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Edited Transcript of SRPT earnings conference call or presentation 27-Feb-19 9:30pm GMT

Q4 2018 Sarepta Therapeutics Inc Earnings Call

BOTHELL Mar 2, 2019 (Thomson StreetEvents) -- Edited Transcript of Sarepta Therapeutics Inc earnings conference call or presentation Wednesday, February 27, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alexander Bo Cumbo

Sarepta Therapeutics, Inc. - Senior VP & Chief Commercial Office

* Douglas S. Ingram

Sarepta Therapeutics, Inc. - President, CEO & Director

* Gilmore Neil O'Neill

Sarepta Therapeutics, Inc. - Senior VP of R&D and Chief Medical Officer

* Ian M. Estepan

Sarepta Therapeutics, Inc. - Chief of Staff & VP of Corporate Affairs

* Louise Rodino-Klapac

Sarepta Therapeutics, Inc. - VP of Gene Therapy

* Sandesh Mahatme

Sarepta Therapeutics, Inc. - Executive VP, CFO & Chief Business Officer

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Conference Call Participants

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* Alethia Rene Young

Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research

* Beau Harkonen Miller

RBC Capital Markets, LLC, Research Division - Senior Associate

* Brian Peter Skorney

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

* Christopher N. Marai

Nomura Securities Co. Ltd., Research Division - MD & Senior Analyst of Biotechnology

* Danielle Catherine Brill

Piper Jaffray Companies, Research Division - VP & Senior Research Analyst

* Fang-Ke Huang

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Gena Wang

Barclays Bank PLC, Research Division - Research Analyst

* Hartaj Singh

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

* Liisa Ann Bayko

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Myles Robert Minter

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

* Ritu Subhalaksmi Baral

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

* Ross Howard Weinreb

Goldman Sachs Group Inc., Research Division - Research Analyst

* Shawn Michael Egan

Citigroup Inc, Research Division - Senior Associate

* Tazeen Ahmad

BofA Merrill Lynch, Research Division - VP

* Tessa Thomas Romero

JP Morgan Chase & Co, Research Division - Analyst

* Timothy Chiang

BTIG, LLC, Research Division - MD and Specialty Pharmaceutical Research Analyst

* Vincent Chen

Sanford C. Bernstein & Co., LLC., Research Division - VP

* Yun Zhong

Janney Montgomery Scott LLC, Research Division - Equity Research Analyst & Director of Biotechnology Research

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Sarepta Therapeutics Fourth Quarter and Full Year 2018 earnings call. (Operator Instructions) As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Ian Estepan, Vice President, Chief of Staff and Corporate Affairs. Please go ahead.

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Ian M. Estepan, Sarepta Therapeutics, Inc. - Chief of Staff & VP of Corporate Affairs [2]

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Thank you, Sophie, and thank you all for joining today's call. Earlier today, we released our financial results for fourth quarter and year end 2018. The press release is available on our website at www.sarepta.com.

Joining us on the call today are Doug Ingram; Sandy Mahatme; Bo Cumbo; Gilmore O'Neill; and Louise Rodino-Klapac. After our formal remarks, we'll open the call for Q&A.

I'd like to note that during this call, we will be making a number of forward-looking statements. Please take a moment to review our slide on the webcast, which contains our forward-looking statements. These forward-looking statements involve risks and uncertainties, any of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements and any such risks can materially and adversely affect the business, the results of operations and trading prices for Sarepta's common stock. For a detailed description of applicable risks and uncertainty, we encourage you to review the company's most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission as well as the company's other SEC filings. 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 our CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [3]

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Thank you, Ian. Good afternoon, and thank you for joining Sarepta Therapeutics for its fourth quarter and year-end 2018 results as well as our corporate update conference call. I would ask that you indulge me as we have much to discuss today.

Before we discuss the fourth quarter itself, let us put it all in the context of the full year of 2018. I do not believe I risk hyperbole when I say that 2018 was a monumental one for Sarepta. We not only successfully met or exceeded the great majority of our objectives for the year, but we went further. We redefined and enhanced our ambition as an organization, and we took steps -- in fact, we took significant leaps forward in the service of our vision to use our genetic medicine engine to rescue and greatly improve the lives of thousands of those living with and far too often dying from rare genetic disease.

In the full year of 2018, we achieved another successful year of EXONDYS sales with net revenue standing at $301 million or about 98% year-over-year growth.

We also met with the FDA and in collaboration with the agency, we defined an efficient pathway for our RNA-based technology. We executed our single-ascending dose study on the first candidate of our next-generation RNA technology, the PPMO, which will be moving to a multi-ascending study in the next couple of months with a readout and a readthrough to our other PPMO programs by the end of 2019.

We commenced and we completed our proof-of-concept trial for our microdystrophin gene therapy. In 2018, we reported unprecedented expression level results, biological marker results and preliminary functional results in the 4 patients who participated in this proof-of-concept.

As reported by Dr. Jerry Mendell last year, all patients showed robust microdystrophin expression, properly localized to the sarcolemma, upregulation of the dystrophin-associated protein complex an additional indication of the functionality of microdystrophin, an unprecedented drop in creating teenage or CK levels and all showed positive functional improvement that is markedly greater than natural history would predict. While transient elevated liver enzymes were seen, all were managed with steroids and resolved.

We also refine our pathway to bring our microdystrophin gene therapy to the community as rapidly as possible. First, by building out our hybrid gene therapy manufacturing approach through hiring of talent and entering into significant long-term partnerships with gold standards in gene therapy plasmid supply and manufacturing, and that is of course, Aldevron, Brammer Biosciences and Paragon as well. And second, by better defining our development pathway for microdystrophin.

In 2018, we also built out our gene therapy engine with additional programs, including the following: a long-term strategic investment and license agreement with Lacerta Therapeutics relates to multiple CNS-target achieved therapy programs, including our Pompe disease program. An exclusive license agreement with Lysogene for MPS IIIA, otherwise known as Sanfilippo disease, a rare and fatal inherited neurodegenerative lysosomal storage disorder. The lead program is currently dosing patients in the Phase II 3 clinical trial. And a third agreement with Nationwide Children's Hospital for rights to a gene therapy program to treat Charcot-Marie-Tooth or CMT neuropathy, which is the most common inherited neuromuscular disorder in the world.

Turning now to the fourth quarter of 2018. We were particularly productive. Starting with our RNA platform, we had another strong quarter of sales with EXONDYS 51 standing at $84.4 million, a 47% increase over the same quarter in 2017, resulting in 2018 sales, that I've mentioned, of $301 million.

We are also reporting today that our 2019 guidance will be between $365 million and $375 million. But I do want to be very specific about that. That is for eteplirsen only. That excludes any golodirsen sales. If we are, as we anticipate, successful in the approval of golodirsen later this year, we'll have to provide updated guidance that will include not only eteplirsen, but also golodirsen.

So we're growing at a very healthy 21% to 25% in our third full year of sales. However, we are also entering that phase where we must continue to fight misunderstandings and misuses of the Accelerated Approval process by some who would use it as an excuse to slow or fight coverage for older or non-ambulant patients. For example, some state Medicaids have mistakenly relied upon the Accelerated Approval path as an excuse to deny coverage.

