Hello, and welcome to the Sarepta third quarter 2012 earnings call. [Operator instructions.] I will now turn the call over to Erin Cox. Erin, you may begin.

Thank you, operator, and thank you for joining today's call. Earlier today, we released our financial results for the third quarter of 2012. The press release is available on our website at www.sareptatherapeutics.com and our 10-Q was filed earlier today. Joining me on the call are Chris Garabedian, our president and chief executive officer; Sandy Mahatme, our new chief financial officer; and Mike Jacobsen our vice president of finance. I would like to note that during this call we will make a number of statements that are forward-looking, including statements about the development and clinical status of Sarepta's product candidates and the potential efficacy, clinical results, intellectual property position, revenues, expenses, potential funding from the government and other sources, and collaboration and partnering opportunities. These forward-looking statements involve risks and uncertainties, any of which are beyond Sarepta’s control. Any such risks could materially and adversely affect the business, results of operations, and the trading price of Sarepta’s common stock. For a detailed description of risks and uncertainties we face, you are encouraged to review the company's official corporate documents filed with the Securities and Exchange Commission. With that let me turn the call over to Chris Garabedian, Sarepta’s president and CEO. Chris?

Thank you, Erin. Good afternoon everyone and thank you for joining us. I’m pleased to provide you with an update and overview of our activities and accomplishments since our last quarterly earnings call, along with our financial performance in the third quarter of 2012. I will soon speak about how the recent data with eteplirsen, our lead program for the treatment of Duchenne muscular dystrophy, has us preparing for a number of activities to move the program forward successfully. But first, I’d like to speak about the financial health of the company. I’m pleased to announce that we have strengthened our cash position in recent months, and have a current cash balance of approximately $57.4 million as of today. This cash position was achieved through utilization of our ATM, or at the market, facility, in addition to warrants that were exercised in the month of October. We have drawn down $38.7 million between September 6 and October 16 from our ATM, with the majority of the $38.7 million being drawn down prior to receipt and release of our 48-week data. The overall average price of the stock sold under the ATM was $19.05, on a total of 1.984 million shares. Additionally, we started to receive proceeds from the exercise of warrants in October, and raised an additional $5.6 million in cash as of today, November 7, on the exercise of approximately 532,000 shares. We also filed a shelf registration today as our previous $100 million shelf was largely accounted for due to the $40 million ATM facility and the $46 million registration of our outstanding warrants. Our new shelf of $180 million will replace our existing shelf, and allows flexibility to continue to finance the company’s operations for the coming years. The company has made significant changes to our operations…

Thank you, Chris. Since this is my first week on the job, Mike will be providing an update on our financials for the third quarter, but I just wanted to express how excited I am to be joining Sarepta and to become a part of the management team. The data that Sarepta has generated this past year highlighted to me the promise of this technology platform, and I believe represents the potential to build Sarepta into a leading biotechnology company in the industry. The recent eteplirsen data in DMD was remarkable, and I’m excited to work for a company that is trying to make drugs available for a devastating disease like Duchenne’s muscular dystrophy. Now I’d like to turn the call over to Mike Jacobsen, who will walk through our third quarter financials. Mike?

Thanks, Sandy. In the third quarter of 2012, we reported an operating loss of $6.9 million, compared with an operating loss of $11.3 million in the third quarter of 2011. This decrease was primarily due to lower research and development expenses related to our non-DMD programs. Revenue for the third quarter of 2012 was $7.6 million, and is very comparable to one year ago. Compared with the prior year quarter, we had a $1.1 million increase in the Marburg contract revenue, primarily due to the timing of subcontracting activities and a $900,000 decrease in our Ebola revenues due primarily to the stop work order we received in early August. During the third quarter, we did enter into a $3.9 million contract with the U.S. government to evaluate the feasibility of delivering our Marburg drug product candidate intramuscularly. This new IM contract had minimal impact on the third quarter results, and almost all of the revenue associated with the contract will be recognized in 2013. With regard to research and development, our expenses were $10.9 million in the third quarter of 2012. This was a decrease of $4.7 million from the prior year quarter. The decrease was primarily due to a $4 million reduction in personnel related costs and non-DMD proprietary research associated with our restructuring that we did in December of last year. We also had a $1.3 million decrease in our DMD program costs, based on the timing of clinical and manufacturing activities. These decreases were partially offset by a $400,000 increase in our Marburg related costs due to the natural fluctuation in the activities that are required under the program. G&A expenses for the third quarter were $3.6 million, which was an increase of $400,000 from the prior year, and that was due primarily to some increases in…

