Sarepta Therapeutics, Inc.

Good afternoon and welcome to the Sarepta Therapeutics third quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hands raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. At this time, I'll turn the call over to Francesca Nolan, Executive Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Michelle, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the third quarter of 2023. The press release is available on our website at surrupted.com, and our 10Q was filed with the Securities and Exchange Commission this afternoon. Joining us on the call today are Doug Ingram, Ian Estepan, Dallin Murray, and Dr. Louise Rodino-Claypack. After our formal remarks, we'll open the call for Q&A. 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 quarterly 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, including any financial projections provided today based on subsequent events or circumstances. And now I'll turn the call over to our President and CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Thank you, Fran. Good afternoon, and thank you for joining Sarepta Therapeutics' third quarter 2023 financial results conference call. It was only two days ago that we announced the results of our double-blind placebo-controlled trial, Embark. Therefore, I will not linger on the results here, but I will begin by summarizing Sarepta's perspective. First, taken as a whole, The results of EMBARQ confirm that Alevitus stabilizes muscles, slows or entirely arrests decline, does so across the ages, and does so with a laudable safety profile not shared by other programs for Duchenne. Second, the EMBARQ results have not only satisfied the confirmatory requirements for our June approval, but have shown that Alevitus benefits patients across age groups consistent with its mechanism of action. Hence, we will soon be submitting a BLA supplement to broaden the Alevitus label to remove age and ambulation restrictions. And finally, we have already engaged in productive and encouraging discussions with FDA, and they have confirmed that they are committed to reviewing an application to broaden the label and are committed to doing so rapidly. Now let me comment on quarterly performance. The third quarter was a defining moment for Sarepta. We launched our fourth therapy and the first gene therapy for boys with Duchenne muscular dystrophy. We continued to drive great performance with our three PMOs, and importantly, on a non-gap basis, we achieved profitability, placing us in ever more rarefied biotech territory. As you will have seen in our release, led by an exceptional launch of Alevitus and continuing performance of our three approved PMOs, Exondys, Vyondys, and Amondys, Third quarter total revenue came in at $332 million. And total net product revenue stands at $309.32 million, growing 49% over the same quarter last year. Reflecting the team's ability to execute and serve Duchenne patients, Elevitus net product revenue came in at $69.11 million, nearly triple mean external consensus. Likewise. Our PMOs achieved $240.21 million in net product revenue, growing 16% over the same quarter prior year. And non-GAAP earnings stood at $38 million in the quarter, a major milestone for Sarepta as we transitioned to a profitable and in the near-term cash flow positive organization. The team has done a tremendous job. working with families, physicians, and payers in the quarter, and it shows in these results. Dalla Murray, our Chief Customer Officer, will walk you through what has been nothing short of a remarkable launch of Elevitus. And looking to the near future, we will take our proven track record of execution and move forward rapidly to expand the label of Elevitus so this team can employ that level of execution to make Alevitis available to the majority of Duchenne patients in the United States. Following Dallin's discussion, Dr. Rodino-Klapek will provide an update on our pipeline progress. Now, as you would expect, we are not providing updated guidance this early in the launch, but also, obviously, across our four approved therapies, we are going to substantially exceed $1 billion this year, another important milestone to be sure. And with that, let me turn the call to Dallin for a commercial update. Dallin?

