Sarepta Therapeutics, Inc. (SRPT) Q2 2018 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Sarepta Therapeutics Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to Ian Estepan, Vice President, Chief of Staff and Corporate Affairs. You may begin.

Thank you, Sonia, and thank you all for joining today’s call. Earlier today, we released our financial results for the second quarter of 2018. The press release is available on our website at www.sarepta.com. Joining us on the call today are CEO, Doug Ingram; our CFO, Sandy Mahatme; our Chief Commercial Officer, Bo Cumbo; Dr. Gilmore O’Neill, our new Chief Medical Officer; and Dr. Louise Rodino-Klapac, our new Vice President of Gene Therapy. After our formal remarks, we will open up the call for Q&A. I’d like to note that during this call, we will 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 risk and uncertainty any of which are beyond Sarepta’s control. Our actual results could materially differ from these forward-looking statements as any and such risk can materially and adversely affect the business, results of operation and trading price of Sarepta’s common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the Company’s most recent Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission, as well as the Company’s other SEC filings. We filed our 10-Q this afternoon August 8, 2018 for the second quarter of 2018 by the SEC required filing deadline. The Company does not undertake any obligation to publicly update its forward-looking statements, including any financial projections provided today, based on subsequent events or circumstances. With that, let me turn the call over to Doug Ingram, who will provide an overview of our recent progress. Doug?

Thank you, Ian. Good afternoon and thank you all for joining Sarepta Therapeutics’ second quarter 2018 results and corporate update conference call. In the second quarter, we took very significant steps, perhaps leaps in the direction of achieving our strategic vision of becoming one of the most meaningful, global genetic medicine companies, while continuing to remain focused on executing on our plans and fulfilling our commitments. We indeed have much to discuss this afternoon, including our newest gene therapy partnership, which will give us three new programs and move us into CNS-targeted therapies; our recent and very productive meeting with the FDA to advance casimersen to a potential near-term accelerated approval in the United States; and our progress in responding to the FDA its clinical hold for our micro-dystrophin program. But, after Winston Churchill famously observed, “however beautiful the strategy, you should occasionally look at the results”. So, let’s begin with our second quarter results. We were pleased to announce earlier today another very strong quarter. Sales of EXONDYS 51, revenue reached $73.5 million, an increase of 110% over the same quarter last year. With strong first half sales of approximately $138 million, we do remain on track to achieve our 2018 guidance of $295 million to $305 million. If you will indulge me, I’d like to give special credit to both Cumbo and his commercial organization, as well as our very strong medical affairs team for a fabulous first half of 2018. Sarepta is that rare breed of fully integrated biotech company that can take a therapy from conception, development and approval, and then supported in the community with strong commercial execution. We also announced in the second quarter that we received a negative opinion from the Committee for Medicinal Products for Human Use, the CHMP, regarding our Marketing Authorization Application or MAA for eteplirsen in Europe. We have commenced the reexamination of the CHMP opinion. The CHMP will hold a Scientific Advisory Group, or SAG meeting, of neuromuscular experts in the fall of 2018, to discuss our application and reexamination. While we believe we have a strong case for access to eteplirsen for patients with exon 51 amenable mutations in Europe, the reexamination process remains challenging. We expect the final decision by year-end. Moving on to our next PMO candidates. We are very pleased with the accelerating progress we’re making with our next two PMO candidates, golodirsen and casimersen. As you will recall, following a positive meeting and guidance from the FDA in the first quarter of 2018, we are in the process of submitting a rolling NDA for golodirsen, our PMO designed to treat patients with exon 53 amenable mutations which will be complete by year-end with a target approval date in 2019. Last week, we held a Type C with the FDA to discuss among other things, our proposal to conduct an analysis of muscle biopsies at week 48 of exon 45 amenable patients in our ESSENCE trial for the purpose of supporting a potential accelerated approval for casimersen, our PMO therapy designed to treat Duchenne patients with exon 45 amenable mutations. Our preclinical models suggest that casimersen as a sequence is as efficient at exon skipping and dystrophin expression as golodirsen. I am pleased to report that the FDA was supportive of our proposal to perform an analysis for dystrophin expression and agreed that it is possible to do so without compromising ESSENCE as a confirmatory trial for golodirsen and casimersen. We will be in a position to conduct that analysis before the end of this year, which means that if we have significant dystrophin expression with casimersen, we should be in a position to file for accelerated approval by mid-2019. Golodirsen and casimersen combined serve and even larger population that EXONDYS 51. So, the near-term opportunity to bring these therapies to the community is very significant. To put this into perspective, if successful, we will have three PMO candidates approved in the United States by 2020, serving nearly 30% of the Duchenne community. Our next generation RNA technology, the PPMO is progressing with a single ascending dose study underway for our 51 candidate where we will get dosing insight by the first quarter of next year. And IND-enabling talks work is being performed for the next five skip amenable mutations beyond 51. Turning now to our gene therapy progress. The second quarter of 2018 has been an extraordinarily important one for our fight to bring a longer, brighter life for those with rare disease, and in particular dose with Duchenne muscular dystrophy. As you know, at our R&D day on June 19th, Dr. Jerry Mendell of Nationwide Children’s Hospital, presented the early results from the first three Duchenne patients who received our micro-dystrophin therapy. To remind you, our micro-dystrophin gene therapy construct has been very elegantly designed by doctors Mendell and Rodino-Klapac. First, as a rhesus monkey-derived AAV vector, rh74 appears to show lower immunogenicity rates compared to other humanized AAV vectors, meaning it should be available to more patients. Second is the micro-dystrophin promoter was specifically chosen for its ability to robustly express in the heart, which is critically important for patients with the Duchenne muscular dystrophy, who typically die from pulmonary or cardiac complications. In preclinical models, micro-dystrophin expression in the heart was observed to be up to 120% of the micro-dystrophin levels observed in skeletal muscles. And third, the transgene was designed to maintain spectrin repeats 2 and 3, which has been recently reconfirmed to be crucial in protecting the muscle from damage. As you, no doubt, are aware Dr. Mendell reported that the three-month biopsy results showed robust gene expression as measured by Western blot and immunohistochemistry with all three patients showing an unprecedented drop in creatine kinase levels, the enzyme associated with ongoing muscle damage that is the hallmark of Duchenne muscular dystrophy. What is particularly fortuitous is that on July 11th, the FDA issued its innovative draft guidance on gene therapy for rare disease that aligns with our goal of rapid drug development, creating an efficient pathway to the market for new therapies. Specifically, FDA has encouraged sponsors to design first-in-patient studies as potential pivotal trials and to consider alternative trial designs. Encouraged by the guidance, but also mindful of its recommendation that early discussions with the agency are crucial, before executing our next study, we are preparing to submit for a Type B FDA meeting to align on the clinical pathway for our registration trial. It is our goal to hold that meeting and to commence the next trial before the end of 2018. Separately, we announced on July 25 that the FDA placed our micro-dystrophin program on clinical hold, based on a third-party plasmid supply issue. As we noted previously, that third-party material was research grade, as this is the current standard for early clinical programs in the academic setting. We have committed to moving to GMP-Source plasmid material going forward and have already completed our audit of the third-party supplier. Pending the completion of Nationwide Children Hospital’s review, we will be in a position to fully respond to the FDA’s critical hold letter in the near future and certainly before the end of August. Given the nature of the hold, we anticipate it should be lifted in advance of our meeting with the agency to align on our clinical pathway. Moving next to our Limb-girdle. As you will recall, we announced in the second quarter, a transaction with Myonexus for five new gene therapy programs, all under the broad umbrella of Limb-girdle muscular dystrophy, also known as LGMD. The current plan is to dose the first patient in the so called 2E program, which is a beta-sarcoglycanopathy, in August. We are working with Myonexus to map out the dosing of the next four LGMD diseases, and we’ll have an update later this year on that. To remind you, the five LGMD programs represent about 70% of the opportunity of Duchenne and share much in common with our micro-dystrophin growth. Now, consistent with our long-term vision, we continue to build upon the breadth of our gene therapy franchise. As you have seen in this afternoon’s announcement, we have today entered into yet another gene therapy transaction, this time with Lacerta Therapeutics. Lacerta was founded as a spin-out from the University of Florida by a number of world renowned gene therapy researchers. Like Nationwide Children’s, University of Florida is one of the top centers of excellence in gene therapy research. Lacerta’s founders have led numerous clinical stage gene therapy programs and made significant advances in and contributions to the gene therapy field. Under the terms of the partnership, Sarepta will make a $30 million equity investment in Lacerta. We have also received an exclusive license to Lacerta’s CNS-targeted, Pompe gene therapy program and rights to two additional CNS-targeted programs. Lacerta will manage the majority of the preclinical development, while Sarepta will lead clinical development and commercialization. Sarepta will pay Lacerta development and sales based milestones, as well as single digit royalties on net sales. Our partnership with Lacerta accelerates our gene therapy strategy in a number of very discrete ways. First, access to world-class talent. As we have said, we are meeting our gene therapy ambition by associating with the world’s best and brightest genetic medicine scientists. Lacerta’s founders, nine in all ,who are widely published in leading peer-reviewed journals, over 500 papers among them, are highly regarded in gene therapy clinical research and hail from leading centers across the United States, including the University of Florida, Nationwide Children Hospital, CHOP/University of Pennsylvania and Weill Medical College of Cornell. Second of course is the expansion of our gene therapy pipeline. To our pipeline of eight gene therapy programs, Lacerta adds at three new gene therapy programs, focused on a very closed adjacency, CNS. Indeed, the first program addresses a CNS approach to a neuromuscular disease, Pompe. We also have rights to two additional CNS-specific therapies. Third is access to gene therapy tools. Lacerta’s novel capsid library could potentially support next generation therapies that are optimized for targeted delivery of drugs to treat these CNS diseases. Lacerta is developing an alternative approach to dose patients with antibodies to AAV, potentially enabling a broader and more robust application of the technology for a wider patient population. And Lacerta’s OneBac proprietary manufacturing platform allows for potentially and more reproducible, scalable, stable and potent AAV manufacturing process. While this will not be the approach, we use for the commercial launch of our micro-dystrophin and LGMD programs, it provides an opportunity to explore new and potentially more efficient manufacturing avenues in the future, as we build our gene therapy division. Next, I will discuss the infrastructure and talent-related achievements we’ve made this quarter. So first on people. We started 2018 with 255 dedicated, passionate employees. As people see the value of our mission, the breadth of our goals and opportunities, and our operational commitment to achieve our goals, over the last year, Sarepta has become one of the top places to work, if one is creative, ambition and wants to make a positive impact on the world. We’ve been hiring at nearly 1.5 employees of business day at Sarepta, and that’s chemists, biologists, developers, manufacturing experts and the like. And we will exit 2018 with nearly double the number of employees, at the beginning of this year. And next, our leadership. I entered 2018 with a strong committed executive team that shares a common vision and great pedigrees. I was pleased in the second quarter to welcome to that already strong team, two first class scientists and biotech leaders, doctors Gilmore O’Neill, and Dr. Louise Rodino-Klapac, both of whom are present on this call, with me today. It speaks reins to the opportunities we have at Sarepta to improve wise that we were able to attract these talents to our senior team. Next, on infrastructure and manufacturing. In this quarter, we commenced our hybrid manufacturing gene therapy strategy starting with our partnership with Brammer Biosciences, which we anticipate will provide us with sufficient commercial supply for our micro-dystrophin gene therapy launch, even under the most aggressive development assumptions. On infrastructure, even as we have taken additional space in Cambridge and built out our facility in Andover. We’re also building an 85,000 square-foot gene therapy center of excellence in Columbus, Ohio, with the goal of strengthening and deepening our commitment to gene therapy, to Columbus and to our relationship with Nationwide Children’s Hospital. Finally, there’s one thing that will drive our success above all of these others. When we achieve our vision of becoming among the most meaningful genetic medicine companies the world over in the coming few years, and I’m asked what was the greatest predictor of our success, I will say one thing, purpose. For us, there is no ambiguity. We know why we get up every day and work as hard as we do. We know that those living with life-robbing rare disease and their families are relying upon us for their futures. This is what fuels our culture. And this is what makes to me so confident in our continuing success. And with that, I will now turn the call over to Sandy for an update on our financial performance. Sandy?