Operator, it’s fine to turn the call over to questions.

Thank you. [Operator instructions.] Our first question is from Ted Tenthoff with Piper Jaffray. Please go ahead with your question.

When it comes down to the confirmatory study, did you say that that would begin in 2014? And I guess kind of a high level question, what’s going to take so long to start that confirmatory study, and also to begin the exon 45, exon 50 INDs and clinical studies? I know you guys are a small group, but what’s going to take that full 12-month period to really get those balls rolling?

This has been pretty consistent to our previous guidance, in that we had, prior to the 36-week and 48-week clinical trial results, we had really halted a lot of our scale up manufacturing production plans. With the encouraging data, we restarted a lot of those activities. And so there’s a few things that need to take place before we begin dosing in our confirmatory study. So first we have to figure out what that trial design is going to look like, and that’s going to be based on our FDA feedback and our discussions with the regulators in the first quarter of next year. Then we will determine, based on the design of that study, the inclusion criteria, the size of that study, the site selection, how many sites we need, what are the best sites to include in that type of study. There’s a lot of planning activities that would take place in the second and third quarter of next year. The enrollment we would expect would begin in the latter part of 2013, and the dosing would begin in that first quarter of 2014 based on drug that would be ready for release. This means that three batches, with three month stability, validated production batches, potentially with a new scale of manufacturing. That would have to be cleared for release. So those activities take time. We have already started on many of those activities. But again, the three validated batches, with three month stability, is probably the biggest factor in dosing starting in 2014.

So it’s really the drug supply. That makes a lot of sense. And is that the same factor with respect to the IND filings, or is it just that you want to be focused on eteplirsen, and obviously resources are limited?

I’d say it’s a combination of factors. Obviously we would have to scale up production to be ready for clinical studies for the other exons as well. So that’s one factor. The other factor is just the feedback that we want to gain from the regulators through pre-IND meetings on these other exons. And we are trying to do two right now, and potentially a third and fourth additional DMD drug almost simultaneously. And part of that is by design, in that we hope that we could construct almost a companion confirmatory study with these other exons, where we could enroll - unlike eteplirsen, which would enroll only those amenable to an exon 51 skipping drug - if we could time and sequence these drugs so that we could do a study that would enroll, for lack of a better word, all comers, those who are amenable to an exon 45, an exon 50, an exon 53, maybe an exon 44. That could be very powerful in gaining the additional drug approvals, and aspirationally, lead to a class approval for the rare exon targets. So we have pre-IND meetings we need to get through. We need to complete obviously all the preclinical animal work that needs to be done to submit an IND, and we’re trying to do this simultaneously with multiple exon skipping targets. And so all of that combined really puts us more comfortably in filing INDs in the first half of 2014.

Our next question is from Christopher Marai with Wedbush Securities. Please go ahead with your question.

First, I wanted to ask about the ATM. It appears you’ve taken down about half of that, or $20 million. Given the liquidity in your stock, and the levels we’ve seen recently, it seems to me you could have taken it all down at attractive prices. So I was wondering, since you didn’t, could we conclude that you’re very confident about the potential for other non-dilutive financing options such as partnerships in the future? And then could you perhaps elaborate on that and help us understand how you think about using the ATM to meet funding needs going forward?

