Good day, ladies and gentlemen, welcome to the Sarepta Therapeutics third quarter 2019 earnings call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one on your telephone. As a reminder, today's call is being recorded. Now I'd like to introduce your host for today's program, Ian Estepan, Senior Vice President, Chief of Staff and Corporate Affairs. Please go ahead.
Thank you, Michelle, thank you all for joining today's call. Earlier today, we released our financial results for the third quarter of 2019. The press release is available on our website at www.sarepta.com and our 10-Q was filed with the SEC earlier this afternoon. Joining us on the call today are Doug Ingram, Sandy Mahatme, Bo Cumbo, Dr. Gilmore O'Neill, and Dr. Rodino-Klapac. After our formal remarks, we'll open up the call for questions. I'd like to note that during this call, we'll 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 uncertainty, 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 the trading price of Sarepta's common stock. For a detailed description of applicable risk 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 statement, 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 on our recent progress. Doug?
Thank you, Ian. Good afternoon and evening, and thank you all for joining us for Sarepta Therapeutics' third quarter 2019 conference call. Our ambitious strategy involving one of the deepest multi-platform genetic medicine pipelines in biotech has required focused execution over the course of 2019. To remind you, we have more than 25 active programs across our RNA and gene therapy platforms, and we're either actively in or in late-stage planning for some nine human clinical trials to advance our plans. I am pleased to say that over the course of 2019, and in the third quarter specifically, we have made very significant strides in advancing our programs and our strategic vision, and I'm excited to discuss those advancements. However, before doing so, I must also acknowledge what we all know, that we had a setback in the third quarter.
Rather than burying it among or after a discussion of our successes, I will begin by commenting on our CRL disappointment that occurred in August. Having worked diligently on our submission for Vyondys 53, the generic name for that is golodirsen, for well over a year, and based on all of our interactions with the Division of Neurology Products, we were very confident that we would obtain an approval on our PDUFA date, which was August 19th. Instead, as you know, we were surprised to have received a complete response letter, also known as a CRL, signed by the Office of Drug Evaluation I. Our disappointment extends beyond Sarepta to the 8% of exon 53 -amenable DMD patients in the United States who degenerate every day while they await access to this therapy.
When I joined Sarepta, I made some commitments, externally and to the Division of Neurology, that we intended to build a positive relationship with the Division of Neurology, one founded on transparency and on solid evidence-based science. Consistent with that commitment, we will work with the agency to address the reasons for the CRL and determine a pathway for a potential approval if one is possible. I have heard from those who would prefer that I speak more often and more publicly on this issue, and/or that I would attempt to engage the patient community or others to assist, for instance, in applying external pressure to bring this therapy along faster. I have no intention of doing either of those things.
If we can win the day with this therapy and with this issue, we will have done so on the science and on the regulations and in collaborative evidence-based discussions with our reviewers at the FDA. I've also heard some speculation about the implications of the CRL, let me take a moment to address these as well. First of all, the Vyondys CRL does have implications for our submission for our next PMO, casimersen. As they are closely related, we will await clarity on the Vyondys matter before we submit for casimersen in the United States. Let me disabuse anyone who might have concerns for our other programs. The CRL does not have any read-through to our micro-dystrophin gene therapy program. The CRL involved two safety signals in connection with an application for an accelerated approval.
Our micro-dystrophin program is overseen by a different part of the FDA, CBER, and we are not seeking accelerated approval there. There is simply no overlap in either substance or personnel. Secondly, to those who may believe that the CRL suggests some sort of bias on behalf of the Division of Neurology towards Sarepta, I would unequivocally and emphatically disagree. Let me reiterate that I remain convinced that we were treated very fairly and professionally by the Division of Neurology. Also, I am very proud of the Sarepta team and how they comported themselves during this review. From my perspective, we have gone a long way in the last 2.5 years in forging a positive evidence-based working relationship with the division. We will work diligently to address the Vyondys CRL.
With that, I do not intend to provide a prediction on outcome or on timing, or to provide interim views during the process. However, I will provide an update to the patient, physician, and investment communities once we have definitive clarity on the outcome of those discussions. Now moving to our positive achievements in the quarter. We have made some enormous amount of progress in this third quarter. EXONDYS continues to perform well with third quarter sales above consensus at $99 million. That is a 26% increase over same quarter last year. Commenting for a moment on our confirmatory trial for EXONDYS. To remind you, this trial comprises three arms. One with EXONDYS at 100 mg/kg , and another at 200 mg/kg versus our current dose at 30 mg/kg .
The trial design, which was an FDA requirement, will answer whether higher doses of EXONDYS provide even more benefit than the currently approved dose. Now, since the comparator arms involve higher doses than the currently approved dose, we were required to begin our confirmatory trial with a healthy human volunteer study. We have completed this trial, and based on the results, we have initiated the main confirmatory trial. We will begin dosing this quarter. Staying on our RNA franchise, we have moved to our multi-ascending dose trial for our next generation RNA platform, the PPMO, and we are dosing trial participants now. We will have safety and dosing insight in 2020.
If our PPMO shows encouraging results in addition to SRP-5051, that is the construct that we are currently in a multi-ascending dose regarding, we have five additional constructs that have already been built, which in total have the potential to treat as much as 43% of the DMD community. We are also conducting research now on new therapeutic targets that could be served by our PPMO platform. Moving next to our gene therapy platform. As you know, we are expending enormous resource and energy to build out our vision of an enduring gene therapy engine. Between our research and clinical stage programs, we have more than 14 therapeutic candidates advancing through research and development.
