Sarepta Therapeutics, Inc.

Good day and welcome to the Therapeutics Quarter 2024 Financial Results Conference call. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone and you will hear an automated message inviting you. Your hand is raised. To withdraw your question, please press star 11 again. As a reminder, today's conference is being recorded. At this time, I would like to turn the call over to Mary Jenkins, Associate 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 2024. The press release is available on our website at SREPTA.com, and our 10-key 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 could materially differ from these forward-looking statements, and any such risks can materially and adversely affect the business, results of operations, and trading prices for surreptitious common stocks. 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, Mary. Good afternoon and thank you for joining Sarepta Therapeutics third quarter 2024 financial results conference call. I am pleased to report another strong quarter of commercial performance. Earlier today, we reported total net product revenue of about $430 million, growing at 39% versus the same quarter last year. Elevitus net product revenue was $181 million. Our ex-US partner, Roche, has made good progress in the quarter. And if one includes the royalty revenue from Roche's ex-US Elevitus performance, we achieved $190.5 million in the quarter. Even without considering royalty revenue, our Elevitus performance substantially exceeded our prior guidance as well as analyst consensus. We are tracking well to Q4 and 2025 performance consistent with prior guidance. Our PMO sales comprising Exondus 51, Lyondis 53, and Amondus 45 achieved approximately $249 million in the third quarter, again, substantially exceeding analyst consensus. As anticipated, we are not yet seeing material cannibalization of our PMO franchise from Alevitus Performance. and we do not expect to see meaningful net cannibalization through 2025. I am also pleased to report that we were again profitable on a GAAP and non-GAAP basis in the third quarter. Dallin Murray, our Chief Customer Officer, will provide more color on commercial performance in a moment. Turning to R&D, we have rationalized and prioritized our pipeline this quarter, and we've made great progress advancing programs. Before I discuss our progress, let me discuss our PPMO program. You will have seen in our release that we have made the decision to discontinue the SRP 5051 development program. This was done after dialogue with the FDA and their requirements, after our own risk-benefit analysis for the program, and in consideration for the evolving landscape for Duchenne, including the approval of a Levitas. Now, one never takes lightly the decision to discontinue a program, but we are confident that our decision is the right one for the patient community and for our stakeholders. Moving to our pipeline progress, we are beginning to move rapidly into late-stage clinical with a planned approval BLA in 2025 for SRP9003 to treat limb girdle muscular dystrophy, or LGMD, type 2E, the commencement of our trial for SRP9004, to treat LGMD type 2D in the fourth quarter of this year, and the commencement of our trial for SRP9005 to treat LGMD type 2C in early 2025, both of which trials are intended to support accelerated approval. We have also made progress with our clinical development efforts for Alevitis, including clinical activity to support XUS approvals and meet our post-marketing commitments. data presentations that speak to the value of Alevitus to those living with Duchenne, and clinical development work intended to expand the population for Alevitus. Additionally, our program to move Alevitus to suspension manufacturing is proceeding very well. We have had very encouraging interactions with the FDA, and we continue our engineering runs in anticipation of commencing a bridging study in 2025. We have also made good progress with the rest of our neuromuscular, CNS, and cardiomyopathy pipeline and intend to share more concerning our pipeline and its progress in 2025. Our head of R&D and chief scientific officer, Dr. Luis Rodino-Klapak, will discuss this decision and our R&D progress in a moment. And with that, I will turn the call to Dallin Murray for more detail on commercial performance and our plans. Dallin?

Thank you, Doug, and good afternoon. We're pleased to report an impressive third quarter led by the continued strength of the 11S launch. The success and performance we've achieved since approval has been and continues to be driven by robust patient demand from both the ambulant and non-ambulant populations, ample site capacity, positive trends in access and reimbursement, and consistent conversion rates as we continue to see patients gaining access within the three to five months conversion timeline. Additionally, as the team works to execute on the broad label, it's important to note that we've thoughtfully built a model which allows us to flex as needed to accommodate demand from different segments, such as the older non-ambulatory patient population. Turning to the third quarter revenue numbers, net product revenue for Alevitus reached $181 million and grew by nearly 50% compared to the prior quarter, exceeding our guidance of quarter-to-quarter growth of 30%. Of note and looking forward, I remain impressed with our team's ability to forecast. As we have shown with our performance this quarter, we have good visibility on the launch dynamics, and as predicted, we are now at the inflection point on the launch curve. Further enhanced by the wealth of data presented at WorldMuscle that Louise will discuss, we have strong momentum going into the fourth quarter and reiterate our previously stated Q4 guidance, which is in line with the current Q4 consensus. Based on all of these factors and our confidence in meeting the Q4 expectations, we remain in a strong position to achieve guidance for 2025. The progress made by this team is unprecedented in our industry. We've anticipated all of the factors necessary to execute on a broad label And our performance provides clear evidence of our continued ability to meet expectations and execute as promised. So to summarize, we continue to see high demand, strong conversion rates, and we are impressed with how sites of care are successfully treating patients at an unprecedented rate. Together, we are changing the face of Duchenne muscular dystrophy in the United States. Turning to our PMO franchise, which also achieved impressive results in the third quarter, importantly, we expect to see continued strength in the coming quarters and years. We delivered roughly $249 million in net product revenue, and with approximately 4% growth in Q3 compared to the third quarter of 2023, the PMOs represent a healthy and solid segment of our Duchenne franchise. Exondys 51 led the way for the PMOs with $140.7 million in net product revenue. Vyondys 53 delivered $32.2 million in net product revenue in the third quarter. And we delivered $75.9 million in net product revenue for Amondys 45 and Q3, representing growth of nearly 15% compared to Q3 of 2023. In closing, I'd like to thank the Sarepta team, and all of our partners, whether at the sites of care or elsewhere. And most importantly, I'd like to thank the patient community who have been with us on this pioneering journey every step of the way. We're grateful to be exactly where we had always wanted to be, and that is with approved therapies serving the vast majority of the Duchenne patient community. And with that, I'll hand the call over to Dr. Louise Rodino-Playpack for the R&D update. Louise.

