Sarepta Therapeutics, Inc.

Good afternoon, and welcome to Sarepta's first quarter 2026 earnings results call. As a reminder, today's program is being recorded. I would now like to turn the call over to Tam Thornton, Sarepta's Director of Investor Relations. Please go ahead.

Thank you, Antoine, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the first quarter of 2026. The press release, along with our presentation slides and supplementary information, will be available on the investor section of our company website. We plan to file our Form 10-Q for the quarter today with the SEC. Joining me on the call today are Doug Ingram, our CEO, Dr. Louise Rodino-Claypack, President of Research and Development in Technical Operations, Patrick Moss, our Chief Commercial Officer, and Ryan Wong, our chief financial officer. Additionally, joining us in the Q&A portion of the call are Ian Estepan, president and chief operations officer, and Dr. James Richardson, our chief medical officer. Before we begin the formal remarks, I would like to note that during this call, we will be making a number of forward-looking statements. Please refer to slide two of our presentation to view the formal text of these safe harbor statements. These statements involve varying risks and uncertainties, many of which are beyond Syrepta's control. Actual results could materially differ from these forward-looking statements, and such risks can adversely affect our business, our results of operations, and the trading crisis throughout this common stock. We strongly encourage all listeners to review the company's most recent SEC filings for a detailed description of these applicable risks. The replica explicitly states that it does not undertake any obligation to publicly update or revise its forward-looking statements or financial projections based on subsequent events. Furthermore, please note that we will discuss non-GAAP financial measures during today's webcast. Complete descriptions and reconciliations of our GAAP to non-GAAP financial measures are included in today's press release and the accompanying slide presentation available to investors on our website. With that, I will now turn the call over to our CEO, Doug Ingram. Doug?

Thank you, Tam. Good afternoon, everyone, and thank you for joining Sarepta Therapeutics' first quarter 2026 financial results conference call. We entered 2026 with a clear set of priorities. Stabilize the business, restore confidence and growth, maintain financial strength, and continue advancing a pipeline with the potential to define Sarepta's next era. In the first quarter, we made meaningful progress against each of these priorities. First, our marketed product performance has stabilized following the disruption and uncertainty of 2025. With expanded field reach, increased physician engagement, and a growing body of compelling evidence supporting the disease-modifying impact of Alevitis, we believe that therapy is positioned to return to growth. Second, Sarepta remains in a strong financial position. We ended the quarter with approximately $748 million in cash and investments, delivered positive GAAP and non-GAAP earnings, generated positive cash flow excluding Arrowhead-related payments, and remain on track for positive cash flow even under our base case assumptions. The financial strength matters. It allows us to fund our pipeline without relying on the equity markets. We are fully funding our programs in DM1, FSHD, Huntington's disease, the spinocerebellar ataxias, and our preclinical and research portfolio. And third, we are making progress in what we believe is a potentially best-in-class portfolio of siRNA therapies, as Dr. Luis Rodino-Klapak will discuss shortly. We are especially encouraged by the early data from SRP1001 and FSHD. and SRP1003 and DM1. And we look forward to additional readouts in the second half of this year. Turning to first quarter performance, total net product revenue was $331 million. That included $229 million from our PMO therapies, Exondus, Myondus, Amondus, and $102 million from Malevitus. Starting with the PMO franchise, we were pleased that the FDA agreed We can submit our clinical data and real-world evidence for Vyondis and Amondis. We have submitted SMDAs seeking to transition those therapies from accelerated approval to traditional approval. That is an important step for patients, physicians, and, of course, the durability of this franchise. Turning to Alevitis, Patrick will provide more detail of the commercial initiatives underway and the early signs of progress we are seeing. But I want to underscore the central point. Our confidence in Alevitis is grounded in evidence, not in mere aspiration. To date, more than 1,300 patients have been treated with Alevitis across clinical trials and commercial use around the world. The totality of the evidence continues to strengthen. The data show that Alevitis is protecting muscle and changing the trajectory of Duchenne. It is giving boys and young men an opportunity that, until now, this disease has never afforded them. We saw this in EMBARQ, the only robust, double-blinded, placebo-controlled trial demonstrating the benefit of a gene therapy in Duchenne. We saw meaningful benefits at year one. We saw those benefits grow at year two. And yet again, at year three, boys continued to diverge on every measure from the expected course of untreated disease. That matters because Duchenne does not wait. Muscle damage is progressive, irreversible, and cumulative. Every month of delay risks further loss. The evidence increasingly supports a simple but urgent message. Physicians and families should evaluate a levitus now before additional irreversible damage occurs. We have also seen supportive muscle MRI evidence showing that a levitus dystrophin helps protect muscle from damage, resulting in less muscle loss and less replacement by fat and fibrotic tissue. This is exactly the kind of biological evidence one would hope to see from a therapy intended to alter the course of Duchenne. We are confident that as physicians and families better understand the disease-modifying potential level evidence and the urgency of intervening before further decline, more patients will move towards treatment. That said, we are still in the middle of our commercial and educational initiatives, and the path from consideration to infusion takes time. For that reason, we are reiterating our full-year guidance of $1.2 to $1.4 billion and would counsel prudence in raising estimates prematurely. Now, staying with the Levitas, we are also advancing our Endeavor Cohort 8 study, which uses serolimus as a pretreatment. More than 25% of sites are already using serolimus on their own initiative. In our interim analysis from the long-term real-world evidence study that we have ongoing, Patients pretreated with serolimus have shown no evidence of elevated liver enzyme to date. That gives us further confidence in cohort 8 and in the potential, with the success of that study and the concurrence of the FDA, to resume offering Alevitas to non-ambulatory patients. Turning to the pipeline, our focus is execution. We are rapidly advancing our siRNA portfolio, including our DM1 and FSHD programs. The first data readout earlier this year showed encouraging signals that these may be differentiated, potentially best-in-class approaches for two very challenging diseases. We look forward to providing additional data later this year. We have initiated and are on track to dose our first patients in our Huntington's disease program, and we are progressing clinical trials in SCA2 and idiopathic pulmonary fibrosis. So to summarize, the business is stabilized. Elevitus is supported by an increasingly compelling body of evidence. Our financial position is strong, and our high-value SIRNA pipeline is advancing across multiple programs. We believe SREP is well-positioned in 2026 and beyond. And with that, let me turn the call over to Louise, who will provide an update on our SIRNA portfolio and broader development progress. Louise?