Now in 2018, CMS issued a warning to all of the states, reminding them that they do not have the right to deny coverage on the basis that a therapy is approved via the FDA's Accelerated Approval mechanism. Even in the face of this warning, some states have continued to deny coverage and require patients to appeal. While states are losing these appeals at a nearly 90% rate, the approach slows down access and robs children of their right to therapy, and we will continue to fight for access for older and non-ambulant patients for EXONDYS in 2019.

Regarding our RNA pipeline, we completed our FDA submission for golodirsen in the fourth quarter, as previously promised. Golodirsen is our PMO RNA therapy designed to treat that 8% of Duchenne patients who are exon 53 skip-amendable. After the close of the quarter, the FDA accepted golodirsen for filing and granted priority review with a PDUFA date of August 19, 2019. The agency also has indicated that they currently do not intend to conduct an advisory committee for golodirsen. We will also be analyzing biopsies for the essence study for casimersen, our drug designed to treat exon 45 skip-amenable Duchenne patients, another 8% of the Duchenne community. If supported by the data, we will -- we plan to submit the NDA for casimersen in 2019 with a target approval in the first quarter of 2020. If successful, Sarepta will have 3 RNA-based therapies treating patients in the United States by the first quarter of 2020, more than doubling the number of patients who may benefit from our PMO platform.

We continue to make progress on our next generation RNA technology, the peptide conjugated PMO platform or PPMO for short. To remind, in animal models, our PPMO technology exhibited greatly improved cell penetration, exon skipping and therefore, dystrophin production as compared to our current PMO technology. Our first program focused on exon 51, about 13% of the community. We'll be transitioning from a single-ascending to a multi-ascending study in a very near term, as previously represented. Our goal is have insight on safety and the maximum tolerated dosing by the end of 2019.

Now turning to our gene therapy platform. We made significant progress in the fourth quarter. As we have discussed in the past, in service of our goal of becoming the world leader in gene therapy with an enduring gene therapy engine, we are rapidly building a first in class gene therapy center of excellence, the greatest level of manufacturing capacity that the world has yet seen in gene therapy, and bolstering our already proven commercial health economics and medical affairs teams to be the leaders in gene therapy. As the foundation of our gene therapy ambitions, let's -- first with our microdystrophin gene therapy program, the largest late-stage gene therapy program currently in development in biotech. Consistent with our prior representations, we scheduled and met with the FDA in the fourth quarter of 2018 to gain insight and guidance on our program. And armed with that guidance, we commenced our previously planned 24-patient placebo-controlled trial, now called a trial study 102, with the goal of further characterizing safety in expression and demonstrating the functional benefits of robust expression of our microdystrophin construct. Again, consistent with our stated goal made earlier in 2018, we commenced dosing study 102 in the fourth quarter of 2018. Study 102 is a double-blind 1-to-1 placebo-controlled, single-site study at Nationwide Children's Hospital with the principal investigator being gene therapy legend, Dr. Jerry Mendell and the material being clinical supply coming from Nationwide Children's manufacturing facility.

By this week, Dr. Mendell will have dosed 9 patients thus far in the study with the goal of completing all of the dosing in the second quarter of this year.

With our manufacturing partners we completed the technology transfer of the microdystrophin candidate from Nationwide Children's and our completing process development to yield optimization and assay development work now. Our goal is to complete that work and commence a multicenter, multicountry affirmatory study using commercial supply by the end of 2019, with among other things, an interim analysis before the middle of 2020. It is also our goal to build commercial supply across the second half of 2019 and all of 2020 so that we could be in a position to have sufficient supply to fully serve the community by the end of 2020.

While we are still working on the particulars of our commercial supply trial, we'll take additional guidelines from the FDA and other ministries of health before its commencement. Please know that our study goal is to build a program that if successful, will permit the broadest availability of our microdystrophin therapy to those patients with Duchenne muscular dystrophy. And by broad, we mean broadest age, genotype and geographic range.

As a separate exercise, we are also working on solving a number of other potential issues with respect to gene therapy, both of which are in the research phase, to be clear. We are conducting preclinical work for mechanisms to permit dosing even for patients who have preexisting neutralizing antibodies to rh74. Fortunately, we are currently seeing only about 15% screen-out rate for neutralizing antibodies. However, given our mission, we see even that level as too high, so we are working on programs that may eventually someday address this issue. We are also conducting work on the concept of re-dosing in gene therapy. Now beyond microdystrophin, we have additional gene therapy programs, exploring 10 separate rare diseases. Earlier today we held a webcast in which we provided the results of the first 3 patient cohort of our limb-girdle 2E program, the first of 5 separate rare diseases we are studying under the umbrella of limb-girdle muscular dystrophy, or LGMP. As Dr. Rodino-Klapac reported, all 3 patients in the study showed robust expression of transduced beta-sarcoglycan. Mean gene expression from this study is measured by the percentage of beta-sarcoglycan positive fibers was 51% and the mean intensity of fibers was 40% -- 47%, apologies, compared to normal control. All post-treatment biopsies showed robust levels of beta-sarcoglycan as measured by Western blot with a mean of a very impressive 36.1% compared to normal control. And in all patients' expression of beta-sarcoglycan was associated with significant expression and upregulation of the dystrophin-associated protein complex. And remarkably, all patients showed significant decreases of serum creatine teenage CK levels at last measurement with immediate reduction of CK and over 90% firm based. It is important to note that these robust expression results were observed at a dose of 5 times E to the 13th. This is a quarter of the dose used in our microdystrophin study, and yet we're seeing the expression levels that I've just mentioned and Dr. Rodino-Klapac discussed earlier today. We anticipate significant readthrough from our 2E program to our other limb-girdle programs. That's our program MYO-102 for limb-girdle 2D, MYO-103 for limb-girdle 2C, MYO-201 from our limb-girdle 2B program or dysferlin and MYO-301 for our limb-girdle 2L program. All of these programs involve restoration of a missing protein that makes up the dystrophin-associated protein complex. And most interestingly, all are the complete gene, and there was a complete native protein, the absence of which is the cause of each of these diseases. This is extremely important as it means that there may be maybe a compelling basis for an expedited approval process, potentially including an Accelerated Approval process in the United States across these programs. Although to be very clear, this is something that we must discuss with the agency and take additional guidance regarding. Beyond just that, each program employs the same caps at rh74, as does our microdystrophin program. Each program construct was designed by Dr. Louise Rodino-Klapac. And 3 of the 5 constructs employed the identical promoter used in our microdystrophin gene therapy program. Current analysis suggests there are approximately 10,000-or-so LGMD patients in the United States associated with our first 5 programs. About the same size as all of Duchenne muscular dystrophy. And globally, there may be as many as 76,000, even 138,000 patients with the 5 mutations we are studying, although many of them may yet be diagnosed as there are no current treatment options for any of these patients. Given the exceptional results that we've seen in our first cohort, and understanding that there is potential readthrough from our first program to these other programs, you saw in our earlier press release today that we have decided to exercise our option to acquire Myonexus and take direct and complete control over all 5 programs. This -- they should ensure that we can move with the rapidity that these patient populations deserve.

There are 3 immediate activities that we must now accomplish for these limb-girdle programs. First, we need to meet with the agency as soon as is reasonably possible to discuss the path forward for all 5 of these programs. Once that meeting had taking place and we have better insight, we will provide an update. Second, we will decide whether to explore a higher dose cohort with clinical supply as is currently permitted in our current protocol. This will take some analysis since we are already seeing remarkable results, which might argue against a higher dose. But on the other hand, at a dose of 5 times either the 13th, we are only 1/4 of the dose of our DMD programs, so there appears to be a real opportunity to safely explore higher doses. Fortunately, this decision should have no impact at all of the timing of these programs and the primary rate limiter is the development of commercial supply in any event.

