Sarepta Therapeutics, Inc. (SRPT) Q1 2021 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the Sarepta Therapeutics First Quarter 2021 Earnings Call. [Operator Instructions]. I'd now like to introduce your host for today's program, Mary Jenkins, Senior Management, Investor Relations. Please go ahead.

Thank you, Jonathan, and thank you all for joining today's call. Earlier today, we released our financial results for the first quarter 2021. The press release is available on our website at sarepta.com, and our 10-Q was filed with the Securities and Exchange Commission earlier this afternoon. Joining us on the call today are Doug Ingram, Ian Estepan, Dallan Murray, Dr. Gilmore O'Neill and Dr. Louise Rodino-Klapac. After our formal remarks, we'll open 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 risks and uncertainties, many of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements and any such risks can materially and adversely affect the business, the results of operations and trading prices for Sarepta's common stock. 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 SEC as well as the company's other SEC filings. 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. And now I'll turn the call over to our CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Thank you, Mary. Good afternoon, everyone, and thank you for joining Sarepta Therapeutics First Quarter 2021 investor Conference call. I am pleased to share with you this afternoon, the exceptional performance we have achieved this quarter with respect to our 3 approved therapies and the significant progress we have made advancing our multi-platform portfolio. Commencing with our quarterly performance, I'm very proud of the Sarepta team's commercial effective fully integrated commercial stage biotech with a focus on execution, we have a well-honed ability to address the often very sophisticated challenges of delivering to and serving patients with a weekly infused therapy for rare disease. From our first launch in late 2016, we have enjoyed compounded growth over the last 4 years of over 19%. And as we have never taken a price increase and price all our therapies at parity, this performance comes from our ability to serve the patient community. I'm very pleased to report in the first quarter, our execution continued, and we achieved product revenue of approximately $125 million, and that represents a nearly 25% growth over the same quarter last year. Our performance comes from our 3 currently approved therapies. As of February of this year, joining EXONDYS 51 and VYONDYS 53, the FDA approved AMONDYS 45 to treat those 8% or more of Duchenne children with an Exon 45 amenable mutation. Having prepared well, we were able to launch on Day 1, including labeling and shipping drug to the warehouse to enable our first patient to be dosed within a week of our approval base. With our third approval, we can now offer therapy to nearly 30% of children with Duchenne in the United States. And from there, we can theoretically build constructs to offer therapy to as many 80% or more of the Duchenne community. We also have the opportunity, and frankly, the mission-driven obligation to bring our U.S. approved and future RNA therapies, to children outside of the United States. So as much as three internally designed, developed and approved therapies place us in a small condrey of biotech companies, we have still barely begun to realize the opportunity available in our RNA franchise. Moving now to our pipeline progress. I will stay with our RNA platform. As just 2 days ago, we announced that what we believe to be profoundly important results from Part A of the MOMENTUM trial. That's our multi-ascending dose study for our peptide conjugated PMO SRP-5051, our next-generation construct. To remind you, our 3 approved PMO therapies for Duchenne have been among the most significant advancements in the treatment of Duchenne since the DMG gene was discovered in 1986. And they are currently the standard of care in the United States for children with the confirmed mutations that our therapies address. Still, our goal is to continually improve in an effort to extend and improve the quality of life of those living with Duchenne. And to that end, the hypothesis that we tested in Part A of our MOMENTUM trial was that if we conjugated our proprietary positively charged peptide to our PMO construct, we could achieve much greater tissue exposure, greater exon skipping and therefore, greater dystrophin production. And if we could confirm that hypothesis, we would have a significant possibility of a greatly improved next generation to send therapy that we could take not only to patients in the United States, but outside the United States as well. Part A of our MOMENTUM trial resoundingly confirmed by our hypothesis, but our peptide could improve PK/PD and induce significantly more dystrophin. At monthly versus weekly dosing of our 30 mg per kg cohort, SRP-5051 exhibited 18x greater exon skipping and more than 400% greater dystrophin versus EXONDYS 51. And they did this with only 12% of the dose exposure and in just about half the time. If we are able to safely confirm this level of dystrophin in the next phase of our trial, the PPMO will have transformed our RNA platform, not only in the United States, but internationally as well, multiplying the potential Duchenne population who will have access to our therapies. And beyond Duchenne, we can evaluate other disease areas where a more potent steric blogging technology could provide benefit. Having reached a profound improvement in tissue exposure in dystrophin, our dose exploration of Part A is complete. This is an important moment for our friend, for Sarepta, but most importantly, for the patient community. We will share these results with the FDA, and then we will discuss with the FDA, the path for the commencement of Part B of momentum. Subject to further discussions with the FDA, our goal is to make Part B our pivotal trial and to seek accelerated approval in the United States if Part B is successful. Separately, we will engage with ministries of Health, ex-U.S. about the clinical path for our PPMO therapies outside of the United States. Moving now to our gene therapy platform. We have made significant progress, and we have important milestones coming over the coming months and quarters to share with you. With respect to SRP-9001, we have gained significant additional insight from Part 1 of Study 102, confirming our confidence that this therapy has the potential to be a significant advancement in the treatment of Duchenne and gaining insight that has helped us hone our protocol for our next clinical trial. Study 301, which will - and we believe with our insight, we have enhanced the probability of success for 301. We have completed our analysis. They've refined our protocol, and we will share this with the community once we have met with the division, obtain their concurrence and have commenced our next trial. Now we have a significant number of milestones for SRP-9001 over the coming months and quarters, and let me catalog the year for you. First, this quarter, we will have the expression and safety results from our first cohort of Study 103. That's our child to confirm the characteristics of our commercially representative SRP-9001 material. All patients in Study 103 have been dosed using the Sarepta manufacturing process intended for all future clinical trials and if approved for commercial supply as well. It is difficult to overstate the importance of this readout. As you will recall, in Part 1 of Study 102, the titering method used by our clinical supply manufacturer created some variability and resulting in about 60% of patients receiving lower than target dose. Our microdystrophin levels of Study 102 Part 1 were nevertheless 28.1%. These are very impressive and statistically significant results, even with the variability for titering. We have developed a much tighter manufacturing process and a much-improved titering method for our intended commercial process. Hence, with our new process, we believe we will achieve expression levels even higher than the 28.1% seen in Part 1. Study 103 will also characterize our therapy. We strongly believe that based on all of our prior work and the significant number of patients that we have treated with SRP-9001 that we have a greatly differentiated and enhanced gene therapy in terms of safety, expression and ultimately benefit. If Study 103 is successful, it will go a long way toward confirming that belief, using the therapy and the process that we will launch with if we are successful. And beyond even that, Study 103 results will represent the culmination of an enormous investment in a journey to become one of the few real world leaders in gene therapy manufacturing. And again, we will have and report those results this quarter. Second, with Study 103 data in hand, we will seek a meeting with the FDA as a predicate to commencing our next trial. We are targeting that meeting around the middle of this year, and we're going to commence that next trial as soon thereafter as is possible. And finally, the last patient, last visit in Part 2 of Study 102, will occur in December of this year, after which we will unblind that study. That means that by early next year, we will have a wealth of additional information on the performance of our therapy vastly more than any other company. We will have data from this double-blind placebo-controlled for 41 patients, 20 of whom who have been on treatment for 2 years and 21 of whom who have been tracked for a year without therapy, and then we'll have 10 track for a year after the intervention of our therapy. So we have a lot to do with SRP-9001 out of readouts this year into early next year. Moving on to our next advanced gene therapy program in the first quarter of this year, Dr. Louise Rodino-Klapac presented the 2-year data from our high and low-dose cohorts for SRP-9003, our gene therapy, for the treatment of LGMD2E. As Dr. Rodino-Klapac reported SRP-9003 with a vector and a promoter identical. SRP-9001 for microdystrophin resulted in very robust expression of the native protein beta-sarcoglycan, the lack of which causes LGMD2E disease that it was associated with the restoration of the dystrophin associated protein complex and then it exhibited a very good safety profile, essentially identical to what we've been seeing with SRP-9001. Importantly, SRP-9003 showed excellent durability to the 2- year mark and SRP-9003 resulted in substantial improvements in NSAD and time to function tests in these children and young adults were much improved versus matched natural history. For SRP-9003 and the rest of our 6 program LGMD portfolio, we intend to work with the division to devise an efficient and executable path to approval. We will prioritize that meeting behind SRP-9001 and that meaning so it will occur in the second half of this year. Our goal is to commence what we hope to be a pivotal trial by the end of this year. Now in the interest of time, I will limit my remarks to these near-term programs that I've just discussed. But know this that our work continues on our very deep multi-platform pipeline of additional therapies and new approaches to the treatment of rare disease, and that includes new and enhanced delivery modalities, our efforts to solve the gene therapy redosing issue and dosing patients with preexisting neutralizing antibodies. And additionally, our progress continues in our gene editing innovation center as well. And with that, let me turn the call to Ian Estepan, our CFO, who will provide an update on the financials. Ian?

