Good afternoon and welcome to Sarepta's third quarter 2026 earnings results call. As a reminder, today's program is being recorded. At this time, I'll turn the call over to Tam Thornton, Senior Director of Investor Relations. Please go ahead.
Thank you, Michelle, and thank you all for joining today's call. Earlier this afternoon, we released our financial results for the third quarter of 2026. The press release, along with our presentation slides and supplementary information, are available on the investor section of our company website. We plan to file our Form 10-Q for the quarter today with the SEC. Joining me on the call today are Mike Severino, our Chief Executive Officer, Dr. Louise Rodino-Klapac, President of Research and Development and Technical Operations, Patrick Moss, our Chief Commercial Officer, and Ryan Wong, our Chief Financial Officer. Additionally, joining us in the Q&A portion of the call are Ian Estepan, President and Chief Operations Officer, and Dr. James Richardson, our Chief Medical Officer. Before we begin the formal remarks, I would like to note that during this call, we will be making a number of forward-looking statements.
Please refer to slide two of our presentation to view the formal text of these safe harbor statements. These statements involve varying risks and uncertainties, many of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements, and such risks can adversely affect our business, our results of operations, and the trading price for Sarepta's common stock. We strongly encourage all listeners to review the company's most recent SEC filings for a detailed description of these applicable risks. Sarepta explicitly states that it does not undertake any obligation to publicly update or revise its forward-looking statements or financial projections based on subsequent events. Furthermore, please note that we will discuss non-GAAP financial measures during today's webcast. Complete descriptions and reconciliations of our GAAP to non-GAAP financial measures are included in today's press release and the accompanying slide presentation available to investors on our website.
With that, I will now turn the call over to our CEO, Mike Severino.
Thanks, Tam. Good afternoon, everyone, and thank you for joining us. It has been a little over 90 days since I joined Sarepta, and I want to begin by sharing a few reflections from that time and how they are shaping my priorities for the company. What initially attracted me to Sarepta was a combination that I believe is unique in biotech at our scale: an established commercial business and leadership position in Duchenne, a promising pipeline with the potential to produce differentiated medicines, and the financial strength to invest in that pipeline from our own commercial cash flows. After my first 90 days, I believe those fundamental strengths are very much intact.
At the same time, I joined the company following a challenging period, so I have been deliberate in focusing on evaluating the business objectively and identifying clear competitive advantages, opportunities where we can improve execution, and areas where investment has the potential to generate the greatest long-term value. My observations are informed by interactions with our stakeholders, physicians, patients, investors, and employees. As Sarepta employees have welcomed me into the organization, I have been impressed with their talent, resilience, deep dedication to serving patients, and shared commitment to advancing the opportunities in front of us. Turning first to our commercial business, our immediate priority has been to reinforce the strength of the broader Duchenne franchise while stabilizing ELEVIDYS demand. During the quarter, enrollment form activity for ELEVIDYS was in line with the second quarter.
We believe that this establishes a new baseline that we can use to assess the effectiveness of our commercial initiatives going forward. We are also bringing a growing body of clinical evidence, including new long-term data and data in the important eight to 12-year age range, into our conversations with physicians and families, enabling us to put the benefit-risk profile of ELEVIDYS into the appropriate context. Importantly, this quarter also demonstrated the continued strength of our PMO franchise. Based on our strong PMO performance and stabilization in ELEVIDYS, we are raising the low end of our 2026 total net product revenue guidance and narrowing the range to $1.25 billion-$1.3 billion. Patrick will discuss our commercial performance and outlook in greater detail shortly. Second, I will turn my attention to the promise of our pipeline.
One of my strongest conclusions from my first 90 days is that the potential of our pipeline, particularly in DM1 and FSHD, is not yet fully reflected in how Sarepta is viewed today. These are genetically defined diseases where the underlying biology is well understood. We have shown robust knockdown of disease-causing mutations in a number of preclinical systems, and promising data from our SAD studies supports their potential to be differentiated therapies. The next step is to demonstrate that these observations extend to a multiple-dose setting and demonstrate consistent, robust knockdown, leading to the downstream biologic effects we believe will predict long-term clinical benefit. Our multiple ascending dose datasets, which we expect to share in the upcoming weeks, are designed to provide the data necessary to move both programs into late-stage development.
In anticipation of these data, we are already preparing for the initiation of registrational studies for both programs. While we are preparing to move forward with a sense of urgency, we will preserve the ability to learn from the emerging competitive landscape and our discussions with regulators to inform the optimal development and regulatory path. Louise will provide more detail on these programs, as well as our progress across the Duchenne clinical portfolio, in her section. Third, I would like to highlight our financial strength, which I view as an important strategic pillar for Sarepta. Revenues from our commercial portfolio provide us with the ability to fund the high-value opportunities in our pipeline while retaining flexibility around how and when we deploy capital.
We intend to remain rigorous about where we invest, prioritizing programs where we believe Sarepta has a scientific or commercial advantage, and maintaining discipline across the broader cost structure. Ryan will provide more detail on the quarter, but our continued non-GAAP profitability, cash generation, and balance sheet strength give us the flexibility to invest through the important catalysts ahead while maintaining a disciplined approach to capital allocation. As I look ahead, my view after 90 days is one of focused optimism. We have work to do, and I want us to be measured by execution, but we also have assets that I believe position Sarepta well for its next chapter: a durable Duchenne franchise, potentially differentiated opportunities in DM1 and FSHD, deep capabilities in rare and neuromuscular disease, and the financial strength to advance those opportunities.
Over the coming quarters, I believe the markers of our progress will become increasingly tangible: continued execution in ELEVIDYS, potentially differentiated clinical data from our siRNA programs, disciplined advancement of our highest-value pipeline opportunities, and consistent financial execution. If we deliver against these priorities, I believe we can strengthen the foundation of the business while positioning Sarepta for meaningful long-term value creation. With that, let me turn the call over to Patrick to discuss our commercial performance. Patrick?
