Good day, ladies and gentlemen, and welcome to the Sys Directotherapeutics Third Quarter 2019 Earnings Call. At this time, all participants As a reminder, today's call is being recorded. And now, I'd like to introduce your host for today's program. Ian Esteban, Senior Vice President, Chief of Staff And Corporate Affairs. Please go ahead.
Thank you, Michelle, and thank you all for joining today's call. Earlier today, we released our financial results for the third quarter 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 Combo, Doctor. Gilmore O'Neill and Doctor.
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 view our slide on the webcast, which contain our forward looking statements. These forward looking statements involve risks and uncertainties, any of which are beyond control.
Actual results could materially differ from these forward looking statements, and any such risks can materially and adversely affect the business results of operations and the trading price of Sarepta's common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report on Form Ten Q filed with the Securities And Exchange Commission as well as the company's other SEC filings. The company does not undertake any obligation to publicly update its forward looking statements, including any financial projections provided today based on subsequent events or circumstances. And with that, let me turn the call over to our CEO of Dougie Rumpu will provide an overview on our recent progress. Doug?
Thank you, Ian. Good afternoon and evening, and thank you all for joining us. First to wrap the Therapeutics third quarter 2019 conference call. Our ambitious strategy involving 1 of the deepest multi platform genetic pipelines in biotech has required focused execution over the course of 2019. To remind you, we have more than 25 programs across our RNA and gene therapy platforms, and we're either actively in or in week stage planning for some 9 human clinical trials to advance our plans.
Team. And in the third quarter specifically, we have made very significant strides in advancing our programs and our strategic vision, I'm excited to discuss those advancements. However, we're doing so. I must also acknowledge what we all know that we had a setback in the third quarter. And rather than bearing 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 Biologous 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 we would obtain an approval on we were surprised to have received a complete response letter. Also known as a CRL, signed by the Office of Drug Evaluation 1, Our disappointment extends beyond Sarepta to the 8% of EXOND 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 in the division of neurology that we we intended to build a positive shift with the division of neurology, 1 founded on transparency and on solid evidence based science. And 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. Now I've also heard some speculation about the implications of the CRM. So let me take a moment to address these as well.
1st, Avaya on the CRO does have implications for our submission for our next PMO casimerseners. As they are closely related, we will await clarity on the Vionic matter before we submit for casimersen in the United States.
But let
me disabuse anyone who might have concerns for other programs. The CRL does not have any read through to our micro dystrophin gene therapy program. The CRL involved 2 safety signals in connection with an application for an accelerated approval. Our micro dystrophin program is overseen by a different part of the FDA, Seaper, 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 two and a half years in forging a positive evidence based working relationship with the division. We will work diligently to address the Vionic CRM.
But with that, I do not intend to provide 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. Exondas continues to perform well with 3rd quarter sales above consensus at $99,000,000.
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 3 arms. 1 was exogenous at 100 mgs per kg and another at 200 mgs per kg versus our current dose at 30 mgs per 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 confirmed the comparator arms involved 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 PBMO shows encouraging results in addition to SRP-five thousand and fifty one, that's the construct that we're currently in multi ascending dose regarding, we have 5 additional constructs that have already been built, which is total of the potential to treat as much as 43% of the BMD 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 spending enormous resource and energy to build out our vision of an enduring gene therapy engine. Between our research and clinical stage programs, We have year end quarter, led by our most advanced program, SRP-nine thousand and one for DMD.
Which at least to my knowledge is the highest potential late stage gene therapy program currently in biotech. You should be aware, our double blind placebo controlled SRP-nine thousand and one microdystrophin trial, the trial that we call Study 2, was fully dosed by midyear, but we took advantage of the availability of additional study material and previously announced that we had increased the study end from 24 patients to 40 patients, significantly increasing the study power and confidence this study. In addition to our initial site with Doctor. Jerry Mendel at Nationwide Children's Hospital, we have added a second site at UCLA, with Doctor. Perry Shea.
