Good day, ladies and gentlemen, thank you for standing by, and welcome to Sarepta Therapeutics Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' prepared remarks, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. I would now like to turn the conference over to your speaker host today, Mary Jenkins, Senior Manager of Investor Relations

Thank you, Olivia, and thank you all for joining today's call. Earlier today, we released our financial results for the second quarter 2022. 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 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 [Technical Difficulty] 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 President and CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Thank you, Mary. Good afternoon, everyone, and thank you all for joining Sarepta Therapeutics' second quarter 2022 financial results conference call. I will discuss our outstanding quarterly performance in a moment. But given its importance to the patients that we serve, to Sarepta and in my view, to the entire field of gene therapy, I will begin by focusing on our progress this quarter with the largest near-term gene therapy opportunity in biopharma, and that's SRP-9001, our gene therapy for the treatment of Duchenne muscular dystrophy. As you will recall, we previously disclosed that we were engaging with the US FDA about the possibility of submitting a Biologics License Application, or BLA, for the accelerated approval of SRP-9001 to treat Duchenne muscular dystrophy. We also cautioned numerous times that we would not change our base case assumption on the timing of approval, unless we have strong conviction on the receptivity to an accelerated approval BLA by the FDA. As we announced last week, our discussions are now complete, and our base case assumption has indeed changed. Over the course of the second quarter, we engaged with FDA in an in-depth review with the agency of the wealth of evidence that supports the safety and efficacy of SRP-9001 and the functional benefits associated with the robust expression have shortened the functional dystrophin when treated with SRP-9001. This included the safety and tolerability data unique to SRP-9001, the preclinical of animal models supporting its benefits, the various function-related biomarkers associated with the nearly 90 patients dosed with SRP-9001 across studies 101, 102 and 103 and the impressive and consistent function of the results, which is, of course, NSAA and multiple time tests across those studies. I would like to thank the FDA for its time, its commitment and its input as the…

Thanks Doug. The significant achievements we've made recently with respect to SRP-9001, our gene therapy candidate to treat Duchenne muscular dystrophy, represents not just an important moment for Sarepta, but more importantly, for the patient community. Notably, we announced this past Friday, July 29, our intent to cement a BLA seeking accelerated approval for SRP-9001. We're a thrill with this development as it speaks to the strength of the underlying science and the data we've generated to date. I want to thank the team for all their work supporting this positive outcome and engaging with the FDA. While also working on the BLA submission in parallel. Due to this major effort, we are well-positioned to submit our BLA this fall. The data we announced in early July including important functional clinical results from studies 101, 102, and 103, and our integrated analysis will support this BLA submission. To remind you, Study 101, and 102 is clinical material, and Study 103 is commercially representative material. I'll now briefly recap these results for you. Starting with Study 103, or ENDEAVOR. We showed the patients in Cohort 1 with an end of 2020 improved four points from baseline on NSAA. Pretreatment had a mean baseline NSAA 22, and at week 52 improved mean of 26, approaching the top end of the NSAA scale. For example, these patients can now perform two activities unassisted that they were not able to perform prior to therapy. The before activities that they needed assistance risk that they now can do on their own. Equally impressive SRP-9001 treated patients improved 3.8 points on unadjusted means and 3.2 requiring of 52 weeks on NSAA compared to the propensity Master external control group, with a p-value of less than 0.0001. These results are impressive as they demonstrate that commercially representatives…

Thank you, Louise. In the second quarter of 2022, the team delivered double-digit growth across all three approved RNA-based PMO therapies. We eclipsed $200 million in net quarterly product revenue for the first time, generating over $126 million for EXONDYS 51, $54 million for AMONDYS 45, and $30 million for VYONDYS 53. This represents roughly 12% growth over the prior quarter and almost 50% compared to the second quarter of 2021. We are thrilled with this performance, and in order to properly contextualize, it's important to note that we experienced ordering volatility due to the July 4th holiday, which fell on a Monday this year. We believe that approximately $5 million may have been pulled forward from Q3 into Q2 as a result. I urge the analysts to incorporate this pull-forward into their models for Q3. As a result of our performance in the first half of the year, as you've already heard from Doug, I'm happy to say that we're increasing our full year net product revenue guidance from over $800 million to a range of between $825 million and $840 million. As we mentioned on our first quarter earnings call, there remain a number of important factors, which could swing our final number in either direction for the rest of the year. These include competitive enrollment into some of our own clinical trials. They are somewhat hard to predict when it comes to the 30% of the Duchenne population that we serve. As such, we provided this $15 million range, which we intend to narrow as we get closer to the end of the year. It goes without saying that I'm very proud of the execution and commitment across all our teams at Sarepta, which enables this kind of success and growth. Moving on to the performance of…

