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

Maybe you can talk about what's a good outcome on some of those endpoints, knockdown, for example.

other endpoints that are important there. Yeah. Well, principle for DMPK, the gene that is responsible for um, uh, for myotonic dystrophy, for DM1. Again, we're in a situation where more knockdown is better. The exact specifics of how these genes are regulated are a little bit different, but still that basic theme that more knockdown is better, I think is quite clear and shown in the data. And so we want to be able to drive knockdown that clearly differentiates us from others. We'll have more data later on this year, as I said. As I mentioned, we have even higher dose cohorts coming early next year. And so making that PK PD correlation, showing DMPK knockdown and the correlation to splicing correction, because what the abnormal form of DMPK does is it alters the machinery that regulates splicing and gives a detrimental and sort of a fetal splicing profile in the setting where that should not be the case. And that's what's responsible for the downstream consequences in DM1. So showing that chain of events will be an important part of the data. It'll be coming later on this year. Showing that PKPD, relationship will be important. And that's important also as we have an eye towards even higher doses that can come early next year.

And so it's going to be an important data set for us. Yep. Makes sense. And there's a lot of companies developing treatments for DM1. And Novartis actually shared some data recently from their phase 3 study. missed the primary endpoint, which was vHOT, so maybe just comment, you know, your thoughts there, how it impacts your thinking relative to your program, thoughts around vHOT, et cetera.

Certainly, I'll start and then I'll turn it over to James to provide some additional detail and color. Obviously, we're paying close attention to the space and we're well aware of the top line outcome of the Novartis study. One important caveat is there weren't a lot of data yet and that's typical in this space. What we know is that that study failed to hit its primary endpoint. There was also a comment made that there were favorable indicators of movement in secondary endpoints. The details of that will have to come out at a later time, probably in a scientific meeting is the way these things would typically proceed. So we'll learn a lot more. But when we think about that outcome for that program, and its potential implications for our program, we think about a couple of things. The first is, what degree of knockdown were they able to achieve? And I certainly don't know within that specific study what they were able to achieve. But if you look at the earlier data, you would estimate that they're somewhere between about 30% and 40%, which is the range of knockdown that they've shown. And as I mentioned, this is a condition where with respect to knockdown, more is better. So the first thing that we would look at is can we drive higher levels of knockdown with whatever dose it is that we ultimately carry forward into later stage development, whether it's one of the two doses that we'll update on later on this year or whether it's an even higher dose, you know, that we can update on early next year. And I think there is a very real opportunity for something that can deliver a greater degree of knockdown to have a larger benefit, to be able to show that benefit in late-stage studies. Because the one thing I can tell you the Novartis result doesn't do is it doesn't shake our confidence in target validation. And in so many areas of drug discovery and development, you can't say that. If you're working in immuno-oncology or some other area and there's a major failure, the first question that comes to mind is, is this even the right target? That's not a question that we worry about in these conditions because we know that the DMPK mutations are causal. The question then becomes, can you knock down the abnormal form to a sufficient extent? Can you do it consistently? Can you do it with a good safety profile? So we're going to be focused on that PKPD and picking a dose for later stage trials that we believe will be truly differentiated with respect to the ability to achieve knockdown. After that, then one has to think about questions regarding study design. So, was vHOT, video hand-opening time, was that the right endpoint? I'm not saying it was or it wasn't, but we'll learn more when those data, you know, are, you know, are released more completely. Are there other features of study design? Stratification, so what was the nature of the baseline? You know, dystonia that existed in those patients. Does one need to control for that in ways that are different was done in the Novartis trial. Those are all things that we'll learn as the data come forward. Those are all things that we can build into our program. But ultimately, we think the opportunity is very clearly there, and in particular, it's very clearly there for a differentiated program that can drive maximal or near-maximal levels of knockdown. So James, I don't know if you want to talk more about the specifics of study design and some of those endpoints.