Thanks, Doug. Good afternoon, everyone. This afternoon's press release provided details for the first quarter of 2021 on a non-GAAP basis as well as a GAAP basis. The press release is available on Sarepta's website. Please refer to our press release for a full reconciliation of GAAP to non-GAAP financial results. Our total net product revenue for the first quarter of 2021 from our PMO Exon skipping franchise was $124.9 million compared to $100.4 million for the same period of 2020. For the first quarter of 2021, individual net product sales were $107.2 million for EXONDYS 51, $17.5 million for VYONDYS 53 and $0.2 million for the recently launched AMONDYS 45. The increase in sales primarily reflects higher demand for our products. We are reiterating our 2021 sales guidance of $537 million to $547 million for our RNA franchise. We have gained good experience over the past 5 years launching these therapies, and we have now executed for over a year in the COVID-19 environment. These factors serve as a foundation for our guidance. In the quarter ended March 31, 2021, we recognized $22 million of collaboration revenue compared to $13.2 million recognized in the same period of 2020, which relates to our collaboration arrangement with Roche. The reimbursable co-development cost under the Roche agreement totaled $13.4 million for the first quarter. On a GAAP basis, we reported a net loss of $167.3 million and $17.5 million or $2.23 per basic and diluted share for the first quarter of 2021 and 2020, respectively. We have reported a non-GAAP net loss of $122.5 million or $1.54 per basic and diluted share in the first quarter of 2021 compared to a non-GAAP net loss of $79.8 million or $1.04 per basic and diluted share in the first quarter of 2020. In the first quarter of 2021, we recorded approximately $22.3 million in cost of sales compared to $12.6 million in the same period of 2020. The increase in the cost of sales is primarily due to increasing demand for the company's products and the write-off of certain batches of EXONDYS 51 not meeting the company's quality specifications in the first quarter of 2021 with no similar activity in the same period of 2020. On a GAAP basis, we recorded $195.1 million and $136.1 million in R&D expenses for the first quarter of 2021 and 2020, respectively, a year-over-year increase of $59 million. This increase is primarily due to the continuing ramp-up of the company's gene therapy program. On a GAAP basis, R&D expenses were $173.5 million for the first quarter of 2021 compared to $114.2 million for the same period of 2020, an increase of $59.3 million. Now turning to SG&A. On a GAAP basis, we recorded approximately $71.1 million and $82.8 million for expenses for the first quarter of 2021 and 2020, respectively, a decrease of $11.7 million. The year-over-year decrease was driven by a decrease in professional services. On a non-GAAP basis, SG&A expenses were $51.5 million for the first quarter of 2021 compared to $54.5 million for the same period of 2020, a decrease of $3 million. On a GAAP basis, we recorded $15.5 million in other expenses net for the first quarter of 2021 compared to $7.4 million in other expenses net for the same period of 2020. The increase primarily reflects an increase in interest expense incurred on the company's loan debt facilities due to an increase in the outstanding balance, partially offset by a reduction of interest expense incurred on the company's convertible debt related to the adoption of ASU 2020-06. We had approximately $1.7 billion in cash, cash equivalents and investments as of March 31, 2021. As a reminder, we sold the priority revenue voucher for $102 million. This transaction closed in mid-April, and the sale will be recognized in our second quarter 2021 financials. With that, I'll turn the call over to Dallan for an update on our commercial activities. Dallan?