Thank you, Doug, and good afternoon. The launch of Elevitus in the third quarter was Sarepta's fourth Duchenne launch. It was by far the most complex and challenging to date. And I'm proud to say the team was ready on day one, and they have knocked it out of the park thus far. As Doug has mentioned, we generated just over $69 million in net product revenues in the third quarter for Elevitus. Notably, the team exceeded our own lofty site readiness expectations with nearly 70 sites ready to dose today. This helps us support the patients at risk of aging out today and also sets us up for longer-term success going forward. We approached this launch by building organically upon what was already best-in-class Duchenne commercial and medical teams. We put additional responsibility on everyone across the board rather than building out separate gene therapy teams. And they have all stepped up magnificently to meet this important moment. Our early success was achieved in three ways. First, flawless execution with our external stakeholders. That is the neuromuscular KOLs, gene therapy sites of care, and the eligible patients they serve. Secondly, proactive payer engagement to expedite access for those patients who are eligible based on the label. And third, establishing a well-functioning, flexible distribution model supported by the CereptiSips team to get each patient's customized kit to the site of care at the right time, just in time for the infusion. I would like to take a moment now to recognize the Duchenne community and how they came together to expedite access for patients. who are eligible for a Levitas. Led by our doctors, nurses, and other HCPs, all stakeholders were ready for this important moment, and it was humbling to see the whole community come together to support eligible patients in their treatment journey. This launch also demonstrated the progress our teams and the experts have made in the past several years, educating the payers about Duchenne. We were gratified by the urgency of payers and expediting policies that allowed access for eligible patients. Additionally, and importantly, the payers played a key role in supporting patients who were at risk of aging out. Saying all of that, we still have much more work to do with some of the payers to achieve our goal of securing access and treatment for all eligible patients across the country, regardless of plan. The team is working diligently as we speak, educating the payers on the robustness of the newly available Embark data. We're confident that this data sets the stage nicely for access to align with our label today, as well as when we gain a broader label. The fast start in Q3 was a function of the team's efforts in the quarter itself. And just as importantly, their efforts over the past seven years building the model which we have established to support all of the Duchenne patients eligible for our therapies. Had this been Cirepta's first launch, our trajectory in the third quarter would have been very different and much slower. We've gained deep knowledge and expertise through three PMO launches, and I'm glad to say we were able to apply these learnings to the launch of Elevitus. So to summarize Elevitus, It was a great first quarter for the launch because our team and our key stakeholders were prepared and they executed flawlessly to support the patients we serve. Driven in large part by the robust Elevitus revenue in the third quarter, we grew overall net product revenue by roughly 30% over the prior quarter. Net product revenue in Q3 of 2023 was $309.3 million. Importantly, as Doug said, in addition to our success with Elevitus, we also had our most successful quarter ever serving patients with our established PMO franchise. We see continued opportunities in the U.S. and globally for our PMO business in spite of the fact that we also expect cannibalization from Elevitus over time. Since the four to five population represents far less than 10% of the PMO business in the U.S., This cannibalization will not have a material impact on our 2023 net product revenue. I'd like to take a moment here to thank all of those who are relentlessly supporting our PMO patients. So as a result of the whole team's effort, the net product revenue from our PMO business in Q3 was $240 million, representing a roughly 16% increase over the same quarter in 2022. Looking now at each of our PMOs individually, net product revenue for Exondys 51 was $142.3 million in Q3, which was over 16% above the same quarter in 2022. Exondys 53 net product revenue was $31.7 million, 3.4% above Q3 of 2022, and Emondys 45 generated net product revenue of $66.3 million in Q3 of 2023. This represents roughly 21% growth over Q3 of 2022. As we've mentioned in previous calls, we are in the mature phase of the market now for all three of our approved PMOs. As a result, while we expect the U.S. growth to continue to flatten and the ex-U.S. revenues while still in the growth phase to remain lumpy from quarter to quarter and thus difficult to project on a quarterly basis. Taken together, we can reiterate our annual guidance of greater than $925 million in net product revenue for our PMO business in 2023. I'll end by saying that I've been continually amazed and impressed by the resilience, commitment, and execution of our Sarepta teams over the years. And while the success over those years has been impressive, what the teams have achieved in the third quarter of 2023 stands above and beyond anything I've seen in my 10 years working to serve the Duchenne community. The future is bright for Sarepta and for the Duchenne community who have been waiting for and very much deserve this progress. Words can't adequately express just how proud I am of our whole team. The individual stories from across the country are too numerous to mention here. Nor can we as a team put into words the joy we feel when we celebrate each and every patient who gains access to any of our dystrophin restoration therapies. And so with that, I'll turn the call over to Dr. Louise Rodino-Claypack. Louise.