I think you said a lot of it really, Mike, in that clearly there's very little doubt in the fundamental biology of DM1, which then leaves the speculation on Novartis around the drug, is it study design? From a study design perspective, I think it's quite likely that they've paid a pioneer's penalty here. We did it enough times in DMD. You're using out. That comes often for the first time in a trial of treatment. And you learn a lot from those studies. And I think that that is a distinct advantage for companies like ourselves who are not yet locked down in our development plans. We're doing a lot of work in this space. As I said, a very experienced in-house team in the neuromuscular space. We have well-networked in the KOL space and have plentiful natural history data, our own in-house clinical data, all of which to build on whatever we get to understand from the Novartis study to make sure, to Mike's point, that we are picking the right primary outcome for our studies. Study in the right population to show a change in that primary outcome. I think it's too early for throw out vHOT as an endpoint. It has a lot of appeal. It clearly does show drug response on a very subjective nature. You hear patients, you hear your PIs, patients know their myotonia changes. How it responds, in a larger study over a longer time period is what I think we're learning at the moment, what Novartis have probably learned in this piece. And so I think we need to make a decision now, what is our best primary endpoint based on all of these data and our expertise and the population in which to drive a change in that. But as said, I am for once happy to be in a position a little behind so we can learn on some of the others' experiences. Yes.

Thank you.

Makes sense. And maybe last sort of pipeline question before we move on, just any updates around the timing of the MAD data readouts for DM1 and FSHD and whether those readouts will be together or separated.

So, as we've said, we expect data readouts in the second half of this year. We're in the second half of the year, so in the coming months, we'll read out both of those studies. They're independent programs. They each have their own considerations, and they each have their own unique value propositions, and so our expectation is we would release each as it is ready. And so I think there will likely be separate data releases. We want to make sure that folks are able to look at the data and absorb those data and understand what they mean for each program individually. They also have their own unique time frames. With respect to the FSHD program, as James mentioned, we're going to be focusing on a number of circulating biomarkers, including some novel biomarkers. And so there's assay validation work that we're doing to make sure that we can bring forward a very comprehensive and high-quality data set. So that program may be shifted a bit back in time within that window, so later on this year, but likely to be the second of the two. I think the DM1 program is likely to be the first. The exact timing is not yet determined because that's based on the progress in those programs, but we're well on track to release data from both studies in the back half of this year, as we've said.

They're great, we're all looking forward to those data. Maybe shifting your commercial program, you talked a little bit about, you know, kind of the history over the past couple years and some of the challenges, but if we start with ELEVIDYS and when we talk about some of the dynamics you're seeing, it sounded like you're getting to some stabilization and maybe some positive changes. Dynamics there as well, so maybe she could talk about those.

The key for ELEVIDYS is moving back to a balanced conversation around benefit-risk, as I described. And a number of factors have enabled us to shift that conversation back to that balanced conversation of benefit-risk. It's not just time from the events. It takes time for folks to absorb new data. There's sort of a natural arc of people's understanding new data like the safety data that were released last year, um, and uh, and arc of their ability to sort of integrate that, uh, together with their overall thinking, uh, about the benefit-risk of the program. We've also released new data, long-term data, the 3-year data as I described, uh, which helps reinforce that long-term benefit, um, for both prescribing physicians and ultimately families, patients and their caregivers who are making these decisions. We've put a number of initiatives in place to expand our field force, to give them the new data that are available to facilitate those conversations. Those conversations are going well. We've dramatically increased the number of physician discussions that we've had. Subjectively, those have been very balanced with focus not only on safety but also on benefit, so those benefit-risk conversations are improving and I think becoming more centered in their focus. And with that we're seeing stabilization of demand and early positive signs as we said on our last earnings call. And so overall, I would say that's going well. We would view it as a build off of this base and sort of a gradual build. So we're not expecting any dramatic inflection point in any particular moment in time, whether it's later on this year or early next year. But we do see signs of stabilization and forward momentum.

Yep.

And that growth that you're seeing or sort of expect over time, is it kind of, you know... You said, I don't want to put words in your mouth, but like some growth here and then does it sort of stabilize at some point in the future and you kind of just, that becomes just a recurring revenue stream that's stable at a certain point in the future?

