Good day, ladies and gentlemen, and welcome to the Sarepta Therapeutics First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen only mode. Later we will conduct a question and answer As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Ian Esteban, Vice President, Chief of Staff And Corporate Affairs.
Please go ahead, sir.
Thank you, Christie, and thank you all for joining today's call. Earlier today, we released our financial results for the first quarter of 2018. The press release is available on earlier this afternoon. Joining me on the call today are Doug Ingram, Sandy Mahatme and Bo Cumbo. After our formal remarks, we will open up call for Q And A.
I'd like to note that during this call, we will be making a number of forward looking statements. Please take a moment to review our slide on the webcast which contains our forward looking statements. These forward looking statements involve risks and uncertainties, any of which are beyond Sarepta's control. Actual results could materially differ from those forward looking statements as any and such risks can materially and adversely affect the business results of operations and the trading prices Sarepta's common stock. For a detailed description of applicable risks and uncertainty, we encourage you to review the company's most recent quarterly report on Form 10 Q filed with the Securities And Exchange Commission, as well as the company's other SEC filings.
We filed our 10 Q this afternoon, May 3, 2018, for the first quarter of 2018 by the SEC required filing deadline. The company does not undertake any obligation to publicly update its forward looking statements, including any financial projections provided today based on subsequent events or circumstances. With that, let me turn the call over to our CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?
Thank you, Ian. Good afternoon and thank you all for joining Sarepta Therapeutics first quarter 2018 financial results and corporate update conference call. We have But before covering all of that, I hope you will indulge me as I make a few brief comments about the state of genetic medicine innovation. And in the context of the transaction we announced this afternoon, the intention of Sarepta participate in shaping the future of genetic medicine. At Sarepta, our mission has always been ambitious to relieve the suffering of those inflicted with DMD and other devastating diseases.
We are fortunate to be standing setbacks, learnings and more breakthroughs. The long held promise of gene therapy to dramatically change the course of disease is becoming a reality. Sarepta intends to play a central role in shaping that reality. We will only achieve this by continuing to allocate the right resources, persisting in overcoming obstacles and marching toward a future where many fatal genetic diseases, which have robbed families first of hope and then have loved ones are transformed into treatable obstacles. We took a major step forward in that direct today as we announced in exclusive partnerships with Myonexus Therapeutics, a clinical stage biotechnology company developing transformative gene therapies for limb girdle muscular dystrophies, also known as lgMD.
Limb girdle is a group of distinct degenerative life threatening neuromuscular diseases, while the various forms of limb girdle have distinct phenotypes Like DMD, they involve muscle degeneration and wasting, eventual wheelchair assistance, and far too often death from cardiopulmonary complications before the age of thirty. The pipeline of 5 Limb girdle gene therapy candidates in development by myelonexus target some of the most severe and common forms of the disease and include 3 clinical and 2 pre clinical programs. Myonexus' lead program has generated encouraging preclinical safety and efficacy data and utilizes rh74 vector, the same vector used in the micro dystrophin gene therapy program, Sarepta is developing with Nationwide Children's Hospital. Of note, Doctor. Luis Rodino Klapic is one of our principal investigators and co inventors of the micro dystrophin gene therapy trial.
And she also is the inventor of the portfolio of Limb Girdle candidates, is the co founder of Myonexus and serves as its Chief Scientific Officer. We will commence the 1st clinical trial with MYO-one hundred and one being developed for limb girdle 2e. In mid-twenty 18 and will report gene expression data in late 2018 to early 2019. Myo-one hundred and one is designed to restore the beta sarcoglycan protein in the affected tissues and reverse the effects of the limb girdle 2e mutation. Systemic delivery of the therapeutic vector in preclinical models has restored full length beta sarcoglycan and demonstrated significant expression levels restoring function in mind.
No significant safety issues were observed in preclinical studies. Turning to the terms of the agreement, in addition to an upfront option payment, Sarepta will pay certain milestone payments that will be used to fund development and will have an option to purchase Myonexus at a set price. After it has had an opportunity to review the clinical results of this trial. This partnership fits brilliantly into our strategic vision for a number of reasons. First, it aligns with our mission of bringing life changing therapies to patients with rare diseases through the development of genetic medicine and specifically gene therapy.
It was developed by gene therapy, Luminary, Doctor. Rodino Klapic and her team, a group we know well and respect immensely. It bolstered our already deep genetic medicine pipeline of 16 compounds to now 21 compounds and it begins to fulfill the commitment we made in January 2018 at the JPMorgan Healthcare Conference to expand our therapeutic focus beyond DMD. To support the successful execution of our deep pipeline, we have been focusing on increasing our talent base across all divisions, but particularly focused on our research, development, regulatory and access functions. We set a goal at the beginning of year to add a new employee every business day through the 1st 2 quarters of this year.
And I am pleased to say that the team has met that goal and we are significantly augmenting our talent. To accommodate our growth, we have also doubled the size of our U. S. Headquarters in Cambridge, Massachusetts, and we have acquired additional property in Andover. Now moving to our first quarter highlights and other recent corporate developments.
We are pleased to announce that we recorded sales of $64,600,000 in the first quarter, and we remain on track to achieve our previously stated 2018 guidance of $295,000,000 to $305,000,000 for EXONDYS 51. We remain confident in the trajectory of the launch especially in light of our and working through the natural chop in the first quarter of the year as patients often change health benefit plans. We are also pleased with the progress we have made in advancing our pipeline. At JP Morgan, we outlined our key inflection points for 2018, And I will now provide an update on how we are tracking so far against these milestones. February of 2018, we announced the outcome of our Type C meeting held with the FDA's division of neurology products, to solicit the division's guidance on the development pathway for our therapeutic candidate Golodirsen, a PMO engineer to treat those DMD patients have genetic mutations subject to skipping exon 53 of the DMD gene.
We remain on track to complete a rolling NDA submission by year end 2018, seeking accelerated approval based on an increase in dystrophin protein as a surrogate endpoint and with a target approval in mid-twenty 19. If we receive accelerated approval, essence would serve as a confirmatory study. We are in talks with the division about potential enhancements to essence, including a proposal to analyze 48 week biopsies for patients amenable to skipping Exxon45 with the goal of accelerating the development of casimersen one of the 2 therapies being studied in essence. We will not know if this is possible as an avenue until we have had further discussions with and we have taken advice from the division. The next milestone is the status of our establishing filing in Europe.