And third, we need to map out the commercial manufacturing strategy and the timeline for all of these 5 programs with our partner, Paragon. Again, once we have this mapped out, we will provide an update. Note, however, that the manufacturing process to these programs is nearly identical to our microdystrophin program. We will be transferring the process from Nationwide Children's Hospital to Paragon and then moving from an mammalian-adherent hyperstack process to a similar but far more scalable the mammalian-adherent iCELLis process, just as we have done with our microdystrophin program.

Beyond our microdystrophin and 5 LGMD programs, we have a number of additional gene therapy programs that are advancing this year, 2019. You will have seen that on February 14, 2019, we and our partner Lysogene announced that we have dosed our first patient in the advance trial for MPS IIIA or Sanfilippo disease. Looking for the second half of this year, with our partner Dr. Zarife Sahenk at Nationwide Children's Hospital, we are preparing to dose our first cohort of patients with Charcot-Marie-Tooth or CMT type 1A, the most common form of the most common inherited neuromuscular disorder, affecting over 2.8 million people worldwide. CMT type 1A itself affects approximately 50,000 patients in the U.S. alone and currently there are no available treatment options for CMT type 1A patients.

As I have said in other forums, while we have made considerable progress and while Sarepta has more opportunity in front of it than I've seen in my nearly 25 years in pharma and biotech, this is not a time for us to congratulate ourselves because 2019 is clearly the year of execution for us. We have very ambitious timelines for our programs to stay ahead of the competition. But to be clear, when I speak about competition, I mean this cruel disease that we're dealing with. In the U.S. alone, DMD claims the lives of 400 boys and young men every year. That means every week that we are delayed, 8 children in United States alone will die, perhaps needlessly. And every month that we are delayed, 33 children die. And every quarter of delay equates to about 100 children who will be taken this disease. And beyond Duchenne, we are convinced that our gene therapy engine offers the opportunity to bring a longer and better life in multitude of patients living with a multitude of genetic disease, diseases like MPS IIIA and CMT and Pompe and our various limb-girdle diseases and beyond. And so while we permit ourselves the occasional moment of pride for a job well done thus far, we are mostly driven by a singular sense of responsibility that comes with believing that we have the opportunity to save lives.

I will now turn the call over to Sandy Mahatme for an update on our financial performance. Sandy?

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - Executive VP, CFO & Chief Business Officer [4]

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Thanks, Doug. Good afternoon, everyone. The Myonexus transaction, which has given us full access to a rich portfolio of allergy MD candidates, cements our position as a leading gene therapy company, bringing our pipeline to 25 programs in development, some of which are in gene therapy. As Doug indicated on our call earlier today, the strategic insight of the rationale for the Linux acquisition centers around rapid pace at which Sarepta will seek to advance these programs through development. From a financial perspective, we believe we negotiated an equitable deal based on fed terms. Further, and because we opted in early, Sarepta generated a substantial savings of approximately $50 million.

Now moving to the financials. This afternoon's press release provided detail for the fourth quarter of 2018 on a non-GAAP basis as well as a GAAP basis. The press release is available in the SEC as well as Sarepta's websites. Please refer to our press release for a full reconciliation of GAAP to non-GAAP.

I'd like to add a quick reminder here that our 2018 non-GAAP financials exclude net interest expense, depreciation and amortization expense as well as onetime expenses and stock-based compensation.

Net product revenue for the full quarter of 2018 was $84.4 million compared to $57.3 million for the same period of 2017. The increase primarily reflects increasing demand for EXONDYS 51 in the U.S.

We reported a non-GAAP net loss of $58.7 million or $0.85 per share in the fourth quarter of 2018 compared to a non-GAAP net loss of $13.3 million or $0.21 per share in the fourth quarter of last year -- I'm sorry, of 2017.

In the fourth quarter of 2018, we recorded approximately $13.1 million in cost of sales compared to $3.5 million in the same period of 2017. The increase was driven by increases in inventory costs and royalty payments to BioMarin, primarily related to increasing demand for EXONDYS 51 during 2018 as well as a onetime writeoff of a work in process material. We expect our cost of sales in 2019 to increase slightly over 2018. Currently, we are projecting a range of 13% to 14% of net revenue.

On a GAAP basis, we recorded $146.2 million and $44.4 million in R&D expenses for the fourth quarter of 2018 and 2017, respectively, a year-over-year increase of $101.8 million. The year-over-year growth in GAAP R&D expense was driven by upfront and milestone payments, increased patient enrollment in our late-stage clinical trials, a ramp-up of manufacturing activities for our PPMO platform and an expansion of our R&D pipeline. On a non-GAAP basis, the R&D expenses were approximately $77 million for the fourth quarter of 2018 compared to $41 million for the same period of 2017, an increase of $36 million.

Turning to SG&A. On a GAAP basis, we recorded $64.2 million and $32.2 million of expenses for the fourth quarter of 2018 and 2017, respectively, a year-over-year increase of $32 million. On a non-GAAP basis, the SG&A expenses were $52.9 million for the fourth quarter of 2018 compared to $26.2 million for the same period of 2017, an increase of $26.7 million. The year-over-year increase was primarily driven by continued buildout supporting our global expansion.

On a GAAP basis, we recorded $2.3 million in net interest expense for the fourth quarter of 2018 compared to $2.7 million net interest expense for the same period of 2017. The decrease in interest expense is primarily driven by payoff of certain debt instruments during the third quarter of 2018.

Turning to our cash position. We ended Q4 with approximately $1.174 billion in cash, cash equivalents and investments. This was an increase of $381 million in our cash position from the prior quarter, which is primarily driven by an equity raise of $513 million, offset by $42.6 million related to new business development deals and $36 million to our manufacturing initiatives. In addition, we have prepaid approximately $92.7 million towards future manufacturing expense in connection with our gene therapy and RNA programs.

From a cash perspective, as we focus on this year, several factors will drive Sarepta's expenses higher in 2019 versus prior years. Investments in developing our pipeline will continue in 2019. This is due to the continued expansion of pipeline, current programs moving from smaller, early-stage trials into late-stage development, the opening up of our gene therapy center of excellence and our continued global commercial expansion and buildout. Most of the expense growth will be driven by manufacturing, the gene therapy manufacturing being the most significant driver. The agreements we execute with Brammer, Paragon and Aldevron will be in place for an entire year and will ramp up from early-stage development work to full production in order to support our expanding gene therapy portfolio for intervention in DMD, LGMD, CMT, Pompe and MPS IIIA disease areas. The compelling early days are generating with both of our microdystrophin and our limb-girdle programs have justified our being more aggressive in the scale necessary to meet the growing needs of the patient community.

Separately, we are also preparing for the potential approval for golodirsen by the FDA in mid-2019 and continue to build out our footprints in markets in Europe, Latin America and Asia.

From a cash position, we remain well positioned to execute our plan and invest in our business. Our philosophy of having a very strong cash balance remains an asset that allows us to not only invest appropriately in our current pipeline but also to remain in a position to be on a front-footed strategy in our field.

