at our SEC filings, but associated with that. Sorry to end on such a...

Thank you very much.