Thanks, Dallin. I'll begin my remarks with Elevitus and then provide an update on our pipeline. We continue to advance the Elevitus clinical program and share new data sets as they become available. We recently published the primary one-year Embark results in Nature Medicine, a high-impact journal. In addition, we had multiple presentations at the World Muscle Society Congress in early October. This included additional Embark data, muscle MRI, and cardiac MRI. Muscle MRI changes were consistent with functional outcomes from Embark Part 1, showing stabilization or slowing of disease progression with SRP9001, while progression occurred in placebo-treated patients, evidenced by accumulation of fat and fibrosis. Cardiac MRI demonstrated that at one year post-gene therapy, there was no evidence of harm observed. Future longitudinal cardiac MRI studies will assess long-term protection of cardiac muscles. As we previously described, Levitas contains an MATK7 promoter that expresses well in the heart to protect cardiac muscle. We have shown in the MDX RAP model of Duchenne improvements in cardiac function as well as overall survival. In addition to the Embark data, we've also presented safety and expression data from Study 103 or Endeavor, demonstrating consistent safety and expression data across ambulatory and non-ambulatory patients. As of the end of October 2024, we have dosed over 80 late ambulatory and non-ambulatory patients within our clinical program and continue to see a consistent safety profile. Finally, we shared five-year longitudinal data from Study 101 demonstrating that SRP9001 stabilizes or slows DMD progression with an increase in divergence from natural history over time, as shown by external control analysis and supported by the independent CTAP analysis. No new safety signals were identified. As mentioned on our last call, the Elevitus accelerated approval for non-ambulatory patients includes a post-marketing commitment to confirm clinical benefit, which will be addressed via our non-ambulatory and late ambulatory study 303, also known as Envision. As a reminder, Envision is a global, randomized, double-blind, placebo-controlled, two-part study. Envision is progressing well, with U.S. enrollment complete and the remaining recruitment occurring ex-U.S. Enrollment is expected to be completed in 2025, with our last patient last visit expected in 2027, following an 18-month placebo-controlled period. We also continue to advance clinical studies that monitor long-term follow-up with Levitis. Our long-term follow-up studies include Endure and Expedition. As a reminder, ENDURE is a Phase 4 observational study that will follow individuals treated with elevatus for up to 10 years. In addition, EXPEDITION is a Phase 3 study enrolling approximately 400 patients that were previously enrolled in elevatus clinical trials and followed for consistent safety and efficacy measures for up to five years. Regarding patients currently ineligible to receive elevatus under the expanded label, we continue to advance multiple studies. For the approximately 15% of patients who are screened out for preexisting anti-AEV RH74 antibodies, we have commenced two studies, one with imlicidase to cleave antibodies and a second with plasmapheresis to remove antibodies. We expect to have expression and safety data from fentanyl patients in early 2025. In addition, for patients under the age of four, we've treated patients as young as two in our study 103, And together with our partner, Roche, we are executing study 302, or INVOL, to gain experience dosing patients under four and as young as three months. We continue to communicate the range of trial experience in patients treated with elevatis from those that are under four to those with more advanced disease. Moving now to our programs for the limb girdle muscular dystrophies, or LGMDs. Starting with SRP 9003. As we mentioned in the first quarter call, we initiated dosing early this year and study SRP9003-301, also known as Emergene, our Phase III multinational open-label clinical trial of SRP9003 for the treatment of limb girdle muscular dystrophy type 2E for beta-cercaglycanopathy. The agreed primary endpoint of Emergene is expression of beta-cercaglycan, the absence of which is the sole cause of the disease. The study is on track to be fully enrolled by the end of 2024. Assuming a positive pre-BLA meeting, we will anticipate a BLA filing in 2025. We are encouraged by the agency's willingness to support a viable pathway for SRP 9003, an ultra-rare genetic condition that is progressively debilitating, results in loss of ambulation, and leads to early mortality. The ability to progress a small NF15 biomarker study together with our ability to demonstrate delivery of a functional beta-circle glycan protein is extremely important, not just for this program, but for the other circle glycanopathies in our pipeline, including LGMD2D and LGMD2C, both of which are progressing to the clinics. Having successfully advanced SRP 9003, we submitted our SRP 9004 IND update reflecting our suspension process this year, with phase one initiation expected by year's end. As a reminder, SRP 9004 is designed for the treatment of limb girdle muscular dystrophy type 2D or alpha-sarco-glycanopathy. Finally, we are also rapidly progressing our program for SRP 9005, for the treatment of limb girdle muscular dystrophy type 2C or gamma-circuglycanopathy. We plan to engage with FDA in Q4 of this year with plans to initiate a clinical study in Q1 2025. To summarize, we are very pleased with the progress of our LGMD portfolio and expect to have three of our LGMDs in the clinic in less than six months. We are maximizing the synergies across this platform from both an R&D and manufacturing perspective. and our sites are firmly set on accelerating the remainder of the LGMD assets to the clinic. Continuing with our RNA platform and beginning with our PMOs, the ESSENCE trial, our post-marketing requirements for Golodursin and Kazimersin, as well as mission or post-marketing commitment for Exondus, are both fully enrolled and remain on track. We look forward to sharing data as soon as the study is complete. Turning now to PPMO. As announced today, and in line with our unwavering commitment to patients first, we have decided to discontinue development of SRP5051, also known as vesiceplicin, our investigational peptide-conjugated PMO, or PPMO, to treat Duchenne. This means dosing in our momentum study, SRP5051-201, has stopped. The safety of study participants is our highest priority, and while we are encouraged by the dystrophin expression results with SRP5051, the long-term safety in a chronic treatment setting does not support further development. Our initial hypothesis was that the hypomagnesemia was manageable and monitorable. Although events thus far have remained medically manageable, in a small number of patients, we saw persistent hypomagnesemia despite treatment discontinuation, and our risk-benefit analysis led us to end the study. The MOMENTUM study has provided important information around the use of RNA-targeted therapies to increase dystrophin production in Duchenne, and we are extremely grateful to the patients, families, and clinicians who participated in our study. Now I'll spend a moment discussing our current and future pipeline. During the past six years since I joined SORAPTA, we've been diligently building expertise and capabilities to advance our current portfolio and identify new assets. We've significantly advanced the field of genetic medicine through clinical trials and advanced research for patients with pre-existing antibodies and the potential for redosing. We've also advanced regulatory precedent for gene therapy for rare disease as evidenced by a rapidly developing LGMD platform. On the research side, we've optimized, developed, and characterized new AAV capsids that will change the landscape for neuromuscular gene therapy and unlock potential in cardiac and central nervous system disease areas. As an example, we've optimized the construct for Charcot-Marie-Tooth type 1A, or CNT1A, using AAV or 74, and are now rapidly advancing to the clinic following exciting preclinical data. As a reminder, we're using a surrogate approach for delivery of the neurotrophin 3, or NT3 gene, to improve myelination and nerve regeneration in CNT1A. This pipeline-in-a-project approach has applicability to other CMTs as well as other demyelinating indications. We look forward to highlighting our impressive pipeline in an R&D day in 2025. I'll close by thanking all the patients who participate in our trials and my incredibly talented R&D colleagues who make all of this possible. The future is bright because of their work. I'll now turn the call over to Ian Estepan for an update on our financial results. Ian?