With that, I'd like to turn the call over to Bo for a commercial update. Bo?

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Alexander Bo Cumbo, Sarepta Therapeutics, Inc. - Senior VP & Chief Commercial Office [5]

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Thank you, Sandy. Good afternoon, everyone. I'd like to start by talking about EXONDYS 51.

Over the past few years, we have watched [Caywell] start patients on EXONDYS 51, and we know it has changed lives. We know the importance of reaching every eligible patient, getting them on and keeping them on treatment. We know that working through the complexities of access to reimbursement are real. And there are patients still waiting to get on treatment. And our team, the best whom I've ever worked with, will continue to be fully dedicated to this effort. We know this community and how important it is to them that we continue to try to make a difference in the lives of Duchenne patients around the world. That is our true mission.

As a result of our efforts and commitment, we were very successful in ensuring that patients received and stayed on therapy in the first 2 years of the EXONDYS 51 launch. And in doing so, it generated $84.4 million of revenue in the fourth quarter of 2018, which reflects a 47% growth over the same quarter previous year. And our goal is to continue to advance our science-based initiatives so that our current and future therapies reach the patients that we serve and patients are able to access innovative medicines now and in the future.

Moving to our 2019 commercial strategy, we will focus on 3 core strategic areas: first, to build on EXONDYS 51's reach. EXONDYS 51 was a very successful launch, which is a wonderful achievement in the face of measurable and notable headwinds. However, our work is not done. For 2019, our focus is to bring EXONDYS 51 to more patients. This is centered around a multistep approach to patient identification and reimbursement. We will continue to identify DMD genotype patients and get them into centers of excellence. We will also continue to educate on EXONDYS 51 skip-amenability as well as identifying new patients through a series of targeted educational initiatives to help support families desperately seeking information. Identifying patients and getting them into care is only the first step. We need to continue to fight for access to reimbursement for all patients living with mutation amenable to EXONDYS 51 skipping. Access and reimbursement continues to be a steady but slow climb. We have grassroots efforts actively underway to work in partnership with state Medicaid plans to ensure coverage for individuals living with DMD and do have an EXONDYS 51 amenable deletion.

Our conversations are science-based and urgent. We have generated additional data that supports the benefits of the drug and we anticipate this data to be published soon. This data along with the EXONDYS 51 experience at the KOL level will help continue to support reimbursement. We are continuing to build an appreciation and understanding around the Accelerated Approval process, which is a cornerstone of the 21st Century Cures Act, and how plans provide coverage for Accelerated Approval products. As they were reminded by CMS in 2018, states are forbidden to deny coverage of any therapy made available through the FDA's Accelerated Approval process. And we will continue to have discussions with states on Accelerated Approval pathway, and why they need to provide coverage for every child amenable to EXONDYS 51.

Our second strategic area of focus for 2019 is to advance our RNA franchise. As Doug mentioned, we announced on February 14, 2019, that the FDA has accepted our NDA for golodirsen or SRP 4053. The FDA also granted golodirsen priority review status with a PDUFA date of August 19, 2019. In light of this development, we will be ready to launch golodirsen later this year. The tenets of our plan will be tailored to reach those individuals in the Duchenne community who are EXONDYS 51 skip amenable. We will leverage our knowledge and experience of EXONDYS 51 to deliver this drug to patients as fast as possible. Continuing with our RNA therapies, we are currently on track to submit our NDA for casimersen by mid-2019, with a target approved for the first quarter of 2020. If approved, casimersen will serve approximately another 8% of the Duchenne's community. What this means is by early 2020, we could have 3 approved drugs out of our RNA platform, doubling our PMO-based opportunity in the United States.

Our third major strategic area of focus is to prepare for the future. To state the obvious, gene therapy is poised to hopefully transform Duchenne and limb-girdle muscular dystrophy forever. Microdystrophin has the potential to be the most successful rare disease launch ever and launch preparations all already underway. As I previously outlined, we had gained incredible experience in DMD that will serve as the foundation for potential launch for DMD gene therapy. However, there will be new areas of focus, which include innovative pricing models, access, site readiness, assay development and engagement of key stakeholders worldwide.

A critical part of this third strategic area of focus is gene therapy pricing. Gene therapies have the potential to profoundly transform the course of previously untreatable diseases. For the over 7,000 rare diseases currently in existence and the over 400 million patients that these diseases impact, there is only one approved gene therapy on the market today. We at Sarepta have every intention to increase this number of approved drugs dramatically in the future. At Sarepta, we believe that the advancement of human health begins with bold steps and audacious goals, which is why a critical component of our efforts in 2019 will focus on playing an active role in creating new payment and reimbursement models for life-altering gene-based medicines.

Sarepta is working with thought leaders in public health and health economists to create a new framework for the way in which treatments for rare diseases are assessed. Additionally, Sarepta's working with economists and payers to create new reimbursement models that address onetime, potentially curative therapies. The goal of these reimbursement models is to support patient access while creating a sustainable model for payers and manufacturers for onetime therapies. Up to now, models accessing value such as ICER do not accurately capture the full benefit of these medicines, especially for gene therapies that can potentially change a person's life forever in just 1 dose. Misvaluing these treatments could have a very real and significant consequence, putting life-altering medications out of reach for patients who have faced a debilitating and fatal disease with no alternative treatment options, while also stifling the development of future transformative therapies.

Sarepta is at the forefront of this issue and we will remain there. We will continue to lead discussions on gene therapy pricing and payment models and take a seat at the table as decisions are being made so that once-in-a-lifetime technologies and potential curative therapies will have a chance at becoming reality to treat as many rare and ultra-rare diseases as possible, ensuring that true innovation continues. This work will also establish a foundation for our ever-growing gene therapy portfolio. The data presented today on limb-girdle muscular dystrophy type 2E is quite promising, and we are very excited for the limb-girdle community. We're doing a tremendous amount of market research on limb-girdle and currently believe there could be as many as 6,000 patients in the U.S. and globally, between 76,000 and 138,000 patients, just within our 5 mutations that we're studying. Unlike Duchenne, genetic testing is not as prevalent within this community, and we need to focus on this initiative even more so than we did with Duchenne. In addition to our market research, genetic testing will help us get a better understanding over time of the total number of eligible patients in our key markets. We cannot be more excited to not only lead the field and the development of potentially life-altering therapies but also pave the way for patients to access these treatments. Our work will not only help patients who have diseases that we are developing therapies for but also for all patients who stand to benefit for potentially curative onetime therapies in the future. This is an incredible responsibility, but one we look forward to solving with our committed partners over the coming years. We are currently standing at a rare moment in time, a moment that will shape the future of healthcare and patient lives forever. And we are proud to do this at Sarepta.

I will turn the call back over to Doug for remarks.

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [6]

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Thank you, Bo. And with that, let's open the call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Brian Skorney with Baird.