Thanks, Doug. Good afternoon, everyone. Over the past year, we’ve built strong foundation that uniquely positions to execute on our strategic vision. Namely, EXONDYS 51 continues to perform well and is a fuel source that has driven and continues to drive the expansion of our pipeline in DMD and new therapeutic areas. Our healthy balance sheet supports the expansion of our geographic footprint and our investment in manufacturing capabilities, which are necessary to deliver innovative therapies to patients around the world. To support these initiatives, we will be growing to over 500 employees by the end of 2018. Despite this rapid expansion, we will continue to thoughtfully manage our expenses by only taking programs in-house when the probability of success justifies the full dedication and support of our internal resources. This model allows us to continue to economically move multiple programs forward in parallel. Although the Company will continue to dramatically transform as it did last year, in the years to come, our approach to managing our finances and building shareholder value will remain much the same. Now moving to the financials. This afternoon’s press release provided details for the second quarter of 2018 on a non-GAAP basis as well as a GAAP basis. The press release is available on the SEC as well for Sarepta’s websites. Please refer to our press release for full reconciliation of GAAP to non-GAAP. I’d like to add a quick reminder here that our 2018 non-GAAP financials exclude net interest expense, depreciation and amortization expenses, onetime extraordinary expenses, and stock-based compensation. Net product revenue for the second quarter of 2018 was $73.5 million compared with $35 million for the same period of 2017. The increase primary reflects higher demand for EXONDYS 51 in the U.S. We reported a non-GAAP net loss of $28 million or $0.43 per share compared to non-GAAP net loss of $26.5 million or $0.48 per share in the second quarter of 2017. In the second quarter of 2018, we recorded approximately $6.7 million in cost of sales compared to $0.5 million in the same period of 2017. The increase was driven by hiring inventory costs related to increasing demand for EXONDYS 51 during 2018. Accrued royalties and payments of $3.7 million BioMarin, which were a result of the settlement and license agreement, we entered into BioMarin in July of last year. We expect our cost of sales to modestly increase in Q4 of 2018 due to depletion of materials that were expensed prior to approval. On a GAAP basis, we recorded, $122.8 million or $58.9 million of R&D expenses for the second quarter of 2018 and 2017, respectively a year-over-year increase of $63.9 million. This increase is primarily related to a $60 million payment we made to Myonexus. On a non GAAP basis, the R&D expenses were $57 million for the second quarter of 2018, compared to $34.1 million for the same period of 2017, an increase of $22.9 million. The year-over-year growth in non-GAAP R&D expenses was driven by increased patient enrollment in our late-stage clinical trials, a ramp-up of manufacturing activities for our PPMO platform, and an expansion of our research and development pipeline, and collaboration costs with Summit Therapeutics. As of January 1, 2018, we started to share 45% of the costs related to Summit’s research and development expenses for the utrophin program. Due to the termination of Summit’s utrophin program during the second quarter of 2018, we expect this expense to significantly decline over the upcoming quarters. Turning to SG&A. On a GAAP basis, we recorded $47.2 million and $36.1 million of expenses for the second quarter of 2018 and 2017, respectively, a year-over-year increase of $11.1 million. On a non GAAP basis, the SG&A expenses were $37.3 million for the second quarter of 2018 compared to $24.2 million for the same period of 2017, which is an increase of $13.1 million. The year-over-year increase was primarily driven by continued build-out supporting our research and development, and commercial expansion. On a GAAP basis, we recorded $4.7 million in net interest and other expenses for the second quarter of 2018 compared to $100,000 of net interest income for the same period of 2017. The unfavorable change is driven by higher interest expense in Q2 of 2018, resulting from our debt instruments that we entered into the latter half of 2017. We had approximately $950 million in cash, cash equivalents and investments as a June 30, 2018. In addition, we have prepaid approximately $33.7 million towards future manufacturing expenses in connection with our gene therapy and RNA programs. With that, I’d like to turn the call over to Bo for a commercial update. Bo?