We have made great progress thus far this year and quarter, led by our most advanced program, SRP-9001 for DMD, which at least to my knowledge, is the highest potential late-stage gene therapy program currently in biotech. As you should be aware, our double-blind, placebo-controlled SRP-9001 micro-dystrophin trial, the trial that we call Study 2, was fully dosed by mid-year. We took advantage of the availability of additional study material, and previously announced that we had increased the study N from 24 patients to 40 patients, significantly increasing the study power and confidence in this study. In addition to our initial site with Dr. Jerry Mendell at Nationwide Children's Hospital, we have added a second site at UCLA with Dr. Perry Shieh. I'm very proud to be associated with that clinician and investigator.
Both sites are actively dosing patients, and we remain on target to complete our dosing by year-end. Micro-dystrophin manufacturing is progressing well. From a capacity perspective, Brammer has now completed the build-out of our single-use micro-dystrophin manufacturing facility in Lexington, Massachusetts. We also have dedicated suites with Paragon in Maryland, with actually substantially greater capacity than our dedicated Lexington facility, which means we have robustly secured capacity well in advance of launch. Our analytical development would proceed well. We continue to make progress on process development and yield optimization. Given our recent capacity, analytical development, and process development progress, we remain on track to commence our next trial, Study 301, with commercial development supply by mid-2020. Study 2 is being conducted with clinical material from Nationwide Children's Hospital.
Study 301 will be a multi-center, multi-country, placebo-controlled trial using commercial process material from our hybrid manufacturing model with Brammer and Paragon. The main study will include DMD patients ages four to seven, but we are also planning a separate study for older and non-ambulatory patients as well. Commenting on a few of our other gene therapy programs. Following exceptional expression and biomarker results in our first three-patient cohort dosed with our construct for limb-girdle 2E, in October, we announced positive nine-month functional results in that same cohort. Consistent with robust expression of the native beta-sarcoglycan protein that is the cause of the disease, all patients improved on every functional endpoint by the nine-month time point.
Consistent with the protocol, we will treat an additional three-patient cohort with a higher dose, and then in early 2020, we will decide on the dose for what we hope to be the pivotal trial. These results will help inform dosing not only of our 2E program, but also of the other limb-girdle programs in our pipeline.
We will also meet with the FDA in the near term to discuss the development pathway for our limb-girdle programs. Informed by this and further work on manufacturing, we will provide an update on the clinical pathway and the timing for our limb-girdle portfolio in 2020. Next, led by our partner, Lysogene, the AAVance gene therapy study for MPS IIIA, also known as Sanfilippo syndrome type A, is proceeding well with 13 patients having been dosed to date. MPS IIIA is a rare autosomal recessive lysosomal storage disease that primarily affects the brain and the spinal cord, causing severe cognitive decline, motor disease, behavioral decline, and unfortunately, death at a young age.
AAVance is a single-arm trial evaluating the safety and efficacy of an rh10-mediated gene therapy to deliver the missing SGSH gene with the goal of robustly expressing the missing enzyme in the brain that is the cause of MPS IIIA. Moving to Charcot-Marie-Tooth, or CMT, Dr. Zarife Sahenk of Nationwide Children's Hospital intends to commence dosing of the proof-of-concept study for CMT1A, subject only to obtaining final release of trial material for that study. CMT is the largest inherited neuromuscular disease in the world, and CMT1A, a devastating peripheral nerve disease, is also the most prevalent form of CMT. Dr. Sahenk's gene therapy is an AAV1-mediated construct to deliver the Neurotrophin-3, NT-3. In animal models, NT-3 has been shown to promote nerve regeneration, improve motor function, histopathology, and electrophysiology of peripheral nerves.
In early proof of principle studies, NT-3 has shown markers of clinical benefits in patients with CMT1A when administered subcutaneously. In summary, we have made great progress in the third quarter and over the course of 2019 toward our ambitions, advancing our RNA and gene therapy platforms, advancing our many development programs, building out our gene therapy manufacturing capacity, and building out our talent. As with any ambitious strategy, our progress this quarter was met with an obstacle in the form of the Vyondys CRL. The breadth of our ambition inevitably comes with challenges and obstacles to address and to overcome. To those who might at times feel discouraged or disheartened by the need to overcome the occasional barrier, we should keep top of mind what we are doing with all of this.
If we are successful in our mission, we will not merely be among the most significant gene therapy and genetic medicine biotechnology companies in existence, but we will have more importantly extended, improved, and saved the lives of countless patients who would otherwise have been left hopeless. With that, I will turn the call over to Sandy to provide an update on the financials. Sandy?
Thanks, Doug. Good afternoon, everyone. Let me start by saying that we had another strong quarter, both in terms of financial performance and in progress towards the pipeline and manufacturing capabilities. With a current top-line run rate at approximately $400 million and a cash balance over $1 billion, we are in a strong position to continue to accelerate our strategic imperatives and invest in the growth of Sarepta. Net product revenue for the third quarter of 2019 was $99 million, compared to $78.5 million for the same period of 2018. The increase primarily reflects a higher demand for EXONDYS 51. On a GAAP basis, the company reported a net loss of $126.3 million and $76.4 million, or approximately $1.70 and $1.15 per share for the third quarter of 2019 and 2018, respectively.
We reported a non-GAAP net loss of $84.4 million or $1.14 per share, compared to non-GAAP net loss of $37.1 million or $0.56 per share in the third quarter of 2018. In the third quarter of 2019, we recorded approximately $13 million in cost of sales, compared to $8.7 million in the same period of 2018. The increase was primarily driven by inventory costs related to higher demand for EXONDYS 51 during the third quarter of 2019, as well as accrued royalty payments to BioMarin and The University of Western Australia. On a GAAP basis, we recorded $133.9 million and $86.6 million of R&D expenses for the third quarters of 2019 and 2018, respectively, which is a year-over-year increase of $47.3 million.
