SRPT - NASDAQ

Good afternoon. And welcome to the Sarepta Therapeutics Fourth Quarter and Full Year 2024 Financial Results Conference Call. As a reminder, today’s program is being recorded. At this time, I’d like to turn the call over to Mary Jenkins, Associate Director, Investor Relations and Corporate Communications. Please go ahead.

Thank you, Lisa, and thank you all for joining today’s call. Earlier this afternoon, we released our financial results for the fourth quarter and full year 2024. The press release, slides and supplementary information are available on the Investor section of our website at sarepta.com. Our 10-K will be filed with the SEC later this week. Joining us on the call today are Doug Ingram; Ian Estepan; Dallan Murray; and Dr. Louise Rodino-Klapac. After our formal remarks, we’ll open the call for Q&A. I’d like to note that during this call, we were making a number of forward-looking statements. Please refer to Slide 2 on the webcast, which contains our forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Sarepta’s control. Actual results could materially differ from these forward-looking statements and any such risks and materially -- can materially and adversely affect the business, the results of operations and trading prices for Sarepta’s common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company’s most recent SEC filings. The company does not undertake any obligation to publicly update its forward-looking statements, including any financial projections provided today based on subsequent events or circumstances. As noted on Slide 3, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP are included in today’s press release and the slide presentation available on the Investor section of our website. And now I’ll turn the call over to our President and CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Thank you, Mary. Good afternoon, everyone, and thank you for joining Sarepta Therapeutics’ fourth quarter and full year 2024 financial results conference call. As you may know, back in late 2017, we created an expansive strategic plan that we called Project Moonshot, one that would require that we raise billions of dollars, chart a course through the unknown and overcome multiple unforeseen obstacles, obstacles that would have deterred a less committed team, but also a strategic plan, if achieved, which would ensure a better life for thousands of Duchenne patients and cement the durable future of Sarepta. After years of work and reams of new insight into the treatment of Duchenne, in 2024, we achieved all of the goals laid out in Project Moonshot. We obtained approval for the broadest possible label for ELEVIDYS, achieving our goal of a transformative therapy that could serve the vast majority of Duchenne patients. We worked with the FDA to reframe the approach to the development of rare and ultra-rare diseases so that therapies previously rendered unviable by FDA requirements now have the potential to help patients. And as a result, our LGMD franchise is moving with renewed speed towards three potential approvals over the next three years. We broadly launched ELEVIDYS in 2024 and achieved results greater than all other in vivo gene therapies combined. At the same time, we continued to serve the community with our PMOs, which grew even in the face of a robust gene therapy launch. We became sustainably profitable and cash flow positive in 2024. Indeed, by the end of 2030, we will do over $16 billion cumulatively in operating income and over $13 billion in free cash flow. And this is after we have closed and made our initial investment in the Arrowhead transaction. And we have secured a durable and even more diversified future through our Arrowhead collaboration, pursuant to which we now add to our gene therapy pipeline a broad platform of siRNA, including four clinical programs, three preclinical programs and six research programs across neuromuscular, CNS, cardiomyopathy, and pulmonary. In addition to multiple gene therapy launches in the coming few years, we will have multiple potential blockbuster siRNA launches before the end of this decade. Now, speaking more specifically of performance, we had an exceptionally strong fourth quarter and full year performance with our four approved therapies. For the fourth quarter, our net product revenue stood at $638 million, growing at 75% over the same quarter prior year. This represents more than $60 million in over performance to our prior guidance. Our full year net product revenue stood at $1.8 billion, representing year-over-year growth of 56% and this over performed to our guidance by over $100 million. Turning to ELEVIDYS, in 2024, we had by a wide margin the most successful launch