Ladies and gentlemen, thank you for standing by and welcome to the Sarepta Therapeutics 4th Quarter 2019 Earnings Call. At this time As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Ianstepin, Senior Vice President, Chief of Staff And Corporate Affairs. Please go ahead, sir.
Thank you so much, Jonathan, and thank you all for joining today's call. Earlier today, we released our financial results for the fourth quarter full year 2019. The press release is available on our website at www. Epta.com, and our 10 K was filed with the SEC earlier this afternoon. Joining us on the call today are Doug Ingram, Sandy Mahatme, Boe combo, Doctor.
Gilmore O'Neil, and Doctor. Luis Regina Klapac. After our formal remarks, we'll open up the call for Q and 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 statement, and any and such risks can materially and adversely affect the business as a result of operation and trading price for Sarepta's common stock. For a detailed description of applicable risks and uncertainty, we encourage you to review the company's most recent annual report on Form 10 K filed with the securities and Exchange Commission as well as the company's other SEC filings. The company does not undertake any obligation to public updated forward looking statements, including any financial projections are provided today based on subsequent events or circumstances. And with that, I'd like to turn the call over for Doug Ingram for our corporate update.
Thank you, Ian. Good afternoon, and thank you all for joining Sarepta Therapeutics fourth quarter 2019 conference call. In 2018, we defined our vision to become one of the world's leaders in sit in genetic medicine to treat rare disease, founded both on our precise and efficient RNA platform and on the build of a G therapy engine capable of rapidly advancing multiple constructs through development into the patient community. In 2019, we executed further matured and brought that vision into greater focus, and 2020 through 2020 we will, if successful, realize much of that vision. We have an enormous number of milestones in 2020, but before we discuss them, let us review the progress that we have made in 2019.
I will begin with our RNA platform. As we announced at the J. B. Morgan Conference in January, our fourth quarter 20 19 revenue stands at $100,000,000. In our 3rd full year since launch, Our 2019 revenue was $381,000,000, a 26% increase over prior year.
I will remind you that we have never taken a price increase since Our 2020 guidance for EXONDYS is $420,000,000 to $430,000,000. As we are just launching VIAZIS, we will wait until later this year before providing revenue guidance, but you can expect the launch curve similar to that of Exxon. In the fourth quarter, we obtained FDA approval for our second RNA therapy by August 53, The approval of Viandis was a win for objective evidence based decision making. It was a win for hardworking professionals at the FDA Neurology Division, that was responsible for this With the regulatory pathway reconfirmed, we submitted our rolling NDA for casimersen, having announced positive results earlier in 2019. 30% of the Duchenne community Exandis alone, and we will be among an exceedingly small number of biotechnology companies who have internally discovered developed and brought to the patient community 3 or more medicines.
In 2019, we commenced our multi ascending dose study for our next generation PMO technology, the peptide conjugated PMO or PPMO for short. Now let's move on to our gene therapy engine. There, we've made great progress in 2019 as well. Starting with SRP-nine thousand and one, our gene therapy for the treatment of Duchenne muscular dystrophy using our micro dystrophin construct. We have completed all dosing in what became a 41 patient placebo controlled trial, study 102.
Patients are now crossing over at the end of their 48 week period. By now, between our first proof of concept study, our main study for 102 and our crossover would dose more than 30 Duchenne Bois with active gene therapy. The study continues uninterrupted and the last patient's last visit should occur in December of this year. We have designed our next placebo controlled trial using our commercial process material, and we've taken initial feedback from the agency. This trial, which we call Study-three zero one, is designed as a global placebo controlled multicenter trial.
We have made significant progress on manufacturing. With our partners Thermo Fisher and Catalent, we have built significant capacity with a dedicated facility completed in Lexington, Massachusetts and even greater capacity than that built at Catalent. Our hybrid manufacturing approach is taking shape with AD PV expertise at our Columbus site and a dedicated AD PD site in Burlington, Massachusetts. This intellectual hub has been responsible for some of our most meaningful advances in 2019. Consider that we have now achieved at scale commercially viable yields for SRP90001.
We announced the JP Morgan that we had commenced engineering runs. By now, I can tell you that we have commenced our GMP runs for SRP 9001, and we're making great progress on assay development as well. We've made great progress on our limb girdle pipeline in 2019. To remind you, LGMD or limb girdle muscular dystrophy, is an umbrella name for a collection of serious, often fatal neuromuscular diseases. None of these diseases have available therapies, So the opportunity to bring a better life for these patients is compelling.
In the first quarter of 2019, we exercised our option and acquired Myonexus gaining access to its 5 LGMD programs. And then we later entered into a license option with NCH to gain access to Doctor. Zarifs to Hanks. LgMD candidate for lgMD2a. These six programs together have the potential of providing treatments for over 70% of patients with LGMD.
In the first quarter of 2019, we presented expression and safety data from our first three patient proof of concept cohort for LGMD2E and it was impressive. Expression was 50% on IHC, and 37% of normal on Western blot. We came back in the 4th quarter, and we updated with 9 month functional data indicating that every child was improving on every functional endpoint. We commenced one additional higher dose 3 patient cohort in 2019 at a 4 times higher dose with the goal of making a dose selection. In 2020 this year.
Moving on to the rest of our gene therapy engine. 2019 was equally consequential. With our partner Lysogene, we commenced a gene therapy trial for MPS IIA or Sanfilippo Syndrome Type A, devastating neurological lysosomal storage disease. We build out our gene therapy center of excellence in Columbus, Ohio, our center of excellence already building new constructs and advancing in 2019, and we in licensed or purchased 18 new constructs, bringing the total number of research development programs to 42 across our two platforms. And we have employed a clever incubation strategy that allows us to build an enormously large pipeline, while still permitting us to remain laser focused on our near term objectives and milestones.
And of course, we entered into a transformational alliance with Roche in the fourth quarter of 2019, where Roche will take SRP 9001, to patients outside the United States. Single candidate licensed in biopharmaceutical history validates our approach, our progress, and the value of our program. But it also serves our mission. If SRP-nine thousand and one proves successful, Roche with its very impressive ex U. S.