Thank you, Mike. Today, I will review our third quarter commercial performance, the work we are doing to support treatment decisions for ELEVIDYS, and the continued strength of our broader Duchenne business. Our third quarter resulted in total net product revenue of approximately $324 million, including $83 million of net revenue from ELEVIDYS and $240 million from our PMO franchise. For ELEVIDYS, we are seeing stabilization in the business, and our exon-skipping franchise continues to demonstrate strong and durable performance. The commercial organization is executing well. We continue to hear positive feedback that our field team's efforts are being well received, with physicians and centers appreciating the support, education, and coordination. Key leading indicators for ELEVIDYS and enrollment forms in the third quarter were in line with Q2 and above where we started the year. Willingness to treat remains solid, and recent start form activity supports our current run rate.
We continue to remain focused on execution, identifying patients, and helping physicians and families understand the long-term evidence for ELEVIDYS, including the recently published three-year EMBARK results. Our sales team brought these data to healthcare providers across our sites of care and referral networks this quarter. What we hear in our engagement with HCPs is that the three-year EMBARK data resonates. With more than 1,500 patients now treated, ELEVIDYS has a depth of real-world evidence that is unique in Duchenne. We believe these data are helping physicians and families better appreciate the long-term benefits of ELEVIDYS. For physicians, the data reinforces what they observed in their own patients treated with ELEVIDYS, and some who have had a period of inactivity are returning to prescribe. We believe this evidence is having an impact as HCPs bring it into conversations with Duchenne families.
Some families are resuming their treatment journeys after pausing, and eligible patients who have recently made the decision to pursue treatment are doing so with more determination to complete their journeys. Throughout the quarter, we continue our work to help educate families about Duchenne and the therapies available to them. Further, as new data emerge, we continue to update our patient education resources so families have current, balanced information to support their conversations with HCPs about treatment options. Louise will speak in more detail to the ELEVIDYS data recently presented at the World Muscle Society, which shows durable two-year functional benefit and manageable safety in patients ages eight to 12 at the time of treatment. Together with EMBARK, these data reinforces the value of ELEVIDYS across the ambulatory population and help address information needs for families of older ambulatory boys.
We continue to work on further building our evidence base with longer-term functional data and ongoing evidence generation. This includes Cohort eight of ENDEAVOR, which evaluates prophylactic sirolimus treatment as part of an enhanced safety profile protocol during treatment with ELEVIDYS in non-ambulatory patients with Duchenne. Looking ahead, we believe the trajectory from here will be influenced by the continued evolution of the data. Turning to our exon-skipping franchise, we delivered another strong quarter.
New patient enrollments increased, and patient adherence to our exon-skipping therapies continues to support ongoing stability in our commercial patient base. in September, EXONDYS 51 marked 10 years since its U.S. approval. I have been with Sarepta since that launch. It has been a privilege to be part of this journey from the beginning, building a treatment category where none existed, earning the trust of the Duchenne community, and seeing firsthand what these therapies mean to patients.
Over that decade, exon skipping has become a foundational treatment approach in Duchenne. More than 1,800 patients worldwide now have been treated with our exon skipping therapies, building a substantial body of real-world evidence across ambulation, pulmonary, cardiac function, and survival. That real-world experience is a key reason physicians and families continue to place their confidence in our exon skipping therapies. The Duchenne landscape is evolving, which requires us to continue to leverage the advantages we have developed over the past decade. This includes deep relationships with the Duchenne community, established reimbursement and patient support pathways, and real-world evidence in a disease that progresses over decades, demonstrating the benefit-safety profile of our exon skipping treatments. We believe that the combination of data, expertise, and relationships differentiates Sarepta and positions us to remain a trusted partner as treatment options expand.
As pioneers in Duchenne, we will continue to use our expanded and experienced field organization to reinforce the value of exon skipping with physicians, patients, and families. Turning to our outlook for the fourth quarter. ELEVIDYS revenue in the third quarter was consistent with the guidance we communicated on our last earnings call. We continue to expect ELEVIDYS revenue in the fourth quarter to trend in line with Q3, acknowledging the quarter-to-quarter variability inherent in a one-time gene therapy. We expect our exon skipping franchise to remain strong in the fourth quarter, continuing the solid performance we have seen across the portfolio. The strength of our PMO business, together with stabilization in ELEVIDYS, supports our decision to raise the low end of our 2026 total net product revenue guidance by $50 million to a range of $1.25 billion-$1.3 billion. In summary, our performance reflects two important dynamics.
First, stabilization of our ELEVIDYS business, supported by a growing body of long-term evidence that is resonating with the community and offers a greater degree of confidence for both physicians and families. Second, our exon skipping franchise continues to provide a durable foundation for our Duchenne business, built on a decade of real-world experience that shows the value of dystrophin restoration versus the natural history of Duchenne. Our priorities remain clear: drive broader adoption of ELEVIDYS among ambulatory patients, build on the strength of our exon skipping portfolio, and support informed treatment decisions through evidence and education. These focused actions, coupled with our deep commitment to patients, will sustain our leadership in Duchenne. Thank you, and with that, I'll turn the call over to Louise. Louise?
Thanks, Patrick, and good afternoon, everyone. We believe the progress the Sarepta team has made these past few months represents significant advancements, positioning us to bring the very best therapies to patients. Beginning with siRNA. It's important to understand why we believe our siRNA approach will deliver the best results for patients. The premise is simple. Rather than applying one delivery approach across all tissues, we select the receptor and delivery architecture that is intended to best address the key biological barrier in each disease. Fully understanding the biology of the disease and how to knock down or eliminate the toxic RNA or protein caused by the disease is critical to impacting its root cause. We believe our approach will offer long-term clinical impact and potentially the highest and most durable knockdown, leading to the greatest functional benefit.
More specifically, our key intended differentiators for the DM1 and FSHD programs include reaching enough muscle fibers, achieving sufficient intracellular exposure, and driving meaningful target knockdown. To date, our preclinical and clinical data support the premise and have shown dose-dependent increases in plasma and muscle concentration, no evidence of saturation in muscle uptake, and the ability to potentially achieve deeper target knockdown, including preclinical data demonstrating robust nuclear knockdown through greater tissue exposure. We look forward to sharing with you the results of our MAD study for DM1 and FSHD in the coming weeks. Our plan to share these data remains consistent. I'll now provide more color on what success would look like for these readouts. Starting with DM1. SRP-1003 is designed to knock down the toxic DMPK RNA that drives DM1 pathology. In DM1, mutant DMPK transcripts accumulate in the nucleus, sequester MBNL proteins, and disrupt normal RNA splicing.