I think in the script it gives some of the detail. But basically we pulled down half of the ATM prior to the 48-week data release. So that was a strategic decision, because we did not know, obviously, what the data would garner. And so the average price that we stated includes the majority of the amount that we pulled was done prior to the October 3 release. The window is not open throughout the month and a couple week period of time that we drew down from the ATM, particularly in anticipation of the release and the subsequent release of the 48-week data. And every company is different in terms of the risk that they will take regarding being in the market proximate to a news event like that. But we did begin to draw down after that as soon as we determined it was okay to do so. So we ended up drawing down most of the rest of the facility, short of a couple million, post the 48-week data. And so that came to that average price of about $19 in terms of issuance. I’ll just add that we did better than the average weighted price in almost every day that we were in the market. We did comparable to the average weighted price, if you take from September 6 through October 16, which was the period of time. So effectively, we were able to issue shares in that period of time with minimal or no effective discount. So we thought we used it very efficiently, that it was a good financing vehicle, and again, it allowed us to take almost a $40 million in the ATM in a very short period of time.

Could you perhaps help us understand what the rate lending step is here for bringing the other exons into the clinic? Actually all four of them, not just the two new ones you mentioned today.

Just briefly explaining the kind of step-wise activity, first we need to optimize the sequence and select the sequence that will be brought into the preclinical testing. And so we have engaged in that process on exon 45 and exon 50, and we are close to preparing to embark on the preclinical testing that would be required as part of an IND filing. There’s a variety of animal testing that’s required to get an open IND, very similar to what we did with eteplirsen. And we need to talk to the FDA to ensure that the program that we’ve shaped, based on precedent with Sarepta’s drugs, but also based on other dialog we’ve had in the past with the FDA, we will determine if everything is being met to qualify to have an open IND in these pre-IND meetings. So those have to take place, and we have to have room to adjust or augment what those preclinical studies and activities will be. The same is true for the additional exon skipping drugs. We need to do the appropriate screening and validation of the exon efficiency to select the target sequence that we would bring in. The reason this step is very important is because this could be an important linchpin for leveraging data that we collect across multiple of these initial exon skipping drugs, so that when we look for future rare exons, we can use the same type of validation assays and methods to determine exon skipping efficiency and lead sequences, where we may not be able to get the type of clinical data that we’re afforded to get with the more prevalent exon. So there’s a variety of factors that influence that, but largely it’s the sequence identification and selection, screening, and then the preclinical program in conjunction with the pre-IND meeting to determine if we have the appropriate data to file. I’ll also just state that once that occurs, to be ready for clinical studies, the agency typically wants to see three months of stability data in the manufacturing process that you use to produce the drug, and so before release of that drug, you’d expect three to four months on top of that to get into clinical testing and dosing.

In terms of these candidates, do you expect to do traditional Phase I studies for them as well? Or do you think that you could do sort of a safety efficacy study all together with regard to the fact that these are a similar class to eteplirsen?

That’s a good question, and I don’t think we have a definitive answer at this time. I think we are firmly in the belief that we have the same backbone chemistry, we would use the same manufacturing process that we’re using for eteplirsen. All of the experience we’ve seen to date suggests that we have similar sequence-independent pharmacokinetics and safety profile. I think if we establish that with a standard dose that we get similar exon skipping efficiency and can show dystrophin production, I think you start to build a case that these drugs are very similar, almost identical, with the exception of the specific genetic sequence information that’s attached to the backbone chemistry. So I think it’s premature to state what the development program is going to look like, but part of the dialog in a pre-IND meeting is going to be gaining some insight into how they’re thinking about these broader follow-on exon skipping drugs.

Next question is from Bill Tanner with Lazard Capital. Please go ahead with your question.

Chris, just on the ATM out of curiosity, was there any amount of that that had to be taken down when you actually put in the facility?