Resources and international expertise will bring our therapy to far more patients far faster. Than we could have ever done on our own. And it places us in an enviable position with the resources to drive our vision and to execute our plans. With the close of our alliance this quarter, we have well over $2,000,000,000 of cash on our balance sheet today. Add to that, the fact that we have just entered into an agreement to sell our by on this priority review voucher for $111,000,000 Add again to that, our revenue this year for EXONDYS and MyONDYS, and it should become clear that we are well to with the resources the assets and the talent to drive our ambitious strategy to fruition.
Looking forward, you will see that 2020 is densed with milestones. So starting with our gene therapy portfolio, Folio for 2020. With respect to SRP-nine thousand and one, we will continue to execute Study 102 with our 48 week last patient last visit in December of this year. We will unblind, evaluate and release those results which should occur in the first quarter of 2021. We are preparing to commence Broadly, we have 3 work streams for Study 301.
We must complete site initiation and training. We must complete our assay work our engineering work and our GMP runs. And if all goes well, we should have GMP material released this July. We need to work with the division to obtain their concurrence on the commencement of Study 301. So of course, there's a lot to do here, but the team is making exceptional progress today.
With respect to our LGMD pipeline, we have dosed all three patients now in our high dose cohort for LGMD2E. We will have expression and safety results available in the second quarter, and we anticipate announcing that data at an appropriate medical meeting in the second quarter. We will make a formal dose selection decision in the third order. We will complete the assay and process development work for LGMD 2E with the goal of having GMP material available in time to commence a trial in early 2021. We will also begin the ADPD work for other of our LGMD constructs as well.
We will continue our dialog with the FDA and come to a view on the development and regulatory pathway for LGMD2E and then the remainder of the LGMD pipeline, our goal is to have all of that completed by year end. So we could commence a trial with commercial process material early next year. We'll also go 17 patients on our MPS IIIA gene therapy program and intend to complete all the dosing by the middle of the year. Our collaborator on CMT otherwise known as Charcot Marie Tooth, Doctor. Therese Sahank at Nationwide Children's Hospital, had intended to commence her proof of concept study CMT last year, but did not have NCH released material enabling her to do that.
That material should be available this year and Doctor. Sahenk intends to commence that study in 2020. In addition to our Gene Therapy Center of Excellence in Columbus, Ohio, we are also building a separate Gene Editing Innovation Center under the guidance of Doctor. Charlie Gersbach of Duke University in Durham, North Carolina in should have that largely complete this year. We have also significant milestones for our RNA platform this year.
We should complete our rolling submission for casimersen in the second quarter of 2020. We plan to result to release the results from our PROMOVI study At the NDA Scientific Conference in March, these results from patients that met the enrollment criteria, or 201,202, that's the study which form the basis for the eteplirsen approval are consistent with the 201-two zero two data set. And we will have dosing and safety insight on our next generation RNA platform, the PPMO this year as well. The PPMO is successfully to be a significant advancement. In our RNA technology and platform.
In summary, we have an enormous amount of work to do this year, but that work will be profoundly consequential for Sarepta, and of course, more importantly for the patients that we serve. To those who may say our plans are ambitious, I would agree, but they are not driven by numerous. They are informed instead by an abiding conviction, found in unobjective evidence, that the science of genetic medicine has come of age that a revolution in health care is upon us now and that Sarepta is playing a leading role in translating that science to practical therapies that improve countless lives otherwise stolen by serious rare genetic diseases. It is in that spirit that I would invite you to join Sarepta and rare disease patients in the U. S.
And around the world in recognizing rare disease data Saturday, February 29th, as we continue to bring awareness about rare diseases and the work that remains to bring therapies to patients fighting those disease every day. And with that, I will turn the call over to Sandy to provide an update on the financials. Sandy?
Thanks, sir. Good afternoon, everyone. Over the course of 2019, we advanced the business at several significant ways. We beat revenue guidance for EXONDYS 51, launched another of our RNA medicines, MyONDYS 53, significantly bolstered our financial position, and struck several new licensing deals, bringing our total number of development programs up to 42. We also struck a partnership Wibroche that closed earlier this month and that brought in $1,150,000,000 into the company.
This collaboration brings significant capital to fully fund our pipeline, including cost sharing payments, and it provides us access to Roche's significant expertise and greatly expands the global opportunity for our lead gene therapy program, SRP-nine thousand and one. Now moving to the financials. This afternoon's press release provided details for the fourth quarter of 2019 on a non GAAP basis as well as a GAAP basis. The press release is available on Sarepta's website. Please refer to it for full reconciliation of GAAP to non GAAP.
Net product revenue for the fourth quarter of 2019 was $100,100,000 compared to $84,400,000 for the same period of 2018. The increase primarily reflects higher demand for EXONDYS 51. On a GAAP basis, the company reported a net loss of 235 point $7,000,000 $140,900,000 or $3.16 $2.05 per basic and diluted shares for the fourth quarter of 2019 2018, respectively. We reported a non GAAP net loss of 100 and $18,900,000 or $1.57 per basic and diluted share in the fourth quarter of 2019. Compared to a non GAAP net loss of $58.7 or $0.85 per basic and diluted shares in the fourth quarter of 2018.
In the last quarter of 2019, we recorded approximately $15,600,000 in cost of sales compared to $13,100,000 in the same period of last year. Increase was driven by royalties due to BioMarin Pharmaceuticals and Englishia Western Australia, as well as higher production costs a result of increasing demand for EXONDYS in Q1. On a GAAP basis, we recorded $223,100,000 $146,200,000 in R and D expenses for the fourth quarter of 2019 2018, respectively. Which is a year over year increase of $76,900,000. This increase is primarily related to $40,000,000 of increase in expenses in clinical and manufacturing, a $10,800,000 increase in compensation and other personnel expenses as well as a 10.4 $400,000 for the fourth quarter of 2019 compared to $77,000,000 for the same period in 2018, an increase of $58,400,000.
