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Edited Transcript of SRPT earnings conference call or presentation 27-Apr-17 8:30pm GMT

Thomson Reuters StreetEvents

Q1 2017 Sarepta Therapeutics Inc Earnings Call

BOTHELL May 3, 2017 (Thomson StreetEvents) -- Edited Transcript of Sarepta Therapeutics Inc earnings conference call or presentation Thursday, April 27, 2017 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alexander Bo Cumbo

Sarepta Therapeutics, Inc. - SVP of Global Commercial Development

* Edward M. Kaye

Sarepta Therapeutics, Inc. - CEO, President and Director

* Ian Estepan

* Sandesh Mahatme

Sarepta Therapeutics, Inc. - CFO, Chief Business Officer and EVP

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Conference Call Participants

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* Alethia Rene Young

Crédit Suisse AG, Research Division - Research Analyst

* Anupam Rama

JP Morgan Chase & Co, Research Division - VP and Analyst

* Brian Peter Skorney

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Chad J. Messer

Needham & Company, LLC, Research Division - Senior Analyst of Biotechnology

* Christopher N. Marai

Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst

* Dae Gon Ha

Leerink Partners LLC, Research Division - Associate

* David Neil Lebowitz

Morgan Stanley, Research Division - VP

* Debjit Chattopadhyay

Janney Montgomery Scott LLC, Research Division - MD of Biotechnology

* Hartaj Singh

Oppenheimer & Co. Inc., Research Division - Research Analyst

* Kerry Tang

Goldman Sachs Group Inc., Research Division - Research Analyst

* Matthew Joseph Eckler

RBC Capital Markets, LLC, Research Division - Associate

* Ritu Subhalaksmi Baral

Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst

* Stephen Gilbertpaul Brozak

WBB Securities, LLC - Managing Partner and President

* Timothy Francis Lugo

William Blair & Company L.L.C., Research Division - Partner

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to the Sarepta Therapeutics, Inc. Q1 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Ian Estepan, Executive Director of Corporate Affairs. You may begin, sir.

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Ian Estepan, [2]

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Thank you, Nova, and thank you all for joining today's call. Earlier today, we released our financial results for the first quarter 2017. The press release is available on our website at www.sarepta.com, and our earnings 8-K was filed earlier this afternoon. Slides outlining the agenda for today's call can be found on the Investors section of our website.

Joining me on the call today are Ed Kaye, Chief Executive Officer; Sandy Mahatme, Chief Financial Officer; and Bo Cumbo, Head of Global Commercial. After our formal remarks, we will open up the call for a Q&A period.

I'd like to note that during this call, we'll be making a number of forward-looking statements. Our full forward-looking statements legend is on Slide 2. Please take a moment to review this slide. These forward-looking statements involve risks and uncertainties any of which are beyond Sarepta's control. Actual results could materially differ from the forward-looking statements as any and such risks can materially and adversely affect its business, results of operations and trading price of Sarepta's common stock.

For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission as well as the company's other SEC filings. We plan to file the 10-Q for the quarter 2017 by the S&P required filing deadline in May. The company does not undertake any obligation to publicly update its forward-looking statements, including any financial projections provided today based on subsequent events or circumstances.

With that, let me turn the call over to Ed for both the corporate and clinical update. Ed?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [3]

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Thank you, Ian. Good afternoon, everyone. We appreciate you joining us for the Sarepta's First Quarter 2017 Financial Results and the Corporate Update Call.

In our first quarter, we had many notable achievements across all areas of the business, which were aligned with our goal of ultimately helping as many DMD patients as possible. These achievements consisted of continuing to make progress with a commercial launch of EXONDYS 51 in the U.S, expanding into ex U.S. territories and building an innovative pipeline.

Based on the commercial trends we have observed to-date for EXONDYS 51, we are raising our full year revenue guidance from exceeding $80 million to exceeding $95 million. Later on the call, Sandy will provide an update on net revenue for EXONDYS 51, our financials for the first quarter of 2017, and guidance for the remainder of the year. Bo will review the progress of the EXONDYS 51 launch and outline the buildout of our European footprint. Before turning the call over to Sandy and Bo, I will begin with an overview of the progress that we've made over the quarter and outline our plans for the remainder of the year. The strong early trends that we reported on our year-end and fourth quarter 2016 call have continued.

EXONDYS 51 is the first and only treatment approved in the United States that targets dystrophin deficiency, the underlying cause of Duchenne muscular dystrophy. The drug is designed to bind to exon 51 in dystrophin pre-messenger RNA, resulting in the exclusion or skipping of this exon with the goal of restoring the reading frame and allowing for the production of an internally truncated dystrophin protein. Based on this mechanism of action, it's important to note that EXONDYS 51 can be used with or without steroids, which only addresses symptoms of DMD, not the underlying cause of the disease.

As a part of our ongoing development efforts in supportive access, we continue our strong commitment to generate cash -- to generating clinically significant data. As you are aware, EXONDYS 51 was approved with a broad indication that has no restrictions on age or disease severity. We believe the vast majority of the 13% of patients amenable to skipping exon 51, including those near end of life, could benefit from treatment.

At the MDA scientific conference in Arlington, Virginia, we recently reported EXONDYS 51 treated patients from Study 201/202, demonstrated approximately half the rate of decline as age-matched patients, these were ages 7 to 15.5 years. From a published natural history study as measured by forced vital capacity percent predicted. In an age-adjusted mixed effects analysis of the FVC percent predicted, EXONDYS 51 treated patients experienced an annual decrease of 2.3% of pulmonary function compared to a 4.1% decline for the untreated natural history cohort. These data support that patients treated with EXONDYS 51 experienced less deterioration of respiratory muscle function than natural history would predict. We view this as notable because patients with Duchenne unfortunately often die from respiratory or cardiac complications. Physicians at the conference who treat DMD in boys appreciated the significance of the pulmonary function data and we believe the publication of this data will help support eligible ambulatory and non-ambulatory patients as they seek access to EXONDYS 51.

