Welcome to the Second Quarter 2015 Sarepta Therapeutics Incorporated Earnings Conference Call. My name is Allen and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Ian Estepan, Senior Director of Corporate Affairs. Ian, you may begin.

Thank you, Allen and thank you all for joining today's call. Earlier today, we released our financial results for the second quarter of 2015. The press release is available on our website at www.sarepta.com and our 10-Q was filed earlier this morning. Joining me on the call today are Ed Kaye, Sarepta's Interim Chief Executive Officer and Chief Medical Officer; and Sandy Mahatme, Sarepta's Chief Financial Officer. I would like to note that during this call, we will be making a number of forward-looking statements about our focus and priorities, upcoming regulatory milestones, efforts and timelines for eteplirsen and our follow-on exon-skipping product candidates in the U.S. and EU, including the potentials and timelines for an FDA eteplirsen NDA filing decision, advisory committee meeting, PDUFA date and approval of eteplirsen, our plans to disclose the results of our fourth biopsy data and potential for the protocol that was developed in consultations with FDA to allow for reliable dystrophin analysis. The potential timing of and our plans to discuss and share certain data with the EMA and the potential MAA submission for eteplirsen. Our vision to treat patients globally, the projected date to complete enrollment in the EU exon-53 trial and for MOVI studies in the U.S.; the potential consistency of safety and tolerability profile of exon-53-skipping agent in humans with that of eteplirsen; our potential plans, timing and trial design for the [Essence] study in the U.S. and EU and for the 4045-101 study in the U.S. The potential timing of and our ability to satisfactorily respond to FDA requests for preclinical rat safety data to the exon-53-skipping product candidate and any potential impacts on the timeline for the Essence study. The driving forces behind our clinical trial design, goals, plans and commitments. The potential availability of additional funds to draw down under our debt facility. The sufficiency of our cash balance to carry us to 2016. Our plans to use FDA draft guidance to inform our efforts and FDA interactions and our beliefs with respect to FDA's responsiveness, understanding and openness. These forward-looking statements involve risks and uncertainties, any of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements as any and such risks can 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're encouraged to review our company's most recently filed Annual and Quarterly Report and other official corporate documents filed with the Securities and Exchange Commission. With that, let me turn the call over to Ed, for both the corporate and clinical update. Ed.

Thank you, Ian. Good morning, everyone and thank you for joining us today for a financial and corporate update for the second quarter of 2015. Today I will provide a regulatory update for eteplirsen our lead candidate for Duchenne Muscular Dystrophy and highlight the recent progress we've achieved in our expanding clinical programs. Sandy Mahatme, our Chief Financial Officer, will provide an update on our financials for the second quarter of 2015 along with a brief review of our manufacturing readiness. To begin the regulatory review, I want to highlight that on June 26th we announced the submission of our new drug application the NDA to the FDA for eteplirsen. I'd like to take this opportunity to thank our entire clinical and regulatory development teams who worked tirelessly to meet our submission deadline. I would also like to acknowledge our sincere appreciation to all of our clinical trial investigators and their staff for your dedication and support to the development of the eteplirsen. Most importantly I would also like to express our gratitude to all of the boys and their families who have made sacrifices to participate in our clinical studies and generate the data that served as the basis of the submission. Needless to say we have all greatly contributed -- you have all greatly contributed to the understanding of our exon skipping candidate and the advancement of science for Duchenne Muscular Dystrophy. Thank you all. I would now like to briefly review the upcoming eteplirsen regulatory milestones and timelines. Following the completion of the submission, FDA has a period of 60 days to evaluate the application to determine if it is sufficient to conduct a full review. If the agency deems that our submission is sufficient for filing we can expect a preliminary review letter from the agency…

