Sarepta Therapeutics (SRPT) Q3 2022 Earnings Name Transcript

November 3, 2022

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Sarepta Therapeutics (SRPT -0.58%)
Q3 2022 Earnings Name
Nov 02, 2022, 4:30 p.m. ET

Contents:

  • Ready Remarks
  • Questions and Solutions
  • Name Contributors

Ready Remarks:

Operator

Good afternoon, and welcome to the Sarepta Therapeutics third quarter 2022 earnings name. As a reminder, at this time’s program is being recorded. [Operator instructions] Presently, I am going to flip the decision over to Mary Jenkins, senior supervisor, investor relations. Please go forward.

Mary JenkinsSenior Supervisor, Investor Relations

Thanks, Kathy, and thanks for becoming a member of at this time’s name. Earlier at this time, we launched our monetary outcomes for the third quarter of 2022. The press launch is accessible on our web site at sarepta.com, and our 10-Q was filed with the Securities and Trade Fee earlier this afternoon. Becoming a member of us on the decision at this time are Doug Ingram, Ian Estepan, Dallan Murray and Dr.

Louise Rodino-Klapac. After our formal remarks, we’ll open the decision for Q&A. I might like to notice that in this name, we might be making numerous forward-looking statements. Please take a second to evaluate our slide on the webcast, which incorporates our forward-looking statements.

These forward-looking statements contain dangers and uncertainties, lots of that are past Sarepta’s management. Precise outcomes may materially differ from these forward-looking statements, and any such dangers can materially and adversely have an effect on the enterprise, the outcomes of operations and buying and selling costs for Sarepta’s frequent inventory. For an in depth description of relevant dangers and uncertainties, we encourage you to evaluate the corporate’s most up-to-date quarterly report on Kind 10-Q filed with the SEC, in addition to the corporate’s different SEC filings. The corporate doesn’t undertake any obligation to publicly replace its forward-looking statements, together with any monetary projections offered at this time based mostly on subsequent occasions or circumstances.

And now, I am going to flip the decision over to our President and CEO, Doug Ingram, who will present an outline of our current progress. Doug?

Doug IngramChief Government Officer

Thanks, Mary. Good afternoon, everybody, and thanks for becoming a member of Sarepta Therapeutics third quarter 2022 monetary outcomes convention name. Commencing with efficiency, as you’ll have seen in our launch, we had one other robust quarter serving the group with our three authorised therapies EXONDYS 51, VYONDYS 53 and AMONDYS 45. As we talked about on our second quarter name, about $5 million anticipated for the third quarter got here in and was booked within the second quarter.

And even with that, whole income for the third quarter was roughly $230.3 million and web product income was $207.8 million, representing an almost 25% progress over the identical quarter final 12 months. To remind you, within the second quarter, we raised our full 12 months whole income steerage to between $905 million and $920 million and our web product income steerage to between $825 million and $840 million. And in mild of our persevering with robust efficiency, we stay snug with that steerage. So let’s transfer now to our gene remedy platform and particularly to SRP-9001, our gene remedy for Duchenne muscular dystrophy.

2022 has been a momentous one for SRP-9001 and for the Duchenne group that we serve. Over the course of the primary half of 2022, we mentioned with the FDA the potential of submitting a biologics license utility or BLA for the approval of SRP-9001 on an accelerated foundation. On account of these discussions and the written suggestions that we obtained, we introduced on our second quarter name that we supposed to submit a BLA for the approval of SRP-9001 to deal with ambulatory Duchenne sufferers. And within the third quarter, we did certainly submit our BLA for SRP-9001.

Now if all goes to plan, the FDA will settle for the BLA for submitting on the finish of November of this 12 months. We anticipate a PDUFA date on our BLA in Could of 2023 and if profitable, a launch by the center of 2023. To those that have requested why we try to maneuver so urgently, let me speak for only a second about why looking for accelerated approval right here isn’t merely acceptable however is compelled by good science and ethics. We’re justified by acceptable illness, remedy and proof.

The accelerated approval pathway is an revolutionary fashionable instrument that has prolonged and saved numerous lives, together with sufferers dwelling with HIV/AIDS, sufferers dwelling with cancers and sufferers dwelling with Duchenne. It brings therapies to sufferers in time to really intervene and do good. And on the similar time, it ends in an explosion of innovation. And the FDA itself has repeatedly famous the chance for accelerated approval in gene therapies the place acceptable.

And from our perspective, SRP-9001 is a perfect candidate for accelerated approval evaluate. Let’s take into account, first, sufferers want this remedy now, not sometime or ultimately. Time is the enemy of these dwelling with Duchenne. It irreversibly robs kids of their muscle and their operate on an hourly and every day foundation, in the end killing them.

Stopping additional illness development is the best want of each Duchenne household and sufferers mustn’t should irreversibly endure when a well-established regulatory pathway exists to deliver that remedy to them now. Second, Duchenne is a well-characterized monogenic illness and the shortened purposeful dystrophin robustly produced by SRP-9001 is an upstream surrogate endpoint for accelerated approval, one addressing the proximate reason behind illness, one based on a wealth of scientific proof supported by preclinical associated biomarker and scientific purposeful advantages and one based mostly on a well-established precedent because the FDA has authorised 4 therapies to this point utilizing shortened purposeful dystrophin as a surrogate endpoint. And eventually, we’re nicely underway to verify the outcomes of that accelerated approval. Our proposed confirmatory trial EMBARK is in totally rolled and totally dosed, so kids can get this remedy quickly and the accelerated approval might be expeditiously confirmed via EMBARK.

The chance of granting accelerated approval is fleetingly small, whereas the chance of hurt to Duchenne sufferers if we didn’t search accelerated approval is definite, is extreme and is indelible. So planning for the success of our BLA, we’re ramping up manufacturing. We’ve got bolstered our industrial, medical affairs, affected person providers and entry groups, and we’re centered on website and launch readiness. Moreover, we’ve got already commenced a examine to slender the early exon mutation exclusions presently in EMBARK and thus, if profitable, to securely develop the provision of SRP-9001 to a bigger proportion of the Duchenne inhabitants.

Likewise, we’re finalizing protocols for the graduation of ENVISION, our examine for nonambulatory sufferers as we glance to develop the label for SRP-9001 to nonambulatory sufferers as quickly as attainable. And persevering with on the theme of increasing the addressable inhabitants, subsequent 12 months, we intend to start out a examine with our associate, Hansa Biopharma, to discover the usage of imlifidase to cleave IgG in rh74 constructive Duchenne sufferers with the aim of safely and successfully allowing dosing with SRP-9001. Dr. Rodino-Klapac will present additional commentary on our gene remedy plans and people will embrace our plans for LGMD in 2023 as nicely.

Now transferring to our RNA franchise. As you might be conscious, we’ve got three authorised PMOs at this time, EXONDYS, VYONDYS and AMONDYS. The primary of these approvals, EXONDYS 51, got here within the fall of 2016, practically six years in the past. So along with persevering with to prosecute our two predominant post-marketing commitments for these approvals, ESSENCE and MIS51ON, we’ve got had the chance with respect to EXONDYS to guage the world proof of the impact of our PMO therapies over time.

On the World Muscle Society convention in Halifax, Nova Scotia in October, we offered examine outcomes on the advantages of EXONDYS versus pure historical past controls. For these , one can find the poster on the investor web page of our web site, together with the survival profit related to EXONDYS. Dr. Rodino-Klapac will talk about these findings in her remarks momentarily.

EXONDYS was authorised on an accelerated foundation utilizing internally shortened purposeful dystrophin. As encouraging because the early knowledge was to help its approval and that of VYONDYS and AMONDYS as nicely, with a degenerative illness, these full advantages mature and reveal themselves solely over time. And that’s the worth of an accelerated approval to the lives of sufferers dwelling with a lethal degenerative illness. With out it, sufferers would have been denied this remedy no less than by extra years and maybe we might by no means have been capable of generate this long-term knowledge with out that approval.

So transferring to our next-generation RNA remedy, the peptide conjugated PMO or PPMO SRP-5051. We’re dosing momentum Half B, and we’re on observe to finish enrollment this 12 months, and we’ll have an information readout on that trial in 2023. Lastly, commenting on a administration transition. We’re asserting tonight that Invoice Ciambrone, our head of technical operations and Manufacturing, might be retiring.