R&D expenses were $110.5 million for the third quarter of 2019, compared to $64.2 million for the same period of 2018, an increase of $46.3 million. The year-over-year growth in non-GAAP R&D expense was driven primarily due to continuing ramp-up of our micro-dystrophin program, our ESSENCE program, and initiation of certain post-marketing studies for EXONDYS 51. Turning to SG&A. On a GAAP basis, we recorded $75.4 million and $53 million of expenses for the third quarters of 2019 and 2018, respectively, a year-over-year increase of $22.4 million. On a non-GAAP basis, the SG&A expenses were $59.6 million for the third quarter of 2019 compared to $42.5 million for the same period of 2018, an increase of $17.1 million.
The year-over-year increase was primarily driven by significant organizational growth and continued expansion to support our commercial launch plans globally and almost 30 therapies in various stages of development across several therapeutic modalities. On a GAAP basis, we recorded $2.5 million in other expenses for the third quarter of 2019, compared to $7 million for the same period of 2018. The favorable change is primarily driven by the payoff of certain debt instruments during the third quarter of 2018, as well as a higher return on investments over the third quarter of 2019. We had approximately $1.1 billion in cash, cash equivalents, and investments as of September 30th, 2019. With that, I'd like to turn the call over to Bo for a commercial update. Bo?
Thank you, Sandy. Good afternoon, everyone. To begin, we are pleased with the continued strong performance of EXONDYS 51 in the third quarter. Total revenues reached $99 million. We were also pleased to be in a position to increase our 2019 revenue guidance range from $365 million-$375 million to a range of $370 million-$380 million for EXONDYS 51. Sales have increased quarter-over-quarter for over three years now, and we continue to see consistent demand for EXONDYS 51 as we speak today. Compliance and adherence have remained high and stable since launch and to date continue to remain steady. It should be noted that in the past two years, we've experienced ordering volatility at the end of the year and suspect that we could see a change in ordering patterns with both Christmas and New Year's falling in the middle of the week.
Internally, we are assuming the pattern for previous years could be more extreme this year due to both holidays falling midweek. With that said, we feel comfortable with the guidance provided. The success we achieved this year reflects the impact EXONDYS 51 continues to have on patient lives. We remain the leading voice with KOLs and payers across the world in support of Duchenne patients and are recognized as the leader in RNA and gene therapies within the Duchenne field. Our strategy to advance the very best science, build awareness and appreciation for Duchenne, and pave new pathways so Duchenne patients gain access to therapy, have resulted in the successful trajectory of EXONDYS 51 since its approval just over three years ago and will play a role for future therapies.
As for golodirsen, if approved, we will be ready to launch, leveraging our knowledge and experience to facilitate rapid access to individuals amenable to exon 53. Our work is focused and deliberate, grounding us in all we do is the patient. That journey begins with identifying patients in our core therapeutic areas: Duchenne, the limb-girdle muscular dystrophies, and MPS IIIA. Patient identification will be central to the commercial organization for the balance of 2019 and leading into 2020 and beyond. The genetic testing program, Decode Duchenne, which we started with PPMD many years ago, consistently identifies patients. We are also in the process of building genetic testing programs for our other disease states we are working on as well. We believe patient identification will always be one of our primary commercial goals, we will continue to place resources on these programs.
Another important goal will be gene therapy site readiness. We are already working on global site readiness for our DMD micro-dystrophin program and working with many of the ZOLGENSMA and SPINRAZA sites treating SMA. Based on the very strong results Novartis demonstrated with their recent launch of ZOLGENSMA, and understanding the label and the differences in patient population sizes between the two disease states, we believe having a strong network of sites ready and trained to handle gene therapies will be critical. We will continue to focus on this as we move through worldwide development and, if successful, commercialization. We also believe it is critical to focus on access and reimbursement as early as possible.
We're already speaking to and educating large to mid-size insurance plans, as well as CMS and Medicaid providers, on the differences between chronic therapies and one-time gene therapies and the importance of quickly gaining access to these therapies for diseases like Duchenne. We have built constructive relationships with payers over time and look forward to continuing to work with them to support broad access. In limb-girdle muscular dystrophy, we are focused on disease education and identifying patients. The limb-girdle muscular dystrophies are a family of diseases, over 30 subtypes in all. Therefore, patient identification is of critical importance.
Our plan is to leverage our knowledge and experience to ensure that we're able to serve these communities as we have in Duchenne. We've already attended limb-girdle muscular dystrophy conferences, held educational symposiums at major neuromuscular conferences, held advisory boards to understand how physicians identify and treat patients, and already have a digital presence within the community. All of this will help us prepare for the potential to support multiple launches in the years to come. Sarepta's prospects to transform the lives of patients with rare diseases is unparalleled in the industry. We have the largest neuromuscular RNA and gene therapy pipeline in the industry, and we understand the responsibility that comes with such an important mission. With that, I will turn the call back to Doug for closing remarks.
Thank you, Bo. Looking forward, we have a number of significant milestones to achieve over the rest of 2019 and through 2020. First, we intend to complete dosing of our SRP-9001 Study 2, that's our micro-dystrophin study, by year-end, with functional readout 48 weeks thereafter. We soon intend to launch process development for SRP-9001, not manufacturing, for purposes of conducting our next clinical trial, gain insight from the agency on CMC and on our trial itself, to commence Study 301 by mid-2020. We intend to dose an additional high-dose cohort for limb-girdle 2E, make a dose selection. We intend to gain regulatory and manufacturing insight to present an update on the development pathway and timeline for our entire limb-girdle program in 2020.