Thanks, Luis, and good afternoon, everyone. The financial results press release provided details for the third quarter of 2024 on a GAAP basis as well as a non-GAAP basis. Please refer to our press release available on our website for full reconciliation of GAAP to non-GAAP financial results. As a reminder, beginning in the fourth quarter of 2023, amortization of unlicensed rights and income tax expense are no longer excluded from non-GAAP results. The company has added the income tax effective adjustments, which represents the estimated income tax impact of each of our pre-tax non-GAAP adjustments based on the applicable effective income tax rate. Non-GAAP financial results for the third quarter of 2023 have been updated to reflect this change for comparability purposes. So for the three months ended September 30th, 2024, the company recorded total revenues of $467.2 million in which consists of net product revenues and collaboration and other revenues compared to revenues of $331.2 million for the same period of 2023, an increase of $135.4 million. Net product revenue for the third quarter of 2024 for Malevius was $181 million compared to $69 million same period of 2023. Net product revenue for the third quarter of 2024 from our PMOX landscaping franchise was $248.8 million compared to $242 million for the same period of 2023. The increase in net product revenue primarily reflects the net product revenue associated with sales of Elevitus. For the three-month end of September 30, 2024, the company recognized $37.4 million of collaboration and other revenues which primarily relates to the commercial beloved supply delivered to Roche and royalty revenue from Roche compared to collaboration revenues of $22.5 million for the same period of 2023, an increase of $14.9 million. The reimbursable co-development costs under the Roche agreement totaled $61.5 million for the third quarter of 2024 compared to $34.9 million for the same period of 2023. As a reminder, these rose to co-development costs are an offset to our operating expenses. On a gap basis, we reported a net income of $33.6 million, or $0.35 per basic share and $0.34 per diluted share, and a net loss of $40.9 million, or $0.46 per basic and diluted share for the third quarters of 2024 and 2023, respectively. we reported a non-GAAP net income of $67 million or 62 cents per diluted share in the third quarter of 2024 compared to a non-GAAP net income of $31.5 million or 31 cents per diluted share in the third quarter of 2023. In the third quarter of 2024, we recorded approximately $91.7 million in cost of sales compared to $37 million in the same period of 2023. The increase in cost of sales primarily reflects The cost of sales related to 11th during the three months ended September 30th, 2024, following the label expansion in June. On a gap basis, we recorded $224.5 million and $194.3 million in R&D expenses for the third quarter of 2024 and 2023, respectively, a year-over-year increase of $30.2 million. The increase primarily reflects a $55.4 million increase costs associated with the termination of an inherent commercial manufacturing and supply agreement, net of the reimbursable termination costs by Roche, partially offset by a decrease in clinical and manufacturing activity for our PPMO and a Tepperson program. On a non-GAAP basis, R&D expenses were $199.8 million for the third quarter of 2024, compared to $163.9 million for the same period of 2023. an increase of $35.9 million. Now, turning to SG&A, on a GAAP basis, we recorded approximately $128.2 million and $120.9 million of expenses for the third quarters of 2024 and 2023, respectively, an increase of $7.3 million. The increase was primarily driven by an increase in professional services used to support the continued efforts to commercialize Elevitus, and an increase in compensation and other personnel expenses, primarily related to the changes in headcount. On a non-GAAP basis, the SG&A expenses were $100.2 million for the third quarter of 2024, compared to $92.8 million for the same period of 2023, an increase of $7.4 million. On a GAAP basis, we recorded $11.8 million in other income for the third quarter of 2024, compared to $12.3 million of other loss net for the same period of 2023. The change is primarily due to an impairment of a strategic investment during the three months ended September 30th, 2023, with no similar activity in 2024. We had approximately $1.4 billion in cash tax equivalents investments in long-term restricted cash as of September 30th, 2024. So to conclude, unsurprisingly, our strong commercial execution and our continued focus on expense management has put us in a strong financial position. We now expect to be sustainably profitable from both the GAAP and non-GAAP perspective, and we'll turn cash flow positive early in 2025. And with that, I'll turn the call back over for Doug to start the Q&A.