I want to give an enormous thanks to Invoice, with out whom we might not be within the place to launch SRP-9001 subsequent 12 months. After a formidable profession, Invoice had been largely retired once I approached him in 2019. However given our mission and our science, and I might wish to imagine some truthful quantity of persuasion from me, I used to be capable of coax Invoice out of retirement and provides them three necessary objectives. First, to finish the method and analytical improvement for SRP-9001, and to make sure we had capability to launch SRP-9001 and to completely meet the necessity of the group; second, to construct a strong, sustainable technical operations operate that has the expertise and the main focus to scale with Sarepta’s ambitions; and third, to arrange his successor as Invoice had supposed to make a big impression in a comparatively brief time period.

I’m proud to say that Invoice achieved each a kind of objectives. We’ve got the method, the individuals and the capability to launch SRP-9001 and to make it a hit. Invoice has constructed a best-in-class group, and we now have over 300 technical operations personnel driving us ahead. And Invoice has ready an excellent successor.

Invoice will transition management of the technical operations group to Bilal Arif on the finish of this 12 months. After which, he’ll stick with us as each an advisor to me and to the manufacturing group via June 2023 after the presumed PDUFA date for SRP-9001. Bilal has been with Sarepta and intimately concerned in all points of our manufacturing actions, together with SRP-9001 from the start of 2019. He has nicely over 20 years of expertise, together with over eight years at Shire, the place he labored for and carefully with Invoice.

I am completely assured that in Bilal, we couldn’t have a extra aligned successor to Invoice, somebody who will proceed our progress with out lacking a beat, who will proceed to drive our technical operations and who’s intimately aware of our strategic priorities and the tactical necessities for fulfillment. Now Invoice has made an unlimited impression at Sarepta, and he is been an ideal thought associate for me and for all of my colleagues on the chief committee. And I do know that sentiment is shared by our board as nicely. I’m more than happy that he’ll stay concerned and advise us via the approval of SRP-9001.

So thanks, Invoice, for all that you’ve got performed and for what you’ll do for Sarepta and for placing us on this nice place to achieve success. And with that, let me flip the decision over to our head of R&D and chief scientific officer, Dr. Louise Rodino-Klapac. Louise?

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Thanks, Doug. Within the third quarter, we achieved two important milestones for the SRP-9001 program. The completion of enrollment and dosing for the Section 3 EMBARK Examine and submitted our BLA to the FDA forward of schedule. I couldn’t be prouder of my staff of R&D and regulatory for his or her dedication, perseverance and execution whereas maintaining the Duchenne group and our mission on the forefront.

On a private notice, these accomplishments are each personally and professionally significant and convey us nearer to realizing the potential of SRP-9001 as a remedy for Duchenne. What we have completed, up to now, with gene remedy for Duchenne is just the start. We’re leveraging our learnings from SRP-9001 and are making use of them to the candidates in our deep genetic medication pipeline. Practically the whole lot of my skilled profession has been devoted to genetic remedy analysis.

My staff and I’ve by no means been singularly centered on bringing only one drug to market. As a substitute, discovering a technique to shift the paradigm and create a platform that shortens the event time whereas producing a number of focused therapies. In parallel and aligned to our technique of bringing forth one of the best therapies to deal with the widest array of sufferers with genetic ailments, we’re happy to announce the development of our MyoAAV platform with the Broad Institute of MIT and Harvard. MyoAAV is a brand new group of adeno-associated viruses that makes use of a modified capsid or outer protein shell of AAV to ship genetic therapies with better effectivity and at decrease doses.

The platform has the potential to supply one other breakthrough in genetic medication supply, with early analysis displaying considerably better gene expression at decrease doses in comparison with pure serotype capsids. Now transferring to our PMO therapies. I need to spotlight Sarepta’s spectacular presence on the 2022 World Muscle Society convention that occurred in October. In whole, we had 14 posters and displays, a number of containing new knowledge from throughout our genetic medication portfolio.

I might wish to focus for a second on a key late-breaking real-world proof presentation on eteplirsen in handled sufferers with Duchenne amenable to EXONDYS 51 skipping. This new evaluation confirmed that remedy with eteplirsen resulted in statistically important survival advantages in comparison with a managed pure historical past comparator group of Duchenne sufferers. The evaluation discovered that sufferers handled with eteplirsen had been an N of 579 sufferers survived 5.4 years longer when in comparison with untreated reproduced patient-level knowledge for Duchenne pure historical past examine, which had an N of 1,224 sufferers. Moreover, longer publicity to eteplirsen was related to elevated survival profit.

Sufferers handled with eteplirsen for lower than two years has survival according to the pure historical past arm with a hazard ratio of 0.89 and a p-value of 0.64. Sufferers on remedy for 2 to 4 years elevated profit with a hazard ratio of 0.36 and a p-value of 0.005. And sufferers on remedy for four-plus years had the best profit with a hazard ratio of 0.11 and a p-value of lower than 0.001. The findings had been typically sturdy to sensitivity evaluation performed throughout cohorts, together with pure historical past controls.

The 5.4-year survival profit was noticed in essentially the most conservative of the analytical fashions. Different findings from the evaluation included eteplirsen sufferers seem to have a 66% increased survival in contrast with Duchenne pure historical past controls, the place P is lower than 0.0001. Additionally eteplirsen sufferers skilled extended survival and had considerably longer survival from baseline in contrast with Duchenne pure historical past controls, the place P is the same as 0.0011. This discovering was constant within the subgroup with sufferers aged 10 to twenty-eight years at baseline, for whom deaths are most probably to be noticed the place P is the same as 0.0001.

And eventually, predicted mortality charges had been decrease for eteplirsen-treated sufferers, in comparison with Duchenne pure historical past management for all sufferers between the ages of 10 to 30 years. These new knowledge on survival provides to the totality of proof we’ve got for eteplirsen, which additionally features a 2.7-year delay within the time to lack of ambulation, a major milestone for sufferers with Duchenne and a slower price of decline in lung operate, resulting in a distinction of 5.7 years freed from air flow. As Doug famous, full particulars of the posters can be found on the investor web page of our web site. Now turning to gene remedy and starting with SRP-9001.

As I discussed on the outset of my remarks, we’re thrilled to have accomplished the enrollment in dosing for the Section 3 EMBARK examine and so submitted our BLA to FDA. I might wish to take a second to acknowledge the large effort undertaken by our staff. Many actions are performed in parallel, so we are able to transfer shortly, however we had been capable of accomplish a lot important work in a brief time period due to the staff’s deep dedication to execution. Our BLA was submitted for accelerated approval based mostly on the expression of SRP-9001 dystrophin protein, a shortened purposeful model of dystrophin as a surrogate endpoint fairly prone to predict scientific profit.

Amongst different issues, it’s supported by constructive preclinical biomarker and scientific purposeful outcomes. In scientific trials, SRP-9001 demonstrated constructive outcomes at a number of time factors, together with one, two, 4 years after remedy along with a constant security profile. The BLA for SRP-9001 contains efficacy and security knowledge from Research 101, 102, 103 or ENDEAVOR, in addition to an built-in evaluation throughout these three research evaluating purposeful outcomes to propensity-score-matched exterior management. Importantly, the purposeful knowledge strengthened the consistency of NSAA enchancment throughout these three unbiased trials and present imply enhancements throughout key secondary purposeful endpoints reminiscent of time to rise and 10-meter stroll/run.

Quantification of the SRP-9001 protein expression is measured by Western blot and supported by immunofluorescence. The expression knowledge from throughout our scientific research exhibit consistency from each our scientific and industrial manufacturing course of. Particularly, the scientific outcomes from ENDEAVOR are constructive as they present that SRP-9001 supposed industrial course of materials improves motor operate and additional confirms our confidence within the remedy impact of our remedy, growing the chance of success for our Section 3 EMBARK. Moreover, these research serve to extend our stage of conviction for EMBARK as a result of each ENDEAVOR and EMBARK are being performed utilizing the identical materials.

Importantly, throughout Research 101, 102, 103, an built-in evaluation, the security profile of SRP-9001 stays constant and manageable with no proof of clinically related complement activation. As I’ve talked about, we accomplished research of EMBARK and are inspired as a result of at over one month Half 1 dosing completion, the security profile stays according to our earlier expertise. I needed to notice that as we put together to enter a evaluate interval with the company, we don’t anticipate publicly sharing extra knowledge cuts main as much as our 2023 regulatory milestones and the EMBARK knowledge readout. We’re dedicated to reaching as many people inside with Duchenne as attainable, which is why, as Doug talked about, we’ve got commenced a brand new cohort as a part of the ENDEAVOR examine designed to slender the on early exon mutations which can be presently excluded in EMBARK.