The last patient in Study 204 will complete the 96-week study by the end of April. Our 204 study is a Phase II open label multicenter study to evaluate the safety and tolerability of eteplirsen in advanced stage DMD patients, who are amenable to exon 51 skipping. We plan to analyze data and believe these analyses will be complete by the end of the year. We also expect dystrophin from study 4053-101, our European Phase II study of patients amenable to exon -- to skipping exon 53 to be available also in 2017. We are in late stage discussions with the FDA on the final protocols for dystrophin measurement and quantification. Details of the protocol will be finalized and we will be able to provide more specific timing at the time of the data readout. We will be measuring exon skipping and dystrophin production via RT-PCR, immunofluorescence signal intensity, percent dystrophin positive fibers and western blot. This comprehensive approach will allow us to actively measure the quantity and the location of the dystrophin produced by both our PMO and PPMO exon skipping agents.

In addition to research and clinical development efforts, we are focused on expanding the number of DMD patients who have access to EXONDYS globally. There are in fact more boys afflicted by DMD in Europe than in the U.S. As a reminder, our marketing authorization application, or MAA, was validated by the European Medicines Agency at the end of last year.

The proposed indications for EXONDYS in the MAA includes all patients amenable to exon 51 skipping aged 4 or older. We have received initial feedback from the EMA and over the next several months, expect to engage in meetings with them to discuss their feedback. The purpose of these meetings will be to agree on the next steps as we work through the multiphase review process.

In the meantime, we are currently planning to submit a request to the EMA for a 6-month clock-stop to complete our ADME study. We also plan to use this time to collect data and conduct additional analyses from existing studies to address any EMA questions or requests that may come. After completing these activities, we anticipate EMA to continue to review until a final determination is made.

We began building our global footprint in Europe this quarter to support the potential launch of EXONDYS. We have hired a General Manager for the region and our European headquarters is currently based in Zug, Switzerland. We are continuing our IP efforts to secure access to the European market. And finally, we remain on track to initiate our Managed Access program in late 2017.

Next, I'd like to turn your attention to our clinical pipeline for DMD, which we believe is the most extensive in the industry. ESSENCE, a Phase III randomized double-blind placebo-controlled study for patients amenable to either exon 45 or exon 53 skipping is on track and enrolling well. The first patient at a European site has been screened this quarter. We expect the trial to be fully enrolled by the end of the year. ESSENCE serves as a registrational study for our clinical candidates: [SRP-405 -- 43] SRP-4045 and SRP 4053. The final protocols for the EXONDYS 51 post-marketing commitments are still being discussed with the FDA. The data generated over the next several years will help inform and determine the clinical effectiveness of this drug.

Based on our current assumptions, final data from our post-marketing commitments will not be likely available for several years. Now switching gears to our PPMO platform, we're excited about the potential for this new class of chemistry that we're developing. PPMO is a specifically designed cell penetrating peptide added on to the PMO backbone, with a goal of increasing tissue penetration, leading to greater exon skipping efficiency and eventually dystrophin production. In the MDX mouse model, we observed a 10- to 30-fold increase in dystrophin production for PPMO conveyor to PMO in skeletal, cardiac and smooth muscle cells.

Increased dystrophin could lead to better efficacy as well as less frequent dosing for patients. PPMO has demonstrated the ability to penetrate an intact muscle membrane in, in vivo studies, which we believe could allow application of the technology to other neuromuscular diseases such as Pompe disease, myotonic dystrophy, Facioscapulohumeral Muscular Dystrophy, FSHD and Friedreich's ataxia. In addition to targeting the muscle, we anticipate PPMO may have the ability to target other organs in the body. If the safety profile of our PPMO compound is confirmed in our ongoing GLP toxicology studies, we plan on rapidly advancing PPMO into the clinic later in 2017.

In summary, we are pleased with the advancement of our clinical pipeline on all fronts. Our mission is to treat as many patients as possible and the recent addition of our Chief Medical Officer, Catherine Stehman-Breen, will further accelerate and focus our clinical development path.

Now I'd like to turn the call over to Sandy for an update on our financials for the first quarter of 2017. Sandy?

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - CFO, Chief Business Officer and EVP [4]

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Thanks, Ed. Good afternoon, everyone. We are pleased to report that based on continued patient and physician interest in EXONDYS 51, coupled with progress in the reimbursement landscape, we generated net revenues of $16.3 million from the sales of EXONDYS 51 in the first quarter of 2017. Based on the recent trends that Bo will elaborate on, we have gained some clarity on the launch trajectory. These trends have continued into April and based on the information that we have to-date, we feel comfortable raising our net revenue guidance for the year from exceeding $80 million to exceeding $95 million. Our guidance only includes sales generated in the U.S. and does not include any potential sales from our Managed Access program, which we expect will begin towards the tail-end of the year.

We are quite pleased with how the launch is progressing, our Q1 achievements and believe that we're well-positioned for future growth. We finished Q1 with a strong cash position due to completion of the sale of our rare pediatric disease, priority review voucher or PRV for $125 million. This sale, as I have previously stated, provided an important source of nondilutive capital to the company and was recorded as a gain from the sale of an intangible asset for GAAP purposes. This is a one-time transaction and has been excluded for non-GAAP reporting.

This afternoon's press release provided details for the first quarter of 2017 in both an adjusted or on a non-GAAP basis as well as GAAP basis. The press release is available on the SEC and company websites. The non-GAAP results we will discuss on this call provide a more accurate picture for ongoing operations and the impact of operations on our cash balance and they exclude restructuring, stock compensation expense and gain from the sale of the company's PRV.

Please refer to our press release for full reconciliation of GAAP and non-GAAP. In the first quarter of 2017, we reported an adjusted or non-GAAP net loss of $33 million or $0.60 per share compared to non-GAAP net loss of $52.5 million or $1.15 per share in the first quarter of 2016.

The decrease is due to product sales of EXONDYS 51, lower manufacturing expenses due to the capitalization of inventory upon the approval of EXONDYS 51 by the FDA and was offset by the increased professional services, primarily due to increased legal fees and commercial initiatives.

As I previously stated, revenue for the first quarter of 2017 was $16.3 million. No revenue was recognized in the first quarter of 2016. Adjusted research and development expenses were $27.2 million for the first quarter of 2017 compared to $35.9 million in the first quarter of 2016, a decrease of $8.7 million. The decrease is due to lower manufacturing expenses because of the capitalization of inventory upon the approval of EXONDYS 51, offset in part by increased patient enrollment in our ongoing clinical trials.