For a therapy to address the underlying biology and treat the disease at its source, it must reach muscle, enter the target cell, knock down nuclear-retained DMPK RNA, and drive downstream splicing correction. Of note, the connection between knockdown and splicing correction and the biological connection to clinical impact and functional benefit is well established in the scientific literature. As presented at the 2026 Oligonucleotide Therapeutics Society in October, we established correction of MBNL-dependent mis-splicing, which means that SRP-1003 is degrading disease-causing RNA within the nucleus. That shows that the therapy degraded pathogenic DMPK mRNA in both the cytoplasm and nucleus in a dose-dependent manner, achieving robust knockdown in each compartment and a nearly one-to-one comparable knockdown across cellular compartments. Clinically, our early SAD data shows a dose-dependent increase in plasma concentration and high muscle concentration in the initial cohort.
Importantly, our upcoming MAD data, cohort three at three mgs per kg siRNA, and cohort four at four mgs per kg siRNA, are intended to extend this evidence by evaluating the relationship between dose, muscle exposure, DMPK knockdown, and splicing correction, along with safety and exploratory functional measures. More specifically, we believe SRP-1003's potential best-in-class profile would include the following: dose response of muscle exposure and DMPK knockdown, clear downstream splicing correction measured through effects on genes relevant to the pathology of DM1, including the CASI-22 panel, supporting the knockdown in the nucleus, and finally, a safety and tolerability profile that preserves the ability to dose to an optimal level for differentiated pharmacology. Now moving to FSHD. SRP-1001 is designed to knock down DUX4, the toxic driver of FSHD in skeletal muscle.
The objective of our MAD study is to connect muscle exposure with DUX4 pathway suppression and downstream molecular effects while continuing to characterize safety at higher exposure. To that end, we believe a successful readout for our MAD study would include continued evidence of strong muscle delivery and the ability to dose without a dose-limiting safety signal, knockdown of the DUX4 pathway reflected in suppression of the DUX4-related gene panel, together with directional improvement in circulating DUX4-related biomarkers, concordance across pharmacodynamic measures, which can help establish a treatment-related signal from variability in an individual assay, and CK interpreted directionally and in the context of the broader biomarker package.
While the data will include early functional measures, we would not over-index on functional outcomes in this readout since the study is small, the population was not selected for functional homogeneity at baseline, and the available follow-up is not long enough to definitively demonstrate a treatment effect on function. FSHD is a progressive disease, and DUX4 knockdown is intended to slow or prevent ongoing muscle damage, so demonstrating function will therefore require an appropriately sized and controlled study with sufficient follow-up. At this stage, we believe the most credible foundation for longer-term benefit is strong, reproducible DUX4 pathway knockdown supported by concordant biomarkers and a tolerable dose. Preliminary functional assessments can help inform endpoint selection and future study design, but the near-term bar is a coherent biological package showing that SRP-1001 reaches muscle, drives DUX4 pathway knockdown, and produces consistent downstream biomarker effects.
In summary, we believe our FSHD and DM1 programs hold the potential to be best in class by not simply reaching the bloodstream, but by reaching enough muscle fibers, maintaining exposure long enough, achieving sufficient intracellular siRNA concentrations, and driving meaningful target knockdown in the nucleus. Given this potential, we are actively preparing for our registrational studies for both programs. Our development strategy is designed to advance each program efficiently towards registrational development while preserving flexibility as the clinical and regulatory landscape evolves. The upcoming datasets are intended to establish the PK/PD relationship, inform dose selection, and provide the evidence needed to finalize pivotal study designs, including patient selection and endpoints. In parallel, Sarepta is advancing operational readiness for late-stage development, including initiating manufacturing for the planned phase III studies with the intent that we are positioned to move quickly following the data and regulatory engagement.
From a regulatory perspective, accelerated approval remains an important potential pathway for both programs alongside traditional approval, and we are planning in a way designed to preserve optionality for either approach. This could include the possibility of a phase II expansion study to support an accelerated approval pathway, followed by a confirmatory phase III study. Ultimately, the strength of the data and our discussions with FDA will inform the appropriate regulatory strategy. Our goal is to build a compelling evidence package and pursue the most efficient and appropriate path to bring these potential therapies to patients globally. Now turning to ELEVIDYS, our gene therapy approved to treat Duchenne.
At this year's World Muscle Society meeting in Japan, we were pleased to present important clinical updates, including data that showed eight to 12-year-old patients treated with ELEVIDYS demonstrated durable and clinically meaningful benefits across the North Star Ambulatory Assessment and time function measures over two years, compared to a well-matched external control group. As you are aware, the years between eight and 12 are when these boys begin to rapidly decline. We also presented an analysis of patients treated ages two and three, a total of 26 patients, that demonstrated robust ELEVIDYS dystrophin expression and sarcolemma localization 12 weeks after infusion. The extensive evidence we have generated in this under-four population is critical to our regulatory strategy to broaden potential ELEVIDYS treatment opportunities for as many Duchenne patients as possible.
We're in the process of discussing our approach with FDA and expect to submit an sBLA for this under-four population mid-next year. We were also pleased to have a robust presence at the Annual Neuromuscular Study Group Scientific Meeting in San Antonio, Texas. We presented seven posters, including the first results from the phase IV ENDURE study, a multicenter, prospective observational study in patients receiving ELEVIDYS as part of clinical care for Duchenne. The study included safety in patients who received prophylactic immunosuppression with SERELYS, which provided preliminary real-world data evaluating approaches to liver safety mitigation risk. The data showed that treatment-related acute liver injury rates were consistent with prior reports, and no acute liver injury events were observed among the subset of participants who received prophylactic sirolimus.