I'm very proud to be associated with my clinician and investigator. Both sites are actively dosing patients and we remain on target to complete our dosing by year end. Microdystrophin 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 actually substantially greater capacity than our dedicated Lexington facility, which means we have robustly secured capacity well in advance of launch.
Our analytical development work proceeds well, and 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 by mid-twenty 20. Now 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 Materials from our hybrid manufacturing model with Brammer and Perriga. The main study will include DMD patients ages 4 to 7, but we are also planning a separate Coming 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 to E.
In October, we announced positive 9 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 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 And informed by this and further work on manufacturing, we will provide an update on the clinical pathway and the timing from our living girdle portfolio in 2020.
Next, led by our partner, Lysogene, the ADVANCE gene therapy study for MPS IIA, 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. Avance is a single arm trial evaluating the safety and efficacy of an rh10 mediated gene therapy to deliver the missing the Doctor. Zarif 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 CMT-1A, a devastating peripheral nerve disease, is also the most prevalent form of CMT.
Doctor. Sahenk's gene therapy is an AAV1 mediated construct. To deliver the neurotrophic Factor III NT3. In animal models, NT3 has been shown to promote nerve regeneration, improved motor function, histopathology and electrophysiology of peripheral nerves, and in early proof of principle studies, NT3 has shown markers of clinical benefits in patients with CMT-1A 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 risk this quarter was met with an obstacle in the form of Vionic CRL.
The breadth of our ambition ambition inevitably comes with challenges and obstacles to address and to overcome. But 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 in 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. And with that, I will turn the call over to Sandy to provide an update
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 of approximately $400,000,000 and a cash balance over $1,000,000,000, 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 $99,000,000 compared to $78,500,000 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 $126,300,000 $76,400,000 or approximately $1.70 $1.15 per share for the third quarter of 2019 2018, respectively. We reported a non GAAP net loss of $84,400,000 or $1.14 per share compared to non GAAP net loss of $37,100,000 or $0.56 per share in the third quarter of 2018.
In the third quarter of 2019, we recorded approximately 13,000,000 in cost of sales compared to $8,700,000 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 $133,900,000 $86,600,000 of R and D expenses for the Third Quarters of 20192018, respectively, which is a year over year increase of $47,300,000. R and D expenses were $110,500,000 for the third quarter of 2019 compared to $64,200,000 for the same period of 2018, an increase of $46,300,000. The year over year growth in non GAAP R and D expense was driven primarily due to continuing ramp up of our micro dystrophin program, our Essence program, an initiation of certain post marketing studies for EXONDYS 51.
Turning to SG And A. On a GAAP basis, we recorded $75,400,000 $53,000,000 of expenses for the third quarter of 20192018, respectively, a year over year increase of $22,400,000. On a non GAAP basis, the SG and A expenses were $59,600,000 for the third quarter of 2019 compared to $42,500,000 for the same period of 2018. An increase of $17,100,000. The year over year increase was primarily driven by significant organizational growth and continued expansion support our commercial launch 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 $2,500,000 in other expenses for the third quarter of 2019 compared to $7,000,000 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 $1,100,000,000 in cash, cash equivalents and investments as of September 30, 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 $99,000,000. We were also pleased to be in a position to increase our 2019 revenue guidance range from $365,000,000 to $375,000,000 to a range of $370,000,000 to $380,000,000 for EXONDYS 51, Sales have increased quarter over quarter for over Day.
Compliance and adherence have remained high and stable since launch and to date continued to remain steady. It should be noted and suspect that we could see a change in ordering patterns with both Christmas and New Years 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 one continues to have on patient lives. We remain the leading voice with KOLs and payers across the world in support of Duchenne patients.
Are recognized as the leader in RNA in gene therapies within the Duchenne field. Our strategy to advance the very best science build awareness and appreciation for Duchenne and pave new pathways of Duchenne patients gain access to therapy have resulted in the successful trajectory of EXONDYS 51 since its approval just over 3 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 EXOND 53. Our work is focused and deliberate and grounding us and all we do is the patient. That journey begins with identifying patients in our core therapeutic areas, Duchenne, the Limb girdle muscular dystrophy and MPS IIIA.
