Sarepta Therapeutics Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2023

There are 14 speakers on the call.

Operator

Afternoon, and welcome to the Sarepta Therapeutics First Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising your hand is phrased. As a reminder, today's program is being recorded.

Operator

At this time, I'll turn the call over to Mary Jenkins, Associate Director, Investor Relations. Please go ahead.

Speaker 1

Thank you, Shannon, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the Q1 of 2023. The press release is available on our website at sarepta.com And our 10 Q was filed with the Securities and Exchange Commission this afternoon. Joining us on the call today are Doug Ingram, Ian Espin, Dalen Murray and Doctor. Louise Rodino Klapac.

Speaker 1

After our formal remarks, we'll open the call for Q and A. I'd like to note that during this call, we'll be making a number of forward looking statements. Please take a moment to review our slide on the webcast, which contains our forward looking statements. These forward looking statements involve risks and uncertainties, many of which are beyond Sarepta's control. Actual results could materially differ from these forward looking statements and any such risks can materially and adversely affect the business, The results of operations and trading prices for Sarepta's common stock.

Speaker 1

For a detailed description of applicable risks and uncertainties, we encourage you to review the quickly update its forward looking statements, including any financial projections provided today based on subsequent events or circumstances. And now I'll turn the call over to our President and CEO, Doug Abraham, who will provide an overview of our recent progress. Doug?

Speaker 2

Thank you, Mary. Good afternoon and thank you for joining Sarepta Therapeutics' Q1 2023 financial results conference call. Perhaps you will see this is a break from the past, but I intend to keep my remarks this evening brief. As you know, in a mere 10 days from now, we will be attending and presenting At the FDA advisory panel for SRP-nine thousand and one, our gene therapy intended for the treatment of Duchenne muscular dystrophy. We believe that the primary areas of discussion at the advisory committee will be these, whether the totality of evidence supports the conclusion SRP-nine thousand and one dystrophin protein at the levels expressed by this therapy is reasonably likely to predict clinical benefit.

Speaker 2

The totality of the evidence will include natural history, the preclinical data, biomarker results and the functional results from our clinical trials. The panel will also address the risk benefit analysis associated with the administration of SRP-nine thousand and one for the We are studying 301, the proposed post marketing confirmatory trials to support the accelerated approval of SRP-nine thousand and one In the event that accelerated approval is granted, the team is well prepared and excited to share with the advisory committee The wealth of compelling evidence supporting the conclusion that SRB-nine thousand and one dystrophin protein in the amounts expressed by that therapy So to set expectations for this call, we intend to discuss 1st quarter performance Doctor. Luis Rodino Klapac will provide a pipeline update. But to respect the process and in light of how soon the meeting will take place, We will not discuss or entertain questions on regulatory matters pertaining to SRP-nine thousand and one or the upcoming advisory committee meeting until it's concluded on May 12. Moving now to the quarter, I am very pleased to announce another strong quarter of performance.

Speaker 2

1st quarter total revenue came in at $253,500,000 Net product revenue came in at $231,500,000 that's a 23% increase Over the same quarter of the prior year and exceeding analyst consensus. It is this very patient oriented execution We intend to apply to SRP-nine thousand and one if approved. We continue to progress our important post marketing Commitments for our 3 approved PMO therapies. We have already completed 11 of our post marketing commitments With respect to ESSENCE, which is our 2 year blinded placebo controlled study for VIONYS and AMONVUS, we were fully enrolled last year and that trial is Proceeding, with respect to MISSION, which is our dose ranging post marketing commitment for XONDYS, Part 2 of that study is substantially enrolled and Progressing. As it relates to SRP-nine thousand and one, in addition to preparing for the May 12 Advisory Committee and prosecuting the BLA with May 29 PDUFA date in mind, we are ensuring that we will be prepared to successfully launch 9,001 and serve the community If and when approved, by now we have successfully concluded all FDA inspections that includes 3 GMP inspections And 2 GCP inspections.

Speaker 2

With our partner, Cabalent, we are producing material to successfully launch 9,001 upon approval And we are finalizing our launch readiness work. And we are finalizing our plans to commence the studies necessary To expand the 9,001 label to the broadest population supported by the science, including our commencement of our non ambulatory study in VISION or Study 303 and our multiple studies to explore the removal of neutralizing antibodies to RA74. Beyond that, we've been advancing our broader pipeline and Doctor. Rodino Klapac will provide an update on our pipeline Now the coming weeks months are monumentally important to the patients that we serve. As I have said many times by now, we stand at a bellwether moment with the greatest evidence based hope yet in history To bring a better life to families today living with and unfortunately today dying from Duchenne muscular dystrophy.

Speaker 2

And we are also well aware that this BLA stands as a bellwether test for gene therapy itself And for the ability to effectively lean in and use the tools available to us to translate groundbreaking genetic science to medicine They can extend and improve patients' lives now, not merely at some theoretical point We feel an enormous obligation to the patients that we serve and our every decision and action is taken and done with that obligation front of mind. And with that, let me turn the call over to our Head of R&D and Chief Scientific Officer, Doctor. Louise Rodino Klapac. Louise?