Thanks, Dallin. Our commitment to the science remains steadfast and our goal to change the lives of patients with rare diseases unwavering. Our opportunity to do good is limitless for those living with Duchenne, limb girdle, and many other diseases for which therapies are either inadequate or non-existent. As Doug has already detailed the Embark results, I'll focus my comments on the progress of our gene therapy and RNA programs. First, limb girdle muscular dystrophy, or LGMD. We remain committed to advancing our LGMD portfolio across a variety of subtypes and look forward to providing continuous updates on these important programs in the months ahead. We presented on our LGMD pipeline this past weekend at the Speak Foundation's 2023 International LGMD Conference and shared our urgency with the community to bring forth genetic medicines for LGMD. To begin, We made excellent progress for Voyagene, our phase one study evaluating SRP9003 for the treatment of limb girdle muscular dystrophy type 2E in ambulant adult patients and non-ambulant patients using clinical process SRP9003 material. We are pleased to report that we completed enrollment in Voyagene and we remain on track to initiate our phase three study using commercially representative process material later this year. Combined with positive expression and functional data shared from our initial study, SRP9003-101, we believe the data from Voyagene will give us insights into a broader patient population. We're also excited to report that we completed dosing in our systemic pilot study, Navigene, for SRP6004 dual-vector RH74-mediated gene therapy to treat individuals with LGMD2V. LGMD2B is characterized by the absence of the protein disferlin. The innovative dual-vector strategy allows us to deliver the full-length disferlin gene, the sole cause of LGMD2B. We look forward to reporting results from this study in the first half of 2024. As mentioned last quarter, our LGMD natural history study of the sarco-glycanopathies, LGMD2E, 2C, and 2D, called Journey, has been fully enrolled and we will follow patients for 36 months. We continue to make progress in scalable manufacturing for all of our LGB candidates in our pipeline and look forward to initiating clinical studies as rapidly as possible. Turning now to the progress we've made with our RNA platform. We were pleased to complete enrollment in the first quarter of 2023 for a momentum study for SRP 5051. and we're targeting readout of the study in 2023. Regarding our post-marketing studies for the PMOs, as mentioned last quarter, we completed enrollment in the ESSENCE trial, a post-marketing requirement for Golodersen and Kazimersen. As a reminder, ESSENCE is a two-year study and is due to readout in early 2026. Finally, we are pleased to have completed enrollment in our mission study, our dose-ranging post-marketing commitment for Exondus. MISSION is a randomized double-blind safety and efficacy dose-finding study comparing the approved dosage of a Teplerson, a 30 mg per kg weekly, to a dosage that provides significantly higher exposure, up to 200 mg per kg weekly. MISSION is a two-part phase three study that was fully enrolled in October 2023 with 160 patients enrolled. We remain committed to rapidly and diligently advancing MISSION and sharing data as soon as it becomes available. We look forward to reporting continued progress with our RNA programs in the coming months. On a personal note, my passion for science and its promise to help others began early in life. These many years later, as I reflect on my career and where we are today in realizing the promise of genetic medicine, I'm grateful and I'm humbled. And yet we have so much more to do. We move forward from here today toward a more promising future for individuals around the world living with rare disease. In closing, I'd like to take a moment to thank this disruptive team for their continued dedication and passion to patients, the science, and our mission. I'll now turn the call over to Ian for an update on our financial results. Ian?

Well said, Louise. Good afternoon, everyone. This afternoon's financial results press release provided details for the third quarter of 2023 on a non-GAAP basis as well as a GAAP basis. Please refer to our press release available on SREPTA's website for full reconciliation of GAAP to non-GAAP financial results. We're obviously quite pleased with the financial results for this quarter. On the back of a tremendous start for the Exondus launch, we actually achieved non-GAAP profitability. And assuming an expansion to the label to the broader Duchenne population, we should achieve sustained profitability. We're quite thrilled to achieve this milestone just in the first quarter of the launch. For the three months ended September 30th, 2023, the company recorded total revenues of $331.8 million, which consists of net product revenues and collaboration revenues, compared to revenues of $230.3 million for the same period of 2022, an increase of $101.5 million. Net product revenue for the third quarter of 2023 from Elevitus was $69.1 million. Net product revenue for the same period from our Exxon's skipping franchise was $240.2 million, compared to $207.8 million for the same period of 2022. For the quarter, individual net product sales were $142.3 million for Exxon's 51, $66.3 million for Armand's 45, and $31.7 million for Vyond's 53. The increase in net product revenue primarily reflects increasing demand for our PMO products, as well as net product revenue associated with the sales of a levitant. In each of the quarters ended September 30th, 2023 and 2022, we recognized $22.5 million of collaboration revenue, which relates to our collaboration arrangement with Roche. The reimbursement of co-development costs under the Roche agreement totaled $34.9 million for the third quarter of 2023, compared to $22 million for the same period of 2022. On a GAAP basis, we reported a net loss of $40.9 million or 46 cents per basic and diluted share and $257.7 million or $2.94 per basic and diluted share for the third quarter of 2023 and 2022 respectively. We reported a non-GAAP net income of $37.7 million or 37 cents per diluted share in the third quarter of 2023 compared to a non-GAAP net loss of $70 million or 80 cents per diluted share in the third quarter of 2022. In the third quarter of 2023, we recorded approximately $37 million in the cost of sales compared to $40 million for the same period of 2022. The decrease in cost of sale primarily reflects write-off for certain batches of our PMO products not meeting our quality specifications in the three months ended September 30, 2022, with no similar activity for the same period of 2023, partially offset by increasing demand for our PMO products. On a GAAP basis, we recorded $194.3 million and $216.7 million in R&D expenses for the third quarter of 2023 and 2022, respectively, a year-over-year decrease of $22.4 million. The decrease is primarily due to a decrease in our manufacturing expenses, partially offset by increases in clinical trial expenses. On a non-GAAP basis, R&D expenses were $163.9 million for the third quarter of 2023 compared to $193.7 million for the same period of 2022, a decrease of $29.8 million. Now, turning to SG&A, on a gap basis, we recorded approximately $120.9 million and $104.8 million of expenses for the third quarter of 2023 and 2022, respectively, an increase of $16.1 million. The increase was driven primarily by an increase in professional services and compensation and other personnel expenses, partially offset by a decrease in stock-based compensation. On a non-GAAP basis, the SG&A expenses were $92.8 million for the third quarter of 2023, compared to $66.8 million for the same period of 2022, an increase of $26 million. On a GAAP basis, we recorded $12.3 million in other expense net for the third quarter of 2023 compared to $400,000 in other income net for the same period of 2022. The change is primarily due to the impairment of our investment and loss on contingent consideration that partially offset by increases in increase of an investment discount net and increases in interest income due to the investment mix of our investment portfolio as well as reductions of interest expense incurred as a result of the repayment of our December 2019 term loan during 2022. We had approximately $1.8 billion in cash, cash equivalents, investments, and long-term restricted cash as of September 30, 2023. We're obviously pleased with the amount of capital on our balance sheet, but in turbulent markets, we know cash becomes even more valuable. We continually evaluate our expenses. That said, based on the Embark results and the information we have today, There's no better use of our cash than to build inventory to serve those with DMD. So with that, I'll turn the call over to Doug to start Q&A. Doug?