Patient identification will be central to the commercial organization for the balance of 20.19 and leading into 2020 and beyond. A 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 Asia identification will always be one of our primary commercial goals, and 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 D micro dystrophin program and working with many of these Zolgensma and SPINRAZA sites treating SMA. Based on the very strong results Novartis demonstrated with their recent launches, Zolgensma, and understanding the label, and the differences in patient population sizes between the 2 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 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 midsize 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. Limb girdle muscular dystrophy, we are focused on disease education and identifying patients. The Limb girdle muscular dystrophy are a family of diseases, over 30 subtypes all. 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 additional presence within the community. All of this will help us prepare for the potential to support multiple launches 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 G 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, Beau. So looking forward, have a number of significant milestones to achieve, but for the rest of 2019 and through 2020. First, we intend to complete dosing of our SRP-nine thousand and one study 2. That's our micro dystrophin study by year end. With functional readout 48 weeks thereafter.
We soon intend to log 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 and then to commence Study 301 by mid-twenty 20. We intend to dose an additional high dose cohort for limb girdle 2e and then make a dose selection. We intend to gain regulatory and manufacturing insight and to present an update the development pathway and timeline for our entire Limb girdle program in 2020. Doctor. Sahenk, tends to commence a proof of concept study for CMT gene therapy And we intend to obtain safety and dosing insights for our PPMO program in the first half of twenty twenty.
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. I'll open up. Alive for questions now.
Questions.
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 filgens on partial hold? And like should we is there any are there any reason to potentially make to other gene therapy program?
Thanks.
Thank you for that question, Alethia. Okay. So, first let me say this. Let's make sure we're all on the same page for those who maybe unaware. And I suspect everyone is aware.
Novartis recently announced that their clinical trial for their AAV9 mediated SMA gene therapy for intrathecal administration was placed partial clinical hold due to the neurotoxicity that was seen in animal models. So first, I understand this. We do not have a 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. But with that said, I should tell you we see no read through to our program and there's a host of reasons for that. First understand that we are dosing peripherally with IV administration.
We're not dosing in artheically as was the issue as announced by Novartis regarding that partial clinical hold. And second of all, understand that we're not using a benign Doctor. Louise Rodino Klapac. He was with us tonight and Doctor. Jerry Mendell chose Rx74 for a number of specific attributes One of the significant ones was that rh74, unlike AD9, as an example, does not promiscuously cross the blood brain barrier.
Unlike SMA, well, 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 C and F so there would be no value there. So this seems to have been a very wise choice. I also know this that we have an enormous amount preclinical and animal model evidence with respect to RA74.
And even at doses that are multiple times higher than, than we're using in our trial, we have never seen some neurotoxicity as it relates to AAVR-eight seventy four.
Great. Thanks. 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 4 micro trips and patients curious if we'll get an update on them in 2020, either in an update from you or possibly a publication from Doctor. Mendell?
Yes. Thanks for that question. Thank you for your, for your, your comments. So yes, Doctor. Mendell has always had a keen interest in publishing the 1 year data on the 4 patients.
And he is working on the manuscript even as we speak. So I'm feel very confident that we'll have a publication in 2020 on the first four patients.
Great, thanks. And then maybe one quick follow-up. 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 what or not their 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. I, as I've said, we're going to work with the agency. And if there is a rapid pathway, work with the agency to see if there is one. What I would like not to do is to provide, interim comments.
So 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 but 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. So thank you for that.
Question comes from Christopher Marai of Nomura.
Really quickly, maybe thinking about dosing off the high dose Limb girdle patients, it seems that that's being pushed into 20 10 money to treat some of that patients and even those yet. And then regarding the PPMO ongoing study, you know, pending the tolerability profile here. Would would you consider modifying this over to the schedule? You know, options? And then when should we see that update?
It wasn't 30 in your concern? Thank you.
I am going to really apologize. We were on able 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 on dosing?
We dosed our our original dose was 5 times E to the 13. The protocol itself called for a dose escalation to two times E to the 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 five times E to 13 to remind when we had expression levels of just over 50% and Of course, we've seen very good signals.