Adjusted selling general and administrative expenses were $22.2 million for the first quarter of 2017 compared to $16.6 million in the first quarter of 2016, an increase of $5.6 million primarily due to higher legal fees and commercial initiatives.

Our research and development as well as selling general and administrative expenses for Q1 were in line with our expectations and we are not changing or updating our expense guidance for the year. We had approximately $391 million in cash and investments at the end of the first quarter. In addition, we have prepaid approximately $21 million towards our 2017 and 2018 manufacturing expenses. To conclude, we believe our guidance places us in a very strong position to successfully achieve our goals for the remainder of the year.

With that, I'd like to turn the call over to Bo for an update on the U.S. launch of EXONDYS 51. Bo?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [5]

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Thank you, Sandy. Good afternoon, everyone. We're increasingly confident in our ability to execute a successful launch for EXONDYS 51 as evidenced by our updated net revenue guidance for the year. Although we're still in the early stage in the launch, we're seeing encouraging trends emerge regarding the commercial prospects for EXONDYS 51. We're continuing to evaluate the market size as we progress throughout the launch. Based on the current literature, we believe there are approximately 9,000 to 12,000 boys living with DMD in the United States and approximately 13% of these boys have mutations amenable to skipping exon 51.

Patient demographics have remained fairly consistent throughout the launch to-date. The mix of patients on commercial Medicaid plans has remained at approximately 4 -- 60 to 40. Based on natural history studies, boys with DMD typically lose ambulation between the ages of 11 and 13 years of age. While we do not capture the status of ambulation within our start forms, the average age of patients currently on therapy is now between 14 and 15 years, which indicates both ambulatory and non-ambulatory patients are obtaining access to EXONDYS 51.

Of note, we last reported the average age of patients on therapy was 13 years of age. This increase suggests progress in securing reimbursement for non-ambulatory patients. From a compliance and persistence perspective, we have previously reported that approximately 40% to 50% of patients opted to have ports placed prior to their first infusion and this trend continued in the first quarter. Although port placements initially slow down the time to first infusion, we expect this would lead to a better experience for the patient and result in better long-term compliance. Although we are still early in the launch, we're seeing high compliance rates and minimal discontinuations consistent with our clinical trial experience. At this stage in the launch, we have not observed drug-related side-effects leading to discontinuations or multiple missed doses.

From a managed care standpoint, reauthorizations are a standard part of the reimbursement process. And to-date, we have not observed a major impact on persistence rates. We have previously highlighted that educating physicians, health care providers and DMD families about the importance of genetic testing would be critical for a successful launch. We have completed preliminary market research, which reveals our efforts have resulted in approximately 19% increase in genetic testing for patients since our initial prelaunch survey. As a result of this genetic testing, a greater number of physicians now know which patients have mutations that are amenable to skipping exon 51.

Another important genetic testing effort is the decode Duchenne partnership with PPMD and Emory. They have reported a greater than 200% increase in Q1 2017 versus Q1 2016 for new applications for genetic testing. These efforts have led to newly diagnosed patients. We believe our educational efforts will continue to increase genetic testing, diagnosis and treatment over time.

As we mentioned during our fourth quarter conference call, all the top-tier DMD centers have submitted start forms. The number of exon 51 amenable start forms has continued to rise in total week over week, resulting in an increased penetration rate throughout the first quarter. The steady flow of start forms throughout the quarter was driven by continued patient demand, increased physician confidence and new patient identification.

Tier 1 and 2 DMD centers which treat approximately 80% of the known DMD population are still consistently submitting start forms. In addition, more Tier 3 centers submitted start forms this quarter, resulting in our total DMD prescriber base increasing by approximately 30% since Q4. There are currently more than 130 physicians submitting start forms. Active physician prescribing along with other positive trends continue to give us confidence in the overall trajectory of the launch and we are pleased with the success we're having to-date.

We continue to have productive discussions with payers and have made significant progress securing reimbursement for patients. There has been a steady increase in starting patients on therapy, with March being the highest month and we're seeing this trend continue into the second quarter. Based on our activities to-date, we believe payers have a much better understanding of the disease, the number of patients eligible for treatment under their plan and the patients who would most likely benefit from EXONDYS 51.

To recap, the commercial team has been focused and successful at obtaining exon 51 eligible start forms, supporting broad access for patients, maintaining patients on therapy and increasing genetic testing and diagnosis through education. Our goal is to provide access to as many patients as possible. Toward that goal, we are working on distribution agreements and a Managed Access program in territories outside the United States and expect these agreements to be finalized in the coming months.

I'm also pleased to announce the appointment of Sarepta's General Manager of Europe, Andrew Robertson. Andrew's hire represents a milestone in our story as he's our first ex U.S. employee and in charge of managing our EU commercial strategy and commercial operations. Andrew comes to Sarepta after having served as Regional Vice President and General Manager for Central and Eastern Europe, Middle East and Africa at Shire International since 2010. Andrew also has previously held leadership roles at Celgene and Genzyme for both the U.K. and Ireland.

To conclude, this is an exciting time for us at Sarepta. We've made progress on multiple fronts and have had additional visibility into the launch of EXONDYS 51 in the United States and look forward to one day serving DMD patients around the world.

And with that, I will turn the call back over to Ed for closing remarks.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [6]

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Thanks, Bo. Based on the progress we've made in all areas of the business this past quarter and certainly since last September, we continue to believe in our ability to execute and build toward a goal of becoming the leader in DMD and other neuromuscular diseases. An important component of this vision along with the development of our internal candidates that I previously outlined, there's a multipronged partnering strategy that allows us to evaluate multiple different therapeutic approaches to treat DMD.

Our most advanced stage development partnership is with Summit Therapeutics. Phase-out DMD is a Phase II clinical study evaluating ezutromid in patients with DMD. This 48-week open label trial is ongoing in the U.K. and the U.S. and aims to establish proof of concept for ezutromid through the evaluation of muscle structure and health. Summit expects to complete trial enrollment of approximately 40 patients in the second quarter of 2017. The company expects to report the full analysis of the 24-week biopsy, MRI and functional data in the first quarter of 2018.