Thank you, Ian, and good afternoon, everyone. With the approval in late February launch of AMONDYS 45, our third PMO-based exon skipping medicine, the team exceeded expectations in the first quarter 2021. As mentioned, total revenue reached approximately $125 million, representing our 18th consecutive quarter of growth since launching in Q4 of 2016. This kind of consistent growth in the face of a pandemic is only possible due to flawless execution by our field teams and home office teams and the determination and commitment of our patients in the larger DMD community. The February 25 approval of AMONDYS 45 casimersen has served as a catalyst to accelerate our momentum even further. While launching during a pandemic can present many challenges, Sarepta has benefited from almost 5 years of building relationships and trust within the Duchenne community. The power of this experience in these relationships are best illustrated by the fact that within a week of the AMONDYS 45 approval, we had obtained access, shipped product to the site of care and dosed the first commercial patient in Florida. It's this of urgency and commitment that goes into driving access for each and every patient. The first quarter of 2021 marks our third approval where we were launch-ready within 24 hours with all facets of our commercial, manufacturing and medical organizations ready for the AMONDYS 45 launch on day 1. We will continue exploring options for patients to safely initiate therapy with AMONDYS 45 in a way that expedites access for amenable patients. We anticipate that the demographics for AMONDYS 45 will be similar to the other 2 populations, EXONDYS 51 and VYONDYS 53 with regards to the average age of patients on therapy and the payer mix. We are pleased with the demand for start forms, and the launch is proceeding on pace. As we saw with VYONDYS 53, the pandemic impacts the speed with which patients get on drug. The primary reasons are the desire to see patients in the center and institutional restrictions. This is why rare disease companies have seen a softness or slowness with respect to the rate of new patient starts compared to normal times. At Sarepta, we expect to see the same dynamic at play with AMONDYS 45. Now transitioning to our broader PMO franchise as a whole and performance in the first quarter, many biotech companies often face headwinds related to typical health plan enrollment cycles that impact revenues in the first quarter of each calendar year. This is especially so with companies like Sarepta who focus on rare diseases. I'm particularly proud that the team has navigated these issues in Q1 more successfully than what we've seen in previous years for our existing patients on EXONDYS 51 and VYONDYS 53. The launch of VYONDYS 53 continued on pace with minimal competitive impact on the growth trajectory of new patient starts. We also continue to see growing EXONDYS 51 revenue. As in previous quarters, the impact of COVID-19 pandemic has been evident and tracked closely with the U.S. national rate of new infections. That said, any impact within the U.S. has been primarily due to missed doses because of COVID infections within the immediate family or the direct care team. From a drug supply standpoint, we are working continuously with our manufacturers, distributors and specialty pharmacy partners to ensure uninterrupted drug supply. As such, there have been no disruptions in supplying EXONDYS 51, VYONDYS 53 or AMONDYS 45 to patients in the face of the unique challenges resulting from the ongoing pandemic. We continue to monitor the situation closely, stand ready to adapt and respond, and most importantly, we'll do all in our power to mitigate the risk and potential impact of COVID-19 on the Duchenne patients we serve. Patient safety is our top priority, and we will continue assessing any and all efforts to ensure patients feel safe and supported during this unusual time. Now I'll turn the call over to Gilmore, for our search - for an update on our research and development activities. Gilmore?