It's 3 patients, so I want to be careful. But we've seen very good signals of, a functional efficacy in these first three patients. So we're in good place now. And then we'll compare both the tolerability and the safety profile for a higher dose as well as the expression levels from that higher dose and we'll make a decision regarding that. And then 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 One of the question 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. And what are we looking for there? And remember what the PPMO is?
Our current technology, the PMO, our RNA technology that forms the basis of the Teferson or EXONDIS 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 than it should result if we can get to the right doses and much significant increases in both exon skipping and then therefore dystrophin production and presumably additional functional benefits. And, and so by before the middle of next year, we're going to essentially get 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.
So that'll include things like tissue levels, skipped levels and perhaps even dystrophin production levels. I'm getting a thumbs up from from Doctor. O'Neill, suggesting that I haven't made a mistake there. And 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 in with respect to manufacturing compositions the way the second center administers it or stability through transportation out to L. A. And then secondarily, I recognize you're not giving play by play updates on your FDA feedback, but we did see recently that Cedar is going to reorganize the Office of Neuroscience and other areas of the Office of new drugs between now and year end. Just wondering if that might mean a change in leadership for the group that's responsible for the Golo application or any other implications this might have for your ongoing dialogue with the agency on lupdersen, casimersen and your future gene therapies?
Thanks.
Taking the first question for regard to micro dystrophin, please understand is a blinded placebo controlled trial. So we'll await those results. But 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 the same hyper GMP hyperstack mammalian adherent adherent adherent process at Nationwide Children's Hospital. So on the face of it, we have no concerns regarding the material itself. And we're very cognizant of things like the supply chain and and the way it's transported.
So we're very confident on those regards. So things are going well. I don't want to we it is a blinded trial, so we'll see the functional results and other related issues. Once all the dosing is done, we unwind that portion end of 48 weeks, but we certainly are very confident on the material itself, and the process for the trial, both with Doctor. Jerry Mendell and also with Doctor.
Perry Shane with 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 Golodirsen at all. I will say this, we have had a very productive relationship, both with Doctor. Billy Dunn and doctor based things, both of whom we have considerable regard for. So we think this is certainly a good answer for 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. So given the tools
and the toolbox currently, would you consider vectorized exon skipping the pro or are you limited by manufacturing capacity as far as the vectorized exascaping is concerned? And just a follow-up on the same question, In terms of a compatibility between wild type dystrophin expression and micro dystrophin, is there a correlation or a conversion say, for example, if you have 8%, wildtype expression, that
should have
the same kind of functional benefit as, say, a 30% microdystrophin. Expression. Thank you so much.
So on the first question, we have programs focused on Duchenne muscular dystrophy, both from an RNA perspective as well. So a gene therapy perspective, others have different approaches. We are generally not focused on, nor do we intend to have a focus in any time in the near future on the concept of using gene therapy to deliver exon skipping modality where it's not something we're were, interested as a gene transfer therapy. I should also note, however, that as it relates to CRISPR Cas9, which itself is a form of exon stimulator. It's not in the RNA side.
It actually is directly edits the genome itself. That is an approach Doctor. Charlie Gersbach is taking. Now he's taking us 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. But if that works, it would be an approach that could, that could, be available perhaps as many as 50% of, patients that had DMD, but that is a research program. It is some ways out. As it relates to the first as it relates to the basic question about the concept of using an AAD mediated approach through some other mechanism and use 7 mechanism or the like to insert an exon skipping agent, it is our focus frankly, it isn't something that we're enormously excited about as an organization. On that second issue, turn to Luis Rodino Klapac who might have some views based on the animal modeling on the any correlates that one sees between expression in micro dystrophin and what one might see of expression in wild type dystrophin?
Sure. Thank you, Doug. In our preclinical studies, we did an extensive dose escalation and we found that as little as 20% dystrophin dispro from positive fibers led to clinical benefit. And if you think about our, clinical results that were about 80% micro from positive fibers were well beyond that level. So we really based it on, extensive efficacy studies in the MDF MDX mouse model for the disease.