I also want to highlight our micro dystrophin gene therapy partnerships with Nationwide Children's Hospital. Nationwide and Dr. Jerry Mendell are ideal partners due to their expertise in gene therapy development. The Gene Therapy Program started in 2009 and over the last 8 years, they have built a facility that can supply, design and produce recombinant Adeno-Associated Virus or AAV vectors. Their facility supports production of 8 different recombinant AAV vector serotypes. Dr. Mendell has been the principal investigator for both the Follistatin Gene Therapy Program for DMD as well as the AveXis program for spinal muscular atrophy.

Over the course of the years, Dr. Mendell has optimized the construct specifically designed for DMD. The promoter was changed to MHCK7 to enhance the activity of the construct. The construct can be systemically delivered to skeletal, diaphragm and most importantly, cardiac muscle and has shown high levels of expression in preclinical studies.

Patients with mutations between exons 18 and 58 or approximately 60% to 70% of the depopulation are potential candidates for treatment with gene therapy. The Gene Therapy Program will enter the clinic in the third quarter of this year and we will provide more details about the clinical trial design in the coming months. Given the complexity of Duchenne muscular dystrophy, we know it will require multiple approaches to secure this disease. Our partnering strategy along with our internal development work represents the most comprehensive approach to treating DMD.

Before opening the call for questions, I'd like to share a personal update. After careful consideration, I believe the timing is right to announce my intention to resign as President and CEO at the conclusion of my current employment term this year in order for me to focus my attention on the next series of key initiatives for Sarepta. These key initiatives include approval of EXONDYS in Europe, the advancement of our next-generation PPMO chemistry into the clinic and finally, next generation therapies for DMD such as gene therapy.

With the approval of EXONDYS 51 and our successful transition to a commercial stage entity, as well as the initial steps we've taken toward becoming a global company, I believe now is the right time to narrow my focus on the key areas of the business where I can have the most impact.

Since transitioning to CEO of Sarepta, we have faced many challenges but also achieved some of the greatest professional accomplishments, not only in my career, but also in the history of the company. As we're putting in place a solid experienced team, I feel much more comfortable about our commercial progress to-date and feel that my skills are best utilized for our key regulatory and scientific challenges that will allow Sarepta to grow into an international company.

I'm announcing this now to provide ample time to work with the management team, the Board of Directors and other senior leaders at Sarepta to find a suitable candidate that embodies really the culture of Sarepta and ensures a smooth and seamless transition. Following this transition period, I will continue to serve the company as an active board member and special regulatory and scientific advisor. While we are proud of our collective contributions to the DMD community to-date, there is still much work to be done. For that reason, I look forward to continuing to advance the aforementioned initiatives in the near term as CEO, to support the incredible team here and most importantly, to serve the patients.

And with that, operator, please open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Alethia Young of Crédit Suisse.

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Alethia Rene Young, Crédit Suisse AG, Research Division - Research Analyst [2]

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Congrats on the guidance increase. Ed, I'm sorry to hear that. You've navigated the company through a very tough time. So I guess two questions. One, what specifically have you helped educate the payers on getting a better understanding around, that's kind of, you think, is now starting to play out for you? And then I guess, second, your announcement, Ed, I mean, what do you guys -- what are you kind of looking for in a CEO at this point? Is it someone more commercially based or more scientifically based like maybe just help us get a flavor for how you're thinking what the skill set should be for someone that follows, you think?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [3]

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Sure, Alethia, thanks for the question. I think in regards to working with the payers, this has really been a major focus not only for the Medical Affairs team but also our reimbursement specialists and the regional account managers. I've been involved with many direct conversations with chief medical officers and even CEOs of companies trying to get them to understand. I think probably the biggest thing we've been able to do is when they have requested to learn more about the clinical data, we've given them what we have so far as far as our clinical information. And so I think that's been the biggest step is that they realized that although our label is very much restricted to really talking about dystrophin, we do have clinical data and obviously we are continuing to do a lot of work in looking at patient reported outcomes, looking at pulmonary function, echocardiograms. So we've really made a commitment to gathering more clinical data. And I think what we've been able to do is get them a little bit more understanding our full package. And I think when they do understand that it's been a much better conversation and, Bo, any comments on that?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [4]

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Yes, I think, actually, we've really -- this last quarter, we've really turned a corner. We're talking to some of the managed care plans and really getting them to understand exactly how many patients we're talking about. And I think last quarter, we talked about one of the plans took a lot of education around because there was not an ICV 9 code or 10 code and they thought they had all of these patients. And after a lot of education and we're actually speaking to the providers in the field and that's -- a lot of that has taking place this quarter. The plan that I spoke to last quarter has already put a policy in place, open to PI, because they have a much better understanding now that it's -- how many patients we're talking about and really understanding dystrophin and the significance of increasing dystrophin from baseline. So I -- really, it goes to the 2 different teams, the national account teams, the Medical Affairs teams doing a lot of educating and really getting their hands around exactly what is dystrophin? How do you use this drug? And the epidemiology that they have within their own plans.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [5]

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And so -- and Alethia, in regards to your second question, I think, I just want to make sure that -- I'm not going anywhere. I want to make everybody comfortable. I think the reason why I decided at this particular time is if you think about the achievements we've made in the last 2 years, it's been really fairly impressive. We were able to really get our entire regulatory process for manufacturing approved, we now have a global supply that we feel very comfortable about. Obviously, we got the approval of -- in the U.S. of EXONDYS 51. Bo and his team has done a great job for -- in a commercial launch with a difficult reimbursement environment. And also for me, I've been able to really focus the company towards DMD research, not -- and getting away from some of the infectious disease programs that -- I wanted to make sure we were focused on one disease that we could supply it. We've also taken the PPMO, which was in the back shelf. We've brought it up to the front, it's ready for clinical development. And we've made some incredible progress in licensing in 3 new programs and we will be very active in continuing. So I think what makes sense, I think, and I appreciate the board being so flexible, is that we can focus -- have someone who can focus on the commercial aspects of the company and I can focus on really the research and the regulatory challenges. We really need to make sure we get approved in Europe. I've got to make sure that we have our PPMO up and running in the clinic and our next gene therapy. I think if you remember, Alethia, that's how we started my career is in gene therapy. I'd love to see this happen in DMD boys. And so it allows me to really focus on this aspect and while someone else can focus on the commercial aspect.