Thank you, Sandy. Good afternoon, everyone. As we head into the eighth quarter of an ultra-rare disease launch, we’re very proud of the progress and the accomplishments the team has made. We had a strong quarter, and remain on track to achieve our full year guidance of $295 million to $305 million. The team also has been able to successfully navigate challenges this year and maintain patients on therapy without significant disruptions. The measurable progress over the last few years is due to the motivation and commitment of the patient community, and the team here at Sarepta. Our U.S. commercial efforts are still focused on identifying patients amenable to exon 51 skipping and driving prescriptions, continuing active dialogue with payers to support broad coverage and reimbursement decisions, and ensuring all patients with DMD have a current genetic test, know their mutation and are appropriately identified not only for EXONDYS 51, but for clinical trials and future therapies. Until newborn screening is a reality, we will need to continue to work with key offices to help educate around the importance of patient identification, early diagnosis and potential treatment options. We continue to be pleased that we’re seeing adoption across all age groups. The average age of patients on therapy is 13 years of age. We do not expect the average age of patients to dramatically change until newborn screening for Duchenne becomes standard medical practice, which would identify hundreds of new patients with DMD. From an adherence and persistency perspective, we continue to see high compliance rates and minimal discontinuations. We also do not expect to see a change in the percentage of patients who are opting for ports at this time. Patient demographics have remained fairly consistent throughout the launch. The mix of patients on commercial and government payers has slightly changed in 2018, as mentioned on the last earnings call. The mix was approximately 55% commercial, 45% government in Q1 and Q2 in 2018 compared to 60-40 in 2017. Our national accounts team and medical affairs organization continue to have ongoing engagement with both commercial and government level payers. As a result, payers have a better understanding of the disease and the number of patients who will benefit from EXONDYS 51 with their plan. Tier 1 and Tier 2 centers continue to receive referrals or identify new patients amenable to exon 51 skipping and submit START forms as appropriate. We continue to call on top tier centers but have purposely expanded our efforts. A portion of our educational endeavors has shifted to large pediatric offices within key states where we are helping to educate on the importance of early identification for children who have not been diagnosed with Duchenne. These efforts are now focused on supporting early testing and diagnosis, and ultimately shortening the timeframe from pediatrician offices to the neuromuscular specialists. As Doug highlighted, Sarepta’s mission is to develop precision genetic medicine that improves the lives of all patients with DMD as well as other life-altering neuromuscular and CNS diseases. We’re able to do this by collaborating with the most notable experts worldwide and continuously striving to advance our multiplatform pipeline. We currently have 23 programs in development at Sarepta. And with each new program comes the responsibility of ensuring treatment access for patients. This brings me to the commercial success of EXONDYS 51, which has provided the framework to support future launches. Building the global company requires complex coordination and flexibility that will work across diverse markets, as well as highly skilled and motivated people. As we continue to build the infrastructure needed to be the worldwide leader in precision genetic medicine, we remain committed to execute upon one goal, which is to keep patients at the center of all conversations. We will also continue to review and refine our strategies to include a variety of innovative approaches to enhance patient access to these therapies. During the reexamination period with the EMA, we have continued to strengthen our global presence in Europe by solidifying our relationships with key opinion leaders and advancing our distribution network. While we’ve already built the infrastructure needed for a potential European approval and a future launch of EXONDYS, we’re also focusing our efforts to build out and support future launches and other countries. We have recently hired our country manager, medical director, head of government affairs and patient advocacy in Brazil. These recent new hires will begin to support the patient and medical community within this country. We know what our aspirations are, and we know how to get there. We’re putting all the framework in place from distribution networks, market access, sales, medical affairs, and patient support, which will allow us to reach patients globally when new therapies are approved. Our focus and commitment of providing new treatment options which are so desperately needed to patients around the world has not wavered. In summary, the U.S. commercial success of EXONDYS 51 has provided the framework and resources to support future rare disease launches. We are leveraging this knowledge to prepare ourselves for operational and executional success. Between our gene therapy programs for both DMD and Limb-girdle as well as the in-licensed assets from Lacerta, our team is preparing for the potential launch of multiple gene therapy products over the coming years. This is in addition to our multiple PMO and PPMO based programs for Duchenne, which if successful, could be launching during the same period of time. From a commercial aspect, we are very excited about the future at Sarepta. We continue to have one of the deepest rare disease pipelines in biotech. And each day, we are taking steps to strengthen our position as the global leader in precision genetic medicines. We will continue to pave the way to bring access to future therapies within rare neuromuscular and CNS diseases. And with that, I’ll turn the call back over to Doug for closing remarks.