Thank you, Dallan, and good afternoon, everyone. Our commitment to and success in serving the Duchenne Muscular Dystrophy Community has been greatly strengthened by the achievement of a number of critical milestones over the past several months. Just two days ago, on Monday, May 3, we were thrilled to announce positive clinical data in the 30 mg per kg arm of the MOMENTUM study evaluating our lead PPMO-based candidate, SRP-5051. The data we shared included safety, measurements and change from baseline at week 12 and for exon skipping as measured by digital drop polymerase chain reaction or DDPCR and dystrophin expression in muscle by western blood. There were 4 patients biopsied in the 30 mg per kg cohort of momentum, both ambulant and nonambulant. Three of the patients were in their late teens and 1 patient was 7 years old at the time of treatment. Of note and due to COVID imposed delays, Patient 1 received 5 doses of SRP-5051 before he was biopsied, while the other 3 patients received their biopsy after 3 doses. The 30 mg per kg cohort showed a significant dose-dependent increase in exon skipping. SRP-5051, when dosed once per month at 30 mg per kg, achieved approximately 11% mean exon skipping at Week 12. Compared to the PPMO 20 mg per kg dose, we observed a greater than fourfold dose-dependent increase in exon skipping after only a 50% increase in dose, indicating that we have hit the steep part of the dose response curve predicted by our preclinical model. When compared to the current standard of care eteplirsen, we observed an 18-fold increase in exon skipping. Now in terms of expression, the 30 mg per kg dose of SRP-5051 resulted in more than 6.5% dystrophin protein expression as measured by Western Block, representing a greater than 100% increase in expression versus the 20 mg per kg cohort at Week 12. Now it is important to note that these results were not driven by a single patient. All the patients responded well to therapy. Indeed, if we remove Patient 1, who, as you will recall, received 5 doses and had the highest expression at 12% from the analysis, the mean expression for the 3 other patients was approximately 5%, a clinically meaningful and robust number. Furthermore, based on our predictive modeling, Patient 1 also provides strong support and validation of that model, which shows we should comfortably achieve greater than 10% dystrophin with once per month dosing over time. It is also important to highlight that baseline dystrophin levels are not a predictor of post-treatment expression. In fact, we observed that 2 patients with the lowest baseline had the highest level post-treatment expression. With regard to safety, we observed 3 serious treatment-related adverse events in two patients, two cases of hypomagnesemia and 1 of hypokalemia or Events were not symptomatic and have all resolved with magnesium supplementation. Our primary working hypothesis is that fusion that PPMO may be competing for magnesium transporter proteins, causing a decrease in magnesium after infusion. Our analysis of the clinical and nonclinical kidney biomarker data, serum and urinary, lead us to conclude that hypomagnesemia appears reversible, not correlated with changes in renal function and is manageable by magnesium supplementation. Importantly, we do not believe there is a cumulative effect as we've seen no evidence that the hypomagnesemia worsens over time upon receiving multiple doses. We and our external experts believe that serum monitoring of magnesium at oral supplementation with magnesium is a feasible approach to enable early detection and management going forward. In summary, SRP-5051 dosed monthly at 30 mg per kg delivers profound and clinically meaningful levels of dystrophin, that represents a significant improvement in potency over our marketed first generation PMO medicines. And SRP-5051 achieves that increased potency with more convenient and less burdensome once per month dosing with a manageable safety profile. We are delighted with these results. Now shifting to our gene therapy programs, in March, our Chief Scientific Officer; Dr. Louise Rodino-Klapac, presented results from our SRP-9003 gene therapy compound in development to treat limb-girdle muscular dystrophy Type 2E at the 2021 Muscular Distributor Association Annual Clinical and Scientific Conference. We believe that durability data will be a key differentiation factor for gene therapies. So we are quite pleased to observe that protein expression in muscle was sustained for 2 years following treatment in cohort 1, the low dose cohort, with mean beta-sarcoglycan expression of 54% at 24 months compared to 36% at Day 60, as measured by Western of Muscle In functional outcome assessments measured by the North Star Assessment for dysferlinopathies, or NSAD, in cohort 1, mean NSAD score improvement are 5.7 points for baseline was sustained through 24 months. And in cohort 2, the high dose cohort, a mean NSAD score improvement of 4 points from baseline at 1 year was observed. Results in both cohorts continue to reinforce the safety and tolerability profile of SRP-9003 and the RH74 gene therapy platform. As Doug already alluded to, we look forward to releasing the results for the first 11 patients in our microdystrophin study 9001103, when we will report on vector genome copy number and dystrophin expression measured by both Western and immunohistochemistry. I'll also reiterate that in Study 103, we utilized our linear QPCR titering assay and can confirm all patients received the target dose of 1.33 to the 14th VG per kilogram. In conclusion, I would like to take this opportunity to thank our R&D team, investigation, study participants in their families whose relentless dedication, despite the prolonged impact of the pandemic, have made all of these achievements for patients possible. And with that, I'll pass back to Doug for Q&A. Doug?

Thank you very much, Dr. Gilmore. Jonathan, let's open up the line for questions now.

[Operator Instructions]. Our first question comes from the line of Gena Wang from Barclays.

This is on for Gena. So one question on the potency assay for Study 301, I think you mentioned in the past that FDA had agreed with your approach of posting but we recently got many questions on this after Pfizer's step back. Could you confirm that all the potency assay matrix has been cleared and you don't need to do any additional work before dosing patient needs 301?

Yes. Thank you for that question. For those who, I'm sure everyone saw it that Pfizer noted today that they - they're still in discussions with the regarding their potency assay for the release of their therapy for their trial so they can start dosing in the United States. So let me be clear about where we are with this. The #1 issue is that we have to have a meeting with the division as a predicate commencing 301: one, we will recall that in September of last year, in connection with the commencement of what we call Study 103, we had discussions with the agency. We were hung up on potency assays at that time as well. I'm very proud of the team actually within a short 2 weeks or so after that initial meeting, we were able to get a live meeting with the division, have a very productive discussion, come - understand better what they were looking for and devise an approach to a potency assay that they would agree with that would allow us to Study 103. We've done additional work on potency assays even since then. So we continue to evolve. Now we have most significant thing we have to do is actually take all of our work, CMC and our protocol for our next trial and then have a discussion with the agency, and we're going to target that for the middle of this year. We feel very good about where we are. We feel very good about our potency assay. We feel very good about the data that supports our potency assay. And all of the rest of our CMC. This is one of the many things that make up the characterization of the product. But so we're clear, we need to actually comply all of that and have an active discussion and a dialogue with the division. And we're going to try to do that as soon as we have the 103 data, and we're going to now be right around the middle of this year. And then our goal is to start our next trial assume thereafter as we are permitted to do. Now with that said, Dr. Rodino-Klapac, if I missed anything, is there any nuance for to mention?

No. I think you got it perfectly. I won't add anything.

Yes. Just a follow-up on 301, what are the remaining gating factors for the initiation?

The big - the two big ones are - we got to get the 103 data. So just to remind everybody, Study 103 is a very important trial for us. That is the trial where we're going to look at the performance of the therapy, both expression and safety in patients with Duchenne muscular using our commercially representative material, the actual process that we'll be doing all of our future trials on the next 301 as well as the commercial material, both in the United States and outside of the United States. So number one is we have to get that data. And of course, you've heard in my opening remarks, we'll have that data this quarter. And once we have that data and it's been we'll share it with the investment community and with the rest of the world. And that will happen this quarter. So that's the one big issue that's the And then the next - and then the second 1 just saying no, but it is basically done, is that we needed to gain as much insight as we could from Part 1 of Study 102. That's the study that we reported out in January to really hone the protocol for our next study, Study 301, and we have done that. And we've made enormous progress and really believe that the insight that we gained for part in Study 102 has been invaluable. It should increase the probability of success in that study. That's been done. And then with all of that and all of our CMC material as well, there's a lot of CMC data. We need to meet with the agency. We'll do that around the middle of this year. And as soon as we've done that, we get the concurrence from the division. We'll commence our next study. And as everyone knows, we'll move as fast as we can thereafter.

[Operator Instructions]. Our next question comes from the line of Tazeen Ahmad from Bank of America.

So Doug, my one question to you is about time line for Study 301. If you are able to start the study sometime this summer, is it your expectation that you would be able to enroll by year-end, just given the calculations that Pfizer provided on its call, it does seem that you could significantly narrow the gap between completion of your study in there? I just wanted to clarify your thoughts on that.