The totality of these data support what we at Sarepta and others in the community already believe about the positive impact ELEVIDYS continues to have on the trajectory of Duchenne. Moving now to our ENVISION study. After careful consideration of our clinical development strategy, we've decided not to resume enrollment of the ENVISION study. ENVISION, as you are aware, has been on hold for over a year, and we have recruited approximately half of its intended sample size. The feasibility of resuming enrollment in a study after such a prolonged hold introduces operational and technical barriers that we do not believe are practical to overcome at this stage. Notwithstanding our decision to not resume enrollment in ENVISION, our commitment to serve non-ambulatory individuals with Duchenne remains steadfast, as this population continues to have fewer treatment options. ENDEAVOR Cohort eight remains central to this commitment.
To remind you, the purpose of Cohort eight is to assess prophylactic sirolimus treatment as part of an enhanced safety protocol during treatment with ELEVIDYS in non-ambulatory individuals with Duchenne. Data from Cohort eight will help determine whether administering sirolimus prior to and after ELEVIDYS infusion can help reduce acute liver injury, a known risk associated with AAV gene therapy. We expect to complete enrollment of ENDEAVOR Cohort eight by the end of this year and are planning to engage with FDA in Q1 2027. Moving now to EXONDYS 51. MIS51ON is our post-marketing commitment phase III dose-ranging study evaluating higher doses of EXONDYS 51 for Duchenne patients who have an exon 51 skipping mutation. We are pleased to report that we have achieved last patient, last visit in the MIS51ON study. We look forward to communicating our results and updates when available.
We look forward to sharing important updates with you, including data from our DM1 and FSHD MAD studies later this year, and our proof of biology data from the Huntington's disease program and data from the ENDEAVOR Cohort eight study next year. Thank you. I'll now turn the call over to Ryan for an update on our financial performance. Ryan?
Thank you, Louise, and good afternoon, everyone. In the third quarter, we executed against our financial strategy, driving meaningful revenue while maintaining expense discipline as we invested in our pipeline. We delivered non-GAAP profit, and the base business continued to generate cash, further strengthening our financial position. Today, I'll walk through highlights from our third quarter results and how we are positioned heading into year-end. Starting with our top-line results. Total product revenues in the third quarter were $324 million, a decrease of 13% year-over-year. For the first nine months of 2026, total product revenues were $983 million, a decrease of 34% over the same period prior year. The year-over-year change in both periods were driven by lower ELEVIDYS sales. Collaboration and other revenues were $58 million for the quarter and consisted primarily of contract manufacturing revenues for commercial ELEVIDYS supply sold to Roche.
For the first nine months of 2026, collaboration and other revenues were $530 million compared to $251 million in the same period prior year. Altogether, total revenues were $381 million in the third quarter and approximately $1.5 billion year-to-date, a decrease of 5% and 14% year-over-year, respectively. Turning to cost of sales and gross margin. Total cost of sales for the third quarter was $189 million, an increase of 25% over the prior year, driven by cost of goods related to contract manufacturing sales to Roche. For the first nine months, total cost of sales was $447 million, which is flat to the same period prior year. Third quarter results included $52 million in take-or-pay charges related to non-cancel manufacturing obligations, where we elected not to manufacture certain inventories for ELEVIDYS.
Product revenue gross margins, which are net product revenues, plus the inventory costs related to products sold, excluding to Roche, were 59% in the quarter and 72% through the first nine months. The take-or-pay charge just mentioned impacted margins by approximately 19% in Q3 and 6% year-to-date. Moving now to expenses. Combined R&D and SG&A expenses in the third quarter were $201 million on a GAAP basis and $169 million on a non-GAAP basis. Non-GAAP expenses decreased 40% year-over-year, driven by the $100 million DM1 milestone payment to Arrowhead in prior year R&D expense and by lower clinical and manufacturing expenses. For the first nine months of 2026, combined R&D and SG&A expenses were $653 million on a GAAP basis and $558 million on a non-GAAP basis.
On a non-GAAP basis, the year-over-year decrease was 61%, driven by the Arrowhead collaboration transaction costs in the prior year period, as well as the cost reductions from last year's restructuring and R&D pipeline prioritization. Bringing these results together, we reported a GAAP operating loss of $9 million and a non-GAAP operating profit of $23 million in the third quarter. On a year-to-date basis, we've reported GAAP and non-GAAP operating income of $363 million and $507 million, respectively. Turning to liquidity. Cash investments increased by $54 million in the third quarter to end with a balance of nearly $1 billion compared with $954 million as of year-end 2025. From the start of the year, adjusting for $250 million of collaboration payments made to Arrowhead, our base business has generated nearly $300 million of cash year-to-date.
Looking ahead to the remaining few months of the year, in addition to the updated revenue guidance provided by Mike and Patrick, we are also narrowing full-year guidance for combined non-GAAP R&D and SG&A expenses to between $800 million and $825 million. Taken together, the guidance reflects a higher revenue floor and lower expense ceiling than our previous guidance, reflecting the continued operating discipline of our business. Over the medium term, our capital allocation strategy will continue to focus on preserving financial flexibility as we approach our 2027 notes maturity and funding our high-potential pipeline, including moving our DM1 and FSHD programs into pivotal studies. With that, I'll turn the call back to Mike for Q&A. Mike.
Thank you, operator. Let's go ahead and open up the call for Q&A.
Thank you. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We do ask that you please limit to one question. The first question will come from Anupam Rama with J.P. Morgan. Your line is now open.
Hi. This is Yuwak Teles for Anupam Rama, J.P. Morgan. Thank you so much for taking our question. With your ongoing patient and physician education initiatives regarding ELEVIDYS, what is resonating and what needs more work?
I'll start, and then Patrick can provide a bit more color. With respect to the commercial initiatives that we've put in place, which are both the sales force expansion and the new data that are available to the sales force in the field, I think the key things that are resonating are the long-term data in particular, and the data in the eight to 12 population. As we continue to build that long-term evidence base, showing improved function in a number of domains, it recenters the discussion around benefit-risk, and we think that's essential because it's important to keep in mind that Duchenne is still, unfortunately, a progressive, debilitating, and ultimately lethal disease. Showing that long-term benefit is very impactful to physicians when they're making their treatment decisions. Patrick, do you want to add anything?