Speaker 3

Thanks, Doug, and good afternoon. As we look forward to the weeks months ahead, we remain resolute in our conviction and our values All the science and present the objective evidence that supports SRP-nine thousand and one's ability to change the trajectory of Duchenne muscular dystrophy. Our goal with SRB-nine thousand and one is to alter the course of this fatal disease by treating the underlying cause of Duchenne With a one time gene therapy that delivers functional dystrophin to the muscle. Sarepta has generated the most compelling preclinical biomarker and Clinical function results to date more than any other gene therapy in development for Duchenne. We've been able to demonstrate based on the Strong scientific underpinning of our construct that early SRP-nine thousand and one data provided read through for our positive clinical experience with the therapy.

Speaker 3

After years of research, we identified an optimal gene cassette, able to retain the most critical protective and functional elements and fit inside AAV thereby enabling its delivery. This gene cassette was packaged into our AAV of choice, rh74, and we chose MHCK7 as our promoter. The early data showed robust expression across skeletal, diaphragm and cardiac muscle. And as a result of that expression, as well as the dystrophin protein demonstrating functional benefits, we saw clinical benefit at the target dose in patients I will explain in a bit more detail. Individuals with Duchenne don't have a functioning dystrophin associated protein complex Understanding this, when we inserted a functional stroke and protein, we saw up regulation of the DAP C in animal More specifically, we saw an almost one for one upregulation of the DAP C when there was expression of the SRP-nine thousand and one dystrophin, confirming the protective properties of the protein.

Speaker 3

Further, we saw significant reduction in creatine kinase or CK. CK is an enzyme associated with muscle damage. The reduction of CK provided further proof that SRP-nine thousand and one was reasonably likely to predict Since 2018 and across multiple studies, we've got the largest number of Duchenne patients, More than any other gene therapy in development for this disease and the clinical results have surpassed our expectations. In summary, SRP-nine thousand and one demonstrated robust expression of dystrophin, far above what literature would suggest is necessary to be protective of the muscle. All of it is properly localized at the muscle membrane or sarcolemma or the axis shock absorber.

Speaker 3

We developed a cell based potency assay that shows that SRP-nine thousand and one is active, functional and protective at the muscle membrane. And as an animal model with robust expression of SRP-nine thousand and one, we saw significant reduction in CK. Finally, expression of SRP-nine thousand and one in patients leads to up regulation of the DAP C. In addition to all of this compelling evidence, We are able to show functional benefit versus what Natural History will predict on SAA for the NorthStar Ambulatory Assessment. This is our primary functional endpoint.

Speaker 3

We observe benefit across 1, 2 and 4 year time points. Based on the totality of the data, We believe that SRP-nine thousand and one qualifies as a disease modifying agent as of the levels of dystrophin expressed are reasonably likely to predict clinical benefit in Now moving to Limb girdle muscular dystrophy or LGMD. We remain committed to advancing our LGMD portfolio across a variety of subjects. I look forward to providing updates on these important programs in the months ahead. Currently, we are making excellent progress on JOURNEY, Our LGMD natural history study and invoizine, our Phase 1 study evaluating SRT-nine thousand and three For the treatment of Limb girdle muscular dystrophy Type 2E in ambulant adult patients and non ambulant patients is in clinical process SRT-nine thousand and three material.

Speaker 3

Combined with positive expression functional data shared from our initial study, SRT-nine thousand and three-one hundred and one, we believe the data from Voyaging will give us insights into a broader patient population. Our next milestones for Voyaging include completing enrollment in the second half of the year and beginning our Phase 3 study using commercially representative process material later in the year. Finally, we are on track to commence a systemic pilot study for SRP-six 6004 dual vector rh74 mediated gene therapy to treat LG and G2b characterized by the absence of the protein deferralis. Turning now to the progress we've made with our RNA platform. We are pleased to complete enrollment in the Q1 of 2023 For our MOMENTUM study for SRP-five thousand and fifty one, and we remain on track to announce data from the study in the back half of twenty twenty three.

Speaker 3

In regard to our post marketing studies for the PMO, as mentioned last quarter, we completed enrollment in the EPICs trial Our post marketing requirement for golodirsen is casimersen and continue to make good progress with our mission study, which is on track to be fully enrolled this year. In closing, we're looking forward to the Advisory Committee meeting on Friday, May 12, as it will provide us the opportunity to share the science and the data in support I'd like to take this opportunity to thank our Sarepta team who have been diligently working these past months. I'll now turn the call over to Dalen for an update on our commercial activities. Dalen?

Speaker 2

Thank you, Louise, and good afternoon. In the Q1 of 2023, The team executed on our core RNA business and delivered another strong performance across all three of our RNA based P and L therapies. As Doug mentioned, we delivered $231,500,000 in net product revenue in the Q1, representing well over 20% growth Over the Q1 of 2022, notably Q1 of 2023 exceeded our expectations And represented the most successful Q1 in the history of our market therapies. In Q1, we have historically seen an impact Due to the expected insurance changes at the beginning of each year, due to the extraordinary efforts of the team in navigating those access headwinds, We saw higher than expected revenue in the U. S.

Speaker 2

In the Q1. Each year our team is prepared for these challenges and I'm very proud of their steadfast commitment, incentive urgency with which they serve the Duchenne community. They know that every minute matters For each one of the patients we serve, total ex U. S. Net product revenue in the Q1 was roughly $31,000,000 This represented a decrease over the prior quarter, which was expected and fully reflected in our annual guidance forecast.