Thanks, Doug, and good afternoon, everyone. Our diverse and advancing rare disease portfolio has always been driven by a core fundamental truth. Pursue the very best science and then follow where it leads. In March of this year, we announced positive preliminary data from our lead programs to treat FSHD and DM1, which are based on the potential of alpha-B, beta-6, integrin targeting ligand to produce best-in-class therapies in these unmet disease areas. Importantly, our integrin receptors are highly expressed in muscle in addition to other tissues. They are also actively trafficked between the cell surface and the endosomal compartments through relatively well-understood pathways. Non-clinical data show that targeting these integrin receptors via small peptides leads to enhanced skeletal muscle uptake compared to using a much larger TFR1 antibody. It's also important to note that based on data to date, our alpha-B, beta-6 integrin-targeting ligand provides superior muscle concentration compared to transferrin-based approaches without dose-limiting toxicity. I will now summarize the early data from our FSHD and DM1 programs. SRP1001 is an siRNA-based treatment designed to reduce or knock down the production of Dux4 protein in skeletal muscle in patients living with FSHD1. Study 1001-101 is a combined Phase I-II single ascending dose and multiple ascending dose randomized placebo-controlled trial in participants with FSHD1 age 16 through 70. As previously shared, we believe our preliminary data from the Phase I-II SAD study supports the potentially differentiated attributes of SRP1001, including a dose-dependent increase in plasma exposure up to the highest dose cohort, Also, superior delivery to muscle enabled by a differentiated approach with the alpha-B, beta-6 integrin, including no saturation of drug uptake, significant suppression of Dux4-related genes, and a rapid and robust reduction in CK to support functional impact. Finally, a favorable safety and tolerability profile with repeated dosing, including no indication of anemia, which physicians have indicated represent an important therapeutic advantage. We look forward to sharing results from the MAD portion of this study later in the year, which we expect will include at least six months of follow-up for our 6 and 12 mg per kg MAD cohorts, which is equivalent to 4 and 8 mg per kg siRNA dosing. This is with respect to safety PKPD data, including circulating biomarkers and Dux4-regulated genes, as well as early functional data. We also plan to discuss our post-phase two with FDA to define an optimal registrational pathway. Now moving to DM1. SRP1003 is an siRNA-based treatment for DM1 designed to target or knock down or silence the DMPK mRNA in target cells. Study SRP1003-101 is a first-in-human phase 1-2 FAD-MAD randomized placebo-controlled clinical trial being conducted in individuals with DM1 aged 18 to 65. The early data we generated for DM1 is important for two reasons. First, our preclinical models are predictive of what we would see in the clinic with respect to muscle concentration. Of note, an increase in plasma exposure has translated into enhanced dose-dependent delivery to the muscle, resulting in robust target engagement. Second, the demonstrated DNPK knockdown we observed was impressive and directionally strong. As you're aware, DM1 is driven by an expanded CUG trinucleotide repeat in DNPK transcripts, causing mutant DNPK mRNA to accumulate in the nucleus and disrupt RNA splicing. As a result, for any therapy to be therapeutically effective, we must effectively target a knockdown or silence DNPK in the target cell. SRP1003 is being developed to achieve exactly that. We look forward to sharing these results in the additional SAD and MAD cohorts in the study later in the year, which we expect will include multiple doses measuring mechanistic and functional endpoints with at least six months of follow-up for our 6 mg per kg cohort, which is equivalent to 4 mg per kg SIRNA. Specifically, we expect to share safety, serum and muscle PK, DMPK knockdown, CASI 22 splicing indices, and VHOD analyses. We will plan our IND submission for U.S. studies shortly after completing our MADS studies. We believe these trials, if successful, will support and provide a clear path to support registrations. In summary, enhanced muscle delivery, robust target engagement, and maximal knockdown are well recognized as the gold standard for FFHD and DM1, and we're excited by the potential of our therapies to reach this standard. In terms of our other SIRNA pipeline program, we are on track for first patient in for Huntington's, and our SCA2 trial is fully enrolled. We look forward to sharing data as it becomes available. Now turning to Alevitis. We are pleased to announce in March that screening and enrollment are underway in Cohort 8 of ENDEAVOR, or Study SRP 9001-103. To remind you, the purpose of Cohort 8 is to assess prophylactic serolimus treatment as part of an enhanced safety protocol during treatment with elevatus in non-ambulant individuals with Duchenne. Data from Cohort 8 will be used to determine whether administering serolimus prior to and after elevatus infusion can help reduce acute liver injury, a known risk associated with AAV gene therapy. The cohort is enrolling approximately 25 participants in the United States who are non-ambulatory, and dosing is currently underway. As a reminder, the immunosuppression regimen will include 14 days of peri-infusion serolimus dosing prior to a Levitas administration and will continue for 12 weeks after a Levitas administration. Primary endpoints include incidence of ALI and elevatist dystrophin expression at 12 weeks. The approach is based on preclinical data and shaped by real-world clinical experience, including guidance from independent specialists in Duchenne and liver health. As Doug mentioned, in addition to Embark three-year functional data, we also reported at MDA caregiver-reported impressions from Embark through two years of follow-up. offering complementary perspectives on treatment impact beyond clinician-reported and performance-based outcomes. We are pleased that our body of evidence for Levitas continues to grow with an unprecedented number of patients dosed, as well as the years of follow-up. We remain steadfast in our commitment to serve the Duchenne community by generating clinical and real-world data to support understanding of long-term outcomes. This also includes our Phase IV observational study in DORC. Now moving to Amandus 45 and Biondus 53. In March, we announced that we requested a meeting with FDA to discuss submitting supplemental new drug applications, or SNDAs, seeking conversion of the accelerated approval of Amandus 45 and Biondus 53 to traditional approvals. This request was supported by data from the Essence Confirmatory Study, substantial published real-world evidence supporting treatment, and the favorable safety profiles of both therapies. Director received feedback from the agency confirming that we were cleared to submit our data from Essence and real-world evidence as part of the SNDAs. We are pleased to share that we successfully submitted our SNDAs at the end of April. In summary, we have numerous value-building milestones upcoming across our Duchenne and SIRNA portfolio. Thank you, and I'll now turn the call over to Patrick for an update on our commercial performance. Patrick?