We’re additionally working to finalize the protocol for ENVISION, a placebo-controlled examine evaluating SRP-9001 in nonambulatory sufferers. Moreover, we’re within the technique of beginning an extension examine for gene remedy research, enabling us to comply with sufferers out for no less than 5 years. Our dedication to our limb-girdle muscular trophy packages has not wavered and continues to be a key precedence for Sarepta. We’re happy that our pure historical past examine journey continues to enroll and represents a key element of our LGMD improvement pathway.

We are going to quickly be conducting a further examine for SRP-9003, utilizing scientific materials for LGMD2E to develop our full expertise in additional ambulatory and nonambulatory sufferers. It is usually our aim to start out a examine with industrial course of materials for SRP-9003 in 2023. And eventually, as well as, quickly we plan to start a systemic pilot examine for our SRP-6004 twin vector rh74 mediated gene remedy to deal with LGMD2B, which is characterised by the absence of the protein dysferlin. The progress within the third quarter exemplifies our dedication to advancing one of the best science within the curiosity of people dwelling with uncommon illness.

We’re enormously grateful to the sufferers who’re — who take part in our scientific trials and their households who help them, together with the scientific investigators and consultants who’ve guided us to the place we stand at this time. Once more, thanks once more to our extraordinary groups, scientists and professionals who’re tirelessly devoted to our mission to deliver ahead [Inaudible]. I am going to flip the decision over to Dallan to replace our inner actions. Dallan?

Dallan MurraySenior Vice President, Chief Industrial Officer

Thanks, Louise. The third quarter of 2022 represented one other quarter of execution for Sarepta’s RNA-based PMO franchise. Internet product income totaled $207.8 million within the third quarter, with roughly $122 million for EXONDYS 51, $55 million for AMONDYS 45 and $31 million for VYONDYS 53. As you will recall from the second quarter, and as Doug talked about up entrance, we guided a $5 million pull ahead because of ordering patterns ensuing from the timing of the July 4th vacation in Q2.

The outcomes for the third quarter together with the pull-forward performed out precisely as we had anticipated and guided. The pull-forward had a disproportionate impression on the AMONDYS 45 web income within the third quarter. We see the third quarter as an anomaly for AMONDYS 45 and count on the quarter-over-quarter progress price to modestly rebound on this fourth quarter. Total, AMONDYS 45 may be very a lot on observe with our expectations, and we proceed to quickly establish and acquire entry for the Duchenne inhabitants amenable to exon 45 skipping.

It is also necessary to notice that the EXONDYS 51 web income has been positively impacted by our ex U.S. gross sales progress in 2022. Ex U.S. income continued to develop 12 months over 12 months, and the overwhelming majority of those ex U.S.

revenues are presently coming from EXONDYS 51. That is changing into an necessary contributor to web product income progress whereas on the similar time, introduces some quarter-to-quarter fluctuations because the ordering patterns are totally different than what we see within the U.S. Because it pertains to the third quarter income, whereas EXONDYS 51 U.S. income grew modestly, the general income for the quarter was impacted by the lumpiness in ex U.S.

orbiting patterns. Taken as an entire, the $207.8 million in whole web product revenues for the third quarter represents practically 25% progress over the third quarter of 2021. We stay on observe to attain our full 12 months web product income steerage of between $825 million to $840 million. Shifting on now to the efficiency of every of our three RNA-based PMO therapies in the course of the quarter.

For EXONDYS 51, we delivered $122 million in web income in Q3. To notice, the third quarter web income for EXONDYS 51 represents practically 6% progress from the third quarter of final 12 months. For AMONDYS 45, notably in mild of the impact of the pull-forward, we’re more than happy with the practically $55 million in web income, representing practically $166 million in comparison with third quarter of 2021. VYONDYS 53 grew greater than 24% over the third quarter of 2021, with web income of $31 million.

We’ve got continued our market management place within the exon 53 amenable inhabitants, and our staff is continuous their efforts to get new sufferers on remedy and keep present sufferers. As we talked about on the second quarter name, we do not count on any substantial modifications for VYONDYS within the coming quarters. Along with one other robust quarter of execution and income technology, we have accelerated our efforts to be launch-ready for SRP-9001 by mid-2023. As leaders in Duchenne, we really feel the urgency of the affected person group and can be certain that our deeply skilled staff might be prepared on Day 1 of SRP-9001 approval, simply as we had been for every of our three PMO launches.

Within the third quarter, as our R&D colleagues had been executing on a BLA submission forward of schedule, the client group ramp up for the SRP-9001 launch hit full stride. Presently, we’re constructing out all of our area and head workplace groups who will lead what we imagine would be the most profitable gene remedy launch to this point. Additional, we’ve got began participating with key websites in order that we and they’re able to help sufferers at approval. The magnitude of this chance isn’t misplaced on us.

We’re the Duchenne market chief with three of the 4 authorised RNA therapies. To be poised to launch the primary Duchenne gene remedy with the information that our R&D colleagues have generated is totally unbelievable. We’re able to take the torch, construct on the efforts of our R&D colleagues and ship this necessary remedy to the Duchenne group. On a private notice, I need to share that I not too long ago celebrated 9 years with Sarepta.

Throughout this time, it has been a privilege to witness the unwavering dedication to our mission and dedication to serving sufferers. I am pleased with our key robust efficiency and execution since launching our first PMO six years in the past. The in depth expertise we have gained has ready us nicely, and I really feel that nobody is in a greater place than we’re to tackle the launch of SRP-9001. And with that, I am going to flip the decision over to Ian Estepan for an replace on our financials.

Ian?

Ian EstepanChief Monetary Officer

Thanks, Dallan, and good afternoon, all. This afternoon’s monetary outcomes press launch offered particulars for the third quarter of 2022 on a non-GAAP foundation, in addition to a GAAP foundation. Please check with our press launch accessible on our web site for a full reconciliation of GAAP to non-GAAP monetary outcomes. For the three months ended September 30, 2022, the corporate recorded whole revenues of $230.3 million, which consists of web product revenues and collaboration revenues, in comparison with revenues of $189.4 million for a similar interval of 2021, a rise of $40.9 million.

Internet product income for the third quarter of 2022 from our PMO exon skipping franchise was $207.8 million, in comparison with $166.9 million for a similar interval of 2021. For the third quarter of 2022, particular person web product gross sales had been $122.3 million for EXONDYS, $54.9 million for AMONDYS 45 and $30.6 million for VYONDYS 53. The rise in web product income primarily displays growing demand for our product within the U.S. and around the globe.

In every of the quarters ended September 30, 2022 and 2021, we acknowledged $22.5 million of collaboration income, which pertains to our collaboration association with Roche. The reimbursable co-development prices beneath the Roche settlement totaled $22 million for the third quarter of 2022, in comparison with $29.4 million for a similar interval of 2021. On a GAAP foundation, we reported a web lack of $257.7 million or $2.94 and $48.1 million or $0.60 per fundamental and diluted share for the third quarter of 2022 and 2021, respectively. We reported a non-GAAP web lack of $70 million or $0.80 per fundamental and diluted share within the third quarter of 2022, in comparison with a non-GAAP web earnings of $2.4 million or $0.03 per fundamental and diluted share within the third quarter of 2021.

Within the third quarter of 2022, we recorded roughly $40 million in value of gross sales, in comparison with $23.4 million in the identical interval of 2021. The rise in value of gross sales is primarily because of growing demand for our merchandise and a rise in write-offs of sure batches of our merchandise not assembly the standard specs for the three months ended September 30, 2022, as in comparison with three months ended September 30, 2021, partially offset by a lower in royalty funds in the course of the three months ended September 30 because of modifications within the BioMarin royalty phrases. On a GAAP foundation, we recorded roughly $216.7 million and $139.1 million in R&D bills for the third quarter of 2022 and 2021, respectively, a year-over-year enhance of $77.6 million. The rise is primarily because of will increase in manufacturing bills as a result of persevering with ramp-up of our SRP-9001 manufacturing.