Thank you very much, Ian. Michelle, let's open the call for questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. And please limit to one question. Please stand by while we compile the Q&A roster. The first question comes from Manupam Rama with JP Morgan. Your line is open.

Hey, guys. Thanks so much for taking the question. Just going back to the Embark results, we've gotten this question. If you guys adjust for multiplicity, on your key functional secondary endpoints. Would you still have statistically significant outcomes on these key measures? Thanks so much.

Yeah, thank you for that question, Anupam. I will turn this call over to Louise.

Thank you. We actually performed a global statistical test, and we did this to do just that, to test for multiplicity and showed that the secondaries did not hit significant just by chance. So we essentially tested MSAA combined with the secondaries and showed that they were, in fact, statistically significant. So this is a quantitative way to test the totality of evidence in respect. So if you think of the forest plot that we showed on our call, that's essentially a statistical test to show that together we see that these are statistically significant.

Please stand by for the next question. The next question comes from Tezeen Ahmad with Bank of America Securities. Your line is open.

Hi, guys. Good afternoon. Thanks so much for taking my question. You know, for me, I think one of the most popular inbounds I've been getting in the last two days is just trying to triangulate timing. So, Doug, to the extent that you can provide us color with what steps are involved next in order to complete your filing, and is there any kind of precedent for a filing like this on the time it would take the agency to review an application? Could it be this calendar year that this could all be complete or would it be something more traditional like a six-month review, for example?

Thanks. Thank you for your question. Let me preface my question by saying I'm probably going to frustrate you by not giving hard and fast timelines other than we're going to move rapidly and we have a commitment from the division to move rapidly as well. Our goal is to file a BLA supplement. I believe it's an efficacy supplement, and we're going to do that very soon. The team is working on it right now. I don't want to commit to the exact date, but very, very soon that will be submitted. I think traditionally the agency may have six months to review. I do not believe – I believe the agency is committed to moving as fast as is reasonably possible to review this. And there is precedent for this. You see this in other areas like oncology all the time, where you can get, for something like this, very fast turnarounds. And of course, remember, this isn't a BLA, but a BLA supplement. So the inquiry, while extraordinarily important, is focused. And that focus is on The fundamental question, does the totality of the evidence justify the conclusion that Alevitus is bringing a better life to these patients? And, of course, we believe that it does. The standard for this is quite clear. It's substantial evidence looking at the totality of evidence. The statute on this is quite clear. I apologize. I don't know what that music is. I promise I'm not playing a guitar right now. the statute says, you know, it's very clear. Can one fairly and responsibly conclude that the therapy will have the effect it purports to have? And the regulations are also particularly clear that for life-threatening and severely debilitating illnesses, ones like the shed, especially where no satisfactory alternative therapy exists, the FDA has determined that it is appropriate to exercise the broadest flexibility in applying the statutory standards. And as Louise just pointed out to everybody, not only are the evidence on whole very compelling that Alevitis is arresting the decline in these patients, but if you do the actual statistics and look across the primary and our functional secondaries, you can see statistically adjusting for any risk of a false positive, adjusting for multiplicities that is powerfully statistically significant. So all of which is to say, winding back to the original question to Zine, that we're going to submit a VLA supplement very soon. The agency is committed to working with us very rapidly. And while I won't give an exact timeline, I am confident that we're going to move quickly to review this and if successful, broaden this label.

Okay. Thanks, Doug.

Please stand by for the next question. The next question comes from Jenna Wang with Barclays. Your line is open.

Thank you for taking my questions. Maybe just follow this comment. Doug, will you announce when BLA efficacy supplement was accepted and in the data package, Can you lay out what kind of data will be included in addition to what you share with us? Would that also be like, say, the protein correlation, you know, of the protein level versus function? Will these data also be included in the package?