Speaker 2

As discussed on last quarter's call, we expect to see continued fluctuations in ex U. S. Ordering patterns quarter to quarter. Overall, the fundamentals of the business coming out of Q1 are completely in line with what we expected at this point in the year. And we reiterate our full year guidance of greater than $925,000,000 in net product revenue for our key Ebola therapies.

Speaker 2

This guidance reflects all of the factors that we navigate and monitor in supporting patients globally. With this increasing global revenue base, we will continue to see fluctuations in the economic revenue from quarter in quarter. Importantly as well in the U. S. Market, we have now hit the mature phase with all three products and as such, We expect more modest growth in new patient starts in the coming quarters for the chemo business.

Speaker 2

Turning now to individual net product revenues for the Q1 of 2023 for our 3 approved RNA based chemo therapies. EXONDYS 51 totaled $132,600,000 representing more than 13% growth over Q1 of 2022. For VYONDYS 53 sales were $33,000,000 growing roughly 18% over the Q1 of 2022. And for OMONDYS 45, sales totaled $65,900,000 representing more than 50% growth In addition to the strong performance in our core business, the team simultaneously preparing and laying the groundwork for the SRP-nine thousand and one launch. The full team is in place, Being rigorously trained as we speak, and I can say with confidence that they are ready to execute if SRP-nine thousand and one is great.

Speaker 2

This launch will represent a historic moment not only for Sarepta, but for the Duchenne community and for genetic medicine. The level of enthusiasm and confidence in the team is at an all time high and they are eager for this opportunity to demonstrate what we are capable of And what would be our 4th launch in Duchenne market? Over the past several months, our field teams and Sarepta Leadership have meaningfully engaged with roughly 75 sites of care on strategic and operational site readiness matters. These important interactions will ensure that the sites are ready to efficiently, safely provide SRP-nine thousand and one gene therapy We've also been working closely with sites to provide education and training As well as ensuring that they have the necessary equipment and resources to deliver the therapy to patients. In addition to site readiness, we know from our experience Chemotherapies that access and reimbursement are crucial to successfully delivering SRP-nine thousand and one to patients.

Speaker 2

We're committed to ensuring that our gene therapy for Duchenne is accessible to all patients who need it and we recognize that meaningfully engaging with payers is We found that the payers are asking important questions pertaining to the SRP-nine thousand and one clinical data, potential patient population site, launch timing and infusion sites. We are encouraged by the positive response we have received thus far and are pleased with the progress we have made in engaging with both commercial and Medicaid payers. If approved, 9,001 will bring forth a potentially transformative therapy to patients who have been waiting for far too long. The team has done a tremendous job preparing for what will be the largest gene therapy launch to date if SRP-nine thousand and one is approved. I'd like to take this opportunity to personally thank the whole organization who are not only executing to support 30% of patients on our key element Today, but we have also risen to the occasion so that we can be ready as a team for this paradigm shifting moment.

Speaker 2

And now, I'll turn the call over to Ian Sippen for an update on our financials. Ian?

Speaker 4

Thanks, Dallin, and hello all. This afternoon's financial results press release provided details for the Q1 of 2023 on a non GAAP basis as well as a GAAP basis. Please refer to the press release available on Trep's website for a full reconciliation of GAAP to non GAAP financial results. For the 3 months ended March 31, 2023, the company recorded total revenues of $253,500,000 which consists of net product revenues and collaboration revenues compared to revenues of $210,800,000 for the same period of 2022, An increase of $42,700,000 Net product revenue for the Q1 of 2023 from our PMO exon skipping franchise was $231,500,000 compared to $188,800,000 for the same period of 2022. The increase in net product revenue primarily reflects increasing demand of our products.

Speaker 4

In each of the quarters ended March 31, 2023 and 2022, We recognized $22,000,000 of collaboration revenue, which relates to our collaboration arrangement with Roche. The reimbursable co development cost Under the Roche agreement totaled $20,300,000 for the Q1 of 2023 compared to $17,700,000 for the same period of 2022. On a GAAP basis, we reported a net loss of $516,800,000 or $5.86 $105,000,000 or $1.20 per basic and diluted share of $387,300,000 a non cash expense incurred in the 3 months ended March 31, 2023, With no similar activity for the same period of 2022, we reported a non GAAP net loss of $85,500,000 or $0.97 per basic and diluted share in the Q1 of 2023 compared to a non GAAP net loss of $48,600,000 or $0.56 per basic and diluted share in the Q1 of 2022. In the Q1 of 2023, we recorded approximately $35,000,000 in cost of sales compared to $31,400,000 in the same period of 2022. The increase in cost of sales is primarily due to an increasing demand for our products as well as write off of certain batches of our products not meeting the quality specification for the 3 months ended March 31, 2023, With no similar activity in the same period of 2022, partially offset by a decrease in the royalty payments during the 3 months ended March 31, 2023, Due to changes in the BioMarin royalty terms, on a GAAP basis, we recorded $245,700,000 and $194,300,000 in R and D expenses for the Q1 of 2023 2022, respectively, A year over year increase of $51,400,000 The increase is primarily due to an increase in our manufacturing expenses.