As referenced in today's press release and consistent with last quarter's remarks about the challenges we faced with our marketing authorization application The committee for medicinal products for human use, also known as CHMP, of the European Medicines Agency's rendered a negative trend vote for our MAA for ateplirsen following our oral explanation last week. Let me provide some context. First, our team, accompanied by world leading DMD outside experts, did a fabulous job of presenting the benefits and clinical results of a teplirsen including the positive results across 3 studies and multiple meaningful including our analyses across 3 studies in our 8 K disclosure. The slides include the results for 6 minute walk tests, loss of ambulation, Northstar ambulatory assessment, and pulmonary function data. In preliminary discussions with the EMA to gain insight into the trend vote, we understand that the CHMP has not concluded that as Tuplerson is not sufficiently effective or that its risk benefit is not sufficient, but rather that Sarepta has not yet met the regulatory standard for conditional approval, particularly based on the rapporteur's concerns regarding the use of external controls rather than placebo controls in the study and the functional importance of pulmonary endpoints in ambulatory patients.
One of the most important measures of on which Sarepta showed significant benefit across all three separate studies. Sarepta appreciated the opportunity to present its data and the robust discussion with the CHMP. Nevertheless, we firmly believe that We will seek a reexamination and we will request that a scientific advisory group, also known as a SAG, made up of DMD and neuromuscular specialists, be called to provide expert guidance and insight into among other things the validity of the external controls used and the importance of significantly slowing pulmonary decline in patients suffering from DMD. This past week, it is our understanding that the reexamination and a related SAG should be granted. It is our understanding that the reexamination process will likely be completed by year end 2018.
So that there is no confusion let me be clear that we are committed to bringing ateplirsen, our next generation RNA therapies, and our gene therapies to patients around the world including Europe. We will continue to build our global presence in a way that advances the growth of our pipeline. And as we get better clarity of commercial launch, we will build our infrastructure to support an appropriately timed commercial presence as well. Moving on to our next milestone for the year. We look forward to hosting our first R and D day on Tuesday, June 19.
The day will highlight our product development strategy and provide an in-depth review of our pipeline programs. Our R and D day will be webcast live on our web site. In addition to a review of all of our genetic medicine programs, we look forward to presenting our microdystrophin safety and expression data from at least 2 patients enrolled in our current gene therapy clinical trial underway with doctors Mendel and Rodino Klapic of Children's Hospital. An additional milestone in 2018 relates to our next generation RNA platform, the PPMO otherwise known as the peptide conjugated PMO. We look forward to announcing progress later in the year on our single ascending dose study for our first PPMO candidate, SRP-five thousand and fifty one, which is designed to treat patients with VMD amenable to skipping Exxon51.
If successful, PPMO offers the potential for significantly improved efficacy with less frequent dosing for patients. In addition to SRP-five thousand and fifty one, we are conducting IND enabling preclinical trials 5 additional PP of O candidates, covering patients with mutations amenable to exon skipping for exon's 53 45, 52, 54. Our first six PPMO candidates would address about 43% of the DMD population. Beyond this, we are working on an approach to bring the PPMO therapies to the extremely rare exon mutations and we are engaging in a policy level discussion with the FDA to discuss how to efficiently bring Ultra rare Exxon PPMOs to patients with DMD. In addition to being a promising next generation platform for DMD, if we are able to generate successful proof of concept data PPMO offers potential utility in a broad range of other diseases.
We intend to build out a strategy for the use of our PMO and PPMO technology and other rare diseases over the course of this year. The team continues to execute against the milestones that we set forth at the beginning of the year. For the balance of and to continue to fight for patients with DMD who are waiting for therapy in the United States and the rest of the world. And with that, I will turn the call over to Sandy Mahatme for an update on the financials. Sandy?
Thanks, Doug. Good afternoon, everyone. Some of the highlights for the first quarter of 2018 include a $64,600,000 of net product revenue approximately $1,000,000,000 in cash, cash equivalents and investments on hand as of March 31, 2018. Now moving to the financials. This afternoon's press release provided details for the first quarter of 2018 on a non GAAP basis as well as a GAAP basis.
The press release is available on the SEC and on our website. Please refer to our press release for a full reconciliation of GAAP to non GAAP. I would like to note that we have made some adjustments to our non GAAP presentation. We now exclude net interest expense and depreciation and amortization expenses from our non GAAP financial presentation, as we believe this presentation best reflects our core financials. In the first quarter of 2018, we reported a non GAAP net loss of $17,900,000 or $0.28 per share compared to non GAAP net loss $31,400,000 or $0.57 per share in the first quarter of 2017.
Net product revenue for the first quarter of 2018 was $64,600,000 compared to $16,300,000 for the same period for 2017. The increase primarily reflects increasing demand for EXONDYS 51 in the U S. In the first quarter of 2018, we recorded approximately $5,600,000 in cost of sales compared to $200,000 in the same period of 2017. The increase was driven by higher inventory costs relating to increased demand for EXONDYS 51 during 2018, as well as accrued royalty payments of $3,100,000 to BioMarin as a result of the settlement and license agreements we entered into with BioMarin in July of last year. We expect our cost of sales to modestly increase in the last quarter of this year due to the depletion of materials that were expensed prior to approval.
On a GAAP basis, we recorded $46,200,000 $29,100,000 of R and D expenses for the first quarter of 2018 2017, respectively, a year over year increase of 17,100,000 On a non GAAP basis, this R and D expenses were $43,300,000 for the first quarter of 2018, compared to $26,700,000 for the same period of 2017, which is an increase of $16,600,000. The year over year increase in growth in the year over year growth in non GAAP R and D expenses was driven increased patient enrollment in our late stage clinical trials, a ramp of manufacturing activities for our PPMO platform and expansion of research and development pipeline, as well as collaboration cost sharing with Summit. Commencing on January 1, 2018, we have started sharing 45 percent of the costs related to Summit's research and development for the neutrophin program. Turning to SG And A, on a GAAP basis, we recorded $43,300,000 $26,200,000 of expenses for the first quarter of 20182017, respectively, a year over year increase of 17,100,000 On a non GAAP basis, the SG and A expenses were $33,700,000 for the first quarter of 2018 compared to $21,100,000 same period for 2017, which is an increase of $12,600,000.