On a non-GAAP foundation, R&D bills had been $193.7 million for the third quarter of 2022, in comparison with $119.6 million for a similar interval of 2021, a rise of $74.1 million. Now turning to SG&A. On a GAAP foundation, we recorded roughly $104.8 million and $61.1 million of bills for the third quarter of 2022 and 2021, respectively, a rise of $43.7 million. The rise was pushed primarily by a rise in stock-based compensation expense, primarily because of a further expense acknowledged via the CEO grant modification settlement executed within the three months ended June 30, 2022, which is acknowledged over the service interval.

On a non-GAAP foundation, the SG&A bills had been $66.8 million for the third quarter of 2022, in comparison with $43.6 million for a similar interval of 2021, a rise of $23.2 million. On a GAAP foundation, we recorded $6.3 million in different bills web for the third quarter of 2022, in comparison with $20.6 million in different bills web for a similar interval of 2021. The lower is primarily because of a rise in curiosity earnings to the funding mixture of our funding portfolio, in addition to a discount of curiosity expense incurred because of the reimbursement of our December 2019 time period mortgage for the three months ended September 30, 2022. Within the third quarter, we had proceeds of $1.1 billion from issuing convertible senior notes due in 2027.

Moreover, we repurchased a portion of our excellent 2024 convertible notes and pay as you go in full the quantity of our excellent associated to the 2019 time period mortgage. The repurchase and prepayment of the prevailing debt resulted in a loss on debt extinguishment of $125.4 million. Assuming an approval of 9001, we anticipate that together with our present money and our projected income, that this providing might be adequate to fund our operations to profitability. We had roughly $2.1 billion in money, money equivalents and investments as of September 30, 2022, and subsequently, we’re nicely capitalized to help the launch of SRP-9001, if authorised.

And now, I am going to flip the decision again over to Doug to start out the Q&A. Doug?

Doug IngramChief Government Officer

Thanks, Ian, for that. Kathy, let’s open the decision for questions and solutions.

Questions & Solutions:

Operator

[Operator instructions] Our first query comes from the road of Gena Wang of Barclays. Your line is open.

Gena WangBarclays — Analyst

Thanks for taking my query. I’ve one query relating to the SRP-9001. Doug, you talked about that you simply count on PDUFA day doubtless in Could 2023. Any concern that the evaluate may very well be customary evaluate? And do you suppose that if it is attainable the FDA want to see three-year Examine 102 knowledge that may mature in January 2023?

Doug IngramChief Government Officer

So we’ve got — in reference to our submission of our BLA, in fact, we’ve got requested a precedence evaluate. We’re planning for that, and that is why we’ve got talked about the Could deadline for the PDUFA date, no less than that is our present expectation. So that’s what we’re planning for. That is what we assume.

And we’ve not obtained any info for the company or any commentary from the division that may lead us to imagine something in another way proper now.

Operator

Our subsequent query comes from the road of Tazeen Ahmad of BofA. Your line is now open.

Tazeen AhmadFinancial institution of America Merrill Lynch — Analyst

Hello. Good afternoon, guys. Thanks for taking my query. Doug, I simply needed to get some element from you on the place you might be along with your manufacturing commitments.

What do you want to present FDA? And if you happen to do get a precedence evaluate, will this permit sufficient time so that you can full no matter commitments you could have agreed upon earlier than the launch would proceed? Thanks.

Doug IngramChief Government Officer

Thanks very a lot, Tazeen. So clearly, we’ll have all of this dialogue with the division in the course of the evaluate itself, however we’re in nice form. You’ll recall that summer season earlier than final in reference to the graduation of our EMBARK examine, the placebo-controlled trial that we totally dosed. Now we had been required to after which acquired mainly the majority of our CMC accomplished and our assay work performed as nicely.

So I believe we’re in excellent form proper now to answer any of the company’s questions, the BLA submission that we made may be very detailed and has an unlimited quantity of CMC. So I believe we’re in very, excellent form proper now.

Operator

Our subsequent query comes from the road of Gil Blum of Needham & Firm. Your line is now open.

Gil BlumNeedham and Firm — Analyst

Hello, everybody, and thanks for taking our query. So Doug, perhaps that is simply useful for us. Can you set in context a six-month distinction for a DMD affected person? Thanks.

Doug IngramChief Government Officer

Six — daily is — to start with, simply so we’re clear as a result of I believe in all probability underlying your query was that it is kind of an assumption that the delta between a non-accelerated approval submission and approval versus a conventional versus accelerating could be about six months. It might be for much longer than that as a result of let’s simply bear in mind, if we weren’t looking for accelerated approval, if that pathway did not exist because it has existed formally for the reason that ’90s, we must look forward to the tip of EMBARK, compile that info, QC all of that. By the point we had been all performed with that, we is perhaps prepared to start out engaged on a BLA. We might submit that BLA someday in 2024.

Assuming we get precedence evaluate, we would in all probability be getting approval within the again half of 2024, not the very finish of 2024. So it is a very important delta within the lives of the sufferers with Duchenne. However even six months, let’s be very clear, is that it is monumental within the lifetime of Duchenne affected person. Keep in mind, and I’ve stated this earlier than, and it isn’t an exaggeration, daily when the solar comes up after which the solar goes down on the finish of that day, a Duchenne affected person has been broken, and broken in ways in which neither our remedy or another remedy presently envisioned would rectify.

That is not with therapies like this do. What this remedy does is a arrest decline. And that implies that they’d get injury every day that won’t be reversed. It additionally means over a six-month time, some — in the USA, in all probability 200 or so of these kids would have died.

And another important variety of lots of could be confined to a wheelchair for the remainder of their lives. And another group of them will lose extra milestones that they would not have. And a few might be on a ventilator, perhaps a couple of hundred might be on a ventilator in simply that six-month interval. After which, compound that as a result of it’s in six months, it is upwards of 15, 17 months delta and the distinction between an accelerated approval and a conventional approval is enormously beneficial.

And it isn’t beneficial to a 200 or 400 or 600 , it is beneficial to the ten,000 to fifteen,000 as a result of each a kind of kids goes to be broken each single day that we wait. And sadly, with respect to science, generally science takes a very long time and that injury is inevitable. However when it is not inevitable, when there’s a pathway that gives a chance to deliver a remedy based on actually good science for sufferers, we needs to be doing that. And we should always actually be combating for that and looking for an accelerated approval.

Right here, as I discussed in my script, once more, that is kind of — I might argue, and I understand that, that’s an argumentation that that is purpose-built, accelerated approval for one thing like Duchenne. It is a devastating, life-ending neurodegenerative illness. It’s not nicely served proper now. There are solely about 29% of the Duchenne inhabitants which have any actual remedy accessible to them.

And we’ve got a surrogate endpoint that is not some downstream correlative endpoint, however truly immediately pertains to the proximate reason behind this monogenic illness, and we all know why these kids are dying. We have identified it since 1986 when the Duchenne — the dystrophin gene and ultimately its protein had been found. They’re dying as a result of they’re lacking the shock absorber of their muscle tissues that protects their muscle tissues. After which, the ultimate factor I’ll say on why it is so compelling from our perspective no less than, to be looking for accelerated approval now could be that we are able to affirm these outcomes comparatively quickly.

EMBARK, our placebo-controlled trial, as , as we sit right here at this time, is totally enrolled.It is totally dosed. And so, there is not some argument about when the confirmatory trial might be full. It will likely be full mainly on a day search. And so, I might argue with the provision of one thing like accelerated pathway, a pathway, let’s be clear, that it saves innumerable lives.

HIV and AIDS sufferers who at one time in historical past, who had a demise sentence after they had a analysis, can now reside with a persistent illness. Cancers and the innovation related to that and Duchenne muscular dystrophy. So from our perspective, it is extremely compelling that we search accelerated approval now, actually given the wealth of knowledge that we’ve got to help it. We had an unlimited quantity of knowledge that justified the usage of the truncated purposeful dystrophin related to our PMOs, EXONDYS, VYONDYS and AMONDYS.

And as that profit has emerged over time and actually matured, we are able to see what profit that brings to sufferers. Effectively, the proof we’ve got, the numbers of sufferers and the expertise and the purposeful outcomes we’ve got for SRP-9001 is maybe an order of magnitude even better nonetheless than that. So it will be — as I stated in my script, and I actually imply it, I believe it will border on unethical if we hadn’t sought accelerated approval. Definitely, after we had very detailed, evidence-rich discussions with the FDA.

However thanks very a lot for that query.

Operator

One second, please. Our subsequent query comes from the road of Colin Bristow of UBS. Your line is now open.