Speaker 4

On a non GAAP basis, R and D expenses were $220,700,000 for the Q1 of 2023 Compared to $173,200,000 for the same period of 2022, an increase of $47,500,000 Now turning to SG and A. On a GAAP basis, we recorded approximately $110,700,000 71 point $8,000,000 for expenses for the 1st quarters of 2023 and 2022 respectively, an increase of $38,900,000 The increase was driven primarily by an increase in professional service expenses to prepare for a potential launch of SRP-nine thousand and one. On a non GAAP basis, the SG and A expenses were $83,300,000 for the Q1 of 2023 Compared to $53,200,000 for the same period of 2022, an increase of $30,100,000 We expect that our R and D and SG and A expense will increase next quarter as we continue to prepare for a potential launch of SRP-nine thousand and one. On a GAAP basis, we recorded $12,700,000 in other income net for the Q1 of 2023 Compared to $17,300,000 in other expense net for the same period of 2022, the change is primarily due to an increase Interest income and accretion of investment discount due to the investment mix of our investment portfolio as well as a reduction of interest expense incurred as a result of the repayment of our December 2019 term loan during 2022.

Speaker 4

In the Q1, we exchanged a portion of our 2024 notes With an aggregate principal value of $313,500,000 and issued approximately 4,500,000 shares of our common stock, We accounted for the exchange as a debt extinguishment, recognizing the difference of the fair value of the shares of common stock transferred on the exchange date And the net carrying amount of the extinguish debt has a loss of $387,300,000 inclusive of the $6,900,000 of third party debt conversion costs. Just again to reiterate, this is a non cash expense. We have approximately $1,900,000,000 in cash, cash equivalents and investments and long term restricted cash as of March 31, 2023. We remain well capitalized to execute on our goals for the year and support our transition to profitability assuming approval of SRP-nine thousand and one. And with that, I'll turn the call back over for Doug to start the Q and A.

Speaker 4

Doug?

Speaker 2

Thank you, Anne. Now before we begin the Q and A, let me reiterate that in light of and in respect of the impending FDA advisory committee, We will not be entertaining questions on the regulatory process or the upcoming advisory committee meeting for SRP-nine thousand and one tonight. I do look forward to discussing those matters with you once the May 12 Advisory Committee Meeting has concluded. And with that, Shannon, let's open the line for questions.

Operator

Thank you. Our first question comes from the line of Colin Bristol with UBS. Your line is now open.

Speaker 5

Hey, good afternoon and huge congrats on being on the cusp of this approval. So on your supply at launch, can you talk about the capacity and ability to meet demand. I'm just asking in light of the fact of or in light of some of the comments from your partner around A slower than expected production ramp at the Maryland site. And then just sort of within this, in terms of patient logistics, Can you talk about your expectations for the initial timelines from a physician prescribing 9,001 to a patient

Speaker 2

Yes. Thank you very much for that Colin. So on the first part of the question, as we've said, our goal and we will meet that goal is to be able to Fully launched and supply the community, assuming that we are able to get an approval. Of course, our goal right now is to get an approval at the PDUFA date, which May 29, we have seen the comments made by Catalent. So we're very clear that those comments And the issues that they were discussing do not play any role in or have any effect on our plans or our production Our plan to the slightest, so we should be in good shape there.

Speaker 2

With respect to the launch, our goal is to launch this therapy As rapidly as possible and I think we have proven ourselves over the last few years very capable of doing exactly that. With that said, The 9,001 gene therapy has its own particular complications. You've got it, for instance, In addition to not simply having a start form for that, we've got to do a number of other things, including Getting a pre infusion antibody test that's sufficiently close to the infusion, that it's valid. And then, of course, not Typically, you have to work through access to reimbursement and codes and the like. So from a planning perspective, while we'll be launching this Rapidly, one should anticipate really seeing a quarter or 2 before we really start seeing a significant ramp.

Operator

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

Speaker 1

Thank you. I also wanted to ask one commercial question. What is your estimate patient numbers for initial indication in the U. S? And also regarding the manufacturing capacity, any major expansion you need to do in order to supply patient for the initial indication in the U.

Speaker 1

S.

Speaker 2

Let me answer the second part first. The answer is no. There are no major Capital expenditures or additional expansion that is required to launch this therapy and serve the community At launch, on the addressable patient population, I'd give you the broadest of strokes. There's somewhere in the 12000, 10000 to 15000 patients in the United States. Our goal, again, assuming that we are approved at PDUFA date, The goal is to serve all ambulatory patients.

Speaker 2

The ambulant patients are about 50%, so it's Roughly 50% ambulant, 50% non ambulant, we'd be covering the ambulant population. And then there will be, of course, patients that would be excluded because they have pre existing neutralizing antibodies. Based on our most recent data, that's about 13.5% of patients would be currently excluded On the basis of having pre existing antibodies to binding antibodies to rh74 and then there is a subset of patients Who would have some of these earlier mutations in a range, in a region that may have a risk of an innate immune response That will be less than 5% of patients. So that remainder is the addressable patient population at launch. Now with that said, I'm going to go ahead and Give you our plans for the future as well because very soon we're going to be starting a number of studies In an effort to fully build out the addressable patient population to the extent that science allows us to, We're pretty confident about that.