The year over year increase was primarily driven by continued build outs supporting our R and D and commercial expansion. On a GAAP basis, we recorded $4,500,000 in net interest and other expense for the first quarter of 2018, compared to $125,300,000 of net interest and other income for the same period of 2017. The unfavorable change is a result of a gain of $125,000,000 from the sale of the priority review voucher in Q1 of last year. Partially offset by higher interest expense in Q1 of twenty eighteen related to our debt instruments entered into the latter half of twenty seventeen. We had approximately $1,000,000,000 in cash, cash equivalents and investments as of March 31, 2018.
In addition, we have prepaid approximately $15,500,000,000 towards our 2019 manufacturing expenses. With that, I'd like to turn the call over to Beau for a commercial update. Beau? Thank you, Sandy. Good afternoon, everyone.
We are very pleased with the progress the team has made over the last six quarters of the EXONDYS 51 launch. We had a strong first quarter and remain on track to achieve our full year guidance of $295,000,000 to 305,000,000 During the first quarter, many biotechnology companies often face headwinds that impact revenue. As Doug previously mentioned, we faced headwinds related to our permanent J code and typical health plan enrollment cycles. The team was able Our U. S.
Commercial efforts are still focused on identifying patients amenable to exon 51 skipping and driving prescriptions. Continuing active dialogue with payers to support broad coverage and reimbursement decisions, and ensuring all patients with DMD have a current genetic test and are appropriately identified for exon skipping aminability. We are pleased that we are seeing continued adoption across all age groups. The average age of patients on therapy is thirteen years old. Which slightly decreased from last quarter.
This trend is due to more patients at a younger age starting therapy We do not expect the average age which would identify 100 of new patients eligible for EXONDYS 51 and other exon skipping or gene therapy high compliance percent of the to identify new patients amenable to exon 51 skipping and submit start forms. We continue to call on top tier centers, but have expanded our efforts to reach additional sites to educate physicians on EXONDYS 51 and the importance of identifying EXONDYS 51 amenable patients. This initiative is intended to identify patients While the patient demographics have remained fairly consistent throughout the launch, the mix of patients on commercial and government plans has slightly changed. The mix was approximately 55% commercial, 45% government in Q1 of twenty eighteen, compared to sixtyforty in Q4 of 'seventeen. As Doug previously mentioned, the data that was used during our discussions with the is also being used as appropriate As a result, payers have a better understanding Our mission is to develop precision genetic medicine that improves the lives of all patients with DMD During the reexamination period with the EMA, we will continue to strengthen our global presence in Europe by solidifying our relationships with KOLs partnering with advocacy groups and advancing our distribution network.
Our focus and commitment patients around the world The commercial success of EXONDYS 51 has provided the framework and infrastructure to support launches of future therapies for rare diseases. We are incredibly excited to enter into From a commercial perspective, the partnership with Myonexus Therapeutics makes strategic sense. Because with success, we would be calling upon the same neuromuscular experts with whom we have relationships and who both who treat both Duchenne and limb girdle muscular dystrophy. Our market research supports that limb girdle patient population has a similar epidemiology to the other Duchenne. If successful, we look forward to serving these patients.
Between our gene therapy programs for both DMD and limb girdle muscular dystrophy, Our team is preparing This is in addition to our multiple PMO and PPMO based programs for Duchenne, which if successful, could be launching over the with our RNA programs being the cornerstone of Duchenne treatment. We are preparing ourselves for operational and executional success and are very excited about the future as Sarepta Now has one of the deepest rare disease pipelines in biotech. Given the work we have done to date and the multiple opportunities before us, our position as global leaders in precision genetic medicine has never been stronger. We are paving the way to bring new medicine to patients with rare neuromuscular diseases. And with that, I will turn the call back over to Doug for closing remarks.
Thank you, Beau. At the risk of repetition, let me again say that 2018 is proving to be a year of transformation. For Sarepta, driven by a steady stream of catalysts in support of our vision to become a leader in precision genetic medicine and positively impact the lives of patients who suffer from DMD and other rare diseases. This past several months have been filled with progress along with new challenges that we fighting to overcome obstacles and bring therapies to patients with DMD around the world. We look forward to our upcoming R and D day in June, which will showcase the depth and breadth of our pipeline programs, our science, our collaborations, and the many milestones we intend to achieve in 2018 and beyond.
And with that operator, can you please open
you. Our first question comes from the line of Brian Skorney of Robert W. Baird. Your line is open.
I guess just when we think about the new licensures that you're taking on with gene therapy and the center and I understand it's coming from Ohio Children's. What does this imply in terms of the vector that that you're working with, for micro dystrophin. I mean, it's the same vector. Is this a sign of confidence on this program? That you're seeing safety or you're seeing, any sort of metrics that would indicate that this is working in these two kids?
You seen any data yet from these 2 kids?
Well, so thank you for the question. This is Doug. So two things. First, as we looked to Myonexus, we do have great confidence in our relationship with Myonexus because of our experience not only with Nationwide Children's Hospital and not only with Doctor. Luis Rodina Klapic, who, by the way, is very likely one of the most successful and prolific gene therapy luminaries that exist today, but also because of, frankly, our experience with the vector RAH 74.
It gives us a lot of confidence moving forward. So this transaction could not be better ceded for Sarepta. And one of the internally, we call this project twin. In reality, I think we really ought to think of this as Project Goldilocks. Perfect next step for our this company in gene therapy.
And as it relates to what we're seeing, let me just say that we are excited for June 2019, We look forward to the opportunity to present, our entire pipeline and data to the community on June 2019.
