Sarepta Therapeutics, Inc.

and full year 2024 financial results conference call. As a reminder, today's program is being recorded. At this time, I'd like to turn the call over to Mary Jenkins, Associate Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Lisa, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the fourth quarter and full year 2024. The press release, slides, and supplementary information are available on the Investor Relations section of our website at Surrupta.com. Our 10K will be filed with the SEC later this week. Joining us on the call today are Doug Ingram, Ian Estapan, and 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 was making a number of forward-looking statements. Please refer to slide two on the webcast, which contains our forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Surrupta's control. Actual results could materially differ from these forward-looking statements, and any such risks can materially and adversely affect the business. The results of operations and trading prices for Surrupta's common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent 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. As noted on slide three, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP are included in today's press release and the slide presentation available on the Investors section of our website. 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, everyone, and thank you for joining Surrupta Therapeutics' fourth quarter and full year 2024 Financial Results Conference call. As you may know, back in late 2017, we created an expansive strategic plan that we call Project Moonshot, one that would require that we raise billions of dollars, chart a course through the unknown, and overcome multiple unforeseen obstacles, obstacles that would have deterred team, but also a strategic plan, if achieved, which would ensure a better life for thousands of Duchenne patients and cement the durable future of Surrupta. After years of work and reams of new insight into the treatment of Duchenne in 2024, we achieved all of the goals laid out in Project Moonshot. We obtained approval for the broadest possible label for alevitas, achieving our goal of transformative therapy that could serve the vast majority of Duchenne patients. We worked with the FDA to reframe the approach to the development of rare and ultra rare diseases so that therapies previously rendered unviable by FDA requirements now have the potential to help patients. And as a result, our LGND franchise is moving with renewed speed towards three potential approvals over the next three years. We broadly launched alevitas in 2024 and achieved results greater than all other in vivo gene therapies combined. At the same time, we continued to serve the community with our PMOs, which grew even in the face of a robust gene therapy launch. We became sustainably profitable and cash flow positive in 2024. Indeed, by the end of 2030, we will do over $16 billion cumulatively in operating income and over $13 billion in free cash flow. And this is after we have closed and made our initial investment in the Arrowhead transaction. And we have secured a durable and even more diversified future through our Arrowhead collaboration, pursuant to which we now add to our gene therapy pipeline a broad platform of siRNA, including four clinical programs, three preclinical programs, and six research programs across neuro-muscular, CNS, cardiomyopathy, and pulmonary. In addition to multiple gene therapy launches in the coming few years, we will have multiple potential blockbuster siRNA launches before the end of this decade. Now speaking more specifically of performance, we had an exceptionally strong fourth quarter and full year performance with our four approved therapies. For the fourth quarter, our net product revenue stood at $638 million, growing at 75% over the same quarter prior year. This represents more than $60 million in overperformance to our prior guidance. Our full year net product revenue stood at $1.8 billion, representing year over year growth of 56%. And this overperformed to our guidance by over $100 million. Turning to Elevanis, in 2024 we had by a wide margin the most successful launch of a gene therapy yet in history. For the fourth quarter, Elevanis sales stood at $384 million, representing a 112% increase over the prior sequential quarter. And while we have already achieved over $1 billion in sales since our initial approval in 2023, this represents less than 5% of the on-label addressable opportunity. So clearly this is just the beginning. Our three PMOs, Exondis 51, Amondus 45, and Bioondus 53, achieved at $254 million in the fourth quarter and $967 million for the full year. We were profitable on a gap and a non-gap basis in the fourth quarter and we were cash flow positive. Dallin Murray, our chief customer officer, will provide more color on commercial performance in a moment. And then to round out the call, our CFO, Ian Estepen, will discuss our financials in more detail. Looking forward, in 2025 we will capitalize on the successes of 2024. As you know, our net product revenue guidance for 2025, excluding royalties from Roche, is between $2.9 billion and $3.1 billion, approximately one-third of which will come from the PMOs and a bit over two-thirds of which will come from Elevanis. This represents -over-year growth of 70% for total net product revenue. And for Elevanis, this represents over 160% -over-year growth. On the R&D and tech ops side, we have more upcoming milestones this year than any other time in our history. As you know, we already met our important Elevanis milestone in late January. We reported the two-year and one-year crossover results for Elevanis from our Pivotal Trial Embark and in all pre-specified measures. That includes all functional measures, muscle health, biomarkers. Those on Elevanis did strongly, statistically, significantly better than untreated natural history would have predicted. We have passed 600 patients now on therapy across the broad range of ages and weights. These data are further proof of the transformative potential of Elevanis to change the future course of this disease for patients. To continue to serve the global market and improve COGS, we are planning for a move to suspension manufacturing. And after completing our GMP runs, we intend to commence our suspension manufacturing bridging study this year. As noted, we are now moving rapidly with our LGMD platform. We are continuing to dose our study for SRP9004 to treat LGMD type 2D. And we have initiated our registration study for SRP9005 to treat LGMD type 2C. We have completed dosing in our Pivotal Trial for SRP9003 to treat LGMD type 2E. And we will be submitting our VLA for approval later this year. We also intend to file our IND for SRP9010 to treat LGMD type 2A later this year. If successful, we will launch SRP9003 next year. We will launch SRP9004 the following year. And SRP9005 will be launched the year after that. As you know, we have closed our transaction with Arrowhead this month. And already there will be several very significant milestones in 2025. This year we will have our initial readout for cohorts for Arrow-DUX4 to treat FSHD type 1. Again, this could be a very significant proof of biology. We will be looking at muscle concentration, downstream, gene correction, and safety. We're also very excited about the potential to directly measure knockdown of the aberrant protein of interest, DUX4. No other program to date has been able to achieve this. And this would be a very powerful result if successful. Likewise, we will have a readout of our initial cohorts for Arrow-DM1 to treat DM1, where we could obtain proof of biology looking at muscle concentration, knockdown, gene splicing, and safety. If successful, we can launch our therapy for DM1 in 2029. Our clinical programs for MMP7 and SCOB2 are progressing well as well. We intend to initiate our first in-human clinical study before the end of this year for Arrow-HTT, which is intended to treat Huntington's disease. And finally, we have a significant number of siRNA and gene therapy pipeline programs underway. And so we intend to schedule an R&D day later this year to discuss all of them in more detail. Our head of R&D and Chief Scientific Officer, Dr. Luis Rodino-Clapec, will discuss our pipeline progress in a moment. With grit and operational excellence, we achieved all of our multi-year objectives in 2024. In 2025, we will continue to execute. We will build on our foundation as one of the very few fully integrated, profitable, and cashflow positive biotechs in the world today. And we will achieve our next ambition, which is to become the next globally relevant big biotech focused on improving the lives of those among us with life-limiting rare disease. And with that, I will turn the call to Dallin Murray for more detail on commercial performance and plans. Dallin? Thank you, Doug, and good

