Sarepta Therapeutics, Inc.

Good afternoon and welcome to the SARAPTA Therapeutics fourth quarter and full year 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 hand is raised. To withdraw your question, please press star 11 again. As a reminder, today's program 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, Shannon, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the fourth quarter and full year 2023. The press release is available on our website at surreptit.com, and our 10-K 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 surreptitious control. Actual results can materially differ from these forward-looking statements, Any such risk can materially and adversely affect the business, the results of operations, and trading prices for Surreptitious Common Stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent annual report on Form 10-K, 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. By the way, everyone, it was Fran's birthday yesterday, so happy birthday, Fran. And good afternoon, everyone, and thank you for joining Threat to Therapeutics' fourth quarter 2023 financial results conference call. Led by an exceptional launch of Alevitus and continuing performance of our approved PMOs, Exondys, Vyondys, and Amondys, we announced this afternoon another strong quarter of full-year growth and quarterly growth as we serve the patient community. As we pre-announced in January at the J.P. Morgan Conference, fourth quarter total net product revenue came in at $365.1 million. growing some 55% over the same quarter prior year, and full-year net product revenue achieved $1.14 billion, growing 36% over the prior year. In addition to continuing strong performance among our three approved therapies, Elevita's performance was particularly impressive and reflects first-in-class launch excellence. Notwithstanding a label limited to four and five-year-olds representing only about 3% or so of the total Duchenne population, Elevitus net product revenue was $131.2 million for the quarter and over $200 million for the full year. I'm exceptionally proud of the team's performance here, which speaks to our level of preparation and attention to detail, expert understanding of all aspects of launching innovative rare disease therapies, and of course our passion for bringing a better life to those living with Duchenne. Dallin Murray, our Chief Customer Officer, will speak to this in his remarks shortly. We also continue to exercise the discipline of a fully integrated commercial stage biotech organization. We were profitable on a gap basis in the fourth quarter, having achieved non-gap profitability in the third quarter of 2023. And we exited 2023 with approximately $1.7 billion of cash, cash equivalents, restricted cash, and investments on our balance sheet. Our CFO, Ian Estepan, will provide more color on financial performance shortly. We also advanced our pipeline in the fourth quarter. In the fourth quarter, we submitted a BLA supplement for Alevitas with the goal of both expanding the label by removing age and ambulation restriction and transitioning our approval from accelerated to traditional. And in February of this year, the FDA accepted our BLA supplement for review and set June 21 as our target review completion date. In the fourth quarter, we also commenced Emergene, our trial for SRP9003 to treat LGMD type 2E. Also in January of this year, we announced the positive results of our trial Momentum Part B, investigating the use of our next generation peptide conjugated PMO SRP 5051 to treat Duchenne patients that are exon 51 amenable. Dr. Luis Rodino-Klapak, our head of research and development, will provide more color on our pipeline progress shortly. You know, in 2017, starting with one approved therapy, $5 million in sales, a modest pipeline, a short cash runway, and little more than ambition and grit, we set out to build a sustainable and mature biotech organization, improve the lives of the greatest possible number of Duchenne patients along the way, and to become the leaders in the use of RNA and gene therapy to treat rare genetic disease. If we are successful in our plans this year, we will have achieved that vision. From there, we can and we will expand our ambition, and relying on our scientific and financial strength, we intend to advance our internal pipeline, but also to bring in external innovation to grow from here, not incrementally, but in great multiples. In short, 2024 is going to be a very important year. And with that, I will turn the call to our Chief Customer Officer, Dallin Murray. Dallin?