of a gene therapy yet in history. For the fourth quarter, ELEVIDYS sales stood at $385 million -- $384 million, representing 112% increase over the prior sequential quarter. And while we have already achieved over $1 billion in sales since our initial approval in 2023, this represents less than 5% of the on-label addressable opportunity, so clearly this is just the beginning. Our three PMOs, EXONDYS 51, AMONDYS 45 and VYONDYS 53, achieved $254 million in the fourth quarter and $967 million for the full year. We were profitable on a GAAP and a non-GAAP basis in the fourth quarter and we were cash flow positive. Dallan Murray, our Chief Customer Officer, will provide more color on commercial performance in a moment. And then to round out the call, our CFO, Ian Estepan, will discuss our financials in more detail. Looking forward, in 2025, we will capitalize on the successes of 2024. As you know, our net product revenue guidance for 2025, excluding royalties from Roche, is between $2.9 billion and $3.1 billion, approximately one-third of which will come from the PMOs and a bit over two-thirds of which will come from ELEVIDYS. This represents year-over-year growth of 70% for total net product revenue, and for ELEVIDYS, this represents over 160% year-over-year growth. On the R&D and tech ops sides, we have more upcoming milestones this year than any other time in our history. As you know, we already met our important ELEVIDYS milestone in late January. We reported the two-year and one-year crossover results for ELEVIDYS. From our pivotal trial EMBARK and in all pre-specified measures, that includes all functional measures, muscle health, biomarkers, those on ELEVIDYS did strongly, statistically, significantly better than untreated natural history would have predicted. We have passed 600 patients now on therapy across a broad range of ages and weights. These data are further proof of the transformative potential of ELEVIDYS to change the future course of this disease for patients. To continue to serve the global market and improve COGS, we are planning for a move to suspension manufacturing, and after completing our GMP runs, we intend to commence our suspension manufacturing bridging study this year. As noted, we are now moving rapidly with our LGMD platform. We are continuing to dose our study for SRP-9004 to treat LGMD type 2D, and we have initiated our registration study for SRP-9005 to treat LGMD type 2C. We have completed dosing in our pivotal trial for SRP-9003 to treat LGMD type 2E and we will be submitting our BLA for approval later this year. We also intend to file our IND for SRP-9010 to treat LGMD type 2A later this year. If successful, we will launch SRP-9003 next year, we will launch SRP-9004 the following year and SRP-9005 will be launched the year after that. As you know, we have closed our transaction with Arrowhead this month and already there will be several very significant milestones in 2025. This year we will have our initial readout for cohorts for ARO-DUX4 to treat FSHD type 1. Again, this could be a very significant proof of biology. We will be looking at muscle concentration, downstream gene correction and safety. We’re also very excited about the potential to directly measure knockdown of the aberrant protein of interest, DUX4. No other program to date has been able to achieve this and this would be a very powerful result, if successful. Likewise, we will have a readout of our initial cohorts for ARO-DM1 to treat DM1, where we could obtain proof of biology looking at muscle concentration, knockdown, gene splicing and safety. If successful, we could launch our therapy for DM1 in 2029. Our clinical programs for MMP7 and SCA2 are progressing well as well. We intend to initiate our first in-human clinical study before the end of this year for ARO-HTT, which is intended to treat Huntington’s disease. And finally, we have a significant number of siRNA and gene therapy pipeline programs underway, and so we intend to schedule an R&D day later this year to discuss all of them in more detail. Our Head of R&D and Chief Scientific Officer, Dr. Louise Rodino-Klapac, will discuss our pipeline progress in a moment. With grit and operational excellence, we achieved all of our multiyear objectives in 2024. In 2025, we will continue to execute. We will build on our foundation as one of the very few fully integrated, profitable and cash-flow positive biotechs in the world today, and we will achieve our next ambition, which is to become the next globally relevant big biotech focused on improving the lives of those among us with life-limiting rare disease. And with that, I will turn the call to Dallan Murray for more detail on commercial performance and plans. Dallan?

