Welcome to the Q3 2015 Sarepta Therapeutics Inc. Earnings Call. My name is Vivian and I'll 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. Please go ahead, sir.

Thank you, Vivian. And thank you all for joining today's call. Earlier today, we released our financial results for the third 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'd like to note that during this call, we will be making a number of forward-looking statements about our beliefs regarding the data package submitted to FDA for eteplirsen NDA, our beliefs regarding the safety and efficacy of eteplirsen, our potential advisory committee meeting in January and PDUFA date. Our beliefs on significance of comparisons of eteplirsen data the matched external cohort and dystrophin expression measures and data, our expectation at all exon skipping therapies will require life long dosing and eteplirsen is conducive to such dosing, our understanding of the regulatory pathway for eteplirsen under subpart age, our plan discussions and meeting with regulatory authorities and potential regulatory milestones in the US and EU for eteplirsen, our vision to make eteplirsen available to DMD patients amenable to exon skipping around the world, our expected progress and timelines across our current and plan studies and their potential impact on regulatory milestone and the company's product development plans, our beliefs regarding our financial position, our R&D plans, our beliefs regarding our capitalization and readiness and sufficiency of our drug supply for a potential US launch ongoing in plan studies, our expected of cost of goods, our readiness and positioning for a successful commercial launch. 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 encouraged to review our company's third quarter 10-Q filed this morning and the most recently filed Annual 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 third quarter of 2015. Today I will provide a brief clinical and regulatory update for eteplirsen, our lead candidate for Duchenne Muscular Dystrophy and provide a summary of our clinical programs. Sandy Mahatme, our Chief Financial Officer, will provide an update on our financials for the third quarter of 2015, along with a review of our cost of goods and manufacturing readiness. As you know, earlier this year we submitted our new drug application for eteplirsen, for the treatment of Duchenne Muscular Dystrophy for patients and animals to exon-51-skipping. We believe we have submitted a robust data package to the FDA that demonstrates clinical benefit, dystrophin production in patients and a safety and tolerability profile that is conducive to life long dosing which exon skipping therapy well required. As we have also announced the FDA completed its filing review and determine that our application is sufficiently complete to permit a substantial review. We have been informed by FDA that we have attentive date of January 22, 2016 for advisory committee. Our PDUFA action date for decision on the application is February 26, 2016 and eteplirsen has a priority review status which is designated for the drugs that offer benefit over existing therapies or provide a treatment where no adequate therapy exist. We recently bolstered our NDA submission by providing new clinical, bio chemical and safety data that we reviewed on October 1, at the World Muscle Society meeting. These data included three year comparison of our primary end point to six minute walk, a test intend to treat population of study 201, 202 versus an external control with a similar inclusion criteria. This analysis is different from what we…

Thanks, Ed. Good morning, everyone. This morning's press release provided details for the third quarter of 2015 in both an adjusted or on a non-GAAP basis, as well as the GAAP basis. The press release is available on the SEC and company websites. The non-GAAP results we will 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 third quarter of 2015, we reported an adjusted or non-GAAP net loss of $46.3 million, or $1.11 per share, compared to non-GAAP net loss of $28.8 million or $0.70 per share in the third quarter of 2014. The incremental loss of $17.5 million is primarily the result of an increase in expenses due to the timing of manufacturing batches, additional investments in raw materials and increased enrollments in our ongoing DMD clinical trials. Adjusted research and development expenses were $34 million for the third quarter of 2015 compared to $20.2 million in the third quarter of 2014, an increase of $13.8 million. Adjusted general and administrative expenses were $12 million for the third quarter of 2015 compared to $9.9 million in the third quarter of 2014, which is an increase of $2.1 million. Following our recent financing, we had approximately $231million in cash and investments. In addition, we have prepaid approximately $17 million towards our 2015 and 2016 manufacturing expenses. Further following the acceptance of NDA we 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. Lastly, from a manufacturing perspective, we believe we have produced enough drugs supply to fulfill the US commercial demand at the time of launch. Our manufacturing capabilities will allow us to supply the entire US market and meet the demands of our current and upcoming clinical studies across our three exon skipping candidates. Our cost of goods will be approximately 15% that’s one-five-percent, based on the typical rare disease pricing model. We remain quite confident on our manufacturing readiness and our ability to supply the market. 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 noting that we hired some excellent talent to our team here at Sarepta, including Dana Martin, who comes to us from Alexion, to head up our Medical Affairs and Patient Efficacy efforts. I'd also like to highlight that both Bill Kambo [ph] who has launched the Vertex Hepatitis C drug Incivek, is heading up our commercial effort, the team that Bill assembled has launched more than 100 different drugs in the rare or specialty drug space. We are confident that should the FDA approve eteplirsen we are well positioned for a successful commercial launch. As we continue to advance eteplirsen and other candidates or patients with DMD, it’s important to keep mind that what is the most critical is that patients need options, while we look forward to in support, patients having multiple disease altering options that are both safe and clinically effective. At this time we believe that eteplirsen's differentiated safety profile, which allows the drug to be dosed at levels high enough to produced essentially significant increases in dystrophin will prove to be the best option for patients amenable who is skipping exon 51 to obtain from clinical dose [ph] If approved by the FDA, our team at Sarepta will be wholly committed to ensuring that eteplirsen's profile is clearly communicated and understood physicians, patients and their families to support in form treatment decisions that best serve each patients needs. And with that operator, we can open up the call to questions.