Thank you, Doug, and good afternoon. The fourth quarter of 2023 represented a strong finish to an already impressive year, as the team generated over a billion in net product revenue. a milestone for Sarepta. As previously noted, net product revenue for 2023 totaled $1.14 billion, consisting of roughly $945 million from our PML franchise and $200 million from the launch of Alevitus, the first gene therapy approved for patients with Duchenne muscular dystrophy. Each of these accomplishments stands on their own merits, and the performance of both surpassed our internal projections and external consensus. In the seventh year of our PMO franchise, we again grew net product revenue by double digits from the nearly $844 million in net product revenue from 2022. As with previous years, we delivered this growth organically without taking price increases on any of our approved PMO products. As such, this growth represents an increase in the number of patients we are serving, reflecting our commitment to the Duchenne community. Turning to Alevitus, we're extremely pleased with the launch execution, exceeding our own lofty expectations. In fact, the $200 million in net product revenue surpassed the combined 2023 revenue of the other five gene therapy launches from the past 18 months. Remarkable given the Alevitis approval occurred just this past summer. The success of Alevitis shows that gene therapy can be commercially viable, providing hope for those patients with Duchenne and for all those with genetic conditions with unmet need. While revenue is how we quantify the success of this launch externally, we measure ourselves on how we support patients. Our preparation was deliberate and intense, and our process was put to the test with a narrow label. The team responded to that challenge with an incredible commitment to supporting all eligible four- to five-year-old patients. This was our fourth Duchenne launch, and our knowledge and experience played a significant role in how the team rallied, worked together, and rapidly supported those patients who were approaching their sixth birthday and who were at risk of becoming ineligible for therapy. Ensuring no eligible patients are left behind is what motivates us. Let's now review the results from the fourth quarter, starting with the Levitas. Net product revenue for the quarter was roughly $131 million. This represented a nearly 90% increase over Q3. We are pleased with our penetration into the very small and narrow segment of the Duchenne population. This four to five-year-old label has presented a number of unique executional challenges that are relevant moving forward. Firstly, a significant proportion of the patients in this age group are not yet diagnosed, given that the average age of diagnosis is around five in the United States. Secondly, those who are diagnosed have not had a lot of time to be fully educated about Duchenne, which means the patients and families need to understand that diagnosis, become aware of therapy options, go through a more involved and longer pretreatment process than the PMOs, one example of this being antibody testing. And on top of this, the patients must also secure access to a Levitas in this very short time window. Our team has found themselves in a race against time to help these patients. And finally, the relatively small number of diagnosed four- to five-year-old patients results in a situation in which we will be working through this prevalent population quickly within the first half of the year. On the flip side, many of these dynamics are reversed once patients have transitioned over to the decline phase of the disease. This is illustrated by our real world experience with the PMOs, where we see a larger proportion treated in the older age groups. which is on top of a larger diagnosed patient pool. Because of all this, we do not expect to see significant additional growth within the existing population through the first half of this year. Notably, however, by the time of label expansion, we expect to have cleared the way for those older patients to get dosed as rapidly as possible upon eligibility. I would caution analysts, therefore, to not use this current younger population as a frame of reference for our market potential in the overall population. The team is preparing as we speak for a broad label with a focus on building upon the successful launch execution to date, and we have the access and capacity in place to execute successfully on any broader label scenario. Let's now take a look at the PMO franchise as a whole. As previously mentioned, 2023 net product revenue of $945 million exceeded our full year guidance of $925 million. This performance represents solid revenue growth across all three brands. In fact, both Vyonda 53 and Amondas 45 continued their double-digit growth trajectory. Looking now at the fourth quarter of 2023, the team delivered roughly 234 million in net product revenue. This was flat versus Q4 of 2022 net product revenue of roughly 236 million. As you may recall from our Q4 2022 earnings call, we cautioned around keeping the guidance of 925 million for the year due to an increase in the quarter-to-quarter lumpiness that we were observing at that time. Looking now in retrospect, it's clear the PMOs performed exactly as we expected and guided. And finally, the performance we just discussed in our PMO business was achieved despite the incredible effort on the Elevitus launch. Notably, we saw minimal impact on our PMO business from Elevitus cannibalization in 2023, given the narrow age range. In closing, in 2023, Sarepta set a new standard for gene therapy launches with Alevitus. We beat external expectations and delivered roughly $200 million. Equally important, we continue to increase the number of patients we support with our PMOs globally. I continue to be immensely proud of our mission-driven team. Combining our PMO and gene therapy businesses we exceeded a billion in net product revenue for the first time, and we have entered 2024 with momentum. And with that, let me turn the call over to our head of R&D and Chief Scientific Officer, Dr. Louise Rodino-Klaypak. Louise.