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

Thank you as a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced to withdraw your question, please press star one one again, we ask that you please limit yourself to one question one moment for our first question. Our first question is going to come from the line of testing i'm at with the of a securities your line is open, please go ahead.

Hi, good evening, guys. Thanks for taking my question. I wanted to clarify what you said a little bit earlier when you were prepping remarks about maintaining guidance for the rest of the year. So when you gave us original guidance, you had said that based on the number you expected in 3Q that you would guide to 100% upside for 4Q results, not that you've beaten expectations. Can you tell us what that base number is? Is it 100% upside from what you just reported? Thanks.

Yeah, we feel very comfortable with the guidance we gave before, which was 100% above the guidance that we had for Q3. I will also linger and note that we continue to be very, very comfortable with The guidance we gave for 2025, the long-term guidance, $3 billion, about two-thirds of which will be Alevitas and one-third of which would be our PMOs. And we're also very confident in our long-term projections, which would have peakier sales across the four approved therapies at $5 billion or more, and that we would be treating with Alevitas the prevalent population over the course of the 2020s into 2021. around 2030 or so, and we'll be growing for some number of years.

Thank you, and one moment for our next question. Our next question comes from the line of Gina Wang with Barclays. Your line is open. Please go ahead.

Thank you. Since I can only ask one question, I will ask about this UTMO discontinuation of 5051. So maybe can you give a little bit more color regarding the hypomagnesium? Is that the main concern FDA raised? And can you give a little bit more color since, you know, at what point that you see more severe cases? And also when we The old data back at the 30 milligram at the 12 weeks was 6.55% protein expression. And at that time you project it could be over 10% at 96 weeks with the protein level is still in line with what you projected and is mainly is the safety. And are you planning to complete discontinue the PPMO franchise?

Yeah, so I will, first of all, thank you for your question, Gina. I'll turn the question over to Louise to make some comments about our decisions regarding the PPMO program.

Certainly, and I'll try to make sure I remember all of the parts. So on the franchise, we are discontinuing the entire PPMO franchise. They all use the same cell penetrating peptide, and so this also includes the discontinuation of the other PPMO programs. The decision to stop the program was based on multifactorial, so it included our discussions with the FDA, which we've had the development of that. At this point, the FDA said that the accelerated approval pathway was not open based on the current profile to date. primarily based on our own benefit-risk assessment, and that was including safety, which included the hypomagnesemia that we saw, which consisted of prolonged hypomagnesemia in some cases. And then the evolving landscape of Duchenne, including the approval of Volubtis. So taking all of those things together led to our decision.

Great. Let me just contextualize all this just to remind folks. So, commencing really in February of 2018, the FDA had confirmed that it had a precedent for the use of the accelerated approval pathway for PMOs. And that precedent was really rested on two things. It's obviously rested on the value of the discharge and production for Duchenne muscular dystrophy, but it also rests, as well, on the safety of the morpholino oligonucleotides, the PMOs, and that safety profile itself is very laudable. It's second, really, to almost none. When one attaches a delivery moiety to a PMO, then you will change that safety profile, potentially, in that risk-benefit analysis, and I think the agency wasn't comfortable with the concept of accelerated approval in light of this change. And then, of course, we independently did a risk-benefit analysis and concluded that the program shouldn't continue. So that's where we are, and I think this is in the first and foremost, first and foremost, it is in the benefit of the patients that we serve. And then secondly, of course, it benefits our other stakeholders as well.

Thank you. And one moment for our next question. And our next question is going to come from the line of Andrew Tsai with Jefferies. Your line is open. Please go ahead.

Hey, thanks. Good afternoon. Congrats on the execution. Thanks for taking my question. So about the Olivetis launch, your partner, Roche, made a comment about two weeks ago, how 500 patients have been treated worldwide so far, including 450 in the U.S. So can you help us reconcile that 450 U.S. patient number? Presumably a good chunk are in clinical trials, but even backing out those patients, we could be getting a nice implied jump in Q4 sales. That could be above your Q4 guidance. So maybe help us reconcile that. Thank you.

Yeah, Andrew, I'm not going to comment or confirm that we haven't provided those numbers like that. We're going to use revenue as our metric, and we're, as it stands today, standing on the guidance that we've provided previously. I mean, it certainly is the case qualitatively that we have dosed an enormous number of patients. We have an extraordinary amount of experience with Alevitus. Luis will have mentioned to you that we've already dosed between clinicals and some commercial 80 or so, probably more than that by now, about 80 patients that are either late ambulatory or non-ambulatory in addition to all of the other patients we've dosed. And as you know, we've not seen a difference in any safety metrics. So the things that look great, the profile of the therapy looks great, and the launch is going great. So that's where we are right now with it. And we're excited to give you an update after Q4.

Thank you. And one moment for our next question. Our next question is going to come from the line of Brian Abrams with RBC Capital Markets. Your line is open. Please go ahead.

Hi, this is Kevin on for Brian. Thanks for taking our questions. I just wanted to ask, can you speak to what progress you've made in conversations with payers on broader coverage policies, and maybe can you speak more to your efforts in insuring Medicaid coverage policies, and if you can remind us what proportion of patients with DMD you estimate to be on Medicaid? Thanks a lot.