afternoon. I'm delighted by the exceptional performance the team delivered in the fourth quarter and for the full year 2024. As we pre-announced in January, net product revenue for 2024 totaled $1.79 billion, consisting of roughly $967 million from our PMO franchise and approximately $821 million for Alevitas. 2024 marked the eighth year of our PMO franchise, which continues to perform well and grew modestly year over year, even in the face of the transformation brought about by Alevitas. As in prior years, the team delivered this growth organically without taking price increases on any of our approved PMO products. As such, this growth speaks to the increase in patients we are serving in the Duchenne community. For 2025, the PMOs remain an integral part of our guidance, and even in the face of strong Alevitas performance, we are only seeing modest U.S. net cannibalization. We are comfortable with the current consensus estimates as they stand today for the PMOs. For the fourth quarter, net product revenues for the PMOs totaled roughly $254 million, growing at approximately 9% compared to the fourth quarter of 2023. Individual PMO net product revenues were $137.6 million for Exondis 51, $40.2 million for Vyondis 53, and $76.2 million for Amondis 45. Now turning to the Alevitas launch and performance. Q4 was our second full quarter with an expanded label, and we could not be more pleased with the launch execution. In particular, for the fourth quarter, Alevitas revenue totaled $384.2 million, exceeding our quarterly guidance by over $60 million. Please bear in mind, even with this impressive growth, at this point in the launch, we have treated approximately 5% of the on-label addressable patient population for Alevitas, so the opportunity ahead of us remains significant, and we have the wind in our sails at the moment. The recent findings from the Part 2 of the EMBARK study adds to the existing robust body of clinical evidence. This will undoubtedly help the team with their efforts going forward. As the launch progresses, we remain confident in our understanding of the launch dynamics and the key drivers, which continue to be robust patient demand for both the Ambulant and non-ambulant populations, ample site capacity for both the infusion and follow-up, positive trends in access and reimbursement for both ambulatory and non-ambulatory patients, and consistent conversion rates as we continue to see patients gaining access within the 3-5 month conversion timeline. Doug took some time at the recent JP Morgan meeting to give more detail on that conversion timeline. Understanding this process is essential to understanding our business model and the confidence we have in our success and ability to execute both quarter to quarter and in the coming years. Five launches and a decade of working in partnership with the key neuromuscular institutions gives us a deep line of sight into the cadence of dosing each patient in each center, in each region, and across the country. For each and every gene therapy patient, roughly 20 to 25 people within each institution play an important part in making that dose happen. Those folks are across each institution from the executive team to the pharmacy department as well as the medical finance and various administrative teams. That's only the people within the institution. We also rely on additional people from our distribution and manufacturing partners along with others from various internal surrupted teams. All need to do their individual parts with perfection and under tight timelines to successfully dose each patient. Why is this important? There are two reasons. The first and most critical is we've now shown as a team we can do this reliably and successfully for over six quarters now since our initial launch. We've built the model and shown we can reliably execute, which has been challenging for others to accomplish. Secondly, it gives us a great deal of confidence in our revenue projections which are driven by our understanding of the patient journey. There are several factors that contribute to the cadence of patients being treated and we have a good line of sight into each of these factors. With over eight years of commercial experience comes a good understanding of where the patients are and their pathway to treatment. We are also pleased with the continued progress in getting broad coverage for alevitas and continue to see patients gaining access who are in plans with more restrictive policies. To date, not a single patient has been permanently denied coverage. And as you can see from our performance, this is a disease state that we understand extremely well. We are very confident in our growth trajectory and I'd like to reiterate a point that Doug made in January that puts our performance into broader context. We project that in the first 30 months of our alevitas launch, alevitas net product revenue will outperform every other in vivo gene therapy combined over that same period of time. Our success of alevitas shows that one-time gene therapy can be commercially viable, providing hope for those with Puchen and for all those with genetic conditions with unmet need. As a reminder, our 2025 net product revenue guidance is 2.9 to 3.1 billion, which represents approximately 70% growth over 2024. Thus far, the launch has played out in line with our projections and we remain comfortable with this guidance given our strong finish to 2024 and our long track record of accurately predicting our performance. In summary, we are comfortable with our guidance for the year and with Q1 consensus. We expect to deliver sequential growth quarter over quarter throughout 2025. And now I have to call over to Dr. Louise Gordino-Praypak for the R&D update. Louise.