Thank you. [Operator Instructions] Our first question comes from Catherine Hu from Bank of America, Merrill Lynch. Catherine, please go ahead.

Good morning. Thanks for taking my questions. I just have a couple of quick ones actually. So in Europe, can you describe how the conversations that are going so far relative to maybe your discussions with FDA prior to filing what other main difference is there. And can you comment on if there have been any discontinuations in the ongoing study so far? And then just quickly looking further ahead, if it’s approved, how we should we think about the sales ramp? Thank you.

Okay. Well, I can – the easy one is there have been no discontinuations and so all of the patients who have been placed therapy continue on therapy. In regards to the EMA, we've been encouraged to present to the data, like we have to the FDA. And so we have a meeting scheduled before the end of the year with a scientific advice working group. We also have – we should hear back in December from about our pediatric investigational plan. And really, as long as the EMA is supportive of our efforts to file in EMA, and of course we have to finalize the negotiations with the pediatric investigational plan. Once we have that and we will file next year, and obviously look forward to working with the EMA on that filing. And again, we're eager to try to get eteplirsen in Europe, so that patients in the European continent can have access to eteplirsen. And then…

On sales reps?

Sanday?

Yes, so what we – I think, our approach, our strategy I think for the sales reps is what we've tried to do and Bos [ph] group has done a very good job, I think of getting a collection of people who - really their focus is explaining the signs and the data. And so, I am not a marketing person, but I do try to focus on is allow people and physicians to make and inform educated decision on science and the data. So what we've done is put a whole group of medical science liaisons very good commercial people. We work with them very closely to make sure they understand the data and really our approach is explain the data to the physicians and allow them to make a decision which they think is the best opportunity for the patients. And obviously the patients and the families have a lot to say. So it really, I think the approach is explain the data, we know the animal data, we know what the difference between the fast forward five ways and POM chemistry that there is – they are more efficient in animals. We also know that we're able to dose five times higher based on the safety profile. We also know we can produce dystrophin. So it’s really not the amount of data, it’s a quality of the data that we want to focus on and make sure that people understand and make an inform decision. So that’s our strategy.

Great. Thank you.

Thank you. And our next question comes from Ritu Baral from Cowen. Please go ahead.

Hi. It’s Elian for Ritu. Thanks for taking the question. Just a follow up from the previous one, with regard to your EME meetings, what data will you have in hand specifically to bring to them and will you have any additional data for EME discussions versus what you submitted in the NDA?

Okay. No, thank you, for that. No, it will be the same data set that we've submitted to the FDA. We had discussions with EMA previously and they requested us to submit the same data that we're submitting to the FDA. So that will be – it will be in essence to two identical packages that they will be able to take a look at and make a decision based on that.

Great. Thanks. And how does the EMA feel about biopsy dystrophin data?

We have not had that discussion as yet, obviously we'll continue to have that discussion. They were interested in it from mechanism of action that the drug is working as expected. But we haven’t had any specific discussions as far associated their interpretation of the data.