Thanks, Dallan, and good afternoon, everyone. This afternoon's financial results press release provided details for the second quarter of 2022 on a non-GAAP basis as well as a GAAP basis. Please refer to our press release available on our website for a full reconciliation of GAAP to non-GAAP financial results. For the three months ended June 30, 2022, the company recorded total revenues of $233.5 million, which consists of net product revenues and collaboration revenues, compared to revenues of $164.1 million for the same period of 2021, an increase of $69.4 million. Net product revenue for the second quarter of 2022 from our PMO exon skipping franchise was $211.2 million, compared to $141.8 million for the same period of 2021. For the second quarter of 2022, individual net product sales were $126.4 million for EXONDYS 51, $54.7 million for AMONDYS 45 and $30.2 million for VYONDYS 53. The increase in net credit revenue primarily reflects increasing demand for our products. As a result, we are raising our 2022 total revenue guidance to a range of $905 million to $920 million and our net product revenue guidance for our RNA franchise to a range of $825 million to $840 million. In each of the quarters ended June 30, 2022 and 2021, we recognized $22.3 million of collaboration revenue, which relates to our collaboration arrangement with Roche. The reimbursable co-development costs under the Roche agreement totaled $26.4 million for the second quarter of 2022, compared to $18 million for the same period of 2021. On a GAAP basis, we reported a net loss of $231.5 million or $2.65 and $81.1 million or $1.02 per basic and diluted share for the second quarter of 2022 and 2021, respectively. We reported a non-GAAP net loss of $103 million or $1.18 per basic and diluted…

Thank you very much, Ian. Olivia, let's open the line for Q&A.

[Operator Instructions] The first question coming from the line of Anupam Rama with JPMorgan. Your line is open.

Congrats on all the progress. Can you talk about the factors that led FDA to get comfortable with a potential approval in all ambulatory patients versus something more age restricted to 4- to 7-year-olds? And how does this change the addressable population based on your market research? A – Doug Ingram: Thank you very much. Thanks for the kind words, Anupam Rama. So first of all, I'm not going to give you a lot of detail about the back and forth when the agency. I'll give you the broad stroke answer, broadly speaking, way the agency got comfortable. Generally, of course, as our very vintage and law I would say the data -- we have a wealth of data that supports the therapy and its benefits over a broad group of patients. And so we think it's appropriate now given the data that we have right now to file a BLA for the ambulatory population. There's no reason to believe that if the therapy is a benefit to four to seven-year-old that the data has shown repeatedly that it is in multiple studies that it would be ineffective with child which is younger or older. It ultimately will not affect the addressable patient population. I want to be very clear, it is not our goal to treat simply the ambulant population as large as that population is as a percentage of entire Duchenne. Our goal is to have the broadest possible label. And the regulations will provide for that given the fact that the mechanism of action of our therapy is equally applicable. It ought to be equally applicable across all age groups to the extent that patients have skeletal muscle bioframe muscle and cardiac muscle level benefit from this shortened but functional dystrophin approaching properly localized. So we've got to do additional work to get that label expanded. There are another of things we will be doing. We will start our non-ambulatory study as I mentioned, what's called Vision or Study 303. We're going to get that started this year. We'll have data from that even before it reads out. It will be a placebo-controlled trial, but we got data from that even before then because we'll have expression in safety experience that we can add to the expression and safety experience, we already have with non-ambulatory patients. As you may know, in some of – in our cohort in Study 103, we had – we dosed non-ambulatory patients including very – much heavier patients over 80 kilograms and significantly older patients, non-ambulatory nearly 20 years old we’ve done that a few times. So this will add to that. And then we would seed through a supplement to expand the label beyond the ambulatory. So the ultimate addressable population certainly is our goal to make it all patients.

Yeah. And just a follow-up. Obviously, the ambulant population is approximately 50% of the population. So, if you were just modeling four, seven year old, you would have a minimum have to double the available patient population based on an ambulant patient population at a minimum.

Thank you. And our next question coming from the line of Gena Wang with Barclays. Your line is open.

Thank you for taking my question. Also, congrats on the accelerated approval path. So I have three part of questions. Regarding the accelerated approval, the FDA feedback. So, what were the main endpoints that serve the basis of a submission of accelerated approval? And did the FDA validate the propensity way to control? And lastly, do you expect FDA to request EMBARK data before accelerated approval?

Yeah. Thank you very much. So first of all, -- I mean, to justify the accelerated approval, of course, it is the totality of all of the evidence, including all of the endpoints, and that includes the preclinical work. The ultimate endpoint that would be the surrogate endpoint would be the 9001 shortened functional dystrophin protein that we justify on – we certainly provided the entire data set, including our propensity analysis. And I think, it's very compelling and we certainly played a significant role in dialogue that we've had with the agency. And then as related to EMBARK, there was never a discussion or a suggestion by the agency that they either would require or would await any of the EMBARK either interim or otherwise. So that was a good mission that arose in our multiple discussions with the agency.

Thank you.

Thank you. Our next question coming from the line of Steven Mallon [ph] with RBC Capital. Your line is open.

Hi. Thanks. This is Steve on for Brian. Congrats on progress. And thanks for taking our question. Can you share a bit more on what you learned from reviewing the totality of the 9001 data on the relationship between micro-dystrophin expression and functional end points, including CK? And what gives you comfort there that the FDA is aligned with the relationship there between expression and function? Thanks.

I think what gives us comfort is that, we had multiple in-depth discussion in the meeting line, but – human telephonic meetings with the division both OTC, Sedar leadership, Sedar office of new drugs,, the Bureau division, which has a particular expertise in tissue. And as a result of that, we have significant conviction based on the written feedback we've received from the FDA that we are to seek a BLA for Accelerated Approval. Louise, do you want to comment any further on, any of the underlying data association?