Thanks, Dalton. 2023 was a year of great accomplishment for Sarepta. For the advancement of science, and for the health and well-being of patients living with rare disease. 2023 will also be remembered as being a defining moment in genetic medicine. In June 2023, the FDA granted accelerated approval to Elevitus, first gene therapy to treat Duchenne muscular dystrophy. Since that time, we've been successfully treating ambulatory pediatric patients aged four through five years with Duchenne who have a confirmed mutation in the DMD gene. And then, just about two weeks ago, and as Doug mentioned, we were thrilled to announce that the FDA accepted and filed our efficacy supplement for Levitis, whereby they will now evaluate broadening the approved indication of Levitis by removing age and ambulation restrictions and converting the Levitis accelerated approval to a traditional approval. Should we receive accelerated approval for Levitis in the non-ambulant population in the United States, our envisioned study also called SRP9001-303, will serve as our confirmatory study for this population. Envision is a global, randomized, double-blind, placebo-controlled, two-part study evaluating the safety and efficacy of delindistrogene moxaparvovac gene therapy in non-ambulatory and older ambulatory individuals with Duchenne. This study is ongoing with all remaining patients being enrolled outside of the United States. With U.S. enrollment completed and the remaining 85% of recruitment occurring ex-U.S., we are confident in our ability to complete this trial. Moving now to our loom girdle muscular dystrophy or LGMD program. On January 16th, we announced that screening was underway in study SRP 9003-301, also known as the emerging study. We are pleased to now share that the first patient has been successfully dosed in that study. To remind you, EMERGENE is a Phase III multinational open-label clinical trial of SRP9003 for the treatment of limb-girdle muscular dystrophy type 2E or beta-sarco-glycanopathy. The primary endpoint of EMERGENE is expression of beta-sarco-glycan, which is an extremely important endpoint for this program, for the other sarco-glycanopathies, including LGMD2D and LGMD2C, and for the field of gene therapy. I'll explain why. Beta-sarco-glycanopathy is characterized by a mutation of the beta-sarco-glycan gene, which fits in a complex of the membrane called the sarco-glycan complex, and is important for function and for preventing muscle damage during contraction. The sarco-glycan complex is a subcomplex of the dystrophin-associated protein complex, or DAPC. A defective sarco-glycan protein results in loss or reduced expression of the other sarco-glycans. as well as other proteins in the complex, such as dystrophin. Therefore, by restoring the missing proteins, such as beta-saccharoglycan, we were able to restore that functional complex at the membrane and thereby restore function to the muscle. Further, earlier this month, I had the opportunity to participate in the Speak Foundation's LGMD Scientific Workshop, which also featured officials from FDA, including Drs. Marks and Verdun, as well as patients caregivers, and clinicians, among others. The key takeaways from the workshop included the perspective that traditional trial designs are not suitable for certain types of LGMD, and that to ensure these therapies have the best chance of success, the totality of evidence must be considered. Doctors Marks and Burdun also expressed their strong support for regulatory flexibility and a higher tolerance for uncertainty for rare diseases such as LGMD. When you're replacing the native protein as well as support for surrogate endpoints for gene therapies. Currently, no treatments exist to effectively treat LGMD2E or the other LGMDs. The emerging study, which will enroll 15 participants who are ambulatory and non-ambulatory, ages four and older, not only holds great promise for individuals suffering from LGMD2E, but will lay the foundation for other LGMD programs, as well as provide a viable regulatory pathway that supports the development of future gene therapies for rare and ultra-rare diseases. These data, combined with positive expression and functional data shared from our initial LGMD2e study, SRP9003-101, which was also published in Nature Medicine earlier this year, and our voyaging study, SRP9003-102, which establishes safety experience across a broader patient population. served together as totality of evidence. As a reminder, VOYAGENE is a Phase I study evaluating SRP9003 for the treatment of LGMD2E in patients ages 18 and older in the ambulant population and ages 4 to 50 in the non-ambulant population. The primary endpoints are safety and change in beta-circublican expression. We expect to have the clinical results this year. Moving now to our RNA platform. We were also pleased to recently announce positive results from Part B of our Momentum study, study SRP5051-201. Based on the data we've generated to date, we believe SRP5051 represents a best-in-class therapy from an efficacy perspective. Momentum is a global, multi-offending dose clinical trial of SRP5051, our next-generation peptide phosphoridiaminate morpholino-oligomer treatment the patients with Duchenne were amenable to Exon 51 skipping. As previously discussed and based on these results, we believe we have a path forward to an NDA and are planning a meeting with FDA to discuss an accelerated approval. We anticipate that this meeting will occur in the third quarter of 2024. Regarding our post-marketing studies for the PMOs, as mentioned, we completed enrollment in the ESSENCE trial, our post-marketing requirement for Golodursin and Kazimersin, As a reminder, Essence is a two-year study and is due to read out in early 2026. In addition, we are pleased to have completed enrollment in our mission study, our dose-ranging post-marketing commitment for Exondys. Mission is a randomized, double-blind, safety and efficacy dose-finding study comparing the approved dosage of a Teflorsen, 30 mgs per kg weekly, to a dosage that provides significantly higher exposure, up to 200 mgs per kg weekly. Mission is a two-part phase three study. It was fully enrolled in October 2023 with 160 patients. We remain committed to rapidly and diligently advancing mission and sharing data as soon as it becomes available. In conclusion, the months ahead are filled with great promise to advance our mission and serve patients around the world living with rare disease. I will now turn the call over to Ian Estepan for an update on our financial results. Ian.