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Brian Peter Skorney, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [2]

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I got most of my gene therapy questions in this morning, so maybe I'll take a different tactic this afternoon and just ask you about PPMO. I know that you have an open label of extension for 5051 posted to clinical trials. Just hoping to kind of get some color on where you are in dosing, if you're at therapeutic doses with a 5051? And when we might actually see some expression data? Do you think that could be a 2019 event?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [3]

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So a couple of facts: one, it won't be a 2019 event. But what we're really looking at in 2019, both in our singular semi-doses and as we transition over to multi-second dose is safety. And the real goal here is to get to a place where we now want the maximum tolerated dose for the therapy is. As I think you know, but just to remind us on the phone, in preclinical models, we see very robust expression if we get the right dosing with our peptide-conjugated PMO as much as an order of magnitude, more penetration, therefore more exo-skipping and therefore, more dystrophin versus the PMO. So the real issue for us is a safety margin issue. Can we get to the right dosing? But I can give you some very good news right now, which is things are going very well and are seeing a less heavy dose study, and we are going to transition to a multi-ascending dose study. But I would be misleading you if I told you that I can give you good insight yet on the top dose because we're not anywhere near that now. So by the end of this year, we will have a very good idea on a maximum tolerated dose and therefore the safety margin for the therapy. We could probably do some work around what that might mean from an expression level, at least based on preclinical models. But it'll really be from there that we'll go into -- we'll have validated the model and then we'll pray to study that actually shows the exact expression that we're getting, and that make sense. Not while a readthrough, not just to our first program, but remember, behind that program, we have 5 additional therapies about, if I'm not getting it wrong, together about 42% to 43% of the Duchenne muscular dystrophy community that could be served by the PPMO.

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Operator [4]

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And our next question comes from the line of Anupam Rama with JPMorgan.

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Tessa Thomas Romero, JP Morgan Chase & Co, Research Division - Analyst [5]

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This is Tessa filling in for Anupam this evening. On the limb-girdle portfolio, with the caveat, I know that meeting was regulated around the horizon for the limb-girdle programs. Can you comment on timelines to regulatory discussions and what program updates you can be confident in, in 2019?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [6]

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Yes, I think at this point -- we do a lot of talking internally about the timeline. So there's 2 sets of timelines here: one is depending upon the clinical and regulatory pathway itself, which will require a discussion with the agency. And the other, of course, quite independent of that, are the commercial transfer and process development work. It's one of the things we absolutely know, based on discussions we have had with the agency late in 2018, is that we need to get to a place where we have commercial supply and commercial process material and those patients on that supply as well. But for us to start discussing the exact timelines yet, it has -- it very likely has the opportunity to mislead at this point. So the first thing we need to do is to get to the agency. We will be doing that very soon. I don't want to promise it, to request a meeting and then of course brief the meeting and have it with the agency. But certainly, we will have later this year the ability to come back and provide better guidance on not only substance and lead a pathway to potential approval both in United States and then around the world for each of these 5 programs, but also a flight path on the manufacturing process. I can tell you that we are working really hard on that. As I said earlier and I keep saying over and over again, we see these preliminary results on QE, just as we felt with our microdystrophin program, it places upon us a sense of enormous obligation to get moving in, I can tell you, proxy organization. Louise and her team, our manufacturing folks, our regulatory folks are all working like mad to better define so that we can talk more concretely about the pathway forward for all 5 of these programs.

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Operator [7]

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And our next question comes from the line of Tazeen Ahmad with Bank of America.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [8]

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I'm just wondering on the time you think it will take to complete the transfer from the adherence stack to the iCELLis process? And also, what do you predict some of the challenges could be in that process?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [9]

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Well, again, I don't want to get hard dates right now. We just acquired Myonexus. So there is a few predicate things we have to do even before we get in the process. First, we have to get IPs transferred over that and then we got to get tech, which is a very straightforward thing. But something that can take its own amount of time, which is to get a tech transfer from Nationwide Children's Hospital over to what in this case is Paragon and then over to start working on process development work and assay development work and yield optimization at Paragon. So I can't give any hard -- I can tell you this. One very positive thing about where we are right now is that our microdystrophin program is leading the way. So we are already in the microdystrophin program computing the process of having the IT transferred to us and transferring over to our partner brand in order to start the process development work. Now we're fairly deep into yield optimization and assay development. And a lot of that work is going to use the benefit of all 5 of our limb-girdle programs. So while in one sense I'm not giving you hard deadlines right now for concerning that, some of it is -- requires more validation before we can speak properly about it. All of the work we're doing on microdystrophin is providing insight into what we'll be doing very, very soon in limb-girdle.

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Operator [10]

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And our next question comes from the line of Alethia Young with Cantor Fitzgerald.

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Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [11]

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I have a question about golodirsen, the launch. I mean, do you think that the ramp phase for the EXONDYS 51 population could potentially be a little faster since I would assume more patients are genotype? Just was kind of curious if you'd give us a little bit more framework to think about a 53 launch versus the 51 launch thing?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [12]

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Yes, it would be great. I'm going to answer that the question instead of Bo because he will famously try to underrepresent our number before. So the truth is that Bo and his team have done a brilliant job over the last few years of defining, actually, a lot of the work regarding eteplirsen that will inherit the benefit. So I don't know the exact 60% to 70% of patients are now genotypes. But working with great patient avenue groups like PPMD, Bo and his team's done an extraordinary amount of work. And that work will apply also to golodirsen. So there will be a ramp here, just like there was a ramp in eteplirsen, but it ought to be -- it ought to benefit from all the great work that's been done with eteplirsen, EXONDYS and it ought to be a healthier ramp when we get golodirsen approved. And I can tell you that Bo's over here wildly agreeing with me.

We got the genotypings done. We have very deep relationship with the physician communities. We've done a very good job of forging relationships with payers, and so that golodirsen should benefit from all that.

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Operator [13]

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And our next question comes from the line of Christopher Marai with Nomura.

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD & Senior Analyst of Biotechnology [14]

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Just a quick one. I guess, 9 patients dosed in the microdystrophin Phase III. I was wondering if you could provide some clarity on when we might hear about any data from that? And if you would be updating us if there were a safety signal that we need to know about what the safety signal may be? And then just quickly on casimersen, any approval pathwork there?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [15]

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Yes, fine, on golodirsen -- I apologize. On golodirsen, the question was are there any safety signals that are a risk.

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Christopher N. Marai, Nomura Securities Co. Ltd., Research Division - MD & Senior Analyst of Biotechnology [16]

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No, microdystrophin.

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [17]

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Oh, microdystrophin. Things are going very well. Our more significant issue right now is Dr. Mendell is working his head off to get everybody in and about 3 biopsies screened and then dosed. And so right now, I think we're doing really -- he's doing brilliant. Dr. Mendell has done brilliant work with 9 patients already dosed. So our biggest issue right now is just making sure that we hit our Q2 goal of having all 24 patients dosed. Things are going very well there. And I think you asked about casimersen, if I'm not mistaken. I'm getting head shakes of no on that. Apologies for re-asking the second question, I apologize for that.

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Operator [18]

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And our next question comes from the line of Brian Abrahams with RBC Capital Markets.

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Beau Harkonen Miller, RBC Capital Markets, LLC, Research Division - Senior Associate [19]

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This is Beau on for Brian. Congratulations again on the limb-girdle data from this morning. I just wanted to clarify whether you've been getting any ongoing feedback from the FDA during the limb-girdle 2E study? And do you have make any sense of their comfort with your plan to manage or prevent the liver toxicity that you saw? And related to that, is FDA sign-off a gating factor for dose escalation in the study? Or is that more just up to Sarepta and the DSMB?