Thank you, Doug, and good afternoon. I’m delighted by the exceptional performance the team delivered in the fourth quarter and for the full year 2024. As we preannounced in January, net product revenue for 2024 totaled $1.79 billion, consisting of roughly $967 million from our PMO franchise and approximately $821 million for ELEVIDYS. 2024 marked the eighth year of our PMO franchise, which continues to perform well and grew modestly year-over-year, even in the face of the transformation brought about by ELEVIDYS. As in prior years, the team delivered this growth organically without taking price increases on any of our approved PMO products. As such, this growth speaks to the increase in patients we are serving in the Duchenne community. For 2025, the PMOs remain an integral part of our guidance and even in the face of strong ELEVIDYS performance, we are only seeing modest U.S. net cannibalization. We are comfortable with the current consensus estimates as they stand today for the PMOs. For the fourth quarter, net product revenues for the PMOs totaled roughly $254 million, growing at approximately 9% compared to the fourth quarter of 2023. Individual PMO net product revenues were $137.6 million for EXONDYS 51, $40.2 million for VYONDYS 53 and $76.2 million for AMONDYS 45. Now turning to the ELEVIDYS launch and performance. Q4 was our second full quarter with an expanded label and we could not be more pleased with the launch execution. In particular, for the fourth quarter, ELEVIDYS revenue totaled $384.2 million, exceeding our quarterly guidance by over $60 million. And please bear in mind, even with this impressive growth, at this point in the launch, we have treated approximately 5% of the on-label addressable patient population for ELEVIDYS. So the opportunity ahead of us remains significant and we have the wind in our sails at the moment. The recent findings from the Part 2 of the EMBARK study adds to the existing robust body of clinical evidence. This will undoubtedly help the team with their efforts going forward. As the launch progresses, we remain confident in our understanding of the launch dynamics and the key drivers, which continue to be robust patient demand for both the ambulant and non-ambulant populations, ample site capacity for both the infusion and follow-up, positive trends in access and reimbursement for both ambulatory and non-ambulatory patients, and consistent conversion rates as we continue to see patients gaining access within the three-month to five-month conversion timeline. Doug took some time at the recent JPMorgan meeting to give more detail on that conversion timeline. Understanding this process is essential to understanding our business model and the confidence we have in our success and ability to execute both quarter-to-quarter and in the coming years. Five launches and a decade of working in partnership with the key neuromuscular institutions gives us a deep line of sight into the cadence of dosing each patient in each center, in each region and across the country. For each and every gene therapy patient, roughly 20 to 25 people within each institution play an important part in making that dose happen. And those folks are across each institution, from the executive team to the pharmacy department, as well as the medical, finance and various administrative teams. And that’s only the people within the institution. We also rely on additional people from our distribution and manufacturing partners, along with others from various internal Sarepta teams. All need to do their individual parts with perfection and under tight timelines to successfully dose each patient. Why is this important? There are two reasons. The first and most critical is that we’ve now shown as a team we can do this reliably and successfully for over six quarters now since our initial launch. We’ve built the model and shown we can reliably execute, which has been challenging for others to accomplish. Secondly, it gives us a great deal of confidence in our revenue projections, which are driven by our understanding of the patient journey. There are several factors that contribute to the cadence of patients being treated and we have a good line of sight into each of these factors. With over eight years of commercial experience comes a good understanding of where the patients are and their pathway to treatment. We are also pleased with the continued progress in getting broad coverage for ELEVIDYS and continue to see patients gaining access who are in plans with more restrictive policies. To-date, not a single patient has been permanently denied coverage. And as you can see from our performance, this is a disease state that we understand extremely well. We are very confident in our growth trajectory and I’d like to reiterate a point that Doug made in January that puts our performance into broader context. We project that in the first 30 months of our ELEVIDYS launch, ELEVIDYS’ net product revenue will outperform every other in vivo gene therapy combined over that same period of time. Our success in the ELEVIDYS shows that one-time gene therapy could be commercially viable, providing hope for those with Duchenne and for all those with genetic conditions with unmet need. As a reminder, our 2025 net product revenue guidance is $2.9 billion to $3.1 billion, which represents approximately 70% growth over 2024. Thus far, the launch has played out in line with our projections and we remain comfortable with this guidance given our strong finish to 2024 and our long track record of accurately predicting our performance. In summary, we are comfortable with our guidance for the year and with Q1 consensus. We expect to deliver sequential growth quarter-over-quarter throughout 2025. And now I’ll hand the call over to Dr. Louise Rodino-Klapac for the R&D update. Louise?