And please remember to limit yourself to one question. Our next question comes from Tazeen Ahmad of Bank 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 that it has a 2024 date for readout, but just wanted to get some clarity if that's roundabout the timeline you're expecting. Thanks.
For 4 02, for 4 to the high dose? We'll come up with more clarity. We'll provide an update in, probably later in 2020 about time lines associated with the confirmatory trial. The good news on the trials is still we're on the same page is that this 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 person in that dose.
To do that, before you could commence the trial the main trial, you have to start without the immune a tiered trial. And we've done that. We've completed that. That's read out. That justified moving to this higher dose study as I've said before, there really are three arms.
There's the 30 mgs per kg, which is our currently approved dose. There's an arm at 100 mgs per kg. There's an arm at 200 mgs per kg. Gets a little bit more complicated than that over time, but that's essentially the study. And that study is initiating now, and we'll be dosing now, and we can provide updates on probably toward the end of 2020 or so, give you some additional updates on time lines.
Our next question comes from Gena Wang of Barclays. Your line is open.
Thank you for taking my questions. The first one is at trial. Just wondering if you can remind us when the data will read out? And also do you think FDA will asset data in order to approve golodirsen and casimersen? And then my second question is very quickly regarding the 1 year data for 4 patients.
Just wondering what will be included in the 1 year data update? Would that include biomarker data? So like CPA and the protein level as well as the functional data? Thank you.
So as it relates to essence, essence will be we'll 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've said, I'm not going to comment on the pathway for Golodirsen until we have more clear from the agency and then I'll come back and provide definitive clarity. And then I think the second question was as it relates to
denser med down, 1 year.
I was wondering if that, it will be, it will be inclusive of farcell biomarker safety. It will be, it will be inclusive of the data that he has on the first four patients at the 1 year mark.
Our next question comes from Salveen Richter of Goldman Sachs. Your line is open.
Good afternoon. Thanks for taking my question. So with regard to the gene therapy manufacturing, can you detail 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?
All right. So let's go through a couple of things. There's obviously elements in a benefit for competitive I won't provide numerically. But broadly speaking, know the following: 1st, we'd long ago tech transferred the process from Nationwide Children's Hospital to us and to this hybrid approach we have. So remember, there really are a collection of 3 group working on process development and then analytical development mostly here.
And that is 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 our partners at Brammer. So we made a lot of progress. First, just to your capacity perspective. As I said, we have fully built with, Brammer Biosciences, a CMC facility in less thing, Tim, and it is done and ready to go. We have the at paragon, we actually have even more significant, well, that is significant capacity.
We have even more significant capacity at Paragon, and that, the NICE units are and getting ready to go as well. Led by, Doctor. Retrarch 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. We've actually made significant on some of our limb girdle programs as well.
In fact, as it relates to yields for the clinical trial, we will be walking 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 what we study 301, which is our commercial process, supply trial. So all in all, I'd say we're making great progress around capacity and assay development, and we're and good progress on process development and yield optimization as well. We still have a lot left to do. But think we started this process.
We got ahead of this early. We got the capacity. As soon as we realized the opportunity in 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.
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. So 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. So a lot of details on who's scheduled for when, but they the 3 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 inside.
Our next question comes from Joel Beatty of Citi. Your line is open.
The question is on exon skipping agents, including your PPMOs in development as well as competing companies. Is there an amount of disruption from those agents that could get so high that it would be competitive with the gene therapy agents in terms of a competitive from a marketing standpoint? And 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. So To remind one, with respect to our microdystrophin program, we're seeing, over 90% expression. And as Doctor. Luis Rodino Klapac mentioned, in response to a question earlier, you get, transformative functional improvements in animal models at, at even lower than that number.
So we, to ask whether there's a possibility that a PPMO, and I think it really would only be the peptide conjugate a PMO, whether it could be in a place where it could actually be in some ways competitive with gene therapy. I think we'll await the results of our study in 2020, but is a high bar. I think the real interesting question for our PBMO program, assuming the success of our gene therapy is that if we got we had such significant and robust expression. And I will say at least in animal models, and I doubt we'll await the data from our multi ascending dose state, but at least in animal models, into 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, I don't have a number of questions.