Yes. Thank you for that, Tazeen. So of course, no one will be surprised to hear us say, we want to move as fast as possible. And so we want to get this meeting with the agency as soon as we can. We have to have the Study 103 data in hand to have that meeting. I think that meeting will occur around the middle of this year. And then we want to start as soon thereafter as we're permitted to do. The timing - the full enrollment will depend in part on the end of the study, of course, and we're still refining that. I'm not going to provide kind of detail on that because that will go into some of the work that we've done on the protocol, but we want to move as fast as possible. I would note that Pfizer - I don't remember the number of sites that Pfizer has ex-U.S., but we'll have significantly more sites onboard. So we should be able to rapidly enroll that therapy. Our goal would be to be able to do it by the end of this year or soon into next year as we can from a pure operational perspective. But I think a number of things that we need to consider. One, consider that we will have a significant number of sites up and running over the course of this year if we can commence that study as soon as possible. And the next big thing to also understand is that there's going to be an enormous amount of demand for this trial. So I don't think there's going to be a patient demand issue that's going to slow us down. So it's really incumbent upon us, first, to get the concurrence from the agency to commence that trial and then to really operate with a significant amount of operational excellence to get it enrolled. And I think - I do think that we'll be able to move very fast with that. I do want to take more issues with some people to me that sort of say we need to close a gap. I do want to be clear. We've dosed significantly more patients than others. We have a significant greater amount of information about the performance of our therapy and the way these kids are working with this therapy. We're the only ones that have had a readout on the placebo-controlled trial. I will note that while we had an imbalance in the 6- and 7-year-olds, and we wish we hadn't, but in the places where we didn't have it in balance the 4- or 5-year-old, we saw a very significant, statistically significant benefit in this therapy. And I will say that we alone, not going to be in being a little bit defensive here, but what surprised anybody that let me a little We will, in early next year, have a readout on Part 2 of this study, and that's going to be just an enormous amount of information. We'll have 41 patients, all who have been treated with our therapy will have cohort, about half of those kids will have something really, really our therapy for 2 years, and we'll be able to look at that when we unblind. And another group will be really interesting as well, we'll have been able to follow those kids for a year without a therapy and then watch the intervention of the therapy and the impact that, that intervention of therapy might have with these children against a match - an age match natural history cohort as an example. And that's all blinded right now. So I think we're doing very, very well. And I think if we can move fast, if we can get the meeting with the agency by around the middle of this year, we can get the next study started shortly thereafter then we should, I believe, be able to enroll this study with rapidity because there's going to be an enormous amount of demand both from investigators and from families with Duchenne muscular dystrophin.

Our next question comes from the line of Josh Schwartz from SVB Leerink.

This is Kelly on for Joe. On your call back in December for the 20 mg per kg SRP-5051 group, you had mentioned there was a slight delay in muscle biopsies due to COVID-19. Could you give a little bit of color on the average time from last dose to biopsy in the 30 mg per kg group? And could this difference in biopsy timing can found the dose response comparison we might be looking at?

I don't think we had any significant issue on the biopsy, but times for the 30 mg, but I will turn this over to Dr. O'Neill could comment on that.

Thank you, Doug. In fact, there were some delays actually in those muscle biopsies. However, because of their duration, we do not believe that they can found the comparison anyway. In fact, if they were to do that, they would have confounded against the 30 mg per kg. I think that we are very confident in our conclusion that we're seeing a definite dose-dependent effect and that we are actually seeing a robust response and very importantly that we are on the steep part of the dose response curve as predicted by our preclinical market. So in summary, we are very confident that our results and from the conclusion for our results, we about the robustness of the expression effect then.

And one final thing, I wouldn't note. For those who wonder, I mean, I really - remember the following. The thesis is pretty straightforward. Tissue exposure leads to exon, skipping leads to dystrophin, production leads to functional benefit. Look at the exon skipping. For those who wonder, look at the significant multiple increase in exon skipping that occurs at the 30 mg per kg. That should be very predictive of a significant benefit over time. And then look at it versus EXONDYS. If you want one wonders why we feel very good about the results that we have and about the potential at least that we have to confirm in future studies in our Part B, the potential for a profoundly improved therapy versus EXONDYS simply look at the fact that we're seeing 18 full, literally 1,800% more exon skipping over EXONDYS. And we're seeing that at 12% of the dose exposure in half - just about half the time. So we do feel - we feel very good. And then again, Dr. O'Neil mentioned in his opening remarks and apologies for belabor it, but all of the kids. It's a small cohort, it's only I get that. But all of the kids in the cohort that we looked at in Part A were significant responders. There's no one responder that drove anything here. And we did see one significant responder, that was the 12% kid. But all the other kids responded as well and the only difference that we can find between the 12% kid and the other kids is that 12% kid had tumor are doses than the other. So when we look to the future and we predict the potential of this therapy, I would keep that in mind because that is a pretty important signal for what we think we're going to see if we look at this therapy over, let's say, 6 months or even over 12 months, what we might see in the way of dystrophin production and then, of course, ultimately benefit from this therapy.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

This is Steve on for Brian. Just as a clarification where any functional data collected at baseline from the patients enrolled in Study 103? And do you plan to assess or report functional changes from these patients?

The kids, I'm going to say this and then you're going to Dr. O'Neill or Dr. Rodino-Klapac We do take functional measures with the kids in 103, but there won't be any report on that for a host of reasons. It's an open-label study. There won't be a report on it immediately. I'd say when we announced you the results in this quarter, we'll be providing results on expression and safety, I wouldn't envision so results. Number one, it's an open-label study. But more important, number two, it's a very early time point. We're looking at kids after just a couple of Mindstone therapy. But perhaps I misstating things. So I will ask Dr. O'Neil to confirm or deny my statement in that regard.

No, I think you summarized nicely.

Our next question comes from the line of Alethia Young from Cantor Fitzgerald.

This is Emily on for Alethia. I was wondering how are you thinking about running studies for some of the other limb girdles beyond 2E? Is there a way to potentially do a basket trial or are they two?