I guess just as a
follow-up to dig a little bit more in
terms of
what is known today, has the I mean, I guess the first biopsy has definitely been done. Has a Western blot already been run on that biopsy or is the plan to run the western blot on the first two biopsies simultaneously?
Two things. One we've so 4 children so far have been dosed. Because we're dosing once a month. And as you know, we're dosing at significant potentially therapeutic levels 2 times 10 to 14. So far, things are going quite well there.
And we are taking biopsies and reviewing along the way. And what I would say generally is that we're excited to present data to the community on June 19 and to explore where we are on June 19th in-depth.
Our next question is from Alethia Young of Credit Suisse. Your line is open.
Hey guys, thanks for taking my question. Unfortunately, on Europe, but good news on gene therapy. 1, just I wanted you to kind of give a comparison on the Nippon chemistry versus yours. It seems more like the Nippon chemistry is like, dry to person, with the antisense. But wanted your thoughts on that.
And then the second one, I just wanted to kind of talk about in Europe and the promo you say you have underway. Is there a way that you can kind of make that work for Europe? I would just just more color on what maybe the next step would be if the review doesn't work.
I apologize. I missed the second question. And the first question, Nippon is a more filino. So it's less like just a person and a more filino. And that's about what we know they don't haven't presented any real data yet.
So there's very little we know about the program other than that. And apologies on the second question.
It's on Europe. So, you have Pro Moby, I believe, right, that's still underway. So I guess I'm just trying to figure out, is there a way that you could sort of use something like that? Or if you get if the re review doesn't go well in Europe, how do we think about what the next step would be there?
Yes, that's an excellent question. I can tell you in conversations with representatives from the EMA, they are also considering the same issues. So there would be other possibilities for developing additional analysis and evidence in the event that the approach that we're currently taking with our current MA filing was unsuccessful on a re exam. And we know that EMA is considering of those issues as well with us. But our current approach, 1st and foremost, is to when we get the final ruling after the TrendVent, which will happen toward the end of May, then we'll commence the reexamination process request SAG or otherwise known as a scientific advisory group process.
And then hopefully, see if we can, we can, change the perspective through the, through that approach. If not, then we're gonna have to regroup and consider what additional analyses or evidence that we can develop that could speed this therapy to children in Europe that are waiting Because again, I will say, and I know it sounds self serving, but having been present, I think that the Ateplirsen, presentation and discussion was impressive and only, made us makes us more resolute that children in Europe amenable to EXONDYS 51 skipping ought to have availability of a Kepler sin otherwise known as EXONDYS 51 in the United States, sooner rather than later.
Just a follow-up. Is that re review timeline 4 months? I mean, I know I think it was that with another company I dealt with, but just wanted to get your view on that Thanks.
Yes. That is exactly correct. It's our understanding that it's approximately 4 months. So the entire re exam, including the SAG, as we understand it, ought to be complete before the end of 2018.
You. Our next question is from Brian Abrahams of RBC Capital Markets. Your line is open.
A couple of questions on micro dystrophin gene therapy. I'm just wondering when we look towards June 19th, how interpretable, I guess, additional data beyond micro dystrophin expression will be, will we see or be able to interpret functional data or any biomarker data or anything else related to micro dystrophin And then just sort of wondering, obviously, we can maybe infer some confidence in the vector and the approach based on the Myonexus deal. I'm just wondering if anything you or the physician group may be seeing clinically or even pre clinically that might improve confidence in the durability of gene therapy in muscle overall. I'll hop back in the queue. Thanks.
Yes, thank you so much for the question. So first of all, as it relates to the data, so what we will, see in, at June 19th is a couple of very important issues about seminal issues. We'll see obviously, Mike, we'll see a dystrophin expression through Western blot. We'll also see both localization and distribution through immunohistochemistry. So we'll get not only the to the extent to which distributors being expressed and the amount of this being expressed, but also we'll get localization at the sarcolemma and distribution, which will give us a strong view at least preliminarily on the functional nature of the dystrophin that's being produced.
We'll also likely get some biomarkers, So we'll likely get to look at some biomarkers and make some conclusions on biomarkers. As it relates to functional endpoints, will remain to be seen. This will be only a few months out for both these children. So the likelihood that we'll have functional endpoints given their young age and the like that would be interpretable is probably a little lower. So I would expect a little less on that than biomarkers and what we're really looking for right now, which is dystrophin, expression, localization, and therefore implied function.
As it relates to durability, we have, we have a fairly significant amount of preclinical work that gives us some comfort around long term durability. We'll see a lot of that on June 19th and there'll be a discussion from both doctors Mendel and Rodino Klapic as it relates to that. I one of the most significant issues that relates to durability will be the amount of expressions. So I know there's already been preclinical work that says that at relatively robust expression levels that the probability of having long term durability is much higher. And so obviously, it'll be it'll be sort of a virtuous cycle.
If we have robust expression, then obviously we can start getting comfortable that even with some diminution over time that durability will be sufficient to continue to confer significant functional benefit. So that's kind of the way we're looking at June 2019.
Our next question is from Salveen Richter of Goldman Sachs. Your line is open.
Thanks for taking my question. So just a couple for me. So one is, in light of this partnership today, how do you see Sarepta evolving as a company? Are you a broader muscular dystrophy company or with a bunch of technologies that you're going to pursue or do you see yourselves expanding into other disease areas?
You. Thank you very much for that. So, so first of all, I want to say this before I move on because I just want to make sure we lose sight of the fact that we are a DMD company. So as we will expand beyond DMD, I don't want anyone to get the impression wherever leaving DMD. We are focused on and committed to bringing a better life to children around the world who suffer from Duchenne muscular dystrophy across as hopefully as many exons and exon mutations as possible.
But beyond that, we do have the intention of becoming a very significant and meaningful genetic medicine company over time. And we mean we likely mean that in two ways. On gene therapy, we're building a significant gene therapy expertise across a number of different ways. And from a talent perspective, from an asset perspective, from a man contracting perspective, etcetera. And then we will bring on assets that make sense, additional gene therapy assets and targets that make sense to continue to drive, benefits to folks that have rare disease.