We would see it as a gradual, a gradual build over time, as I said, and that's with respect to the currently indicated population. So nothing that I've described contemplates yet whether we return to the non-ambulatory population, and we can talk about that in a second. But with respect to the currently indicated population, we would see that gradual build over time. We certainly think there's durability in this franchise. We know that there is unmet medical need. We know that there are patients who can benefit from therapy. And so we would see long-term stabilization. We're not in a position today to give long-term guidance. But we do see that positive momentum, and we see ELEVIDYS being a very substantial contributor in the long term as well. And as we think about, you know, what to expect the remainder of this year, should we be thinking flat-ish, or how should we think about the progression there? Well, as we said on our last earnings call, the first half of the year benefited from a large number of patients that were already in queue, right? From 2025. Obviously there were safety disruptions in 2025 and some patients dropped out, but many did not. And in particular, in the short term, there may have been a delay in making treatment decisions as those data became absorbed by the community. So that bolus of patients worked its way through the first half of the year and results in the first half of the year, uh, benefited from those patients. What we're going to see in the second half of the year is demand that was generated earlier in 2026 at a period in time before we had our commercial initiatives in place, before we had centered that benefit-risk conversation. So we're expecting that to be modestly lower than the first half, but stabilizing over time, and again we're seeing that long build off of that base. What I would caution is that there's about a 6-month journey from enrollment form to treatment on average and so the effects that we're seeing on enrollment forms, the positive momentum that we're starting to see in the marketplace, it's going to take time for that to translate into revenues. That's more something that we'll see in 2027 than in the back half of this year.

Great. And you talked about label expansion into, it's the non-ambulatory patients with Endeavor data later this year. Maybe talk a little bit about that and your confidence in being able to expand the label.

So, the non-ambulatory population is not currently in our label. And we have a study ongoing, we have cohort 8 of the ENDEAVOR study, which is looking at the impact of sirolimus on hepatic safety in that population. And that will be an important component of future discussions around labeling for that non-ambulatory population. The hypothesis in that cohort 8 is that sirolimus can be effective in reducing the incidence of acute liver injury in the non-ambulatory population. The specific hypothesis we built into that study is a 50% reduction in the incidence of acute liver injury, which would be quite meaningful. And when you broadly decrease the incidence of acute liver injury, what you're also going to do, although it's hard to study in a clinical trial, is you're going to reduce the likelihood of those severe cases, which are the ones that we're really worried about. So we're essentially looking at the base of the pyramid to determine whether we can improve hepatic safety, and that should, based on everything we know about drug discovery and development, reduce the likelihood of those more severe cases. That study's underway, so we don't have data yet. It's enrolling as we speak. We expect to have it completely enrolled this year, with 12-week data in the first quarter of next year. And those will be important data for us and important data for us to discuss with the FDA around the potential to return to the non-ambulatory population. And those data will form the centerpiece of those conversations. As we've said, we'll reach out to the agency. Our plan is to do that in the first quarter of next year with data in hand to have those conversations. And those discussions will really define what the path is to a return to the non-ambulatory population. It is a durable franchise.

That makes sense. And maybe we can last 2 minutes here. Just the PMO business looks like you've got some nice stability there, but you may be facing competition next year. So maybe just talk about some of the near-term dynamics and how you think things might evolve next year.

These are products that have been on the market for a number of years. They've delivered clear patient benefits. Over that time period, we have extensive real-world evidence, which we've published in a number of settings, which demonstrates that, which shows, for example, prolonged time to ambulation, decreased rate of pulmonary decline, cardiac decline, even overall survival in a real world setting, based on that published evidence. And those are things that matter to patients and to their physicians. And so we feel good about the benefit that those have brought long term. We also have supported those products extensively in the marketplace in terms of establishing reimbursement pathways, helping patients navigate a very complicated reimbursement landscape, other patient support systems, home infusion, all of those things matter as well and are contributors to that 90% plus adherence that we've demonstrated in the real world. And so we think that all matters to patients. There are programs that are moving forward in this space. In 2027, Dyne will have a PDUFA date. We welcome drug discovery and development in this space as innovators. And we understand that over time we will move into a competitive marketplace. We think we're well positioned to compete in that marketplace. So for example, all of those things that I mentioned, the long-term experience, the data that had been published, the reimbursement pathways, the patient support systems, the home infusion, which is critical, for these patients to maintain them on therapy in a way that is not disruptive to their lives or their caregivers' lives. We think all of those things matter, and we'll add stickiness to this franchise. So we think we're well-positioned to compete in that longer-term marketplace.

Okay, great. It looks like we're just about out of time. Michael and James, thanks so much. Really appreciate your time today.

Thank you very much.

It's been a pleasure. Thank you.

Thank you very much. This live transcript is auto-generated without human intervention or review. This live transcript is auto-generated without human intervention or review.