The year over year growth in non GAAP R and D expenses was driven primarily due to a continuing ramp up of our microdystrophin program, our SSENSE program, and initiation of certain post marketing studies for EXONDYS 51. Turning to SG And A. A GAAP basis, we recorded $81,400,000 $64,200,000 of expenses in the fourth quarter of 2019 2018, respectively. Year over year increase of $17,200,000. On a non GAAP basis, the SG and A expenses were $65,800,000 for the fourth quarter of last year.
Compared to $52,900,000 for the same period of 2018, an increase of $12,900,000. Organizational growth expansion supporting our commercial launch, as well as 40 therapies in various stages of development across several therapeutic modalities. On a GAAP basis, we recorded $4,800,000 in other expenses for the fourth quarter of 2019. Compared to $2,300,000 of expenses for the same period of 2018. The unfavorable change is primarily driven by increase in interest expense, is recognized for our new term loans that was received by the company in December of 2019.
We had approximately $1,100,000,000 in cash cash equivalents and investments as of the end of last year. In addition, with the close of our alliance with Roche this quarter, have well over $2,000,000,000 in cash on our balance sheet today. With that, I would like to turn the call over to Bo for a commercial update, Bo.
Thank you, Sandy. Good afternoon, everyone. Toward our 2019 objectives around execution and our commitment to deliver on our stated goals, I'm pleased to report the following on behalf of the organization. We exceeded revenue consensus expectations for both the 4th quarter and the full year of 2019, totaling $100,100,000 $380,800,000, respectively. As Doug mentioned, our 2020 guidance for EXONDYS 51 is $420,000,000 to 430,000,000.
In terms of continuing to serve the community, we know that there are additional patients who may benefit from Agondis 51, and we will continue to overcome access reimbursement challenges to get patients on therapy. Golodirsen, or biopsy, Egencillary approval by the FDA on December 12, 2019. Vionic 53 treats Duchenne muscular dystrophy patients
who are
amenable to skipping EXOND 53. Acting with urgency and the knowledge that patients were waiting, we launched Vionic 53 within 24 hours of FDA approval, just as we did with EXONDYS 51. We submitted all of our compendium contracting and reporting reporting requirements and beyondas53.com, a critically supportive resource for family and when live. While we are leveraging our deep knowledge and expertise from the EXONDYS 51 launch, it is important to understand that there will be a standard procedures and required reimbursement policies associated with launching a new drug with a unique NDC or national drug code. Our team is prepared to work steady launch trajectory for LIONIS 53, resembling the launch curve for EXONDYS 51.
The only difference is that we are preparing and planning for the amenable Exxon53 space to be competitive. In support of our goal to increase access for Bionic 53, we are pursuing a multi pronged strategy. Although commercial and state Medicaid plans now have a much better understanding of Duchenne, we are continuing to educate about disease progression the benefits of treatment. Our goal is to work towards coverage to be all inclusive regardless of ambulation status, age or gender. We do expect commercial payers to have medical policies in place faster than Medicaid.
We also understand that from our previous launch the mix of commercial to Medicaid patients will adjust over time. And we believe it will eventually move towards a fifty-fifty minute or higher for Medicaid. Further, we are continuing Medicaid to make accelerated approval treatments available to patients. As you know, this is critically important for Duchenne based on the percent of patients covered under Medicaid plan. While the launch over Christmas holiday did delay some physician and patients seeking treatment during that period of time, We have been receiving start forms from top tier centers across the U S and are working with healthcare providers to ensure they are educated around the minimally for skipping exon 53.
As this population is different from exon 51 with some exceptions, epidemiology suggests that Bionic 53 can serve approximately 8% of the Duchenne community. But we will have to take into consideration that there are a number of patients already enrolled in or being recruited for clinical trials or have a deletion that will be amenable to EXOND 51. And, therefore, could already be on EXONDYS 51. With that said, we continue to have conversations with health care providers about the number of patients within their clinics and with payers about the number of patients eligible for treatment under their plan We are working with Our mission to be the global leader in precision genetic medicine started with EXONDYS 51. And has continued with the approval and launch of IONIS 53.
We are now preparing for the potential launch of casimersen for patients amenable to skipping EXOND 45. Behind these important medicines is an industry leading pipeline of programs, 42 in all. Driven by new modalities designed to treat complex rare diseases, including MPS IIIA and Limb Girdle muscular dystrophy. Sarepta is working with urgency and is focused on understanding the epidemiology and global prevalence of these diseases. We are continuing to refine our analysis and uncover additional insights, while collaborating with top neuromuscular specialists.
Each day, we are learning more about these diseases. And with each piece of evidence that we gather, we were able to apply these insights to our disease awareness HI identification efforts that are already underway. 2019 was a great was a year of great accomplishments, not only for the commercial organization, but the company overall. Looking to the future, patient care will continue to be our driving force as we translate scientific information into medicines designed to improve their lives of patients around the world. And with that, I'll turn the call back over to Doug.
Thank you, Bowen, and thank you for both Andy. And with that, let's open the call for questions.
Certainly.
Our first question comes from the line of Rick Duborough from Cowen. Your question please.
Good afternoon. Thanks for, thanks for taking the question so early in accommodating the rare disease week agenda here in TC guys. Appreciate it. Doug, can you let us, can you let us know when the last patient, for gene therapy was dosed. Basically, what is the shortest follow-up period, both for, micro dystrophin as well as limb girdle?
And can you talk about, the safety profile, especially liver, especially plate that you've seen in that time period for both programs? Thanks.
Well, I can just tell you very broadly that as a sort of backward engineer, we're going to have the for the 41 patient study 102, the last patient last visit will be in December. So if you work work backwards, you'll see that the last patient was right at, I think it actually might have been the very 1st week in the 2020. So that was the first forty one patients dosed. We're continuing on an ongoing basis to those patients on crossover as well with those significant numbers. I've mentioned to you now, but in study 102 between the proof of concept 101, between the main 41 patient study and between the crossovers, we've dosed over 30 patients with active therapy.