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Operator [6]

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

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Anupam Rama, JP Morgan Chase & Co, Research Division - VP and Analyst [7]

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Just wondering if you could provide some color on the upcoming Adcom related to ESSENCE and the potential protocol amendment there. In particular, is 6-minute walk, as the primary endpoint, something that might come up for a reconsideration?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [8]

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No, actually, this is a pretty straightforward Adcom. And in fact, this is a really very helpful, it's Adcom for the Pediatric Advisory Committee. The entire focus of the Adcom is on the use of ports in a placebo-controlled trial. One of the problems we had is that the FDA had made us put in a provision that the use of essential intravenous ports could not be allowed. The families and the patient objected to this because it was really a hardship for them and it was adding an enormous amount of stress on the boys, having to try to find intravenous access in some of these boys every week. So in fact, it was the IRB at UCLA that requested this. Dr. Perry Shieh was very supportive and he asked if he could do this and the patients asked to do this. So the question really is going to come to the use of ports. We think this is advantageous to us very much because it then will have much better compliance during the trial. So this is actually a really good thing for us and we're very pleased that the FDA Pediatric Advisory Committee took this question up.

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Operator [9]

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Our next question comes from the line of Chad Messer of Needham.

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Chad J. Messer, Needham & Company, LLC, Research Division - Senior Analyst of Biotechnology [10]

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Ed, I just want to say, congratulations on all you've accomplished as a CEO, you're certainly setting a high bar for whoever is replacing you and it's great you'll still be around, keeping an eye on a lot of the progress. So you said you're still getting more patient start forms coming in at a good rate and obviously treating more patients. Just wondering if you could comment on what's going on with the conversion rate? It's good we're making some progress here. But just wondering sort of the average time between when someone fills out a start form or when they actually get treated, if that's improving at all?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [11]

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Yes, let me -- since Bo is closest to the data. Let me ask Bo to take care of this.

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [12]

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Yes, we've had actually pretty good quarter. When we've talked about sort of managed care, we've had a lot of plans that come on, they have a lot of plans that put policies in place. And of course, that always helps the conversion rates for the boys that are actually on that individual plan. Conversion rates change from plan to plan if a patient has one plan to another. But overall, it's increasing patients getting on therapy because we actually have more policies in place this quarter than the last. And to your earlier point, yes, start forms are continuing to roll in. I think right out of the launch, we had many start forms coming in from Tier 1 and Tier 2. I think what's very exciting to see is we now had an increase of greater than 30% of our prescriber base and start forms are coming in more from some of the Tier 3 accounts as well. So this is -- it's a very positive trend for us heading into the second quarter.

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Chad J. Messer, Needham & Company, LLC, Research Division - Senior Analyst of Biotechnology [13]

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All right, yes. Two question, I guess. So just other small quick one on your Summit partnership. I'd been expecting another payment for ezutromid in the first quarter. I know they've kind of changed when they're going to read-out data on that. Just wondering what the story is. When that might be expected to be owed to them.

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - CFO, Chief Business Officer and EVP [14]

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Yes, Chad. So the payment is expected to be made towards the back end of the second quarter. It could potentially slip into the third quarter but the likelihood is the back end of the second quarter. As a reminder, it's a one-time payment, so it will not count for non-GAAP purposes. So it will just be a cash payment of roughly $22 million.

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Operator [15]

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(Operator Instructions) Our next question comes from the line of Brian Skorney of Robert Baird.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [16]

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I guess I was just wondering if you could give a little color in terms of how progress is going in the split up between commercial and public pay. I know the indication should be a substantial -- [continue to] Medicaid covered patients and what percentage of patients right now on commercial make up the split of private versus Medicaid. How's progress with Medicaid going and are you actually seeing meaningful patient commercial starts with Medicaid programs?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [17]

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Yes, Brian, that's a good question. So it has been around 60-40 in that split between commercial and Medicaid and that stayed fairly consistent. What we're seeing is that, as you know, the approval of Medicaid is on a state-by-state basis. So really over the last quarter, we've seen some significant improvements. There's always a delay before they have their meetings. So we have to wait for the meeting to occur before they can vote on approval. But yes, the number of states that are now reimbursing on Medicaid continues to increase and obviously this is an important group and population and many of our patients are on Medicaid. So this is important. So I'll Bo give his flavor for that.

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [18]

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Yes, Brian. We've actually had some pretty good success this quarter and I think that success will continue heading into Q2. Most of the states do take about 6 months before they review a policy and we're up at that 6 months. So we've actually had a lot of plans this past quarter, real recently, actually, provide a policy in place. I think one of the biggest ones, though, that's really been exciting because a lot of the states are looking to this plan, that's California. California put out a policy that's very favorable, has broad access and they reached out to a lot of the KOLs to help design this policy. A lot of the KOLs throughout the country understand what California did and they're pushing their states to do the same. And a lot of the state plans are actually looking toward California of how they came up with this policy and so I think it's a very positive trend to come. Obviously, we have a lot of work to do and -- but we do have a lot more visibility heading into Q2 than we did in Q1.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [19]

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Just to clarify that 60-40 spread, that's what you're saying, that would be the number of patients, overall, that you think are split up. Or is that the number of commercial starts you're seeing?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [20]

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That's correct. Overall, it will be 60-40 when you look at all the start forms. Obviously, there was a little bit of lag in Medicaids at the beginning of launch but they're catching up.

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Operator [21]

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

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Kerry Tang, Goldman Sachs Group Inc., Research Division - Research Analyst [22]

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This is actually Kerry on the line. I just have a few questions. First, regarding the launch you had previously disclosed 250 start forms. Is there -- do you have -- how is that number growing and do you have an update in number? And in terms of the conversion times, how are you seeing that changing? Is it approaching the kind of the 30-day end of the spectrum? And I have a follow-up question.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [23]

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Yes. So in regards to -- we're not giving guidance on the start forms. But I think as you can see is reflected in the revenue, number of conversions are certain increasing and that's been going at a very steady state. Obviously, there continues to be -- this is a complicated process and obviously, the time going through, we expect that overall it will decrease. But Bo, why don't you talk about what is the time now from start form to reimbursement?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [24]