Thank you, Louise, and good afternoon. Today, I'll summarize our performance in the first quarter for our on-market therapies, provide an update on execution of our 2026 initiatives, and close with how that translates into performance for second quarter and the balance of the year. For the first quarter, total product revenue was $331 million, including net product revenue of $102 million for Elevitus and $229 million for the PMOs. For Levitas, first quarter results reflected measured demand, which we believe was influenced by the ongoing information gap within the ambulatory population. This reflects the dynamics we outlined last quarter as we advance efforts to rebalance the discussion around safety and efficacy to support informed decision-making for a Levitas treatment. Importantly, Q1 demand fundamentals have not deteriorated. Instead, we are addressing the information gap we know exist and are building momentum around a robust label and new data following the events of 2025. The PMO franchise continued to demonstrate durability with demand remaining stable and in line with expectations for mature therapies that are foundational for slowing the decline of Duchenne. We experienced seasonal dynamics in Q1, which contributed to the quarter-over-quarter decrease versus Q4. Our focus for 2026 and beyond remains squarely on ensuring that patients and physicians have a balanced, data-driven understanding of a Levitas' benefit-risk profile. The treatment journey for a Levitas has multiple touchpoints, including patient identification, referral, evaluation, and payer review, in addition to the time and information a family needs when deciding to pursue treatments. While our commercial model supports all touchpoints within this treatment journey, as discussed last quarter, we are actively implementing a number of initiatives to augment our execution, including expanding the number of field resources to support referring physicians, extending our reach within sites of care. In addition, the company is deploying new educational resources and tools to support patients and families. We have increased our footprint fielding a contract sales force to focus on physicians who may be in a position to refer patients to a site of care for gene therapy or prescribe one of our exon skipping therapies. This team recently completed training and deployment in the field is underway. We expect the team to be fully operational as we enter the second half of this year. Expanding our footprint with a contract sales force has enabled us to deepen our efforts at Sites of Care with our Sarepta sales team. Our sales team will devote time to more robust interactions with prescribers at Sites of Care and engage with the extended care team. In addition to my team's initiatives, the company is developing more educational resources and tools to aid patients and families in their preparation for a conversation with their clinicians. In an age where information online is abundant and can be difficult to navigate, having clear resources and tools available to caregivers and patients is Sarepta's response to supporting the unique and very personal journey of each patient. All these interactions with referring clinicians, prescribers, supportive care providers, families, and caregivers are grounded in clarity, repetition, and transparency as we recognize the decision to treat with Alevitus requires time and trust. To date, a growing body of empirical evidence supports that Alevitus is changing the trajectory at Duchenne. We integrated the long-term Embark data, including muscle MRI findings, into our educational efforts and discussions with clinicians, addressing what matters most, preservation of muscle over time. Our efforts are having an impact, and feedback from prescribers and the patient advocacy community affirms our approach. Safety must be considered within the totality of evidence, including the durable benefit of levitas. HCPs and the ambulatory population were directly affected by misperceptions of levitas, so education remains essential and is a focal point of our work. We remain confident that all these initiatives should address the needs of prescribers and patients. But I do want to set expectations very clearly. The time from enrollment form to infusion is a six-month process. Given this, it will take time to see the potential impact of my team's action to be reflected in sales. Last quarter, I said we are seeing green shoots. early signals that give us confidence we are headed in the right direction, and the team is squarely focused on delivering the efficacy message to drive demand. For example, enrollment form activity is more geographically diverse. Sites have previously paused activity in 2025 are participating and submitting enrollment forms. Across the broader referral ecosystem, we are seeing more consistent HCP engagement. suggesting that awareness and understanding of the benefits of Alevitas is resonating. We expect momentum to build progressively through 2026, with greater visibility into improvement most likely to emerge in the latter part of this year and into 2027. Our efforts are substantive in responding to the needs of prescribers and patients and will improve with reach and repetition. Reestablishing momentum will lead to steady growth over time and not a sharp inflection. We believe our guidance assumptions for 2026 appropriately reflect a measured trajectory, accounting both for timing dynamics and patient decision cycles. Given this reality, we are comfortable with the Q2 consensus. And as Doug stated earlier, we reiterate the full-year guidance of $1.2 to $1.4 billion and would counsel prudence in raising estimates prematurely. Our long-term conviction in Levitas remains strong. As the only FDA-approved gene therapy for Duchenne muscular dystrophy, we have treated more than 1,300 patients in both the clinical and commercial settings with Levitas. The current and growing body of data demonstrates the disease-modifying potential of Levitas, and as a result, we believe Levitas has the opportunity to remain a cornerstone therapy in Duchenne for years to come. And finally, a brief update on the PMO franchise. The PMO franchise remains durable in 2026, supported by longstanding physician experience, a well-understood safety profile, a continued commitment to preserving muscle function, and exceptionally high rates of adherence with our therapies. Physicians continue to view exon skipping as an important treatment, particularly for patients who are not candidates for gene therapy or for those who choose to defer treatment. The robust body of real-world evidence that demonstrates meaningful benefits in survival and cardiac function reflects more than a decade-long commitment of Sarepta's scientific investment and leadership dedicated to improving outcomes for those with Duchenne. In closing, our commercial focus in 2026 is clear. Execute with discipline, educate with data-driven conversations, build momentum, and support the unique needs of each and every patient. We are encouraged by the early rebuilding signals for Alevitus, the stability of our PMO business, and the long-term opportunity to support those with Duchenne and change the trajectory of the disease. Thank you, and I'll turn the call over to Ryan. Ryan?