And it made very well in, as we lates to gene therapy, go even beyond neuromuscular disorders. And we will look at that on a case by case basis. This is the perfect next step today with, with, Lim Girdle, because it is one step over. It's not an enormous reach. And then, and the beauty of limb girdle is, I should say is, epidemiologically, it is about the same size as DMV And we have 5 gene therapy programs in limb girdle, and that represents about 70% of limb girdle.
So look at the sort of compare that to DMD, Templer, for instance, is 13% of DMD. And we're our Limb girdle will be about 70% of about the same epidemiology theological size. And I would imagine with gene therapy, we could we'll do other neuromuscular disorders and maybe even move beyond other neuromuscular disorders, if that makes sense. On the RNA side, once we see there's 2 ways to look at the RNA side, and we're doing the work right now and building out our strategy right now. Particularly as we see positive signals in our PPMO, we have the opportunity to move into other rare disease areas with our PPMO as well.
In that area, we will likely focus our attention and interest and dedication to what we really know well, which is neuromuscular and also CNS And if we see positive signals in PPMO, I imagine there'll be those who'll be interested in partnering with us even beyond that, we would certainly consider that at the time. And then with if you look across these, you sort of think about the future and the vision of Sarepta across the pipeline, understand that particularly as it relates to DMD, there is a real value to be, to being a big player in RNA as well as the player currently in gene therapy because there is a real opportunity to benefit. These children and hopefully not just children now, but also adults as people age by giving them combination therapies of exon skipping to benefit them and then also gene therapy transform them both pre gene therapy and post gene therapy. So that's the way we're looking at our vision into the future.
Thanks. And then at your R and D day, will we see data on 3 patients out to 3 months or or will we see data on more patients? What about the 2 other DMD programs that you were conducting And then with the myonexus program, any clarity you can give us here about the preclinical data that you've had to date? And then with regard to your vector constructs, how similar are these to the nationwide micro dystrophin program?
So first of all, let's walk through it. As it relates to the micro dystrophin program, so we'll have at least 5 patients dosed by June 19th, but we'll have, we'll actually buy a biopsy data that will be analyzed on very likely on 2. Would be a hope that we could have 3, but it's unlikely just given the process and the timing of taking biopsies and getting the Western blotchiness be done. So it is almost certainly the case that we'll have 2 patients that will be able to present biopsy data on with respect to to that. And then, I'm sorry, the other two questions were, yes, so on the construct, the short answer is that, Again, as Doctor.
Luis Rudino Klapic was the co inventor of micro dystrophin, as well as the inventor the limb girdle constructs, cassettes, etcetera, there is enormous similarities. One of the interesting things about limb girdle is it is in many ways, not just phenotypically, but also underlying very similar to, DMD. This is the very complex that is associated with, dystrophin. And in fact, not in all 5 of them, but in, I think, 3 of 5, they result in a lack of dystrophin, which is why they have a significantly, a serious Feenah time. So there's a lot of construct similarity between these 2, not just in the vector, of course, R874, which we're having we're getting increasingly confident about, but also in just the way they were built and the effect and their neuromuscular and the motors are similar, etcetera.
So they're very, very similar. And I think you had a third question and I apologize for that.
Just anything you can give us on the preclinical data here?
Oh, yeah. So the preclinical data is we'll discuss this in-depth on June 19th and I'll do a very poor job of discussing now. Other than to note that as it relates to, I think at least to maybe 3 of the constructs, there is preclinical debt on is actually in 2 of them I'm data on 2 patients. So this was back at a time. It's a little bit earlier where there was inter muscular injections as first steps that was being done CBAR and the industry does it a different way now where we go straight to infusions because of fact that I am essentially inoculates the children to future gene therapy programs and isn't the right approach.
But there were I am approaches with respect children on at least 2 of these programs. And there was very positive proof of concepts on both. They were there was both great expression as well as, as well as correlated functional benefit, but it was from an I'm perspective. So we're moving with MYO-one hundred and one. Our most advanced program into the clinic with patients, in an infusion way with potentially therapeutic levels that will give us them really robust potential data by the end of 2018 into the first quarter of 2019.
Thank you. Our next question is Rannupam Rama of JP Morgan. Your line is open.
Hey guys, so much for taking the question. Maybe just a couple, logistical questions on the EU regulatory process. What kind of input do you guys have on the scientific advisory group that's going to be convened? And I believe like after the trend vote, there's a 30 days later, you get a final vote, but did that ship to year end? Or 18 now or is it viewed as 2 separate processes?
And I think the final question is kind of like what gives you confidence that the EU situation could result in a wind here the second time around? Thanks so much.
Thanks for that. So a couple of things. First, The Scientific Advisory Group will be chosen by the obviously by the CHMP and EMA. There are obviously are a limited number of real luminaries in DMD in Europe, so we can envision who some of those potential participants would be, but I think they're going to focus on trying to find, physicians who are general thought leaders in Duchenne muscular dystrophy as well as some neuro other neuromuscular participants. You are right about the process to their what we're announcing right now is a trend vote.
It's not the actual vote. The actual vote will occur toward the end of May 30 days after the oral explanation. But for our planning purposes, we don't envision that the final vote will be any different than the trend vote. And then we'll have 15 days thereafter commence the reexamination process. And that will be approximately a 4 month process.
The SAG or the Scientific Advisory Group process will occur within that construct. It will occur within that reexamination process. So that will all occur fairly rapidly inside of that process. There's always the opportunity independent of that to look for scientific advice, separate from what we're currently doing, because the reexam, so you understand cannot, doesn't permit us to provide additional evidence. You're not allowed to do that in the re exam.
So this is really looking at the analysis and reanalysis of the that we've done in the re exam. And then as far as confidence goes, I want to be very clear about this. I don't want to create the false impression that, that we don't have a significant challenge. In front of us, as we have said, I think, hopefully many times, leading up to the oral explanation, the standard is very high as set by the CHMP from for this review. And that doesn't change in the reexamination.
So it remains a very challenging issue. The one thing that we are at least hoping for is that we will all get additional insight from the true Duchenne muscular dystrophy experts, given that we are told that we will get sag in connection. With the re exam, that lease gives us some hope that that we'll get that our re exam will be informed by Shhen Muscular District V expertise, but I don't want to create the false impression that we don't have a significant challenge on our hands. We do. And we have a significant challenge on our hands.