Thanks, Dallin. Building on the accomplishments of 2024, I'm thrilled with the promise before us and the vast opportunities there are to continue to make a difference in patients' lives. Firstly, alevitas. Late last month, we announced positive follow-up data from EMBARQ for study SRP 9001.301, a global randomized double-blind placebo-controlled phase 3 clinical study of alevitas. Specifically, we shared crossover results from those who received therapy in part two of the study. We also shared the two-year results of those treated in part one of the study as compared to an external control. Given what we know about alevitas, what the science and data have shown us and what we have observed in the large population of patients that have been treated with alevitas, we were not surprised by such overwhelmingly positive data from the study, which demonstrated that alevitas impacts the trajectory of Duchenne and offers an early treatment option intended to avoid unnecessary and unavoidable muscle damage. Speaking to the therapy's durability, the data are clear. Those not on therapy decline in their functional abilities faster than those on therapy, who stay healthier longer versus the natural history would predict. Intervention is critical in maintaining precious muscle before it's lost. With that, I'd like to pause for a moment and reiterate the significance of the MRI muscle data. As mentioned on last month's these data support long-term function and healthier muscle. Specifically, we saw modest to no increase in fat fraction from baseline to two years, and levels of two years were well below what was seen at one year in the placebo patients. This is consistent across muscle groups. We look forward to publishing data from EMBARQ at forthcoming scientific meetings and in peer review journals. In summary, as evidenced by the data, alevitas demonstrated a clinically meaningful response across all of disruptive studies with increasing divergence from natural history over time that supports the durability of the therapy. To ward our goal of providing alevitas to all eligible patients, we are advancing the ENVISION study or study SRP 9001-303, a global randomized double-blind placebo-controlled two-part trial evaluating the safety and efficacy of alevitas in non-ambulatory and older ambulatory individuals with Duchenne. ENVISION is progressing well, and as previously mentioned, enrollment in the United States is complete, and our last patient last visit is expected in 2027, following an 18-month placebo-controlled period. In addition, for the approximately 15 percent of patients who are screened out for pre-existing anti-AEV 74 antibodies, we've commenced two studies, one with enlytidase or study 104 to cleave antibodies and a second with plasmapheresis or study 105 to remove antibodies. We expect to have expression data from both of these studies in the second half of 2025. Moving now to our program to the limb girdle muscular dystrophes or LGMDs. We were thrilled to announce in December 2024 that we completed enrollment and dosing of Emmergene or study SRP 9003-301 or Phase 3 clinical trial of SRP 9003 to treat LGMD type 2e or beta-circoglycanopathy. Emmergene is a global study and the primary endpoint is biomarker expression of the beta-circoglycan protein, the absence of which is the sole cause of LGMD 2e. Data from Emmergene are expected in the first half of 2025. Further, we were pleased with the outcomes of our pre-biologics license application meeting with FDA, including endorsement for a rolling BLA submission. We are on track to submit our BLA filings seeking accelerated approval for SRP 9003 in the second half of 2025. We're also encouraged by the progress of our other LGMD programs. At the end of 2024, we initiated Phase 1 of SRP 9004 in development to treat LGMD 2d. And in early 2025, we'll initiate our Phase 1-3 seamless design clinical trial for SRP 9005, which is in development for the treatment of LGMD 2c. This March, we look forward to sharing with you a wealth of data from our Duchenne and LGMD programs at the MDA Clinical and Scientific Conference taking place March 16th and 19th in Dallas, Texas. And we also look forward to highlighting our impressive pipeline at an upcoming R&D day in 2025. As a preview, we have numerous programs in various stages of development across neuromuscular central nervous system, cardiac, and pulmonary indications, many of which are nearing INDs. Of note, for NeuroTrephin 3 or NT3, we have optimized the NMT1A constructs for -Marie-Tooth type 1a or CMT1a using AAV RH74 and are now rapidly advancing to the clinic following exciting preclinical data. As a reminder, we are using a surrogate approach for delivery of the NT3 gene to improve myelination and nerve regeneration in CMT1a. This pipeline and the product approach has applicability to other CMTs as well as other demyelinating indications. On the research side, we've continued to innovate across platforms. We've optimized, developed, and characterized new AAV capsids that will change the landscape for neuromuscular gene therapy and unlock potential in cardiac and CNS disease areas. We are also driving innovation in gene editing, enhanced delivery for RNA, and are pioneering new mechanisms to upregulate gene expression. The future cannot be brighter for genetic medicine. Further, we look forward to sharing data with you later this year around our FSHD1 and DM1 programs. As a reminder, SRP1001, formerly known as ARODUX4, is currently in clinical development to treat FSHD1, an autosomal dominant disease associated with the failure to maintain complete epigenetic suppression of Dux4 expression in differentiated skeletal muscle, leading to overexpression of which is myotoxic and can lead to muscle degeneration. We are encouraged by the non-clinical data generated thus far and look forward to the data readout later this year. Turning to myotonic dystrophy type 1 or DM1. DM1 is driven by an expanded CUD trinucleotide repeat in the 3' untranslated region of DMPK transcripts. These abnormal transcripts cause misregulated splicing known as spliceopathy for certain messenger RNAs which are directly linked to the clinical manifestations of DM1. We believe that silencing the apparently transcribed DMPK mRNA using SRP1003, formerly known as ARODM1, may halt CUD expansion-related splice defects in patients with DM1 and thereby improve muscle strength and function. We look forward to sharing the data from the SADD study later this year as well. Now to discuss our RNA PMO platform. The Essence trial, our post-marketing requirement for Goladursin and Casimersin, as well as Mission, our post-marketing commitment for Exondis, are both fully enrolled and remain on track. We look forward to sharing data as soon as the studies are completed. In summary, I'd like to take the opportunity to thank the patient community, investigators, and my disruptive colleagues. All this progress would not be possible without you. And finally, I'd like to recognize this Friday is Rare Disease Day. There are more than 7,000 rare diseases, only a small percent of which have any treatment. As a company dedicated to bringing forth new treatments for rare disease, it's an important day for our employees and the patients we serve. It's a day to reflect on the impact of rare disease on the infected individuals and their families, and to acknowledge all the work that still needs to be done, and to celebrate the progress that we've made. With that, I'll turn the call over to Ian for an update on the financials. Ian?

Thanks, RLRK. Well said. Good afternoon, everyone. This afternoon's financial results press release provided details for the fourth quarter of 2024 on a gap as well as a non-gap basis. Please refer the press release and slide deck available on Surruptors' website for a full reconciliation of gap to non-gap financial results. So the three months ended December 31, 2024. The company recorded total revenues of $658.4 million, which consists of net product revenues and collaboration and other revenues compared to revenues of $396.8 million for the same period of 2023, an increase of $261.6 million. Net product revenue for the fourth quarter of 2024 from Alevitas was $384.2 million compared to $131.2 million for the same period of 2023. Net product revenue for the fourth quarter of 2024 from our PMO Exxon Skipping franchise was $254.4 million compared to $233.8 million for the same period of 2023. The increase in net product revenue primarily reflects the net product revenue from sales of Alevitas. In the quarter ended December 31, 2024, we recognized $20.3 million of collaboration and other revenues compared to $31.7 million for the same period of 2023. This revenue primarily relates to our commercial Alevitas supply delivered to Roche, royalty revenue, and our collaboration arrangement with Roche. The reimbursable co-development costs under the Roche agreement totaled $26 million for the fourth quarter of 2024 compared to $23.5 million for the same period of 2023. As a reminder, these Roche reimbursable co-development costs are an offset to operating expenses. On a gap basis, we reported a net income of $159 million, or $1.65 per basic share and $1.50 per diluted share, and a net income of $45.7 million, or $0.39 per basic share and $0.47 per diluted share for the fourth quarter of 2024 and 2023, respectively. We reported a non-gap net income of $206 million, or $1.90 per diluted share in the fourth quarter of 2024 compared to a non-gap net income of $86.6 million, or $0.82 per diluted share in the fourth quarter of 2023. In the fourth quarter of 2024, we recorded approximately $132.3 million in cost of sales compared to $44.2 million in the same period of 2023. The increase primarily reflects cost of sales related to a levitus during the three-month ended December 31, 2024, following the label expansion in June of 2024. On a gap basis, we recorded $200 million and $195.5 million in R&D expenses for the fourth quarter of 2024 and 2023, respectively. A -over-year increase of $4.5 million. The increase is primarily due to an increase in our manufacturing expenses related to a ramp-up of batches produced for our LIMB-VIRTLE program, partially offset by a decrease in clinical trial expenses related to the discontinuation of the PPMO program. On a non-gap basis, R&D expenses were $172.7 million for the fourth quarter of 2024 compared to $165.1 million for the same period of 2023, an increase of $7.6 million. Now, turning to SG&A, on a gap basis, we recorded approximately $163.9 million and $131.7 million in expenses for the fourth quarter of 2024 and 2023, respectively, an increase of $32.2 million. The increase was driven primarily by an increase in professional services used to support the continued efforts to commercialize the levities and ongoing litigation matters and an increase in compensation and other personnel expenses primarily related to changes in headcounts. On a gap basis, the SG&A expenses were $131.6 million for the fourth quarter of 2024 compared to $105.7 million for the same period of 2022, an increase of $25.9 million. On a gap basis, we recorded $10.1 million in other income for the fourth quarter of 2024 compared to $15.7 million for the same period of 2023. The change was primarily due to a decrease in interest income and an increase in investment discount, and that is a result of lower interest rates and a mix of our investment portfolio. As mentioned earlier, we're maintaining our 2025 total product revenue guidance, which reflects a 68% growth from 2024 at the midpoint. We also are introducing expense guidance for 2025. We anticipate combined 2025 non-GAP R&D and SG&A expenses to be in the range of $1.2 to $1.3 billion. The incremental expense is almost exclusively related to Arrowhead development programs. Excluding these costs, our expenses would be essentially flat compared to the prior year. To conclude, we had approximately $1.5 billion in cash, cash equivalents, investments, and restricted cash as of December 31, 2024. As Doug said, now that the Arrowhead transaction is now closed, which was fully funded by our existing cash reserves, we project returning to similar cash levels by year end of 2025, driven by the strong, elevative launch. Further bolstering our financial position, we secured a $600 million revolving credit facility. The combination of a positive business outlook and our strong financial position has really well to execute on our 2030 strategic goal. With that, I'll turn the call back over to Doug for Q&A. Doug?