The first is, is there a place for a cognitive therapy of a very transformative gene therapy with a potential follow on of PPMO. And obviously, there's also the opportunity of gene therapy success for the PPMO for those patients who would otherwise screen out of, the gene therapy. And then 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 some very high doses and was, was significant and well tolerated. And 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 Starek LOCK as significant doses.
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 3 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.
And, just to clarify your answer to Salveen question. So have you finished assay validation? And if not, when do you think you might nail that down with FDA and and start those engineering runs you mentioned?
Answer the second question first. We still have work to do on assay validation. But we're making great progress under the guidance of Doctor. Reed Clark and 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. So obviously, we we've made great progress so far on assay development.
As it relates to our Study III, there are a number of elements of it that we'll disclose later as we have further discussions the agency. So we're all clear about the goals of that study. It's our attention 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. And by broad, of course, we think both in terms of age, we want 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. And the studies that we're designing are designed with that intention. Our main study, the study that with the primary study, proposed for the functional result is the age forty seven year olds, and that's a 1 to 1 placebo controlled trial double blinded, etcetera, multi. Site multi country trial. But we have other studies as well.
We will have some study 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. So, so that is our goal. And our goal is to have this all commence by mid-twenty 20.
Our next question comes from Brian Skorney of Baird. Your line is open.
Hey, good afternoon guys. Thanks for taking the call. So you said that you're on track for a mid-twenty 20 start to study 3. But on last quarter's call, you guided for first half twenty twenty, you're actually set that you might do it as early in 20 possible, first quarter, if possible. So I'm just trying to square away if manufacturing is up online, Lexington Facilities is running.
Feeling good about your yields. What's sort of the change here between this quarter and the last quarter to say it's more mid-twenty 20 as opposed to targeting a first quarter possibility?
This is not. So we're clear that you shouldn't read into my comments, delay. There's no delay. Just understand. Our goal is to lock what's one locks process development?
Then you have to go through an entire process of confirmatory runs and the like just to be in a positioned to commence the trial. And then, of course, you've got, we've got site readiness and site IRB approval. So we've always guided to mid-twenty 20. First half of twenty twenty to mid-twenty 20 and that continues to be our plan. So leave that at read my current statements as a positive development that we can to 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 20.
Our next question comes from Anupam Rama of JP Morgan. Your line is open.
Hi, all. This is Hess Romero filling in for Anupam tonight. Thank you for the updates and for taking our questions. Just one from us on the confirmatory commercial supply 301 trial. I wanted to confirm that if indeed there will be 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.
I'm just wondering if you'd reached agreement on how many patients will be within within this? And then my second question, if I could, on the Chacon Marie Tooth program, Can you just remind us of timelines for dosing here? Really how when they should when all the patients should be dosed just trying to think about potential timelines for data on that program. Thanks so much guys.
On the first question, we have meetings planned with the agency across a number of programs, including about CMC and the Study 3 or design. We'll have that done, certainly planned in time to commence Study 3 or 1 by mid-twenty 20.
On the to we were
just out of respect for every analyst trying to get a question on the call. We're asking everyone to only ask one question. So that's happy to follow-up afterwards.
Our next question comes from Tim Lugo of William Blair. Your line
is open.
This is John on for Tim.
Thanks for the question. I was just wondering if you can provide any additional detail sales 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 who we see by providing some insight on the Second of the two questions. On the first of the two questions, this is obviously very rare disease, but we're very excited to serve, this community. This is a devastating disease that, historically has been bereft of any health, these children, degenerate rate, both cognitively behaviorally and then neuromuscularly rapidly commencing at about four or five years old. And So there's obviously, we're very excited about it commercially. We're very excited about it for our mission.
And then as relates to the safety and scientific issues, Luis, if you have any insight into that.
I would just add, as we've mentioned 13 patients have been dosed. This is a direct delivery. There's the preclinical data is exceptional that supports this approach and that we are getting very robust delivery into the parts of the brain that are meaningful for for biological and functional efficacy.