So yes, there would - the short answer, probably not the most satisfying answer. The short answer is we're looking at a lot of different approaches right now to the - and there's a lot of ideas we have and potentially some basket studies around some, for instance, the starts are other very similar therapies or the kinds of things we're pondering. But the predicate for all of it has to be a discussion with the pathway for limb-girdle Type 2E. Because that will really set the framework within which we could have discussions about the efficient pathway for all of these therapies. So we have a number of different ideas. I don't want to get too far out of my skis around them until we've actually met with the division. We will do that this year. As I said in my opening remarks, we really want to prioritize that right behind 9001, simply because we don't want to overburden the division and our own team as we're dealing with the various things we're dealing with. So we'll first focus on 9001. We'll have a meeting on 9003, hopefully, very shortly thereafter. And our goal is to find a very efficient pathway and hopefully, you get started on what we like to believe will be a pivotal trial this year, but we'll have to do that with the concurrence input from the division. And there's a lot of reasons why we think we should be able to move quickly. Just to remind everybody with respect to SRP-9003, and this is similar to most of the other limb girdles, if not all of them, we're dealing with the native protein. These are all monogenic diseases characterized by the absence of a protein, usually a structural protein and the absence of that structural protein is causing the generation and debt. These therapies, let's go start with SRP-9003 as the lead here, 9003 is a gene therapy that codes for the actual native protein. So we're able to deliver to these children who are dying from the absence of beta-sarcoglycan, the native beta-sarcoglycan protein properly localized at the muscle membrane acting as the structural protein at most for these kids to benefit from it. We do that really robustly. So far, the data on safety looks very good. The kids are doing open-label though it is. The kids appear to be doing very well versus natural history, and the therapy is very durable. So we think we have at least the opportunity to have a good robust discussion with the agency about in the context of what we're seeing in the context of this very rare disease and in the context of this native protein, developing - coming with the development program that is fit-for-purpose for that disease state. We'll have that discussion then we'll report out on that and where our goals are with that. And that will inform the rest of our and we'll be able to provide some additional information on that over time. But ideas like basket studies are the kinds of things we're pondering. We have to find clever ways to address these very rare diseases, particularly rare diseases that have significant therapeutic commonalities.

Our next question comes from the line of Gil Blum from Needham & Company.

Congratulations on your progress on the pipeline. So we've discussed the potential for accelerated approval in the U.S. for SRP-5051. Maybe going on the global aspect of this, would there be challenges in enrolling a randomized study for SRP-5051, assuming a placebo control, for example?

I apologize. I missed the piece of it. It cut out. Can you repeat the last part of the question, apologies?

Yes, absolutely. So when thinking of a global study for SRP-5051, could there be potential challenges in enrollment if there's a placebo arm?

Well, I will say. I don't think there is going to be significant challenges in enrollment simply because Duchenne Muscular Dystrophy is a devastating 100% fatal disease. I will also say, and let's not kid ourselves. In this rare disease, it is a very painful thing for patients to the times accept the concept of placebo-controlled track. They're willing to do it. We've seen this over and over again. We've done it with which is a very significantly longer placebo-controlled trial. We've done it with Study 102. We'll do with the upcoming 301. So I'd say we've got to be very mindful about these issues and think of the patient first on things like placebo-controlled trials. I do think that the ultimate answer is that we need a placebo-controlled trial. I do think we can enroll it. And I think patients will do that, particularly if it's a thoughtful program. I think the good thing about 5051 is that we make dystrophin very rapidly. So perhaps that means we can have a more moderated approach to this - the length of the study. Now as long as you're talking about ex-U.S., I think it's important to really focus on the value to the patient community from SRP-9000 - sorry, 5051 with respect to If we look back historically, our PMO, EXONDYS, VYONDYS, AMONDYS, those have all been approved through the accelerated approval process in the United States. On the basis of a biomarker that reasonably predict clinical benefit, and then we've got studies thereafter on that. That mechanism doesn't exist outside of the United States in really any significant way. And so that limits our ability to take that approach ex-U.S. and bring the PMO forward. So we do get ex-U.S. sales, and we have a managed access program ex-U.S. that has benefited kids around the world. But generally speaking, this has been a largely U.S. service with our PMOs. The PPMOs could really change that. We're talking about a therapy that we can confirm it in the next clinical trial in Part B, this could induce dystrophin rapidly. And it could reduce dystrophin, that could be significantly over 10%, which I think most people would say is just a profound home run amount of dystrophin. That very likely opens for us the opportunity to bring this therapy in a very lean way ex-U.S. around the world, including Europe. We've already had, in the past, some discussions with EMA around these issues. But obviously, the next thing we need to do is separate from our discussions with the FDA has had some discussions with some ministries of health around the world to ensure that we're building a clinical development program that's fit for their purposes as well as for the FDA purposes as well. So we'll do all of that, but it's important to us. It's important to the patient community, of course, we can't be a U.S.-centric organization with our therapies, kids around the world, hundreds of thousands of kids around the world with Duchenne muscular dystrophy, who needs treatment. So we've got to find an avenue for them. And I think the PPMO 5051 had its progeny could be that avenue potentially. And of course, down the roads in the next couple of years so could SRP-9001, of course, we're significantly focused on the rest of the world with respect to our gene therapy as well.

Our next question comes from the line of Colin Bristow from UBS.

Congrats on the quarter. So on 9001, you mentioned that the linear QPCR method is achieving expression levels which were greater than you saw in Part 1 or Study Looking at my notes, I think you said that you saw no correlation between dystrophin expression and function in Part 1. So can you confirm whether you saw a threshold relationship with expression levels and could you maybe put some levels around that? And then just another quick one. Could - is there any interest on your part in pursuing a filing strategy with the FDA based on the 4-to 5-year-olds, obviously, assuming endeavor looks okay.