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

Thank you. If you would like to ask a question, please press star 1-1 on your telephone. You will then hear an automated message as your hand is raised. If you would like to withdraw yourself from the queue, press star 1-1 again. We also ask that you please wait for your name and company to be announced before proceeding with your question, and please limit yourself to one question. One moment while we compile the Q&A roster. And our first question for the day will be coming from the line of Tazin Ahmad of the Bank of America Securities. Your line is open.

Okay, great. Thank you for taking my question. One has asked Doug about the cadence of what you're seeing in 1Q so far with regards to patients that are being onboarded. You've talked extensively about certain things that cannot be changed, and you reiterated your confidence about guidance for 2025. Can you give us a little bit more granularity on what you're seeing in 1Q and how we should be thinking about the cadence of uptake for the rest of the quarters this year?

Thanks. Thank you very much for your question, Tazin. A couple things. First, let me reiterate my confidence on the guidance for the year. We're still very good about the guidance we have. I would remind everyone we have a very good track record of setting reasonable guidance and meeting or very often exceeding that guidance. The only thing I'll say about quarters going forward is that we will continue to see growth quarter over quarter as we ramp this launch. Things obviously are going very well for this launch through 2024, and I think our guidance should imply it's going very well in 2025 as well. There is a certain cadence to all of this, everything from the start form, the single case contract that I've talked about before, the infusions, the need for pre-existing neutralizing antibody assays and the like that describes the cadence. But it's going very well, and what we'll see over the course of this year is growth quarter over quarter over quarter to achieve our guidance for the full year, which of course is $3 billion in total. A little over two-thirds of that will be coming from Alevitus and the remainder from our 3 PM us. So thank you for that.

Thank you. And one moment for the next question. Our next question will be coming from the line of Ellie Murl of UBS. Your line is open. Thanks.

Hey, guys. Thanks so much for taking the question. For limb girdle, just from your work in the space, what's the latest on what you see for the prevalence of 2E and how many in the U.S. are diagnosed today and the mix of ambulatory versus non-ambulatory patients? Basically, if you will be launching here next year, how should we be thinking about the contribution potentially to revenue and how many patients there might be kind of waiting for therapy? Thanks.

I'll give you the broadest strokes, and then I'm going to turn the call over to Luis if she has any information on the split between ambulatory and non-ambulatory. Obviously, type 2E is a very rare disease. It's an ultra rare disease. In fact, all of the three sarcovacan launches that we'll have over the next three years are individually very rare. But collectively, they will represent about 25% of the Duchenne elevitus opportunity. So they will be important contributors first and foremost, to be clear. They'll be enormous contributors in the lives of patients living with and being generated from these really devastating muster dystrophies. And then they will be important for the organization as well. But they'll be modest. They'll be about 25% of Duchenne. So they'll be important but modest. With that said, additional question that had been asked was the split of ambulatory and non-ambulatory specifically as relates to type 2E. And I don't know Luis if you have any information on that, Edythe?

Yeah, there's generally an even split, I would say, as genetic diagnosis, especially for the limb girdles, has come along. We were seeing more of the ambulatory population. I think historically you would have said it would be geared towards the non-ambulatory. But now it's generally a 50-50 split.

Thank you. One moment for the next question. And our next question will be coming from the line of Jenna Wang of Barclays. Your line is open.

Thank you for taking my questions. I have one question regarding the data update later this year for both FSHD and the DM-1. If I hear correctly, DM-1 will be the SAT data. Is FSHD also SAT data? And if it are the SAT data, how many cohorts and how long follow-up and what kind of data you would share with us?

Yeah, I will turn this to Dr. Rodino Clayback to provide some color on that.

Yeah, for both FSHD-1 and DM-1, it will be the SAT data. So early we'll be focusing on single-ascending dose study data, which will be focused on safety, some early signals of biomarker efficacy, which will be muscle concentration, knockdown, essentially splicing, restoration as well. So it will be early data, but we look forward to showing that in the second half of the year for both.

We're also really excited with FSHD as well that our hope, and of course we'll only know when the data comes in, is that we'll be able to show through an assay the actual direct knockdown of DUCS-4, which of course is the goal of the therapy for FSHD. If we can do that, that is a really significant proof of biology because no program before has been able yet to achieve that goal. So we're very excited to see that as well.

Thank you. And our next question will be coming from the line of Brian Abrams of RBC. Your line is open.

Hi, this is Kevin for Brian. Thanks for taking our questions. So maybe just on LimGurl type 2e, can you maybe tell us a little bit about what you think the bar is for your upcoming 2e data? And then maybe how do you think that bar translates to other LGMD subtypes that we'll eventually see data from? Thanks so much.

We've done, I'll comment on it and then Luis, you update with any more precision. Broadly speaking, we have been working with the agency over a very long period of time, in essence, to help educate the agency on the bar that should exist for these sorts of ultra rare diseases, particularly diseases and therapies like SRP9003 for LimGurl type 2e, where you're dealing with the replacement of the native protein unaltered, which the absence of that protein is the sole and exclusive cause of the disease. So I'm very proud to say we have very small end studies. They're single arm studies. They look to expression and safety. So in the broadest of strokes, the bar will be that we're getting nice expression. I would hope largely consistent with the expression that we've seen in the past, because remember we've actually dosed SRP9003 in prior cohorts and of course, a good safety profile. We have a lot of conviction around this, as you can well imagine, first because we've already actually dosed patients with SRP9003, but also because SRP9003 stands on the shoulders of all of the work that we've done with 9001 now, Elevitis. We have dosed hundreds and hundreds and hundreds of patients with Elevitis. We understand the laudable safety profile and we understand the power of our constructs and our promoter to get really good expression and get it safely. So that's sort of the bar and we're very confident about where we're going to go with that. And on your other question, this will be similar across the Lindbergh old programs that we have already aligned with the agency on the approach that we're taking for 9003 and 9004 and 9005. And we're confident that this affects a modernization in the way the agency's looking at transformative therapies for ultra rare diseases. Louise, is there any more detail that I have omitted?