Thanks, LRK. Good afternoon, everyone. This afternoon's financial results press release provided details for the fourth 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. Before we get to the results, I just wanted to flag that beginning in the fourth quarter of 2023, Amortization of in-license rights and income tax expense or benefit are no longer excluded from non-GAAP results. The company has added income tax effective adjustments, which represents the estimated income tax impact of each pre-tax non-GAAP adjustment based on the applicable effective income tax rate. Non-GAAP financial results for the fourth quarter and full year 2022 have been updated to reflect this change for comparability purposes. So for the three months ended December 31st, 2023, the company recorded total revenues of $396.8 million, which consists of net product revenues and collaboration and other revenues compared to revenues of $258.4 million for the same period of 2022, an increase of $138.4 million. Net product revenue for the fourth quarter of 2023 from Elevitus was $131.2 million. Net product revenue for the fourth quarter of 2023 from our PMO Exxon Skipping franchise was $233.8 million compared to $235.9 million for the same period of 22. For the fourth quarter of 2023, individual and net product sales were $131 million for Exxon's 51, $69.9 million for Amandas 45, and $32.9 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 sales of Elevitus. In the quarter ended December 31, 2023, we recognized $31.7 million of collaboration and other revenues compared to $22.5 million for the same period of 2022. This revenue primarily relates to our collaboration arrangement with Roche. For the quarter ended December 31, 2023, the company recognized $9.2 million of contract manufacturing collaboration revenue associated with multiple batches of commercial Levitas supply delivered to Roche with no similar activity ended December 31, 2022. The reimbursable co-development costs under the Roche agreement totaled $23.5 million for the fourth quarter of 2023, compared to $51.7 million for the same period of 2022. On a GAAP basis, we reported a net income of $45.7 million, or 49 cents per basic and 47 cents per diluted share and a net loss of $109.2 million or $1.24 per basic and diluted share for the fourth quarter of 2023 and 2022 respectively. We reported a non-GAAP net income of $86.6 million or 82 cents per diluted share in the fourth quarter of 2023 compared to a non-GAAP net loss of $53.6 million or 61 cents per diluted share in the fourth quarter of 2022. In the fourth quarter of 2023, we recorded approximately $44.2 million in cost of sales compared to $30.8 million for the same period of 2022. The increase in cost of sale primarily reflects increasing demand for our PMO products, an increase in royalty payments due to levity sales in 2023 with no similar activity in 2022, and write-off of certain batches of our products not meeting our quality specifications in the three months ended December 31, 2023. with no similar activity for the same period of 2022. On a gap basis, we recorded $195.5 million and $213.8 million in R&D expenses for the fourth quarter of 2023 and 2022, respectively, a year-over-year decrease of $18.3 million. The decrease is primarily due to a decrease in manufacturing expenses and upfront milestone and other expenses. On a non-GAAP basis, R&D expenses were $165.1 million for the fourth quarter of 2023 compared to $186.8 million for the same period of 2022, a decrease of $21.7 million. Now, turning to SG&A, on a GAAP basis, we recorded approximately $131.7 million and $120.5 million of expenses for the fourth quarter of 2023 and 2022, respectively, an increase of $11.2 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 $105.7 million for the fourth quarter of 2023 compared to $86.6 million for the same period of 2022, an increase of $19.1 million. On a GAAP basis, we recorded $15.7 million in other expenses, income net for the fourth quarter of 2023 compared to 5.5 million dollars for the same period of 2022 the change was primarily due to an increase in the accretion investment discount net due to an increase in interest rates we had approximately 1.7 billion dollars in cash cash equivalents and investments and long-term restricted cash as of december 31st 2023 so to conclude we're incredibly pleased to achieve our first quarter of profitability from a gap perspective It is impressive to reach this milestone in just the second quarter of the 11-inch launch and highlights the leverage in our business. For the reasons down in that line, there may be some lumpiness on the bottom line in the first half. That said, with an expansion of the label, we expect to be highly profitable for the full year. Also, as I previously noted, in preparation to serve the community in the event of a label expansion, we're continuing to ramp our manufacturing of the Levitas. This continued investment will be apparent in the first quarter financials in the remainder of the year. We are thrilled to have the resources on hand to continue to build the inventory needed to deliver a Levitas to the Duchenne community. And with that, I'll turn the call back over to Doug to start the Q&A. Doug?

Thank you very much, Ian, Shannon. Let's open the call for questions.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourself to one question. Our first question comes from the line of Gina Wang with Barclays. Your line is now open.

Thank you. I think, operator, your voice was cut off, so I don't know how many questions I can ask. I just asked two very quick questions. So one is, I love this. So for the proposed label, was that based on FDA feedback or was purely from SeruptusN? and a second regarding the emerging Phase III study in LINGERD02E. Was it confirmed with the FDA that 15 patients would be sufficient, and what protein level would be approvable?

Yeah, thank you very much for your question, Gina. For the future, it is one question per panel, but I appreciate your questions. Let me answer them. So the basis for our request to expand the label by removing both the age and ambulation restriction, that is driven by the science. I want to be very clear about that. We're in the midst of a review. We're pleased with the progress of the review so far, but it's too early right now to give you a substantive view on the division's perspective on that. But our view is that the science and the totality of the evidence supports the label expansion that we've asked for. And it's the right answer from our perspective. It's the right answer from the science. It's the right answer from a policy perspective. And most of all, it's the right answer for patients living with Duchenne muscular dystrophy, which I hope will be all of our North Stars in this regard. With respect to Emergene, or emerging, I should say, the protocol for that has been shared with and reviewed with by the FDA. And they have, on the basis of those discussions, including the end of the study, given us their blessing to commence that study. And we'll provide additional information on the level of expression, you know, likely to predict the clinical benefit at a later date. I would note in our prior studies, we've had two cohorts. We've seen very robust expression of the missing beta-sarco-glycan protein, the absence of which is the sole and exclusive cause of the degeneration in patients who have LGMD type 2E. Thank you.

Thank you. Our next question comes from the line of Tazeen Ahmad with Bank of America. Your line is now open.

Hi, good evening and thanks for taking my question. I just wanted to get a sense as you look for the extension of label and how to model COGs, especially as more patients get on therapy over time and the weight of the patients presumably will go higher as it gets to older patients. What's a reasonable range of COGs that we should be assuming? Thank you.

Yeah. Ian, I'll turn this to you. Sure. So, from a COG perspective, we've been pretty clear. that we're targeting 80 obviously from our financials that we reported today you see it's much higher than that but over time as heavier patients get on the therapy and obviously our pre-expense inventory is exhausted you'll see the COGS obviously start to increase and our margin to start to decline more to that 80% range which we've been guiding obviously we can't give Complete clarity around that because we have a suspension which could be coming online, which is a much higher yielding process in time for some of the older, heavier patients to be coming on, which would offset their weight. As we said, over time, you'd see some erosion of the margin from where we currently are, but modeling in around 80% is probably reasonable.

Thank you. Our next question comes from the line of Joseph Schwartz with Lee Ring Partners. Your line is now open.