Thanks, Bo. As we move into the latter half of 2018, we are pleased with the progress that we have made to date, advancing our ambitious vision married to a continuing focus on practical execution. For the remainder of 2018, we will be focused on key areas of the business and catalysts, including the following: Completing the rolling NDA submission for golodirsen; evaluating dystrophin data for casimersen; completing the reexamination for eteplirsen in Europe; advancing SRP-5051 and the rest of our PPMO platform; removing the clinical hold on our micro-dystrophin program; meeting with and gaining insight from the FDA on the registration pathway for our micro-dystrophin program; and commencing the enrollment of patients in a pivotal study for micro-dystrophin; dosing patients in our first Limb-girdle clinical trial; and continuing to build for the future including hiring more colleagues, advancing our manufacturing capabilities, and building out our gene therapy center of excellence. And with that, operator, can you please open the call for questions.

Thank you. [Operator Instructions] Our first question comes from Ritu Baral of Cowen. Your line is open.

Good afternoon, everyone. Thanks for taking the question. Maybe I’ll start with the Lacerta deal. Doug, can you talk about the difference between the Lacerta Pompe program and some of the others like Mortensen [Ph] and Spark? And just a quick follow-up question on golodirsen and casimersen. How are you thinking about the pricing of those programs in relation to EXONDYS?

Okay, good. So, the first on our Pompe program. Obviously, to say it’s early days would be an understatement. I think, we just announced it less than 50 minutes ago. So, we’ll have a lot more to say about that and we’ll build out the thesis on our Pompe program our Pompe gene therapy program over time with Lacerta. One thing I will say is that we have a unique approach to our gene therapy program with our Pompe program, which is that it is a CNS-targeted approach to what is a disease that is in many regards, CNS-driven, but has neuromuscular manifestations. And I think in that regard, we will be differentiated from others, at least as a beginning. The second…

So motor neuron targeted, Doug?

Yes, yes.

Okay.

Yes. And the second thing I would say about is just a credential, our Pompe program is it was invented and developed at University of Florida by none other than Dr. Barry Byrne, who along with folks like Dr. Jerry Mendell and now our very own Louise Rodino-Klapac is among that verified group of world luminaries in the development of gene therapy constructs. And then, answering your question about golodirsen and casimersen, while we have haven’t gotten that far to really pull out a sharp pencil on either one, the short answer is that it will be priced at parity with eteplirsen.

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

Hi, there. Thanks very much for taking my questions. And congratulations on all the progress. Two for me. First on the micro-dystrophin clinical hold. It sounds like you’ve already made good progress there. Wondering if you could give us a little bit more in terms of specifics with respect to what needs to be done at NCH. And maybe based on your initial audit of the third-party supplier and ongoing regulatory feedback, if you could characterize your level of confidence in the rapid resolution? And then I had a follow-up casimersen.

Okay. So, first, I’ll start with the clinical hold. The short answer is that as you said, we’ve made great progress. We have, from our perspective, drafted what we believe would be a complete response. We’ve completed an on-site significant audit of our third-party supplier that went very well. With respect to our partner, Nationwide Children’s Hospital there, they did their own independent review as well and they’re also reviewing our work. And it really is just kind of getting that all collated and together and then putting together a complete response to the clinical hold letter that is polished. So, it’s really -- we really are in the final strokes of getting our response. So, as I said before, I’m very confident this will get done by the end of August. And frankly, I would be disappointed if it was the latter part of August. And then, on what we’ve found that we’ve completed our audit of the third-party supplier and it went very well, we had great cooperation, we also had great confirmation of the approach that third-party supplier takes to the development and release of GMP-Sourced plasmids that we feel very good. I would say at this point, I am frankly very confident in the rapid resolution of the issues associated with the clinical hold.

And just on casimersen, I was wondering if you could give us any more detail on how you’re able to work the 48-week biopsies into ESSENCE and I guess working around methodologically, I guess overcoming the challenges of maintaining study integrity, but still getting that data?

Yes. The short answer is, very carefully, because I’ll say, definitely don’t want to put ourselves in a position that through the process of looking at these biopsies, we compromise the integrity of ESSENCE, which will act as a -- not only is it an independent study, it also acts as a confirming study for golodirsen. And of course, if we get good results, it’ll act as a confirmatory study for casimersen. The good news is that we came up with in advance with a protocol that would essentially, sort of hive off a group that was blinded to everyone else, would look at the biopsies themselves from the active arm for the casimersen arm, and that we could do it in a way that wouldn’t compromise the results, wouldn’t unblind the study to those who would be looking at it and the like. And we’ve presented that, shared that with the division and the division is in agreement with us that we haven’t approached that. [Ph] So, we feel very good about it.

Our next question comes from Christopher Marai of Nomura Instinet. Your line is open.

Hi. Thanks for taking the question and congrats on the progress. So, just thinking about dosing ex patients with your dystrophin gene therapy, assuming the hold is removed, do you see any opportunity to dose additional patients before the start of a registration trial, which I think you said you hope to start by year-end, but would those patients dosed be part of that trial? And then, secondarily, I was wondering how you look to interpret competitor data as it may come out with respect to these biopsies. We understand maybe World Muscle would the this site of a competitor data release, three patients or so. And wondering how you internally will be evaluating, I suppose biopsy and dystrophin data? Thank you.

Well, okay, so let’s start on the dosing side. So, our focus right now really independent even of the clinical hold is to focus on a meeting with the agency to get alignment around the clinical path and the appropriateness of what we envision to be a pivotal trial for the therapy. So, that really is our big focus right now. So, even if we came off of clinical hold, immediately, which is not going to happen, it’s going to take you some time to get this response and then the agency has 30 days to review it. We still really want to focus our effort and energy into getting a meeting with the agency, getting alignment around the clinical pathway, and then dosing patients. And we -- if things work well and we execute brilliantly, we think we can get that all done. We can start not only enrolling patients by the end of 2018, but actually dosing patients in what hopefully is a pivotal trial by the end of 2018. So that’s going to be our focus. And it really is informed not only by our own ambition but also by this draft guidance from the FDA regarding gene therapy in rare disease, which came out, I believe, as I said, on July 11, which really gives us a lot of confidence the agency wants to look innovatively at gene therapy, particularly gene therapy and rare genetic diseases, but also provides very explicitly that it’s important to have early and robust communications with the agency. So, that’s our focus right now. And then, on how we deal with competitors. I guess, the issue about competitors is a simple one. It’s great for us, it feels us to work fast and work hard. And we’ll wait to see what we have, what I will say rather than speak about others’ programs, I can speak again to our own. We have a very elegantly designed construct. So, we have a construct, quite apart from just the fact we have extraordinarily good dystrophin production through immunohistochemistry and through Western blot as revealed in the first three patients at our R&D Day. We have a concert that’s very elegant in a number of other ways. We have low screen-out rates for pre-existing anybody’s likely because we’re using rh74 which is unique to us. We have a promoter, which again is unique to us that expresses very robustly in the heart. In fact, in animal models, it expresses 120% of what we would see in skeletal muscles. If that held true for instance for these three patients, it means that they would have 100% or so of expression on immunohistochemistry in the heart, which is great. And then, of course, there was really an elegant design around the cassette itself, it maintains spectrin repeats 2 and 3, which is very recently in a paper, I believe it was in March of this year, confirmed, was extremely important to avoid muscle damage and the protection of muscle damage. So, we think we have a fantastic construct. And marrying that with the fact that we’re going to move as fast as possible, we think we have a real opportunity to benefit a lot of patients if trial works out. One final thing I do want to point out, apologies for being a little long winded on this. But, talking about trial design. One of the things we focus on is the discussions with the agency, which of course, is extraordinarily important to make sure we’re aligned with the FDA. But, it’s even more complicated than that, because we want to make sure that we’re designing a study that’s not only appropriate for the United States and for the FDA, which is important, and we certainly want to make sure we do that, but that is fit for purpose for the rest of the world. Because, as we said many, many times before, and as Bo just said a moment ago, our goal is not to treat a subset of patients with Duchenne muscular dystrophy, we really want to treat as many patients living with muscular dystrophy as is possible around the world. There are 70,000 or so individuals around the world who are living with Duchenne muscular dystrophy. Our goal is to create a program that gives us a pathway to be in the communities all around the world treating patients.