No, the ATM facility is at our discretion of when we want to issue shares. We don’t disclose discussions that we’ve had strategically with Sarepta’s board in terms of what is the right strategy to implement the ATM. But no, ATM facilities are typically at the discretion, except if you’re in possession of material non-public information, then typically you’re not able to issue shares during those so-called blackouts.

No, I understand that. I was just wondering if when you put that in, was there some requirement that the company take some down at that point in time, but it sounds like that’s not the case. Just trying to get a handle on when the company exercised the ATM in full, everything that was done in the third quarter was done just proactively.

Yeah, there was no contractual obligation. We could have decided not to draw down on the ATM at all.

Okay. And then as it relates to the manufacturing, if money was no object, how quickly could you ramp up the manufacturing to meet the market demand, and I guess maybe the demand just by the numbers of kids that have exon 51 mutations? And then could you maybe ballpark what the cost of that would be to get you to the point to where you could meet the entire market demand?

It’s not an issue of the cost of that, it is the issue of scaling up the production process, and having a larger scale validated production method. And remember, this is the first time that we or anybody in the industry has scaled up these types of morpholino synthetic peptide-like molecules as oligos. I mean, there’s not a lot of synergy in terms of any learnings that have occurred with this phosphorothioate chemistries like [unintelligible]’s drug that I’m sure they scaled up. And so we’re really charting new territory, and we know what we need to do, and we’re set on achieving that. But it’s not anything that we believe a partner could accelerate our activities, because of the financing needs. It really is executing on what we know we need to do, and we believe we can manage the costs of that. Remember also, these are oligos, so they require the subunits. And this is one, a large dose. It’s a large [mir] length. It’s a 30 [mir], eteplirsen is. So we have to produce the various subunits, the As, the Cs, the Ts, the Gs, and then have API final drug product production from there. So we are setting forth, 2013 is going to be a big year for us in the efforts to scale up manufacturing, to do all the setup that’s required, and to start producing drugs that we can use in clinical studies and ultimately for other purposes such as commercial access. So again, I just want to dispel the notion that it’s because of a lack of funding that is “slowing us down” or something.

But I mean let’s say that if we’re thinking strategically that right now you’re planning, obviously, to scale up to a point that you could conduct a confirmatory study of whatever size that would be, and presumably it would be a fraction of what the ultimate market opportunity would be. So then going from starting, to scale, to meet a clinical requirement to, let’s say, maybe mid-next year, you hear from the FDA that you get accelerated approval, there’s not going to be much of a time lag in going from, we can fulfill the needs of a clinical trial, shifting gears to we can fulfill the needs of the market. Is that fair to say?

Let me provide some clarity. We have been producing eteplirsen at what I would describe as small-scale production. And that was sufficient to supply drug for our current ongoing 12-patient study. We knew that we would need to increase the scale, let’s say get to mid-scale production, to be able to support pivotal studies or confirmatory studies, or what would be needed for just registrational activities related to eteplirsen as well as some of the early development work needed for the other exons. We know that we will have to get to large-scale production capacity to be able to launch commercially and satisfy what we believe the demand might be for eteplirsen in the marketplace. So we had already initiated and started plans for this mid-scale production to support the clinical studies that I’ve described. We’d be ready with that drug in the first quarter of 2014. But the large-scale production is a parallel effort. That’s something we would have to do as well. Many companies would sequence this. They would get to three validated batches with three-month stability at a mid-scale production before moving to large scale. We’re not anticipating sequencing this. We believe we can do this in parallel so that we can prepare for the potential of an early commercialization. However, we want to talk to the FDA to understand how feasible that scenario is before we move aggressively into the large-scale production process. But we are already doing that in terms of the planning, the paper exercises around that, what that would look like, assuming we get a positive nod from the FDA in terms of an acceptable accelerated approval filing. So I hope that answers your question in terms of how we’re managing these various activities and what it means to supply for clinical trials versus supplying for commercial demand.