And you summarized it well, maybe I'll just linger on one point in the fact that for the sacroglycans, LDMD2E being the first, these are the full-length genes. So in this case, beta-sacroglycan is both the gene therapy, it's also the biomarker. We've demonstrated extensively pre-clinically how the biomarker expression leads to functional improvement and then that translated in our studies clinically and we saw two different doses, we saw improvements in both expression that led to functional improvements over time. Those patients will be sharing five-year safety follow-up data for those patients continuing to do well. So that will be our first study and then the other sacroglycans will follow suit. We're all using, we're using RH74 across that platform so not only are we leveraging the 9001 data but then also the other sacroglycans. So we're in good position in terms of the outcomes of these studies and the outcome of the DLA.

Thank you. One moment for the next question. And our next question is coming from the line of Andrew Fay of Jeffreys. Your line is open.

Thanks, I appreciate the update. Congrats on all the progress. Maybe one more question on the DM1 FSHD data you'll be sharing later this year. Do you think the initial SAD SAD data will be conclusive to the point where investors can determine whether these programs are looking superior or not or do you need MAD data and how would you define superiority in these two programs? Thank you.

I'm going to turn this over broadly to Luis to talk about it. Let me say at the inception, first of all I don't want to do what other small biotech companies often do which is oversell early data, you know the data has to evolve. These are however very very important proofs of biology so I want to be very clear both from a safety perspective, a muscle concentration perspective, a knockdown perspective, a downstream gene splicing perspective and as relates to FSHD where you can actually directly see the knockdown of Dux4. So while there'll still be lots of work to do from there and we don't want to oversell the data, this is a really really important moment and it should give at least signals of potential future product profiles that versus other potential approaches to FSHD and DM1 but Luis you can provide more detail.

Yep just to add to that I would say that what we know from the Aerohead platform that we've seen in their other programs and from the preclinical data is the translation from preclinical to clinical and so we've been excited to see that and that's what we'll be looking for is that data and the translation into the clinic so it'll certainly be a good indicator in terms of the knockdown that we're seeing, the muscle concentration, those are the things we'll be looking for as robust clinical developers. We're obviously looking to the MAD data to come following that but certainly we're excited to see the MAD data and the translation from preclinical and just an extension of their already promising data across the platform for Aerohead.

Thank you one moment for the next question and our next question is coming from the line of costas, Valerius of BMO capital markets, please go ahead.

Thanks for taking our question and congrats on the progress. A question on elevities from us given that it's been about eight months now since the expansion, can you comment on whether you have seen any reinvestments for PMOs in elevity treated patients and if not are you hearing anything from payers around their willingness to reinvest PMOs following elevity treatment? Thank you.

Yeah so let me say, costas, thank you for your question. In broad strokes I will still note that they're still very early days and so you know trying to draw broad conclusions is challenging. As we've noted one of the most interesting I think data points we should linger on for a second is while we've had all this success we're still only treated less than five percent of the addressable on label patient population for elevities and so you've got to both have to really test this issue, you've got to have the elevities and then you have to have the fact that elevities is treating a patient previously on a PMO but we do have instances of reimbursement of both so we've already seen that. I don't want to oversell it right now and I'm sure we also have instances where that was impossible but it's not black or white or binary right now. I will reiterate you know one of the things that that is we're very excited about is that you know so far we haven't seen significant net cannibalization. We'll see some cannibalization in the U.S. We're seeing very good growth of our PMOs. XUS of course the overlap is modest given that we only treat 29 percent of patients with Duchenne muscular dystrophy with our PMOs and it's nice to see that we have seen some payers interested in willing to put kids on sequential therapy post-gene therapy but it's still very early days and I wouldn't over read that. That's absolutely right.

That's absolutely right.

Yeah. Thank you. The next question will be coming from the line of Mike Oltz of Borges family. Your line is open.

Hey guys thanks for taking the question. Maybe just a quick one on the 500 million share repurchase program. Can you just remind us you know what the time frame is there and then some of the considerations as you decide you know when you might deploy that.

Thanks. Sure I'll turn this to

Ian for his thoughts. Sure so the time period is 18 months. Like I said obviously we just completed the arrowhead transaction and so you know we're going to quickly building back our cash reserves over the course of the year. Like I said in our prepared remarks we're going to be back to the same level at the end of 25 as where we started where we ended in 24. So it just talks to the strength of the launch and so as we continue to build our cash reserves we're going to look to be opportunistic around you know potentially deploying that capital and buying shares. So obviously we're not going to telegraph when we do it specifically but we certainly have it you know at our disposal and we're you know we're looking at the right time to do tax acute.

Thank you. One moment for the next question. And the next question is coming from the line of Joe Schwartz of Leric Partners. Your line is open.

Great thanks very much. So since approval in 23 it seems like the Levitas launch has had a few different stages with great growth early on following accelerated approval then a couple of flat to down quarters in early 24 followed by nice really nice return to growth following the expanded label in mid-24. So since your 25 guidance seems to imply that growth this year should be more moderate I'm just wondering if you can give us your view about the stage of the launch that we're in now and how you see it evolving this year. Are there any important constraints to that we should keep in mind this year?

So Joe thank you for your question and I will say with due respect I do not characterize our launch exactly the way you do I would say we had a brilliant launch in 23 with a very thin label then we had you know we achieved something that I achieved which is a very very broad label but of course the cadence for that broader launch requires the natural cadence of kids getting on therapy which to remind everyone even though we had done a brilliant job in site readiness and action reimbursement we're already there's just a cadence to getting the kids on therapy there it takes about four months and there's there's really no magic to fixing that because it's the cadence of the single case contract and the scheduling and fusion beds and the amount of follow-up and the assay work and the like so there's a certain cadence we had anticipated exactly what we saw in 24 which was we would see this hockey stick ramp towards the back half of the year which is exactly what we saw and as you know we grew in the fourth quarter quarter by 112 percent and then I would note for this year I mean with respect against the statement that the growth is modest this year we're going to grow with elevitous over 160 60 percent year over year and I would put that up well first I can't put it up against any other gene therapy let's be clear because we have blown away every other gene therapy cumulatively but also I think you know for launches this is just about as successful a launch as one could have imagined and we're still in the robust robust growth phase of this this launch

Thank you and our next question will be coming from the line of Gilblum of Needham and Company. Your line is open.

Hi good afternoon everyone and again congrats on all the progress. So maybe a question here on the move to suspension manufacturing with the bridging study later this year. Can you remind us what are the potential associated cost savings and also how broadly applicable is I mean you guys use a lot of different programs for the same gene therapy is this translatable you know just outside of DMV or is this very narrow? Thank you.

Yeah so let me answer the last question first. So our goal if successful is to evolve almost all of our gene therapy programs to suspension. In fact if I'm not mistaken, Luise you'll correct me if I am, the only program that will remain in adhering it's just the timing of it and we didn't want to slow down the approval as kids are waiting for it is 9003. All of the even all the other sarco glycans will be in suspension and you know broadly speaking of course that it's very dangerous to sort of to try to estimate the cause impact. We've got more work to do but it will be very very significant. We're seeing upwards of five times to even greater times more yield efficiency so you could envision a margins significantly over 90% eventually with this and also the ability to you know really bring this therapy to the far reaches of the world and that's of course one of our big goals. So to remind everyone we said it already in the in our prepared remarks but our goal is to complete our GMP runs and to start our bridging study before the end of this year certainly and then the goal of course is if all goes well and we're successful to evolve to suspension in 2027 which would be really really elegant timing for us as we think about our global plans.