Thanks, Dallan. Building on the accomplishments of 2024, I’m thrilled with the promise before us and the vast opportunities there are to continue to make a difference in patients’ lives. Firstly, ELEVIDYS. Late last month, we announced positive follow-up data from EMBARK for study SRP-9001-301, a global, randomized, double-blind, placebo-controlled Phase 3 clinical study of ELEVIDYS. Specifically, we shared crossover results from those who received therapy in Part 2 of the study and we also shared the two-year results of those treated in Part 1 of the study as compared to an external control. Given what we know about ELEVIDYS, what the science and data have shown us, and what we have observed in the large population of patients that have been treated with ELEVIDYS, we were not surprised by such overwhelmingly positive data from the study, which demonstrated that ELEVIDYS impact the trajectory of Duchenne and offers an early treatment option intended to avoid unnecessary and unavoidable muscle damage. Speaking to the therapy’s durability, the data are clear. Those not on therapy decline in their functional abilities faster than those on therapy who stay healthier longer versus the natural history would predict. Intervention is critical in maintaining precious muscle before it’s lost. With that, I’d like to pause for a moment and reiterate the significance of the MRI muscle data. As mentioned on last month’s call, these data support long-term function and healthier muscle. Specifically, we saw modest to no increase in fat fraction from baseline to two years and levels at two years were well below what was seen at one year in the placebo patients. This is consistent across muscle groups. We look forward to publishing data from EMBARK at forthcoming scientific meetings and in peer-reviewed journals. In summary and evidenced by the data, ELEVIDYS demonstrated a clinically meaningful response across all of Sarepta studies with increasing divergence from natural history over time that supports the durability of the therapy. Toward our goal of providing ELEVIDYS to all eligible patients, we are advancing the ENVISION study for study SRP-9001-303, a global randomized double-blind placebo-controlled two-part trial evaluating the safety and efficacy of ELEVIDYS in non-ambulatory and older ambulatory individuals with Duchenne. ENVISION is progressing well, and as previously mentioned, enrollment in the United States is complete, and our last patient last visit is expected in 2027, following an 18-month placebo-controlled period. In addition, for the approximately 15% of patients who are screened out for pre-existing anti-AAVrh74 antibodies, we’ve commenced two studies, one with imlifidase or Study 104 to cleave antibodies and a second with plasmapheresis or Study 105 to remove antibodies. We expect to have expression data from both of these studies in the second half of 2025. Moving now to our programs for the limb-girdle muscular dystrophies or LGMDs. We were thrilled to announce in December 2024 that we completed enrollment in dosing of EMERGENE or study SRP-9003-301 or Phase 3 clinical trial of SRP-9003 to treat LGMD type 2E or beta-sarcoglycanopathy. EMERGENE is a global study and the primary endpoint is biomarker expression of the beta-sarcoglycan protein, the absence of which is the sole cause of LGMD 2E. Data from EMERGENE are expected in the first half of 2025. Further, we were pleased with the outcomes of our pre-Biologics License Application meeting with FDA, including endorsement for a rolling BLA submission. We are on track to submit our BLA filings seeking accelerated approval for SRP-9003 in the second half of 2025. We’re also encouraged by the progress of our other LGMD programs. At the end of 2024, we initiated Phase 1 of SRP-9004 in development to treat LGMD 2D. And in early 2025, we will initiate our Phase 1/3 seamless design clinical trial for SRP-9005, which is in development for the treatment of LGMD 2C. This March, we look forward to sharing with you a wealth of data from our Duchenne and LGMD programs at the MDA Clinical and Scientific Conference taking place March 16th through the 19th in Dallas, Texas. And we also look forward to highlighting our impressive pipeline at an upcoming R&D Day in 2025. As a preview, we have numerous programs in various stages of development across neuromuscular, central nervous system, cardiac and pulmonary indications, many of which are nearing INDs. Of note, for neurotrophin 3 or NT-3, we have optimized the constructs for Charcot-Marie-Tooth type 1A or CMT1A using AAVrh74 and are now rapidly advancing to the clinic following exciting preclinical data. As a reminder, we are using a surrogate approach for delivery of the NT-3 gene to improve myelination and nerve regeneration in CMT1A. This pipeline and product approach has applicability to other CMTs, as well as other demyelinating indications. On the research side, we’ve continued to innovate across platforms. We’ve optimized, developed and characterized new AAV capsids that will change the landscape for neuromuscular gene therapy and unlock potential in cardiac and CNS disease areas. We are also driving innovation in gene editing, enhanced delivery for RNA and are pioneering new mechanisms to upregulate gene expression. The future cannot be brighter for genetic medicine. Further, we look forward to sharing data with you later this year around our FSHD1 and DM1 programs. As a reminder, SRP-1001, formerly known as ARO-DUX4, is currently in clinical development to treat FSHD1, an autosomal dominant disease associated with the failure to maintain complete epigenetic suppression of DUX4 expression in differentiated skeletal muscles, leading to overexpression of DUX4, which is myotoxic and can lead to muscle degeneration. We are encouraged by the non-clinical data generated thus far and look forward to the data readout later this year. Turning to myotonic dystrophy type 1 or DM1, DM1 is driven by an expanded CUG trinucleotide repeat in the 3’ untranslated region of DMPK transcripts. These abnormal transcripts cause mis-regulated splicing, known as spliceopathy, for certain messenger RNAs, which are directly linked to the clinical manifestations of DM1. We believe that silencing the inherently transcribed DMPK mRNA using SRP-1003, formerly known as ARO-DM1, may halt CUG expansion-related splice defects in patients with DM1, and thereby improve muscle strength and function. We look forward to sharing the data from the SAD study later this year as well. Now to discuss our RNA PMO platform. The ESSENCE trial, our post-marketing requirements for golodirsen and casimersen, as well as mission, our post-marketing commitment for EXONDYS, are both fully enrolled and remain on track. We look forward to sharing data as soon as the studies are completed. In summary, I’d like to take the opportunity to thank the patient community, investigators and my Sarepta colleagues. All of this progress would not be possible without you. And finally, I’d like to recognize this Friday is Rare Disease Day. There are more than 7,000 rare diseases, only a small percent of which have any treatment. As a company dedicated to bringing forth new treatments for rare disease, it’s an important day for our employees and the patients we serve. It’s a day to reflect on the impact of rare disease on the affected individuals and their families and to acknowledge all the work that still needs to be done, and to celebrate the progress that we’ve made. With that, I’ll turn the call over to Ian for an update on the financials. Ian?