Thank you, Patrick, and good afternoon, everyone. On behalf of the disruptive team, I'm pleased to report a strong quarter of financial execution to start the year. where our base business was profitable and cash flow positive. In my brief remarks today, I'll share highlights from the quarter and some perspective on how we're thinking about the rest of 2026. Starting with the P&L, first quarter total revenues were $731 million, a decrease of 2% compared to Q1 of last year. The decrease in our net product revenues year over year was driven by lower elevative sales and was partially offset by an increase in collaboration and other revenues. In Q1, we reported $400 million of collaboration and other revenues, and consistent with previous guidance, this included $325 million of non-cash collaboration revenue related to Roche declining a program option, as well as $40 million of milestone revenue from the first commercial sale of Levitas in Japan. Turning to gross margin, total cost of sales for the quarter was $109 million, a decrease of 21% compared to last year, given primarily by lower sales volume. On a unit sales basis, gross margins were 82%. Moving now to OpEx. Combined R&D and SGA expenses in the first quarter were $263 million and $224 million on a GAAP and a non-GAAP basis, respectively. Both included the $50 million annual Arrowhead Collaboration license fee recorded to R&D. This was a significant decrease compared to the prior year quarter because of the cost restructuring initiatives enacted last summer, and as a prior year quarter, included the upfront transaction costs from the Arrowhead collaboration. Putting it all together, in the first quarter, we delivered a GAAP operating profit of $358 million and a non-GAAP operating profit of $398 million. These results are reflective of the strength of our underlying business and the non-cash collaboration revenue recognized during the period. Shifting to the balance sheet, we ended the first quarter with $748 million of cash and investments, a sequential decrease of $206 million, driven by $250 million of payments to Arrowhead, the second D1 milestone in the annual collaboration payment I just mentioned. Also, as noted earlier, excluding these planned payments, our base business continued to generate positive cash flow. Looking ahead to the remainder of the year, we are reaffirming our prior revenue and office guidance, as well as our expectation of profitability and to be growing our cash balance from here. As you heard earlier on the call, we are very encouraged by the early data emerging from our FSHD and DM1 programs. And if the data continues to translate clinically as they have so far, we believe they represent significant opportunities to benefit patients with unmet needs and create long-term value for investors. In closing, I will highlight that our current operating expense outlook and medium-term planning fully contemplate advancing both programs through a late stage of development. Leveraging the strength and durability of our commercial execution, We believe we are uniquely positioned to fund and execute these programs and our broader pipeline responsibly without placing strain on the balance sheet. And with that, I'll turn the call back to Doug. Doug.

Thanks, Ryan. Let's open the call for questions.

Thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you need to 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. In the interest of time, we ask that you please limit yourself to one question each. Our first question comes from Anupam Rama from J.P. Morgan. Please go ahead.

Hey, guys, this is Joyce on for Anupam. Thanks so much for taking our question. With your Salesforce expansion and ongoing initiatives to help close some of these information gaps, I was just wondering if you could comment on feedback you've been receiving regarding your three-year Embark data and which parts of the data specifically have been especially resonating with physicians. Thanks so much.

I'll turn this over to Patrick briefly to comment on some of the advisory boards you've had and some of the direct interactions you've had with physicians on the three-year data and other data.

Thanks, Doug. We've been having multiple adverts and discussions with physicians, both myself and Ian and Doug, one-on-one, but also the field team as they're out there engaging. And what's moving the needle is the efficacy data as well as the MRI data. And once the physicians see both the divergence over time from natural history of patients that are treated with Alevitis, tied that with the MRI data, that's moving the needle and also reflects exactly what they were expecting from a therapy like a Levitas as well as what they're seeing in their clinic.

And I think all that's exactly right. You had more experience with it even than I have, but there's a couple of reasons that this is occurring. The first is the data itself is really impressive. If you look at the one year in BART data, On every secondary measure, every time measure, we were statistically significant on this placebo-controlled and blinded well-controlled study. And then you look at two years on all measures, we are doing much better. Eleven is doing much better than untreated patients. And that gap grows even more in year three, exactly what you'd expect from a disease-modifying therapy that's changing the trajectory of disease. And then from an urgency perspective, we have muscle MRI data, which is exactly what you'd expect to see, which is, that if you get treated, you are going to save yourself from a lot of damage and the fat and fibroid tissue that comes from that damage and the loss of muscle. And so it's understandable that it's compelling when you talk to physicians about all of this data. And that's not even all the data that we have. We obviously have the five-year data from our original cohort as well. The other thing that's important to understand when you think about our initiatives is something that is both frustrating but a big opportunity, which is when you do market research, What I've just told you now, and what Patrick's mentioned to you now, isn't well understood. That in large measure, because of a lot of the important things that happened last year, but that distracted us last year, there was a lot of focus away from what this therapy was doing for patients. And as we sit here right now, both in the patient community and significantly in the physician community, there is a massive information gap around those issues. So when you sort of take that and kind of shake off the frustration that comes from that and realize that's actual opportunity. And then you think about the initiatives that Patrick's putting in place. It gives us an enormous amount of confidence for the future. We've more than doubled the size of our sales force. We have a contract sales force. We have grand data now. We have much better promotional material founded on that great data. We have great educational efforts in the patient community and the like. And we have the muscle MRI data that makes the point that you cannot wait, that that you will never catch up if you wait. There's an enormous amount of opportunity here to benefit patients and to get the Levitas moving. Now, with that said, I'm going to say what I said in my script, and I do want to be very careful. We are excited about where we are. We have these initiatives that are in play. This is a long cycle process, and we're reiterating our guidance, $1.2 to $1.4 billion, and we'd ask you, along with us, to exercise some prudence in changing estimates until we get these initiatives going along the way. And the good news is that we're in a great place, even in a base case situation, to fully fund without the need to go to the equity markets, what is a very, very exciting SIR&A pipeline.

Thank you.

Our next question comes from Costas Billy Iris from Oppenheimer. Please go ahead.

Thank you so much for taking the question. One question on Amondis and Biondis, SNDA, and sorry if I missed it. Can you clarify whether you have requested or received priority review there, and when should we expect a decision from the FDA? Thank you.

Yeah, these are SMDAs. We didn't ask for priority review, so it's the regular time cycle. So, we would imagine that the PDUFA date will be sometime in February of next year.

Thanks.

Thank you. Our next question comes from Ellie Merrill from Barclays. Please go ahead.

hey guys just uh two questions for me um you mentioned some 1q seasonal dynamics can you just elaborate on what you saw there and how we should think about the appropriate run rate as we head into 2q and beyond for both the pmo franchise and elevatus and then a question on the huntington's program can you walk us through what you see as potentially differentiating versus other silencing approaches and development and what we could expect from the proof of biology data next year thanks

I'll turn the first part of the call over to Patrick, after which Luis can touch on the honey mix program.