Hi, all. Thanks for taking our questions. This is Will on for Joe. Congrats on the great quarter here. So one question for us on manufacturing. With the recent acquisition of Catalan by Novo and the expected expiration of your agreement with Catalan at the end of this year, how are you guys thinking about manufacturing moving forward? And then in terms of capacity and the potential for an expanded label this year, are there any potential for supply constraints in the near term? Thank you.

Yeah, thank you for your questions. Well, first of all, I think there might be a misunderstanding of some sort. Let me be very clear. Our agreement with Catalan does not end at the end of this year. We have a long-term relationship with Catalan. They've been very good partners of ours. So there will be, from our perspective, no impact. from the acquisition of Catalan by Novo Holdings. As we understand it, Novo Holdings would be acquiring the entity as a whole. The GLP-1 related manufacturing I think is going to be sold down to Novo Nordisk, and then Novo Holdings will hold the rest of Catalan, and it'll be run the way it's run today. And we've had, I have had direct discussions with the, you know, the senior management at Catalan, and I'm quite confident that it is business as usual with them. So we're feeling very good about that. And generally from a supply perspective, you know, I will say what we have done together over the last, since 2018, at the beginning of this journey from a manufacturing and CMC perspective, Yeah, it would be nothing other than miraculous if it wasn't for the fact that it's science and hard work driven. As we sit here today, we're doing really a brilliant job of serving the community and will be continuing to do a brilliant job of serving the community over the course of this year with our partner, Catalan. So we're feeling very good about where we are.

Thank you. Our next question comes from the line of Gil Blum with Needham & Company. Your line is now open.

Hi, everyone. Good afternoon, and thanks for taking our question. So, I know this may be knowable, but, you know, can you remind us what the population divide is between ambulatory and non-ambulatory patients, and what is kind of the median age for loss of ambulation? Thanks.

So, I can give you the broad strokes. It is about, epidemiologically, about 50-50 between ambulatory and non-ambulatory patients. And, Dale, if you have the recent estimates of the loss of ambulation?

You cut out there for a second. Did you say the diagnosed patient?

No, I said what is the average age of loss of ambulation?

Oh, average age of loss of ambulation. I think, you know, Louise would probably have better data than me, but it would be depending on different publications in the 11 to 12 range. Louise, does that sound right for me?

Yeah, some are slightly earlier. To your point, there are some differences.

Thank you, Mel.

Thank you. Our next question comes from the line of Brian Abrams with RBC Capital Markets. Your line is now open.

Hi, this is Lena Dawn for Brian. So maybe I'll ask 1.5 questions. If that's okay, not quite 2. So I guess, can you? clarify the application process with respect to a levitis, I guess. Is the conversion to a full approval and the label expansion two separate questions before the FDA that have potentially separate timelines, reviews, discussions around them? Can they be separated? And then I guess just related to that, you mentioned in the prepared remarks you're thinking through broad label scenarios. So, and you mentioned if you get an accelerated approval in the non-ambulatory setting. I guess, is that part of those scenarios? Is that something you've heard from the FDA, or is this just preparing for all the possibilities? Thanks.

So, a couple things. Yes, there are essentially two issues at the agency at the same time. One is modifying the label to expand the label and to provide access to a much broader population of patients, and it As we said, and it bears repeating, our BLA supplements requested the removal of all age and ambulation-related restrictions from the label because we believe that's founded on science. And, of course, the second question then is the view that we have satisfied the requirements for our confirmatory trial and that the entire process approval should be translated from accelerated to a traditional approval you know there there are many different scenarios there there's obviously you know going to be dialogue about the breadth of the label and then of course there'll be this dialogue about what portions of that are confirmed for traditional approval and what portions of that are confirmed for and will remain an accelerated approval. So there are many iterations. We have a strong view on what we think the science justifies. So first from an administrative perspective, the timelines are identical. So we have a June 21 a target completion date, that is for both of those issues. So we'll address both of those issues with June 21. And we're very pleased with June 21, as you know, because we had them guiding people to end of August from that perspective. On the substantive issues or, you know, what's going to happen in the review, that's going to be subject to the review and we're in the early days. Again, I'd say we're very pleased at least with the engagement of the division thus far, but we have more work to do and more, discussions to be had, and I don't want to overpromise before the end of this. I will also say there are a lot of different iterations. From our perspective, priority number one is the broadest possible label. So as between the two issues that we're discussing, we are first and foremost focused on the broadest possible label, giving the potential of access and hopefully a better life to the greatest number of patients. And then, of course, it's important to us, but The secondary issue is translating this from accelerated to traditional, and the breadth of that will be a separate discussion. But we have more work to do and more discussions and work to do with the agency, and June 21 will be our return date on all of that.

Thank you. Our next question comes from the line of cost. This bill is yours. With BMO Capital Markets, your line is now open.

Thanks for taking our question and congrats on the impressive progress. So, one quick question from us. If we assume that your label will restrict levities used to ambulatory patients only for all ages, how straightforward would it be for physicians and importantly payers to clearly determine whether someone is ambulatory or not, given that patients are losing ablation progressively? So, there may be a stage where the ambulation status is unclear. So, would it be clear for physicians and payers to determine if someone is eligible or not? Thank you.