Dr. Zarife Sahenk intends to commence a proof of concept study for CMT gene therapy NT-3, and we intend to obtain safety and dosing insight for our PPMO program in the first half of 2020. We obviously have a lot to do, but a lot of milestones as well over the coming months and quarters. Thank you all for joining us tonight, and I'll open up the line for questions now.
As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. We ask that you limit yourself to one question each. Please stand by while we compile the Q&A roster. Our first question comes from Alethia Young of Cantor Fitzgerald. Your line is open.
Hey, guys. Thanks for taking my question, and congrats on all the progress over the quarter. This may be a simple one, but I was just curious to get your perspective on ZOLGENSMA partial hold and are there any reads to potentially make to other gene therapy program? Thanks.
Thank you for that question, Alethia. Okay. First let me say this. Let's make sure we're all on the same page. For those who may be unaware, and I expect everyone is aware, Novartis recently announced that their clinical trial for their AAV9-mediated SMA gene therapy for intrathecal administration was placed on a partial clinical hold due to neurotoxicity that was seen in animal models. First, understand this, we do not have any unique insight into the ZOLGENSMA clinical hold itself or the ZOLGENSMA program. Certainly, one should look to Novartis to gain accurate insight on that program and those issues. With that said, I should tell you, we see no read-through to our program, and there is a host of reasons for that. First, understand that we are dosing peripherally with IV administration.
We're not dosing intrathecally, as was the issue as announced by Novartis regarding that partial clinical hold. Second of all, understand that we're not using AAV9. Dr. Louise Rodino-Klapac, who was with us tonight, and Dr. Jerry Mendell chose AAVrh74 for a number of specific attributes. One of the significant ones was that AAVrh74, unlike AAV9 as an example, does not promiscuously cross the blood-brain barrier. Now, unlike SMA, where that would be a value, there is absolutely no value to these micro-dystrophin constructs in the CNS at all. They have promoters that wouldn't turn on in the CNS, there would be no value there. This seems to have been a very wise choice.
Also know this, that we have an enormous amount of preclinical and animal model evidence with respect to AAVrh74, and even at doses that are multiples higher than we're using in our clinical trial. We have never seen evidence of neurotoxicity as relates to AAV rh74.
Great. Thanks.
Thank you.
Our next question comes from Whitney Ijem of Guggenheim. Your line is open.
Hey, guys. Thanks for taking the questions, and also congrats on all the progress. I'll ask a question on the original four micro-dystrophin patients. Curious if we'll get an update on them in 2020, either in an update from you or possibly a publication from Dr. Mendell?
Yeah. Thanks for that question. Thank you for your comments. Yes, Dr. Mendell has always had a keen interest in publishing the one-year data on the four patients, and he is working on the manuscript even as we speak. I feel very confident that we'll have a publication in 2020 on the first four patients.
Great. Thanks. Then maybe one quick follow-up. Thanks for all your comments on golodirsen. I guess I'm just curious if you're willing to comment on the type of meeting you'll be having with the FDA and whether or not they're timing based on that?
I missed the end of your question, but I still have the answer. The answer will be, frustratingly, I'm not going to provide updates. As I said, we're going to work with the agency, and if there is a rapid pathway, we'll work with the agency to see if there is one. What I would like not to do is to provide interim comments. I don't want to provide updates along the way, either on meetings that we're having or the pathway that we're considering or the views of the agency. I will make a promise to everyone. When we have definitive clarity, I will very rapidly provide an update, not only to the investment community, but also obviously to the patient and the physician community as well. Thank you for that.
Our next question comes from Christopher Marai of Nomura. Your line is open.
Hey. Good afternoon. Thank you for taking the question. Just really quickly, maybe thinking about dosing of the high dose limb-girdle patient. It seems that that's being pushed into 2023 before that patient has even dosed yet. Regarding the PPMO ongoing study, pending safety tolerability profile there, would you consider modifying the dosing schedule? If this was to show a rapid [response]. When should we see that update? It wasn't clear to me in your prepared comments. Thank you.
I am going to really apologize. We were unable to hear your question. I'll try to answer what I think may have been your question. I think there was a question about limb-girdle dosing for the 2E program. We'll be dosing patients over the course of this quarter, and we'll have that insight from a biomarker perspective early next year, and that's when we'll be able to make the decision. If the question in part was what are the choices are on dosing, our original dose was 5x10^13. The protocol itself called for a dose escalation to 2x10^14 . That's what we will be doing in the next three-patient cohort. We'll be getting that done very soon, and we'll have that dosing insight early next year. Armed with that, we'll make a decision.
We've seen great results in our 5x10^13. To remind, one, we had expression levels of just over 50%. Of course, we've seen very good signals. It's three patients, I want to be careful, but we've seen very good signals of a functional efficacy in these first three patients. We're in a good place now. We'll compare both the tolerability and the safety profile for a higher dose as well as the expression levels from that higher dose, we'll make a decision regarding that. I think you asked a question about the PPMO. I'm going to apologize, I didn't get the first part of the question. I think part of the question may have been when can we expect an update regarding the PPMO program? That will happen certainly before the middle of 2020.
It should be actually significantly earlier than that, hopefully. What are we looking for there? Remember what the PPMO is. Our current technology, the PMO, our RNA technology that forms the basis of the eteplirsen or EXONDYS, and golodirsen, and casimersen, and the like, is this morpholino technology. The PPMO is a peptide-conjugated version of that same technology. The peptide, which is positively charged, at least in animal models, drags that therapy into the cell in much greater abundance. Then it should result, if we can get to the right doses, in much significant increases in both exon skipping and therefore dystrophin production, and presumably, additional functional benefits. Before the middle of next year, the one big question is can we tolerably increase doses to significant levels? So far, things are going very well, but we have more work to do.