Speaker 2

So the biggest opportunity obviously is to get to the non ambulant patients. That is extraordinarily important to us and to them. Non ambulant patients don't have the luxury of time, so we've got to move as fast as possible. We are starting our study 303 For the non ambulant population very soon, the goal is to have sufficient safety and expression data from that study to seek an update to our label early next year to get non ambulatory patients in the label so we can begin to dose them. And we're starting As well, 2 additional studies for 2 alternative approaches to clear pre existing neutralizing antibodies.

Speaker 2

And if We're capable of doing that and that would also bring back into to frame for the ability to dose patients that are currently excluded because They have something that reacts and is a pre existing neutralizing antibody. That's an extraordinarily important issue. As well, oftentimes you'll when you talk to patients and their families, parents will say that the worst Day of their lives was getting the news that their child had to shed muscular dystrophy and that the second worst They are their lives, which finding out that their kids are one of these rare kids, about 13% of kids, who have That's positive for pre existing neutral acne antibodies. So we need to move fast to try to solve that issue for them. Thank you for those questions, Gene.

Operator

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

Speaker 6

Hi, good afternoon. Thanks for taking my question. Can you expand on what you've been hearing in your preliminary conversations with payers? Is your sense that they would be open to paying for 9,001 under accelerated approval or would prefer to wait for full approval? And Should we expect sort of a similar mix as with the exon skippers with regards to the proportion of patients initially receiving access?

Speaker 6

Thanks.

Speaker 2

I'll make the broadest of strokes and Dylan you can follow-up if I'm missing anything. First of all, the conversations have gone Very well. We've been in dialogue with payers regarding the potential for SRP-nine thousand and one for many years now. I think going back as far as mid-twenty 18, Dal and myself and others We're meeting with payers that our accident reimbursement team have been meeting with payers significantly. The amount of evidence that we have that Supports the conclusion that 9,001 is a beneficial therapy for kids and it's going to do a lot of good.

Speaker 2

It is Very, very robust. So these discussions have gone very well. With that said, I'm going to be very clear, of course, as is The case with rare disease therapies right now, aspen reimbursement is a complicated, challenging thing. The good news for all of us Is that 9,001 is going to be launched by Sarepta. And at the risk of sounding a bit immodest, In my view, there is no team better than this Sarepta team to serve these patients, Work intelligently with payers and gain access for this therapy for these kids as rapidly as possible.

Speaker 2

And I am quite confident that's going to recur. Quite confident payers are going to do the right thing. And certainly, I believe that they're going to do the right thing in the context of accelerated approval, which is, From our perspective, the approach that one should be taking with respect to 9,001 given the data that we have in front of us. Yes. And I think Doug's really covered it.

Speaker 2

There are, as we said In the opening remarks, really constructive great dialogue going on with the payers. And right now, we're at the we're Prior to launch, they're asking great questions about the timing and the patient population. And I think more specifically, Colin, to your question, Regardless of when the policies are put in place, the payers are going to look at each patient on a case by case basis. And so The team, as Doug said, is ready to manage that right from day 1. We're experienced and battle hardened team.

Operator

Thank you. Our next question comes from the line of Judah Frommer With Credit Suisse, your line is now open.

Speaker 7

Hi. Thanks for taking the question. Another one sort of from the payer angle. Any idea if there could be kind of a difference in ramp for patients that are, I guess naive to RNA therapies versus those That are on the PMOs gaining access and then any indications around potential value based payments given like you said, this is going to be the biggest Gene therapy launch ever. So from a cost perspective, could there be any, I guess, interesting dynamics To the time of payments.

Speaker 7

Thank you.

Speaker 2

Yes. As it relates to the first question, I don't think there's going to be a difference in ramp. I think this is for those who are amenable to this therapy, which at launch, we are successful in our BLA would be Ambulance patients excluding a very narrow range of mutations who are rh74 Negative. I think this therapy is going to be extraordinarily important and I think that there's going to be an equal ramp whether you're naive or not naive To the PMOs and in fact we have dosed patients that have been on the PMO and remained on the PMO post dose. So we have good data That supports that.

Speaker 2

On value based agreements and the like, I'm not at a place right now where we're going to discuss those issues yet. I will tell you that we have done an enormous amount of work about which I am extremely impressed and proud To frame the value proposition in the pharmacoeconomic model for one time therapies like SR29,001 and our approach to the payer community, pricing, value based agreements and the like will be in So I have the frame of that value framework itself. And the one thing I will tell you qualitatively at least and that we'll at the right time talk quantitatively Is that the value that this therapy will bring to Duchenne patients is going to be significantly greater Then the cost of this therapy to the healthcare system, which is what we all should want.

Operator

Thank you. Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.

Speaker 8

Good afternoon. Thanks for taking my question. With regard to manufacturing, can you just provide us with some details of where you stand On inventory as you look to this launch and then the breadth of your manufacturing relationships in order to address the supply that's required Over at least the 1st year or 2nd or for 2 years of launch here.

Speaker 2

Sure. So we are building inventory as we Speak to be ready for a launch. So that's obviously an ongoing activity with Catalent. It's a high priority for us and fortunately also a high priority So we're in great shape there. And that's great for launch and we're in great shape there.