Yeah, and what we do know and what we do see is quarter-to-quarter dynamics. They're noisy, right? And so it reflects just a small number of patients, either this quarter or the next quarter. And so When we look at it, it's not something we can be extremely precise on, but we do know things like illnesses, patient-family dynamics do impact those quarterly-quarterly dynamics, and that's something that we do look at and evaluate as we provide our guidance.

Yeah, one thing I will say about that as well is, remember, the reason for all of that is that this is a one-time therapy. So, you know, with a chronic therapy, you kind of get this installed base, and you're really just forecasting on the margin. With a one-time therapy, you're forecasting new every quarter. And with a therapy like Elevitus, which is a couple million dollars net, a couple patients that have the flu in the last week of the quarter can impact. So there's just a little more variability here. As much as we have a nice line of sight, there's more variability here than you might expect. see in a chronic therapy.

And then on the PMO side, there's lumpiness in the XUS business as well as the beginning of the year we do see insurance changes and so that does impact the PMO side of the ledger.

With that, we will carry the call to those.

Thank you. As you mentioned, we're very excited about the Huntington's program and we think that we are potentially differentiating for several reasons. So the first is really the use of the mechanism of action, and that's using the TFR ligand in combination with the subcutaneous injection. And this really allows us, based on preclinical data, to get into the deep brain regions, which is essential for Huntington's disease like the striatum. And based on the preclinical data in mouse models as well as non-human primates, the we have particularly high knockdown in these deep regions, and that's really what set this program apart for us and got us excited. So it's early days. We are on track for first patient in, but we will be looking for proof of biology in terms of safety and then evidence of activity in terms of knockdown in the first data that we see, and that'll be earlier next year. So I'm very excited based on preclinical data and very much looking for differentiation based on the mechanism of action and the dosing itself, which is much less invasive than some other programs.

Thank you. Our next question comes from Andrew Tsai from Jefferies. Please go ahead.

Hey, congrats on the quarter. This is Matt Barkis. I'm for Andrew Tsai. I just wanted to ask about what you guys are expecting in terms of the reduction of ALI incidence in the non-ambulatory cohort AIDS trauma data set expected later this year. And I think you said you wanted to see a 50% reduction in ALI rates, where I think the clinical rate is around 40%. But is it different in the real world? And might ALI rates in cohort AIDS actually mimic the real-world settings?

Yeah, so I'm going to turn this question over to Luis. But before I do, let me make a quick comment, which is that we do have some evidence before cohort 8 that gives us some confidence around the success of cohort 8. Dr. Soslow, as you may know, has pretreated a number of patients and presented that data, I believe, at World Muscle earlier this year. And in that setting, the pretreatment with serolimus completely abated any increase in liver enzymes. Also, we have the real-world evidence study, Endeavor, I believe, and we've done an interim analysis there, early days, and I want to be very clear, the overlapping evidence, because some of Dr. Soslow's data is in there as well, but in that setting as well, we've seen no increases in liver enzymes so far when a patient is pretreated with serolus. Obviously, we need to dose more patients. Obviously, we need to get cohort A dosed and get the readout on there. But as you can imagine, given that, given our preclinical data, and given the experience anecdotally from other physicians who've used serolimus and other immunosuppression regimens, we feel a significant amount of conviction around the potential success of cohort A and the ability to get back to offering this therapy to non-ambulatory patients who desperately need need a therapeutic option would have none but for this therapy. But with that, I'll turn it over to Louise to talk about the clinical trial itself and what the standards are there pursuant to the staff plan.

Sure. And you were correct. We were looking for a 50% reduction in the incidence of ALI. The trial is an open-label trial enrolling approximately 25 patients. We do have the ability to look at the data and enhance the end if required. But regarding the ability to reset 50%, I'm going to ask Dr. Richardson to just comment on it in the clinical trial versus the real world.

Yeah, thank you, Louise.

Yeah, thank you, Louise. And you're quite right that we have seen a different instance of ALI in the clinical trial setting versus the real world setting. That's partly driven by by the use of the research, I say GLDH, in the clinical trial setting. We'll be using that in cohort eight, and so our primary analysis will be to look at a reduction of 50% or more versus our historical clinical trial rates, which include GLDH. We'll also be able to look at it without GLDH to make sure that there is no specific signal to that biomarker, and as Louise said, there's an open label study Should we see anything that deviates from these original assumptions, we'll be able to adjust the sample size accordingly.

Thank you. Our next question comes from Brian Abrams from RBC Capital Markets. Please go ahead.

Hi, guys. This is Kevin. I'm for Brian. Thank you for taking our questions. Maybe following up on the seroloma study, can you talk a bit about your new N of 20 Phase 4 enhanced study of patients receiving? and serolimus in the real world. Just curious how that fits with your potential regulatory strategy for non-ambulatory patients, whether maybe it was required by regulators, and your considerations on potentially just simply upsizing the current study versus running this real-world study in parallel as well. Thank you.

Luis? Yeah, I'm going to turn it to James in a minute, but at a highest level, so the phase four study gives us the ability to look at the use of serolimus in ambulatory patients as well, as well as looking at gene expression based on this. So these two elements are important to looking at serolimus in a population other than the non-ambulatory population. But James, maybe you can give a few more details about the study.

Yes, sure, absolutely. I mean, this is a study looking at commercially dosed patients under the same solomus regimen as we're using in cohort 8. It's not part of a broader regulatory strategy, but simply just asking the hypothesis about the use of solomus and mitigation of ALI in a broader Duchenne population. The data could be supportive to cohort 8, but it's not necessary for that non-ambulatory strategy. But we'll simply reaffirm The current hypothesis that this is equally well-tolerated across a broad range of Duchenne patients, and we would expect a similar efficacy in terms of reduction of ALI.

Thank you.

Our next question comes from Mike Utz from Morgan Stanley. Please go ahead.

Hi. It's Avi Novick on the line for Mike. Thank you for taking our questions. I guess just a quick one on guidance. I think on the prior call, you indicated that you're more comfortable with the low end of guidance? That would be more likely, I guess, given the positive green shoots you've seen early this year. I guess, would you be more comfortable that maybe the middle or high end of guidance might be more likely? And I guess, if not, what do you need to see to sort of get there? Thanks.