Okay. Thanks for taking the question.

Thank you. And our next question comes from Debjit Chattopadhyay from Roth Capital Partners. Please go ahead.

Hey, good morning. And thanks for taking my question. Just wondering if your thoughts on the evolving narrative on one of your competitive data looking specifically at the 300 to 400 meter baselines and the lack of correlation with age, is that something that you're seen with your data set or any conversation with thought leaders and how does that impact your PROMOVI study and any kind of – any other studies being planned?

Okay, yes. Thanks, Debjit. I think the challenge of course is in regards to the PTC, it is a different genetic mutation, and we know based on the data that Janney Montgomery [ph] has published with his group, that the play mutations especially the nonS mutation appeared to have a milder phenotypes. So they are not as severe as certainly exon 51 deletions and some of the other deletions that are seen. So it’s a little hard to compare because we're really talking about apples and oranges and there can't be a direct comparison. I think what – we have modified our inclusion criteria, so one of the things we learned from our own data set is that we have to be careful about handling patients who are too affected because they – we know it takes some time for the dystrophin production can occur, you know, on patients rapidly deteriorating. So what we've done is we have inclusion criteria that is between 3 and 450 six minute walk test of baseline. The other aspect that we've done is we've included – we've excluded patients who between screening and baseline drop more than 15% and so that’s at least a month time between. So what we've tried to do is make sure that we have a population that’s not rapidly deteriorating, but that would be expected to deteriorate over year. So I think we've tried to accommodate to make sure that we're successful, I think the 300 – the 400 is not something that we've seen in our population. And so I am not sure if that’s something specific for the nonS mutation, but it’s not specifically something that we can relate to.

Great. And in terms of the composition of better patent IP issue, what's your confidence that you should be able to win that one?

Well, I think obviously we had reported about the methods of used patent. We're still waiting to hear on the composition of matter, we have not heard any information. I think based on all the work we've done, we've had a very good team Ty Howton his group has really done a good job I think in trying to make a very good argument and present it to the patent court. So obviously we'll have to see. I think we feel confident that we'll prevail on this, but obviously we're going to have to wait and see what the patent office says when they have the final ruling.

And one last question, the safety data base with the additional patients, will that be available prior to the briefing documents becoming public or is that something that you're planning for the advisory committee meeting? And thank you so much.

Sure. So that will be – so that’s obviously submitted to, is part of the NDA and that will all be included in our briefing document and hopefully that should – obviously we'll be available prior to the advisory committee, so everyone have an opportunity to take a look at it. But as I said, before, and this is been true for so far for all of our programs with 53 for 45 and certainly for eteplirsen, and that we have a pretty large data base of 114 patients. We have not seen anything different than what we've previously recorded. So I think as the boys have tolerated the drug pretty well, and no new safety signals and obviously it’s something we've been looking at very carefully.

Thank you so much.

Thank you. And our next question comes from Heather Behanna from Wedbush Securities. Please go ahead.

Hi. Thanks for taking the question. I just wanted to get a little bit more information, thanks for the color on the COGG. I am just curious and looking forward if you think about multiple exons and the fact that you might have shared study materials, how should we think about cost of goods moving forward or is this chain kind in the best key scenario?

So Heather, in terms of the cost of goods, it is 15% and you're right, it’s really for eteplirsen which is 30-me, as we go to the other exons which are average between 22 or 23-mer we expect the cost of goods should be lower. In addition to that, we are looking at advancing our chemistries, so we are able to transfer more mature sub-chemistries to the CMOs that we have. We should be picking up some optimization there as well. So over time they should trend down, but at this point too early to guide on it.

Great. Thanks.

Thank you. And our next question comes from Ted Tenthoff from Piper Jaffray. Please go ahead.

Great. Thank you very much. Following up two questions, just with respect to intellectual property, what's the way this in Europe, I mean, does eteplirsen have freedom to operate there, is there a chance you guys can get freedom to operate there and that’s all?