I'll add that certainly, between our -- the strength of our data was in the preclinical data and we've learned from our functional data linking the 901 dystrophin to function has continued through all of our clinical studies to see consistency across those clinical studies with 9001 dystrophin. And the data is compelling, so I'll just keep going back to about the totality of the data, the expression data, the biomarker data and functional data is what we're up.

Thank you. And on the animal data that predicted exactly what we would have seen in the studies that we've run. We've run a -- just keep -- we'll kind of go on the act a little bit. I would remind everybody, we have dosed nearly 90 patients just in Study 101, 102 and 103. I'm not talking about March, which, as you know, you will have in the next few weeks. I think fully enrolled in that study and that will be another 60 patients before we cross them over. And we've seen very consistent results, very consistent functional results in the 101, 102, 103, very, very strong key values across it, all the underlying biological markers support the conclusion that this therapy provides a significant benefit. All the protein was properly localized, and sarcoglycan acting as the shocking where they've been mentioned it is mid-single-digit in CK. CK is very noisy endpoint, and yet every one of our studies, we see significant drops in CK that is a great ambition, the benefit that we're also seeing in the functional results both NSAA and time test all of which are truncated. We've seen third-party at muscle MRI that has been truncated in the reduction of fat and fibrotic tissue. So there's just a wealth of totality of evidence that supports the conclusion from our perspective that the SRP-9001 therapy and the result in shortened -- the functional protein, which was rationally designed over 14 or more years through both design and review of natural history, and then in purses justified the conclusion that our protein is functional. We have a very liable safety profile. And on that basis of all of that plus the feedback we've received from the FDA, we think there's certainly appropriate, and we have an enormous amount of conviction about the pathway forward as we seek a BLA for an accelerated approval for the ambulant population and then follow-up in the non-ambulant population as soon as reasonably possible as they're important part of our mission.

And our next question is coming from the Judah Frommer with Credit Suisse. Your line is open.

Yeah. Hi. Thanks for taking my question and congrats as well on the progress. We were just kind of curious given how close the timelines are between the accelerated BLA filing? And the EMBARK data coming out. In your mind, is the accelerated BLA somewhat of a low-risk option to explore approvability? And does it in any way compromise if you didn't get the accelerated approval, the ability to quickly file with the EMBARK data thereafter, to the point where if it's not accelerated, we should still be thinking about the same timelines for a Phase 3 filing?

Well, first, I'll answer the last question first, which is -- this will actually speed up our discussions, since we'll be in a BLA would be agency. But so we're clear, we would not file. I want to be very clear about this. We've said this many times over the last many months, we would not submit a BLA for accelerated approval unless we have developed strong evidence-based conviction that the BLA would be well received and that we would get a very productive review. So we don't see this as a low risk issue, would have been even easier for us to simply await the EMBARK readout now. Waiting for the EMBARK readout and then compiling a BLA thereafter and then filing a BLA after [Audio Gap] time line to get this therapy to children [Audio Gap] waiting for it by as much as the year. And given the feedback -- it is clearly the more appropriate and frankly, ethical thing to do is submit a BLA for an accelerated approval. And given the data that we have, get this therapy to take as soon as possible. I would remind you all that while the NGV on Sarepta may be very similar between those two scenarios, it is not the same answer for the children are waiting for this therapy. Every single solitary hour of every single day, not to be overly dramatic about it, but it is not dramatic in its objective fact. This is a horrible disease is generating these kids and stealing from them their muscle. So if we can get this therapy approved on an accelerated basis, there will be thousands of children that will be -- will have had that that muscle shape that would have otherwise been lost as a result of at least probably a year gap between what a traditional approval would be if we file the BLA after EMBARK readout versus our ability to file a BLA now and get an accelerated approval for the ambulant population. So I think it is -- but again, I want to be very clear to people that might say -- almost sort of suggesting that there's a fly or no. It was a result of a significant in-depth review, a significant number of meetings with the FDA that gave us the conviction to submit an accelerated approval BLA, which we will be doing this fall. Thank you very much for your question.

Thank you. One moment for our next question. And our next question is coming from the line of Tazeen Ahmad with Bank of America. Your line is open.

Hi, guys. Good afternoon. Thanks for taking my question. Ian, you had said not to expect a meaningful uptick in expenses in 4Q. But as you ramp up commercial supply, can you give us a sense of how expenses in 2023 could compare to this year? And then separately, can I ask on PPMO, when should we expect the next update, either data wise or on path forward? Thanks.

Yes. Just on the expenses, you’ve seen uptick in OpEx. However, because of the growth of our revenue from a net cash burn perspective, I actually expect it to be relatively flat for 2022 and 2023.

And I'll turn the PPMO question over to Louise, who might want to comment on the interactions with the PPMO.

Yes, with PPMO, we’ve obviously submitted information to FDA and waiting for their feedback. So we’ll update as soon as we have that.

Our next question coming from the line of Salveen Richter with Goldman Sachs. Your line is open.

Hi. Thanks for taking our questions and congratulations on the feedback. We were wondering if you would be willing to divide the population, may be accept a label in younger patients as part of this accelerated approval process. And how the discussions in Europe are progressing for a potential faster path to approval? Thank you.