Thank you and the next question will be coming from the line of Richie Burrow of TD Cowan. Your line is open.

Hi guys thanks for taking the question. Doug and Louise I wanted to ask your current thoughts as you understand the landscape on the potential for splicing biomarker based accelerated approval for your FSHD and DM1 programs. I know it's far in the future but obviously this is a hot topic of the space and then actually if I could follow up on Gil's question he asked about the bridging study. Can you describe what that bridging study is? It sounds like it's going to go fast.

Yeah on the bridging study it's a relatively I don't know who's given the actual land it's a relatively small study looking at empirically looking at expression and safety to confirm that it's substantially similar to the adherent approach so it should go relatively fast. You know everything everything's work but it should go relatively fast and we intend to start that bridging study you know later this year and then with that I'll turn over to Louise if you have any thoughts or comments on the the potential for an accelerated approval approach with either FSHD or DM1.

Yeah you know we're in the early stages I would say for FSHD Doug alluded to it but in we're in a unique position with FSHD where we have an assay that actually can quantify the knockdown of the primary defect in the indication which is Dux4 and so that gives us unique opportunity in terms of potential biomarkers as well. In these early studies we are looking at multiple biomarkers and functional outcomes and that's what these phase one studies are intended to do so then you can optimize and pick the best path forward. I think it's an opportunity to evaluate as far as splicing I think it is one of many biomarkers so whether it would be the sole biomarker is something left to be explored.

And of course we recognize yeah there we know amongst others there is a lot of open discussion dialogue and even some you know differences of opinion regarding the pathway for approval. This is one of these really rare moments maybe in my time it's erupted the first time where we get to be informed by others and so you know we're going to get informed by not only our direct conversations with the FDA but what others are seeing when they're looking with the FDA and that will help inform our path forward. So it's an interesting and interesting place to be where we get to be informed by others as opposed to with most of our other therapies having been the one to inform the world and chart the path forward.

Thank you and our next question will be coming from the line of Brian Skourney of Beard. Your line is open.

Hey good afternoon. Thanks for taking my question. I was hoping you could kind of walk through what you sort of perceive as the current order of potential rate limiting steps to commercial elevitous revenue recognition. I'm just trying to understand but it doesn't seem like it's demand in any sense right now. So what's sort of the step throughs that are kind of creating blocks from realizing the full demand? Would one be like insurance authorization? Would two be center capacity? Could you like kind of rank order those?

Rank ordering is hard. Let me turn this over to Don and force him to rank order but let me say a couple things. I don't want to call them blocks because it's just a cadence issue. It'd be like saying you know, Dallin often uses a metaphor that this is often like you know, think of this more than this is not like prescribing a drug. This is almost more like you know, organ transplant. There's just a lot of steps that have to go through to get from here to a kid dose. That's why it's about a four month process and you know, I'll give you some data on that. There are something like 25 individuals at a site of care that touch this therapy moving from the start form to the infusion and that goes through lots of different departments. It's not just the internal pharmacy and the institutions that are in the nurses and the physician. It's also all the way back into the financial area and the CFO of the organization and the like and so there's just a cadence. I mean give you an example, Brian, that there is it's about a can be as much as a four week or longer process to do the single case contract. Almost every time a patient gets dosed, the site and the payer enter into a specific site contract. It's an administrative step. It has to be done. It is done. It's done very well. We understand the process exceptionally well. I'm quite confident now I can say it without fear of being arrogant. There's no organization in the world that understands this process as well as we do, but there's just a cadence to this and it is all the things you're mentioning. It's the very process of getting the first meeting and then getting to the assay and then getting the infusion site ready. At the same time, it's the start form and the single case contract. It's negotiating with the payers if you have to. It's the when necessary negotiating with the payers around it. Remember, I will comment on this. There's been certainly some misunderstanding regarding payers and some relatively superficial surveys that were done. Look, we're doing really great with payers right now. We're doing better with payers with the Levitas than we did with the PMOs and I would note we've done really, really well with the PMOs over time, I think, as anyone would agree, that the policies really set themselves into three buckets. There's a lot of policies that are just dosed to label, give access to label more than there were with the PMO. We're really excited about that. Some of our bigger payers are in that camp. There are some payers that have restrictions and there are some payers that have a lot of restrictions. The interesting thing is that those different policies will not affect today the ultimate kid getting on a therapy. What they do do is internally they define the amount of time to get a kid on therapy and the amount of work that needs to be done to get a kid on therapy, but they get on therapy. So it's going to get everyone's head around that idea. Our PMOs, with eight years of battle-hardened experience, our win rate if a payer is going to be very persistent and take us to an internal or external appeal is over 90%. With 11 is right now, we're sitting right now at 100%. So no kid has been permanently denied therapy thus far. So in any event, all of these things describe this broad cadence that is about a four-month process. Dallas, do you want to rank order then? Well,

Brian, I think you can summarize everything that Doug is saying with one word, which is time. Everything here takes time and so you really, therefore, cannot point to one thing. As I said in my prepared remarks, we have robust patient demand. We have more demand than can be treated today. We have ample site capacity. We have enough site capacity to treat our peak forecast. We've got positive trends in access and reimbursement that we're allowing to convert patients within that consistent three to five-month time frame. So those together, then when you layer in what Doug said, it's just a game of time to get these patients on therapy. And that is all fact. Because we've got a deep and very detailed line of sight into all of this, this is what informs our quarter to quarter growth and our guidance for the year. I

will say it's probably two things. It's time and insane attention to detail, which Sarepta is really good at. I am sitting here, I will tell you, at our national training meeting today with all of our folks focused on this. And the amount and attention obsessed into detail and the passion to make sure a kid never slips through the cracks but can get on this therapy and benefit from Levitis is insane. And that explains why we've been so successful. And it explains why we are comfortable with our guidance for 2025, which I would say is very robust guidance. $3 billion is a 70% growth overall for the year. And as relates to Levitis, over 160% growth year over year, which speaks to the execution ability of this team out here in Scottsdale.

Thank you. And our next question will be coming from the line of David Hoenn of Dolce Bank. Your line is open.

Hi, there. Thanks for taking my question. So I just had one on if you have any thoughts on a recent data set that was generated by a next generation DMV gene therapy competitor. And do you have any insights in your field for us when our family patients might think about receiving treatment with commercial Levitis versus enrolling in a clinical trial for one of these other products? Thank you.