Okay. And then, just to clarify, so we don’t expect additional dystrophin production data from your gene therapy program to be presented? That would be number one. And the number two, just with respect to just thinking about how you -- sorry, go on.

No. I apologize. Finish your question. I apologize.

With respect to I guess just interpreting competitive data, I guess what I was wondering is how does the Company look at it? Obviously you’re going to see it, you’re going to be interested in it. How should we look at that? Should we look at vector genome copies, dystrophin levels, PK levels, I mean, all of the above? Or I would love to understand how you guys want to compare and contrast substantial data that we see here, later this year from a competitor. What might be most meaningful? Because obviously, there are no problems interpreting dystrophin data from biopsies, et cetera. And it’s across all comparisons. So, I want to understand just maybe from your lens, therapy experts in Duchenne, how you look at that? Thank you.

Yes. Those are great questions. One thing I want make sure -- I clarify. It is very possible. In fact, it’s probable that there’ll be additional data out of our first treated cohort by the end of this year. Dr. Mendell will be making the choices about the forum. But, it’ll be at a medical forum likely before the end of this year. But, remember, will have two things. We’ll have biopsy data from a fourth patient. We had a -- there was a fourth patient dosed even before the June 19th day, we just didn’t have a three-month biopsy yet. So, there was no ability to provide that information. So, he’ll be able to present that. There’ll also be biomarker data including obviously CK level data for all of the patients, and at least in the first patient will be nearly year’s worth of biomarker and CK level data that will be presented by the end of the year. So, I suspect that we will get more and increasingly robust data out of our program. Even though, we’re going to spend a lot of our focus on designing our pivotal trial. As we think about other therapies and what they might present later this year or otherwise, I think there’s -- and you raised some very good points. I think, obviously, dystrophin expression is extraordinarily important. One of the issues with dystrophin production is measuring it. We tend to be expert at measurement. We tend to be very conservative at measurement as well. Frankly, I think most people that would look at it, say that we are very -- we’re so thoughtful that we’re conservative. And so, one of the things we’ll be looking at very carefully is others might be looking at things like immunohistochemistry and Western blot is to ensure that they’ve done it in ways that are similar to ours or looking at the ways they’ve done it and sort of comparing and contrasting associated with that. I think there’s other things that you need to look at beyond that. Obviously, CK level, the CK drops is very valuable. We frankly are very excited about the CK level drops that we’ve seen, they’re unprecedented as you know in the first three patients that we have, the drops were nearly 90%. It’s never been seen before in a three-month period or otherwise. And I think Dr. Mendell has already revealed. So, I don’t think I’m revealing anything secret that the initial drop in the fourth boy was quite significant as well, certainly, at least in the hunt of if not even -- maybe a little better than even that. And so, I think those are important things to look at. But then, beyond that, there are other things to consider. And that’s why we really talk a lot about the elegance of our construct. So, I think frankly, the fact that we’re seeing less than a 15% screen out rate is really important. And it’s important even in addition to the great results that we’re seeing so far. Because it means that we’re going to have the opportunity to treat an enormous number of patients. And that seems to be better than at least what the literature would suggest for other AAVs. I think probably extraordinarily important than it would do is the amount that a promoter expresses in the cardiac muscle. These children are taken from us, these patients are taken from us, either from pulmonary or cardiac complications. And so being able to protect the heart is enormously important. Other promoters have shown some expression in the heart, but I’m not sure we’ve seen animal models from any other promoters associated with other programs that would show the kind of expression that we’re seeing here, which is 120% of what we’re seeing in the skeletal muscle. Now, to look at these stations and to start to correlate cardiac expression is really going to require us to look at preclinical models and the animal models. We’ve been willing to share that, so presumably others will be the same. And we’ll get to see what other people look like there. And then, I think quite apart, we got to start predicting what’s going to happen over the long run with the protective quality of the construct that’s been created. We know that micro-dystrophin works in animals. We know that there is a wonderful natural case study associated with this, a 61-year old patient, started all of this was a bed rest patient who had essentially a naturally occurring form of micro-dystrophin and was 61 years old and remained ambulatory. So, there’s a lot of hope that there’s protection associated with micro-dystrophin, and certainly our PK levels will lead us to believe that that’s what’s occurring here. But, really, looking carefully at the construct itself, and seeing if that construct matches that 61-year old patient, and also seeing how elegantly it matches the natural dystrophin protein is important. That’s why we continue to emphasize what others have independently emphasized in published literature recently that maintaining spectrin like repeats 2 and 3 is extremely important to predict the protective quality of the dystrophin. So, there’s a lot to consider when we consider comparing across programs.

Great. Thanks, Doug. I appreciate the color.

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

Hey. Good afternoon, guys. Thanks for taking -- two quick questions for me. First one, assuming you guys get the clinical hold lifted in the outlined timeframe, just wondering, are you at production scale that would allow you to dose every patient in the third cohort immediately or is that a rate limiting step to completion of enrollment? And on ESSENCE, it looks like clinical trials, study is still enrolling. Just wondering where you’re at in the enrollment process there? It seems like it’s taken longer than originally expected. Do you guys have updated timeframe on that?

Yes. Thank you for that. So, first on the clinical hold, if we are off clinical hold, then we have alignment from the agency. We won’t have -- clinical supply won’t be a rate limiter for us. Okay. So, will be in good shape with clinical supply for our next cohort or trial. As it relates to ESSENCE. So, we are continuing to enroll ESSENCE and we’re continuing to roll ESSENCE in Europe, not in the United States. That’s an important thing to remember because one of the things you want to ensure is that if we obtain accelerated approval either golodirsen or for casimersen, we want to make sure that that it doesn’t compromise our confirmatory trial or we would have a fundamental issue associated with it. We’ve also increased the N of ESSENCE, the number of patients in ESSENCE, frankly, in light of the fact that we’re going to use it as a confirmatory trial, we want to increase the probability of success by placing more patients in the trial. And we -- frankly, it was one of the issues that we discussed with the agency who was enthusiastic about the concept of increasing the N and gave us the approval for that.