Yeah, thanks for your question. You're exactly right. We guided 1.2 to 1.4 and sort of advised folks that they should be thinking toward the lower end of the 1.2 to 1.4 until we see more. The short answer is that we are making very good progress in our initiatives, but the initiatives are long-cycle initiatives. A number of them have already gone underway. As an example, our sales force has doubled, and they're out in the field talking to physicians, and that's great. We've got great marketing material. We have additional marketing material coming out with our three-year data as well. So that's going to be great. We've got educational efforts. We've got a contract sales force that will be getting in the field very, very shortly and has been trained up. But with all of that said, as excited as we are and the conviction we have about these tools, we want to speak cautiously for the time being and just be thoughtful. And so we're not changing our guidance. And we would caution others to be prudent in raising their internal estimates prematurely. Let's get underway and get these initiatives going. And we do see some green shoots. And we certainly see when we, you know, qualitatively, when this information is understood by physicians and understood by patients, it has a meaningful impact. But it's going to take some time because these are all, you know, long cycle processes. essentially resetting people and getting them to really understand the evidence set, both on safety and efficacy.

All right, great. Thank you for taking our question.

Thank you.

Thank you. Our next question comes from Salveen Richter from Goldman Sachs. Please go ahead.

Thanks for taking your questions. This is Tommy on for Salveen. Maybe if we could get to the extent that you're available, the details on patient numbers at dose levels for the SIRNA data by year end, and especially how will the functional measures for this data factor into how you're thinking about the registrational outlook and kind of competitive comparisons? Thank you.

Great. I'll turn this to Louise.

Sure. We're both studies. So for FSHG, we will have data from our 6 and 12 MIG per KG MAD cohorts. And so those are our highest dose cohorts. It's equivalent to 4 and 8 MIG per KG siRNA. With respect to DM1, we will have our follow-up from our 6 MIG per KG MAD cohort, which is equivalent to 4 MIG per KG siRNA. So as I mentioned, we'll be looking at safety, biomarkers, and early evidence of functional outcomes. And James, perhaps you can comment on how we're thinking about the functional data. Is it early in terms of the follow-up and the number of patient numbers?

Yeah, thank you, Louise. I mean, I think primarily, as you say, safety and the PD biomarkers will help us select the appropriate dose to carry forward into the Phase III program. Clearly, we're going to look at the functional data to understand what we think is supposed to be the most responsive outcome that help us select and drive our design for our phase three. But I would not, as Louise has said, expect any significant movement in the functional measures at six months in FSHD. In DM1, we would expect to see a signal in VHOD at this time frame. But similarly, for the other time function tests, it's very early in this process. disease state and in the size of cohort to make any definitive conclusions.

Thank you. Our next question comes from Tazeen Ahmed from Bank of America. Please go ahead.

Hi, guys. Thank you so much for taking my questions. A couple on FSHD and DM1, or rather one on those. How do you think about comparing the data that you've presented so far to products that have already shown data that might be further ahead in development? Specifically, how should we be thinking about what the right endpoints should be in order to look at? I know that there's a Novartis study that's being debated as to whether or not in DM1 the right endpoint is being used. I'd love to hear your thoughts on that. And secondly, as you talk to FDA about the... the shift to get the PMOs to permanent approval. Can you talk about if there's been any change, any further change in who you talk to in the divisions that are relevant? Just trying to get a sense of continuity of people that you might be engaging with. Thanks.

I'll turn this over to Louise.

Sure. Regarding the comparative data, as we mentioned in the disclosure call, in terms of what we're looking at and why we think that our program differentiates in terms of the amount of siRNA that we're getting into the muscle, and that's using the alpha-b beta-6 targeting ligand. And so that truly, in terms of comparison, allows us the more you can get into the muscle, the more knockdown you can get, and that leads to better biomarkers and downstream functional markers. And so that's the way we're thinking about it with this early data is how can we get the highest level into the muscle so that we can have the most robust effect. We want to make sure that we are having a product that is giving us the best chance of efficacy and consequent function. So with regards to the functional outcomes, I'm going to turn that to Dr. Richardson in a second regarding DM1. On the PMOs, we're generally seeing the same, interacting with the same individuals in the agency that we have been for the for the PMO programs and for those SMD8s. But James, perhaps you can comment on the DM1 function.

Yeah, I mean, I think we're seeing in the DM1 space what you commonly see as developers move into a disease space that we see an evolution in our understanding of the functional endpoints, and we also see a greater investment in natural history data. We've seen recently with Nick Johnson's group publishing from the MDM1 study which is building on our understanding of the appropriate functional outcomes. So I think from our point of view as a sponsor, without commenting on other sponsors' program, we're in an advantaged position of being able to take these natural history data internally, be able to speak to people like Nick Johnson and others and take their opinion on the primary endpoints. and then look at the functional data coming out of the cohorts we're seeing in Phase 1 and 2, put that together, and reach our own decision on what we think is the most appropriate primary and secondary endpoints for our Phase 3 study, and obviously discuss that subsequently with the FDA.

Thank you. Our next question comes from Joe Swartz from LeRinc Partners. Please go ahead.

Thanks very much. I have a question on the SRNA programs, which we'll have data on later this year. First, is there any data preclinical or otherwise which suggests that deeper reductions in Dux4 expression would be expected to translate into greater clinical benefits for your approach in FSHD compared to competitor therapies with lower knockdown profiles? And then in DM1, what specific magnitude of splicing correction would you want to see in the upcoming MAD cohorts to prove that 1003's differentiated delivery can translate into a best-in-class clinical profile, and why wouldn't VHOT improve fairly quickly for your approach, since it has seemed to be fairly sensitive for other RNA approaches early on?

I'll turn this to Luis. I will note that I think James did suggest that FEHOT may be an appropriate measure in the MAD, but the other longer-term functional endpoints require more time with the disease. With that, I'll just turn to Louise to answer both of those questions.