Louise, do you want to take that call? That question?

The first part of the question, could you...

I think the question is -- I think it's a split, and I'd say it's a -- I think it's approximately 60-40 ambulatory to non-ambulatory VIP on that. So we model that if you think about the Accelerated Approval versus the full approval.

That's correct. And then the European discussions are going well in our 301 trial, the global trial with European patients included, certainly, this partner, Roche, are driving the ex-US development and conversations and discussions with health authorities are proceeding well. And obviously, our development in the US are supportive of that as well.

Thank you. And our next question coming from the line of Colin Bristow with UBS. Your line is open.

Hey, good afternoon, and a big congrats on the progress. So a few from my side. Regarding the discussions around the accelerated pathway, can you give us any color on what was discussed regarding the sort of titering or product consistency issues in Part 1? And sort of what gets FDA comfortable with this? On the expression versus function data, this is something you've been teasing us with for a while. Now FDA has seen it, when should we expect to see it. And then just finally, the letter that you got from FDA, who is the signatory on the letter? Thank you.

Yeah. So I like to give them Colin. But first of all, with respect to consistency, the number, the issue that occurred with respect to the clinical material previously that was related to Part 1 didn't relate to Part 2 of Study 102, but related to Part 1, had everything to do with the titering method that was being used by our partner, Nationwide Children's Hospital. They have this super coil titering method that resulted in when we looked at them with a more accurate and titering method that we saw that 60% of the batches were less than the target dose. That doesn't exist anymore. So just to be very clear, even before we move to our commercial manufacturing process itself, we had already developed a linear titering method that was far more precise. And then generally speaking, our commercial process is in really all regards, much tighter. So we feel very good about the consistency of the process. So generally speaking, we did shed everything at the agency including all of the biomarker data, preclinical data, expression data, functional data, expression CK and function data together. We're not going to provide additional updates, or do I really want to provide any sort of blow by blows in the agency. I think the obvious next step for us with respect to this therapy in the patient community, is to get this BLA filed, get this BLA reviewed. And if successful, get this therapy to as many patients who would benefit as possible. And then finally, as it relates to the signatory on the letter that we received came from the Head of -- Dr. Peter Marks [ph].

Our next question coming from the line of Ritu Baral with Cowen. Your line is open.

Good afternoon, guys. Thanks for taking the question. I want to move to gene therapy inventory for a second. Can you comment on the inventory that you have on hand, how long it's good for? And how much you intend to generate by the time of potential approval? And the flip side of that is, how much progress have you made on centers that are qualified to administer the therapy. I know that's something you guys have been working on, like every single world muscle have attended. Can you talk to the number of centers and what the administration capacity is?

Yes. So I'm going to turn this question over the question on the centers to our Head of Customer Interaction, Gilmore O'Neill. But before I do that on gene therapy, inventory, generally, we'll be in a very good place to launch the therapy. We intend to be in a place where we can have sufficient capacity to launch this therapy without delaying and assuming that we are alone and launching our therapy to fully serve the community without delay. And we'll have -- by then, our anticipation is a couple of years of shelf life on therapy so we can build a robust amount of inventory to ensure that we can do that. With that said, Gilmore, perhaps you want to touch on the question about our centers of excellence interaction.

Yes. Thanks for the question, Ritu. And as you have noticed and seen at the prior neuromuscular, we've identified this as a critical success factor and have literally been working on it for years. We have seen this as a rate rider for prior gene therapy launches in terms of having sites ready to go and trained on day one. And so, our aim for day one, will be to allow to have enough sites ready to go to allow all eligible patients to be treated in a timely manner. So as Doug has previously mentioned, externally, the -- the target is to do that is higher than a little bit north of 50 sites in total and 50 centers because these are highly specialized neuromuscular centers will treat more than 80% or up to 80% of the eligible population. So that works for us. We can target some key centers of excellence, many of who are already dosing with Zolgensma. So as you said, we're making progress and the plan is to have them ready to go on day one.

I will say also, two things. Certainly, we have a lot of work to do, given that we're looking into an accelerated approval, which is a very tight timeline. With that said, and then that means we have real work again, we want to approach it with an enormous amount of energy in community. But I would hope that over the last six years, we have shown the community what we can do to serve the Duchenne community with our therapies. The most recent results that we've seen with quarter over prior quarter growth of just about 50%, hopefully gives people with additional confidence that when SRP-9001 is approved, we'll be able to fully serve the community and robustly get that therapy to centers and also support centers in the appropriate at least use of the therapy, so we get optimal results with patients, which, of course, is our goal.

And our next question coming from the line of Matthew Harrison with Morgan Stanley. Your line is open.

Hi Thank you taking our questions. This is Max Skor on for Matthew Harrison. I guess, this question can extend to ENVISION, but how are you managing variability in the Phase III EMBARK trial? And do you think you can lower the standard deviation below, let's say, the 4 to 5 points we've seen with we've seen in most of the natural history studies. Thank you very much A – Doug Ingram: Sure. Louise, do you want to touch on the control that we have in EMBARK?