Thank you. Our next question comes from Matthew Harrison of Morgan Stanley. Your line is now open.

Great, good afternoon. Thanks for taking the questions. I think, I’d like to focus a little bit just on manufacturing and just understand where you are in terms of profit development and scaling now? What are the steps that you need to take over the course of the next year, let’s say, to be in a position to be able to have commercial supply, and assuming that Cohort C plays out as you previously described, be able to dose crossover patients with commercial supply? Thanks.

So, we have provided only a certain amount of information regarding the entire process for competitive reasons. What I can tell you is the following. We are in the process development, tech transfer process with Brammer. We have informed our thinking from the experience that others have had. So, for instance, AveXis has been very informative on the sidelines as they really went through the exact process we had from Nationwide Children’s Hospital. And that’s helped inform our thinking. From a bridging perspective itself, we are making essentially only those changes necessary from a process development perspective that are necessary to scale up. Otherwise, we’re trying to remain as close to the original process as possible, so we don’t create unnecessary risk associated with bridging. The Brammer relationship will provide us, as we said, with sufficient supply to robustly launch in the United States and elsewhere, even assuming very aggressive development assumptions and timelines. And we will be comfortably in a position to use the potential commercial supply to those patients at crossover after one year. So, those are our plans.

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

Hi. Thank you for taking the question. This is Ross on for Salveen. You initially indicated your strategy is really to broaden your reach as a neuromuscular focused company. However, you’re now expanding into more broadly CNS and lysosomal storage disease. So, how should we be thinking about your long-term strategy here, is Sarepta more of a broad played gene medicine company?

So, the -- here is the way we -- we married two things. So, we married big ambitious strategic vision with very strong execution oriented abilities. And that’s an interesting concept. So, we have very significant ambitions. And I wouldn’t envision if you look out five years from now that we would necessarily be limited to neuromuscular and CNS. We will be on the gene therapy side in multi-therapeutic area, significant gene therapy. Company, as I said, our aspiration is to be one of the most meaningful, if not the most meaningful genetic medicine company in the world over the coming years. But, the approach that we’re taking to get there isn’t going to stray from what we know. We’re going to continue to build on what we know as we move out in concentric circles of focus. Then -- and our most recent partnership, Lacerta is a perfect example of that. We start with Duchenne muscular dystrophy and RNA technology. And then, we’re moving to gene therapy. We’re becoming the world’s experts, hopefully, in gene therapy, and hopefully you agree with me on that. And then, we’ve moved to Limb-girdle. Limb-girdle was right next door to Duchenne muscular dystrophy. And as I said before, it was a basically a goldilocks type of transaction, very similar in many ways. So, when we’re going to move from there, moving to CNN is a very logical next step. It’s very similar to neuromuscular in many ways. And the kinds of CNS programs that we’re looking at right now are the kinds of CNS programs that are closely aligned to neuromuscular. Pompe is a perfect example of this. We are taking a CNS approach but to a disease that has a significant neuromuscular manifestation. With that said, we’re going to continue to build our expertise, build our ambition, build our gene therapy center of excellence, and we’re not limiting ourselves in how far that takes us from a therapeutic area perspective. Just know -- we’re not going to wake up one day sort of crazy over our skis in areas that we don’t understand. So, there’s a number of things that we look at. We a rare disease company for the time being, we will remain a rare disease company. We’re looking for monogenic diseases that are understood and well characterized. And we’re going to do a combination of two things over time. We’re going to continue to do thoughtful transactions like Lacerta and Myonexus, our Nationwide Children’s Hospital transaction and the like, in license and we’re also going to build a capability of building our own as well.

And then, just two follow-up question. So, on the Lacerta deal. Can you specifically provide more details around like the types AAV vectors you’re going to be bringing in? And really what highlights about these programs to spark your interest in comparison to other players out there?

Well, couple of things. We’re not prepared to provide a lot of detail on that now, but I promise you will in near-term. We won’t be a year from now, when we start discussing some of that. But we’re going to discuss that over time, some of the capsid related issues and vector related issues. And even, we have two early stage CNS programs beyond Pompe, and we’ll discuss that over time when they get closer to being in patients. The thing that’s really got us interested about Lacerta is a couple fold. Certainly, we’re excited about the programs that we have and the access to these two programs and the access to Pompe disease which is, which really fits with our mission and our passion brilliantly. The opportunity to work with these types of genetic medicine luminaries, like the nine founders of Lacerta is extraordinarily important to us. The ability to get closer to University of Florida is extraordinarily important to us. One of the things as -- we’ve built a lot of our gene therapy thinking around was this relationship with Nationwide Children’s Hospital. And the ability to take that and extend it to University of Florida, which is unquestionably one of the world’s centers in gene therapy is valuable to us. And then the other tools. We’re building a significant gene therapy division and we need tools. So, the idea that we have access to a breadth of capsid library to play with is really valuable. The fact that they have really innovative ways of looking at manufacturing that might benefit us in the future is really valuable to us. So, all of that together aligns with our vision of becoming a very, very significant, meaningful genetic medicine Company.

Got it. And then, finally, just on Limb-girdle. So, how can we think about the severity of the 2E program compared to DMD? And really, what’s the read through we can expect from this initial program onto the remaining four others?

So, I can allow Dr. Rodino-Klapac to talk a little bit more about this. But, let’s start with 2E. 2E is the most -- is very similar to Duchenne muscular dystrophy in its manifestations and the like. 2E is -- in fact, there is many things about that have symmetry with our Duchenne muscular dystrophy. First of all, the size of the program is about the same size as a EXONDYS 51 amenable patients. It’s sort of in that same hunt. The capsid that we’re using rh74 is the same, which is the same across all five programs. This is a dystrophinopathy, it results in the lack of dystrophin. So, we’re using a promoter that expresses -- in the heart, it’s the same promoter that we’re using with DMD. There is enormous symmetry there. And then, beyond that Louise if you’d like to comment a little bit more on sort of extending to the other four as well?

So, three of our five programs are focused on sarcoglycans, which if you remember from R&D Day, are components of the dystrophin associated protein complex. They’re very similar. And the fact that when you have a deficiency in one, you have a deficiency in the others and while restoring dystrophin, you restore those. And conversely when you restore sarcoglycan, you restore the others. There’s a lot of similarities, as Doug mentioned, in the severity of the disease. There’s cardiomyopathy involvement in 2E. So, there is a lot of adjacencies between the programs. And we expect that we’ll see similar results with the rh74 and also the same promoter between the two programs.

Thank you. [Operator Instructions] Our next question comes from Joseph Schwartz of Leerink Partners. Your line is now open.