Yeah, okay. Thank you very much for your question. First, let me be clear. I resist the assumption that we may only get ambulatory alone, of course. because we are at this point seeking a removal of the ambulatory restrictions. But to your point, ambulation is in the label today. And the question then is, how do physicians determine what ambulation means? The short answer is that that is left to the medical judgment of physicians, but there is good guidance. in medical practice for that it is based on functional assessments and functional tests there are well-defined approaches probably the most common perhaps the most gold standard approach is the definition from synergy which is that there is a patient reported continuous use of a wheelchair without ambulation and then that is verified by the physician by the inability of the patient to walk 10 meters unassisted. So that would be a typical functional assessment that a physician would use to determine ambulatory status. So this isn't an enormously difficult functional assessment and conclusion to make by physicians.

Thank you. Our next question comes from the line of Nina Bittuto-Gard with Deutsche Bank. Your line is now open.

Hey, guys. Thanks for taking my question. Just to follow up on the last question, could you just remind us what data was included in the filing on patients that are non-ambulatory, if any, just to kind of clarify that? Thanks.

Yeah, we have data from children up to 20 years old from a separate study that we call Study 103. that went in with it. We obviously also have an ongoing study, Envision, which is a study for non-enduratory patients. Now, that is an ongoing placebo-controlled trial, but the safety from that study is obviously made available to the FDA on a continuous basis, and all of that supports our BLA supplements.

Thank you. Our next question comes from the line of Tim Lugo with William Blair. Your line is now open.

Thanks for the question. Can you discuss the level of warehousing currently occurring in the DMV community and maybe any subpopulations ahead of this potential expansion in the summer, which we should be aware of? I know we all focus on ambulatory and age-related. Is there anything else, though, that we should be also looking at maybe while we function? or other cell populations?

Well, I'm not 100% sure what we mean by warehousing, to be honest. There is going to be an exceptional amount of demand for this therapy when the label is expanded, both from the physician community, but from families with Duchenne muscular dystrophy. And we stand prepared to build the material and have lots available to fully serve that demand over the course of 2024. But, Dallin, do you have other thoughts on the warehousing question itself?

Yeah, if it's related to the PMOs and warehousing with the PMOs in anticipation of the gene therapy, we were worried about that leading up to the initial launch, and the team did an exceptional job of making sure that that did not happen. And we don't see widespread warehousing where patients – getting delayed or really at any warehousing where people are foregoing PMO in anticipation of the gene therapy. So I think, as I mentioned in the script, one of the things we're particularly pleased with this year is the continued incredibly excellent execution of the PMO team for patients who were not eligible for the gene therapy for Levitas.

Thank you. Our next question comes from the line of with Mizuho. Your line is now open.

Hey, guys. Thanks for taking my question. So just going back to the exon skipping products, could you, and I'm not asking for full guidance or anything to that effect, maybe just help us understand the first half of the year. You know, in the prior quarter, growth, year-over-year growth was relatively strong in the first half. Just wondering how we should sort of think about the first half of 2024 for those three products. Thanks.

We haven't provided guidance on the PMOs for this year, but, you know, we're doing very well. I mean, I think you saw very good performance of all three of the PMOs last year. In fact, the Mondas and Biondas were still growing at double digits. And one of the things that's interesting is that we are not seeing right now and probably won't see a significant amount of cannibalization from Alevitus over the course of 2024 that will have a significant impact on the PMO. So we feel very good about where we are with our three RNA-based therapies in 2024.

Thank you. And then the broader population opens up. How do you think that physicians might prioritize which patients to treat first in the context of site constraints? Thank you so much.

Yeah, that will be an issue that physicians are going to have to grapple with. There are a number of constraints. One of the things that you have to recall or remember is that we need to ensure that we're always prioritizing great outcomes and safety over, for instance, short-term So we need to make sure that physicians, and physicians will know this and they're going to certainly consider this, they need to make sure that they can not only infuse patients but follow up appropriately. And so that will likely require them to prioritize patients as they consider this therapy. The short answer is that we can't invade the practice of medicine decide for them what to do. There's the compelling arguments on both across the spectrum. On the one hand, there may very well be physicians who want to prioritize very young children to get in and intervene before damage is done. On the other hand, for the non-ambulatory patients and later patients, there is a race against time for those patients. And so getting to those patients, um, And stopping damage before it's too late is extraordinarily important. So these are going to be difficult decisions. Physicians are going to have to work that out. And I'm sure there'll be white papers and discussions among thought leaders on that topic. The issue today is a slightly different one. The prioritization today, given the label that we have, is to ensure that we get kids on the label. And this really comes from the physician. um more than from us to get kids on the label before they age out and the the therapy won't be available to them so if you looked at the bias here the bias is tends to be to the you know in this tight age range of four and five to be in the later ages because we're they're really trying to get to those kids who if they don't get through the administrative process will age out to six years old the good news is that if we can expand this label That issue goes to the side, then we'll have to deal with the other issues about prioritization and the like. But it ultimately will be a physician decision and the issue of the practice of medicine for physicians.

Thank you. Our next question comes from the line of Ritu Baral with TD Cowan. Your line is now open.