We'll be getting dosing insight and safety signals before the middle of next year. That'll include things like tissue levels, skip levels, and perhaps even dystrophin production levels. I'm getting a thumbs up from Dr. O'Neill suggesting that I haven't made a mistake there. We'll have that before the middle of next year. I apologize if there are parts of your question that I was unable to hear and therefore I haven't answered.
Our next question comes from Brian Abrahams of RBC Capital. Your line is open.
Hi. Thanks very much for taking my questions. On micro-dystrophin, anything you're seeing so far with the additional cohort of patients to suggest that this new batch might be any different from the batch used to dose that first 24 or I guess 12 patients, perhaps with respect to manufacturing composition, the way the second center administers it, or stability through transportation out to L.A.? Secondarily, I recognize you're not giving play-by-play updates on your FDA feedback, but we did see recently that CDER is going to reorganize the Office of Neuroscience and other areas of the Office of New Drugs between now and year-end, and just wondering if that might mean a change in leadership for the group that's responsible for the golodirsen application or any other implications this might have for your ongoing dialogue with the agency on golodirsen, casimersen, and your future gene therapies. Thanks.
Taking the first question regarding micro-dystrophin, please understand this is a blinded placebo-controlled trial, so we'll await those results. With that said, also understand that the material for this trial is the same process and the same manufacturer, both of our clinical material coming from the same GMP, HYPERStack, mammalian adherent process at Nationwide Children's Hospital. On the face of it, we have no concerns regarding the material itself. We're very cognizant of things like the supply chain and the way it's transported. We're very confident on those regards. Things are going well. It is a blinded trial, so we'll see the functional results and other related issues.
Once all the dosing is done, we unblind that portion at the end of 48 weeks, but we certainly are very confident on the material itself and the process for the trial both with Dr. Jerry Mendell and also with Dr. Perry Shieh at UCLA. Talking about the reorganization, the short answer on that is that we're not going to, and I'm certainly not going to speculate on what that could mean for golodirsen at all. I will say this, we have had a very productive relationship both with Dr. Billy Dunn and Dr. Bastings, both of whom we have considerable regard for. We think this is certainly a good answer for those in neuroscience and neuromuscular across the industry.
Our next question comes from Debjit Chattopadhyay of H.C. Wainwright. Your line is open.
Hey, good afternoon. Given the tools in the toolbox currently, would you consider a vectorized exon skipping approach, or are you limited by manufacturing capacity as far as the vectorized exon skipping is concerned? Just to follow up on the same question, in terms of a comparability between wild type dystrophin expression and micro-dystrophin, is there a correlation or a conversion, say, for example, if you have 8% wild type expression, that should have the same kind of functional benefits as, say, a 30% micro-dystrophin expression? Thank you so much.
On the first question, we have significant programs focused on Duchenne muscular dystrophy, both from a RNA perspective as well as for a gene therapy perspective. Others have different approaches. We are generally not focused on, nor do we intend to have a focus anytime in the near future, on the concept of using gene therapy to deliver an exon skipping modality. It's not something we're interested in as a gene transfer therapy. I should also note, however, that as it relates to CRISPR-Cas9, which itself is a form of exon skipping, it is not in the RNA side, it actually directly edits the genome itself. That is an approach that Dr. Charlie Gersbach is taking. He's taking a different approach than others in that regard.
His CRISPR-Cas9 approach actually does a fairly significant cut, and if it is successful, and this is a research program at this point, this is not a development stage program, and we are some ways away from a development stage program. If that worked, it would be an approach that could be available perhaps to as many as 50% of patients that had DMD. That is a research program, and it is some ways out. As it relates to the basic question about the concept of using an AAV-mediated approach through some other mechanism, a U7 mechanism or the like, to insert an exon skipping agent, it isn't our focus, and frankly, it isn't something that we're enormously excited about as an organization.
On that second issue, I'll turn to Louise Rodino-Klapac, who might have some views based on the animal modeling on any correlates that one sees between expression of micro-dystrophin and what one might see of expression of wild type dystrophin.
Sure. Thank you, Doug. In our pre-clinical studies, we did extensive dose escalation, we found that as little as 20% micro-dystrophin positive fibers led to clinical benefit. If you think about our clinical results, that were about 80% micro-dystrophin positive fibers were well beyond that level. We really based it on extensive efficacy studies in the mdx mouse model for the disease.
As a reminder, if you'd like to ask a question, please press star then one. Please remember to limit yourself to one question. Our next question comes from Tazeen Ahmad of Bank of America. Your line is open.
Hi, good afternoon, guys. Thanks for taking my question. Just wanted to get a sense, Doug, about the timing of the readout for the confirmatory study that you're starting this quarter. I think on clinical trials it has a 2024 date for readout, but just wanted to get some clarity if that's round about the timeline you're expecting. Thanks.
For 402.
402, the high dose. Yeah.
We'll provide an update probably later in 2020 about timelines associated with the confirmatory trial. The good news on the trial, just so we're on the same page, is that this is a little more complicated as a confirmatory trial than one might normally imagine. This is not a trial with a placebo arm versus the approved dose. It was, as I've noted in my comments, it is a confirmatory trial that actually tests a different thesis, which is the current dose versus a significantly higher version of that dose. To do that, before you could commence the main trial, you have to start with a healthy human volunteer trial. We've done that. We've completed that. That's read out. That justified moving to the higher dose study. As I said before, there really are three arms.