Sure. Thanks for that question. For what I would say we have a great deal of learnings from 1 or 2, which we applied to Study 301, or EMBARK. And so of those included our inclusion/exclusion criteria. One of the things we did was the rise to time less than 5 seconds, for example, to ensure a population -- homogeneous population. Having said that, our study is extremely well powered. And given the recent Study 103 results, it gives even more confidence in 301 in terms of the outcome of that trial. So we certainly have applied our learnings. In addition, as Doug spoke to earlier, the consistency of our titering in addition to the learnings that we put into the inclusion/exclusion criteria.

Thank you, one moment for our next question. Our next question coming from the line of Debjit Chattopadhyay with Guggenheim. Your line is open.

Hi. good afternoon. Thank you for taking my question. Just has there been a fundamental shift in how the FDA use gene therapy to proceed with the BLA submission with what feels like a priority review for a very broad population. And would you need to provide any biomarker data at month three from the EMBARK study to complement the BLA? Thank you. A – Doug Ingram: Thank you very much for the questions. Look I think that agent is always been committed to gene therapy, I think that justification for this accelerated approval of BLA which will be first accelerated approval in gene therapy. In vivo gene therapy I think is a result of the data that we have. I will remind you, this is not a data set that justifies this filing. We have nearly 90 patients worth of data. We have years of preclinical and animal data that shows how the surrogate endpoint, which is the 9001 protein, will perform. And then we translated it into patients, and we've seen great results. We even seen great results over the longer term where you see -- what we would have anticipated and predicted, which is essentially a disease-modifying therapy where you get in that. You had a very significant benefit in the first year. And then as you would expect from a disease-modifying therapy in a degenerative disease, you see that benefit grow significantly over time. You saw the two-year mark in 102. We had a five-point delta. And then you look at these kids, small, I will admit, a very small cohort, but still pretty impressive. You see the -- nearly a 10-point delta versus natural history. And then finally, on EMBARK, there has been no suggestion from the agency as we stand right now that they would need to see additional information from EMBARK.

Our next question is coming from the line of Brian Skorney with Baird. Your line is open.

Hey good afternoon, everyone. Thanks for taking my question. Just to add to the questions around the FDA discussions. Just want to see if there you had discussed with the FDA at all the thought about expanding the placebo-controlled portion of EMBARK. I know both the size and the follow-up period of the placebo-controlled portion of ESSENCE was increased after EXONDYS approval in order to have definitive results from a larger two-year study. Just wondering, was there any discussion about doing this for EMBARK if the AA pathway relieves a little bit of the pressure to get an early approval?

Yeah, there wasn't. No discussions like that has occurred. Obviously, we didn't -- we have not proposed that. With respect to ESSENCE, one of the reasons that we increased the size of ESSENSE and it was -- actually, I think initially at the suggestion of the FDA was to ensure that we had ESSENSE properly powered, and so we did just that. The issue with respect to EMBARK is as we look at it right now, we're very well-powered. So we're over 90% -- stronger over 90% powering based on our analysis. So we feel very good about where EMBARK is as I would note, that as we've looked at the various potential end, the highest end that we could look to at the time was 120 patients, and that's where we ended up because we wanted to make sure we prioritize success in that trial.

Great. Thanks Doug.

Thank you.

One moment for our next question. And our next question coming from Hartaj Singh. Your line is open.

Great. Thank you. I just got two questions. And again, really nice update. One is, I was just wondering, as you mentioned, you've had a lot of conversations with the FDA over the last few months. If there was to be an AdCom, can you just maybe speculate on what aspects could FDA focus on? I mean, would it be various efficacy databases? Could it be the manufacturing? Could it be anything safety related? I mean, knowing full well, it's just poor speculation part. But I imagine you would have gotten a sense of where FDA is comfortable and where they're not. And then just secondly, can you just remind us of the royalty or the tiering structure you have with Roche on ex-US sales for SRP-9001? Thank you.

Sure. I'll turn the royalty question over to Ian in a second. Look, thank you, Hartaj, for predicting in advance that I would be wildly speculating on the AdCom. I mean, I would say, look, we feel great about where we are. We've got an enormous wealth of data that justifies the approach that we're taking right now. Obviously, all of this review issue. We'll submit our BLA. It will be filed. If all goes well, we'll have a very positive review. We haven't been informed by the FDA that we're going to get an AdCom. We will prepare as if there's going to be an AdCom that wouldn't be at all surprising that we had an AdCom, we would actually invite it. We're excited. It should just be another opportunity, frankly, for us to highlight our data, the safety and efficacy and the like or regard again. And I'm sure that AdCom would go into all of the issues, which is certainly the CMC issues always feel very solid on the CMC issue. Obviously, on the core -- the ability of our SRP-9001 protein to predict clinical benefit, which I think the data is -- it is an understatement to say that it's powerful. I mean we've got an enormous amount data on that we’ve been normally patients we dosed, kind of analysis we done and all the pre-clinical work and of course, safety. But even on that, as we've said, of course, this is -- we get to take safety very seriously. We have a very laudable safety profile that we stack in right now. So we feel good about all of it. I'm sure if there was an AdCom. We don't know that yet. There wasn't AdCom, we would expect them to explore all of those issues. But again, I think the totality of evidence that we have with respect to SRP-9001 and the justification for Accelerated Approval is very robust right now, and we feel very good about where we are and how this review would track

Yes. And then, as it relates to our royalty arrangement, the Roche based on ex US sales and surprisingly, the actual royalty rate goes from low-double-digits to the high-teens, and that's actually based off of our manufacturing yield though, determine the exact level.