We have now dosed 6 patients with limb girdle, both the previous dose and now the higher dose in limb girdle. And of course, a lot of that's blinded. So the the roles see together, both the safety and the full safety and efficacy. But broadly speaking, I will say again, because consistent with our preclinical models, we have never seen anything that looks like complement or reductions in platelet counts below the normal level. So So things continue as they were study, Study 102 continues completely uninterrupted.
Making great progress there. The exciting thing about 102 is that we'll have last patient in December and we'll have a readout in the first quarter of 2021. And I will remind you that redown, not merely on expression and on safety, but also on function using NSA.
Our next question comes from the line of Tazeen Ahmad from Bank of America. Your question please.
Good afternoon guys. Thanks for taking my question. I just want to ask about PPMO. You've talked about data for this year. Specifically, Doug, what kind of data do you think that we'd be able to see?
And can you just narrow the timeline for us on what part of the year that would be? And then I guess related to that, assuming that, the data looks better ultimately than PMO and that you also do have gene therapy proved? How do you think about the package that you're offering overall to DMD patients? Why would they need to be, let's say, on PPMO and gene therapy potentially? Thanks.
Thanks for that. I'm really glad you're asking about PPMO because we're very excited. We're excited about our RNA technology generally, we're very excited about what PPO and not maybe, of course, we don't have the results yet. I'm going to turn this over briefly to Doctor. O'Neal to talk about some of the data that we'll get we need a couple of broad strokes.
So we're targeting the middle of the year. For sundowna, we're continuing to dose escalate. If things look great, we might even dose escalate beyond the middle of the year, but we'll have safety and, safety exposure and dosing information by the middle of the year. And I'll let through, and he'll sort of give you some more detail on that. On the broader question about what the what this might be for patients if we have both gene therapy and either our current a or an exchange rate conversion of RNA PPMO.
In the future, that's work that we're doing right now. I know that There are a lot of investors that have kind of assumed for planning purposes that there would be great cannibalization of the RNA franchise that gene therapy comes. And it turns out in the end that the gene therapy that we're working on is so profoundly impactful that it alone is meaningful and that it cannibalizes it, then so be it. We'll be thrilled with that answer for patients. But I think there is a lot of hypotheses and some thesis and some literature actually that would support the conclusion that there may be a common sense of value of gene therapy and RNA.
And I think with the PPMO, if it really was a profoundly significant advancement over our current technology might make that even more meaningful. So we're doing a bunch of work on that right now. We'll come back likely early next year and provide additional insight and views on what the combination of our RNA technology gene therapy might mean. And there's two things to look at there's science, obviously, the science of that and that. And of course, there's the access and reimbursement related issues that Bowen and his team are working on.
And with that, I will turn it over to Doctor. O'Neill to talk a bit about the information that we'll receive around the middle of this year.
What we actually were looking at a combined data set, in the second quarter, from both healthy volunteers which is a single ascending dose study and a serocort multi ascending dose study in Duchenne patients in which we will have a comprehensive safety data, we will have systemic exposure that is blood exposure. We will actually have muscle exposure using muscle biopsy And we will actually also be looking at some pharmacodynamic data with the particular folks at exon skipping because these will be short follow ups at this point. Thank
you. Our next question comes from the line of Joel Beatty from Citi. Your question please.
Hi, this is Sean Egan calling in for Joel. Thanks for the updates today and also for taking my questions. On the DMD gene therapy, I know that you guys have previously said that you plan to have adequate supply to address the market. But in a scenario where it's is limited. Are there conditions in the agreement with Roche that dictate how product will be allocated between the U.
S. And rest of the world? Thank you.
The short answers will, again, we are chatting to our goal. And our goal is to ensure at the moment of launch and the availability to the community in each of the various regions that we and then in the U. S. And then Roche with us outside the U. S.
Will go that we'll have adequate supply for patients. Obviously, we've got much work to do with Roche on that. Particularly as we think about how broad this could be outside of the U. S. When you have, a partner with the resources and Roche.
And we'll just plan for them. The real work on the most significant work, at least for us now, is on the assay development and process development and getting GMP runs and getting buy in from agency and commencing this trial. We've built already a significant amount of capacity. We've got a standalone site at Lexington Massachusetts, we've got significantly more already over at Paragon Catalent. And as we do the work and we progress, if we need more capacity still, we can certainly do that.
We've got a relationship with the Paragon alone that would have provided us with our ability to take additional suites and add additional capacity as we proceed. So we're planning for success. And I'm quite confident in our relationship with Roche, we'll both be planning for success.
Thank you. Our next question comes from the line of Christopher Marai from Nomura. Your question please.
Yes. Hi, thanks for taking the question. 1 on MPS IIIA and your progress there. Just wondering if you could comment a little bit on the age of the patients that are being enrolled? And then perhaps a little bit on, the type of endpoints, you're going to be looking at, and then your confidence in being able to see a difference between, I believe it is the natural history that drug And that's it.
Thank you. All
right, great. Doctor.
I'll be able to. Chris, thanks for your question. I think there were 2 elements you wanted to know about outcomes of the age of the patients. The study and actually, you can see it on clinicaltrials dotgov. Action requires patients to have at least an age of six months.
But the key, ceiling for age is really created by a requirement that they have a development quotient 50% or greater. So that naturally restricts the upper age group, there. Regard to the outcome measure, I kind of hinted at it, which is the development quotient is the primary outcome measure. And essentially, that is a way of capturing the cognitive behavioral development of the children in this trial, and that portion essentially is, not surprisingly, eracio, determined by the outcome measures in 1 of 2 measures, the, the Bailey scale, which is a development measure for instance and toddlers or the complement assessment battery. Each one is used depending on the age, of the patient.
And then to your point, yes, we are looking at the, outcome, versus a natural history, which, is, again, described in clinicaltrials dotgov. So thanks for your question.