Speaker 2

If you look down the road, longer term, of course, we also have our relationship with Thermo Fisher. We have an entire standalone site with Thermo Fisher, one of the decisions we made in connection with our PLA submission was not to try to get 2 sites Approved at the same time, the complexity associated with that would have created a significant risk of delay. And I think as we've said A million times, delay is not something that patients with Duchenne can have. So what we will do post launch is work with the division to get the Thermo Fisher site up and running and The good news is that launch our site with Catalent and our suites with Catalent is sufficient For launch of the therapy and serve the community.

Operator

Thank you. Our next question comes from the line of Gil Blum with Needham and Company, your line is now open.

Speaker 4

Good afternoon, everyone, and thanks for taking our question. Doug, in your earlier comments, you mentioned that the company is planning to start some of the other studies, including non ambulatory patients and The clearing of antibody studies,

Speaker 2

what about planning a study in younger patients? I'm assuming that As with all gene therapy, younger is usually better. Thank you. Yes. Well, let me comment on that last Keith, first, it is extremely important that we get to younger patients as well.

Speaker 2

I want to be very clear. But I want to be also clear that there From our perspective, there is no place across this journey of Duchenne where the intervention of a therapy like 9,001 that Restore functional dystrophin to patients won't be beneficial. There is no trial that's Beyond value, that's important to remember. So if you're 19 years old and you've been in a wheelchair for 5 years, You are as valuable to us as a very young child. So that's why we're very focused on the non ambulant side, but we are spoken on the very young as well.

Speaker 2

We've already dosed Kids that are down to 3 years old, Luis, you might want to comment on other plans we have to dose much younger children as well.

Speaker 3

Yes. We dosed 3 year olds in our 103 study and then we're also planning an additional study along with Roche to dose even younger than the 3 year olds that begin in short term.

Operator

Thank you. Our next question comes from the line of Tazeen Ahmad With Bank of America, your line is now open.

Speaker 3

Hi, good afternoon. Thanks for taking my questions. I guess, Ian, I just wanted to clarify a comment that you made regarding write offs of certain batches of the company's products That weren't meeting quality specs. Which products were they? Can you share and have you resolved that issue?

Speaker 3

And then also maybe just to follow-up on comments that Doug made regarding inspections being completed. Can you also confirm whether or not FDA has any comments on the inspection? And if they have, have they been resolved? Thanks.

Speaker 4

Sure. I'll take the first one first. That was regarding the PMO. This is just part of our Manufacturing process, if you look back over several quarters, that's happened. So, this is just something That's part of the normal manufacturing process and there's some batches that don't meet specs and we have to write it off, but nothing to be Concerned and should be expected continue to go far.

Speaker 2

And then as it relates to the second question, all of the inspections are completed and any of the observations have been entirely satisfied. So we're in great shape from an inspection perspective.

Operator

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

Speaker 3

Hi, guys. Thanks so much. I actually have a couple of questions on EMBARK. I'm curious what percent of patients have completed that trial? Just Trying to gauge how back end loaded enrollment was.

Speaker 3

And then also how frequently do you measure NSA? And how are missing data imputed? Thank you.

Speaker 2

No, I can't answer the last part, but the first part on the completion.

Speaker 3

The study was completely enrolled last fall in terms of the so we can expect the 1 year endpoint So to close out this fall with the study report early next year. In terms of the NSA, these are The primary endpoint for the MSA is at 1 year, but we measure it at intervals prior to that certainly, part of the 1 year endpoint.

Speaker 2

We'll update on the stat plan when we announce the results.

Operator

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

Speaker 9

Hey, guys. Thanks for taking the question. Just another one on the 9,001 launch.

Speaker 10

Do you

Speaker 9

have a sense of how many patients might want to Switch from some of your PMO therapies and how do you plan to manage that? Thanks.

Speaker 2

So, let me say 2 things. First, we don't anticipate at launch a significant impact on our current PMO revenue, just from a revenue perspective, in the long run, one should assume some significant cannibalization. It won't happen Early on, to the extent that the patient wants to switch from PMO to have access to the gene therapy, we will embrace that And we're excited for them.

Operator

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

Speaker 3

Hey, guys. Thanks for taking my question. I just wanted to go back Some of the questions on the payer conversation so far. Can you just, tell us a little bit about whether any of your conversations so far have about kind of restrictions and the coverage policy post embark. Thanks.

Speaker 2

We intend to launch this therapy and work with payers to get access to this therapy immediately. I would remind folks that we have 3 approved therapies today, XONDYS, VYONDYS and EMONDYS, all of them were approved via the accelerated approval pathway. And the team has done, in my opinion, an absolutely brilliant job of working with payers to ensure rapid access for patients Who are amenable to those 3 therapies. We'll take that same execution focus. We will apply it to 9,001 And we anticipate that payers are going to respond well, given the robustness of our data and that kids are going to have access immediately.

Operator

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

Speaker 10

Yes. Thanks for taking the question and best of luck obviously. Can you talk about how you view capital deployment In a post approval role, you obviously have a lot of studies we've talked about. You have to build the label out. You also have limb girdle.

Speaker 10

And I believe your Pipeline is described as 40 compound feet. So that sounds like a lot of R and D, and I'd love to hear your thoughts around that, which is Probably money extremely well spent, but maybe if that also includes your thoughts around pricing of 901?