Yes. So on the first one, I want to make sure we did - I'm not suggesting there's not a correlation between expression and function. There unquestionably is, and that's why we're really maximizing expression is extraordinarily important to us. I think what we were saying before, just to put a fine point on it is, when we look at the Part 1 and Study 102. When we look at the 6- to 7-year-old, which is really where you look, and you ask why did we missed the primary endpoint, it was the 6- to 7-year-old, and it was the baseline characteristics. And it wasn't the fact that we had variability in titering. In fact, we had variability in titering for the 4- to 5-year-olds, and we knock it out of the park. So just so we're very clear about that. We do think that more is better with respect to dystrophin, but the 28.1% we had in Part 1 of 102, we believe, had we had the baseline characteristics right, it would have correlated to significant functional benefits and we would have hit our primary endpoint. So that's really what we're saying there. We don't have further data on the upcoming call. We should have that on 103. We'll be getting that data in the very near-term from an expression perspective as well. And then on the pathway forward with the division, let me say that we are not without we want to be creative to find avenues to bring this therapy as rapidly as possible to patients suffering from Duchenne muscular dystrophy. And so we'll have wide-ranging discussions with the agency over time. I think for planning purposes, I think, it would be wise that people for planning purposes to presume that it is Study 301 that will be our pathway to approval in the United States as our base case assumption. And that's really the, I think, the most probable approach that we're going to take isn't to suggest that we don't have other ideas, and we're not thinking about things and we don't have discussions. With the division, but I think if we're going to plan, I think people should plan for 301 being the mechanism and that means we need to get to the division. We need to show them our CMC in protocol, get their concurrence. We need to start 301 as soon as we can this year. We need to get that enrolled as fast as possible. We get a readout of that as soon thereafter as possible. It will be a 52-week study, and we could be in a good place to file a BLA if we were successful in the United States, and we're not very far into the future, if we can just get going this year. So that's - that, I think, has to be our base case assumption, all of us.

Our next question comes from the line of Danielle Brill from Raymond James.

Yes. This is Daniil on for Daniel. Just very quickly, you mentioned previously that you plan to enroll additional 4- to 5-year-olds in Study 103. Just wanted to ask if been completed in those patients? And do you need to wait for those data before meeting with the agency to discuss plans for Phase III?

So we're going to answer the last question first. We're not going to wait. So the meeting with the agency is going to be founded on the original, the first 11 patients. So our initial cohort of patients. We did update the protocol, as you may recall, so that we could add some additional patients to the protocol. We did that for purposes of sort of creatively thinking of what kind of data sets we need if we were going to have far more managing discussions with the agency about faster pathways in the United States. Toward that end, we've lost a significant number of them. I don't know if we've dosed - I suspect we haven't dosed all patients yet, but we've dosed a significant number of patients. Well, actually, I think, let me open the line to Dr. Louise Rodino-Klapac. I can't tell us. She's agreeing with me or disagree with me?

Yes. Yes. All of it.

So apologies. We're better than I thought. I apologize for that of those patients. But any event, we don't - we are not going to wait. We don't wait for the outcome of those patients for the FDA. We are going to - are meeting with the FDA is predicated on our first governor patients. And that will accrue, as I've said before, around the middle of this year once we get the 103 in hand. Apologies for misstating.

Our next question comes from the line of Brian Skorney from Baird.

This is Luke on for Brian. On 9001 on 103, again, I guess what can we expect to see in terms of individual patient level of expression?

Well, I don't know if we've made all the decisions on the exact presentation. Obviously, we haven't seen the data yet. I think broadly speaking, what you should look for is the expression data which will be both western as well as and the safety data. That's the information that's going to tell us about it. I think one of the things that I - that's the primary information. That will tell us about the performance of the therapy, that will tell us about what therapy we have for purposes of our clinical trials and that will give us a view of what this commercial process material is going to look like when we get approved and then the nuance details of that we haven't worked out obviously yet.

Our next question comes from the line of Salveen Richter from Goldman Sachs.

This is Sonya on for Salveen. Beyond DMD, what other indications can the PPMO platform be applied to? And would you be able to do that in parallel?

Yes. That's great. I'm laughing because we were having this discussion just today, and I was saying, I don't want to get out of my skis and promise the particular disease dates. There are a number of diseases that may vary - there are very serious diseases that may benefit from the steric blocking technology. And we've talked about them in the past, and you'll see them, and we actually have some IP on some of them. But the discussion changes even more significantly when you have not only a really precise therapy like our PMO, but you have a very - a much more potent version of that with our peptide conjugated PMO. So I guess what I would say is I don't want to discuss additional diseases or I feel like I'll be committing myself to things that we haven't yet decided as an organization, but there is a cascade of opportunity here. So let's think about the near-term and the mediate and then right after the immediate. Mediate is get through the agency, get their concurrence on the approach and with their concurrent start Part B for 5051 itself. The next big opportunity for us is the other exons. Remember, we're not an exon 51 company. We're a BMD company. So the wonderful thing about our technology and the wonderful thing about exon skipping is there are a very few mutations that wouldn't benefit from exon skipping and where this wouldn't work. So we could at least theoretically, we can get to over 80%. I think the estimates are up to almost 85% of kids with Duchenne where we could build constructs to serve them. That's the next big opportunity. The next big opportunity, and this is a massive opportunity, in my view, is expanding the regions that we can go to. So think about where this could take us. Right now, we're doing very well. We've been - Dallan Murray and his team have done a brilliant job. We've been growing at 19% compounded growth, and we've served - we've grown 25% this quarter. And that's just fantastic work. And by the way, I will note no price increase in that. No change in pricing, parity pricing. So that's all serving the community, and that's tremendous work but managing what we could do if we could actually treat not the 10,000 children in the U.S. and some ex-U.S. sales, but actually get approvals around the world. I mean, that would just multiply the population of patients that could benefit from our RNA splicing technology. And then the next one there, I'm not suggesting this is chronic - the chronologic because we're going to be looking at all of these very soon is, okay, now that we have a very potent new version of our PMO, and we're getting confident about it. What do we think? What's the next disease state or 2 disease states that we take this? And that's something we're going to be looking at over the course of the rest of this year. But I don't want to commit ourselves to it yet because we've got a lot of work to do to really decide what the smartest next move is for the PPMO post-5051 and then the other exons.