Thank you. Our next question comes the line of Brian Abrahams from RBC Capital Markets. Your question please.
Hi, it's Bert on for Brian. Thank you very much for taking our question. I was just interested to get your thoughts on Pfizer's Phase III study design and timing and see, I guess, where you think how much of a lead do you think you have at this point in DMD? And then after your initial feedback from the FDA on Study 3, if there have been any changes to your plan to approach the agency with the 12 month functional data from study 2, with the 3 month expression data from Study 3, presumably in early 2021, to determine the potential for that making up sufficient filing data set?
Yes. So a couple of thoughts. First on the latter thought, there's nothing in our discussions with agency that's impacted our broad, perspective on the approach, both the 30 1 in our current study 102. Obviously, we've taken, views of the agency, the consideration and made modifications, but they've been modest to date. Going back to the Pfizer posting on clinicaltrials dot gov, I'm going to turn this over briefly to Doctor.
Emilio can provide insight into that, broadly speaking. I will say, of course, that anybody working in this area of Duchenne Muscular dystrophy should deserve 2 dose. This is, of course, an important area and all of us worked in driving this direction as a positive You can imagine our views on our own construct and its value, particularly given the results that we've seen so far, both in safety. And in expression, we've had enormous expression, as you've seen in the first four patients dosed with our our current dosing. And from a functional perspective, I think you've seen all four of those boys at 9 months, showed significant improvement and improvement over natural history at every single functional endpoint.
So we're very excited about where we are and where we're driving. And certainly, we see ourselves as the leader of Duchenne Muscular Dystrophy and in the leader of gene therapy for muscular dystrophy, but, kudos to anyone working in this area. But with that said, I would turn this over to Doctor. Emil to give you a view on the thank you, Nathan.
Thank you, Doug. Thank you, Bertloff. You know, as a group of people who are passionately committed to, Duchenne Boys and helping them, take on disease, we're obviously always very happy to see the increasing investment and increasing attention of, the scientific community and frankly, the commercial sponsored community in treating Duchenne. I think what's important to say is that, we are on track with all our activities with regard to for trial site and set up. We have very excited, investigators, very enthusiastic investigators and patients and are, you know, very happy about the progress and the commitment, that we are receiving.
I think it's also important to see that as our program can evolve, we're seeing some emerging differentiation factors, some of which I'll name, but 4, one obviously is our promoter, in which we have a specific promoter, which is both highly efficient and very precise in targeting, expression of micro dystrophin. And why does that matter? Because it targets that expression to squeeze this cardiac muscle, which are the 2 critical organs or tissues, adversely impacted by Duchenne. And second, as Doug has said, we have seen, high degrees of expression of microdystrophin in muscle in treated Duchenne Bois in our proof of concept study. 3, we have not seen counter activation.
And 4, and very importantly, with regard to our program, we have fully enrolled in 41 patient, double blind randomized placebo controlled study. And we are on track to actually, get a readout of its evaluation of the clinical benefit of microdystrophin expression in Duchenne Bois in the first quarter of next year.
Thank you. Our next question comes from the line of Alethia Young from Cantor Fitzgerald. Your question please.
Hey guys, thanks for taking my question. I guess, I just wanted to ask a little bit about upcoming limb girdle readout. I mean, obviously, you got a pretty good, a quite good response in the low dose of about 50% expression. I mean, is that needing sufficient or if you're able to see more, would you potentially go into the higher dose? Just kind of help us think about, what are the plans forward with that?
Yes, it's a great question. So again, just to remind everyone, we had the we dosed, 3 patients in our first dose last year, we saw a couple of things. 1, the therapy was well tolerated with, with some elevated liver enzymes. And I think, I guess, everyone by now, you said that these are going to see elevated liver enzyme. The good news is both in our micro conditioning program and in this Limb girdle program the liver enzymes have responded well to steroids and are manageable to come back down to baseline.
And then from an expression perspective, and then from a expression perspective in our first dose cohort, as I mentioned in my prepared remarks, we saw on, immunohistochemistry, about 51 percent protein positive fibers, very good intensity, which is an important thing to consider whenever anyone looks at protein positive fibers, you should always be asking about intensity as well. I think the intensity here was memory is correct, something like 47% tell me if I'm incorrect. No one's telling me I'm incorrect. And then we saw on Western blot about 37% of normal. And then on top of that, as you know, we had 9 month functional data from these 3 children.
And the good news is every child and every functional measure was improving. And so are we doing now? We're doing 1 dose higher for X that dose so we can make the dose decision between those 2. And we are, I think, in a very, good position right now because from our perspective, from what we've seen, both in animal models and the like, the dose, the expression that getting right now and the signals that we're getting right now are sufficient to envision that we have a very transformative, transformative therapy for limb girdle type 2E. And so we want to explore 1 dose higher.
If we there and then if we're going to make a dose decision, it's going to obviously be a risk benefit analysis. And we're going to look at the benefits and we're going to see if we see significantly increased expressions with the same safety profile, let's imagine that is one scenario. Then certainly we go to a higher dose. If we see about the same expression, between the 2, then there would be no value to it. And of course, we're going out to We have to look at tolerability and safety as well.
So the good news is I think either decision both decisions will be made based on the objective evidence We'll see that evidence in the 2nd quarter. We'll make an official decision in the 3rd quarter. But I think there's no answer that will be a bad one for us. It'll just be objectively 7. And more important than us, I think there'll be a good decision in either event for patients that are living with and generating from limb girdle type 2 leading.
Thank
you. Our next question from the line of Matthew Harrison from Morgan Stanley. Your question please.
Hi, this is Max Gore on for Matthew Harrison. Regarding the Limb girdle 2E program, could you provide an update on discussion, discussions with regulators? Has your changed at all on a potential accelerated approval pathway? Thank you very much.
So just started that process. I think we may have mentioned at the JP Morgan Conference that we've just opened up the dialogue with the agency. We're envisioning that this is going to be a process going to take dialogue and education and fairness, to the division. One of the things that makes this study and this focus on limb girdle so compelling is that there are no therapies for it. And because there are no therapies for it, it is not characterized as well as, for instance, Duchenne muscular dystrophy.