Thanks, LRK, well said. Good afternoon, everyone. This afternoon’s financial results press release provided details for the fourth quarter of 2024 on a GAAP, as well as a non-GAAP basis. Please refer to the press release and slide deck available on Sarepta’s website for a full reconciliation of GAAP to non-GAAP financial results. For the three months ended December 31, 2024, the company recorded total revenues of $658.4 million, which consists of net product revenues and collaboration and other revenues, compared to revenues of $396.8 million for the same period of 2023, an increase of $20 -- of $261.6 million. Net product revenue for the fourth quarter of 2024 from ELEVIDYS was $384.2 million, compared to $131.2 million for the same period of 2023. Net product revenue for the fourth quarter of 2024 from our PMO exon skipping franchise was $254 million, compared to $233.8 million for the same period of 2023. The increase in net product revenue primarily reflects the net product revenue from sales of ELEVIDYS. In the quarter ended December 31, 2024, we recognized $20.3 million of collaboration and other revenues, compared to $31.7 million for the same period of 2023. This revenue primarily relates to our commercial ELEVIDYS supply delivered to Roche, royalty revenue and our collaboration arrangement with Roche. The reimbursable co-development costs under the Roche agreement totaled $26 million for the fourth quarter of 2024, compared to $23.5 million for the same period of 2023. As a reminder, these Roche reimbursable co-development costs are an offset to operating expenses. On a GAAP basis, we reported a net income of $159 million or $1.65 per basic share and $1.50 per diluted share and a net income of $45.7 million or $0.49 per basic share and $0.47 per diluted share, for the fourth quarter of 2024 and 2023, respectively. We reported a non-GAAP net income of $206 million or $1.90 per diluted share in the fourth quarter of 2024, compared to a non-GAAP net income of $86.6 million or $0.82 per diluted share in the fourth quarter of 2023. In the fourth quarter of 2024, we recorded approximately $132.3 million in cost of sales, compared to $44.2 million in the same period of 2023. The increase primarily reflects cost of sales related to ELEVIDYS during the three months ended December 31, 2024, following the label expansion in June of 2024. On a GAAP basis, we recorded $200 million and $195.5 million in R&D expenses for the fourth quarter of 2024 and 2023, respectively, a year-over-year increase of $4.5 million. The increase is primarily due to an increase in our manufacturing expenses related to a ramp-up of batches produced for our limb-girdle program, partially offset by a decrease in clinical trial expenses related to the discontinuation of the PPMO program. On a non-GAAP basis, R&D expenses were $172.7 million for the fourth quarter of 2024, compared to $165.1 million for the same period of 2023, an increase of $7.6 million. Now turning to SG&A, on a GAAP basis, we recorded approximately $163.9 million and $131.7 million of expenses for the fourth quarter of 2024 and 2023, respectively, an increase of $32.2 million. The increase was driven primarily by an increase in professional services used to support the continued efforts to commercialize ELEVIDYS and ongoing litigation matters and an increase in compensation and other personnel expenses primarily related to changes in headcount. On a GAAP basis, SG&A expenses were $131.6 million for the fourth quarter of 2024, compared to $105.7 million for the same period of 2022, an increase of $25.9 million. On a GAAP basis, we recorded $10.1 million in other income met for the fourth quarter of 2024, compared to $15.7 million for the same period of 2023. The change was primarily due to a decrease in interest income and accretion of investment discount, net as a result of lower interest rates and a mix of our investment portfolio. As mentioned earlier, we’re maintaining our 2025 total product revenue guidance, which reflects a 68% growth from 2024 at the midpoint. We also are introducing expense guidance for 2025. We anticipate combined 2025 non-GAAP R&D and SG&A expenses to be in the range of $1.2 billion to $1.3 billion. The incremental expense is almost exclusively related to Arrowhead development programs. Excluding these costs, our expenses would be essentially flat compared to the prior year. And to conclude, we had approximately $1.5 billion in cash, cash equivalents, investments in restricted cash as of December 31, 2024. As Doug said, now that the Arrowhead transaction is now closed, which was fully funded by our existing cash reserve, we project returning to similar cash levels by year end of 2025, driven by the strong ELEVIDYS launch. Further bolstering our financial position, we secured a $600 million revolving credit facility. The combination of a positive business outlook and our strong financial position us really well to execute on our 2030 strategic goal. And with that, I’ll turn the call back over to Doug for Q&A. Doug?