I would add that, with data like this, it does take time and repetition to deliver that message and to change prescribing behavior. With our expanded team, we're meeting with many physicians more than once. It lets us walk through the data again and again and discuss it in depth. Our focus is really, it's consistent execution and helping patients progress through their treatment journeys.
Thank you. The next question will come from Casas Valerisis with Oppenheimer. Your line's open.
Thank you so much for taking our question, and congrats on the strong quarter. I have one question on DM1, on DM1, quickly. On DMD, ENVISION study specifically, how does terminating this trial impact the potential return of ELEVIDYS in the market for non-ambulatory patients? On DM1, what splicing improvement would you consider a success given the high biological noise here and the Novartis failure with an siRNA? Thank you.
Okay, so on the question with respect to ELEVIDYS and the ENVISION study, the ENVISION study was not part of our plan to return to the non-ambulatory population. The central part of that plan right now is evidence to show improved benefit-risk with the introduction of sirolimus, which is being studied in ENDEAVOR Cohort eight. ENVISION would not have provided data in time to inform that decision under any case. Given the fact that it's been on hold for more than a year, as Louise mentioned, this was purely a practical decision based on operational and technical considerations. Once we have the Cohort eight data, as we've said in our prior call, we will discuss them with the agency promptly, and that's what's going to inform the potential path back to the non-ambulatory population. We remain committed to addressing those data needs through whatever way is needed.
Right now, the central piece of that equation is Cohort eight. With respect to DM1, I think we're in a range with splicing correction where clearly more is better. What Novartis showed was variable, and perhaps in the 10%-15% range. I think we would conclude that that's not enough. We certainly want to be well above that. We're in the range where we think more is better. So, our aim is to push splicing correction as high as we possibly can. Obviously, the first step in that chain is to get very solid knockdown, robust knockdown. We think the preclinical evidence that we've generated supports our ability to do that, and the ability to drive muscle concentration in the single ascending dose also supports, in our view, our ability to do that.
In the upcoming multiple ascending dose, we want to see that translate into robust knockdown, as I said, and splicing correction that is, I think, meaningfully different than what was demonstrated by the Novartis program.
Thank you. The next question will come from Brian Abrahams with RBC Capital. Your line's open.
Hi. Thanks so much for taking my question. Are you guys seeing something, I guess, beyond what you've shared before to warrant movement of the siRNAs into phase III and ramp up before fully unblinding, or is it just a matter of being prudent to maximize your efficiency? On a related note, do you think there could be a situation where, depending on your data, you could still pursue accelerated approval even if that path is not available to others? Thanks.
The data that give us confidence to begin preparations for registrational studies come from all the lines of evidence that I mentioned just a moment ago. We have very strong preclinical data and good early clinical data from our single-ascending dose studies that tell us that we believe we should be able to achieve very high levels of knockdown in both programs, that that will translate into the downstream effects, whether it is splicing for DM1 and DMPK knockdown or DUX4 inhibition of DUX4-regulated genes in FSHD. We think those data are very strong. The single-ascending dose data bolster that confidence because the ability to achieve high muscle concentrations in FSHD, we have already shown strong knockdown. We have those data coming in the multi-dose setting for both programs, more on FSHD and our ability to look at that for DM1.
That constellation of evidence is what gives us confidence, and we are going to move forward rapidly, and we are prepared to act when we see the data in the upcoming weeks, as we said. It is really that constellation of evidence that gives us confidence.
Thank you. The next question will come from-
I am sorry, operator. There was a second part of the question that I forgot to address, which is whether we believe there could be an accelerated approval pathway for our programs even if that was not available to others. The short answer to that is, the ability to pursue accelerated approval is based on the strength of the data. We would expect to have strong data, and so we would expect to have those pathways available to us. Obviously, we will discuss our data with regulators as we move forward, but our expectation is that accelerated approval should be on the table for both of those indications.
Thank you. Our next question will come from Andrew Tsai with Jefferies. Your line is open.
Hi. Good afternoon. Thanks for the updates. Exciting times. Sticking with the DM1 FSHD, totally understood what to expect on efficacy. On safety, hypothetically speaking, what could be some of the special AEs you're particularly looking out for? I don't think there's a TFR, so there shouldn't be anemia risk, but αvβ6, could that be linked to any respiratory CV signals? Maybe even for your earlier stage IPF program. Anyway, any color around what you expect on safety would be very helpful. Thank you.
The safety profile that we've observed, both preclinically and in the single-ascending dose studies, has been very favorable. We've not identified dose-limiting toxicities or particular toxicities that might, for example, be AEs of interest going forward. As you mentioned, we do not have a transferrin receptor component to our delivery system, so anemia would not be something that would be expected in our program. With respect to the integrin targeting and experience with integrin modulation as a therapeutic program, I think they're very different things. We know that in some cases, when very high levels of αvβ6 have been targeted, they have led to pulmonary effects when prolonged suppression is the goal. However, as a delivery vehicle where there's only intermittent exposure, we've observed a very favorable safety profile. So, we would not expect to see similar findings in our program.
James, I don't know if you want to add anything further.
No, I'm fine. Thanks, Mike.
Thank you. The next question comes from Ellie Merle with Barclays.
Hey, guys. Thanks so much for taking the question. Just another couple on DM1 and FSHD. Just as you guys are moving quickly into registrational studies, how are you thinking about dose selection? Could you potentially pick higher doses, lower than the ones that we will get at these upcoming MAD readouts? Also, you mentioned you plan to move forward rapidly into registrational studies. Could you just give a little bit more clarity in terms of what specifically this means from a timeline perspective, when you might meet with the FDA, and how you're thinking about that? Thanks so much.
Certainly. I'll start, and then I'll let James provide some more color. With respect to dose selection, in both of these indications, we are in a situation where we believe greater knockdown is better. So we will take forward the highest dose that gives the best knockdown that is tolerable, and all of the evidence to date would make us think that the full dose range that we're exploring will be tolerable based on all the evidence that we've seen to date. There are higher doses in both the DM1 and FSHD program that are underway that would give their full readout in early next year, as we've mentioned in other settings. So it certainly is possible that one of those could ultimately be the selected dose.
However, we do believe we will see enough evidence and a strong enough indication of dose response with the upcoming data readouts that will have a good indication of both the ability and the dose that we will likely move forward into registrational studies. James, I do not know if you want to provide any additional detail.