Colin BristowUBS — Analyst

Afternoon. And thanks for taking the questions. only a couple from my aspect. First on the case of myocarditis, you had, I believe it was in Cohort 2103, simply any replace right here, any additional insights across the trigger? After which, second, on Pfizer’s current protocol change to display screen out the sufferers with deletion within the areas of exon 52 to 71.

I imagine this spans the area that 9001 incorporates close to the C-terminal area. Form of any index or concern in your aspect round kind of potential immunogenicity points for sufferers missing native proteins in that area? Thanks.

Doug IngramChief Government Officer

No to the latter query, however I will throw each of these questions over — Dr. Rodino-Klapac can present extra shade.

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Thanks for that query. Clearly, we’re persevering with to comply with our sufferers. In order you recall, the sufferers in Cohort 2 with myocarditis had sustained cardiac operate, regular cardiac operate development baseline. There was a troponin enhance.

Additionally, as , in Duchenne, these will increase can happen in pure historical past as nicely. And so, the affected person continues to do nicely and proceed to comply with. However no different updates apart from that. By way of the genetic exclusions, as we have talked about, we have excluded one to 17 in EMBARK, however we’re conducting our Cohort 5 examine to slender that down.

We’ve got not had any issues with the C-terminus for our program.

Operator

Our subsequent query will come from the road of Salveen Richter from Goldman Sachs. Your line is now open.

Unknown speakerGoldman Sachs — Analyst

Thanks for taking the query, and congratulations on the progress. That is Tommy on for Salveen. And we’re questioning if you happen to’ve mentioned the state of affairs the place you get accelerated approval for 9001, however EMBARK isn’t stat sig on MSAA probably because of variability or different elements? And may you touch upon what may very well be just like the chance of — that you’d get an Adcom? Thanks.

Doug IngramChief Government Officer

Certain. So let me begin with the primary one. First, earlier than I touch upon that hypothetical, let me be very clear, we’re very assured on EMBARK. We’re very nicely powered.

We’re powered nicely into the 90s. It is vitally nicely knowledgeable. That complete examine in its design may be very nicely knowledgeable. Now in coping with the problem immediately and I believe the query underlying all of that’s basically what — do you — would you decide to eradicating the remedy from the market if EMBARK did not hit that — see, that is not the precise customary.

The precise customary is to take a look at the whole totality of the proof and if the totality of the proof did not justify the continued availability of the remedy, then would you decide to eradicating? And the reply to that’s, in fact, yeah. That’s the usual for accelerated approval. And we’d actually try this, however the truth that we’re very assured. And we’re assured based mostly not simply on the ability of that examine, however on the entire knowledge that we have already got on the remedy.

And I apologize — maybe somebody can remind me of the second query?

Ian EstepanChief Monetary Officer

Adcom.

Doug IngramChief Government Officer

Apologies. Yeah, I knew there was — the brief reply is that we have not heard but from the company whether or not or not we’ll get an Adcom. We are going to know that in all probability shortly after the company accepts our BLA, which ought to happen in late November. However on condition that that is the primary in its class, we’re actually planning for and assuming that we might get an Adcom and that may happen within the spring of 2023.

Apologies for that.

Operator

Our subsequent query comes from Matthew with Morgan Stanley. Your line is now open.

Matthew HarrisonMorgan Stanley — Analyst

Nice, Good afternoon. Thanks for taking the query. I simply needed to ask about a few of the real-world knowledge that you simply offered and a few of your ideas simply across the time level for the first endpoint in EMBARK. I believe, one of many issues a whole lot of traders are involved about is potential variability from sufferers.

I ponder if you happen to’ve thought of an extended time level in that examine and simply your confidence that one 12 months is the correct time for the first endpoint in that examine? Thanks.

Doug IngramChief Government Officer

Yeah. Thanks. The actual-world proof for EMBARK, to start with — I imply, for EXONDYS, that is very thrilling for us, and we have had the chance to essentially comply with these youngsters over numerous years to see it emerge. Now bear in mind, in fact, that the PMOs and [Inaudible] ones are very totally different, proper? The PMOs make — they reliably make quantifiable quantity of dystrophin, and it does it very constantly throughout all of our therapies and throughout all of our research, however it’s making a a lot smaller quantity of truncated purposeful dystrophin than the 9001 makes.

So the impression on the lifetime of the kid is totally different over a distinct timeframe. And simply so we’re clear as a result of I believe there have been misunderstandings. 9001, once more, makes a truncated purposeful model of full-length dystrophin, as does Becker dystrophins or Becker kind of Duchenne, in addition to the PMOs. They usually’re all sort of cheap approximations of the identical factor.

After which, as we glance to the 9001 examine, I might say, once more, that we have taken under consideration the variability and the heterogeneity of the affected person inhabitants within the design of the examine, we have been very rigorous and nicely knowledgeable about it. As everybody is aware of, we’ve got, along with a wealth of pure historical past knowledge and our personal expertise, and I do not suppose anybody no less than from an organizational perspective, has the sort of expertise we’ve got. We’ve got the 101 knowledge, the 102 knowledge, Half 1 knowledge, Half 2 knowledge, 103, a number of cohorts. So we’re nicely knowledgeable within the design of that examine, and I believe comparatively conservative within the assumptions that we make across the powering of that examine.

And based mostly on all of that, together with the quantity of variability that we’re assuming and the usual deviation we’re assuming, we really feel very assured within the powering of that examine, which, as I’ve stated, is nicely over 90%, even conservatively assumed. So we really feel excellent about the place we’re, and we really feel excellent about 52-week timeframe. Now I may also say that 52 weeks within the lifetime of a Duchenne affected person is a brief time period. However that is what makes 9001 so thrilling, you could truly already see the pretty important delta within the trajectory of illness if you take a look at a trial that is been on 9001 for 52 weeks versus pure historical past.

And if you happen to hold studying that out, you see it increasing. You’ve got seen it increasing in two years. You see on the four-year mark with the 101 youngsters really transformative as you’d count on, from one thing that offers with the foundation reason behind the illness and alter the trajectory of the illness in a disease-modifying approach, the place you are actually over 9 factors on a 34-point scale if you get out to 4 years. So two issues on it.

One, we’re very snug with the powering of EMBARK, and we’re very assured and have a whole lot of conviction round these outcomes. It is without doubt one of the largest research of its type that exists proper now. And we’re very excited in regards to the — what this implies to Duchenne youngsters, we’ve got one 12 months, however it’s two years, three years, 4 years, 5 years, 10 years. And I believe far past that, hopefully, if we get authorised.

Operator

Our subsequent query is from the road of Joe Schwartz of SVB Securities. Your line is now open.

Unknown speakerGoldman Sachs — Analyst

Hello. That is Beth on for Joe. For SRP-9001 BLA submitting for ambulatory sufferers, we had been simply questioning when you have a way from the FDA in case your present knowledge package deal is adequate to help use in ambulatory sufferers broadly no matter age? Simply in our doc checks, need to provoke gene therapies earlier than later. I additionally was curious if you happen to perhaps take into account doing a examine in DMD sufferers youthful than 4 to help use there, sort of much like what Pfizer is doing with their two- to three-year-old examine? Thanks.

Doug IngramChief Government Officer

So we do really feel good and assured in regards to the method we’re taking — looking for approval for the ambulatory affected person inhabitants and remind us that the regulatory customary, in addition to the authorized customary for extrapolating to better elements of the inhabitants, is nicely understood, when you could have a presumed mechanism of motion that may be relevant to a broader inhabitants. You’ve got the flexibility to check in a slender inhabitants to see the impact, as we had been discussing a second in the past, to cope with the heterogeneity that it comes from a bigger inhabitants, then develop it to broader populations. In order that’s why we have chosen the ambulatory inhabitants. We need to get began as quickly as attainable on a placebo-controlled trial for the nonambulatory inhabitants.

We are literally ongoing dosing nonambulatory youngsters at this time, however in our 103 protocol, we need to develop it to the nonambulatory affected person inhabitants as quickly as attainable as a result of these youngsters want this remedy quickly. After which, to your level, we’re — I believe we’re within the planning phases for our examine to go considerably decrease, however I am going to flip that to Louise Rodino-Klapac are you able to speak about going even decrease than the four-year outdated inhabitants in EMBARK.