There's the 30 mg/kg , which is our currently approved dose. There's an arm at 100 mg/kg . There's an arm at 200 mg/kg . It gets a little bit more complicated than that over time, but that's essentially the study. That study is initiating now, and we'll be dosing now, and we can provide updates on that probably toward the end of 2020 or so, give you some additional updates on timelines.
Our next question comes from Gena Wang of Barclays. Your line is open.
Thank you for taking my questions. The first one is ESSENCE trial. Just wondering if you can remind us when the data will read out, and also do you think FDA will want ESSENCE data in order to approve golodirsen and casimersen? My second question is very quickly regarding the one-year data for four patients. Just wondering what will be included in that one-year data update. Would that include biomarker data such as CK and the protein level as well as the functional data? Thank you.
As relates to ESSENCE will read out. Obviously, we're recruiting now, but we've recruited over 70%, so ESSENCE is coming along very well. We should have a readout in ESSENCE around 2023. As I said, I'm not going to comment on the pathway for golodirsen until we have more clarity from the agency, then I'll come back and provide definitive clarity. Then I think the second question was as it relates to?
Dr. Mendell's one-year micro-dystrophin
His one-year data will be inclusive of functional biomarkers, safety. It'll be inclusive of the data that he has on the first four patients at the one-year mark.
Our next question comes from Salveen Richter of Goldman Sachs. Your line is open.
Good afternoon. Thanks for taking my question. With regard to the gene therapy manufacturing, can you detail the progress you've made on yield optimization and assay work, essentially where you stand right now with overall tech transfer from NCH as you look to start the commercial grade pivotal trial?
Okay. Let's go through a couple of things. There's obviously elements in that for competitive and other reasons I won't provide numerically, but broadly speaking, know the following. First, we long ago tech transferred the process from Nationwide Children's Hospital to us and to this hybrid approach we have. Remember, there really are a collection of three groups working on process development, and then analytical development, mostly here. That is, we have our own group, we've got a significant group, and we've got 10 iCELLis units here at Sarepta, and then we've got our partners at Paragon, and we've got our partners at Brammer. We've made a lot of progress. First, just from a pure capacity perspective, as I said, we have fully built with Brammer Biosciences, a single-use facility in Lexington, and it is done and ready to go.
At Paragon, we actually have even more significant capacity at Paragon, and the iCELLis units are there and getting ready to go as well. Led by Dr. Reed Clark at Sarepta, we've made great strides on assay development, and as it relates to process development, we've made significant strides on our micro-dystrophin program, and we've actually made significant strides on some of our limb-girdle programs as well. In fact, as it relates to yields for the clinical trial, we will be locking, I'm not going to give you exact date, but it will be in the near term. We'll be locking process and beginning confirmation runs so that we're in a position by the middle of 2020 to commence Study 301, which is our commercial process supply trial.
All in all, I'd say we're making great progress around capacity and assay development, and we're making good progress on process development and yield optimization as well. We still have a lot left to do. I think we started this process, we got ahead of this early. We got the capacity as soon as we realized the opportunity in front of us, and I think the team is very focused. We've got a lot of great expertise here, and we're making good progress.
Our next question comes from Danielle Brill of Piper Jaffray. Your line is open.
Hi, guys. Good afternoon. Thanks for the question. Doug, have you dosed any of the additional limb-girdle 2E patients? You said that you'll have the dose selected by early next year, is it safe to assume that they will be dosed by the end of this year? Thanks.
They should be dosed by the end of this year. We have the material. The patients are all screened. I'm not going to give details on who's scheduled for when, but the three patients should all be dosed by the end of this year, and we should have insight in that. It should be around before the end of the first quarter, we should have insight.
Yep.
Our next question comes from Joel Beatty of Citi. Your line is open.
Hi, thanks for taking the question. The question is on exon-skipping agents, including your PPMOs in development, as well as competing companies. Is there an amount of dystrophin expression from those agents that could get so high that it would be competitive with the gene therapy agents in terms of competitive from a marketing standpoint? If so, could you help characterize what that may be?
Well, it's hard to characterize in advance. I will say that is an enormously high bar. To remind one, with respect to our micro-dystrophin program, we're seeing over 90% expression. As Dr. Louise Rodino-Klapac mentioned in response to a question earlier, you get transformative functional improvements in animal models at lower than that number. To ask whether there's a possibility that a PPMO, and I think it really would only be the peptide conjugate, a PPMO, whether it could be at a place where it could actually be in some ways competitive with a gene therapy. I think we'll await the results of our study in 2020, that is a high bar.
I think the real interesting question for our PPMO program, assuming the success of our gene therapy, is that if we had such significant and robust expression, and I will say at least in animal models, and we'll await the data from our multi-ascending dose study, but at least in animal models, getting to the right dose, you could have an order of magnitude, more exon skipping, more dystrophin production, and then significant increases in function. The real question in that scenario, well, there's a number of questions. The first is there a place for a combinative therapy of a very transformative gene therapy with a potential follow-on of PPMO? Obviously, there's also the opportunity of gene therapy successful for the PPMO for those patients who would otherwise screen out of the gene therapy.
If the PPMO is, again, let us await the data before we get too far over our skis, but if the PPMO data was able to get to very high doses and was significantly well-tolerated, then obviously the next question for us, and we're looking at this right now, is what other areas could we take this therapy to provide benefits to patients who would benefit from steric blocking at significant doses?
As a reminder, we ask that you please limit yourself to one question. Our next question comes from Ritu Baral of Cowen. Your line is open.