Thanks, Ed. Good morning everyone. This morning's press release provided details for the second quarter of 2015 in both an adjusted or non-GAAP basis as well as GAAP basis. The press release is available on the SEC and company websites. The non-GAAP results we will would discuss on this call provide a more accurate picture for ongoing operations and the impact of operations on our cash balance and exclude the impact from the evaluation of our prior outstanding warrants and stock compensation expenses. Please refer to our press release for a full reconciliation of GAAP and non-GAAP. In the second quarter of 2015, we reported an adjusted or non-GAAP net loss of $35.9 million or $0.87 per share compared to a non-GAAP net loss of $24.5 million or $0.61 per share in the second quarter of 2014. The incremental loss of $11.4 million is primarily the result of an increase in expenses due to manufacturing, our timing of manufacturing batches, additional investments in raw materials and increased enrollment in our ongoing DMD trials as well as a decrease of $2.6 million in our revenues associated with our prior government contracts. Adjusted research and development expenses were $26.6 million for the second quarter of 2015 compared to $18.3 million in the second quarter of 2014, a decrease -- an increase of $8.3 million. Adjusted general and administrative expenses were $9.6 million for the second quarter of 2015 compared to $9 million in the second quarter of 2014 an increase of $0.6 million. We had $158 million in cash and investments at quarter end. In addition we prepaid approximately $18 million towards the second half of the year's manufacturing expenses. Further upon acceptance of our NDA we will have another $20 million available for drawdown under our debt facility. This cash balance is more than sufficient to carry us well into 2016, so we are comfortable with the cash runway we have. With that I'd like to turn the call back over to Ed.

Thanks, Sandy. Before we open the call to questions, I'd like to conclude by saying that we feel the release of the FDA's draft guidance for developing drugs for the treatment of Duchenne Muscular Dystrophy and related dystrophy's on June 9th was a big step forward for the Duchenne community as well as the rare disease community in general. The guidance is a combination of an extensive effort led by PPMD that involves the support of patients, caregivers, academia and industry. It is unprecedented for an efficacy group to propose draft guidance in order to incorporate the patient perspective into drug development. We at Sarepta understand the significance of this achievement and would like to thank PPMD for spearheading this effort. The theme that resonates throughout the document is that FDA in making regulatory decisions will consider patient and caregiver tolerance for risk of a serious and life threatening nature of DMD. Patient input including use of patient reported outcomes will be a critical element in assessing risk benefit. We plan to use this guidance to inform our future development efforts and guide our interactions with the FDA. We believe this sends a signal to the broader rare disease community that FDA has been responsive to the needs of patients, understands the urgency for serious and life-threatening diseases and is open to providing appropriate flexibility in such cases. We are grateful to the Duchenne patient communities for spurring the FDA to issue the guidance. It serves as a prime example of what can be achieved when all key stakeholders work together to improve the lives of patients. And with that operator we can open the call for questions.

Thank you. [Operator Instructions]. Our first question is from Robyn Karnauskas from Deutsche Bank.

Hi, guys. Can you hear me?

Yes. We can, Robyn.

Great. Hi guys, this is Evan on for Robyn. Thank you so much for taking my questions. So just thinking about the potential upcoming panel, what's your view as the most challenging potential question that the panel will bring up? And then how would you respond to that?

[indiscernible] the question. I mean I think that obviously the most challenging part of really our submission is that it is based on 12 patients and I think obviously that has been a focal point that we've had numerous discussions with the FDA. Now saying that I think the advantage that we have is we have really been able to supplement the data over three years and give a much more broad understanding of the effect of eteplirsen. And I think the main factor of course is also that we been able to with really the help and guidance of the FDA have a comparable historical control group that we can show and really compare to. So I think that will be probably the biggest question. But I think we've done a great deal to try to supplement the entire submission to get the FDA comfortable and advisory committee that this data set is reasonable.

Great. Thank you so much for taking my question. Really appreciate it.

The next question is from Samos Samenondis with RBC Capital Markets.

Good morning. Thank you very much for taking the question. Ed you talked about your potential European strategy for eteplirsen. Could you discuss the IP implications and the current status of the drug in Europe?

Well as you know we have under an appeal and waiting to hear a response specifically on exon-51. We have nine of the 11 exons that were found in favor and were overturned. What we are really doing is trying to make sure that we are continuing with the regulatory approach and to make available the drug in Europe and obviously this will accelerate the process. I think the discussion about the IP really becomes imperative when we are closer to a regulatory approval. So I think we are obviously waiting to hear. We have a number of different strategies going forward and I think this -- our first step is really to make sure we have the drug approved in Europe and then I think the discussions in regards to the IP will follow that.

Okay. Great. Thank you for taking the question.

The next question is from Steve Brozak with WBB.

Yes. Good morning. You have just mentioned the size of the data which you have got which obviously initially FDA was questioning as to the pool and the numbers. But now that you have basically crossed over a threshold in terms of time and how long you have monitored these patients, what kind of a change have you seen in just the questions that have been asked? Because obviously the powering of any kind of data sample is -- becomes very significant if you are looking over a longer period of time. So what are you seeing as far as that goes? And I have one question concerning the draft guidance you just mentioned as well.