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Thanks for that, [Inaudible]. To say that not too long ago performed examine with Cohort 103 examine, and we plan the examine to go even youthful than three years outdated as nicely. So actually, we’re in a remedy that broadly addresses this inhabitants.

Operator

Our subsequent query comes from the road of Brian Abrahams of RBC. Your line is now open.

Brian AbrahamsRBC Capital Markets — Analyst

Thanks a lot for taking my query. Perhaps shifting gears to limb-girdle. What is the newest on the CMC assays and course of improvement there? After which, maybe I misheard it, however it appears like there’s going to be, I assume, a plan for 2 research now with scientific supplies after which materials in it, subsequently, with industrial scale materials. Simply any sense of conduct time strains and perhaps how these two research may mix to help a possible pivotal path? Thanks.

Doug IngramChief Government Officer

Yeah. I am going to flip it to Louise, who can present extra shade. However I am going to say within the broadest of strokes, we’re nonetheless engaged on the assays for the industrial course of launch assays for 9003. To remind everybody that to start out a examine that might type the premise of an approval, the present customary of the company is to have these assays basically performed and prepared for industrial use, scientific use is not adequate.

So we’re engaged on that. It does take time, and we’re persevering with that. However our aim is to have all of that performed and to start that examine in 2023. As you level out, we’ve got two totally different research.

They don’t seem to be — the intention was to not have them performed kind of serially however they are often performed concurrently. These are actually in a really actual sense, unrelated research, each of which ought to happen in 2023. After which, the query is, why are you doing two research? Why not simply do your examine along with your industrial course of materials when the assays are full? And the reply for that’s that we’ve got scientific materials accessible to us that may be very usable and we expect would considerably profit sufferers and would give us some actually extra attention-grabbing perception in different elements of the inhabitants than the studied inhabitants for functions of our — what could be our pivotal trial subsequent 12 months with industrial course of. And so, from our perspective, it solely is smart that we use that materials and do a examine and acquire extra perception whereas on the similar time, from our perspective, no less than benefiting sufferers.

Louise?

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

[inaudible] will add in regards to the [inaudible] sort of materials including sufferers [inaudible] in addition to these nonambulatory sufferers. And so, it should give us important perception into the whole inhabitants. And as Doug talked about, isn’t a reasonably [inaudible] for the interior industrial course of materials [inaudible] cohort. And so, we’re ensuring that we’re capturing the entire inhabitants with these [inaudible].

Operator

Our subsequent query comes from the road of B. Skorney at Baird. Your line is now open.

B. SkorneyBaird — Analyst

Hey, good afternoon. Thanks for taking my query. I assume, as we take into consideration potential launch, clearly, scientific websites are considerably prepped for this and affected person demand would presumably be fairly excessive. I assume, what have your conversations been like to date with payers? I do know that payers have kind of pushed again not too long ago on Subpart H approvals.

Simply making an attempt to consider the curve of the launch. You are, clearly, in negotiations with a ton of payers on Recuplashen have some thought of utilization of Zolgensma. However simply do you suppose that there is going to be hurdles put up till you get the EMBARK knowledge out? Or do you suppose that payers might be comparatively versatile at preliminary subpart H approval?

Doug IngramChief Government Officer

So I assume, I might say, a few issues. And Dallan, if I miss something let me know. First, I am going to say what Dallan might be too humble to say, which is the excellent news is there might be a number of hurdles to beat. However we’re battle-hardened within the capability to work with payers and overcome obstacles and get youngsters on remedy.

I might remind all people that we have been — we’ve got three authorised therapies from EXONDYS, we have been rising at what’s between 35% and 40% CAGR now for practically six years. Our compliance and adherence charges nicely over 90%. Our capability to get these youngsters on remedy — and with respect to a persistent remedy, hold them on remedy, has been simply large. We have been capable of go to the prior course of, and the reauthorization course of would not be related for gene remedy, that makes the purpose.

We positively know what we’re doing. The excellent news is that we’re working considerably with payers, at the same time as we communicate. We have been doing it for numerous years to ensure we actually perceive their perspective and what they need. As a result of to your excellent level, I believe that if you consider the issues that may constrain demand or open up demand, let’s go first from the affected person perspective, will probably be huge.

We aren’t in any respect involved, sufferers are determined to get a remedy like this from our perspective. I believe, physicians might be equally in the identical place. The third factor is capacity-related points on the websites, are they nicely ready to infuse because it pertains to that? Our aim in the end is to have 70 skilled websites accessible to infuse. And actually, about 80% of sufferers are served by about 50 websites.

So we needs to be in excellent form. And the overwhelming majority of those websites have already got important expertise with gene remedy. We’re befitting from the launch of Zolgensma. After which, the fourth one is payers, and I believe we’re working very nicely and really thoughtfully with payers, very proactively with payers and we’re pondering of some very revolutionary approaches.

And our aim is just to get — let’s be clear. I’ve stated earlier, I do know I get a bit strident about this, however I really feel strongly about it. These youngsters do not have the luxurious of ready. They want remedy they usually want it now.

And ready three or 4 months for remedy is inappropriate. So we’re working with payers on that actual challenge, which is we do not simply need entry, we would like entry in a well timed method. And I believe well-informed payers are going to be — I am not suggesting there will not be challenges, however payers are going to be supportive. And positively, if you take a look at our price proposition for our remedy, and we have performed a whole lot of work on the worth of — the target worth of this remedy, I believe, goes to be very compelling.

Now from an uptake perspective, let me be very clear, it takes a while to get via the method. So assuming we get authorised on the time line we envision, it should take a few quarters to get via the method and begin getting youngsters infused and the like. However then, I believe the uptake goes to be very sturdy if we have performed our job nicely, and I do suppose Dallan and staff have the flexibility to do that very nicely, in all probability second to none. Dallan, have I forgotten one thing that I ought to have commented on?

Dallan MurraySenior Vice President, Chief Industrial Officer

No, I believe you have lined it, Doug. I believe, there’s a few issues that the payers — we have had constructive dialogue with the payers, and there’s a actual excessive stage of receptivity to gene remedy, primary. Secondly, within the final six years, due to the Duchenne group and notably our KOLs, neuromuscular KOLs, I believe the payer group has realized quite a bit about Duchenne. And there is a — that we’re in a distinct place now than we had been within the launch of — in 2016 of EXONDYS 51.

After which, I believe the final and essential factor I might say right here is that thanks to Louise and our R&D colleagues. The information that we’ll be launching with the publications that we’ll should help the worth and the work of our well being outcomes people as nicely, this worth framework that Doug was speaking about. We have realized quite a bit as nicely in Duchenne, and this might be a really totally different — we’re nicely ready to interact in constructive dialogue right here.

Operator

Our subsequent query comes from the road of Tim Lugo of William Blair. Your line is now open.

Tim LugoWilliam Blair — Analyst

Thanks a lot, and congratulations on the progress. I do know we’re laser centered on the AA and even EMBARK knowledge subsequent 12 months. Nonetheless, we have not heard a lot about Europe shortly. Are you able to simply give us an replace in your relationship with Roche and the time-frame for O-N making impression in Europe and past.

I assume that is going to be EMBARK dependent it doesn’t matter what happens with the AA?

Doug IngramChief Government Officer

Yeah, thanks for that. So first, we’ve got an ideal working relationship with Roche. I believe, you may — I believe you will see it revealed of their public statements. I believe, Roche is — appears to be about as bullish as we’re about this remedy publicly, and that actually is reflective of the very constructive working relationship we’ve got with our colleagues at Roche, and we have an excellent collaborative method throughout all points of the event program, industrial planning, regulatory and the like.

Yeah, I have been on Europe and past Europe to different elements of the world outdoors the USA. I’ll depart it to my colleagues at Roche to tell the exterior world on the timing of issues apart from to know what you have famous, Tim, which is that I believe that Roche’s public statements have been that they are going to rely on the EMBARK readout because the pathway for his or her approvals after which the HTA discussions that they will have in Europe and around the globe. So I believe that — except we hear one thing totally different from Roche, I believe that is their public assertion, and that is what we should always rely on.

Operator

Our subsequent query which comes from Anupam Rama of J.P. Morgan. Your line is now open.

Anupam RamaJ.P. Morgan — Analyst

Hey, guys, thanks a lot for taking the query. I needed to comply with up on Tazeen’s query earlier. And I believe you have sort of highlighted this a bit bit, however on the manufacturing aspect, what are the 9001 provide eventualities that you simply’re planning for, seeking to subsequent 12 months pending approval? And are there any kind of constraints or hurdles we needs to be contemplating in relation to provide entry as we take into consideration this launch curve?