Hey, guys. Thanks for taking the question. Doug, you mentioned that you have, I guess, locked in a placebo-controlled design aspect to the phase III, the 301 trial. Can you describe your current thinking on patient numbers, randomization? You didn't mention younger patients, and it sounded like you said that you're sequestering older patients in a different study. Just to clarify your answer to Salveen's question, so have you finished assay validation? If not, when do you think you might nail that down with FDA and start those engineering runs you mentioned?
Answering the second question first. We still have work to do on assay validation, but we're making great progress under the guidance of Dr. Reed Clark. Obviously, our goal and target and every intention is to have that done well in advance of the commencement of our Study 3, which is going to start in the middle of 2020. Obviously, we've made great progress so far on assay development. As it relates to our Study 3, there are a number of elements of it that we'll disclose later as we have further discussions with the agency. We're all clear about the goals of that study. It's our intention in that study to have data and results sufficient both from approval perspective as well as from an access and reimbursement perspective to serve a broad population for Duchenne muscular dystrophy.
By broad, of course, we think both in terms of age. We want from the youngest children to the oldest patients with DMD, and we also mean the broad in regard to mutations. We want to ensure that patients across all mutations have an opportunity to benefit from this. The studies that we're designing are designed with that intention. Our main study, the primary study proposed for the functional results, is the age four to seven-year-olds, and that's a one-to-one placebo-controlled trial, double-blinded, et cetera, multi-site, multi-country trial. We have other studies as well. We will have some study for younger patients, to your very good question, then we will have older patients and non-ambulatory patients as well in a separate study, and we're planning those as well. That is our goal, and our goal is to have this all commence by mid-2020.
Our next question comes from Brian Skorney of Baird. Your line is open.
Hey, good afternoon, guys. Thanks for taking the call. You said that you're on track for a mid-2020 start to Study 3, but on last quarter's call, you guided for first half 2020. You actually said that you might do it as early in 2020 as possible, first quarter if possible. I'm just trying to square away if manufacturing's up online, Lexington facility's running, feeling good about your yields. What's sort of the change here between this quarter and last quarter to say it's more mid-2020 as opposed to targeting a first-quarter possibility?
We're clear, you shouldn't read into my comments a delay. There's no delay here. Just understand, our goal is to lock, once one locks process development, then you have to go through an entire process of confirmatory runs and the like, just to be in a position to commence the trial. Then, of course, we've got site readiness and site IRB approvals. We've always guided to mid-2020, first half of 2020 to mid-2020, and that continues to be our plan. Read my current statements as a positive development that we continue to make good progress on analytical development capacity and process development so that we will be in a position to fulfill our goal of starting this trial by mid-2020.
Our next question comes from Anupam Rama of JP Morgan. Your line is open.
Hi, all. This is Tessa Romero filling in for Anupam tonight. Thank you for the updates and for taking our questions. Just one for most on the confirmatory commercial supply Study 301. I wanted to confirm that if indeed the FDA has agreed that there will be an interim analysis on micro-dystrophin expression in this study. That I think the intention was that this would read out in 2020. Just wondering if you've reached agreement on how many patients will be within this? My second question, if I could, on the Charcot-Marie-Tooth program, can you just remind us of timelines for dosing here? Really when all the patients should be dosed. Just trying to think about potential timelines for data on that program. Thanks so much, guys.
Yeah. On the first question, we have meetings planned with the agency across a number of programs, including about CMC and the Study 301 design. We'll have that done, certainly planned in time to commence Study 301 by mid 2020.
Tessa, sorry. Just out of respect for every analyst trying to get a question on the call, we're asking everyone to only ask one question, happy to follow up afterwards.
Our next question comes from Tim Lugo of William Blair. Your line is open.
Hi, this is John. I'm for Tim. Thanks for the question. I was just wondering if you can provide any additional details on the Sanfilippo program, maybe specifically around the commercial prospects or the safety expectations from dosing directly into the brain?
Well, I guess broadly speaking, I can turn to Louise, who might provide some insight on the second of the two questions. On the first of the two questions, this is obviously a very rare disease, but we're very excited to serve this community. This is a devastating disease that historically has been bereft of any hope. These children degenerate both cognitively, behaviorally, and then neuromuscularly, rapidly commencing at about four or five years old. Obviously, we're very excited about it commercially, we're very excited about it for our mission. As it relates to the safety and scientific issues, Louise, if you have any insight into that?
I would just add, as we've mentioned, 13 patients have been dosed. This is direct delivery. The pre-clinical data is exceptional that supports this approach, and that we're getting very robust delivery into the parts of the brain that are meaningful for biological and functional efficacy.
This is Gil more O'Neill here, I think I can speak about the neurosurgical element of the procedure for human patients. So far, it seems while you kind of, how should I say, it gives you pause to think or a concept of injecting directly into the brain. This actually is an experience that has been developed over many years in the context of many therapeutic interventions, and it's been well tolerated to date. We anticipate that the benefit -risk is likely to be positive in the context of what is a very serious disease.
Our next question comes from Liisa Bayko of JMP Securities. Your line is open.
Hi. Thanks for taking my question. Just a couple pertain to the model. How many patients are on therapy, and what percent do we think is our genotype right now? What's the growth in that? Thanks.
Well, we don't typically provide, typically we don't provide information on patients on therapy for the commercial product EXONDYS. I assume, Sandy, you have a comment on gross to net?
Well, we haven't provided specific guidance on gross to net either. When you look at our commercial and non-commercial split, it hasn't really changed in the recent past. That's about all we've said so far on that topic.
We're obviously very pleased with the performance of our product since its approval in 2016. As you saw, we were continuing to grow in the last quarter, which means we're continuing to serve additional patients with EXONDYS or eteplirsen. I should note this, so I'm sure people know this, but to the extent you don't know this, we don't take price increases, or we certainly haven't in the past. When you see growth on sales, you're obviously seeing additional patients being served by this therapy.