So education is part of this process. So we've got an ongoing dialogue with the with the FDA, where we'll share information and we'll dialogue, we'll come to the right development regulatory approach have some time to do that because with the same time, we've got to do the assay development and the process development and then we've got to build GMP material. Our goal is to have G And A material released by the end of this year. So we want to complete that discussion before the end of this year, have a regulatory and development pathway developed by the end of this year and started trial by early next year. Our view remains the same, which is that for an ultra rare disease like Limb Girdle 2E, where this is a gene therapy and the gene therapy here intends to to insert a gene that codes for the actual native unaltered protein, a structural protein in a monogenic disease distinguished by the fact that it is a missing protein that is causing the generation of death in these children that we should be able dialogue with the agency to come with the agency through an efficient pathway to bring these therapies to these patients as fast as possible.
And reasonably considered in light of the constraints that come from dealing with a rare, very ultra rare and heterogeneous disease. So It's a long winded win of saying we have more dialogue with the agency to have and we'll have a good answer on that by the end of this year. Thank
you. Our next question comes from the line of Gena Wang from Barclays. Your question please.
Good afternoon, Frank. Congratulations on
the update on August and thanks
for taking
my questions.
I guess Hi,
Paul. All right. One question on
I'm sorry. I apologize, but we cannot hear you. Apologies for that.
Can you hear me okay?
Indeed, we can.
Hello?
Yes, we can hear you now. Thank you.
Okay, great. I guess my question on our modeling, I guess, how should we think about the impact of the Roche OUS deal on OpEx over the next few years? Like for example, I think your R and D how much of that is attributed to the MDG gene therapy and how should we think about modeling cost savings based on the cost sharing payments?
Yes. So just to remind, I'm going to turn this over to Sandy, but just to remind everyone on the call so that people track the relationship that we've entered into with Roche has a number of components. We had an upfront payment that was between a fee and a premium based equity purchase just shy of about $1,200,000,000 have additional milestone payments along the way, about $1,700,000,000. If I'm not mistaken, we have significant mid teen royalties associated with revenue ex U S, net sales ex U S, upon rolling that out ex U. S.
And then with cost sharing. And so the cost sharing is that from the execution of the agreement not the closing of the agreement. But from the execution of that agreement, Roche is responsible for half of all of the global expenses for our development program for our micro dystrophin program, SRP-nine thousand and one. And then to the extent along the way, was any additional ex U. S.
Required studies, Roche would be 100% responsible for that. So with that, Sandy, do you want to comment on its impact on the burn rate over the next year?
Yes. So thanks for the question. In terms of the burn rate, to put your question, the Roasteal should bring us cost sharing payments, and that'll help with the burn rate, about $75,000,000, maybe even $100,000,000 this year and in the next few years. But aside from that, the Rosegate is primarily about bulking up our finances. It gives us a significant number cash rate because it's almost $1,200,000,000 it brings in, in addition to PRB also adds another $110,000,000,000 to our, our balance sheet.
But I don't think this should be significant, enhancement to the modeling, that work that you'll be doing. In terms of modeling out the cash spend. So just to talk about the cash spend, if you remember, last year, we had almost $300,000,000,000 of business development deals. Primarily due to the $170,000,000 we spent on Minexus. In addition, we had also guided that we will be investing heavily in gene therapy, both in 2019 as well as in 2020.
I think we had indicated about $600,000,000 to $650,000,000 of spend. And that's really where the bulk of our spend is between business development and therapy manufacturing. In addition, in anticipation of a, of ion disapproval and also bumping up our inventory for a potential customer approval. This is another area that, from an RNA manufacturing perspective, that we're directing, some of our spend. Aside from that, I don't think our core spend should increase dramatically over what you saw in, fourth quarter.
So just going back to your question, I don't see the gross transaction. Significantly impacts what you're modeling aside from the cash runway that we have.
Thank you. Our next question comes from the line of Tipp chapatiya from H. C. Wainwright. Your question please.
Hey, good afternoon. So first clarification on DPPMA program, I believe the update will be 12 week biopsy. So if that's the case, how would you set expectations in terms of, do you know what dystrophin expression? And number 2, for the limb girdle program, would you automatically expect, a dose dependent increase in a better cycle? Like I can, given that historically, when we look at the XLMTM program from Audentis, our 3x increase in dose did not necessarily translate into more protein, but provided a much better morphology and higher genomes per cell.
So that should give more durability. So just kind of thoughts around what the expectation should be for both the dystrophin in PPMO and the expression protein expression for limb girdle muscular dystrophy. Thank you.
Okay. I'm going to give the second question to Luis, but before I do let me touch briefly on the PPMO results. So you're exactly right. It's 12 weak biopsies. And so the expectations on dystrophin shouldn't exist because we're we aren't even going to look at for dystrophin at this early stage.
As you may recall, for dystrophin expression, for our PMO, it was a 48 week expression before we really started looking to see expresses. So this is early for dystrophin production. We will see Exxon skipping. So that will be a strong correlation to the kinds of dystrophin that see over time as it builds over time. But that's and that's think it kind of go no go on PPMO is frankly dosing safety.
So to remind, everyone of what the PPMO is about. So Our RNA technology has the PMO, the base PMO has 2 things about it that have been very laudable. It's precise and it's safe creates exon skipping and it creates dystrophin and it's very safe and safe and even at high doses. It has a limitation associated with that limitation is that it's a neutrally charged molecule that gets into cells passively and that's a limitation. Our goal with the PPMO is to reduce this to remove that limitation by using a positively charged peptide that would, it interacts with negatively charged protein vikings and rags the PMO into the cell and greater abundance.