Sure. I think the advantage that we have is really the totality of the data we were able to collect over three years and that includes certainly the 6-minute walk test data, other outcome measures such as the North Star. Now we have biopsies that go over 180 weeks. We have four different biopsies. We have been able to supplement the data package significantly. We have over 70 patients that have been exposed now that will be submitted. We will have over 100 patients that have exposure of variable lengths by the week 120 safety update. So all of this information I think is what really supplements the package and gives us -- it really gives a better ability to look at what is the safety and efficacy of the drug. So I think that -- it's the duration I think that has really allowed us to help supplement the package.

On the draft guidance obviously this is de novo in terms of what the collaboration that's been established. Have other support groups of other collaborators from other fields approached you in terms of asking questions about it? Because I want to get a sense of how novel this is from you in terms of what you have seen so far and what your team has seen? And I will jump back in the queue, thank you.

Yes. I think it's been an interesting time and I think in response to the FDA guidance for Duchenne, the community of other rare diseases are now looking very seriously at doing the same type of discussion with the FDA and trying to develop their own draft guidance. I know the Spinal Muscular Atrophy foundation is very interested in this and other groups are really looking at how this can be done. So I think this is -- and it was actually Janet Woodcock that really mentioned that this was really a precedent that was set and I think what will happen is that we will see many other rare diseases that will follow this and try to assist and make sure the patient voice is expressed in these type of guidances so that we all have a clear pathway on how we take this forward.

Great. Well thanks for taking the questions, I look forward to the news in 2015. Thank you.

All right. Thank you.

The next question is from Brian Skorney with Robert W. Baird.

Hey good morning guys, thanks for taking the question. I wonder, if you can just review for us what the [indiscernible] data we can expect to see ahead of the end of November. I think you said that at the medical conference we will see some of the fourth biopsy data. I just want to know about the 192 week data and any comparison between some of the natural history that you guys have gotten, will we see any of that analysis ahead of the panel?

Yes. Obviously we are looking very carefully at what's the appropriate venue in publication and trying to make sure that we can time it so that it comes before the panel so that people have an opportunity to review. So all of that natural history data specifically on the 6-minute walk comparing it really over a three year time period will be included in various different venues. So whether -- I believe that whether it's a publication or at a scientific meeting really depends on the timing. So we will make sure that we have an ability to present all the data so that you are able look at it and make up your own conclusion as to what this means.

Got you. And then just on the I think you said the juvenile rat for the exon-53-skipping candidate. Can you just give us a little more color on exactly what that was? And you said it was at the highest dose tested, the highest dose test what's that relative and to what we would equate to a human clinically effective dose?

Sure. Yes. So and again this is not unusual. So this was in the juvenile rat which has also -- and one of the reasons they do have very immature kidneys. So this was seen at 900 milligrams. We have recently gotten back the PK data comparing it to the humans versus the animal models and what we are seeing is that it is not an elementary conversion, in other words, it's not based on surface area but it really is on a mg per kg basis. And this was at 900 milligrams per kilogram and obviously the current dose is at 30 milligrams per kilogram. So it's a huge difference above -- not the starting dose but really just what we are planning to do for our treatment guidelines, so it's well above that. Remember in the Murine models for three months in the non-human primate which are more sensitive those were -- we didn't see any safety signals. I think one of the interesting things is that if you -- all of these preclinical animal studies are really done to determine your starting dose. So if you think about it we are -- this is -- we are 10 times over our treatment does not our starting dose. So this is a little after-the-fact but it's pretty typical that you have to submit all the data including the pathology in the preclinical group that the FDA has requested us, we will comply to this. But I think most importantly, we are not seeing any safety signal in the humans which always trumps any preclinical safety data.

All right. Great. Thanks guys.

Our next question is from Chris Ari with Oppenheimer.

Good morning, thanks for taking the questions. Actually I wanted to follow-up I guess Brian's question there, just with respect to dosing and dose ranging studies, could you help us understand how you arrived at the doses for the follow-on exons and is that based on really your data for eteplirsen? That data I thought was -- where you are looking at 30 mg per kg going in the next trail, that wasn’t the highest dose you tested. Can you maybe give us a little clarity on why you chose 30 mg per kg and how you chose those follow-on exon doses without dose ranging studies? Thanks.