Doug IngramChief Government Officer

Yeah. Thanks. So I believe, with Tazeen I used to be answering a barely totally different query, which was — to your level which was, are we in a fine condition from a CMC perspective? Do we’ve got the assays performed and the — and the information that’s supported? And the reply to that’s sure. We have performed a ton of labor.

And actually, we did a ton of labor earlier than EMBARK, so we had been in excellent form. After which, I believe, your query is an excellent one, which is how about capability? Are you in fine condition from a capability perspective to completely launch? And the reply is sure, we’ll be in excellent form. We’re planning to launch for the ambulatory affected person inhabitants. That’s our present working assumption, broadly talking, and our aim is to completely serve that group directly.

And even assuming a reasonably aggressive uptake and even assuming, which I believe is, at this level, a particularly reasonable assumption that we might be launching this O-L.

Operator

Our subsequent query comes from Hartaj Singh of Oppenheimer. Your line is now open.

Hartaj SinghOppenheimer and Firm — Analyst

Nice. Thanks, and thanks for all of the updates. Simply had a fast query. The MyoAAV program.

I do know, Louise, you and your colleagues if you had been at Nationwide, you had been engaged on rh74 for over a decade, and it appears you could have a best-in-class AAV vector there. What actually attracted you to MyoAAV? And I assume, is it considerably higher than rh74? And lastly, how do you see it sort of entering into the clinic in DMD, LGMD?

Doug IngramChief Government Officer

Certain. Thanks for that query. I am going to flip this to Louise to remark.

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Yeah. Thanks for that query. So actually, we’re — we love rh74 [inaudible]. By way of our bullishness about it, MyoAAV may be very thrilling.

It is within the analysis section. And what we have seen is increased [inaudible]. We’re enthusiastic about it [inaudible] as soon as we proceed to validate on a scientific path for that as nicely.

Doug IngramChief Government Officer

I apologize, Hartaj — I am sorry, Louise. I believe, Louise is reducing out a bit bit. I am going to simply repeat much less artfully what I believe Louise was saying, which was — look, first I’ll repeat what Louise stated, firmly, we love rh74. We’re excited.

That’s actually the platform proper now for our gene remedy centered on neuromuscular and neuro and albeit, cardiomyopathies as nicely. And there’s no — from our perspective, no less than, there isn’t any higher present serotype from a security perspective, coupled with a tropism perspective than rh74. So this is not about any negativity on rh74. We’re thrilled with it.

Clearly, there is a gigantic quantity of future worth to sufferers and to the breadth of sufferers if one can discover methods to lower dose, which might make therapies extra reasonably priced around the globe, and so on., and possibly enhance security and the like. We’ve got an extended technique to go. We’ve not dosed any sufferers and even wholesome human volunteers with MyoAAV, however at a preclinical and animal mannequin perspective, we’re seeing some issues that actually excite us in regards to the potential no less than for MyoAAV. Might or not it’s actually an order of magnitude extra tropic than any of the present serotypes, which might actually be terribly significant.

It might be significant around the globe in locations like India and Africa and different locations the place we’ll should discover a totally different sort of value of products to essentially have the total breadth of the advantages of our therapies, together with 9001. And it in all probability takes us to many different kinds of illness states that may be difficult at this time. At these value of products with gene therapies presently at this time, there are in all probability sure sorts of ultra-rare ailments that grow to be very troublesome. And that is — frankly, that is not acceptable.

That is tragic. If we’ve got the flexibility to deal with even very, very uncommon ailments, we must be fascinated with methods to do it. And MyoAAV — if not MyoAAV, perhaps another capsid, however presently one of the best factor we have seen and we have seen every little thing, is MyoAAV. It may actually be a transformative next-generation method to gene remedy.

So we’re in love with rh74, however we’re excited in regards to the potential of MyoAAV down the highway.

Operator

One second for our subsequent questioner. Our subsequent questioner which comes from the road of Anvita Gupta of Cowen. Your line is now open.

Unknown speakerGoldman Sachs — Analyst

Hello, guys. That is Amrita for Ritu from Cowen. I needed to proceed your questioning on the MyoAAV program. So are you guys seeing any transduction of satellite tv for pc muscle cells to hopefully get a way of probably enhance sturdiness in DMD sufferers? Or is that one thing that you simply hope to discover?

Doug IngramChief Government Officer

Effectively, actually, we are going to discover satellite tv for pc cells and the like. I do not know if we’ve got but. And — if Louise’s mic is working.

Unknown speakerGoldman Sachs — Analyst

Are you seeing that already in preclinical —

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

We are going to discover it. Simply to say, we’ve got additionally explored our transduction there with Allied. So it isn’t one thing we already see, however we’ll actually consider it with MyoAAV as nicely.

Operator

Our subsequent caller, which comes from the road of Yun Zhong of BTIG. Your line is now open.

Yun ZhongBTIG — Analyst

Hello. good afternoon. Thanks for taking the query. it is truly an outdated query that has been requested earlier than, however now that you simply’re speaking in regards to the launch of gene remedy program with robust confidence, so in all probability extra associated.

So what sort of impression do you count on the launch to have in your exon skipping revenues? And are we going to construct that into our launch technique, please? Thanks.

Doug IngramChief Government Officer

Yeah. So one of many issues we speak about typically as a corporation is that we’re a patient-driven, affected person mission-driven group. So let’s begin with the primary premise. If certainly, we’ve got a remedy that’s as helpful as we imagine 9001 is and it has an impression or drastically cannibalizes the present exon skipping platform, and the youngsters because of which can be benefiting from it, we’re thrilled.

So I simply need to be very clear about that from our perspective. We lean into one of the best know-how for teenagers. We do imagine, to start with, although, that there might be a major place for each gene remedy and our exon skipping remedy, both PMO or next-generation PPMO for a really very long time to up. First, I might remind all people — and we can’t see important cannibalization within the close to time period in any occasion for numerous causes.

So the very first thing to notice is that we’re — over 50% of our present therapies are — about 50% of our present affected person inhabitants on our exon skipping is nonambulatory. In order that they want this remedy whereas they’re ready for us to get 9001 authorised. Second of all, there — till we do one thing about it, there are neutralizing antibody associated youngsters, perhaps 14% or so, that will not have availability for gene remedy. We try to do one thing about that.

As I discussed within the opening remarks, we’ll begin a examine with our associate, Hansa. And we’re very inspired by the preclinical knowledge that we have seen, and we could very nicely have the ability to handle that. However till that is addressed, that remedy will proceed to profit these youngsters. After which, in fact, around the globe, there will be a number of locations, each within the U.S.

and around the globe the place there simply could be the availability for a PMO or PPMO the place a gene remedy isn’t. So we do suppose they are going to coexist for a while. After which, in fact, that does not even take into account the problem of the co-administration of gene remedy after which a PMO or PPMO, which no less than in a few of the preclinical fashions and even some literature would recommend is an additive worth so as to add each collectively. And if that is the case, and we’re performing some fundamental analysis on that to proceed to discover it, you then would have a long-term reply for teenagers with a onetime remedy after which over the long term, a persistent remedy.

However I’ll return to the assertion I made at the start. If ultimately this 9001 is so important as we imagine it’s and that it ends in cannibalization of our exon-skipping remedy and children are benefiting enormously we’ll be thrilled with that reply, frankly. And you will be thrilled, too. Let’s be sincere.

As an investor, you will even be thrilled as a result of that is — the inhabitants that may be addressed with 9001 is big proper now. It is huge even with the present restrictions. After which, we’re lowering — we have truly began dosing already, a examine to scale back the quantity of early exons that must be excluded. We’re specializing in the neutralizing antibody constructive sufferers, and we’ll begin a examine on that, that if it really works, would deliver one other 14% of youngsters in body for us.

After which, in fact, the most important of all is attending to the nonambulatory youngsters, and we’ll work like mad to get that performed and get the label expanded to nonambulatory youngsters as quick as attainable.

Operator

Our subsequent query comes from the road of Kristen Kluska of Cantor Fitzgerald. Your line is now open.

Unknown speakerGoldman Sachs — Analyst

Hello. That is Rick on for Kristen. Thanks for taking our query. For the real-world EXONDYS 51 knowledge offered on the World Muscle Society, may you speak about the way you’re particularly fascinated with the significance of those knowledge within the excessive unmet want, nonambulant inhabitants? Thanks.