Sure. So Ted, we had prevailed in nine of the eleven exon skipping drugs, but not especially one in Europe. And coming in November in fact, our fewer process, we'll be close to four years. So I think one of the things that we're trying to do is obviously we're making sure that we're moving ahead with the marketing authorization application, trying to get in and obviously we're looking not only from a legal perspective but looking from the perspective of making sure any pathway that we can get into Europe is what we have heard from coming from the patients. There is lot of enthusiasm to make sure that they have drug available on Europe and obviously we're going to continue pursue that.

Great. Thank you. And I am looking forward to the regulatory process advancing.

Thanks, Ted.

Thank you. And our next question comes from Chris Marai from Oppenheimer. Please go ahead.

Hi, guys. This is actually Michelle on for Chris. We also have a question on your pipeline, the 500 pre clinical exon skippers, we are wondering how many per year you guys are planning to bring into the clinic and just general timelines around that development? And then we are also wondering if manufacturing was the way liming step there, or is it something else?

Okay. No, thanks, Michelle. That’s a good question. Obviously we have exon 45 and 53 in the clinics, so that moving ahead. And really our plan is to utilize all of the data certainly the preclinical data, the clinical safety data from 51, 45 and 53 as our package. I would say that really the rate limiting factor is our discussions with the FDA and the EMA and what is actually the package is going to look like. We have had agreement I think with the FDA and also in discussions with the EMA, that they appreciate that the rare and rare exons cannot have a standard clinical development pathway. They are too small, you'll never have the patient numbers. So what we're suggesting is that we have an abbreviated preclinical program package that we have a much more abbreviated clinical package potentially even just looking at the profile, as far as, looking at dystrophin production and following these patients long-term for efficacy and safety. So that could mean that we could bring on a number of programs simultaneously and put them in a registry to follow them. So I think the challenge that we're going to have is we need to really workout the exact details with the regulatory authorities. The limitation is not related into manufacturing, because fortunately we will have a number of different manufacturers, I think we made a lot of progress. It’s a same sub units, it’s just a difference in the sequence order. So that’s not going to limit us. It really is going to be – the limitation I think its going to be the regulatory science, and this is obviously a new pathway. So we're going to have to make sure that we work with the regulatory authorities to come up with a pathway that’s going to be acceptable to patients and that we can reduce the timeline. So obviously as we – clearly there the focus is eteplirsen, the FDA is working full time on that with us, but as soon as we get approval for eteplirsen we're going to be focusing our attentions on working with the regulatory authorities to half a pathway for all of this follow on exons and clearly we're going to do this as quickly as possible.

Okay. Great. And then just one more, are you guys looking at using MRI data enriched [ph] for patients likely to respond to therapy?

Obviously there is been a lot of interest in MRI, and in fact I am on the scientific advisory board for the Imaging DMD group with Chris Garabedian [indiscernible] So its something that we as a company are very interested in. We don’t know how MRI is going to be used because it’s a new tool. We are using it in our study 203 in boys four, five and six. So hopefully we'll get information on that. I think the field and certainly we hope ourselves that if we treat boys earlier we're going to have a better clinical outcome and the reason why we hope that’s the case, is it they are going to have less muscle damage. And what we know in literature is that certainly boys who are currently in our trial should have a fairly significantly amount of loss of muscle and atrophy and add [ph] post tissue and connective tissue. So we can treat the boys earlier the hope would be that we could have a better out come. And I think we will use MRI. We're also using MRI and MRS in our European study right now for exon 53. So once this data becomes available I think we'll be able to use this information in other clinical trials and hopefully it will help us, inform us as we go forward.

Okay. Great. Thank you, guys.

Thank you. And our next question comes from [indiscernible] Please go ahead.

Hi, thank you for taking the questions Ed, you referred to your competitor just a person in your comments I believe when you said that if a drugs gets to the market, via an accelerated approval pathway, FDA guidance states that the need is still there. Is that your interpretation of the guidance or is this something that the FDA told you after the schedule Sarepta for tentatively four for January and BioMarin for November?