Thank you. And one moment for our next question. Our next question coming from the line of Tim Lugo with William Blair. Your line is open.

Congratulations on all the progress for patients in the quarter. And you mentioned that the expression or safety data from the non-ambulatory study would be available around the time of a potential approval. Is that something that could be available or kind of supplemented in the filings? Is that something that could be available prior to approval, prior to an AdCom? I guess could you just talk a bit about when that could come out through 2023?

Yes. Thank you very much for the question. And thank you very much for making the point that I hope we're all making, which is the importance of this accelerated approval pathway, it is, of course, important to see us is, of course, important, in my opinion, to the entire field of gene therapy, but it is particularly important to these patients. And that is the primary motivator for all of this. We can -- if we're successful with this accelerated approval, there will be in the United States, thousands of patients who would have been generating over a period of time when, at least from our perspective, they will have a therapy that will be a great benefit to them. So this -- and then apologies, the short answer on your other question is, we -- I can't speculate on that right now. That's not a topic that has been discussed with the agency, and it is something that we're going to have consider independently, whether there is a value to, whether it would be received and whether we would be capable of providing out of the ENVISION study or Study 303, any additional safety or expression data that's never been discussed with the FDA, and we have to discuss it internally. Our primary goal with respect to the non-ambulatory population right now is to get that study start end of year, working on getting that study starting as soon as possible, and we certainly want to do that.

Thank you. And our next question coming from Gil Blum with Needham. Your line is open.

Good afternoon and thank you for taking my questions. And let me add my congratulations, especially considering what this means for patients. So in 2023, you might be facing a world that has both gene therapy and PMO at the same time, similar patient population. Any thoughts about the kind of sales dynamics you might see between these two populations? Do you think patients are going to switch or go on one therapy and maybe go down to another? Thank you.

Yes. So there's a lot that we have to -- there's a lot of models we have to do with respect to this. And then some of it will just be empirical as we launch this therapy. Our current plan assumes a significant amount of cannibalization. I would say, with respect to the initial approval, which would be for the ambulant population. Obviously, we still have the PMO available to the non-ambulant population. And so, it shouldn't have any impact there. And beyond that, we think there is potentially a very compelling argument for the PMO to continue even the patients who are planning to or have received gene therapy for a host of reasons. The first reason is that, there is already evidence in the literature to support the proposition that there is big benefit to patients getting on a PMO in advance of gene therapy that it would, in fact, not only protect them in advance of gene therapy, which is a crucial importance, but also that it might actually enhance expression and the benefits of gene therapy, if one is on a PMO or we going to approve the pre-PMO. And then the coexistence of those two therapies may very well be a benefit to patients who are doing some work on that right now from a preclinical perspective. And then, as I said before, there will be certainly patients who will have available to them, either in the United States or around the world, mRNA technology and not a gene therapy or gene therapy, not of RNA. So I think there is a particular value of both the patients into Sarepta at having both of these nodalities coexist. So while our current modeling is relatively conservative and seeing the significant amount of cannibalization, we're going to have to play this out and see if that is actually the case over the long run or if these therapies coexist.

Thank you. And our next question coming from the line of Joseph Schwartz with SVB Securities. Your line is open.

Thank you. And best wishes as you advance through this regulatory process. I realize some of you were not at the company when EXONDYS was approved, but given some similarities to today, at least on the surface and the fact that there were significant differences in opinion with the FDA back then. I was wondering if you can provide us with any insight into the degree to which those weighing into the FDA today are unified or split at all in their opinion on the recent guidance to file for Accelerated Approval? In other words, how broad is the buy-in now at the agency versus when EXONDYS was in the limelight? And is there as strong a champion pushing for SRP-9001 approval at the agency now, if there was for exon 51 or there not need to be for any reason that you can point to.

A couple of thoughts on that. One, I wasn’t here at the approval of EXONDYS, but I did come, not too long after that approval occurred and the launch occurred. So some of my comments will be based on the historical record and not of my own personal experience. I’ve experienced with the VYONDYS and AMONDYS and I have experience with respect to 9001 today. Obviously, I wasn't here to [indiscernible]. There -- this will be significantly different. So we're very clear. First of all – first of all, let's be very clear, before I say anything else, I want to be clear. EXONDYS and AMONDYS are doing an enormous amount of good for patients in the United States and, to some extent, overseas as well. We have some real world data that's going to be coming out to be published, and then presented at World Muscle, but I'll make exactly that point, across basically every EXONDYS of benefit. So it was a tremendous benefit to patients. And from my perspective, it was the right decision to have approved EXONDYS in the first place, and I certainly think my honest in the minds as well, reserve the benefit. They are benefiting patients significantly. With that said, there are going to be a lot of differences between this accelerated approval and the prior approval, the first of which, of course, is the amount of data that supports this. The data has really built from EXONDYS. EXONDYS was approved on 12 patients. We're not talking 12 patients or 90 patients with multiple studies. The functional results are concordant. There's significant p-values on them. are 0.0001 in that hunting every one of them, the underlying biological activity is unequivocal from my perspective, all of the benefit is unequivocal and the safety is laudable…

Yeah. And maybe I'll just add on the other rates, but I'll just kind of reiterate it. We had just announced today that essentially EMBARK is practically fully enrolled. So essentially, we would have to wait about a year. So there's really no incentive for us other than, Doug, good point about the patients for us to move forward if we didn't feel that we were going to get a fair review and that there wasn't broad support across the agency. And I certainly wouldn't -- obviously, this market still remains challenging. And we're not going to commit dollars unless we thought we were going to be successful in getting these patients to therapies. Obviously, to Doug’s point, we have to go through the review, but we were not going to commit dollars in this market unless we thought that there was a good chance for an ultimate freedom.