Yeah, so it's about, following my remarks, if there's anything to add or if I've made a fundamental error, you can correct me. Broadly speaking, it's about 50% commercial, 50% Medicaid. Things are going very well. interactions, both from a Medicaid perspective and a commercial perspective, are very productive. And one of the things that we're really benefiting right now is a couple things. One, the amount of evidence and data that we have that supports bringing a Levitas to a broad group of Duchenne patients is great and gives us a lot to talk about. The depth of the conversations that we're having with payers and the quality of those conversations is Absolutely fantastic. And we're all benefiting from this. If one focuses down on Sarepta itself, we have become very expert over the last nearly a decade, about eight years, in working with payers and gaining access to patients for our therapy. At the same time, in fairness, physicians have become experts increasingly more sophisticated in how to manage through the process to get kids on therapy. And payers, both Medicaid and commercial, have become far more experienced with Duchenne muscular dystrophy and how that disease works and the like, so that the entire quality of the discussions are far more productive than they may have been some eight years ago. And it's also... resulting in the performance that you're seeing today, which is, of course, a very, very good launch, which is matching the trajectory that we had imagined that we would have with all of the work that we did to prepare ourselves for this launch.

Thank you. And one moment for our next question. Our next question comes from the line of Sylvain Richter with Goldman Sachs. Your line is open. Please go ahead.

Thanks for taking our question. This is Tommy on for Salveen. So just on the 2Q call, I believe it was mentioned that there were some infusions that were rescheduled from 2Q to 3Q. Is it possible to quantify that impact? And more broadly, what's the latest thinking on how to think of the tail end of the launch and the peak year? Thanks so much.

The first part of the question I will turn over to Dallin. The second part of the question is that what I will say to you right now is that we're going to go through a period of significant growth over the course of this decade, and we will get through the prevalent population by 2030. With that said, Dallin, if you want to comment a little more on Q2, Q3.

Yeah, the question was if that impacted our performance or our guidance in any way. Remember, we guided off of Q2 sales, growth off of Q2 sales, so that was factored into our guidance and expectations for Q3 and Q4 already. So there's no real quantification of the impact of that.

Thank you. One moment for our next question. Our next question comes from the line of Anupam Rama with JP Morgan. Your line is open. Please go ahead.

Hey, guys. Thanks so much for taking the question. Just a quick one for me. You've given a little bit more details on kind of your internal pipeline focus here in the near term. Looks like we're going to hear a little bit more at an R&D day in 2025. Just wondering how we should think about sort of the time and resources spent on the internal pipeline versus you guys doing some external business development. And I know you guys only said one question, but since it's third quarter earnings, if I could just ask if you might pre-announce at a small healthcare conference in January, that would be cool. Thanks.

Okay, so first of all, thank you very much for your question, Donna Palm, as it relates to your first question. Let me say that we are really focusing right now on two major and very important things. One, of course, is the launch of Elevitus, which, as you can see right now, hopefully is going swimmingly, and that's the result of an enormous amount of work over many years by a lot of folks. Also in that first part is the continuing performance of the PMOs, which themselves are doing very well, bringing a better life to kids, very durable, and so far not seeing any significant impact from the launch of Elevitus. So all fantastic there. The second big effort of this organization right now is advancing our internal pipeline. We're getting a lot of great traction there. There is a lot of excitement. We're going to do kind of a curtain raiser next year and you know, really show you some of the deeper pipeline and some of the things that we're very excited about. But even in the near term, in the late stage, you can see we are in the next, you know, few months really we'll be in clinical trials on three of our limb girdle programs. So that's really beginning to accelerate and we're very, very excited about that. That's what we're focused on as an organization right now. Yes, we are going to go, as Ian has said, we're We're going to be profitable from a gap and a non-gap basis on a go-forward basis, as we have been in prior quarters now. And we're going to be cash flow positive, really starting very early next year. And that gives us some opportunities to think even more broadly. But if you're asking us about the things that we're focusing on right this minute, right now, it's ensuring the success of our four approved therapies, including the launch of Alevitus, and really advancing and accelerating our internal pipeline, which we are excited about. Now, on the second one, I'm not going to make any commitments as we stand here right now. We have had, as you know, a history of doing some pre-announcements at that conference in January. But, of course, we'll wait and see in January what we do there. But, you know, we will likely be consistent with history. That's where we are.

Thank you. One moment for our next question. Our next question is going to come from the line of Danielle Brill with Raymond James. Your line is open. Please go ahead. Hi, guys. Thanks so much for the question.

So by our math, there was about 20 additional patients treated in 3Q versus 2Q. And for all intents and purposes, it sounds like the launch is going great. So I guess we just thought that the step up in treatment rates could be more pronounced following the label expansion. Can you just talk a little bit more about what you're seeing in the market and what the main bottlenecks are to getting these kids treated?

Thanks. Let me just say again, first of all, when we talk about performance, we're going to talk in revenue as our marker. We're not going to use other metrics. And we're very, very excited about the progress of our launch, and it's going exactly to plan. And we're seeing the trajectory that we had envisioned, and we spoke about it. a few corridors back. So everything is going fantastic. The shape of that growth is a combination broadly of three things, and it always will be. Some of it is, you know, a piece of it is site capacity, and that's not simply, you know, a matter of getting more sites up and running. It's making sure that you have sites that are well-educated, well-informed, expert, and that they have the ability to manage and monitor kids post-dosing so that we always have this extraordinarily positive, you know, safety and efficacy profile that we have today with Alevitus, at least from my perspective. The second one, of course, is just, you know, manufacturing and batch release and making sure that we're thoughtful about that. And the third one is payer interactions, which are going great, both from a Medicaid perspective and a commercial perspective. Everything is going very well. So things are tracking exactly as we had hoped. And that's why we're able to reiterate the guidance that we provided previously, both about Q4 and our guidance for 2025, which is $3 billion is the mean of that, and our long-term forecast and the fact that we will be going through a period of multiple years of significant growth as we, over the course of this decade, treat the prevalent population, even as we are also treating the incident population now and deeply into the future.