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Yes, let's start first with the start forms. I think what I'm pleased with is we're seeing so many start forms continue to come in and especially in the Tier 3 are really now starting to catch up. And I think also another thing that's interesting about the launch is that even the Tier 1 and Tier 2s are finding more. I just had dinner recently with one of the Tier 1 physicians, she's a very well-known physician, it was actually this Tuesday. And she was talking about how she went through her charts 3 different times and every single time she's found additional patients. And then we had another account that's a Tier -- one our Tier 2 accounts that thought they had only 10 exon 51 amenable boys. They brought in their geneticist and they came in and they went through every individual chart and they actually doubled the amount of exon 51 amenable boys. And so this is what we're seeing. This is actually leading to the increase, over time, of start forms. From a time to conversion, it really is variable. And I think I mentioned at the very beginning of the launch, that we expect 30 to 90 days and really it does play out for many boys like that. But obviously, we've had boys that have had -- that have converted over less than a week and we also have boys at the other end of the range. When you think about some of the plans that actually have a policy such as Anthem, we've talked about in the past, it does take longer. But even with Anthem, we have 30% of the boys that are currently have start forms on drug with Anthem.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [25]

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Yes, and I think, in my experience, if you think about it, is that over time, as the plans get more custom and have reviewed all the data, that time for conversion and reimbursement will go down. And I think, hopefully, we'll see that reflected later in the second half of the year.

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Kerry Tang, Goldman Sachs Group Inc., Research Division - Research Analyst [26]

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And I just had one final question. So with regards to SRP-4053 study reading out this summer. What is your plan and what is the regulatory outlook for the program? And what is the progress of the valid -- FDA validation of your dystrophin assays?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [27]

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So we've had a number of discussions and having gone back and forward with the FDA. And really the focus is that we wanted to make sure that they were comfortable with the protocols. And that once we had the final data, there wouldn't be any issues in regards to the way the samples were processed and read. So we're very close to that and expect that, that will be starting soon. Remember, this is a Phase II study and the study will be -- it has been extended. So the only data we will be having is dystrophin and really the focus of the dystrophin is we want to see in our -- really in another exon skipping PMO backbone, we want to see -- are we seeing the same amount of dystrophin that we saw with EXONDYS 51. So it really is going to be focused on the dystrophin production. We won't be having any read out as far as the clinical and that will occur later. So we'll really will be focused on do we see similar amounts of dystrophin based on what we saw on EXONDYS 51.

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Operator [28]

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

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Timothy Francis Lugo, William Blair & Company L.L.C., Research Division - Partner [29]

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I'd also like to pass on my best wishes for your next stage at the company. And for the PPMO program, are you going to start normal healthy studies when you begin dosing random patients or do you think you go straight into DMD boys? And do you have any -- what are the exons you'll be targeting initially?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [30]

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Yes. So obviously, it's a complicated process. Our plan is really to do -- because this really is a new molecular entity because when we add the peptide on it, it's not simply a PMO anymore, it's really a new drug. So we will be, obviously, required to do a single ascending dose. And our plan right now is to do that in normal healthy volunteers to really -- and that really is going to assess the safety, we'll have a pretty good understanding of PK. And hopefully, that will expedite the process of going into a Phase II, which we will do in DMD patients. Right now, we're assessing this and obviously we haven't had the discussions with the FDA or the EMA at this point yet. But very likely, we're considering doing a head-to-head comparison, EXONDYS 51 boys to be able to really know in a very definitive way how much better the PPMO chemistry is compared to the PMO. Once we make that determination, I think our plan would be to very quickly take the entire platform into PPMO. But we really read that first initial study to see how much better and also to really understand the safety. So when we -- I would say by mid-2018, when we start the study, we'll have a much better idea when we're in DMD boys -- some of the comparisons between these 2 compounds.

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Operator [31]

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Our next question comes from the line of Debjit Chattopadhyay of Janney.

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Debjit Chattopadhyay, Janney Montgomery Scott LLC, Research Division - MD of Biotechnology [32]

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Now since you wanted to focus primarily on the pipeline on the EMA approval, could you walk us through what exactly the EMA is asking especially as it relates to the 6-month clock-stop that you're planning to ask for? Do you need substantially more data or is the data that you're collecting currently would be sufficient?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [33]

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Sure. The major reason for the clock-stop is the -- we need to submit the ADME data and that data won't be ready until closer to the 6 months. So we want to make sure we have enough time to give them all the information they need in regards to the final ADME data. What we're going to be using this time to make sure that we are continuing to analyze data that we currently have. There's no plans to start -- give any new data or any new studies right now. And obviously, it's a little bit too early. We will be having more direct face-to-face meetings with them to overgo and really understand what the requirements will be. I think it's important to remember, obviously, this is for conditional approval. There's always more challenges with conditional approval, it's not for full approval. So we really want to understand what kind of a data set they will require. So I think we'll have a better understanding later in the year when we have those discussions with our rapporteur and co-rapporteur.

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Operator [34]

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Our next question comes from the line of Hartaj Singh of Oppenheimer.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [35]

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The question I had was just on the presentations you did at MDA, some of the long-term data you have with boys over 4 years now. In physicians that we're talking to, lack of progression, whether it's boys with ambulatory or nonambulatory is very important to them for getting boys on this drug and it seems you're having this data. I know it's [not] part of your label but how much does that play into your discussions with payers? And also just the pharmaeconomic benefits that go with boys staying ambulatory versus becoming nonambulatory. Any thoughts there?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [36]

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Yes -- no, I think you bring a very good point and really, we would've hoped that therapies now would completely reverse the disease and we would stop it completely. I think as expected, what we're seeing is slowing down on the progression of the disease and this is really important for patients. A good example is if the data that we're seeing in respiratory is confirmed and we'll be looking at this at our larger population of nonambulatory boys, it means potentially that these boys could be off a ventilator for years as opposed to what would happen in the natural history. That's a huge benefit for quality of life. The other things we'll be looking at and we've been working with various different companies and working with the patient groups to develop a quality-of-life measurement and observable related outcome, where we can look at things like the ability not only to walk but the ability to use your hands for important things like typing on a computer, using a cell phone, using an electric wheelchair, feeding yourself, transferring from a wheelchair. So even people who are further advanced, some of these improvements in slowing down the progression can be significant. And I think we learned several things as part of this trial. But the 6-minute walk test is -- it doesn't capture all of the aspects of the disease. So what we're trying to do is become smarter and get better data on especially the nonambulatory status, so we can present this to insurance carriers and say, this is what the drug is doing, this is what the benefit of the drug is. And I think that's going to really be a focus for us trying to collect as much clinical data as possible to get people comfortable that they understand what to expect from this drug.