And This is Gil Ronip 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 concept of injecting directly to the brain This actually is an experience that has been developed over many years in the context of many therapeutic interventions. And, is being well tolerated to date. And, we anticipate, that the benefit risk, to be positively in the context of what is a very serious disease.
Our next question comes from Lisa Bayko of JMP Securities.
Just a couple pertains to the model. So, how many patients on therapy and what percentage do we think is our genotype right now? And then also what's the growth in that? Thanks.
Well, fruit. So we're not we don't typically provide and typically we don't provide information on patients on therapy for the commercial product EXONDIS. Sandy, I assume Sandy you have a comment on gross to net?
Well, we haven't provided specific guidance on gross to net either. I mean, when you look at our commercial and non commercial split, it hasn't really changed in the recent past. But that's about all we have said so far on that topic.
We are obviously very pleased with, the performance of 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 EXONDIS or Eteplirsen. And I should note this. So people I'm sure people know this, but to the extent you don't know this, we don't take price increases certainly haven't in the past. So when you see growth on sales, you're obviously seeing, additional patients being served by this therapy.
Our next question comes
Thank you very much for taking the question. So, can you remind us your how you were going to leverage the data from the now 40 patients study to help you get FDA approval now that you have a placebo controlled study plan to be initiated in mid-twenty 20. Apparently, you won't be able see any data from the 40 patient study before you initiate the pivotal study?
Correct. So 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. But, again, we'll be done dosing as long as well and things are going very well right now. We'll be done dosing.
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 microdystrophin 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, least we'll have that in a significant subset of the 301 trial 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 And 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
of 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?
Yes, thanks. It'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 have a 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 very pleased with that. That's why we have great relationships with, Aldevron and with Brammer, now, Thermo Fisher, Theragun, now Catalent, But we're looking at other things as well down the road. We'll certainly do feasibility studies on whether additional capacity internally makes sense. And we'll look at other modalities, even beyond the principles 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.
Hi, thanks. Doug, I don't know if you mentioned the number of patients enrolled in Study 2. I was just wondering if you had account of the 40 patients that you're targeting for that study. How many of them were you enrolled? And then how many patients do you expect Doctor.
Shea to enroll of the 40 patients?
I don't have details on the split between Doctor. Mendell and Doctor. Shay, I can tell you there is a significant inventory of patients, in both sides. So 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 dose.
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, I don't want to get too over my skis on these things and a patient was dosed today. So 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. So, Doug, just, 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 to study in mid-twenty 20.
Are we, I guess, given the competitive landscape of some of the other guys that are using vectorized and Allegos, for example, as well as your commercial product and some of the other micro dystrophin players also entering a larger phase 3 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 put some broad statements in Doctor. O'Neill may want to comment on things like trial site numbers, but just broadly understand the following. We're We don't take for granted the lead that we have, but we do have a lead right now. Versus other folks. And we've already built by the end of this year, we'll have 40 patients dosed in our placebo controlled trial, proof of concept study with our first four patients, of course, has done some time ago.
We'll have data on those first four patients in the publication in the near term. And we're very confident about the progress we're making toward Study 301. We're very, 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 30 But with that said, Doctor. Neel, if you want to make any additional comments.
So what I would say is
that we're very conscious of the issues we've raised around competition or, at that point, right? We're putting it, but with patients actually trying to decide and size, deciding across different studies. We are engaging, we are already obviously actively engaged with sites to our prior and ongoing efforts with our PMO programs. And we are actively engaged with sites around the world. You're looking at evaluating an interest, expanded landscape and the capacity to participate in a 3 year old study.
So we are actually confident, that we can actually enroll, as is required, to meet the timelines that we've outlined. But I'd say we are very conscious of issues you've raised, and that's why we are being very careful and precise in we evaluate and engage with cellular insights around
the world.
There are no further questions. I'd like to turn the call back over to Doug Ingram, any closing remarks.
Thank you very much and thank you all for joining us this afternoon this evening for our update. 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.