Animal models tell us that it works brilliantly, at least in animal models, doing that. And that we get if we can get to the right doses, we get very high increases in exon skipping and therefore in dystrophin production. There are literally at the right doses again as much as an order of magnitude, increase. So real opportunity to be a significant improvement The one significant question for us is that can we get to those doses? Can one actually get up to the kinds of doses that we would we would believe over time would develop dystrophin significantly greater than the PMO.
And that's what we will have insight into by the middle of this year as we will have safety insight, some exposure insight, exon skipping, insight and we'll have a view on our ability to get to those doses and then we can envision what dystrophin would look like if we looked at it a year or so. And with that, I will turn over to Luis to answer some of the questions about the Limb girdle.
I think the question was around, would we expect to see a higher expression at this higher dose given the preclinical data? So based on our nonclinical data, you're right to say that we typically don't see changes in expression unless you're at a threefold or half log a higher dose. So in this case, we're at a fourfold, higher dose in our high dose cohort. Based on our non clinical data, we would expect to see higher levels of expression. Getting back to Doug's point, we see very good levels of expression, 50% in our low dose and this is already a transformative dose.
We would, based on the nonclinical data expect to see above that, but this will be a decision based on both safety and and efficacy in the end and, we'll look at the data collectively. I think to your point about higher doses, since our high dose in limb girdle equivalent to micro dystrophin, we're quite happy with where we'd be at. If you were pushing the dose even higher is where you might, end up seeing saturation and you might not see increased levels of expression. So in the dosing levels that we're on based on non clinical data, we feel like we're in a very good range to see increased expression.
Thank you. Our next question comes from the line of Anupam from JP Morgan. Your question please.
Hey guys, thanks so much
for taking the question. Just a quick one from me. I guess following on some of the Limb girdle questions, it sounds like we're going to have a pretty good look in 2Q of kind of expression and then safety and other factors. So what's that incremental work that needs to be done between the 2Q update and then when we get, sort of dose selection? Thanks so much.
That's a great question. Not a ton. So we're going to look at that data and we'll have it presented in, at a medical meeting in the second quarter. We just want to make sure that we're thoughtful that we make sure we've looped in the DSMB in the process and the like. So but honestly, there's not a ton of work to do from reviewing the data and releasing the data to the actual dose selection, but we just want to make sure for technical reasons that that we've done over promise and that we can make a formal dose selection in the third quarter.
So not an enormous amount of work.
Our next question comes from the line of Salveen Richter from Goldman Sachs. Your question please.
Thanks for taking the question. This is Ross on for Salveen. So just given the current timelines with Study 102 and 103, an expectation for, 102 Defelast patient and in December of 2020. Do you guys think that you're still going to positioned to conduct that 3 month comparability in, I guess, by year end or even early 1Q 20, If not, when should we expect that to occur? And then I just have a follow-up on the MPS III study.
Yes. So on that, the short answer is yes. We are still progressing well. In fact, this is a study 301 to remind everyone is significant international multi center trial. So we also believe there's going to be significant demand for that trial.
We'll be recruiting, I think, briskly when that study starts. So we feel, right now, we have a lot to do. So it is always It's always risky predicting the future, but we feel good that we'll be in a position to look at both functional data out of 102 and at the same time, look at with respect to a subset of 301, an appropriate subset of 301, expression safety and CMC related work. In early 2021. So we think we're on track.
And if I may interrupting just for a second, Doug, I just want to make sure it's quite clear the last patient into 102, well, has already occurred. We're talking the last patient lasted in question. I'll actually apply those last patient came, essentially it's the last patient's last visit for the 1 year of functional data. Just to be sure that I would clear on
Yeah. So 102 was the bulk of 1 of 102 was all dosed in, in 2019. As you know, it was a 40 patient study. It's now a 41 patient study, while a patient was dosed in early 2020 and that will result in the last patient, last visit in December. We'll be able to compile that information unblinded and have that those results in the first quarter of 2021.
And at that same time, if we if everything goes to plan, we'll also we should also have expression CMC and safety data from a subset of Study 301, which is the commercial material trial.
Thank you. Our next question comes from the line from Vincent Chen from Bernstein.
Great. Thank you very much for taking the question. On the manufacturing process for your DMD gene therapy, what are the major analytical assays that are remaining developed or finalized? And one specific question, what is the potency assay that you use and have regulators indicate its factory or is that still being sorted out?
Luis, do you want to touch on that question?
Sure. So all of the release essays have been developed. They're just in, final stages of validation. So currently our we're using a in vivo potency assay with a in vitro potency assay in development.
Thank you. Our next question comes from the line of Whitney Itham from Guggenheim. Your question please.
Hey guys, just a quick one from
me and sorry if I missed it, but for the MPS IIIA program, I think you said 17 patients treated Can you remind us what the time point for the primary endpoint is and are there any interims or any potential to get kind of an interim read on that given you have treated a significant number of patients there?
Yes. So the current protocol has it's a 20 patient study. Our goal is to have all of the patients dosed before the middle of this year. We're obviously well on the way towards that. 17 of 'twenty already dosed.
It's against a natural history cohort. It's a 2 year study with a 1 year interim. So There is the chance of an interim look at the data in the middle of 2021.
Thank you. Our next question comes from the line of Joseph Schwartz from SVB Leerink. Your question please.
Good afternoon. Thanks for taking our questions. This is a dig on dialing in for Joe. Just a question and a follow-up, if I may, regarding your PMO filing strategy. So with your rolling NDA submission initiative for casimersen, following your Golodirsen experience, I was wondering if there is any additional requirement to submit that NDA or any particular commitments on your part either prior on or after the potential approval.
And sorry if
I missed this, but can
you clarify the guidance for the Mission 51 confirmatory trial for Edaperson? I understand SSENSE is due to complete by 2024, but I wanted to get the number for Mission 51, please.
So going to the PMO strategy, the short answer is now. We had a very positive, very thorough review from the neurology division at the end of which the neurology division firmly, recommended the approval of that therapy. And of course, while there was a delay, it it got that approval for us. And so we're going to follow the same pathway for casimersen. We're in the midst of enrolling the NDA.