Our next question comes from Yun Zhong of Janney. Your line is open.
Hi. Thank you very much for taking the question. Can you remind us how you were going to leverage the data from the now 40-patient study to help you get FDA approval now that you have a placebo control study planned to be initiated in mid -2020? Apparently, you won't be able to see any data from the 40-patient study before you initiate the pivotal study.
Correct. One possibility, and this will require first additional conversations with the agency, and then obviously, all of this will be considered in the context of the data when it actually develops. Again, we'll be done dosing if all goes well, and things are going very well right now. We'll be done dosing what we call Study 2, the 40-patient placebo-controlled trial, by the end of this year. We'll have a readout on that 48 weeks thereafter, which will provide both safety as well as functional benefits of our micro-dystrophin therapy. At or before that time, we will have expression-related information from the next study, which is Study 301, which is our commercial supply trial.
At least we'll have that in a significant subset of the Study 301 itself, which means that at the time that there is a readout from our Study 2 on function and safety, we will also have insight from both the CMC and from biopsy data on the comparability of our commercial supply and our clinical supply. Certainly at that time, we'll approach the agency and discuss the pathway for the fastest possible approval consistent with regulations and good science and good safety.
Our next question comes from Vincent Chen of Bernstein. Your line is open.
Hi, guys. This is Brian on for Vincent. I guess I just have a question about the future manufacturing model for your gene therapy programs. Is the goal eventually to bring some capacity in-house, or is your sense that primarily relying on the CDMOs is the long-term strategy?
Yeah, I think that's a great question. As you know, you can see through what we're doing from a platform perspective that as we stand here even now, I think we have one of, if not the deepest, gene therapy specific pipelines and it's because we intend to be a durable, enduring gene therapy biotechnology company treating rare disease for a long time. That means we're going to be looking at lots of things. We're very excited and we're very pleased right now with our hybrid manufacturing model. It's allowed us to move rapidly, to gain expertise quickly, and to work with some of the best and brightest, and we're very pleased with that, and that's why we have great relationships with Aldevron and with Brammer, now Thermo Fisher at Paragon, now Catalent. We're looking at other things as well down the road.
We'll certainly do feasibility studies on whether additional capacity internally makes sense. We'll look at other modalities even beyond the approaches we're taking right now. As it relates to our micro-dystrophin program and these limb-girdle programs that we're working on right now, this is the approach we're taking, and it's working well for us.
Our next question comes from Tim Chiang of BTIG. Your line is open.
Hi, thanks. Doug, I don't know if you mentioned the number of patients that are enrolled in Study 2. I was just wondering if you had a count of the 40 patients that you're targeting for that study. How many of them have already enrolled, and then how many patients do you expect Dr. Shieh to enroll of the 40 patients?
I don't have details on the split between Dr. Mendell and Dr. Shieh. I can tell you there is a significant inventory of patients in both sites. Being able to fulfill our need to get everyone dosed by the end of the year shouldn't be an issue. I don't have an update or count on the number of patients dosed. We know that the first 24 patients were all dosed before the last time we spoke on our earnings call. We're dosing patients even as we speak. In fact, while I don't want to get too over my skis on these things, a patient was dosed today. We're on track to have everyone dosed by the end of this year.
Our next question comes from Joseph Schwartz of SVB Leerink. Your line is open.
Hi, good evening. Thanks for taking our questions. This is Dae Gon dialing in for Joe. Doug, sorry if I missed this. Just thinking about the timeline going forward, I briefly caught you talking about Study 2 being complete enrollment-wise by the end of the year, with 48-week data towards the year-end of next year. If we think about the calendar or the timeline of Study 3, which was anticipated to study in mid 2020. I guess, given the competitive landscape of some of the other guys that are using vectorized antisense oligos, for example, as well as your commercial product and some of the other micro-dystrophin players also entering a larger phase III trial in 2020, can you maybe talk about comfort level in terms of your enrollment?
How many trial sites are you anticipating, and what's your target enrollment here that could actually get you through to that year-end biopsy data to match the concurrent 48-week NSAA data?
Well, I'll say some broad stroke statements, and Dr. O'Neill may want to comment on things like trial site numbers and the like. Just broadly understand the following. We don't take for granted the lead that we have, but we do have a lead right now versus other folks, and by the end of this year, we'll have 40 patients dosed in our placebo-controlled trial, our proof of concept study with our first four patients, of course, was done some time ago. We'll have data on those first four patients in a publication in the near term, and we're very confident about the progress we're making toward Study 301. We're very confident about where we'll be at the end of 2020 as we're reading out the functional data from Study 2 and the opportunity to have biopsy and CMC related data from Study 301.
With that said, Dr. O'Neill, if you want to make any additional comments.
All I would say is that we're very conscious of the issues you've raised around competition, or that's not really the right way of putting it, but patients actually trying to decide and sites deciding across different studies. We are already publicly, actively engaged with sites through our prior and ongoing efforts with our PMO programs, and we are actively engaged with sites around the world, looking and evaluating at interest, the competitive landscape, and the capacity to participate in our 301 study. We are actually confident that we can enroll as is required to meet the timelines that we've outlined. I'd say we are very conscious of the issues you've raised, and that's why we are being very careful and precise in how we evaluate and engage with study sites around the world.
There are no further questions. I'd like to turn the call back over to Doug Ingram for any closing remarks.
Thank you very much. Thank you all for joining us this afternoon and this evening for our update. We look forward to executing against our plans for the remainder of 2019 and obviously to providing a further update at our next conference call early next year. Thanks.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participating. You may now disconnect.