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Operator [37]

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Our next question comes from the line of Ritu Baral of Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [38]

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I just wanted to follow-up on a previous question on Medicaid versus the private plans. So what is the difference in conversations that you have or the process -- differences in the process between the Medicaid plan and the conversations you've had with private payers. And then, Bo, as you mentioned, people are looking to how -- or other states are looking to how Medicaid evaluated and improved the drug. Can you give us a little more clarity on how they did that and whether national paywells are more important versus regional paywells as we look across the Medicaid plans?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [39]

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Yes, I think the process is really very similar. It doesn't matter if it's commercial payer or Medicaid. The only difference is, obviously, the Medicaid is done on a state-by-state basis whereas the commercial payers are often much more national and have -- aren't necessarily restricted to a geographic area. I think the one aspect that has been the most helpful for the insurance carriers, whether it's Medicaid or not, they really want to listen to the experts in the field. So people who are taking care of these boys, who have experience with the drug. And that's really what they want to hear. And I don't think it matters if it's a national or for that part, an international or regional expert. They just want to talk to someone who has an appreciation. And what I can say is that carriers and the insurance carriers and the Medicaid have been asking us for list of physicians, both in their region and nationally, who have experience with the drug. And what we try to do is just make sure that we can facilitate those discussions between the physicians and, really, it's the physicians at Medicaid and the physicians at the insurance carriers. So it's a physician to physician discussion, and that's really been the most effective. Bo, any other comments?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [40]

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No, I think Ed summed it up very nicely. The only major difference, really, that I see is Medicaid tends to take a little bit longer. Sometimes they play out into the public because they have open hearings. But at the open hearing, the physicians are showing up, to Ed's comments, and talking about the benefits that they see in their experience on clinical trials or other boys on drug. And I think that, that's providing a lot of confidence for the states to make the appropriate decision.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [41]

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So that's how Medi-Cal did it and if this is the case, then is there any reason we shouldn't expect maybe some of the late time lines but potentially the same outcomes as your discussions with private plans?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [42]

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Ritu, could you repeat your question, you broke up.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [43]

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Is that how Medi-Cal did it with the public hearings and what they focused on? And if that's the case, it just sort of implies that with somewhat of a lag, the outcomes with all the Medicaid programs would be the same as your discussions with the private plans?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [44]

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Yes, Medi-Cal did a very good job at reaching out to all the major centers in the state and really gathering their information and appropriately they took the time in Q4 and early Q1 to really understand the disease state, understand the drug, look at patients that would benefit from the drug and then make a decision. So they actually reached out to all the different sites. One of the things that -- and a lot of the states have really taken notice of how they did it. And actually to be fair, some of the states were thinking about this very differently at the beginning and then paused and obviously took a hard look at what Medi-Cal did and tried to reevaluate how they're doing it. So like the state of Florida, I know, recently, pulled all their KOLs in and had conversations with them. I think a couple other states did as well and really they're taking the step from Medi-Cal. So I think, ultimately, these boys will get on therapy and it will broad coverage and it'll be based off of speaking to clinicians and understanding the disease.

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Operator [45]

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Our next question comes from the line of Christopher Marai of Nomura.

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst [46]

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First for Bo, maybe could you elaborate on what fraction of those first 250 start forms have been converted into a treated patient. And then secondarily, how much of a slowdown are you experiencing due to placement of the port. Is that occurring mostly in Q1 sites or is that across the board? And then, finally, do you anticipate any delays or interruptions in treatment due to adoption of ports after the patient has started drugs?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [47]

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Yes, Chris, I'm sorry, you broke up a little bit as well but the question was really about discontinuations due to ports and then also sort of the replenishment rate of start forms?

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst [48]

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Yes, the fraction of the 250 start forms that you had, I guess, in January. How much of those have been converted into patients on drugs?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [49]

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Yes, we're not providing sort of an update on the number of start forms that converted to infused boys but what I can tell you that the replenishment rate has been highly successful. I mean we're replenishing every week over week, it's been increasing. And I think many of the boys that we had in Q4, obviously, are on transition drug. We actually have boys in approximately 35 different states now that are on commercial drugs. So I mean, and just some states won't have boys because they're smaller states. So I mean we're seeing a really robust commercial launch across the board and I think your second question is about discontinuations?

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst [50]

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Well, just in terms of how much these ports potentially: one, slow down adoption; And then, two, are there going to be patients on drug currently that want to swap over to the port having previously started drug? Is that going to create any delay or interruption in treatment?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [51]

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Yes, so the first question regarding time. It does take a little bit of time and we've mentioned it sort of on the Q4 call, that port plays, once they decide to get a port, you have to have a port consult, then you have to have the surgery, et cetera. There is a delay. Sometimes it's 2 weeks, sometimes it's 6. It really depends on if they can get a port consult or not. So there is some delay. What I can say is, that's actually, from a compliance standpoint, it's turned out to be a very, very good thing for these children because they're getting their infusions on a regular basis, they're not having to get stuck multiple times to try to find the veins. The compliance rates have -- we feel that -- as of right now, we feel the compliance rates have gone up because of this. As far as boys that are scheduling ports, that are already on therapy, typically no because they're on therapy, they're finding the veins, then they get a port consult and they get the surgery. And they actually infuse sometimes either the same day or the day after. So really, typically we would not see any missed doses if everything is scheduled correctly. Ed, is that appropriate?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [52]

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Yes, no, I think what we're seeing, Chris, is that they're finding better sources for the placement of the port. So it's either done by a general surgeon or it's done by an interventional radiologist and I think it's kind of split 50-50 between who does it. So I think what the big factor is, now the sites, basically the clinical people who schedule the ports, they're getting very good, they know the surgeons who know how to do especially the pediatric placement. So I think it's getting better and I think as Bo said, I think, long-term, it's a great thing for us to have the ports in place because the boys don't get nervous about having to go and have an intravenous stick to have a new placement every week for an IV. And so overall, I think it's going to help it. And I think with boys who are on therapy, I mean they have access but they're choosing to have a port. So typically, you'd schedule that way in advance, you still receive your weekly infusion. So I don't anticipate that, that's going to really interfere significantly with compliance.