Well, first, there are no next generation gene therapy programs. So I'm going to correct the record on that. That's a misstatement. But look, a couple thoughts on it. We do understand that Zola put out some very, very early first in human data. A couple thoughts first. Fantastic. We are thrilled that a number of organizations are looking at researching new therapies for kids with Duchenne Musterdistrophe. And to be honest, we take a lot of pride in it. Because I think but for the success that we've had with our PMOs and with the Levitis, they wouldn't have this robust focus on finding new therapies for kids. So we're very excited about that. I do want to note that we have to remember that the families with Duchenne Musterdistrophe have to make difficult decisions today. And they need accurate information to make them. That's for the families to make. Clearly, there is one absolute overarching fact, which is there is one approved therapy that is transformative in nature, that is a disease modifying gene therapy, and that is the Levitis. And that can treat 80% of children with Duchenne Musterdistrophe and young men, and occasionally women with Duchenne Musterdistrophe. And our goal is to ensure that families have the right information so they can make the right decisions, which is often a very difficult decision. Do you get the current therapy? Do you look at a clinical trial and take a therapy that's been tested less and the like? But I just want to make sure the only thing I'm very thrilled with others focusing on this, I think it's a really positive for the Duchenne community and everybody should applaud it. But I do want to make sure people are providing the right, balanced, reasonable information so people can make intelligent decisions and not make the wrong decisions. And the actual decision that people make between entering into a clinical trial for a new experimental therapy versus getting on an approved therapy that's been shown to be safe in applications is a difficult decision that's going to be made between the families and their healthcare provider, hopefully properly informed with all the current data.

Thank you. Maybe

just one thing to add to that and I'll try to believe to go into more depth. But I do think it's important for people to recognize and certainly Luis has done a lot of work, empirical work for over many years looking at constructs and seeing their functionality. And certainly as we've seen with other development programs that different constructs have different efficacy and safety profiles and therefore when Luis tested all these programs, she really moved forward with the optimized construct from a functional perspective and that's why we're able to see data based on our expression lead to functional outcomes. And so that's really important when patients are thinking about therapies that it's not just only expression but actually the functionality of the construct. And to Doug's point, we've been able to show that in clinical studies. But Luis, since you did the work, you probably have the best point of view on

that. Thanks for that. I think it's important in the fact that the dystrophin space is unique for gene therapy and that in the small dystrophin space that you're looking at different functional contributions from these constructs. And so the quality of the dystrophin that you're producing is extremely important. Just one of the things that we noted in our studies when we compared it to other constructs was the inclusion of spectrum repeat three for stability of the construct. And we found that over time that this was critical to the functionality of our construct and the corresponding functional improvements that we saw that corresponded from preclinical work to clinical work. And so it was, as you all know, you've been on this journey with us, hundreds of patients over many years and multiple clinical studies showing the same in terms of the expression leading to functional benefit. And obviously with a traditional approval now and over 600 patients treated both clinically and commercially. So certainly the quality of the construct and the functional data that's demonstrated in the clinic is critical to making a decision about the therapy that a patient chooses with their family.

Thank you. And the next question will be coming from the line of Rai Forseth of Guggenheim Securities. Your line is open.

This is Rai from Debjit's team. We have two questions. Number one, how is serreptum modeling the impact of competitive gene therapies in DMD, especially on the annual incidence population under the assumption that the prevalence pool is saturated? And number two, for the 2E program, should we expect higher vector genomes per nucleus relative to historical serrepto data and protein expression above 50%? And is there a threshold for regulatory submission?

I think I've answered the threshold question. Thank you for that. And I think if we get expression consistent with what we've seen before with 9003 and before that with 9001, and I would remind you we got really extraordinary vector genome copies per nucleus. And we do it with a very rigorous approach, fairly unassailable approach to looking at things like vector genome copies and expression, ones that we worked on for years and years with input from the FDA. Might have to be very careful about that because it's very easy to do these things in ways that give false information. But if we get those levels of vector genome copies per nucleus and we get the kind of expression that we've seen both in 9003 and 9001, we're very confident that we'll get an approval assuming the safety is there and we're very confident about that. As far as modeling, it's way too early to be modeling competition from people that have one, two, and three patients in these early experimental therapies, probably haven't even figured out manufacturing at that point. Certainly we wouldn't be modeling anything this decade in any event, something we can look to as people will actually start progressing.

Although I would say thank you for that question because the size of that incident population is really underappreciated. It's really double the size of the Zolgensma market currently. We'll be ready for any competition when it comes. As Doug said, it's going to be a long time coming. And we really are excited about the possibility of treating patients earlier and preserving function earlier in that patient journey. So it's a great question from the perspective of a very underappreciated part of the Duchenne market opportunity.

Thank you. And the next question will be coming from the line of JPMorgan. Your line is open.

Hi, guys. This is Priyanka Anfron of HOME. Thank you for taking our quick question. As the R&D day is in the second half of the year, can we assume potential new data could be presented there from Arrowhead or other non-Arrowhead pipeline programs? Thank you.

I'll turn that to Louise to comment.

I don't think we've said exactly the timing of when we will present the Arrowhead data. It all depends on the timing of the data release and how that lines up with R&D day. We're excited to talk about the platform generally, I would say that, as part of R&D day. And our deep pipeline that we haven't really made able to share in detail. So we look forward to that. As we have more timing, we'll share with you.

Thank you. And the next question will be coming from the line of Byron Amen of Piper Sandler. Your line is open.

Yeah. Hi, guys. Thanks for taking my question. For the emerging trial, I think you're enrolling both ambulatory and non-ambulatory patients while the phase one enrolled ambulatory. So should we expect expression would be similar non-ambulatory patients to what was observed in the phase one ambulatory data? And then when you report these data, will you be comparing these to the NCH National History cohort? Luis?

Yeah, a couple of things in there. So we've treated both ambulatory and non-ambulatory patients. We see similar levels of expression. So the emerging analysis will analyze those two populations separate from a functional perspective. That will be the follow on study, the confirmatory study, but from an expression level, yes, we'll evaluate both. In terms of what we're comparing it to, we have our own journey natural history study, and that will be the comparator for the confirmatory study.

Yeah, and just, you know, our history has shown that we get great expression across the continuum of disease from very young to very advanced.

Thank you. And our next question will be coming from the line of Gavin Clark Gartner of Evercore. Your line is open.

Hey, guys, thanks for taking the question. I just wanted to focus on terminal value. So if I look at the outer year of consensus estimates, take 2033, I see about 2.2 billion in U.S. 11 of sales. So that implies about 850 to 900 treated patients annually. Maybe, remind us specifically what you're seeing on U.S. incidents, but more broadly, do you believe this consensus estimate is plausible and maybe explain what has to happen for Levitas to reach and stay into that range into the next decade? Thank you.

This is the incident population is looking at what the terminal incident population would be. In the U.S., the incident population will be somewhere in the low 400s, 420, 430s. So you can do the math on that. And then, of course, we'll have the PMOs on top of it because the PMOs are enduring as well. And then by that point, although, you know, this might be speculative until we've solved it, we will likely have solved the redosing issue by the 2030s as well. So you'll have to add to that concept as well. And of course, if you talk about the terminal value on Levitas, it's not the terminal value on the company, as you know. Fall goes well. We'll be launching three LINGURTLE programs in the next, you know, literally every year for the next few years. We have new ones coming. We have new INDs. And if all goes well, we'll be launching FSHD in 2028. We'll be launching DM1 in 2029. Both of those are multi-billion dollar peak year sales opportunities. So obviously, the terminal value will be significant on the organization as a whole.