Just to reiterate, I think we will get a large range of exposure out of this upcoming readouts. As Mike has referenced, in the FSHD program, there is a higher dose cohort that is still in the clinic at the moment, and we will get a read on early next year. I think putting these two data points or these two readout points together, we will have an opportunity to pick our dose and discuss that with regulatory agencies in the new year.
Thank you. The next question will come from Ritu Baral with TD Cowen. Your line is open.
Hey, team. This is Josh Fleishman on for Ritu. Thanks for taking our question. Curious, what needs to be done prior to releasing the upcoming MAD data? Once that data is presented, are there any gating items to pivotal trial start? One more to tag onto that. How does Novartis's recent miss in HARBOR and potential patient heterogeneity shape the way you think about designing a potential pivotal DM1 study? Thanks.
Okay. Maybe I will start with the comments on HARBOR, and then Louise, do you want to pick up with the question about what needs to be done prior to release of the data? With respect to HARBOR, obviously we need to see more complete data from HARBOR to have a better understanding of exactly what happened. What is publicly available are still just top-line commentary, essentially, on the results, the fact that their dose failed to hit statistical significance, although there's been follow-up commentary that they believe they're seeing clear evidence of biological effect in multiple secondaries. We think that's a good thing, and that's consistent with what we already know in the field, which is that DMPK mutations are causal in this disease. I would say there are two things that we think about when we look at HARBOR.
First is just the degree of DMPK knockdown and splicing correction that one is able to achieve. As I mentioned earlier, more is better, and the higher up we are on that curve of knockdown and splicing correction, obviously I think it strengthens our ability to show an impact even in a similarly designed study. It's also worth looking at those data when they are available, which is going to be in an upcoming meeting. We're hearing it may be MDA in the spring, but we'll have to see if that, in fact, is confirmed, to see how the endpoint vHOT performed. There are a number of questions that remain to be answered.
Were there patient selection, patient variability issues that may have clouded the ability to get a positive readout in that study, along with potentially knockdown that was not quite sufficient to demonstrate an effect in that population? There are design considerations that one could use to address this, baseline enrollment criteria, potentially even stratification if necessary. We'll keep an eye to all of those things as the data emerge and as we discuss our plans with regulators. I'd also say we're not locked into any particular study design at this point. We have the flexibility to choose amongst various approaches, both for accelerated approval and full approval, and that will be a focus of our conversations with regulators early next year. Louise, do you want to take the question about data readiness?
Sure. I think in terms of what needs to be done, it's typical for any of, say, at the end of a study right now, which is really data transfer, data cleaning, QC, and then any analysis that needs to be done with that individual dataset. That's right now, that's the phase that we're in right now in terms of getting ready for the upcoming readout.
Thank you. The next question will come from Brian Skorney with Baird. Your line's open.
Hey, good afternoon, guys. Thank you for taking the question. I guess I also want to push a little bit on the HARBOR results and how you sort of interpret a potential pivotal trial design as you're thinking about structuring that. Given the historical context Sarepta has had, I mean, you've run three randomized controlled studies in a muscle disease, and we've sort of been in this regular shift to trying to find the right endpoints, the right timeframe for analyzing the endpoints, and we haven't really seen that come to an effect.
I'm just wondering how you kind of think about de-risking a similar pathway in DM1, where we don't really know as of now, even when we restore more normal protein function, how to design a study with an endpoint that can capture an effect with a heterogeneous differential clinical function, and that time course of measurement doesn't sort of overwhelm any clinical difference. When you think of your pivotal trial design, is vHOT a good endpoint? Is 5xSTS a good endpoint? Is MDHI? How do you kind of fall on what the Assuming you have to do a full clinical study for full approval at some point, what is the clinical endpoint that you're looking at and timeframe for evaluation?
Well, I'll let James comment on the clinical endpoint. The one thing that I would say is that the further up that curve we are with respect to our ability to knock down the toxic mRNA and improve splicing, the greater our ability will be to show improvement on whatever endpoint we ultimately select, as long as, of course, it is disease-related, and we will be picking endpoints that are very clearly disease-related. But James, do you want to talk more specifically about endpoint and study design?
Yeah, absolutely. I appreciate the reference to our experience in this area. We are obviously experienced neuromuscular developers with a lot of in-house expertise. I think one very clear learning is it's not the endpoint in itself, but it is the population in which you test this endpoint and the duration over which you're testing it. I think without revealing our inner workings, we are going through a process of reviewing the access to external data that we have from a natural history perspective, our own data, and interacting with KOLs in the field in order to find that most responsive endpoint or endpoints across the appropriate time period and in the appropriate population.
Thank you. The next question is going to come from Yanan Zhu with Leerink Partners. I'm sorry, with Joe Schwartz, Leerink Partners. Your line is open.
Great. Thanks so much. Mike, you came from AbbVie where development is run to big pharma standards, and you said that you want Sarepta judged on execution. Sarepta's history is mixed on clean wins, so I'm wondering, after almost 100 days, what's your honest view of Sarepta's trial design and execution capabilities? Specifically, is there anything that you would change in order to give DM1 and FSHD programs the best shot at being able to succeed based on not only just choosing the patients that you enroll and the endpoints you study, but setting up statistics and training raters and picking sites and everything else that goes into good clinical trial hygiene? Can you give us an insight into your view now that you've been there a while? Thanks.
Sure, I'd be happy to do that. As you point out, I've run clinical development programs around the industry for many years now across a wide range of companies, across Amgen, across AbbVie. A couple of things I think are transferable across disease states. One of the most important is, if you want to have a positive study, you need to have the most substantial effect size you can. That's why our focus on the ability to deliver, the ability to knock down whatever species we're talking about, whether it's DMPK or DUX4, is so critical. A number of study design elements become essential as well. These endpoints require experienced clinical sites to administer effectively, to administer consistently, and to get the sort of quality data that we need.