We're going to give it a full throated reexamination effort. We are hoping that a SAG will be the SAG will be meaningful and hopeful and helpful in that process and we'll that done by the end of the year. And then separate part from that, we'll begin to consider what additional steps we could take apart from the re exam if the re exam itself is ultimately on 6 possible.
Our next question is from Matthew Harrison of Morgan Stanley. Your line is open.
Great. Good afternoon. Thanks for taking the questions. If I could just maybe shift to, essence for a second. So can you just talk about what the steps are to adjust on that study to be able to use the 48 week biopsy for Exxon45 and what sort of consultation you have to take with the FDA to be able to do that?
And and sort of what the pluses and minuses for that study would be, if you were to do that. And then separately, could you just also talk a little bit about from EXONDYS 51 from the commercial side Maybe just be a little bit more specific about the permanent J code headwinds and exactly do you expect that to assist into the second quarter or do you think that's completely finished now in the first quarter? Thanks.
Right. Okay. So dealing first with the first question. So the short answer on, the essence and the potential modification of essence is that we are going to we're calling a Type C meeting with the agency. We've already teed it up with the division and we're going to have a Type C meeting where we discuss the mechanisms and protocol that would be associated with looking at the biopsies from 25 exon-forty five amenable patients that have been treated with casimersen for 1 year and looking at dystrophin expression The goal of all of this, so we're quite clear, is that in the event that we're able to do that and in the event that casimersen dystrophin expression is robust and at least in preclinical models, which so far have shown themselves to be very predictive of what we'll see in human clinical trials, if we should see robust casimersen expressions.
So by the way, in preclinical models, casimersen is about as efficient in the production of dystrophin as Golodirsen was you know, Golodirsen was 3.5 times as efficient as teprosyn. And so that's the goal of all this. What is the issue and why do we need to make sure we're very careful when we talk depth with the agency about that. And that's a very simple thing. Essence is going to be the confirmatory trial for Golodirsen.
We're in a really good position with that. And it will also, by the way, in the event that we're able to do this, become the, confirmatory trial for casimersen as well. And so we want to make sure that we walk through this issue with the division and ensure that we have their buy in on doing this and that and their comfort that we're not doing anything, through our protocol that would compromise the integrity of essence. Because in the event that we compromise the integrity of essence, we would compromise the ability to get approval for Golodirsen and ultimately CASM And so that's the concept there. We only know the FDA's view, obviously, when we have our Type C meeting and hopefully either they agree with us or they have additional protocol concepts that we'll obviously adapt to.
But in the event, that the agency is very uncomfortable with this, then we wouldn't do it because it would compromise both casimersen and go years. If we can do it, just so we're clear, it would prove casimersen approval only about 9 months after Golodirsen. So it really would be valuable the 8% of children that are exon-forty five amenable and waiting for therapy. So on the commercial side, I'd say broadly speaking, that turn it over to Bo. Broadly speaking, the this J code issue was a Q1 issue.
It's not a Q2 issue at all, but we'll let Bo provide the color on
this. Doug has it correct. Switching from a temporary J code to a permanent J code all the patients that have medical benefits will switch over and it's really the majority Q1, a little bit into Q2, but for the most part, it's over.
Great. Doug, if I can just follow-up just briefly. So on essence, is the issue an unblinding issue that they would be worried about or can maybe just talk maybe a little bit more specifically about what you think the issue may be? And then is there a timeline here for the Type C meeting and And when you think you'll be able to provide feedback to us on if you can make a modification or not?
Yes. So, yeah, I think So you hit the nail exactly on the head. So the concern would be whether we've created the right sufficiently rigorous protocols around the look at biopsies so that we have avoided any concerns with compromising the trial through some I'm blinding that would compromise the integrity of the trial. So that's the issue. We think we have good protocols for it.
We think we've been very thoughtful about it, but we really want to sit down with the division, get their input. I'm sure they agree with us if they don't, but they have alternative ideas, adapt them, obviously, and then we'll make the call. The process of between asking for, so we are in the process right now of requesting the meeting. So we should have there's a set we don't have a meeting set yet. We're requesting the meeting even as we speak.
So we probably are at least 3 months or so out from our ability to provide a meaningful update. Certainly, by the end of the year, we'll know exactly where we are in by the third quarter, we'll have a good view on where we are. But we'll keep you informed as we're moving along with it.
Great. Thanks very much.
Our next question is from Joseph Schwartz of Leerink Partners. Your line is open.
Great. Thanks very much. Congrats on all the progress. So, you've obviously been making some progress with follow on candidates. So how sufficient is the oligo manufacturing that you've been putting into place?
And do you think you can keep case with, multiple PMO approvals. We've been hearing that some CMOs are pretty stretched with all of the activity in the industry and your oligos are on the more demanding side of the complexity spectrum.
We have, and I'll let Sandy can comment on this addition. We have no current concerns regarding supply issues with our oligos. We're in great shape.
Yes, that's really what I would say as well. We really have no concerns. We have significant capacity that we've built up with multiple backups And, you also have an inventory buildup of both subunits as well as APIs for all our 3 lead programs. Which is obviously 51,000,000 dollars, $53,000,000 $45,000,000 for both PMOs and PPMO. So, Joe, we have no concerns in the manufacturing front.
Okay, great. Thanks. I'll leave it to that one question.
Thank you.
Thank you. Our next question is from Tim Lugo of William Blair. Your line is open.
My Myles means around for Tim Lugo. Congratulations on the mine access deal. I think it fits in really well with your gene therapy looking forward to becoming a major player in the field. Just two questions, if we can turn to GELD GT to therapy. The primary endpoint for that trial is CT antigen.
I'm curious to hear what additional endpoints or what the primary therapeutic portfolio, if you like? What you're looking for in that trial to progress that forward. And also when those patients are going to transfer from the dual femoral artery injection into the more mainstream IV that you're seeing with the market leadership programs? Thanks.