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - Executive VP, CFO & Chief Business Officer [20]

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So thanks for that question. Apropos continue to see back, obviously we haven't had formal interactions with the FDA. We do notify the FDA of data. From what you've been gazing off dose escalation, that is not strictly required for protocol by the FDA but as we said, we are planning to interact with them anyway. But from the point of dose escalation, that does not require FDA approval. I think from the point of view of the liver function. I think it's really important to emphasize the fact that this was -- that these were transient bumps, even in the context of the serious effort event where the child was admitted. It was a very transient bump. It responded very rapidly within days of re-escalating prednisone. This child and what constitutes us [prevented off], has now tapered off the prednisone and the liver enzymes are at baseline and remain so and are stable. So yes, this is indeed a transitive event. And then going forward obviously, we are modifying our glucocorticoid regime to more prescriptively call for longer dosing.

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [21]

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So the biggest issue I think now is of the second -- now it's clinical supply general worry and the dose is really internal question in -- with ODSME, which is we're seeing one of your -- we would believe to be a very remarkable expression. We have also some insight both from our preclinical models and from our microdystrophin program that we can safely dose higher than this and we've got to make a decision about what the right answer for that is. As I've said before, neither of those answers either direction will have any material impact on the timelines and flightpath in bringing this therapy to the community.

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Operator [22]

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And our next question comes from the line of Ritu Baral with Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [23]

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Which programs do you think have the most positive reprove from the market -- from the limb-girdle to e-data this morning, which of those constructs are most parallel? I guess, Doug, you mentioned 3 out of the 5 had the same promoter, which are those? And how should we think about maybe Charcot-Marie-Tooth and that construct in all of this?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [24]

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Yes, so let me say one thing, and then I'll leave it to Louise, who will give you more detail. In the broadest of strokes, there is significant readthrough in all in these programs for a number of reasons: first, chiefly amongst them are these. First of all, of course, Dr. Louise Rodino-Klapac, she'll be modest about this, was the designer of all 5 of these programs. So the same thoughtful approach to the design of these programs and flesher promoters and the like was the same across both our microdystrophin programs and all 5 of these. All 5 of them very importantly, are rh74. All of them be able to dystrophin-associated protein complex. They are all single gene mutations. They all aimed to do a very similar thing, which is to have a full-length gene. And therefore, they made a protein and deposit the injury. Now I'll let Louise go into the details. But you're right, 3 of the 5, the ones that are associated with a desire to have an increase benefit in the heart, used this MHCK7 promoter, which, at least in the first 2 report-outs that we have, is giving us a lot of confidence around the productivity of that promoter. And then 1 of the 5, I should note, and Louise should comment on that, is it does have something that is a little different, which is this dual-vector construct and slightly different only in that regard. With that said, maybe a little bit more detail from you, doctor.

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Louise Rodino-Klapac, Sarepta Therapeutics, Inc. - VP of Gene Therapy [25]

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Sure. I think Doug covered it well. But all of these programs are using rh74. So there's [race to] all type programs. In addition to 2E we're using MHCK7 promoter and the LGMD2B and 2C programs, which also have significant cardiac involvement. On the other 2 programs, LGMD2C and LGMD2L, were using a PMCK promoter, which also expresses very highly in skeletal muscle, but not as much in the heart where we don't necessarily need any of these programs. So we were thoughtful in the way that we designed which promoted to use for which study that we have a robust clinical results in all. The point of the LGMD2C program, we're using a novel dual vector approach where we reconstitute the entire protein using 2 different vectors. But this is also delivering a full-length gene, and in fact all of our programs again are delivering the native full-length gene and corresponding protein.

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Operator [26]

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And our next question comes from the line of Danielle Brill with Piper Jaffray.

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Danielle Catherine Brill, Piper Jaffray Companies, Research Division - VP & Senior Research Analyst [27]

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A quick one from me. In the DMD trial, are you targeting all patients? Or are you excluding those with mutated exon 18 to 58?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [28]

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This is Doug. So let's be clear, there's 2 answers to that. In the current trial, there are exclusions for certainly the earlier exon and again with the later exon. That is not our long-term goal. So I don't like to create a false impression that we envision our label at the end that would have those exclusions. We intend in connection with our next trial, or say, trials associated with commercial material to address those issues and we'll move some of the restrictions that out of overabundance or an abundance of caution existed in the protocol for what we call stated study 1 and now study 102. So that's our ultimate goal is to have the broadest possible coverage, both of patients, age groups, geography, but also genotype as well.

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - Executive VP, CFO & Chief Business Officer [29]

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And let me just clarify, we're not excluding 18 to 58, it's the corollary. It's the 1 to 17 and the 59 setback. We're including 18 to 58. And as Doug says, the plan is to expand, is sort of in a planned manner in our development.

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Operator [30]

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

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Ross Howard Weinreb, Goldman Sachs Group Inc., Research Division - Research Analyst [31]

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This is Ross on for Salveen. Just one quick question on the microdystrophin program. Can you just provide an update on the status and the timeline associated with the beginning commercial supply program?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [32]

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Yes. So the goal remains the same. So we're -- we got a lot to do, but we're deep in the process. The biggest gaining item -- they're 2 things we need to do for -- to start the commercial supply trial: one is the design of the trial. And that should not be it at all and DDI are doing some interesting work to make sure that we've got a really thoughtful program there but the other is, of course, the commercial supply itself. And I've mentioned before, we are deep in the process development. In fact, we are in the yield optimization stage and the release assay and other assay development stage. So our goal remains the same. I mean, the second half 2019, leaning likely towards this -- well, the later in the second half of 2019, our goal is to commence a multi-centered, multicountry site study with commercial supply, and we're continuing to work in that direction.

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Operator [33]

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Our next question comes from the line of Gena Wang with Barclays.

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Gena Wang, Barclays Bank PLC, Research Division - Research Analyst [34]

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Just one regarding manufacturing. Wondering if you can walk through additional steps that will be required for Brammer Bio to produce initial commercial product? And then also, will you be willing to test suspension cells for better scalability in the future?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [35]

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So let me take the second question first. On the suspension, there are a lot of really interesting ways to go about commercial supply. There's -- what we're doing right now is sell these units. There is suspension. People talk about potential efficiencies associated with Baculovirus or an insect-based approach as opposed to a mammalian approach. We have chosen -- and we have done a lot of programs right now. We have 10 gene therapy programs, we will have more than those in the future in connection with our goal of becoming the world's leader in gene therapy to treat rare disease. We'll be looking at a lot of things, including suspension in perhaps either Baculovirus. We have a very interesting relationship with Lacerta and they have something called the OneBac system. But with respect to our Duchenne muscular dystrophy program, and at least with our initial limb-girdle programs and probably all of them are limb-girdle programs, we had chosen to go to iCELLis. And we've done that for a very specific reason. And that is because it is the closest to what we have at Nationwide Children's Hospital. Nationwide Children's Hospital has a mammalian-based adherent system, but it is on hyperstacks, it's not easily scalable. An iCELLis shares much in common -- is also adherent. It is also mammalian. But it is a 3-dimensional structure and therefore, it's much more scalable. What is good about it is that iCELLis versus suspension is very scalable. So we get very good productivity out of iCELLis that competes with suspension. And beyond that as we sort of crossed it out across the goods perspective, we feel very confident and comfortable with where we're tracking. So I would suspect that we will not be moving to suspension with respect to our Duchenne muscular dystrophy, microdystrophin program or as it stands right now, our limb-girdle programs. And on the pathway, the pathway is, as I said before, so we had a number of things to do and I can tick off which ones that have been done and which ones remain to be done. The biggest -- the first thing we had do is get an IV in our hands, and then go through the process of tech transfer information like Children's Hospital with our Duchenne program to Brammer Bio sites. That is long done, and done and dusted. We completed that work. The next thing to do was to start working with the iCELLis units and do process development, and we are deep in that process. In fact, we're more than deep in that process. We've actually started the next phase, which is yield optimizations. We started getting runs into yield optimizations, and we're very deep into that as well. And then the next thing we're doing, and we're doing many of these things in parallel, is assay development work. There are a number of assays, some of them are off the shelf, some of them have to be bespoke, that need to be developed to ensure that we have the right commercial process and the right release process for a material. So we're sort of deep into those as well, and we've got a very good team and a very good partner in with Brammer as well in that development. So that's kind of where we are right now. That should, if everything goes brilliantly, lead us to a place where in parallel from that will be working on the exact design and getting sites up and ready to go for this commercial supply trial and then by -- before the end of this year, the second half of 2019, is our goal to commence the commercial supply trial.