I think we've gained significant experience as a company over the last many years in how to conduct studies in neuromuscular disease and how to pick those sites and how to work with those sites to make sure we get quality data. With respect to our study design and statistical capabilities, they are as good here as they are anywhere. I think we know how to design studies well, and I have a lot of confidence in the siRNA programs going forward. I think we'll put together the various pieces of what it takes to run a very effective and what I believe will be a successful registrational and phase III program as we get these data in-house, as we discuss with regulators the overall path to approval, whether that's accelerated initially and in the longer term, full approval.
But I'm confident that we have the pieces here that we need to do that successfully.
Thank you. The next question will come from Yanan Zhu with Wells Fargo. Your line's open.
Great. Thanks for taking our questions. Was wondering, it's a two-part question on FSHD and DM1. Regarding FSHD, I think you mentioned you'd look for concordance across PD markers in order to distinguish signal from noise or variability in individual assay. I was wondering, could you elaborate on that? Is there a more higher hurdle in terms of signal to noise for FSHD as compared with DM1, given that that comment wasn't associated with DM1? Then perhaps just quickly wanted to clarify, are you going to report vHOT for DM1? If you do, how should we interpret that data? Yeah. Thank you.
Yeah. I'll ask Louise to comment on the question with respect to FSHD. With respect to DM1 and vHOT, we will show the functional measures we've collected. Those include vHOT. That will be part of the data that we expect to release. What I would say is, these are relatively small cohorts or very small cohorts with respect to the functional endpoints. They are well-sized with respect to the biomarker endpoints, the ability to judge target knockdown, and the impact that has on downstream biologic effects. They are quite small compared to a phase II expansion or certainly a phase III study. That's why we have made the point that one should not over-index on functional measures very early on in a clinical program.
With respect to consistency of measures, whether they're biomarkers in FSHD or in DM1. Before I hand it over to Louise, what I would say is just, it's a general point, that we always want to see consistency of measures across a chain of events that we think are causally connected. That's one of the ways that we assess the strength of evidence. Louise, would you like to add any additional color around FSHD in particular?
Sure. Just for FSHD, again, we're looking for concordance across our PK, so our muscle and serum concentration, our DUX4 target genes, and then the circulating biomarkers. With FSHD, we have the opportunity to look at circulating biomarkers, which supplements the biopsy data, which is a single time point versus circulating biomarkers. That was really what the comment was about. Again, we're looking at the totality of the evidence and looking for that consistency across from knockdown all the way down to eventual functional improvement.
Thank you. The next question will come from David Hoang with Deutsche Bank. Your line's open.
Hi there. Thanks for taking my questions. Wanted to pivot a little bit here and ask about EXONDYS and get your latest thoughts on the potential impact if a competitor exon skipper for exon 51 DMD is approved by the January PDUFA date, and how you think about the durability of EXONDYS and how much switching could actually occur next year. If I could just have a follow-up on your base case, let's say, for the regulatory path forward for restoring a non-ambulatory label for ELEVIDYS once Cohort eight data from ENDEAVOR is in hand. Where do you kind of go from there, and what are your expectations in terms of what the FDA may ask for, if anything else?
Okay. So, with respect to potential competition for exon 51 and the exon skipper, we're prepared for that. I mean, our baseline assumption is that Dyne will get their approval in early 2027, in January 2027. We believe we are in a strong position to compete in a competitive marketplace. We have a very long track record of safety, a well-described safety profile, significant long-term real-world evidence that shows improvements in a number of areas, including overall function, cardiac function, pulmonary function, compared to matched controls, and we think that positions us very well. The other thing that I would say is, it takes time in a marketplace like this to establish the appropriate commercial footprint, the reimbursement codes, navigate the reimbursement landscape, and that typically can take a period of months to several months.
Based on all those factors, we think wholesale switching of stable patients is not likely early on, and we would expect to see impact when we see it more towards the back end of 2027. At this point, I think we need to see a little bit more, see what their label looks like before we give any more specific colors than that. But that's certainly the way we're thinking about it. With respect to the non-ambulatory population for ELEVIDYS, what we've said on past calls, I think, is still very much the case. Discussions with the FDA on a potential path to return to the non-ambulatory population are best had with data in hand.
Our plan is to approach regulators, approach the FDA in the first quarter, towards the end of the first quarter, when we have the 12-week safety data from Cohort eight in hand, and we'll have those discussions, and that's what will inform the specific steps from there.
Thank you. The next question will come from Salveen Richter with Goldman Sachs. Your line is open.
Thank you for taking our question. This is Tommy on for Salveen. Just a quick pipeline question on Huntington's. In the context of recent siRNA data in the field, maybe speak to what you're targeting in terms of the HTT knockdown with SRP-1005 and your confidence in the overall brain distribution and safety profile here. Thank you.
With respect to our Huntington's program, first of all, we're very encouraged by all the data that we've generated to date. In our Huntington's program, I think the preclinical data very clearly demonstrate that we are not only able to cross the blood-brain barrier, but in the manner in which we're doing that, we get to the deep brain nuclei that one needs to impact to demonstrate clinical benefit in Huntington's disease. We see that through the early studies up through NHP studies. In a separate program, Arrowhead has shown ability to cross the blood-brain barrier using the same delivery technology that we're using, so we think that is something that adds additional enthusiasm from our perspective about our ability to hit the target that we want to hit. We're aiming for very substantial Huntington's knockdown.
I think at this point, it's hard to give an exact target in terms of what we would expect in CSF knockdown, for example. But the important point to consider here is that by the nature of our delivery system, delivering systemically and getting across the blood-brain barrier, we essentially know that we're getting not only to the surface that interfaces with CSF, as one would do in an intrathecal program, but actually getting to those deep brain nuclei where the molecule would really have to do its work. We look forward to generating the data next year to prove biologic activity. We'd expect to have those data sometime around mid-year. James, I don't know whether you'd like to add anything further.
Yeah, I mean, I think just to reiterate that point, Mike, that I think it's, for the field, positive to see therapies driving mHTT knockdown in the CSF. But if you're giving your therapy in the CSF and measuring it in the CSF, then you haven't really demonstrated that you're getting it to the area where the disease is active. In contrast to the point Mike's made, that when you're giving it systemically and measuring the CSF, we know that we are really hitting the disease where it's causing neuronal degeneration.