Hi, guys. Thanks for taking the question. I want to just follow up on the sort of guidance given, your comment on how not to expect additional growth in a Levitas through the first half of the year, at least until the PDUFA. Is that a comment or a reflection on just the fact that you've reached sort of a run rate on four- to five-year-olds, or is that a comment on sort of capacity of the system's throughput? You know, are you getting through as many patients as possible? And can you comment on what that sort of throughput capacity of like the centers is at this point for when hopefully the label expands? Thanks.

Yeah, this really isn't a capacity issue right now. So I think as Alan commented in his opening remarks, the label that we have today in this population, it's really a fairly unique label. population. First, as we all know, it's a very narrow age range, four to five years old. But that alone doesn't really describe the unique nature of this population, because beyond that, there's a significant percentage of those patients that are not yet diagnosed. And so that, you know, makes it unusual. And then when they are diagnosed, remember that they're not all getting diagnosed on four years in one day. You know, some of these kids are getting diagnosed deep into their fives. And so what does that mean? It means that a family faced with what is, you know, very likely the most devastating piece of news so far in their life has to come to grips with that news. then understand it well enough, and then go through the administrative process that exists to get approval, to get antibody tests, to get an infusion date, and to get infused. So this is a very unique population. In light of that, you know, just to give a shout out to the team, it is particularly impressive when one considers that we did $200 million in that product revenue this year. So what Dallin's really talking about when we talk about this is just simply that as we work through the prevalent population, this is a really unique population and much narrower than you might imagine the four to five. And so by the middle of this year, assuming no label extension, you would get to a place where you'd begin to be treating the incident population as opposed to sort of a bolus of prevalent population in this group. Now the good news is that we have a June 21 date for our request for a label extension. So hopefully by July we'll have a broader label and we'll be able to serve a much greater percentage of the population.

Thank you. Our next question comes from the line of David Hong with Citigroup. Your line is now open.

Thanks for taking the question. I just want to ask a little bit more about the suspension culture manufacturing you have in the works. How fast did something like that come online? And once that is operationalized, how might that improve your margins?

So we're very excited about where we are from a suspension perspective. There's still a ton of more work to do, but a couple of things to think about. We are very advanced, actually, in the suspension work that we're doing. Not just with 9001, but we're actually getting great results from a suspension perspective with some of our limb girdle programs. A couple of our sarco-glycan programs actually transitioned to suspension, and we're making great progress there. When we focus specifically on Alevitus, we are in engineering runs right now on suspension. We've done 500 liter. We're doing another 500 liter. We'll start in the next month or so, 2,000 liter. We're so far getting not only really tremendous enhancement on yield, but really good product qualities. If all goes well, our goal is to have this suspension process available commercially by 2026. Now, that's a moonshot goal on our part. And with keeping the patients front and center, we're going to try to move as fast as possible. But, you know, hopefully we have the history to prove that we can come up with audacious plans and serve them. So we're really excited about that. As far as what that might do, both from a capacity perspective as we go around the world with our partner, Roche, and a COGS perspective, you know, that's going to require more – work and more clarification as we get these runs done, but it won't be modest. It'll be multiples. I mean, we are seeing, you know, multiple times greater yields with suspension than we get with our ICELS process, which is, you know, Ian mentioned, still derives right now an 80% margin. So we're, you know, I mean, you're probably hearing my voice, a certain amount of enthusiasm for our manufacturing approach and our suspension approach. And this is, you know, it is still early days and we're just in engineering runs right now, but we're very, very excited about what this could mean for our ability to bring this therapy across the world and at a lower cost of goods as we go across the world.

Thank you. Our next question comes from the line of Mike Oles with Morgan Stanley. Your line is now open.

Hey, guys. Thanks for taking the question. Maybe just a quick one on timing. Since the PDUFA date was granted two months ahead of expectations, just curious if the thinking now is you'll probably get a decision close to the PDUFA date, or is the FDA still really committed to rapidly reviewing this and might get an answer sooner? Thanks.

Well, I have no reason to believe that the FDA isn't. committed to rapidly reviewing this. With that said, there's still a lot of work to be done. And I think it would be prudent for all of us to assume that our target completion date of June 21 is the date on which we're going to get the answer on this. So we're planning for June 21, even though we are, I don't think anyone thinks we fiddle around. We try to move as fast as possible. But we're assuming June 21 is when we're going to get on. label expansion request answered.

Thank you. Our next question comes from the line of Danielle Brill with Raymond James. Your line is now open.

Hey, guys. This is Alex. I'm for Danielle. Thanks for taking the question. I know the PMO confirmatory trials are fully enrolled. Could you just remind us whether we should expect data for admission this year?

No, we shouldn't. It doesn't read out until 2026.

Thank you. Our next question comes from the line of Brian Scorny with Baird. Your line is now open. Brian Scorny with Baird. Your line is now open.

Hi, this is Charlie on for Brian. Thanks for taking our questions. So we were just wondering if you've heard anything from Roche regarding timelines with the EMA as well as if the European opportunity were to come online, would there be any supply limitations resulting from that? I know you're very comfortable with the expansion of the label, but bringing on a whole other continent, do you think you'd have to do any prioritization between regions? Thank you.

What Roche is publicly saying that their goal is to submit in 2024. And then as relates to supply, you know, our supply plans include our partner Roche.