There will be certainly more in the package than the top line. We're still evaluating other information, including, you know, for instance, protein and and other things, CK and the like. But obviously the focus of the review is going to be, first and foremost, the efficacy and the safety for this therapy. And then, of course, it's all going to be evaluated in relation to our request to broaden this label by removing age limitations and ambulation limitations on that. Um, you know, we, I don't think we've made any final decisions about, you know, what we're announcing during this process, but obviously, generally speaking, we tend to be pretty transparent with folks.

Thank you. Please stand by for the next question. The next question comes from Colin Bristow with UBS. Your line is open.

Hey, good afternoon, and congrats on the impressive Elevitus sales. Maybe another one on the Embark data. Can you speak to the interpatient variability you saw in Elevitus-treated patients? You know, sort of a question we've been getting is, were the positive results driven by a small group of high responders? And maybe if you could also comment on how this variability compared to the Phase 2 experience, that would be helpful. Thanks.

Sure. I'm going to flip this over to Louise to answer specifically, but I would generally note that the positive results, the p-value on these positive results, they're not close. On the time to rise, it's 0.002. On the 10-meter walk run, it's 0.004. On the global statistical analysis, when one looks at the primary and all the secondaries together, it's 0.004. So it's very, very powerful. But perhaps you want to answer more specifically on some of the variability issues.

Yeah. Generally, we did not see high variability amongst the patients. The standard deviation was either at or below what we anticipated from our previous studies that we used to power and embark. So we did not see any high variability.

Thank you. It's helpful.

Please stand by for the next question. The next question comes from Reeve Forsyth with Guggenheim.

Your line is open.

Hi, this is Rye. I'm for DebJet. I am very sorry, but I was unable to hear that question. Can you ask it again, perhaps? Yes. This is Rai for DebJIT. Did the top-line data provided to the FDA on EMBARQ include information on microdiscipline?

Goodness, I am so sorry, Ry.

I heard the beginning, but I don't hear the question itself. I'm very apologetic.

I think he asked if it included data on microdiscipline expression.

Oh, well, I imagine that we'll have that data, Bill. during the review process with the FDA. As Louise said, the expression we're seeing is in the hunted range of what we've normally seen, so there's nothing unusual about it. In fact, the p-value on it is .0, many zeros. It's very strongly, robustly. As you would expect, the limit is robustly mixed. That's the question, though. That helps. Thank you. Thank you so much, Ryan. Apologies, I couldn't hear you. I'm sorry about that.

Please stand by for the next question. The next question comes from Brian Scorny with Baird.

Your line is open.

Hey, good afternoon. Thanks for taking the question. I guess it wasn't something we looked at very closely before, but I'm starting to want to tell, I think, time to rise had a non-significant difference in favor and treatment, but not that different in terms of magnitude. I think maybe just under half a second differences. You can tell me if that's right or not. So I know you've talked extensively about the baseline imbalance issue here, and it seems particularly acute in the case of baseline time to rise, where the active arm was 5.1 at baseline and placebo was 3.6. So I was just wondering if you've gone back and looked at making adjustments for baseline imbalances to evaluate the time to rise differences in study 102, and in particular, if the four- to five-year-old subgroup looks the same in 102, is it dead in a mark?

Yeah, thank you for that question, Brian. I'll turn this to Louise to respond.

I'm going to speak generally, because what we did was take the inclusion criteria that we've generated for Embark and applied it to our previous data when we compared it to the external control. And what we found there is a difference when you exclude those patients that would have been excluded by that criterion 102 where you had those rapid decliners. So in that case, we saw a more significant difference, but the specific numbers are escaping that right now. But we did do that analysis where we kind of applied the same exclusion criteria and did see a difference.

Great, thank you. Yeah, maybe just one thing to add in that analysis. To Luis's point, we saw a very, we saw a really good consistency between what we observed in 102 and what we observed in 301.

Please stand by for the next question. The next question comes from Salveen Richter with Goldman Sachs. Your line is open.

Good afternoon. Thanks for taking my question. With regard to the regulatory submission, are there formal or regulatory procedures involved with revisiting an accelerated approval after the primary endpoint fails and in a confirmatory trial here? And then just any preliminary feedback on your data from payers and how that might impact the existing label or from physicians with regard to how they think about use in patients here.