Thank you, and one moment for our next question. Our next question comes from the line at Valley Mural with UBS. Your line is open. Please go ahead.

Hey, guys. Thanks for taking the question. Can you just elaborate a bit more on your comments on site capacity just now, just the latest that you're seeing? You mentioned you're seeing ample site capacity, but I guess how many sites dose patients in 3Q, and I guess how dispersed or concentrated has this dosing been across the sites? Thanks.

Yeah, so we have about, so I'll just say broadly, we have about 75 sites. They might modestly increase over time, reactively, and Dallin can provide an answer to us on, as we sit here today, what percentage of those sites have actually been dosing sites?

Yeah, the vast majority of centers have dosed patients, and we really don't get into the specifics quarter to quarter on, you know, how concentrated these sites are. So as Doug had said earlier, we're guiding our, you know, we're focusing our guidance on revenue, net product revenue.

Thank you. And one moment for our next question. Our next question is going to come from the line of Gil Blum with Needham & Company. Your line is open. Please go ahead.

Hey, guys. Thanks for taking our question, and congrats on the progress. So, you know, now that 5051 seems out, are there any thoughts for lifecycle management of the PMOs? And it kind of feels like Sarepta is strategically moving away from ExxonSkippers. Thank you.

First, I don't want to suggest for a moment that we're moving away from ExxonSkippers. And we do have a lot of thoughts on other modalities for exon skipping. We're not in a position right now to discuss them in any detail, but we are constantly looking at opportunities to enhance the benefit that our therapies provide to patients. The reason that we're not moving away from exon skipping right now, even though we are very excited, both about Alevitus and what Alevitus can do, and also the rest of our deep pipeline, including cardiomyopathies and CNS and other neuromuscular as well. The reason we're still excited about PMOs is they're doing an enormous amount of good right now. And that's an important thing to consider. The PMOs make a small amount of dystrophin, but a small amount of dystrophin is very meaningful as we have recently published the real-world evidence on exondus, which will presumably be the same answer for viandus and amondus over time as their experience are really tremendous. We're seeing multiple years out of a wheelchair, multiple years better mortality, multiple years off event, you know, reductions in emergency room visits and the like. So we remain very excited about the benefit that our PMOs can safely provide to patients. And that's one of the things that's really great about the PMOs. And that is that they are not only are providing a really significant benefit to patients, but the safety profile is great. And that's why One should remember, even as we think about our own pipeline and we think about others, that while we're always ambitious, the bar for beating the PMOs is very high and the road to any approval for an alternative to our PMOs on the exon skipping side is very long. So I don't want to suggest for a minute that we're in any way less excited about our PMOs. We're excited every week that a patient gets an infusion and benefits from either Exondus or Vyondus or Amondus. And we will remain that way. And I think one of the things that I'm excited about right now, particularly during the launch and the fact that we're not seeing a ton of cannibalization, is that there is a long road for the PMOs. I think they're going to be very durable.

Thank you. And one moment for our next question. Our next question is going to come from the line of Ritubaro with TD Cowan, your line is open. Please go ahead.

Hi, guys. Thanks for taking the question. I wanted to ask about forward guidance, especially given the insight you guys have on basically revenues. Doug, you mentioned, you know, three to five months time to fill. And just given where you guys are notified about when a patient is seeking reimbursement and when you have to, you know, make their kit, ship the kit, et cetera, and when they're dosed, are we going to, one, are we going to continue to get some pretty granular guidance as you've given? And two, given the healthy beat, congratulations, this quarter, what sort of swing factors should we be thinking about despite that three- to five-month insight, you know, logistical swing factors beyond, you know, Ian's, tendency to give conservative guidance?

Look, of course, it's always our goal to provide reasonable and accurate guidance, but guidance that we're very comfortable with. And we will continue to ensure that we are comfortable with the guidance that we provide. And if that makes us seem conservative, I'm probably proud of that. We have an enormous amount of insight, as you know, about not only broadly about the Shenmuster Distribute and epi and prevalence, but all the way down to, you know, things like start forms and the like. And that does provide us with an indoor with a lot of confidence as we think about forecasting and guidance and the like. And with that said, as we sit here today, and notwithstanding our very, very positive, in my view, and significant beat, we're gonna We're not going to update our guidance at this moment, and we'll talk again probably at JPMorgan if we do pre-announce at JPMorgan about 2025.

Thank you, and one moment for our next question. Our next question comes from the line of Joe Swartz with Learing Partners. Your line is open. Please go ahead.

Great. Thanks very much. I have a question about the next MRI study you plan to do. I'm wondering how will this differ from the MRI data that you presented at WMS, and will you be using gadolinium enhancement to evaluate tissue characteristics like edema and fibrosis, periodosing, and will you evaluate global longitudinal strain?

Luis?

Sure. So, from the EMBARQ study, the longer-term data, We'll be following the patients over time, and then that will be compared. There's a wealth of natural history data compared to natural history since all patients have been dosed now. So they'd be compared to their baseline and then to natural history. So we'll continue to do MRI, MRS, and T2. T2 gives the early signal of the inflammation and edema that you noted. So that's a precursor to changes that you would see by MRI and MRS. So we'll continue to use those three measurements and strain as a portion of the MRI results.

Thank you. And one moment for our next question. Our next question comes from the line of Costas Biliris with BMO Capital Markets. Your line is open. Please go ahead.

Hi, everyone. Thanks for taking our questions and congrats on the quarter. One question from us on manufacturing. Given the 300% quarter-over-quarter growth of Elevity Sales ex-US and potential further acceleration with upcoming approvals in Europe and Japan, can you comment on your manufacturing capacity to meet this high level of demand? And to follow up on this same topic, can you clarify whether the suspension manufacturing will be only with thermal features or there is optionality to do that with Catalan as well. Thank you.