Our next question comes from the line of Tim Lugo from William Blair.

So as you start to think about ex-U.S. and the PPMO platform, you signed a deal for ex-U.S. for microdystrophin gene therapy. Can you maybe discuss why you would take TPM to Europe on your own, while you still have a partner for the gene therapy product and kind of your thinking around go alone versus partnership with PPMO?

Well, we'll have to have some discussions with our partner, Roche, regarding that. But Roche has an option to the RNA technology ex-U.S., so we'll have discussions with them about that. But either way, I mean, let me be very clear about this. Our first and foremost goal is to develop therapies to benefit children around the world, including with Duchenne muscular dystrophy. And either directly ourselves or through our partner, Roche, or through someone else, we're going to serve that community. So your point is a good one. I mean, the approach that we take to get in the therapy to other places around the world may vary depending on discussions that we have with others, including our partner, Roche, that we're there with SRP-9001. But we'll get this the therapy there at is successful, we're going to do everything we can to make sure that kids around the world get access to this therapy.

Our next question comes from the line from Cowen.

This is on for Ritu. Congrats on the recent progress. So based on your insights gained from Study 102 Part A and apology that this is an ongoing process, but what might Study 301 size inclusion/exclusion criteria look like? And would it have an interim analysis built in like perhaps also looking at content via MRI at an earlier time point. So any color there would be really useful.

Yes. So let me be very clear. Those are great questions. And I apologies to frustrate you and tell you that I'm not going to answer, then I apologize. We have done - and they're all the right questions. What's the right in, what's and how we're looking at endpoints, what's the exclusion and inclusion? Are we were finding things? Are we looking at other aspects in the trial? So we built the protocols around a lot of the issues that you raised. I will - there's a couple of reasons why I want to wait to discuss the protocols with the outside world. First, of course, is that the protocol in a very real sense is tentative until we have discussions with the division and how to get their input and get their views. And the second one, of course, is that we have a lot of - from our perspective, a lot of insight and proprietary insight around the thoughtful way to build the next trial in a way that will maximize the probability of success and speed. And so we want to meet with the agency, get their input. And then we will provide all of that information, but it will be post the meeting with the agency at or right around the time that will commence that trial, and we'll share it with the world.

Our next question comes from the line of Difei Yang from Mizuho.

This is Alex on for Difei. So just one on the LGMD gene therapy program and the recent presentation at the NDA meeting in cohort 1, we saw increasing dystrophin expression over time. But BCM and protein intensity was a bit lower, was going down over time. I'm wondering if you could give us some details on that? How should we think about that? And are we reading too much into the VCN data here or was there any changing methodologies for these measurements?

I think Louise is going to say, we're probably be reading too much into the but I'll turn it over to Dr. Rodino-Klapac to respond.

Yes. Just to - so we start beta-sarcoglycan expression by multiple measures by what strategy said and also by fluorescent by a number of positive fibers, intensity and the vector copy and those were all within the range that we saw within the first cohort. So we didn't see anything significant in terms of drop in. We're very pleased with the durability that we saw over that course of time and also the increased destruction associated protein conflict. So we're quite pleased with the results we saw two years in the low-dose cohort and continued in the high dose as well.

Our next question comes from the line of Anupam Rama from JPMorgan.

This is Tessa on for Anupam. Just one question from us. Bridging from the Pfizer news earlier this week, a question that we've been thinking about is if every DMD gene therapy sponsor could run into some of the similar issues with respect to the potency assay that you have overcome. What are your thoughts here? And what advantage could if you guys are the only ones who can dose in the U.S. for a gene therapy trial?

Yes. Thanks. Obviously, we were the only one that had the ability to start the trial in the U.S. advantage to that would be astronomical. I don't want to get out of my skis and say that. I want to - let me start with an enormous amount of humility. We've got to meet with the division ourselves. Now I do think that we have benefited from the fact that we had an opportunity to dialogue around potency assays and expectations with the division last year in the sort of September into October time frame. And I'd like to believe that that's really benefited us and really provided us with the kind of direction. And we've built our potency assays and even evolved our potency assays based on those discussions so that as we prepare for our meeting with the division around the middle of this year, I can at least say that we are confident in our data package. I think we have a very good data package. I think we have, I think, a very thoughtful approach to potency assets. I think the data that we have on things like - I'm just focused just on potency, but things like on the potency assay is very good, very positive data, and we think we have a very strong package. I still want to be very clear. We've got to meet with the agency ourselves, and we got to talk CMC and talk to protocol and get the agencies blessing and then we'll commence our next trial. I think dosing in the United States is a very important issue, of course. And I'm not targeting one even needs me to say that. And so it's a big focus of ours to have a successful meeting with the agency. I think we're going to be in great shape with it. Let us assume that the Study 103 data looks good as well, we'll have that data shortly. And then all of our CMC data, with our 103 data with the data that we've seen in Part 1 and 102 and our protocol, I think we'll have a very productive discussion with the division. And then hopefully, if all goes well, be able to start that dosing in the United States and around the world very shortly thereafter this year.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Doug Ingram for any further remarks.

Okay. Thank you very much, Jonathan. Thanks, everyone, for joining us. And thanks for your very thoughtful questions this evening. I think it's pretty obvious from our remarks and from our answers to the questions, but we have a lot to do this year. We have a very focused team. We'll have a number of very significant readouts and milestones over the course of 2021 into 2022. I've got, in my view, a fantastic team, the best team we've ever had, a very focused and energetic about getting things done and advancing these therapies. And certainly, as we all know, we have a mission that matters. So we're getting up every day, fighting like mad to advance these therapies and improve the lives of patients with rare disease, including, but not limited to, the children who have Duchenne muscular dystrophy in all of the children and adults who have the various limb girdles on which we're developing therapies. And that is only the tip of the iceberg of the work that our team, including our research team are doing to advance our programs. So thank you all very much, and I look forward to additional updates across the course of 2021 as we read them out.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.