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst [53]

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Okay, got it. And then with respect to just the EMA and the ADME data that's being requested. Could you elaborate maybe further on that? Does that have to do with perhaps their concerns about PMO technology [not] being different than some other logos that look at. Or how should we think about that? Is it just a small data set in pediatrics? What's sort of triggering that additional look at data?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [54]

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Well, in regards to the ADME study, that's standard that they always require it. So that's nothing unusual and we just need to make sure that, that is submitted during the review process and, obviously, so we have to wait to get that in. So that's not anything really unusual. I think in regards to the overall MAA approval, obviously, I think, the biggest factor it is a small data set and clearly, this is not new news and it's the before our conditional approval. So I think we'll wait to see what other kind of information they would like. Obviously, there's going to be a lot of questions in regards to the manufacturing, as there typically are. And there's a whole host of things that are included. So I think right now we're still early in the review process and when we have those discussions, we're going to see what other things they may want us to do as far as any analysis or any data. So I think we're still kind of waiting to see.

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Operator [55]

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Our next question comes from the line of Dae Gon Ha of Leerink Partners.

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Dae Gon Ha, Leerink Partners LLC, Research Division - Associate [56]

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Calling in for Joe. Just one quick one from me. So you mentioned increase in SG&A, primarily driven by the commercial initiatives and the legal. So could you maybe comment on sort of the legal situation on the EU side and how that's progressing?

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - CFO, Chief Business Officer and EVP [57]

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Yes, so what we announced at the last third quarter call was that our SG&A is trending slightly upwards and we said about $20 million to $24 million of expenses over and above what we had last year. So taking it up to approximately $92 million for the year. Now bear in mind that most of those expenses relate to either our commercial initiatives or our medical affairs expenses. So the portion that's being spent on legal is very, very small. What we're focused on is trying to resolve the IP issues in Europe because our goal is to ensure that the drug is available globally. We don't expect the legal expense to be significant. So the guidance that I give in SG&A is primarily commercial and medical affairs as I indicated.

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Dae Gon Ha, Leerink Partners LLC, Research Division - Associate [58]

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Are there any near-term or midterm catalysts to look forward to in terms of resolution of the IP?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [59]

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No, obviously, it's something that is a focus and as we approach our expanded access programs in Europe, we're committed to resolving this issue but nothing on the immediate horizon.

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Operator [60]

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Our next question comes from the line of Matthew Harrison of Morgan Stanley.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [61]

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This is Dave Lebowitz in for Matthew Harrison. I guess I have a really quick question. Previously, you had given the breakdown on which patients -- about the proportion of patients that were getting reimbursement on a case-by-case basis versus those who are included in the formulary and those plans that did not include patients in formulary and if you could just update that, it would be appreciated.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [62]

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Yes. When we look at it -- the total start forms that we have into the system of approximately 80% of all the start forms I have currently, will either be covered by [PI], have some restricted coverage or case-by-case basis. So we feel very confident with the coverage that we're heading into Q2 and Q3.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [63]

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Is this a breakdown between how many are case-by-case versus those that are included in the plan?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [64]

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No, I don't have that.

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Operator [65]

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Our next question comes from the line of Matthew Eckler of RBC Capital Markets.

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Matthew Joseph Eckler, RBC Capital Markets, LLC, Research Division - Associate [66]

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I wondered if you could provide us with any color on what kind of trends you're seeing in terms of the average weight of patients who are starting on commercial supply as well as what the mix is of the ambulatory and nonambulatory patients. And then also how you expect that these two things might change over the next 12 months or so.

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - SVP of Global Commercial Development [67]

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Yes, we're not providing guidance on weight but we did, in the script, we talked about the average age of boys currently on therapy is now in between 14 and 15 years of age. And this is up from the JPMorgan conference when we announced it's about 13.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [68]

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So we don't collect the -- whether they're ambulants or nonambulants. So that's the kind of information but you could expect just based on the natural history there'd be a certain number of boys at that age group would also be nonambulant.

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Operator [69]

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Our next question comes from the line of Steve Brozak of WBB.

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Stephen Gilbertpaul Brozak, WBB Securities, LLC - Managing Partner and President [70]

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Congratulations, Ed. I'm looking forward to reading the Harvard Business School case study on what just happened. But since most questions have been asked and answered, I do have one. European, obviously, approval is next. You had remarkable advocacy from clinicians and the patient groups that were out there. And obviously, now you've got clinical data that's rolling in. Can you give us any kind of feedback as to what you're seeing on the European clinical and patient advocacy? And what some of the -- what some of the hallmarks you think you're seeing at our place?

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [71]

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Well, I think, you know the process in Europe is different than in the U.S. When it comes to reimbursement on a country-by-country level, really, the patient advocacy is so critical. I think, however, where we've made significant inroads is we've had longstanding relationships with the patient advocacy groups. They understand the drug, they understand the commitment that we've made to the patients. And we also have, remember, many sites in Europe that are currently using our drug and have experience, many of them have been in other studies with us. And so we have a number of clinicians that have experience with not only EXONDYS 51, but also with our 45 and 53 compounds. So we would expect, and again, typically, what the EMA will do and CHMP is they'll call in these experts. Now they won't be -- obviously, because they've been involved in some of the studies, they're not coming with us, specifically. But they want to ask how what's their information and they typically also will ask patients -- certain patients from the patient community to talk about their experiences. And clearly, we have a lot of the patient advocacy. So it's a different process. It is not really prone to pressure from the advocacy community and because this is an isolated international body that is run by 28 different countries. So it can't be influenced by one country, only the reimbursement is influenced. But I think what we have been able to do really over the last couple of years is really make lot of good relationships, I think, with the physicians and also with the patient groups and we expect them to be very supportive but it will be very different from what you saw in the U.S.

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Operator [72]

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And I would now like to turn the call back to Dr. Kaye for closing remarks.

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Edward M. Kaye, Sarepta Therapeutics, Inc. - CEO, President and Director [73]

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Okay, thank you, everyone, for joining today's call and we look forward to updating you on our progress on the next quarterly call. Our commitment to patient health will continue to be the first and foremost of our primary goal. Have a great evening.

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Operator [74]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude the call. You may now disconnect. Everyone, have a wonderful day.