Thank you very much for that, Ian. And Lisa, let’s open the call for questions.

Thank you. [Operator Instructions] And our first question for today will be coming from the line of Tazeen Ahmad of Bank of America Securities. Your line is open.

Okay. Great. Thank you for taking my question. I wanted to ask Doug about the cadence of what you’re seeing in 1Q so far with regards to patients that are being onboarded. You’ve talked extensively about certain things that cannot be changed and you reiterated your confidence about guidance for 2025. But can you give us a little bit more granularity on, again, what you’re seeing in 1Q and how we should be thinking about the cadence of uptake for the rest of the quarters this year? Thanks.

Yeah. Thank you very much for your question, Tazeen. A couple things. First, let me reiterate my confidence on the guidance for the year. We’re still very good about the guidance that we have. And I would remind everyone we have a very good track record of setting reasonable guidance and meeting or very often exceeding that guidance. The only thing I’ll say about quarters going forward is that we will continue to see growth quarter-over-quarter as we ramp this launch. Things obviously are going very well for this launch through 2024 and I think our guidance should imply it’s going very well in 2025 as well. There is a certain cadence to all of this, everything from the start form, the single-case contracts that I’ve talked about before, the infusions, the need for preexisting neutralizing antibody assays and the like that describes the cadence. But it’s going very well. And what we’ll see over the course of this year is growth quarter-over-quarter-over-quarter to achieve our guidance for the full year, which of course is $3 billion. In total, a little over two-thirds of that will be coming from ELEVIDYS and the remainder from our three PMOs. So thank you for that.

Thank you. And one moment for the next question. Our next question will be coming from the line of Ellie Merle of UBS. Your line is open.

Hey, guys. Thanks so much for taking the question. For limb-girdle, just from your work in this space, what’s the latest on what you see for the prevalence of 2E and how many in the U.S. are diagnosed today and the mix of ambulatory versus non-ambulatory patients? Basically, if you will be launching here next year, how should we be thinking about the contribution potentially to revenue and how many patients there might be kind of waiting for therapy? Thanks.

I’ll give you the broadest strokes and then I’m going to turn the call over to Louise if she has any information on the split between ambulatory and non-ambulatory. Obviously, type 2E is a very rare disease. It’s an ultra-rare disease. In fact, all of the three sarcoglycan launches that we’ll have over the next three years are individually very rare. But collectively, they will represent about 25% of the Duchenne ELEVIDYS opportunity. So they will be important contributors first and foremost, to be clear. They’ll be enormous contributors in the lives of patients living with and being degenerated from these really devastating muscular dystrophies. And then they will be important for the organization as well. But they’ll be modest. They’ll be about 25% of Duchenne. So they’ll be important but modest. With that said, an additional question that had been asked was the split of ambulatory and non-ambulatory specifically as it relates to type 2E. And I don’t know, Louise, if you have any information on that.

Yeah. There’s generally an even split. I would say as genetic diagnosis, especially for limb-girdles, has come along, we’re seeing more of the ambulatory population. I think historically you would have said it would be geared towards the non-ambulatory, but now it’s generally a 50-50 split.

Thank you. One moment for the next question. And our next question will be coming from the line of Gena Wang of Barclays. Your line is open.