No, I’m going to take that. That’s helpful. I think the parallel aspect of it may be something that is perhaps lost in the conversation. Just a couple of really quick questions as it relates to meeting with the FDA. It’s our understanding that they’re already assembling background information from others to better inform them as to how they should think about this. And I apologize for asking a question that may be difficult to answer, just from the speculation perspective, but do you have any thoughts as to, let’s say you meet with the FDA, how quickly you could have some feedback from them as to whether or not an accelerated path is viable?

As I mentioned, we’re not going to make that decision about whether we pursue an accelerated approval filing until after we meet with the FDA. What I’ll say is that these are very nuanced discussions often. And we ask certain questions, we get specific information in response to those questions. And we try to ask questions to elicit the most unambiguous answers that we can imagine, so that we can be better informed. There’s dialog back and forth, written between the FDA and the company prior to a meeting, and then there’s typically discussion of minutes that follow the meeting. I think we are going to approach this in a very measured fashion in that it’s unlikely that we would try to interpret the results from an FDA meeting without confirmed formal meeting minutes to give us the confidence of how we’re going to proceed. And that can sometimes come 30 days or so after the actual meeting itself, before you finalize those and formalize those meeting minutes for the files. So obviously we don’t know. We don’t know how the FDA is going to react. We don’t know what information is going to be gleaned between now and then at the meeting, and so it’s hard to say how confident we’re going to be, how determined we’re going to be, but it’s going to be based on that FDA meeting and the feedback we get. And that’s all we’re prepared to say at this time.

Right. And one last question. And again, maybe it’s unfair to put you on the spot, but it seems like one of the sticking points potentially of an accelerated approval could be how do you actually conduct the confirmatory study if you’ve got the drug available in the market. And I don’t know if you would care to comment on strategies that you’ve contemplated that you might take to the FDA and say this is how we think we can make it available as well as preserve the ability to do a confirmatory study.

You know, Bill, we do. We think about that quite a bit. And we discuss it internally, various trial designs. I know we lived first-hand, when we were trying to get approval of the current study with eteplirsen, how challenging it was to get IRB approval with the placebo arm, with an investigational therapy that had shown at least some dystrophin production in a previous study. The community, you know they are of the opinion that you should avoid a placebo if you can in a study, and that’s a lot of the feedback we’ve gotten. But we also know that the FDA is the important customer here, to make sure we satisfy the requirements. So what we’ll be doing is having that dialog with the FDA. If it looks like we’re having a constructive dialog around an accelerated approval filing, then we will be ready to discuss how we might augment a clinical study as a result. There are ways that a study can be conducted without a placebo arm, but again it’s premature to speculate as to what we might do without the FDA feedback. But to share some examples, you could envision an untreated cohort of DMD patients who might be amenable to other exon skipping drugs, who have similar inclusion criteria. You follow them similarly, and we see how they perform without treatment, because we don’t have the drugs to treat those boys. There are obviously a lot of companies in the rare disease area that are making the case for comparing to natural history and looking at endpoints on what would be typical of a DMD patient that you select for a study, and is that a basis for approval. There are ways to do time to event, where you could have rescue therapy, where you don’t have to wait until a boy loses ambulation in a study on placebo, where it may be irreversible. They may never be able to get the ability to walk again. But if they drop below a certain threshold on other outcomes, that they would qualify for the study. There are various ways to consider this, and we’re thinking about all of them, and we’ll be going into the FDA with the right strategy to discuss all of these options depending on their openness and the signals around an accelerated approval filing.

Our next question is from Reni Benjamin with Burrill.

Chris, can you talk a little bit about, or provide any color regarding, the secondary endpoints or benefits, whether it’s pulmonary function tests or EKGs? Just with the strength of the data, I imagine that a lot of clinicians are probably evaluating a whole spectrum of tests at this point. Can you give us any color regarding this?