Thank you. And our next question coming from the line of Yun Zhong with BTIG. Your line is open.

Great. Thank you very much for taking the questions. So a follow-up question on the non-ambulatory patient, was that a study -- the new study required by the FDA during your discussion with the agency? And based on your answers to the previous question, I guess, is not going to be part of the confirmatory study required again by the FDA? And secondly, I just wanted to confirm the time line. I believe you talked about potential accelerated approval around midyear 2023. So that should be before you get top line data from the EMBARK Phase 3 study. But what happens is the EMBARK Phase 3 study missed the primary endpoint. Has that possibility come up at all during your discussion with the FDA? Would there be any room of flexibility depending on how the data look like?

So, on the first question, the ENVISION or 303, obviously, is our decision and our -- and we've been planning that for quite some time. So that did not come up with the agency, with that regard our decision. With respect to the timing, yes, if all goes well, the accelerated approval would be in advance of a readout in EMBARK. And you haven't had detailed discussions about EMBARK and its results, but on the other hand, we're very confident about EMBARK. We're very well powered. We're over 90% powered. So we feel very good about it. We were over 90% powered before we saw the readout on Study 102 Part 2, and we now have even more conviction and frankly, the powering was only increased if you apply that. So we feel very good about where we are with that. By the way, I want to update -- I think I said 60-40 ambulatory, non-ambulatory the FDA is more, I think, in having collect a 50-50 I want to make sure there's a misstatement. Is that correct, Dallan?

Yes. Closer to 50-50 in the estimated prevalent population.

Apologies for that extremely.

Thank you. And our next question is coming from the line of Zhiqiang Shu with Bernberg. Your line is open.

Great. I want to add my congrats to the progress as well. Just a few clarification questions. First, on the -- based on your communication with FDA, I guess, has FDA explicitly encourage you to file based on accelerated approval? And secondly, I wanted to ask, Ian, around the SG&A uptick expense in the second quarter. You mentioned the -- that was primarily driven by non-cash stock options. Should we assume the expenses in Q3 and Q4 should come down substantially? Thank you.

Yeah. So thanks. Look, on the FDA communication, what I would say is that based on our communication on the bytes from the agency, we have enormous. We have significant conviction on the concept of submitting for an accelerated approval BLA and we feel very good about the approach that we're taking. And then with that Ian, perhaps you want to talk about the non-cash items.

Yeah. Thanks. So as it relates to -- yes, you're going to see the biggest this quarter. There will be some smaller stock-based compensation expenses over the coming quarters about $50 million that spread out through probably over the next year or so much significantly less. But remember, the most important thing to think about here is that this is a -- this expense is non-cash charge. So it has no impact at all to our overall net cash burn.

Our next question coming from the line of Danielle Brill with Raymond James. Your line is open.

Hi, guys. Good afternoon. Thanks for the questions. Two quick ones. Given the proximity of the anticipated accelerated approval to EMBARK reading out, I'm curious to hear what you're thinking on the payers front? Is it possible that they'll drag their feet to implement coverage, or are you expecting full buy-in? And then I appreciate that you've generated much more data at this point, but have you set a new precedent here? And do you anticipate that your competitors will follow suit with pursuing Accelerated Approval? Thank you.

Yeah. Thank you very much for your question. So on the second question first, the -- our ability to submit for -- and our conviction around the BLA is unique to our therapy. And the wealth of data that we have on our therapy and the 90-plus patients across three therapies that -- data that we have and the 14 years of preclinical work that supports that and the safety profile, which is unique to SRP-9001. It is on that basis that we're filing for Accelerated Approval. And I don't think we're setting a new precedent. I think this is very consistent with the statutes and the regulations and frankly, the precedent at the FDA about where an Accelerated Approval is appropriate. But I want to be very clear that decision stands on the data in front of us, which is unique to SRP-9001 and unique to the SRP-9001 protein, which is from our perspective at least, unequivocally beneficial to patients and we can safely deliver that therapy in great expression levels. As it relates to payers, I would say as challenging as payers can be, we've got -- we forged a very positive relationship with payers over the nearly six years, since the approval of EXONDYS. And so I don't want to make it seem easy. Dallan and his team work every day and fight every day to ensure that patients get on therapy and stay on therapy across our three approved therapies. But hopefully, you will see in the results that you had, which is, I used to say 20 quarters, it's 20-something quarters of positive quarter-over-quarter over quarter-over-quarter growth. The CAGR so far of over 40% annual -- compounded annual growth rate and even a 50% growth over the same quarter last year. That given a therapy and having the opportunity to take that therapy to patients, we are a company that knows how to execute, knows how to work with payers, knows how to get this therapy, not only delivered to the community -- support community, for patients getting on therapy and staying on therapy with respect to chronic therapies or any states getting therapy and getting it appropriately with respect to this onetime gene therapy. So, there's a lot of work to be done, but I'm very confident that there is no better team. Certainly, no better team but with respect to Duchenne muscular dystrophy than the team that you have are fighting every day for patients. And so, I'm very confident about our ability to translate an approval into therapeutic and benefit patients.