Speaker 2

Well, I'm going to say 2 things. I'm going to turn this to Ian, who can comment about capital deployment in a more general sense. I mean, let's first, We are going to significantly focus on research and development and the like, of course, and we will continue to do that deep into the future. That Our current plans assuming that we're approved and our plans come to fruition would have us being profitable next year. As it relates to the pricing for 9,001, the pricing of 9,001 will occur in the context of the pharmacoeconomic models we use To ensure that the value is appropriate for that therapy and that as I said before that the value Comment on the capital deployment plans?

Speaker 4

Yes. No, I think you're exactly right. We're obviously going to continue to invest in R and D, but we're also going to Be focused on profitability and follow metrics that will guide that and ensure returns for shareholders. But obviously, as you know, investing in our R and D is going to lead to continued growth and we're going to be focused on Moving programs forward that have high probability of success based on the data which we generate, we also think The market conditions right now lend itself to being in a position to Partner or acquire technologies that we think are scientific breakthroughs, as we continue to build out our pipeline. We're going to be very consistent with the approach that we've used previously.

Speaker 4

So obviously, put us in a position where we're one of the leading emerging biotech

Operator

Our next question Comes from the line of Kristin Kluska with Cantor Fitzgerald. Your line is now open.

Speaker 3

Hi, good afternoon and best wishes to your team this month. Can you talk about the latest as it relates to looking at some of the ways you're looking to address pretreatment for those with pre existing antibodies To AAV, I saw that you're presenting with Hansa some preclinical data at ASGCT. The agenda was literally just released about an hour ago. So can you talk about Some of those efforts, please?

Speaker 2

Yes. So there are 2 approaches and there's more to say beyond this, but we Okay. Look, broadly there are 2 approaches that we're taking right now. 1 is, of course, with our partner, Hansa and enlithidase to Cleave and therefore remove antibodies that would stand in the way of a child getting 9,001 and the other is using apheresis To clear, antibodies, is there anything else you missed at that, Louise?

Speaker 3

Hi, Skye. We have strong preclinical data with both approaches. And as Doug mentioned, we're I'd like to start 2 clinical studies on both approaches. So this has been important to us to make sure that we can serve the entire community.

Operator

Thank you. Our next question comes from Hartaj Singh with Oppenheimer and Company. Your line is now open.

Speaker 10

Great. Thank you. Thanks for the question. I just got a quick question on the voyaging study in LGMD. Assuming you get that Phase 3 started with commercial representative material by the end of the year, how much insight will the Phase 2 and the Phase 3 give you Into the other LGMDs, I mean, could you move faster?

Speaker 10

Could regulators be amenable to Looking at them holistically versus very separately, and then how easy will it be to scale the manufacturing

Speaker 2

Yes. Let me say broadly. Once seen public presentations from Doctor. Peter Marks, You'll know that his ultimate goal, his long term goal is to get to a place where you can build therapy upon therapy And particularly if you're using the same facet, which we are in connection with the LGMDs that you should be learning from each of them Being able to greatly shorten the timelines, I think a form of that will occur with our limb girdles. But we are in the early days of limb girdles.

Speaker 2

So It won't be fully formed like that as we are moving through. We do get significant Value and learning from each of these programs that we apply to the next one, the limb girdles are benefiting Enormous sleep of 9,001. Remember, most of our limb girdles, the majority at least use the same promoter as 9,001 And they all use the same capsid R874. So there is this virtuous cycle where we ought to be able to start moving faster and faster over time. It's going to take some time to do that.

Speaker 2

I would say, we and finally, I'd say on manufacturing, we definitely benefit from prior knowledge as we move forward, But each of these programs is its own program and requires some bespoke elements, including, for instance, Much of the assay work. Some of the assay work could be very translatable, but a lot of this assay work is bespoke From program to program, and so that does take some time, and it will take some time with respect to some of these loan hurdles.

Operator

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

Speaker 11

Hey, good afternoon and thanks for taking my question. I just wanted to clarify one of the comments you made in your prepared remarks. You brought up Embark in the context of the AdCom. Could you clarify and frame that question again?

Speaker 2

Oh, I think oh, yes. One of the issues that we just need to discuss at the Advisory committee is that, MARQ, which is our proposed confirmatory trial, obviously needs to complete and complete on time. And so one of the Obviously, reasonable questions one would pose is, are you confident that if we give you an approval now on an accelerated basis that Embark will in fact Complete that there won't be something about the approval of this therapy that would somehow influence the ability to successfully complete Embark. As you know, Embark actually was fully enrolled as of last year, September of last year. So I think relative to Other accelerated approval therapies, we are in a particularly advantageous Brilliant position with respect to the completion of our confirmatory trial.

Operator

Thank you. Our next question comes from the line of Joseph Schwartz with SVB Securities. Your line is now open.

Speaker 12

Hi, everyone. Thanks very much. Since we're so close to the panel, I was wondering if you have seen the FDA's briefing documents at this point and if You can give us your gestalt about their tone so that we can

Speaker 2

be more prepared for what to expect. Yes. As I've said, We are 10 days away and counting from the advisory committee meeting. I want to be very clear about this. What we're all doing together right now is extraordinarily serious.