Hi, guys. Good afternoon. Thanks for turning our question. This is Dae Gon dialing in for Joe. So, one quick one and one follow-up if I may. One, with regards to your Cohort C plan as you’re contemplating it, you mentioned the draft guidance that was very supportive of a single trial for marketing authorization. So, going back to that, the draft guidance also stipulates evaluating multiple doses as highly appropriate. So, given that you have had some great success with your initial cohort, how are you thinking about implementing perhaps multiple doses in your Cohort C? And then, as a follow-up, the micro-dystrophin program, I was wondering if you could comment on the rh74’s transduction efficiency in satellite cells. And as we look at the satellite cell specifically, what observations have you made in terms of asymmetric cell divisions there? Thank you.

Well, let me briefly mention on the dosing issue, and then I’ll pass it over to Dr. Rodino-Klapac on the satellite cell related issues. So, the short answer is that we -- there was an enormous amount of preclinical work that supported the dosing that went into what we call Cohort B, the dosing of the patients that you saw on June 19. And as a result of that, it provided the Dr. Louise Rodino-Klapac and Dr. Mendell and the FDA and Sarepta with a comfort to go to what was very robust dosing is to give you -- to remind you for instance regarding other ones. So, one of the other programs is about a quarter of the current dose of our program. And then, the other one, Pfizer’s half the dose of our current programs. So, we are -- we really went to very robust dosing. Given the expression levels that we’re seeing, just to remind everyone, we’re in the 75% to 80% dystrophin positive fiber range and just by any measure, extremely robust Western blot dystrophin expression. We have no intention of increasing the dose beyond where we are right now, which is very robust. On the satellite cells, let me pass it over to Dr. Rodino-Klapac for her views.

What we know from our preclinical models is that we are getting transduction of satellite cells with rh74. And moreover, as I alluded at R&D Day, also on the patient biopsy, we were very intrigued to see that we are also getting transduction in the patient biopsy of satellite cells that we’re also expressing micro-dystrophin. What we’re doing now is doing careful quantification to be able to say what the percentage of these cells are. But, I think it provides us strong rationale moving forward that if we’re also transducing satellite cells, will get even more sustained and enduring effect. So, more to come on that.

Thank you. Our next question comes from Debjit Chattopadhyay of H. C. Wainwright. Your line is now open.

Hey. Good afternoon. On the ESSENCE study, do we need to reconsent the patients because I believe not all patients were undergoing biopsy because the biopsies are standard between week 48 and week 96? And then on the GALGT2 program, any updates on that and getting it to maybe a systemic dosing and restarting the program with more frequent dosing schedule, as opposed to once every month?

On the ESSENCE trial, we don’t have to -- we’re not reconsenting kids or we’re not doing any new biopsies. These are biopsies that are either already completed when your biopsies already completed for children or biopsies that are coming up that were already planned in the trial. So, this is simply frankly the -- this is pretty simple concept. We play to protocol that allows us to look at what already would have existed before the end of this year, actually I think by the end of the third quarter and then analyze it. Am I miss anything there? Dr. Gilmore O’Neill: No, that’s exactly it. The only changes are on expanding the sample size, but for the procedures, the procedures have not changed. And so, we do need to reconsent for procedures.

And then, on GALGT2, we’re still in discussions with Dr. Flanagan on GALGT2. He -- as we know, he wants to move his -- informed by the results that we’ve seen with rh74 and the great safety that we’ve seen associated with rh74, he wants to review the program and change to full infusion. He has some work to do to set that up and we’re actually in the process of discussing that right now.

Thank you. Our next question comes from Liisa Bayko of JMP Securities. Your line is now open.

Hi. This is Jon on for Lisa. Thanks for taking the question. Just to follow-up on casimersen. I’m wondering if you could provide any more color on your interactions with FDA in terms of how many samples they’d like to see as far as dystrophin for something that’d be sufficient for accelerated approval. Is there a certain number they’ve given you or how robust does this data have to be to proceed forward?

Our proposal to them was to show them biopsies from 25 patients, which is identical to what we showed with respect to golodirsen and that was the basis for our Type C meeting. And they were comfortable with those numbers as they were comfortable with golodirsen. Is it, Dr. O’Neill? Dr. Gilmore O’Neill: Yes. That’s absolutely correct.

Was there any discussion about a lower number of patients?

We didn’t propose it so. And I’m just quite confident that they wouldn’t proposed it if we -- so, we think 25 patients was appropriate that’s what we had with golodirsen. And we get that very soon. Dr. Gilmore O’Neill: We’re on track to generate those data.

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

Hey, there. Great. Thank you for the question. I had a couple of housekeeping questions. One is that you’ve got some still ongoing expenses, preclinical expenses for ramp-up in tox studies for PPMO platform, golodirsen and casimersen. If I remember correctly, you had to do ADME study last year in eteplirsen before you filed with CHMP which actually was the reason for the delay of filing and in Europe. Is there any kind of -- are these just ongoing clinical kind of preclinical tox studies or is there additional requests coming from the regulators? And then, the second question was this, just your inventory levels have gone up almost 25% to $104 million. I assume all the casimersen, golodirsen, gene therapy manufacturing has gone through the R&D line, because they are still in clinical development. So, just any thoughts on that? Is that sort of the norm as you’re just having more and more sales effects on this? Thanks.

Before I pass the inventory question over to Sandy, the short answer on the preclinical expenses are, they’re all part of the current strategy that we have. We’re doing IND-enabling toxicology work for five additional PPMOs beyond our 51, what we call, 5051, our PPMO for the 51 amenable mutations. And we’re doing all of that work, including ADME works. So, it’s not coming as a result of additional requests from agency at all, it’s coming from our strategic plan. And then, Sandy?

Yes. So, our inventory levels did go up, and that’s primarily stocking up sub units as well as API for 45 and 53, as well as our PPMO study. So, yes, the inventory levels did go up, because of all our expanded manufacturing for the clinical programs.

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

Hi. Myles on for Tim. Thanks for taking the question. Congratulations on the quarter. Just your R&D, I believe you alluded to an ongoing nucleotide therapy that you might intend to develop for Pompe disease. And given today’s announcement with Lacerta, is it safe to assume that you’re just going solely gene therapy for the therapeutic rationale in that integration or are you taking the approach like you do with DMD where you might have a patient on EXONDYS 51 and micro-dystrophin gene therapy? Just trying to get our heads around that?

Yes. I should really turn this over the Dr. O’Neill. I know he’s very passionate about this particular issue. It was a very first thing we discussed at our very first interview. But, let me just say the short, and we are we are -- our goal is to be a precision genetic medicine company. And the best way to provide the most benefit to patients from our perspective is wherever possible to provide multiple modalities that could treat and enhance lives. So, with that said, it’s obviously, our goal to proceed with our Pompe program and gene therapy, but we would be looking at Pompe from an RNA perspective as well. Dr. Gilmore O’Neill: I would agree with that. I am actually quite passionate about the idea that we should offer multiple modalities that can either be selected by patients based on preference or actually look at combinations to maximize the effect. And so, from a strategic point of view, and a strategic intent, our goal and our objective would be to never exclude number of approaches. I think, the best way to look at it is the way we’re approaching Duchenne with morpholino platform and the gene therapy platform.