Thank you. Our next question coming from the line of Kristen Kluska with Cantor Fitzgerald. Your line is open.

Hi, everyone. Congrats on a very exciting quarter for the company. So, most of my questions have been asked, so I'll change topics a little bit here in gene therapy. So based off the path you took with SRP-9001 and your discussions with the agency, has this changed how you might envision some of the trial designs for the Limb-girdle programs? And of course, I understand here that you'd want to see some supportive data before figuring out the path forward, but any initial thoughts at this stage? A – Unidentified Company Participant: Louise [indiscernible].

All right. Thank you for that question. So,, we -- there's kind of work going on in Limb-girdle. So as you know, we have five programs, and we've been working hard on all of the CMC-related activities including the LGMD specific assays to support the program. Certainly, all of the data that we've collected with SRP-9001 is supportive of the Limp-girdle program being the same 74 vector and the promoter in many cases and delivery method. And so. the data that we generate today to support of, we also have our data which we've shared with Limb-girdle CE that has been very promising in both expression and functional results as well. And so we're taking all of that collective data, and obvious learnings from our pathway of 9001 to apply where we can. These are obviously smaller populations, but there's a lot of limb that we can apply, and we're moving swiftly to get to our next set of trials and those in Limb-girdle. So thanks for the question.

Thank you. And our last question coming from the line of Gavin Clark-Gartner with Evercore. The line is open.

Yes, hey. Thanks for taking the question. I just wanted to ask if you could give any more granularity around the status of the CMC work? And thoughts on the timeline for engaging with the FDA, is it maybe later this year saying or more like a 2023 event? Thanks.

On limb-girdle, in particular?

Yes. Yes, for limb-girdle.

Yes. So we're trying to get a look behind that we are -- we are working hard on the CMC for our limb-girdle programs. There's a lot of work to be done. We've learned an enormous amount that we can capitalize on as a result of SRP-9001. We know it's the same capsid, the same promoter with respect to many of our Limb-girdle. But a lot of it just takes time and it has been empirical process to bid some of these assays in particular out. So, we're working like mad, Louise if you want to touch on any of these issues in any more detail, but I do think we're working hard to try to get a lot of this done this year.

Yes. I would add, we certainly have learned in the development of the assays, but for each of the Limb-girdle subtypes, there are still specific assays that have to be developed for each one. And so those -- such just as Doug alluded to, it takes time. So that's we're working on it.

The good news is that we know exactly what we need to do given SRP-9001. Other then there's no significant enormous event of step in any of this. This is really just work and empirical assay development and confirmation and potentially frustrating things sometimes that it just takes time and that's what we're working on right now. There's only so fast one -- could go when you have to rely upon some of the preclinical studies that support these assays. But we're looking like now on that. And I understand that we -- it's a high priority for us.

Thank you. And I'm showing no further questions at this time. I would now like to turn the call back over to Mr. Ingram for any closing remarks.

All right. Thank you very much, and thanks for your time this evening. I think you all hopefully come away from this call, at least understanding how excited we are. Both with respect to our current performance, I don't want to lose sight of that and I won’t – Dallan is here and he wouldn't let me lose sight of the fact that we really are doing an enormously great job, in my view of serving the current community with our approved therapies and it shows in our performance and it shows in our guidance. But I’m -- we're very, very excited about where we are with SRP-9001. Certainly, with respect to our conviction around BLA and then, of course, with respect to the progress we've made with respect to our confirmatory trial, EMBARK. .: The final thing I'd like to say, I made a comment briefly on the same thing last time, and I'll say this again, that is I know this year has been a very challenging time for the biotech investor. And it seems sometimes -- and I understand why, but it seems sometimes the hope and vision are lately replaced with a, sort of, blinkered pessimism that results from what has been a tough year. But I would remind us all that as challenging as it may be, what we all do together, that's the biotechnology organization and our scientists and professionals, but importantly, also those on this call today, those of you who invest in biotechnology, this is unbelievably important to society and it endures our optimism. The science and genetic medicine, in particular, has made revolutionary advances over these years. And we and others will translate this science to therapies that will improve the human condition and make outsized returns for those like you who have taken the risk on genetic medicine. Sarepta, in my view, is a leader in genetic medicine for rare disease, and we intend through our scientific execution and our tenacity to lead that return to optimism. And when optimism returns and optimism will, of course, return. It should be for companies like Sarepta that preferentially benefit. Companies like us with a strong balance sheet, with strong revenue, with best-in-class talent and with a strong late-stage pipeline poised to improve lives, not some distant future, but literally very soon. Companies like Sarepta that at least in my opinion, know how to execute and get things done. And with that, I would ask you all to have a lovely evening. Thank you for your time.

Ladies and gentlemen, that does conclude the conference for today. Thank you for your participation. You may now disconnect.