Again, on the first question, I'm not 100% confident I understand the question. Let me be very clear. The standard for confirmation of an accelerated approval is looking at the totality of evidence and determining whether the benefits of that therapy have been confirmed by the entire data set, not just the confirmatory data, but all of the surrounding evidence that would exist, including other studies. And I would strongly argue that not only Embark, but all of the supporting data evidence as well as strongly confirmed the benefits of this therapy. So I think we're in very good shape there. The focus of our review with this division is going to be on the breadth of the expansion of this label. That, I am quite confident, is going to be the review focus. And as relates to that, as you know, our strong view is that having confirmed these results, having confirmed them across patients and looking at the totality of this evidence and looking at the forest plot as an example and looking at the statistical analysis of the forest plot adjusted for multiplicities, it is quite clear that this therapy is arresting the decline in these patients and deserves to be made available to patients without limitation to age or artificial restrictions around angulation. As relates to payers, this is additional evidence in our armamentarium with payers. Things have gone very well. Dallin and his team, medical affairs, our commercial, our field force, access to reimbursement and the like, have just done a fabulous job supporting the launch of Elevitus. And I hope everyone will agree with me that it shows in our performance this quarter and this bolstered the discussions that the team can have. Now we can, as an example, we now have a really powerful metric that is compelling on the speed with which one should put a kid on therapy. So as well, I will remind you on the time to rise, not only is the P value, I think 0.002, if I am not mistaken, but And time to rise is the single greatest prognosticator of loss of ambulation and a rise time above five seconds, as we've talked about often and it's in the literature robustly, is the single greatest predictor of early loss of ambulation. And Embark has shown that using a Levitas reduces the odds of that occurring in a 52-week period by over 90%. So this provides an additional compelling indicator with payers who, frankly, so far have done a really good job of providing access. This provides additional evidence that it really is important to get kids on this therapy as soon as possible. And I would argue, looking forward to label expansion, it is a compelling argument for why this therapy should be, this label should be expanded as soon as possible as well so everyone has access to it.

Please stand by for the next question. The next question comes from Wyere with Mizzou. Your line is open.

Hey guys, thanks for taking a question. Congrats on the great quarter for Elevides. So I guess my first question is, were those you know, the patients who were dosed, were they primarily those who were pretty much anticipated the approval, the accelerated approval, and they, I guess, you know, more like the bolus. And, like, how many, would you be able to share how many patients are waiting to be dosed in the coming quarter? And just continuing this theme, now that the Embark data is read out, do you have any sense of, um, Any shift in patients' receptivity to the product? At all, I know it's early days. Thanks. Yeah, let me answer those questions quickly.

First, I don't think there will be any shift in the desire for this therapy, I think, except for patients that are not in the, parents of patients that are not in the four- to five-year-old range, I think, are probably even more compelled to to want this therapy and are going to wait impatiently, as they should be impatient, to have this label broadened. We don't share patient numbers. We're going to use our metric for success and the measure of our success, net product revenue, as we've said. On the issue of sort of bolus or warehousing of patients, there were certainly some number of patients that physicians were, um, getting together and gathering to ensure that they could prefer, preferentially get dosed before they, um, aged out. Cause the label obviously, as you know, um, restricts the dosing to, um, six and below six and five. Um, but we've had a steady stream of, um, new start forms since the approval. And so, you know, looking forward, we have a steady, um, stream of, of, um, start forms that are working through the process um and you know one other thing people have been asked what i'll say say it um you know dennis the team dell and others has done a brilliant job on site activation you know i think our goal as you know our goal had aspirationally been to have 50 sites um ready to infuse at launch And then very aspirationally, we thought perhaps by the end of the year, sometime next year, we could get all the way to 70 sites, but we're at 70 today. So the team has just done a brilliant job getting sites ready and up and running, and there is a steady stream of start forms to work through. Thank you.

Please stand by for the next question. The next question comes from Danielle Brill with Raymond James. Your line is open.

Hi, guys. Good afternoon. Thanks so much for the question. Doug, so we spent a lot of time discussing Embark advocacy data. I'd like to switch over to Stacey. I recall myocarditis events being discussed at the ADCOM, including one event that had occurred in Embark at the time. Just curious if there are any additional safety events of this nature that occurred in the study or any other SAEs leading to hospitalization.

Thank you. Thank you for your question, Danielle. I will turn the call over to Louise to respond.

Yeah, we did not see any differences in the types of SAEs or the frequency of those SAEs. That was One of the most reassuring things about EMBARQ was the continued safety profile and now taken together all of the previous trials. We have a large safety database that's consistent among those trials.

Please stand by for the next question. The next question comes from Ritu Borrell with TD Cohen. Your line is open.

good afternoon everyone thanks for taking the question um doug could you um and maybe dylan walk us through how you see patient numbers for the different scenarios that our regulatory experts suggest could are in play essentially for label expansion you know you mentioned 10 percent of your pmo sales are for four to five those are covered um but how would you segment it by maybe six to seven-year-olds if FDA wants to go down that route again and how that number would change if you do got the full ambulatory population, which per my calls now extends to like 12 years of age.

For ambulatory?

Yeah, like that's the average age of loss of ambulation now, 12, 13. Okay.

That may be correct. I'll have Dallin confirm that in a second. Broadly speaking, I mean, look, first of all, I want to be very clear. We're not looking for a label expansion to go from four to fives to four to sevens, and we don't think there's any reason scientifically one would be limited to four to sevens given the data. We've never seen that before. You've never seen it in any other label for Duchenne therapy. these sorts of age-related restrictions. But answering the broadest question, all ambulatory versus all ambulatory and non-ambulatory is about 50%. So the ambulatory population is about half of all patients, and then non-ambulatory is the other half, of course. And so that, to our mind, is the big cut. But, Dallin, is there anything else you'd like to say on this topic?