Doug IngramChief Government Officer

Effectively, the great thing about — look, with respect to dystrophin. So I assume, that is an attention-grabbing query. The query is what impression does it have upon ambulatory. Initially, perceive — all this knowledge is equally relevant throughout the entire inhabitants as a result of each child is on — there could also be a distinct a part of the journey or place within the journey, however they’re all affected by precisely the identical challenge.

They’re lacking purposeful dystrophin because of which they’re damaging their muscle tissues each time they transfer them. And the worth of this real-world proof is it’s proved over a really lengthy time period, that what we noticed at the start with EXONDYS actually reveals itself over time. And — so I believe it is actually necessary in that regard. And it is necessary for EXONDYS and it is necessary for VYONDYS, it is necessary for AMONDYS.

And naturally, metaphorically and kind of by instance, makes the purpose of the worth of accelerated approval, you simply think about what we are going to see over time with 9001 after we take into consideration the quantity of dystrophin that’s induced with 9001. After which, lastly, let me be very clear, so I need to loop again to one thing that is necessary, which is with respect to EXONDYS and VYONDYS and AMONDYS, we’ve got a major variety of post-marketing commitments. We’ve got actually invested already lots of of tens of millions of {dollars} in progressing these research, and two of them are actually top-of-mind assent submission. And I do need to be very, very clear to all people that, however what we’re very enthusiastic about with respect to real-world proof, it is our obligation and our absolute dedication to proceed and be certain that we full each of these research as well timed as attainable.

So the real-world proof is — it’s extremely encouraging. We have to proceed to work on our post-market commitments as nicely.

Operator

Our subsequent query, which comes from the road of Zhiqiang Shu of Berenberg. Your line is now open.

Zhiqiang ShuBerenberg Capital Markets — Analyst

Nice. Thanks very a lot for taking the query. I might wish to ask in regards to the exterior management that’s included in your built-in evaluation within the gene remedy package deal you submitted for accelerated approval. I ponder, have you ever acquired any alignment with the FDA on the management — exterior management based mostly on pure historical past? Clearly, we’re conscious that not too long ago, there was a unfavourable opinion from an oncology product from the — at Supervisory Committee.

Simply questioning when you have acquired any alignment there. And the way necessary it’s to have that knowledge to help your accelerated approval? Thanks very a lot.

Doug IngramChief Government Officer

Effectively, so to start with, I believe the totality of proof is very necessary. So the design, why it exists the way in which it exists, the extent to which it is a cheap approximation of a Becker dystrophin, the preclinical work, the entire associated biomarker work. After which, the entire scientific knowledge that we’ve got, together with the built-in evaluation, we’ve got 101. These youngsters are one 12 months, two years, three years, now 4 years out.

You bought 102 Half 1 and Half 2, these youngsters are one in two years out. We have got 103, a broad take a look at youngsters from a security perspective. And 103, very broad age ranges, very broad weights and the like. And positively, the built-in evaluation pulling all of it collectively is moreover beneficial.

What I might say on the FDA is that the FDA has seen all of this knowledge, we have shared all of this info with them. Clearly, all — however their views on all of that’s going to disclose itself within the evaluate course of itself. However we really feel excellent. I am undecided how one does an exterior management extra rigorously than the way in which we have performed it.

Simply to remind individuals, it isn’t a easy exterior management — we used a well-masked exterior management, however then we matched on 4 totally different covariants, not merely one covariant, which is age, NSAA baseline, I believe 10-meter stroll/run. I imagine, rise time, if I am not misremembering. After which, we did not even cease there. We acquired that very carefully matched.

However to make sure that we had a good correlation between the — and is carefully a consultant, exterior group management was our precise group as attainable. We did this regression evaluation and this propensity matching, which is basically synthetically makes the distribution, not merely the means however the distribution similar throughout the 2. So throughout the limitations related to exterior management, that is about as rigorous as one will get. After which, on high of it, I ought to notice that most of the sufferers within the exterior management truly got here from placebo-controlled trials, so to the extent that folks may marvel about that.

They really got here from a really related method that you simply’d should a placebo-controlled trial as a result of they had been on a placebo on the time that their info was developed. So we’ll have this full evaluate with the company. I do not suppose it is anybody piece of knowledge. I believe, it is the entire knowledge that is going to enter the dialogue as a result of bear in mind, with respect to accelerated approval, the elemental query is, does this surrogate endpoint — on this case, we’re speaking about purposeful shortened dystrophin.

So is it fairly doubtless based mostly on all of this knowledge, fairly prone to predict the scientific profit? We’re, clearly, the sponsors, so you may think about what our perspective is, however we imagine it’s extremely compelling.

Operator

Our final query, which comes from the road of Gavin Clark-Gartner of Evercore ISI. Your line is now open.

Gavin Clark-GartnerEvercore ISI — Analyst

Hey, thanks for taking the query. For LGMD, I am simply questioning if you happen to’re planning to incorporate a placebo arm for both of these subsequent trials? And what your present pondering on registrational endpoints is?

Doug IngramChief Government Officer

Louise, do you need to contact this?

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Yeah. You noticed that we [inaudible] is not going to embrace a placebo arm that’s [inaudible] older sufferers who’re going to be extra extreme ambulatory after which nonambulatory. And as we take into consideration the Section 3 examine [inaudible] settlement.

Doug IngramChief Government Officer

Simply to remind all people with respect to 9003. So we’re — we have seen in our — we have performed two cohorts with scientific materials. You may see we have gotten a really related security profile of 9001, not stunning at rh74, and it is the identical promoter. And we have seen excellent expression throughout each of the cohorts.

And I might remind you of two extra issues after we take into consideration what that examine design must seem like. The primary is to do not forget that not not like Duchenne muscular dystrophy, 9003 2E, which is — it is the shortage of beta-sarcoglycan, beta-sarcoglycanopathy. It’s nicely characterised in that regard. We all know precisely what’s inflicting the demise within the technology of those youngsters.

It is a lack of beta-sarcoglycan correctly localized to the sarcolemma of their muscle. And 9003 induces an unlimited quantity apart from native protein correctly localized and related as well as with indicators on the purposeful aspect related to the entire situation being a purposeful protein, upregulation of the dystrophin-associated protein advanced, discount in CK and the like. So with all of that in thoughts, and given the truth that that is an ultra-rare illness, our view is that the registrational trial for this must be considerate and take that under consideration and be lean sufficient to get this trial performed quickly and get this remedy to youngsters with out undue delay or pointless delay.

Operator

With no additional questions, I might now like to show it again to Doug Ingram for closing remarks.

Doug IngramChief Government Officer

All proper. Effectively, thanks all very a lot for spending time with us this night, and thanks, everybody, in your very insightful questions. Clearly, the subsequent seven months are among the many most consequential in our historical past. And we’ve got a reasonably lengthy historical past.

And greater than that, I imagine, no less than which can be in all probability among the many most consequential for Duchenne sufferers, maybe for the reason that discovery of the dystrophin gene again in 1986, if I am remembering appropriately. And so, with that stated, we’re wanting ahead to the entire work that we’ve got forward of us, and we’re wanting ahead to updating you as we cross via these necessary milestones. And with that, I might ask everybody to have a stunning night.

Operator

[Operator signoff]

Length: 0 minutes

Name contributors:

Mary JenkinsSenior Supervisor, Investor Relations

Doug IngramChief Government Officer

Louise Rodino-KlapacChief Scientific Officer and Government Vice President

Dallan MurraySenior Vice President, Chief Industrial Officer

Ian EstepanChief Monetary Officer

Gena WangBarclays — Analyst

Tazeen AhmadFinancial institution of America Merrill Lynch — Analyst

Gil BlumNeedham and Firm — Analyst

Colin BristowUBS — Analyst

Unknown speakerGoldman Sachs — Analyst

Matthew HarrisonMorgan Stanley — Analyst

Brian AbrahamsRBC Capital Markets — Analyst

B. SkorneyBaird — Analyst

Tim LugoWilliam Blair — Analyst

Anupam RamaJ.P. Morgan — Analyst

Hartaj SinghOppenheimer and Firm — Analyst

Yun ZhongBTIG — Analyst

Zhiqiang ShuBerenberg Capital Markets — Analyst

Gavin Clark-GartnerEvercore ISI — Analyst

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