Speaker 2

It's important to us and it's important to our investors, But it is vastly more serious and important to the patients living with Duchenne muscular dystrophy. This is literally a potential line for debt issue So in regard to that, we are going to be mission driven. And what that means to us is we're going to stay very focused On prosecuting our BLA, preparing for our ADCOM, we're not going to discuss the ADCOM or the briefing books or the Regulatory process right now, we're going to do a we're going to get ready for and in my humble opinion, we're going to do a brilliant job. Sorry, I'm putting a lot of pressure on you, Louise. We're going to do a brilliant job of presenting what I believe to be the wealth of evidence that supports The conclusion that 9,001 and the amounts made by this therapy is reasonably likely to predict clinical benefits.

Speaker 2

So in light of that With all respect and apologies for not answering your question, I'm not going to answer your questions on the regulatory process through the advisory committee until After day 12, and then we're going to all come together and I'm going to be thrilled to talk about all of these issues with you.

Operator

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

Speaker 4

Good afternoon. Thanks for taking my questions. Maybe going back to the manufacturing ramp, Doctor. King, some expectations on how many patients do you plan to treat for 9,001? And secondly, on 9,003 linguro program, obviously, you commented the Phase III will start in the second half of the year.

Speaker 4

Is there any possibility for accelerated approval pathway for this program as well? Thanks very much.

Speaker 2

So answering the second question first, ultimately, we will propose a form of accelerated approval For 9,003, this is an ultra, ultra rare disease. We are the 9,003 makes The native protein, the absence of which is the sole and exclusive cause of the demise and ultimately the death of patients that suffer from 9,003. So Certainly, if we see great results in the confirmatory triad that in the Phase 3 that we're starting, we are going to propose an accelerated approval pathway. As to the first question, I'm not going to provide numbers on numbers of patients other than to say our goal is to treat every patient that's amenable To this therapy as quickly as reasonably possible, and so we're preparing ourselves to have a robust launch.

Operator

Thank you. Our next question comes from the line of Gavin Clark Gartner with Evercore ISI, your line is now open.

Speaker 2

Hey, thanks for fitting me in. Just to follow-up on the LGMD2E question, So the short answer is we're going to start that study before the end of this year. We will align with the agency on that along the way. We've got work to do there. Obviously, we've been prioritizing 9,001 right now.

Speaker 2

The functional endpoint would likely be a form of NSAA, which I think is called NSAT, if I'm not It's been adapted for Limb girdle, but we'll obviously also be looking at expression and safety with respect to 9,003.

Operator

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

Speaker 8

Hi, guys. This is Annette on for Ritu today. Can you confirm the timing of Embark top line data? Have there been any changes to that? And then any updates to your long term revenue guidance of $4,000,000,000 in 2025?

Speaker 8

How will you be revising this if 9,011 is approved this month.

Speaker 2

Our forecast assumes approval this month. So I'm sorry, what the first question was?

Speaker 3

Embark readout.

Speaker 2

Yes, there's been no change in the Embark readout. Embark was fully enrolled as of September of last year. It's going swimmingly, it's obviously blinded. So It's being executed swimmingly and we anticipate top line really again in this year, early next year.

Operator

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

Speaker 13

Hey, good afternoon. Thanks for taking my question. I guess kind of jumping off on some of the questions around the ability to successfully And Bartha, you mentioned, can you just talk to us about study conduct? And is there any risk That accelerated approval could put study conduct at risk. I think you said before that Most U.

Speaker 13

S. Patients have actually had their last visit. So can you just kind of review what you would say to Someone questioning whether or not you're going to be able to successfully maintain study conduct on IMbAAC once you have commercially available 9001 under

Speaker 2

There's no risk, 0 risk. The study was enrolled, fully enrolled September of last year. All of the kids in Part 1 of the study have received their doses. The kids on crossover are being dosed even as we speak. Any kid that has yet to be dosed will be dosed in the next few months maximum.

Speaker 2

So the margin is going very well. We'll read out On time, regardless of whether we receive accelerated approval. There's no reasonable risk Good afternoon.

Operator

Thank you. Our next question comes from the line of Anupam Rama with JPMorgan, your line is now open.

Speaker 2

Hey, guys. Thanks so much for taking the question. On SRP-nine thousand and three, Could we see any portions of the Voyaging data this year maybe starting ahead of the commercial material Phase 3? I think that we are only committed to like enrollment completion, but not data itself potentially. But just wondering if you could see some Yes.

Speaker 2

I'm sorry for jumping in there. It's not clear

Operator

Thank you. Would now like to hand the conference back over to Doug Ingram for closing remarks.

Speaker 2

Well, thank you all very much for joining us this evening. Thank you for your questions and thank you for accommodating my request that we not talk about the regulatory process or the advisory committee. As much as you want to ask questions about that and as much as I want to answer questions about that, if I'm going to be honest and direct with you, I look forward to obviously, we all look forward to May 12. That advisory committee meeting is an unbelievably important moment for patients living with Duchenne. I'm extraordinarily confident in the ability of this team to present the data well and to frame it brilliantly, as I said before.

Speaker 2

And I look forward to coming back together thereafter and discussing where we are and the path forward. So thank you all. Have a lovely evening.

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Earnings Conference Call
Sarepta Therapeutics Q1 2023
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