Thanks. Yes, thank you very much. So as it relates to Gauzy D. 2 things. 1, for your first question, it's an excellent one that we need to do more work on before we get to the point I'm actually looking at the biopsy data and make meaning of it, which is we've got to come to a view we're certainly informed by Doctor.
Flanagan, who I think already has a pretty advanced view on what success looks like when we look at the biopsies. Galg GT2 is really fascinating because we're it's an interesting alternative to micro dystrophin. It might have great utility even beyond the MD, given the fact that it, that it, the thesis is that not only does it increase eutrophin expression, which acts as a surrogate for dystrophin, but it also should strengthen the sarcolemma in a general sense because it recruits proteins. But we've got to do a lot of real thinking before we go out and talk about what success looks like there and what exact expression we're looking for. It's something that we're going to have to struggle with again.
As it relates to moving over essentially to full infusion, so one of the reasons we're that in a sense we're on pause, Doctor. Flanagan's dosed one child child's doing brilliantly. No issues from a safety perspective. But he believes that we really ought to be moving to a full infusions. And he's actually in the process of getting his IND updated.
So he can do both full infusions and also accelerate the pace of patients faster than just once a month. So we're in that process right now. So the goal is actually to go from this forward to get at the IND updated and to go full infusion as opposed to this lower limb perfusion, which is where we are right now with the IND.
Fantastic a little bit there and congrats.
Thank you so much.
Thank you. Our next question is from Debjit Chattopadhyay of H. C. Wainwright. Line is open.
Hey, good afternoon. So both of your lead gene therapy programs and as well as the recent partnership, they all use audit74. So assuming age and exercise induced vector expression loss, have you or your KOLs looked at retreatment strategies or is the long term goal supplementing with Exxon Skipping primarily with PPMO?
Yes. Thank you. That's a great question. Both strategies are inside of our pipeline. So we're doing work.
So going to the latter part first, so we there is already existing literature that describes the potential benefits that exist from a combination of gene therapy and exon skipping through PMOs or PPMOs. We're actually doing additional work to actually round out that hypothesis and look at the benefits. As it relates to redosing, we are actually already with Doctor. Luis Rodino Klapic and Doctor. Mendell about strategies in the future for redosing Doctor.
Rudina Klapac has done historical work. Then she has some very good thesis on how that can be done and we're funding that even as we speak. So obviously it's a bid out, but it is definitely our goal. If we're able to become successful with micro dystrophin, the things we're going to certainly want to do is look down the road for redosing. If it turns out in 20 or 25 years, these kids could these adults then would benefit from a readouts.
So the PPMA program, are you halfway through the single ascending dose part right now? Thanks.
The PPMO, yes, we're we're definitely we're halfway there, no. No. Unfortunately, with the single ascending dose study, which is a very traditional 3 by 3 study. It is just a very conservative and therefore, a relatively long process for dose escalation. We really started an is extremely sub therapeutic levels and we're moving up, very slowly, as you can imagine.
So people have asked, are we how do we feel about it? And the answer is we feel great about it, but that I wouldn't take a ton of comfort around the fact that we're seeing that we don't have any issues right now simply because we are still significantly, sub therapeutic. It'll be the end of the year before we have real significant insight.
Thank you. Our next question is from Christopher Marai of Nomura. Your line is open.
Hey, good afternoon. Thanks for taking the question. Maybe one for Bo, real quick. Just on the EXONDIS number. Any ex U.
S. MAP sales in that number? And then when should we anticipate any color on that or inclusion of ex U. S. Sale?
And then perhaps one for CND, just to squeeze it in there, the gene therapy product with myonexus and your your DMD program I assume is being made nationwide? How should we think about manufacturing to build out when will that occur? Thank you.
Hi, Chris. Yes, at the even at the JP Morgan conference, we hinted around that the ex U. S. Sales were going to be insignificant. And that's exactly what it was, this case.
We're going to hit the target of $295,000,000 to $305,000,000 this year. And maybe a few $1,000,000 will come from ex U. S. Sales, but it will be insignificant just as it was this quarter. So the majority of sales happen from the U.
S.
And thanks for your question, Chris. In terms of gene therapy, GMP Manufacturing, we made a lot of progress. I'll quote your words, as you said, $100,000,000 goes a long way to fixing the gene therapy manufacturing problem. And that's exactly the way we see it We've assembled, quite a few people in our gene therapy manufacturing group, and we will have a significant update in the near term. So stay tuned.
Our next question is from Ritu Baral of Cowen and Company. Your line is open.
Hey guys, thanks for taking the question. So just continuing client debate about the degree of micro dystrophinics pressions needed to constitute success for when you unveil the data in June. Doug, you mentioned localization distribution as as variables, and also, but the higher the better, for durability. Is there a number that you have in your head where you say, yeah, this is a home run. Is there a number where you say, okay, maybe we have to think about dosing up And given the seemingly good safety you've seen so far, like why not do that now?
Why not dose up?
Well, great. So a couple So, first of all, on dosing, just to go there. So, we one of the great things about working with Doctor. Regina Clapic as well as Doctor. Mendell and Nationwide is that we really do stand on the shoulders of a of just a ton of preclinical work that justifies the safety of our vector.
So as an example, we have the ability from a safety margin perspective to dose up. We're two times 10 to 14th, which interestingly is the highest dose that anyone has ever received in gene therapy, we could actually dose up to 6 times 10 to 14. The reason that we're not doing that is simply because in preclinical models, 2 times 10 to 14 to shown very robust expression in animal models. And so our current thesis is that 2 times 10 to 14th is an appropriate dose for robust expression. In the event that we didn't see robust expression, we could reconsider that, but that is not our working thesis right now.
And then sort of what is success? There's 2 ways to look at it. If you, what we informed by what we know about dystrophin, you could actually have fairly modest expression and still believe it's robust. So I think as we all know, very small amounts of of increased dystrophin properly localized, converse benefit, not only you know that in Kepler's in Lodirsen, but we know that from nature, you can look at exon 44 amenable children. They have only background amounts of exon skipping that they get naturally, just like it confers by teprocynagolodirsen or casimersen.