At World Muscle Society we did share the two nonambulant boys, their pulmonary function scores. And the reason we did that is because in an ambulatory DMD population, we typically don’t see a decline. It’s typically a compensatory decline after they lose ambulation. Then you start to see early signs of progression on pulmonary function. And then sometimes cardiac function lags after that. And so we really collected those measures as safety endpoints to show that a stable ambulatory DMD population would remain stable. However, we thought for the two nonambulant boys that this was something that was meaningful, that they had been able to maintain good pulmonary function despite being nonambulant now for several months. We’ve talked a lot about the other exploratory clinical endpoints that were quite variable and less sensitive than the 6-minute walk test, and so now that the placebo delayed treatment patients are now on drug, it’s even more noisy in terms of being able to interpret anything from those other clinical endpoints. But we’ve continued to capture these data points, and we will continue to capture safety and every 12 weeks or so these measures that you’re describing. I think it’s important to understand that although it’s only a 12-patient study, we are capturing volumes of data, and this does take time to sift through and interpret. We are still going through the 48-week data set just to try to understand what the data is telling us to prepare our briefing document. It’s one of the reasons we wanted to take the appropriate amount of time to understand the data, so we can prepare the right briefing documents, ask the right questions, and prepare a good discussion with an understanding of the full 48-week data set as we go into the FDA meetings. We think this preparation work is very critical, and very important to understanding our drug, as we start to have these dialogs with the FDA around confirmatory studies and accelerated approval. But again, as we get additional information on these data points and other ones, and as we get follow-on information, we will be sharing those at the appropriate time and the appropriate venue accordingly.

And then just confirming, you mentioned the next data collections will be at week 62 and 74, is that correct? And I assume that’s going to be before the FDA meeting. Would we see those results?

At this time, it’s not clear when we would have those data points ready for presentation. So we’re going to be continuing to work with our site, our CRO, on transfer of those data, the analyses, etc. And again, we will communicate our plans for disclosure of those at the appropriate time.

And just maybe some thoughts regarding the broad aspects of the platform, and the platform technology. Because I know, at least in the past, there’s been preclinical results in a variety of indications. I think one indication was hemophilia. I know you have your hands full, but are you starting to think at all about broadening it to other indications outside of DMD?

Yeah, we’re thinking about it in two ways. One is in the rare genetic disease area. There are other applications. With the encouraging biochemical response we got in Duchenne, we do think there are other rare genetic diseases that this type of technology could be applied to, and could help us fuel a pipeline for the future at Sarepta. It is a little bit of a function of bandwidth. Our DMD follow-on products are almost a pipeline in itself, and so we’re evaluating which additional targets can we include beyond DMD for internal drug development, and would we might want to consider a partner. But I also think the platform itself has a lot of application beyond rare genetic disease, as we’ve shown in the infectious disease space, and in areas that we would not be prepared or ready, or don’t have the bandwidth, to pursue on our own. So if you think about the oncology area, this is a platform that could play very nicely there. We could consider partnerships on the platform for specific disease areas like that with specific partners. So we are focused right now on DMD activities internally, and as it relates to business development, are focusing a lot of attention right now on the prospect of an ex-North American partner. But we have thought about preparing the right business development decks with the new data that we’ve had generated over the last few months and soliciting interest in a platform deal. So I’d say it is something that’s of interest to us, and stay tuned as we plot out the strategy with that and look forward to future communications regarding other business development activities.

Just one last question regarding manufacturing. You had mentioned previously about mid-scale manufacturing versus large-scale. Can you just help us think about quantitatively the difference between mid-scale and large-scale?

We’ve not disclosed the details around our manufacturing plans. It’s simpler to state that our small-scale production was producing enough drugs for a 12-patient study. A mid-scale production campaign would be four to fivefold greater scale in terms of active drug product. A large-scale would be five to six times mid-scale production. So if mid-scale is five to six times greater than small-scale, and large-scale is five to six times greater than mid-scale, then you’re talking kind of a 30-36 fold greater capacity with large-scale production than we currently have with our small-scale production.

We have no further questions at this time. I would like to hand it back to Chris Garabedian for closing remarks.