Sure. On FSHD and the knockdown of DUX4, so if you recall, DUX4 shouldn't be expressed at this time in late development. It's expressed early in development and then turned off. It should not be expressed in adults. any stochastic expression is toxic. And so therefore, the greatest amount of knockdown gives you the greatest amount of benefit. So if 100% knockdown would be fantastic. So obviously, more knockdown is better. And that's what we're looking for. In terms of the target for DMPK knockdown, the answer is similar in terms of what we're looking for. So we're looking for increases in muscle concentration leading to improvement in DMPK knockdown. We know that increased For preclinical data, correlation of DMPK knockdown correlates with functional improvement, and so that's what we are looking for. And based on the data to date, we've seen dose-dependent increase in muscle concentration, and we'll be looking at the DMPK knockdown with our MAD data later in the year. And then, as Doug already mentioned, on the VHOT, we certainly would expect earlier signals As you said, for VHOT, it's an early sign of function. James, anything to add to that?

No, no, just completely agree, just to distinguish between VHOT, as we said, which we do think we will see a signal with at this point, and other functional outcomes which will take longer.

Thank you.

Thank you. As a reminder, to ask a question, we ask that you press star 1-1 on your telephone and wait for your name to be announced. In the interest of time, we ask that you please limit yourself to one question. Our next question comes from Yagal Nokomavitz from Citi Group. Please go ahead.

Hi, great. Thank you for taking the questions. I had a question on SRP1001 and the dose response with respect to muscle concentration. When you doubled the dose, you got about a six-fold increase a supralinear increase in muscle concentration. So I'm just curious if you could comment on that in terms of the mechanistic rationale and whether in the multiple ascending dose part of the study you would also expect that kind of far exceeding linear dose proportionality at the higher doses. Thanks. Luis?

Yeah, we certainly saw an increase there, which wasn't linear. We would expect to see it start to plateau based on the preclinical data. We did see a jump from the lowest dose, which wasn't unexpected based on preclinical data, but we would see it plateau at the higher doses, but certainly continue to increase based on the preclinical data.

And just one follow-up, with regard to the study that you mentioned for serolimus in the real world, where you didn't see any evidence of liver enzyme elevations, could you just expand on that in the sense that where there were no grade 1 or any abnormalities in liver enzymes in that real-world study?

Sure, Luis. Yeah, so this is our real-world data where we can go back and survey the results from investigators. And this is an investigator called in terms of ALI. So we see that 25% are using it, and we're not seeing any evidence of ALI as determined by the investigator.

Okay, thank you.

Thank you. Our next question comes from Ritu Baral from TD Cal, and please go ahead.

Hi, team. This is Joshua Fleischman on for Ritu. Thanks for taking our question. I wanted to start by asking, what is the current progress of Cohort 8 recruitment, and are there any current timelines to enrollment completion? On the call, you guys also mentioned DM1 functional data, but what FSHD functional data will be included in the second half 26 data release? And then lastly, what are Sarepta's plans for additional BD deals, thinking about both timelines to a deal and potential disease areas? Thank you.

So, like on Cohort 8, I'll just be quick on it and then turn the FSC question to Luis. I'll touch on the BD. First, on Cohort 8, just so we're clear, we are right where we said we would be. We're dosing patients now. And our goal is to have the study complete and the data available by the end of the year. And so we're on track for that. With respect to business development, the good news is that we're in a great place as an organization. We are not required to do business development for our future success. We have a very straightforward strategy right now. We've stabilized the business. We have four approved therapies. They are performing well, and we think they'll perform, as it relates to Levitas, even better with our new initiatives. We are in a very strong financial position as an organization. We saw that we were profitable on a gap and non-gap basis. Absent our Arrowhead payments, we were cash flow positive, will be cash flow positive going forward, even in our base case assumption. That allows us to fully fund our SIRNA pipeline. And we're really excited about this SIRNA pipeline. You've seen the DM1 and FSHD data early, though it is, and we're excited to see that data later this year. We have Huntington's disease and IPF and multiple scars and six research programs, so we're in great shape there. With that said, we have a very active search and evaluation group that look for transactions, and we'll continue that. We've got a very, very proactive head of business development in Josancas, and we're constantly looking for opportunities. But, you know, we also have a very high bar for that. So that's where we are with that. And with that, I will turn the FSHD question to Louise.

Sure. So the question was, what functional outcomes are we looking for in FSHD? So, James, do you want to comment?

Absolutely. Just to reiterate, the primary purpose of this study is to assess safety, PK, and then the PD response. I think we're particularly excited about also looking at circulating biomarkers at this point. We are obviously conducting functional assessments as part of the study, including reachable workspace, standard battery of time function test, and strength testing that you would expect. This is a slowly progressive neuromuscular disease, and this is not a point in time where I would expect a very strong signal from a functional endpoint perspective. But clearly, if we do see something at this point, that would be a fantastic upside. And any signal we do see in terms of responsiveness of the various endpoints compared to one another will help us select the appropriate primary outcome for our phase three study.

And then out of reachable workspace, time function tests, and strengths, which of those will be included in the second half 26 data release?

James? Yeah, I mean, we will have data on all of these endpoints. I think that we'll be able to give a summary of the above. But again, as I said, I wouldn't be expecting a priority to see significant changes in any of them.

Thank you.

Thank you. Our next question comes from David Huang from Deutsche Bank. Please go ahead.

Hi there. Thanks for taking my questions. So maybe one on Elavides. Do you have any sense of how many centers are currently offering Elavides and maybe how does that compare to the number at the time of initial launch? And then just quickly on cohort eight, could you talk about the regulatory path after you have the data in hand Would this be like submitting an FNDA, or just how should we think about the FDA interaction with cohort data? Thank you.

I don't think we've – have we given information on numbers of sites historically, Patrick?

I mean, we've talked about the number of sites that we've had just in the market. So we've got 75-plus sites that are available and offering up a Levitas, and that has not changed over time. So it's still consistent out there.

We have also seen, again, in the green shoots category, we have seen sites that, with some of the dislocation of last year, it paused, that have picked up and then commenced submitting start forms again.

So that's a positive green shoot as well. And with that, I'll turn the second part of the question over to Luis.

Sure, once we have the cohort 8 data in hand, we'll meet with the agency and then we'll determine the path forward after that. So we're committed to share the data with them as soon as we have it, and that's when we'll meet with them and discuss.