No, I think you covered it, Doug. Our goal is to, you know, target all the patients that we can get in the entire population. I'll read to you to your question about average age of loss of angulation. I think you're in the right range, but the KOLs have been talking a lot about, you know, the definition of loss of angulation too, because as you know, there's heterogeneity. So you'll, you have some patients walking at much older ages and we have a whole cohort of patients, uh, who've been treated with the PMOs for years now that are going to, we believe have older ages of loss of ambulation as well. So it won't be, we believe, you know, the ambulatory population won't be defined by age, but as Doug said, our aspiration is a broad label and targeting all of the patients who, who will be eligible.

And is that 50% of your PMO sales too?

On, yeah, I, the ambulatory versus non-ambulatory split. I think it's in that range of 50%. I think the access is more difficult in the older patients. So on average, we've got a higher penetration in the younger ambulant population. Great. Thank you.

Please stand by for the next question.

The next question comes from Mike Alls with Morgan Stanley. Your line is open.

Good afternoon and thanks for taking the question. You mentioned now that you have about 70 sites are active. Can you give us a sense of what percentage of those sites have actually prescribed the Levitas so far? Thanks.

We are going to, apologies, I'm going to frustrate you. We're going to resist that level of detail either on Numbers of sites are infused or, you know, probably more specifically, number of patients infused at any one time, as we have done for the last seven years. And I think we've done, you know, generally over time to good success with folks. We use net product revenue as the marker for success and uptake and the like. So apologies for that, Mike.

Please stand by for the next question. The next question comes from Tim Lugo with William Blair. Your line is open.

Thanks for the question. You mentioned earlier in the week that you didn't expect an additional advisory committee for broadening the label. But, you know, we can all remember when we didn't expect one for the accelerated approval. discussion. I guess why not request an adcom? It seems like listening to the adcom the participants were much more amenable to a non age restricted approval than the agency was.

Yeah. Okay, so it's a good question. And I, I'm not surprised by the comment I there are those that might say that I have a I have a poor historical track record of predicting adcoms. notwithstanding the fact that the last time I said we weren't going to have an adcom, I did have that in writing. The reason that we don't believe we're going to have an adcom is that we don't believe that we will need one. And I think that, you know, I believe, as we said today, that that is a view that would be shared by us and FDA leadership. As we've said before, we had a very productive and encouraging response discussion with the FDA leadership on the data and on the possibility of submitting it for a broad label. I would also note that the agency has changed. The division in particular has gone through some pretty significant changes over the course of this year. There's been a reorganization, just to remind you, where OTAC has been replaced by this super office OTP. And not too long ago, a new leader, Dr. Nicole Verdun, took the helm as the head of OTP. So I would say, you know, just one ought to remember that the division is evolving. Obviously, in the event that there was an advisory committee, we would be well prepared for it. And I believe we would perform exceptionally well there. I think Dr. Rodino-Klapak and team just did a fabulous job representing us. And as one may recall, we did ultimately win that adcom. But as we sit here today, we feel pretty confident that we can get a label expansion without an advisory committee.

All right. Thank you.

Thank you very much.

Please stand by for the next question. The next question comes from Gil Blum with Needham and Company. Your line is open.

Good afternoon and congratulations on all the progress. Going back to a question, a follow-up on Colin's earlier question about 20 questions ago. So, PTR in study 102, is there any chance that there would be some follow-up, especially on the patients that were older and were crossed over in part two of study 102 regarding time to rise? It would just be interesting to see how that data looks in comparison to the Embark data.

Thanks. Sure. Louise, your thoughts on that?

Yeah. All the 102 patients are continued to follow for up to five years, so that's certainly something that we can look at over time. We don't have that data at hand, but we can look at that.

Please stand by for the next question.

The next question comes from Brian Abrahams with RBC Capital. Your line is open.

Hi there. Congrats on the strong first full quarter of the LLVDIS launch. Thanks for taking my question. Can you remind us of the protocols in place in EMBARQ to protect against functional unblinding? Was this a topic that ever came up with the FDA in your recent discussions? And might you expect any differences in the effect functional unblinding, if there was any, might have on timed tests versus on NSAA? Thanks.

Yeah, I can allow Luis to discuss the protocol aspects of the blinding process, which was exceptionally rigorous. We can generally assume that a very objective time test would be less subject to any kind of influence in the event there was an unblinding, but I would say also that I think the protocol was very good about the blinding process and the study itself, one should remember, was actually very well run. I want to be clear about that. But Louise, any thoughts on the blinding process?