Thank you. One moment for the next question. And the next question is coming from the line of Sammy Corwin of William Blair. Your line is open.

Great. Thank you. Congrats on the progress and thanks for taking my questions. I was curious how you're thinking about the evolution of your gross margins in 2025 and 2026 as Levitas begins to compromise a larger percentage of your revenue. And then a quick question on your FSHD program. Is this Dux4 assay new or was it developed in health? And could you just elaborate on it a little more? Thank you.

Sure. I'll turn the evolution question to Ian and then Luis can touch on the Dux4 assay issue.

Yeah. So from a margin perspective, what we've said is that obviously we've already expensed the inventory already. So that's starting to come off. And then over time, as we continue to treat heavier patients, you're going to see the margin go down. We expect it to be in the kind of high 70s as we continue to penetrate into the non-ambulant patient population. But as Doug said, as we continue to work on our suspension manufacturing process, we expect that to start getting much significantly higher, trending towards 90%. So as we're treating the heavier population, we expect the margins to improve in the 27 timeframe.

Thank you.

And just on the Dux4 assay, this is a quantitative assay developed by Arrowhead. As we've mentioned, Dux4 is expressed at low levels, somewhere around the incidence of one in a thousand nuclei. So it's difficult to measure, but Arrowhead has successfully done that. And so this is an assay that will be on boarding as well, but we're excited to see it because it's not something that's been able to be accomplished in the field.

Thank you. And the next question will be coming from the line of Mitchell Kapoor. HC, your line is open.

Good afternoon. This is Dan on from Mitch. Thanks for taking our question. And congratulations on the positive cash flow for the year. So pairs we've spoken with have said that they have had patients experience two rounds of appeals and were ultimately denied. Would an IRO denial not count as permanent denial? And if not, what qualifies as a permanent denial? Thank you.

I'm not sure. I know that I'm not sure who you spoke to. I know you did a survey. One was actually not a payer. It was PBM. And I think you might've talked to one payer. We have no kids that have been permanently denied therapy. I'm not suggesting it will always be a hundred percent. Our PMOs trend above 90% over the last eight years, but we're seeing even a better response than the PMOs or the Levitas. So we're doing quite well. We don't have any kid that's been permanently denied therapy. Some are still in process, but no kid's been permanently denied therapy. Yeah. So

yeah, Dan, we've dosed patients in the plan that you're talking about. We're not going to provide you any more details other than that.

Thank you. And the next question will be coming from the line of white ear of Mitch. Your line is open.

Hi guys, this is Leo on for oil. Thanks for taking our question. Could you provide some detail on the learnings from the pre BLA meeting with the FDA on 9003 and how these learnings might be applied to the follow on limb girdle programs? And then also based on the recent changes within the agency, how do you think FDA interactions might change going forward? Thanks.

So Luis, you want to touch on the sort of pre BLA discussions broadly?

Yeah, broadly it was an extremely positive meeting, I think across all of the different things that you would speak to in terms of the non-clinical data. The clinical plan for the clinical trial was endorsed. CMC in terms of our plan, so that was endorsed. Using beta-circle glycan as a surrogate biomarker for accelerated approval was endorsed. So it was a very positive meeting. The agency certainly understands and we've already seen the challenges that are faced with that in terms of trial design, in terms of manufacturing. So we've already set the stage for the other follow on circle glycan. So I think it bodes well for the entire platform. And we were certainly encouraged by it and certainly seen a change in the agency over the last two years and really promising. And that's what

we're doing as well. I do want to say, you know, we are very proud of, I am very proud of the work the Luis and her team have done working with the agency to evolve and modernize the approach to ultra rare disease and its paid dividends for the limb girdle programs, not only 9003B and beyond. But I also want to give credit to the division itself. I have to say, you know, the Senate director, Dr. Marks has had a vision for, you know, being thoughtful and modernizing the division and comporting with modern science and not creating barriers that make it unviable to treat ultra rare disease patients. And I think that Dr. Burdun, the head of OTP has done really an exceptional job of taking that vision and operationalizing it in ways that we're seeing and I think others are seeing as well. Which is, you know, as we think about rare disease day coming up on Friday and we said some really brilliant thoughts on that. I mean, just playing in that I think we're moving in the right direction as a people to be able to bring a better life to patients with ultra rare disease. And I give the enormous kudos to OTP for playing their part in that.

Thank you. And our next question will be coming from the line of Salveen Richter of Goldman Sachs. Your line is open.

Thanks for taking our questions. This is Tommy on for Salveen. Just overall, what do you see is error has differentiation in terms of kind of their chemistry or structure versus some other RNA approaches in DM1 and FSHD? And on a levitis, is there flexibility to expand upon existing infusion center capacity, including, for instance, staffing needs? Thank you.

I'm going to turn the first part of the question to Luis. Let me briefly talk about a levitis. So what we really need to understand is that this is a very detailed cadence from beginning to get a kid dose. So, if site capacity isn't alone the issue, you know, people often say, well, what if you found a way to have, you know, more infusion days? That'd be great. But then you need infusion nurses, then you need follow-up, then you need more single case contracts, then you need to think about back in the finance function, what are the credit limits associated with all of that? So it really is just a certain cadence. The thing that I'm excited about is this team has unlocked this opportunity and really become experts in that cadence. And that's why we're able to provide guidance of $3 billion for the year, because the team's figured it out. But that is a cadence is the cadence. And I don't think the opportunity for dramatically changing that exists. And with that, I'll turn the first part of the question over to Luis.

Yeah, on Arrowhead, I think the comprehensive answer is that Arrowhead is focused on every aspect of the construct. And so we like the diligence of their approach. I would like to call out their targeting ligands as being a differentiator, because getting to the right tissue in the case of muscle for FSHD and DM1 using the alpha V beta targeting ligand that we use the same one with IOAV, for example, we know that it works well in muscle. So that's a differentiator. But they focus on the design from the siRNA, from the targeting ligands, from every aspect of the construct. And so we just like their comprehensive diligent approach. It's something that we model with gene therapy, for example. And so I think it's all of the above, but we certainly appreciate targeting ligands for the various tissues.

Thank you. And that concludes today's Q&A session. I would like to turn the call back over to Dougie for closing remarks. Please go ahead.

Well, thank you, everyone, for your questions this evening. Appreciate them. We've had a really tremendous 2024 and a great Q4 of 2024. And as we track into 2025, things are going very well. Couple things, we're obviously going to continue to drive this launch of Elevitis. The team's done a really great job on that. And I think they will continue to do that. We're going to continue to focus on our PMOs and ensuring that patients are benefiting from our PMOs over this year. And then we have more milestones to read out in 2025 than any other time in our history. And so I look forward to updating folks across this year as we move forward with our Lidngirdles as an example. We get the FSHC data and we get the DM1 data and we keep driving as an organization. So thank you all very much and have a wonderful evening.

This concludes today's program and thank you for joining this conference call. You may all disconnect.