You know, certainly our hope, we have to have a meeting with the FDA to figure out the exact regulatory process one has to go through, but in the event that the serolimus data proves to be change the risk benefit of this therapy significantly in favor of the non-ambulatory patient. We would hope that the agency would work with us to get this therapy offered to non-ambulatory patients as fast as possible for the obvious reason. Duchenne generally is a disease that doesn't permit waiting. It's just not a therapy that can wait every day. These kids are damaged and no group of patients know that better than the non-ambulatory patients who have a desperate need for intervention to save what muscle that they have remaining after they've become non-ambulatory and have progressed the disease so with that said we've got to meet with the agency as luis has said but it is our very hope that the fda will work creatively with us to get the the indication back in the label so we can begin to have thoughtful conversations with physicians and families and offer this therapy to them.

Thank you. Our next question comes from Andy Chin from Wolf Research. Please go ahead.

Hey, this is Brandon for Andy. Thanks for taking the question. So you noted that levitis or the business has stabilized. Does a return to growth assume only access in the ambulatory setting, or does that growth assume that you're able to resume treatment in non-ambulatory patients? Thank you.

Yeah, when we talk about return to growth, we're talking about in the ambulatory population right now. Obviously, with the success of serolimus and cohort 8, if it is successful, and we certainly have conviction that it will be, and getting that back in the label, then, of course, we'll have to re-forecast the post-app. But when we talk about our initiatives right now and the return of growth, we're talking about the ambulatory population because, obviously, non-ambulatory is not in our label. We would never promote non-ambulatory if it is not in our label.

So we're talking about ambulatory.

Thank you. Our next question comes from Jiayi Wang from Moziho. Please go ahead.

Hello. This is Jiayi Wang on behalf of Warrior. I guess I just want to ask about, you know, the 20% you mentioned the sites that are already using serolimus. I guess what's holding the remaining 75% from adopting this regimen assuming it's going to help reduce the ALI risk? Do you think it's because you're concerned about any immunosuppressing side effects or they're just not familiar with the regimen?

Our best guess would be that education and information has to flow between physicians and thought leaders and the like. One of the things that we are not permitted to do is play a proactive role in that. We don't have sorolimus on our label. We can't promote to it. So the simple approach, which would be to go and share data with patients physicians is something that we are not permitted to do. So the spontaneous use of serolimus in 25% of the physicians comes entirely from physician practice and from sharing of best practices among physicians. I would anticipate that it would grow, but we can't play a role in that growth. And so that will mute that growth until we get the cohort eight data out.

We get the ability to get this in the label for non-ambulatory patients in particular.

Thank you. Our next question comes from William Pinkering from Bernstein. Please go ahead.

Hi. Thank you for taking my question. For DM1 and FSHD, are you seeing any difference in half-life across the two drugs and any implications that might have on dosing interval in a phase three trial? We read in the protocol documents that the FSHD half-life is expected to be twice as long as DM1, five weeks versus two and a half weeks, hence the question. Thank you.

Luis?

Sure. We're seeing some similarities because we're using the same peptide across the programs. With respect to the timing interval, we are looking at 10 weeks versus 12 weeks in terms of the dosing interval. James, perhaps you'd like to comment on how we're analyzing that in the protocol.

Yeah, no, just to reiterate what you've said, really, Louise, that we're not expecting differential half-lives between the two products, given that they are chemically very similar, same ligand and just different siRNA cargo. And the clinical data that we've seen is largely supportive of our preclinical data, but we do think that we can probably drive a little bit better efficacy than we've seen already by reducing the dosing interval to 10 weeks. We will see those results as part of the cohort five, CM1, and the subsequent FFHD cohort seven.

Thank you. Our next question goes to Mitchell Kapoor from HC Wainwright. Please go ahead.

Hi. Thanks for taking our question. It's Jade on for Mitchell. So just on elevitis, could you comment on the recent FDA adverse event reporting system listed fatality due to cardiac and breathing issues, which was reported three weeks ago? And if so, how much time has elapsed between the patient receiving elevitis and this incident? How old is the patient? What was their ambulatory status? And do you have any information on the specifics of their DMD mutation? Luis?

So that was a commercially treated patient treated with Levitas nearly 14 months post-treatment. So based on the available information, we analyzed it and it was deemed to be unrelated to the Levitas treatment.

Thank you. Our next question comes from Brian Scorney from Baird. Please go ahead.

Hi, this is Luke. I'm for Brian. Thanks for taking the question. Just wanted to get an update on your efforts of addressing AAV immunity, maybe to treat lower titer patients or eventual retreatment. Thanks.

Luis?

Sure. So, we've, this data will be presented. So, we have preliminary data from our apheresis study and some preliminary data from the study with Hansa as well. indicating there is some ability to reduce titers in patients that have antibody positive. So this is something that we've paused those studies for now, but something that we will certainly look to in the future and that we do see the potential to lower antibodies and have an effect, but it would need more clinical study.

thank you uh this does conclude the the question and answer session i will now turn it back over to doug ingram for closing remarks yeah thank you for that thank you all for joining us this evening and for your very thoughtful questions you know we are as i said before tracking through 2026 with an enormous amount of opportunity in front of us and we have a very straightforward strategy to capitalize on that opportunity we have four in my view, tremendous therapies, and our goal is to maximize the opportunity with those four approved therapies, first and foremost, for the Duchenne patients who benefit from them, but also for our investors. The second, of course, is our very strong financial position. You will have seen that we were profitable on a gap and a non-gap basis. We have over $750 million in cash and investments We were cash flow positive, if you exclude the Arrowhead payment, and we'll be cash flow positive on a go-forward basis, even in our basest case with respect to our approved therapies. And all of that allows us to fund this very exciting siRNA pipeline and to do it very independently. We've got a lot there, DM1, FSHD, Huntington's disease, IPF, SCA2, SCA1, SCA3, the research programs. We're really excited about them. We've seen some great data. on DM1 and FSHD to lead the way. And we're very excited that the second half of this year to share with you more robust data still on both of those programs, which we think could potentially be best in class. And the fourth pillar of our strategy is our employees. We have a really dedicated group of very seasoned expert folks who, say what you will, have shown nothing but exceptional execution over these many years. And I think taking those four pillars into account, we have one of the most exciting opportunities in front of us that we've had as an organization in our long history. And I look forward over the course of this year to sharing more information on our execution and some of our milestones. And with that, have a lovely evening, everybody.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.