Thank you.

And just one quick follow up just to the previous question around mission and the timing. Just one thing to remind everyone is that this is a dose, it compares the doses of the drug. The data, which we'll read out, will be comparative from the 30 mg per kg compared to either the 100 mg or 200 mg per kg, and there's no risk of the drug being pulled off the market.

Thank you. Our next question comes from the line of Kristen Koska with Cantor Fitzgerald. Your line is now open.

Hi, this is Rick Miller on for Kristen. Thanks for taking our question. Since launching, are you able to talk about if and how the profiles of DMV patients that are looking to get on Alevitus have changed? Or to put it another way, I imagine you had highly engaged caregivers who were ready for Alevitus on day one. So are you seeing more patients coming forward now after a few months of commercial experience or caregivers to get their child in line for Alevitus? Thanks.

Yeah, I would say the broadest of strokes. there is going to be a substantial demand for this therapy. I don't think that's changed. I think it's what we anticipated before launch. I don't think it's changed after launch. Duchenne muscular dystrophy is a devastating disease, and the opportunity that's offered by Eleven is It's an important one. I think physicians understand that. Families with Duchenne Muscular Dystrophy boys understand that as well. But Dallin, if you have any additional color on this or views, please share them.

No, I think broadly speaking, you're exactly right, Doug. We're not seeing a real major change in terms of the patients coming in. It is, as we said up front, a small population. As soon as they're getting diagnosed and have had their discussions with the docs, they're coming in through the enrollment forms. We're just working through those patients as fast as we can prior to them aging out, but no major differences. For example, there wasn't a big bolus of patients that initially came in, and now that's different. It's been a steady clip, essentially.

Thank you. Our next question comes from the line of Anupam Rama with JP Morgan. Your line is now open.

Hey, guys. Thanks so much for taking the question. At the conference in January, you talked about 70 sites being active and about half of those sites had dosed patients. Can you give us a sense of where you are kind of now in the first couple months of the year? Thanks so much.

Yeah, I believe that that remains the accurate answer, but, Fallon, you can give us an update if there's any change in that.

No, Anupam, that really hasn't changed all that much. There's obviously more than there was then, and there's a higher proportion of sites that have dosed, but But, you know, we're actively looking at this on a daily basis. And we have this flexible model where we can bring on new sites, get them trained and up and ready as needed. So we've got more than enough sites up and running. And we, you know, throughout, we've got great geographic coverage, but the team is also ready to support and serve as needed out there.

I really do want to give an example um kudos to this team for for where we are you know the the i think everybody knows the goal was to try to get to 50 as much as 50 sites in 2024 2023 with by the end of 2023 which would have been you know um would have been record smashing for a gene therapy launch and that there was going to be this aspiration that maybe someday we could get to 70 sites that would be trained and up and running. And this team got, as you know, over 70 sites in 2023, but also the way they got there is something that gives me an enormous amount of pride, which is, as I said earlier in this call, we don't prioritize revenue over patient safety and great outcomes. Far more important for us to ensure great outcomes and This team has done a ton in that direction. These 70 sites that are activated are activated because they've all been well trained. They're in good shape to be able to safely infuse this therapy and get good outcomes and consistent outcomes, which is important. We have a very laudable safety profile for a full body infusion gene therapy, and we want to ensure that remains the case over the long term, not the short term. And then, of course, there's a lot of other programs around that, the ability to access experts so that every physician has an opportunity to get the right kinds of information to inform the way they not only infuse but monitor patients and react is something that has been, that is unique. I'm not sure anyone else has ever done the kind of work we've done. So we're in great shape right now to serve this community and serve it responsibly. So I'm really proud of where the team is right now. And frankly, it also explains... our revenue in 2023.

Thanks, Doug. And as you were speaking, that team did get us just a direct answer to Ana Palm's question. And we're closing in on 60% of the sites have dosed. So it just, exactly as you said, it's just increasing as we go.

Thank you. Thank you. I'd now like to turn the call back over to Doug Ingram for closing remarks.

Thank you, Shannon. Thank you all for joining us today. Thank you for your insightful questions. We appreciate it. At the risk of repeating myself, you know, I think 2023 was an extraordinarily important year for Sarepta. We, you know, a lot of folks on this team in concert with the patient community and investigators and physicians, frankly, moved heaven and earth to get us where we are today, which is, I think, you know, fast maturing, fully integrated biotech organization committed to bringing a better life to patients with Duchenne muscular dystrophy, limb girdles, and other serious rare diseases. 2024 is actually going to be even more significant if we're successful. And that's going to put us in a position where we can do a lot of good for a lot of rare disease patients and where we can reward those who have stuck with us and invested in a better life for these patients. So I will remind you, if we are successful this year and we broaden the label for Alevitus and we can meet our goals this year, we are going to leverage our acumen and our financial strength and the talent of this team. And through both advancing our internal pipeline but looking to external innovation, we will have the goal of growing even after Alevitus. not incrementally, but in multiples. So we're going to build for ourselves a very big ambition if we are successful in 2024. With that said, we need to focus on 2024 and be successful, and the team is prepared to do that. And I look forward to updating you along the way as well. So thank you and have a lovely evening.

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