Yeah. Thank you very much for your questions, Costas. First, as it relates to the first part of your question, we're very comfortable with our forecast and our manufacturing to supply. We're in a very good position from a manufacturing perspective to serve ours and our partners' needs. As it relates to suspension, to remind everyone, things are going very well with suspension right now. We're in engineering runs, both in 500 liter and 2,000 liters, and we're going to start our bridging study next year, assuming everything goes well, and we believe it will. And we have not made a decision, as it stands today, on who we will use as a commercial supplier for suspension. So that's an issue we're continuing to ponder and evaluate.

Thank you, and one moment for our next question. Our next question comes from the line of Brian Scorny with Baird. Your line is open. Please go ahead.

Hey, good afternoon, everyone, and thanks for taking my question. Actually, my question is on redosing, and I guess when can we think about seeing initial data here from either the AFERISA study or the HANSA collaboration study you're planning to go about? And how do you kind of think about clinical development here? Do you focus on patients who had received prior levodas but had an adequate dystrophin response? Do you target naive patients with higher RH74 serology? And do you have access to just implidase in your hansedil, or is HNSA5487, their next-gen cleaver, included in that? Thanks.

All right, I'm going to turn this to Luis. Before I do, I want to make sure I have a clarification here. And Brian, thank you very much for your question and the opportunity to clarify. So there is definitely an opportunity down the road to use some modality to either cleave or clear neutralizing antibodies in a manner that might allow for redosing. And we're very excited about that potential. But just so we're clear, as we sit here today, that is not actually the goal of our near-term studies. Our near-term studies are intended to do something slightly different, which is to clear or cleave antibodies that have been acquired by a Duchenne patient through environmental exposure to put them in a position where we could dose them with a Levitas, and that would provide an opportunity for another 15% or so of Duchenne patients who would right now be screened out to actually get the opportunity to have a Levitas. And with that, Luis, if you want to provide some color on Brian's questions.

Sure. So the question about when we'll have data for both studies, we'll have safety and expression data in early 2025 on the initial cohorts. And really, that data will inform us for anything we do in the future with regards to a potential study for redosing. As Doug mentioned, that's not the goal right now, but we've been positioning ourselves to be ready. In case we do, we've shown good data in non-human primates. So the challenge for redosing is much higher antibody levels. And so this data from these pre-existing antibody charts will be critical in and seeing how far we can go and how we might design a study if we were to do so with three dosing.

And then, Brian, to answer your final question, we have a right of first negotiation on a next-generation therapy.

Thank you. And one moment for our next question. Our next question comes from the line of Christine Kluska with Cantor Fitzgerald. Your line is open. Please go ahead.

Hi, congratulations on the revenue beat. You seem to not be getting a whole lot of credit for the limb girdle portfolio. So I wanted to ask if you could remind us about the number of patients you expect could be identified around the time of these launches and how we should be thinking about that market opportunity. Thank you.

Yeah, that's a great question. Thank you very much. And it's a particularly poignant question now because we're really starting to make traction and move fast on our limb girdle portfolio. Broadly speaking, let me say that the limb girdle portfolio that we have today is about 70% of the opportunity of Duchenne muscular dystrophy, so quite significant. And if you think about the size of Duchenne muscular dystrophy, maybe in the 12,000s, 15,000, probably more like 12,000 range in the United States, then you can see this is a massive opportunity to do good and do well by our investors at the same time. Our near-term program, CervoGlycan, are themselves actually quite significant. They're something in the range of 25% or more of the Duchenne Muscular Dystrophy, and we're going to be in late-stage development with all three of those programs in the coming few months. So there's a big opportunity that I think people will start focusing on as they clear and get more excited about and more confident about the launch of Elevitus, and hopefully this quarter has helped them do that.

Thank you. And one moment as we move on to our next question. Our next question comes from the line of with . Your line is open. Please go ahead.

Yeah. Hi, guys. Thanks for taking my questions. Can you maybe just talk about the split of patients that you saw in the third quarter across ambulatory versus non-ambulatory from a commercial standpoint? And what type of access are you seeing across both groups? Thanks.

Yeah, we're not going to provide a granular breakdown of that, but I can give you some broad qualitative color. I mean, one of the things that one would anticipate that we anticipated and others have anticipated at launch is that there may be a bias in favor of ambulatory patients over non-ambulatory patients at launch. And certainly that is the case, but it isn't probably as significant as some may have imagined. We're seeing a very significant percentage of start forms for late ambulatory, non-ambulatory patients, which is fantastic. I think that as more information comes out about the number of patients that have been dosed in the late ambulatory, non-ambulatory setting and the safety profile that we're seeing there, which is the same as the ambulatory patients, it's only going to increase that awareness and excitement. We've already dosed kids in the mid-20s who are obviously non-ambulatory, and we have stark forms of men in their late 30s, which is, you know, very, very advanced for Duchenne muscular dystrophy. So while there is, as we have guided to and anticipated, there is some bias towards the ambulatory versus non-ambulatory in the very early days, you know, there is a very significant percentage of non-ambulatory and we're quite confident that's going to continue to increase over time. Dallin, is there anything else about that that I've missed?

No, not at all. And, you know, just to add, it's not really going to fluctuate quarter to quarter. As you had said, that bias towards the ambulatory population is kind of in the early going stages of the launch, but we don't expect much fluctuation in that breakdown from quarter to quarter. So thanks.

Thank you. One moment for our next question. Our next question is going to come from the line of Gavin Clark-Gunter with Evercore ISI. Your line is open. Please go ahead.

Hey, guys. Thanks for taking the question. I just wanted to ask on the ESSENCE confirmatory trial, is the latest guidance still for data in 2026? I'm just looking at the trial page and it still notes the primary completion date is next week, actually. And just more broadly for this trial, do you have any sense what the requirements to actually pull these drugs off the market may be, especially in light of the fact we haven't really heard anything following the Viltepso results? Thanks.