Thank you. Our next question comes from Yun Zhong of Janney. Your line is now open.

Hi. Thanks for taking the question. So, the agreement with Lacerta, I see from the company website under Pipeline there are couple of indications. So, is it fair to assume that the two CNS indications will come out from dose indication listed on the website? And then, also, are you able to share whether the delivery is going to be systemic or local or still to be determined?

Yes. So, on the first -- your first question, the answer is yes. It’ll be -- it’ll come from among their previously disclosed CNS assets. The second one, the Pompe program and I believe the other programs as well will be in local [ph] its delivery.

Okay. On manufacturing, I believe you said that it’s a slightly different from what you’re using for micro-dystrophin in Limb-girdle. At some point, do you plan to maybe make it more consistent, so that all programs can be integrated?

Well, we’ll look at that over time. Here’s the exciting thing and then interesting thing about their program. So, Lacerta has a very innovative approach to manufacturing that we really like -- want to explore, we want to explore for future programs. One of the things I want to make very clear is that we’re not going to jump at that program and start moving over to this program as innovative as it may be from a manufacturing perspective, because it would almost certainly ensure that we wouldn’t be able to get to the community and treat patients as fast as we want. The program that they have is a [indiscernible] virus approach; we’re mammalian virus with a mammalian cell approach with respect to our micro-dystrophin and Limb-girdle program. So, it’s certainly the possibility that we could in the future look at other innovative ways to manufacture. But as we stand here right now, as I said before, we want to constantly marry strategic vision with practical execution. And so, we’re going to take the programs that we currently have that we’re very excited about to Duchenne muscular dystrophy with micro-dystrophin and our Limb-girdle in particular, and we are going to move as fast as we can to get those therapies assuming that they work and assuming that they get across the finish line to the community and to patients. And that’s going to mean that we’re going to make the least number of changes necessary to scale up from a commercial perspective. And then, we have over here from a research perspective and a future therapy perspective and maybe even a future perspective with respect to current programs down line, a really interesting approach to manufacturing that we’re going to look at very carefully.

Our next question from Tim Chiang of BTIG. Your line is now open.

Doug, do you guys have a reexamination date set yet for the CHMP review for eteplirsen before year-end?

We have -- we’ll have two things. We have a SAG, Scientific Advisory Group that we will be invited to and then subsequent to that we’ll have a reexamination and an oral explanation. I think it’ll occur in the fall.

Okay. And maybe just one follow-up. I know. Dr. Mendell, there was certainly a lot of interest in the three patients worth of data and all the biomarker data that you showed. I think you cited that he’s going to show some additional follow-up data from those three or four patients. Is it possible that we might even see some functional data at year-end?

Obviously, the decision on functional data will be Dr. Mendell. Almost certainly he’s going to want to present the fourth biopsy data, as well as the biomarker data and he may also present some functional data as well. His one of the patients will be almost nearly a year post therapy. So, there might be some insight that can be provided. One of the things we want to be very careful about of course is not overanalyze functional data after a short period of time and a limited number of patients. The good news by the end of the year is we’ll have one patient that will be 11 months on therapy, almost a full year. But, I’m also going to leave that to Dr. Mendell to make the decision on the exact data that he wants to present.

Our next question comes from Gena Wang of Barclays. Your line is now open.

Thank you for taking my questions. Just one quick question regarding the PPMO data update later this year, just wondering if you can share with us some color regarding the type of data you will be presenting? For example, number of patients, how many dose cohorts, and type of data, is that protein level safety, if you can share with us any of these information?

It will be -- it’s a little difficult to say numbers of patients because it kind of depends on how we proceed and dosing and how many cohorts we get up to, et cetera. What we will have by the first quarter of next year, will be very important, but will seem to many as very soft data. Because what we’re going to get by that first quarter next year is dosing insight. We’ll be able to know if there a combination of the doses that we’ve escalated to and the modeling that gets done off of that dosing because we’re in a single-ascending dose right now, then we’ll move to a multi-ascending dose where we imagine -- where the data tells us we can go from the therapeutic dosing perspective. So, it’ll be a very interesting discussion because it will seem to people very soft. To us, it’s very hard data to be real drag, because, we know from animal models that we get significant increases in the therapy at the right place, as a result of these -- that peptide, and we know, when we get the therapy there, we get very significant exon skipping and dystrophin production, literally as much as a full higher -- order of magnitude higher, I should say, versus what we get with the PMO. So, the biggest issue for us is ensuring that we can get to those kinds of therapeutic doses that induce very significant dystrophin. So, it’ll be very soft, Gena, to be honest. It’ll be dosing insight, essentially how high we can get from the therapeutic perspective without concern from a safety perspective. But, it will also be very meaningful to us into the rest of the program.

So, I will assume we’ll also see the protein level right about the protein data from the these patients in addition to safety data?

Yes. We won’t have that kind of data. These are single-ascending dose study. These are literally single-ascending dose studies, just single doses. So, the issue -- this is purely a safety issue right now. How high can we get the dose? And then, it’ll be some time -- it’ll be about 12 months thereafter before we actually see dystrophin production. Now, one night therefore think that this is really less interesting than we think it is. But, this is really an interesting issue because the animal models tell us, if we can get to good robust therapeutic doses, we’re going to see significant increases in dystrophin reduction, because we’re going to see very significant increases in exon skipping. We see exon skipping animal models at high therapy doses in the far better than 50% and 70%, even 80% of exon skipping range, and dystrophin production as measured by Western blot that is, order of magnitude or even more in some muscles. So, dosing insight we get is going to be very, very telling for us and for the future of the program.

Okay. And just one quick follow-up regarding the Lacerta partnership. For the AAV library strategy, just wondering -- are you looking for -- like, are you collaborating with them, looking for some vector can cross blood-brain barrier or would there be some local delivery directly to the CNS system?

We’re going to look at sort of all of those interesting issues. We just have an entire capsid library to play with. I mean, we already know, there are capsids obviously that cross the blood-brain barrier, we know that, for instance, AAV9 crosses the blood-brain barrier in a very promiscuous way. So, which makes tons of sense for something like SMA, which benefits both in the periphery and in the central nervous system, makes, one would argue, significantly less sense in something like Duchenne muscular dystrophy where you don’t actually want the therapy crossing blood-brain barrier. The good news is we don’t use AAV9. We use rh74 there. But we’re going to look at the capsid library across all of our programs over time including programs that we don’t yet have developed or in-licensed.

How’s the IP regarding these vectors?

We have -- the good news is we’ve got good intellectual property around the constructs that we have.

Thank you. And ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Doug Ingram, Sarepta’s President and Chief Executive Officer, for any closing remarks.

Thank you everyone for joining today’s calls and for your questions. We look forward to updating all of you on the ongoing progress over the coming months as we track toward our goals and toward our catalysts. Everyone, have a good evening.

Ladies and gentlemen thank you for practicing in today’s conference. This concludes today’s program. You may all disconnect. Everyone, have a great day.