Yeah. Just specifically, so the patients and caregivers obviously blinded the PIs as well as the physical therapists doing the functional tests are all completely blinded. So the studies maintain blinded The study staff that's disrupted is blind and it's maintained by a third party, so there's a rigorous process in place to make sure that the blind remains intact. That's helpful. Thank you.

Please stand by for the next question.

The next question comes from Kristen Kluska with Cantor Fitzgerald. Your line is open.

Hi, good afternoon. This is Jason Bouvier on for Kristen Kluska. Thank you for taking our question and congrats on the strong quarter for Alevitus. One question from us, the cadence of treating patients is going faster than the original timelines you laid out. So we're just wondering what the biggest drivers are there and how might this also impact the potentially broader launch next year? Thank you.

All right. Well, I'm going to take the question even though Dallin wants to because I want to brag about our team. I mean, I think there's two significant reasons why the cadence of this launch is going exceptionally well and why this launch is, from my perspective, an unprecedented success in gene therapy. The first of which, of course, is the therapy itself. Levitas is an extraordinarily needed therapy that patients who have been on it and families that share their experience with it are strongly of the belief that they need this therapy and these kids have been stabilized and are doing things age-specific that untreated kids haven't been able to do. And then, if you don't mind me bragging a little bit about the team, I mean, this is an example of exceptionally great execution by the Sarepta folks led by Dallin, our chief customer officer. By going beyond that, this is our manufacturing and distribution folks as well. Just a large team effort to execute on this. And this isn't new for us. I want to remind everyone now that we have now four therapies that we have launched. Every one of those therapies and their launches have gone exceptionally well. I mean, if we look at the PMO, just to digress for a moment, I mean, we are now from our first PMO that was approved in late 2016. We're still growing. We grew at 16% quarter over the same quarter last year, even as we're launching and doing brilliantly there. So I think there's a combination both of a great therapy, as all of our four therapies, I believe, have been, and exceptional, focused, granular therapy well-informed execution. And what does this mean for the future? It means that we know how to serve the Duchenne community and one of the things that excites us about a broader label is we'll be able to bring a Levitas to the majority of children and men and young men in the United States that are living with and degenerating irreparably from this ferocious disease and so I'm really excited about the opportunity to bring this therapy to more patients, even as we're doing really well with the launch right now. Thank you very much for your question.

Please stand by for the next question. The last question comes from Joseph Schwartz with Delirium Partners. Your line is open.

Great. Thanks very much for fitting me in. I was wondering, how are you thinking about upcoming clinical data for a different gene therapy candidate, which we'll have an interim look soon? Is there anything that you'll be focused on in particular? And how do you see the tradeoff between safety and efficacy if it were able to produce a greater impact on an SAA? How would that impact your relative value proposition for Levitas?

Thank you for the question. Look, as I've said many times before, we have in front of us an exceptionally ferocious competitor, and that's Duchenne muscular dystrophy. And all of our focus and all of our energy is in beating this damn disease, and I think this team is doing a brilliant job of that. We're exceptionally pleased with the performance of Alevitus, You know, there were some, you know, many years ago, people made decisions about constructs and capsids and the like. And with the benefit of many years of experience, we are exceptionally proud of and frankly, nothing less than thrilled with the particular capsid and construct that we have. It's shown not only that it is able to intervene, protect these muscles of these children and arrest the decline, but that it can do that with a particularly laudable safety profile given the amount of therapy required here and the fact that it's full-body infusions. RH-74 has been a standout, and we're quite confident that anyone who was rational, who had an opportunity to make a decision today about what capsid they would use and what construct they would develop. I'm sure they would do their best to try to copy us. So we're not focused on any competitor besides Duchenne muscular dystrophy, and we are ferociously committed to beating this disease. So that's our focus right now. But thank you very much for your questions.

I would now like to turn the call back over to Doug for closing remarks.

Well, thank you very much, Michelle, and thanks, everyone, for attending tonight, and thank you for your very thoughtful questions. Let me summarize. This quarter has been an extraordinarily important one. With our fourth approval, we launched the Levitas, and in my opinion, we launched it brilliantly. We have continued to serve the community with our PMOs, which continue robust growth, even in the face of an 11th launch. And on a non-GAAP basis, we are now profitable and we are marching toward a cash flow positive in the very near future. We have built a strong, enduring organization that is focused on two major things. The first is serving our patient community through brilliant science. And the second is executing and getting things done. And that is precisely what we will be doing over the coming months. We intend to continue our strong performance and commitment to serving this community. We intend to move with speed to submit our efficacy supplement and conclude the review on the broadening of the Alevitus label. And when our label has been updated to remove age and ambulation restrictions, we intend to bring this therapy to the majority of patients living with Duchenne in the United States. And with that, I look forward to updating all of you on our progress along the way and have a lovely evening. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.