Thank you. The next question will come from Tazeen Ahmad with Bank of America. Your line's open.
Can you hear me now? I'm sorry. Hello? Can you hear me now?
Yes, you are coming through clear now.
Okay.
You may continue.
Sorry about that. Yeah, sorry about that. As you think about how your PMO franchise could coexist with your gene therapy franchise in DMD, do you have any updated thoughts on that? And whether or not over time you think you would have insurance be more willing to reimburse for both at a more consistent level? Thanks.
Patrick, would you like to take that question?
The insurance companies, as they evaluate our therapies, we talk about our long-term evidence for ELEVIDYS and, of course, with our PMOs, and we also point to the real-world evidence. The insurance policies that are established today are really silent on, for the most part, moving from ELEVIDYS back to a PMO. It's something that the team continues to keep an eye on, and we do engage with prescribers and the payers that have questions around the benefits of both treatment of ELEVIDYS and PMO. And so those conversations are ongoing, and we continue to provide those payers with additional information as it's developed.
Thank you. The next question will come from Lachlan Hanbury-Brown with William Blair. Your line's open.
Thanks for the question. You mentioned that you want to approach the FDA with the Cohort eight data in hand in Q1 to then sort of figure out the path forward. Just wondering, can you remind us on the interactions you've had with them about this in the past, when you spoke to them about Cohort eight, maybe what they want to see out of it? Is it just safety, or do they want any biomarkers or anything? Thanks.
Yeah, James, you want to go ahead and take that?
Yeah, thanks for the question. We discussed and agreed the trial design with the FDA in the latter half of 2025, when we were also going through the safety label change negotiations. The primary outcome and the trial design is agreed. This is a trial to look at the impact of sirolimus on the mitigation of ALI primarily. We'll be taking biopsy data. I think that will be interesting more broadly because we've seen pre-clinically some evidence that sirolimus may increase the rates of micro-dystrophin expression, but that's not going to be central to our FDA discussions and wasn't discussed during our agreements around the protocol.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. The next question will come from Andy Chen with Wolfe Research. Your line's open.
Hi, thank you so much. This is Jason speaking for Andy. Just wanted to quickly ask about your outlook for ELEVIDYS revenue growing in 2027, and wanted to touch a little bit on REGENXBIO potentially launching in second half of 2027, targeting younger patients. Are you seeing any treatment deferrals or anticipating market share loss, and how does this affect your 2027 outlook and the strategic importance of the planned under-four label expansion? Thank you.
Okay, there are a couple parts to that question. I will start. Patrick, you may want to add a bit later. With respect to REGENXBIO, I think we still need to hear more from them about the discussions that they are having with regulators later on this year to understand what a likely path forward would be for them and when a submission and approval might be appropriate. Our view is that there should be a consistent bar for programs in this area, particularly when there is a full approval such as we have in this space, which generally includes placebo-controlled data sets and data sets that are more substantial than what others have presented publicly before. For example, we have treated a very large number of patients pre-approval and approximately 1,500 patients, more than 1,500 patients post-approval.
And so, it is important to keep in mind the data set that would be evaluable for benefit-risk for a program that is much earlier, like REGENXBIO. Having said that, part of your question was, do we see treatment deferrals? There, my point would be that there is an urgency to treat in this condition. We know that these children have, unfortunately, a progressive, debilitating, and ultimately lethal condition, that as time passes, there is increasing muscle destruction that is irreversible. So, there really is an urgency to treat. When there is a fully approved product that has shown the long-term benefit that ELEVIDYS has shown, we think that is very meaningful to physicians and to patients and their families. So, that is not something that we are seeing significantly. Was there a third part to your question? Four-year-old, yeah.
So, the under-four population, that is an important population to us for exactly the reason that I just described, that with time, there is progressive muscle destruction, and therefore, treating earlier, we believe, is important. We believe our ability to treat the under-four population is strongly supported by the evidence that we have generated in the four and above population and the correlation that we have shown between dystrophin expression, micro-dystrophin expression with our therapy and long-term clinical benefit. And so it is a population that is important to us, regardless of the competitive considerations, because we think it is the right thing to do for patients. It does open up, if successful, an important additional population for us, but that is the way we are thinking about it.
Thank you. I am showing no further questions at this time. My apologies, someone just came into the queue. So our next question is going to come from Gil Blum with Needham. Your line is now open.
Thanks, guys. This is Jonathan on for Gil. I was wondering, with the ELEVIDYS trajectory, given the six-month lag that you guys have previously talked about from enrollment to infusion and the relatively flat enrollment forms from second quarter to third quarter, should we be expecting ELEVIDYS revenues to remain relatively stable then through the first quarter of 2027? And when would you guys expect sales growth to begin re-accelerating, and are there any early indicators that would suggest inflection could occur sooner?
So, this is Mike. I will start, and then I will hand it over to Patrick Moss. As we described, the dynamic is such that with the six-month journey from enrollment form to infusion, what you are seeing in terms of results in Q3 and in Q4 in the future will be demand that was essentially generated earlier in the year at a point before we had our commercial initiatives in place, before the long-term data and the eight to 12-year-old data that I described were in place. And so we think of this as essentially a clean baseline. We are expecting that we have stabilized both enrollment form activity and ELEVIDYS demand overall going forward. We are going to want to see longer-term trends before we give more color on when we would expect to see growth return in the franchise.
We do believe that there is the potential for long-term growth, but again, particularly given the variability inherent in a one-time gene therapy, we want to see some longer-term trends before we give too much more color on that. Our long-term view of the potential of ELEVIDYS has not changed, and there are a number of upcoming data readouts and milestones that could influence that, such as the Cohort eight data. We talked about the under-four submission that we're planning next year. So there are a number of things that will determine the overall trajectory there. But again, our view of the long-term potential and the ability to grow ELEVIDYS remains unchanged, but it's a little bit early to talk about the specific timing. James, I don't know if you want to add any additional color.
I would just add that we're going to continue our execution of our commercial initiatives as you've laid out, including patient identification, our physician education, and our treatment verification.
Okay. Thanks, Patrick.
Thank you. I am showing no further questions in the queue. This will conclude today's conference call. Thank you for participating, and you may now disconnect.