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Operator [36]

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And our next question comes from the line of Joel Beatty with Citi.

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Shawn Michael Egan, Citigroup Inc, Research Division - Senior Associate [37]

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This is Shawn Egan for Joel. Could you provide a little additional color on the interim look for the confirmatory commercial supply trial in DMD? Specifically the number of patients you expect to have at that interim look, the timing and points that needed to support manufacturing comparability?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [38]

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So we're in the stage right now that -- I don't want to provide even ranges of numbers right now. Because again, similar to what we said of limb-girdle, we need to take -- we need to come up with some views, we have some preliminary views. And then we can talk to the FDA. So we're very clear. We are -- we need to work in close collaboration with the agency and ensure that everything that we're doing are -- is exactly as the agency would see it. So we do have a view that our commercial supply trial will have an interim look. Our goal to have an interim look on some number of patients after what we revisit to be 3-month biopsy because that's what we've been looking at, it seems to work quite well. And then look at comparability across the 2 supplies, both commercial and clinical. But the exact number is going to require additional discussions for the agencies before I feel confident providing a view on that.

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Operator [39]

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Our next question comes from the line of Timothy Chiang with BTIG.

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Timothy Chiang, BTIG, LLC, Research Division - MD and Specialty Pharmaceutical Research Analyst [40]

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Doug, what do you think about enrolling nonambulatory patients in some of the gene therapy studies? I mean, of course, you're seeing really good results in younger patients at this point. But at some point, do you think you'll be looking to deal with older patients as well?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [41]

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A couple thoughts on that: first, just so you know just by a way of background. In our limb-girdle program we have older patients. They are ambulatory but they are 13 years old. So we have already begun with our gene therapies looking at older patients. As it relates specifically to the Duchenne program, let's go to the end. It is crucial that the program has -- is built so that there is access to older and nonambulatory patients who, if we are correct in our thesis and if our early evidence bears out, will benefit enormously, qualitatively and with an extension of life from our Duchenne muscular dystrophy program. Our current program with Dr. Mendell, of course, has a narrow age range. But let us be clear, the reason it has a narrow age range is to ensure this disease that is degenerative and that requires different markers and different functional outputs depending on age, we need to have it narrowed up so that we actually can prove the functional benefits correlated to expression. In our next group of studies, we are going to look very thoughtfully and carefully at how we ensure that we can address older and nonambulatory patients in a way that not only gets us a label, but ensures this has free -- much better access for older patients. But then we have data that is compelling for payers in the United States and also for HTA numbers around the world. So this is going to be a big part of our next study.

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Operator [42]

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Our next question comes from the line of Vincent Chen with Bernstein.

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Vincent Chen, Sanford C. Bernstein & Co., LLC., Research Division - VP [43]

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Thinking about the commercial confirmatory study, what would you expect the powering of that study to look like, recognizing you'd be fairly unconstrained from a manufacturing and patient enrollment perspective and there's a broad population of folks you'd like to enroll. How many patients are you likely to target?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [44]

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Well, we don't have the exact numbers now. That will be significantly higher than the 24-patient study we have with Dr. Mendell, for a host of reasons, one of which is we want a multicenter trial. Let's just sort of start with that alone. We want a multicenter trial. We frankly want a multicenter and very likely multicountry trial. So there will be an opportunity to have a much larger ramp and to actually still in terms of the number of sites rapidly enrolling, right. I mean, 1 of the uses of Dr. Mendell is he is working like mad and every additional patient is a patient of Dr. Mendell right now has to treat the following, so it has its own constraints. We will be unconstrained in our second trial as in regards to that. So I don't have the exact numbers. It will be significantly larger than the 24-patient study that we have today. Because in addition to -- in addition to that empowering, we have to think about some of the other patient populations and ensure that we're addressing that in connection with the next study.

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Operator [45]

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And our next question comes from the line of Hartaj Singh with Oppenheimer & Co.

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Hartaj Singh, Oppenheimer & Co. Inc., Research Division - Research Analyst [46]

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I just had a quick question on the expenses. Sandy, you provided a lot of color and granularity in your comments and on the press release. Can you just give us a little bit of idea whether the fourth quarter, which I know generally tends to be heavier on expenses, so maybe that's not the right way to think about. But just give us any thoughts on how to think about expenses going into 2019? And with the potential launch of golodirsen if you do that with the second half of manufacturing, could we see a heavier second half versus first half?

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Sandesh Mahatme, Sarepta Therapeutics, Inc. - Executive VP, CFO & Chief Business Officer [47]

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Thanks, Hartaj. So in our guidance, specifically on expenses for 2019. What I would guide you towards is to look at our Q4 expenses and use that as a trend to project out what our expenses will be for this year. And for perspective in Q4, we spent approximately $130 million for our OpEx on a non-GAAP basis versus about $84.5 million of revenue. So we do not have a significant cash burn from our operations. Most of the burning was from onetime events that if you look at the balance sheet or pro forma items, we had approximately $100 million of cash expense. And most of that was from business development deals and our gene therapy manufacturing prepayments as well as a large amount for our CapEx. Much of that, too, was for gene therapy and RNA manufacturing. So I think I'd guide you towards our Q4 expenses to use that as a trend, obviously, to slope upwards. And then I'd add a little bit more for our potential launch for golodirsen as well as for our ex-U. S. ramp, especially in Brazil and Japan as well as in Europe.

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Operator [48]

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And our next question comes from the line of Timothy Lugo with William Blair.