So obviously this is our own interpretation of other regulations. But we've also had these discussions with the FDA and they have confirmed this is the guidance and this is the regulation. So it’s not only our interpretation, but it’s also interpretation of the FDA that this is exactly what they put in the guidance. So I think its – our focus us is clearly, we think that patients should have an option, and obviously I think if BioMarin is successful, that only helps us from – because this is the same mechanism of action, and we have the ability to treat at higher doses and we have demonstrated that we can produce dystrophin. So I think it’s only good for the patients to have the option to have two different drugs. So I think there still is an unmet medical need. If the profiles were identical, and had the same safety profile and it had the same chemistry, then clearly if one got accepted there wouldn’t be a need. But I think we feel very strongly and I think the patients in physician’s community feels that patients need the options because there really differences between the two compounds. And I think what is needed is to allow physicians and patients to chose based on the profile of efficacy and safety are the compounds and I think that’s – that makes the most sense I think for the patient community.

I definitely agree that it makes sense for patient community, but you said, this is good for you, if the competitor drug gets to the market first. Don’t you think that given the very strong unmet medical need, there would be a rush from parents to get their kids on dystrophin if it’s approved and then there would be less likely to switch once they are on a therapy and they are stable?

Yes, I know, that’s a fair statement. I think the way we look at it though, is that there is also an opportunity here. And what I mean by that is that we have now over 50 sites in the US that are using our drugs and mostly eteplirsen. So the physicians and most of the physicians in the US have a lot of experience with our product. So I think they don’t have as much experience with dystrophin, so I think it gives us an opportunity to compare the two profiles and for people that be able to then make a decision based on their personal experiences which drug they think is best for the patients. Obviously it would be naïve to assume that certainly patients are going to go on. But I think over time, and certainly I've experienced this with other programs, and you know I was involved in Fabrazyme and obviously there were competitors for that. But I think what has worked in the past, if you explain what's the benefit and the safety profile for your drug, over time and people have a chance experience. If you recall, we started this a few years ago, we were two years behind. A couple of months difference now. I think based on the profiles of the drugs, I think over time people will chose whatever drug is best for the patients. So I think it’s a temporary setback but its something that we certainly – I think give people the data and reasonable people make a reasonable decision.

Okay. Thank you. And you talked about the selection of the external control group that you use, the 13 boys that you are comparing your data set with. Can you tell us how involved the FDA was in that process? For example, did they look at the individual 13 patients you've picked, and said this make sense or do they, okay, the overall approach that you're using?

So, to be clear, they had suggested to use the external control group, so that was in their original guidance to us and it had been reiterated. And again, the value of external control group is that we would have never been able to do a placebo control trial over three years. And so, I would have love to have placebo data for three years, its not possible and so the question is what's the next best thing that you can do, and I think what we tried to do is this is the next best, its close as we can get to placebo control. So the FDA is - obviously we have given them all the raw data and allow them. So just – to be clear, we took two data basis, combined them, we used the criteria, so it was 186 patients, and then we took only those boys that were on steroids and that were older then seven, that was 91 patients and then if we look at just boys who are older than on steroids, and are amenable to exon skipping it was 50 patients and then finally 13 patients who were amenable exon 51 skipping. So we took every single patient that was net 186 patient data base and based on our matching criteria. So we didn’t exclude anyone. And I think the questions obviously that the FDA will ask us and will want to know about is, how close are there, and so if we look at age, if we look at baselines, six minute walk test, the same five genotypes they were all on steroids for six months prior to entry and steroid use was prednisone and deflazacort after recommended doses, we know that this external control group is similar to what's been reported in placebo control populations. So they can tell us any other way that we could have made this more comfortable, we're happy to talk about it. But I think we're confident that we were very meticulous in making sure that we included this data set. And I think its just good as possibly could and it gives us three years with the data and that’s not something that anyone else will ever be able to do in the placebo control study. So that’s why I think we feel pretty good about it, but obviously its going to be up to the FDA to make sure that they are comfortable with what we've done.

Great. Final question, someone asked earlier about discontinuations, where in the new trials are you running any dose interruptions or dose reductions?

No, it’s the same, we have not had any issues.

Okay. Great. Thank you very much.

Thank you. I am not showing any further questions at this time. I'd like to turn the call back over to Ed Kaye for closing remarks.

Okay. Thank you, operator. And just want to make sure that everyone – and we really appreciate everything that patient community has done to participate this and we appreciate everyone joining the call today. And again we look forward to certainly the advisory committee and providing for the data to the community. Have a good day.