And they show either somewhere between no undetectable amounts in Western blot to what we've done, which has shown that they that even after 19 years, they might have around 2% And they have a clinical phenotype that is significantly different. They're out of a standard wheelchair in about 3 to 5 years longer. So small amounts matter. So what we're kind of looking at, if you look at it from that perspective, we would say 5% would be significantly higher than anyone's ever been able to achieve with discipline production. It would clearly be a benefit.
I don't think we would consider 5%. We've considered 5% acceptable. We wouldn't consider it a home run by any stretch. 10% or above, I think, would be a home run from on a Western blot perspective for micro dystrophin. Now, I will also say, for those who go and check the background, in animal models, we're seeing significantly greater expression than that, but that isn't what we need for success.
So I'd say, if we saw 10%, we would have a very significant therapy on it.
And Doug, does that factor in the irability comment you made earlier? Like do you need 15 to ultimately steady state at 10?
Well, I think that's a really good point. I think that's why I think if we had 5% I think if we had 5% dystrophin, which is at 3 months, which is literally 500% higher than we see with Golodirsen at 1 year. That would be really significant. The thing that would give some pause is long term durability. When does 5% become 4% or 3%?
How many years does that take? But to your very good point, if we have 5% or better yet, 12% or 13% or 14%. We can start getting comfortable that even if there is a loss of variability over the long term, will stay above the therapeutic amount for quite some time. And then the other thing that I would say, again, going back to what we've seen in other models. So Doctor.
Voigt, as an example, has a paper on this issue, which is on the durability issue, we stand in an interesting place as a company because we have RNA and gene therapy. And we have the ability to use exon skipping, which will enhance durability. What Doctor. VOitz paper shows is, at least in animal models, if you use exon skipping in advance of gene therapy, you reduce any loss of the early vector by something like 8 times. And then the hypothesis is if you use some form of exon skipping either PPMO or PMO afterwards, you're very likely going to increase the long term durability.
So we stand at an interesting place given the fact that we have a multi platform genetic medicine approach to DMD
Understood. Thanks for taking the question.
Thank you. Our next question is from Hartaj Singh of Oppenheimer. Your line is open.
Yeah, hi. Thanks for the question. I just had one quick question. Assuming you have positive data, from the gene therapy programs and the update we get June, how do you sort of see the next step in terms of your clinical trials? What would you go to?
Would it be a trial analogous to what you're on with Golodirsen? The phase 1two, which could then get you to accelerate approval. Just any thoughts and color there would be really appreciated. Thank you.
Yes. Thank you for that. So I let me say that we are going to give an update on June 19th about our approach to gene therapy and the to the extent that we have positive data our approach to bringing that therapy as rapidly as possible to patients in the United States and then ultimately around the world. So I don't want to go into any detail now on that simply because we're working through some issues and we're going to save that for 2019. Other thing to say this, and it won't come as a surprise to those who know our approach.
We feel a great sense of responsibility to patients suffering from Duchenne muscular dystrophy in the United States and around the world. We understand that every day these patients around the world and there's some 70,000 or 80,000 of them, are suffering irreversible damage that even gene therapy won't fix. We can stop the decline. And so we feel a sense of moral responsibility to move rapidly what you will see on June 19 in the event that we have positive data is a plan that will be very ambitious in our effort to bring the therapy to patients that are waiting
Thank you. Our next question is from Lisa Bayko of JMP Securities. Your line is open.
Hi, this is John on for Lisa. Thanks for taking the question. Just a quick follow-up on the CM CHMP vote. You just noted that the trend vote was negative. I was wondering what the actual vote was on and what the voting results were?
Thank you very much.
We don't have that. So we don't have that within the final vote. We just know the trend vote was we know that the trend vote was negative and we also know that, that the representatives from EMA were quite direct with us that the vote was not a vote that the therapy was ineffective or that the risk benefit was established to not be there, but rather it was lingering questions around the, issues associated with the use of external controls in the 3 studies. As there were a number of issues, but these are the biggest ones that seems that issue and the second significant issue is that we have 3 studies across all three studies, both ambulatory and non ambulatory, we showed a significant, arrest of pulmonary decline in both ambulatory and non ambulatory patients. You can see this because there's an 8 K that has the entire presentation in it.
And, I think there were questions from the tour about the clinical meaningfulness of, of pulmonary decline and arrest pulmonary decline. And that's why our hope is that, that in the re exam with the SAG, we can get additional insight the clinical importance of slowing pulmonary decline, which of course we believe is important given the fact that these that children with Duchenne muscular dystrophy, almost always die as a result of either cardiac or pulmonary. Issues.
Janney. Your line is open.
Hi. Thanks for taking the question. And this might be a follow-up question to previous question on ex U. S. And I believe you talked about an expanded access program in Europe.
And at one point, I just want to you are able to share any information on the current status of that program? And also on the reexamination, is it possible at all you can submit any new information data or is it going to be purely based on whatever you have presented?
I'll answer the latter question and then the first question, Beau can provide additional color on our managed access program or map program. As it relates to the re exam, the short answer is that you can provide new evidence. I understand you could probably provide new analysis of pre existing evidence and data, but we can't additional evidence. For instance, we have additional Permovi patients that an additional evidence from additional Permovi patients as that trials ongoing, but, we can't, insert that into the reexamination process. That would have to happen through a separate process that we would considering the event that we were unsuccessful in the reexamination.
And with that, I would turn it over to Bo to comment on the macro
Yes, we set up a map program, but really, in Europe, it goes very slowly. It goes slowly across the globe. And really 2018, we were not expecting a lot of sales. It was, as I mentioned to Chris earlier, this year will be insignificant from a MAP program. We've set up the basic infrastructure.
Now we're we have been hiring MSLs medical directors to support the staff as needed, but It's going to be insignificant in 2018, regardless.
Okay. Thank you.
Thank you. And that does conclude our Q and A session for today. I'd like to turn the call back over to Mr. Doug Ingram for any further remarks.
Thank you, everyone, for joining today's call. I appreciate that you're joining us and I appreciate the questions. We look forward to updating you on our ongoing progress in the coming months, including on our R and D day, which, as we've said, is scheduled for June 19. Have a lovely evening.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone, have a good day.