Sure. So obviously the challenge we have is in a small population, a true adequate dose ranging study is always challenging and certainly this has been in my experience with other rare diseases. For us we made the decision on 30 milligrams as opposed to 50 milligrams and it was based on the production of dystrophin. What we saw is we didn't see any difference between the 30 and 50 in the dystrophin production, obviously since this is chronic dosing we wanted to go with the lowest effective dose. We didn’t see any safety signals. So we based the follow-on exons on really information of eteplirsen and trying to project on that. We will be collecting very similar pieces of information in regards to the dystrophin production. We will make those determinations as to what is the dosing that would be appropriate. I think our main concern was providing an adequate amount of drug that was likely to have a clinical benefit that did not have a safety signal. And I think from what we've seen, I think it's a very reasonable dose. Obviously if there is new information that comes out of these studies we would adapt to it accordingly.

Okay. Great. And then just a follow-up on some of the question -- some of the patients treated in the original trial. Have there been any further [slight] deteriorations in those patients' ability to ambulate, have any become non-ambulatory?

No. All of those, all of the boys currently are ambulatory and continue to be on drugs and have also not developed any difference as far as the safety profile.

Okay. So for that's for 10 of the 12 patients?

That's right.

Okay. And then just one quick final follow-up. I know your drug differentiates itself in some ways from safety even on sort of a simple metric like infusion reactions. I was wondering, remind us maybe have you seen any infusion side reactions? Could you characterize those?

No, Chris. We haven't seen anything. Obviously there's always -- if you have an IV that infiltrates you are going to see a reaction thus to the infiltrating IV fluid, but no we have not seen the infusion reactions and this is also true with the naked PMO chemistry and when it's given subcutaneous for other indications. So we have a fair amount of experience and we really have not seen the typical infusion reactions. And I think it's because we don't stimulate the innate immune system and overall it appears to be well-tolerated.

Okay. Great. Thanks for taking the questions. Congrats on the quarter.

Thank you.

The next question is from Tim Lugo with William Blair.

Hi, this is Roger on for Tim. Thanks for taking the question. Just a bit of clarity on the preclinical tox. What was the carcinogenicity study requirements at the FDA and did you guys receive a waiver for the two-year? And then given the kind of increased enrollment and the 70 patients and 100 patients that you mentioned at the NDA submission on the 120 safety update do you expect to report on any efficacy measures from those patients? Thanks.

So just in regards to the preclinical tox, we will be doing the carcinogenicity study and that's something that was deferred but will be completed in time. We are doing -- obviously for eteplirsen we already have a nine-month monkey tox for the following exons for 45 and 53. We are doing really a full tox profile which includes nine monkey tox and those have been initiated. Your second question was?

Just if there was going to be efficacy submitted at the 120 safety update on the 100 patients that you expect?

Yes. No, this is just going to be on safety because again its again an insufficient period of time. Because you know we will only -- we won't have an adequate period of time to really do any kind of efficacy updates at that time. Those studies will be reported when they complete -- when all of the patients complete their time periods and obviously we will report those efficacy data at that time.

Great. Thanks.

The next question is from Debjit Chattopadhyay with Roth Capital Partners.

Hey, thanks. All of my questions have been answered. Thank you so much.

Thanks Debjit.

The next question is from Heather Hanna with Wedbush Securities.

Hey guys thanks for taking the question and congrats on all the progress. Just a quick follow-up on the tox signals for the exon-53. Is this something that you have seen in any of your other studies? Is it a cost effect? Do you think it's mostly molecule specific?

What we do know is that all of the molecules for the PMO chemistry are excreted unchanged through the kidney. So at the very high dose in all of the drugs that we see we do see some accumulation at the top limits, say like in the murine model at 900 milligrams per kilogram, we do see some accumulation of the drug and that's seen in all of the things. But again these are at extremely high doses and at lower doses we don't see any adverse effects of the drug in kidney or the other target organs. So I think what we will be doing is obviously we will know that first information and really what we will try to do is just confirm that the target organ is kidney as we have seen in everything else. So I am not expecting any revelations but obviously we will wait till we have the full path report.

Great. And then just a quick follow-up on the human data for eteplirsen. For those 70 to 100 patients of data how many of those do you think will you actually have three months safety data for?

So we have -- we had committed to the FDA that we would have 12 patients with three months safety data and that's what we submitted in addition. So obviously as we come to week 120 we will have many more patients who will have reached that 12 week safety data cut off.

Okay. Thank you.

That was our last question. I'd like to turn the call back to Ed Kaye for closing remarks.

Thank you for joining today's call. We plan to update everyone in the near future regarding upcoming regulatory milestones for eteplirsen. Once again we would like to thank the entire Duchenne community for all the support. Have a good day. Thank you.