We should have that rolling NDA completed in the second quarter and then we'll have our PDUFA date. We'll be providing updates along the way. With respect to Tuplirsen, where I apologize. I missed the exact question. Short answer with the Tuplirsen, just to remind everyone is that We have a confirmatory study with respect to the 10% it really is 2 studies.
It required 1st, a healthy human volunteer study. I would remind everyone that this is a bit of an unusual confirmatory trial. But if you imagine the normal confirmatory trial using a, placebo control. You would have the current dose approved versus the placebo control. This is different.
This is our current dose. Versus, an escalating higher dose of ateplirsen to really ask the question if even higher doses of ateplirsen would confer additional benefit over the benefits already achieved with the current dose of ateplirsen. That required because that those doses were not yet approved, required as a predicate, a, a healthy volunteer study to be conducted to ensure that it was safe And that was completed and read out. And it was safe and we've commenced study 4 02 remission and we're on our way with it. But it was a very specific question.
I'm just short answer is we're on our way. It'll be obviously, it'll take some time to complete that study.
Thank you. Our next question comes from the line of Tim Luka from William Blair. Your question please.
Hey, this is Loch on for Tim. Thanks for taking question. I was wondering if you could provide an update on the number of patients that have enrolled in the second sites of the micro dystrophin studies at UCLA and and whether you've sort of seen or heard any differences in the experience there compared to dosing in the prior prior patients at Nationwide, especially as it pertains to safety and tolerability?
Sure. The first answering your first question first, the bulk of the patients obviously were enrolled and dosed at Nationwide Children's Hospital on Doctor. Jerry Mendell as the he had to bolster the patients before we had to increase the end of the trial from 24 to 40 and what became 41. So the bulk of the patients who were at Nationwide and answering your second question, the answer is no. We have heard of no significant differences and experience between the two sites?
You may just add that, of course, the blind. This is a blinded study. So the blind has been maintained, and so, when we talk about the experiences, the experience at the site level, we can't count it on safety or at experience with this update remains blinded. That was sorry, that was still more entertaining.
Thank you. Our next question comes from the line of Lisa Bicke from JMP Securities. Your question please.
Hi, thanks for taking the question. Doug, you seem a little hesitant on, on the commercial splice study 301. Can maybe comment? Are you tracking as everything going as planned thus far? You know, and just to clarify, are you expecting GM P product to be available in July or is that when the study will actually, start enrolling?
Just to clarify that. Thanks.
The short answer is the team is doing brilliantly. I can give nothing but kudos to our technical operations team and our clinical operations team. And progressing towards the commenced in the Study 3.01. We've done great work from a process development and clinical development at Cylated. So we're tracking right now.
And we will have GMT material released in July. The precise date that we will commence the trial is predicated on free things. It's It is certainly predicated on having that material available that is an enormously significant part of this. And that's why we were so excited to be achieving commercially viable yields by the end of 2019. And with the fact that we were able to start engineering runs was exciting for all of us.
The idea that we were our GMP runs was exciting for us as well. And of course, we've built an enormous amount of capacity to be ready for that. Then the two other things that we have to do across the way are we have site readiness. That means we have to get all of that initiated and trained and the like. I think we're well on the way to getting all of done and the team is very focused on that.
And then the third thing that we're going to have to do as a predicate is to gather the data and engage with the agency and ensure that we're on the same page with the agency to commence the study 301. So much to do, but we have made an enormous amount of progress of 1 stands back for a bit and considers where we were at the beginning of this journey just a year and a half or so ago. And we're tracking well to the commencement of 301 and we're tracking well to the completion of Study 102.
Thank you. Our next question is a follow-up from the line of Christopher Rye from Nomura Instinet. Your question please.
Hi, yeah, thanks for taking the follow-up. I was wondering if you can comment perhaps on, the, the Phase III trial and its design for the gene therapy product 9001. I guess Pfizer reported their, trial design or recently announced their trial design on clinical trials. I've got it. It appears they are dosing patients, with their gene therapy as well as, stable doses of steroids throughout the period of the trial.
So it seems to be on top of steroids.
And I
was wondering if you could comment on your plans or any regulatory discussions in that regard, because as I recall, you're not dosing on top of regular steroid doses. Thanks.
So the Boys with Duchenne muscular dystrophy are as standard of care on steroids. So we would maintain in all of our studies, children on regular steroids throughout the study. We also have a protocol to modestly increase steroids in advance of the treatment as a prophylactic. Which is typical. So the study 301 tracks, towards the commencement and that we've talked about the design before hasn't changed in a significant way.
It is a currently in addition to be a one to placebo controlled trial in the main study 301. It's currently envisioned to be 4 to 7 years old. It'll be a multicenter trial as well. Obviously, blinded. We will have separate studies as well along the way.
And we're moving as fast as possible both for them as well. One of those is study we call 303, which is for a study focused on non ambulatory patients. We think it's extraordinarily important to focus as well on non ambulatory patients. Even though I think there's a strong argument that in the United States, one can achieve, an approval across a broader age group when the mechanism of action, would presume that that all age groups would benefit even if you studied a smaller age group, but both for access and reimbursement purposes in the United States as well as for approvals ex U. S, it's important we study a broad age population and we'll do that through, Study 303 as well as through 301.
This does conclude the question and answer session of today's program. I'd like to hand the program back to Doug Ingrid for any further remarks.
Thank you all for joining us this evening and for your questions. We appreciate them all. I I think everyone can see, we've made a lot of progress over the last few years toward our broader vision of becoming one of the most significant leaders in genetic medicine focused both on RNA and the build of this what we believe to be profound gene therapy engine upon which we are working. 2020 will be an enormously important year for us. We've got a lot to do here.
And if successful in doing it. And if science, cooperates with us, then we will make an enormous leap towards achieving our vision of bringing a better life to countless patients who are living with degenerating from and far too often dying from rare genetic disease. So thank you very much for that. I look forward to the opportunity over the course of 2020 to keep everyone updated as we progress.
This does conclude the program. You may now disconnect.