Well, first of all, Louise, correct me if I'm wrong, the readout for Essence is in 2026, correct? That's correct. Yeah. And then as it relates to the standards, The standard for evaluating a therapy and whether it should be removed from the market is based on the totality of evidence. When all of the evidence is in on the therapy, the FDA will look at the totality of all of the evidence associated with that therapy, including study results, including trends in the study results, including presumably information like the real-world evidence that we've gathered with respect to the PMOs, which has been very positive so far, and then we'll make a decision. It won't be a yes or no based on one single trial. That isn't the standard.

Thank you, and one moment for our next question. Our next question is going to come from the line of Leo Watson with Mizuho. Your line is open. Please go ahead.

Hi, this is Leo on Troy. Congrats, Mr. Encorder, and thanks for taking our question. How are you thinking about the competitive dynamics in the Exxon skipping business given the recent competitor data readouts and the discontinuation of the PPMO? And while you expect no material cannibalization through 2025, we're just curious on how you're thinking about cannibalization going forward in the long term. Thanks.

Let me answer the second question first. So we don't think we'll see net cannibalization over the course of 2025. Remember, we also have ex-US sales of the PMOs, and those won't be in the near term at least subject to any cannibalization. We do model cannibalization after 25. How significant, if at all, that will be is something we're going to watch and monitor, but we have some reason to believe that these therapies are going to be very durable, certainly on a net basis over this entire decade, but we'll see how that goes post- 25. As relates to competition, I should note that we're not very focused on competition right now. There is no one near us today, either on the PMOs or, you know, certainly on a Levitas. And I will not comment on other folks' programs, and I wish them well. One of the things I do want to point out as relates to the PMOs is that how much good those PMOs are doing today. You know, there was An open issue about that perhaps in late 2016 when Exondys was approved, the Teplerson, but the real world evidence has been really supportive. You can see it in the compliance rates for these therapies. They're doing an enormous amount of good with a really, really laudable safety profile. And so the one thing I would say is that when we think about the PMOs and we think about competition, one ought to remember that this bar to overachieve from both an efficacy and safety perspective for the PMOs is a very high bar. And the road for even getting to clinical data that would allow one to think about approval is a very long one. This requires one to go, you know, Exxon by Exxon over a very long period of time. So, you know, I wish these folks well. I think that they have a high bar and a long road to get to the right place.

Thank you. One moment for our next question. Our next question is going to come from the line of Sammy Corwin with William Blair. Your line is open. Please go ahead.

Hi there. Congrats on the quarter and thanks for taking my question. Looking ahead to a potential launch in Lynn-Girdle, do you expect any synergies between LGMD and Ellevitis in terms of sale reps or treatment centers? And then with the discontinuation of 5051, could any cost savings there be used to accelerate the development of any of those Lynn-Girdle programs? Thanks.

Well, in a way, a yes and a yes to both of your questions. Is there synergy between the a limb girdle launch and what we've done with 11 is a hundred percent. Absolutely. It's going to be very, very, very synergistic. Um, you know, there'll be nuanced things we need to do in advance to make sure we're very successful, but we have a very seasoned, um, group of folks that know how to, um, to do service, the rare disease community and the neuromuscular community and to get gain access and reimbursement and to focus on distribution. it's a fascinating thing to consider that the group that launched Exondus, you know, back in late 2016 that have become so expert, you know, 80% of those folks remain here with Sarepta today. So yes, there'll be a lot of really nice synergy and really frankly synergy at the therapy level as well. I would remind folks that, These limb girdle programs that we're talking about share the same capsid, so they will really be standing on the shoulders of the safety profile of Alevitus and the same promoter as Alevitus. So the productivity of these therapies is standing on the shoulders of Alevitus. And then as it relates to 50-51, I don't want to suggest that we can accelerate the plans based on the cost savings from 50-51 only because we're already doing everything we can to move these as fast as possible and you're seeing it in the progress that we've made and announced in this earnings call. But certainly there will be some cost savings from 50-51 that we get to use to focus back down into research and development in advance of our program, including our pipeline, which we're very excited to talk about next year.

Thank you. And one moment for our next question. Our next question comes from the line of Mike Auls with Morgan Stanley. Your line is open. Please go ahead.

Hi, this is Rohit Auls from Mike. Thanks for taking our questions. Since we're at the inflection point for elevated sales, can you provide any color on early 4Q trends and how they're tracking versus expectations?

Thanks. We're not going to do that right now. We have sort of reiterated the guidance that we've provided previously. Notwithstanding that some appear to have criticized us for being conservative, we are standing by our guidance for Q4, and we are reiterating our guidance for 2025, which I would remind you is a very significant $3 billion, two-thirds of which will come from Elevitus and one-third of which will come from our three approved PMOs. So we're feeling very good about where we are as an organization and very consistent with... all of our internal forecasts over the last year or so.

Thank you. I would now like to hand the conference back to Doug Ingram for closing remarks.

Well, thank you all very much for your very insightful questions and for spending time with us this evening. We've had a very positive quarter from our perspective. The Elevitus launch is going swimmingly. The PMOs are performing very well, and we're really starting to see a lot of traction in our pipeline, and we're getting very excited about our pipeline generally, but we're very excited about our late-stage limb girdle programs as well, which are moving into what will be clinical trials that can support the approval of those therapies as well. And as one commenter made today, and I agree with, I don't think there has been enough attention spent on the limb girdles or the opportunity there both to do good for some patients who really need us and do well by the investors who stand by us. I look forward to keeping you all up to date and talking to you about the fourth quarter performance when we announce fourth quarter performance next year. Thank you all very much.

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