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Myles Robert Minter, William Blair & Company L.L.C., Research Division - Associate [49]

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Myles Minter on the line for Tim. I'm just wondering whether you can comment on where you are with taking some additional guidance from the AMI regarding [exon plus] and approval in the AU? And if you see similar headwinds to a potential approval pathway for golodirsen and casimersen there? Or if you're still thinking about potentially unblinding a promote of your ESSENCE trial? And if that would help you in that manner?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [50]

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Yes. So first the with respect to golodirsen, it is our goal to take additional scientific advice. In fact, we've been encouraged by DMA to take scientific advice. So we'll -- I don't want to overpromise, but we'll have an update in 2019 on the potential pathway for eteplirsen in Europe. As everyone knows, we've done a lot of work in 2018 with the goal of bringing eteplirsen into the European patient community. And we have -- we were unsuccessful in 2018, but we remain committed and possible to find pathway to Europe. We do think it's only fair that patients in Europe have access to this therapy, that it is, from our perspective, benefiting patients with exon 51 in that ability in the U.S. As it relates to golodirsen and casimersen, we have yet to trial and it is very likely that will be the pathway for approval, that is a placebo-control blinded study. We couldn't unblind it but -- let us be clear about that. We couldn't unblind it as a basis for seeking approval somewhere else because that trial, assuming that we are approved for golodirsen and then for casimersen, the very beginning of next year will serve as the confirmatory trial for both of those approvals, so it has to remain intact and viable and blinded as well. So ESSENCE will almost certainly be the pathway to a potential approval in Europe for golodirsen and casimersen, and we'll have a better insight once we take scientific advice -- additional scientific advice from the EMA on eteplirsen later this year.

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Operator [51]

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And our next question comes the line of Liisa Bayko with JMP Securities.

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Liisa Ann Bayko, JMP Securities LLC, Research Division - MD and Senior Research Analyst [52]

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You sort of touched upon a topic that I've been pondering a lot myself, and that's the whole pricing models around gene therapy. And I'd be curious as sort of a leader in this conversation and really at the forefront of what's going on. Can you maybe talk about what are some of the -- kind of what's rising to the surface as the most reasonable pricing models? And then is there some sort of consistency? Or do you think it'll be -- the same across different payer types, for example the one-payer systems like in Europe or kind of the private payer and multi-payer systems like in the U.S.? Can you maybe just speak to those 2 things, I guess the sort of idea of 1 common payment system for gene therapy globally? And then also what's sort of emerging as the best payment models? Or what's the most topical at this point in time?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [53]

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Yes, it's a fascinating issue because we're doing a ton of work on it right now. You could like -- it's our goal to be a leader in gene therapy and one of our goals to be a leader in beginning to solve some of the structure issues associated with access to gene therapy. I suspect there won't be 1 overarching structure. Because I don't think that there will be even 1 overarching structure in the United States, the United States system. We're exploring a number of things. But let's step back for a second and put this in context. There are really 2 issues with the gene therapy. One question that people have is just the value itself. Well, the pricing in value of gene therapy. I posit that putting aside distraction, probably relations issues, in reality the value of transformative gene therapies, which is exactly what society wants, which are onetime significant transformative moments, is there. This is not actually a value proposition issue associated with gene therapy. But in the -- let's start with the U.S., which will be some of the test cases that we'll be bringing around the rest of the world. There are fundamental structural issues that we need to address and find answers for it, and there are obviously answers for it. Things like paying incentive, dealing with payers, payments over time issues or subscription models. I can tell you that Bo and his team has access to reimbursement in our government payers group are all working together with a number of really innovative outside folks, looking at these issues and coming to views on which of these various models, or which many of these models will work best and is most amenable because most of it is what is best for the payer. We're having -- we're already having advisory committee meetings and discussions with a number of private payers and we're beginning to dialogue with -- state Medicaids and CMS as well. That's a little bit behind the private payer discussions. So I think by, I would say, from a Sarepta perspective, by the end of this year into early next year, we will have very -- almost certainly have landed on the 1 or couple of perspectives on what we would do in the United States, then a subset of those around the world to address the access issues and ensure that there is maximum access to patients rapidly when these therapies approve. I think the most likely alternative to just the lump sum payment is payments over time. And probably inside of that, risk-based payments and I will say that so long as the value proposition is there, Sarepta remains committed to any of those models and we're looking at all of them right now.

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Operator [54]

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Our next question comes from the line of Yun Zhong with Janney.

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Yun Zhong, Janney Montgomery Scott LLC, Research Division - Equity Research Analyst & Director of Biotechnology Research [55]

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So this is a follow-up question on casimersen because I don't believe I heard you answer a previous question. So I wonder if you can confirm the status of the biopsy analysis? Then the -- do you plan to announce that biopsy data before you submit the NDA? And also is there a specific level of protein expression you would like to see to feel comfortable before moving into NDA submission?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [56]

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Yes, so we don't have -- the short answer is that the biopsies will be analyzed in the coming 60 to -- 30 to 60 days maximum. So we'll have -- we don't have the data now. We'll have that data. And then 2 things: one, we certainly will -- we'll certainly share with the investment community the results of that at or before we would make a submission to the agency on that. And as far as the amount, I can only tell you what the preclinical models predict. The preclinical models, which have been fairly accurate in their predictions, as an example predicted when we went to golodirsen that golodirsen would be somewhere in the 2x and 3x more expression than we had with eteplirsen and lo and behold, it was about 2.4x more expression than eteplirsen. And the preclinical models predict that casimersen will be sort of in the hunt of golodirsen, maybe modestly below golodirsen, and at least from all of our discussions with the agency and precedent that would be in a position that would -- we'd very comfortably support a submission for casimersen to submit the biopsies or as the preclinical models suggest.

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Operator [57]

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And our next question comes from the line of Edward Nash with SunTrust Robinson Humphrey.

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Fang-Ke Huang, SunTrust Robinson Humphrey, Inc., Research Division - Associate [58]

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This is Fang-Ke Huang for Edward Nash. A quick question on the MPS IIIA programs. And since you already started the clinical trial, have you guys discussed -- or licensing has discussed these regulated agencies regarding what's the bar for approval? And secondly, can you show us -- remind us what are the Phase I2 data looks like?

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [59]

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Sure. I will turn this to Dr. O'Neill.

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Gilmore Neil O'Neill, Sarepta Therapeutics, Inc. - Senior VP of R&D and Chief Medical Officer [60]

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Thanks. So thanks for that question. There have been interactions with the agencies in the design and planning of this study. But I don't feel that I want to start disclose details of that right now. And the prior data basically, I think most of the data -- the prior phase I data used different construct. I think it's important to understand. The concept we used in this current study was actually a significantly optimized construct, which enabled in the non-clinical setting a substantial enhancement in both delivery and expression. And it is that construct that is in our current study, the pivotal study that's been run by my SG.

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [61]

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I will say one interesting thing about the MPS III program, is that it has an interesting readthrough to some of our programs is that in the preclinical models with MPS III, early models, they used a particular promoter. They switched promoters and found a 300% increase in expression models. If you think about that and then you look across to our programs and you look across to our microdystrophin programs and then you look at our first [neural] program, which is a quarter of dosing yet we still see really robust expression, even at a quarter of the dose. It does begin to give one the view that the particular promoter that we've chosen, this MHCK7 heavy chain promoter, appears to be very productive, which is -- speaks reams to what could happen with our other limb-girdle programs and obviously as an additional comfort with our addition of muscular dystrophy program.

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Operator [62]

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This concludes today's question-and-answer session. Now I would now like to turn the call back to Doug Ingram, Chief Executive Officer, for closing remarks.

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Douglas S. Ingram, Sarepta Therapeutics, Inc. - President, CEO & Director [63]

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Thank you all for spending the evening with us. And certainly, thank you doubly for those who were with us this morning for our webcast. Appreciate it, obviously. As I said in other forums, 2019 is the year of execution. We have much to do. As we track through the year and we execute, we'll obviously be providing additional guidance on all of our programs, certainly, including our additional microdystrophin program as well as all of our limb-girdle programs. So thank you all, and have a lovely day...

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Operator [64]

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