Thank you for taking my question. I have one question regarding the data update later this year for both FSHD and the DM1. If I hear correctly, DM1 will be the SAD data. Is FSHD also SAD data? If it are the SAD data, how many cohorts and how long follow-up and what kind of data you will share with us?

Yeah. I will turn this to Dr. Rodino-Klapac to provide some color on that.

Yeah. For both FSHD1 and DM1, it’ll be the SAD data. So early we’ll be focusing on single dose -- single-offending dose study data, which will be focused on safety, some early signals of biomarker efficacy, which will be muscle concentration, knockdown, especially splicing, restoration as well. So it’ll be early data, but we look forward to showing that in the second half of the year for both.

Also really excited with FSHD as well that our hope, and of course, we’ll only know when the data comes in, is that we’ll be able to show through an assay the actual direct knockdown of DUX4, which of course is the goal of the therapy for FSHD. If we can do that, that is a really significant proof of biology because no program before has been able yet to achieve that goal. So we’re very excited to see that as well.

Thank you. And our next question will be coming from the line of Brian Abrahams of RBC. Your line is open.

Hi. This is Kevin [ph] on for Brian. Thanks for taking our questions. So maybe just on limb-girdle type 2E, can you maybe tell us a little bit about what you think the bar is for your upcoming 2E data? And then maybe how do you think that bar translates to other LGMD subtypes that we’ll eventually see data from? Thanks so much.

We’ve done -- I’ll comment on it, and then Louise, you update with any more precision. Broadly speaking, we have been working with the agency over a very long period of time, in essence, to help educate the agency on the bar that should exist for these sorts of ultra-rare diseases, particularly diseases and therapies like SRP-9003 for limb-girdle type 2E, where you’re dealing with the replacement of the native protein, unaltered, which the absence of that protein is the sole and exclusive cause of the disease. So I’m very proud to say we have very small end studies. They’re single-arm studies. They look to expression and safety. So in the broadest of strokes, the bar will be that we’re getting nice expression, and I would hope largely consistent with the expression that we’ve seen in the past. Remember, we’ve actually dosed SRP-9003 in prior cohorts, and of course, a good safety profile. We have a lot of conviction around this, as you can well imagine, first because we’ve already actually dosed patients with SRP-9003, but also because SRP-9003 stands on the shoulders of all of the work that we’ve done with 9001 now ELEVIDYS. We have dosed hundreds and hundreds and hundreds of patients with ELEVIDYS. We understand the law, the safety profile and we understand the power of our constructs and our promoter to get really good expression and get it safely. So that’s sort of the bar and we’re very confident about where we’re going to go with that. And on your other question, this will be similar across the limb-girdle programs, that we have already aligned with the agency on the approach that we’re taking for 9003 and 9004 and 9005, and we’re confident that this affects a modernization in the way the agency’s looking at transformative therapies for ultra-rare diseases. Louise, is there any more detail that I have omitted?

You summarized it well. Maybe I’ll just linger on one point in the fact that for the sarcoglycans, LGMD 2E being the first, these are the full-length genes. So in this case, beta-sarcoglycan is both the gene therapy, it’s also the biomarker. We’ve demonstrated extensively pre-clinically how the biomarker expression leads to functional improvement and then that translated in our studies clinically, and we saw two different doses. We saw improvements in both expression that led to functional improvements over time. Those patients will be sharing five-year safety follow-up data for those patients continuing to do well. So that will be our first study, and then the other sarcoglycans will follow suit. We’re all using rh74 across that platform, so not only are we leveraging the 9001 data, but then also the other sarcoglycans. So we’re in good position in terms of the outcomes of these studies and the outcome of the BLA.

Thank you. One moment for the next question. And our next question is coming from the line of Andrew Tsai of Jefferies. Your line is open.

Thanks. I appreciate the update. Congrats on all the progress. Maybe one more question on the DM1 FSHD data you’ll be sharing later this year. Do you think the initial SAD, S-A-D data, will be conclusive to the point where investors can determine whether these programs are looking superior or not or do you need MAD data, and how would you define superiority in these two programs? Thank you.

I’m going to turn this over broadly to Louise to talk about it. Let me say at the inception, first of all, I don’t want to do what other small biotech companies often do, which is oversell early data. The data has to evolve. These are, however, very, very important proofs of biology. So I want to be very clear, both from a safety perspective, a muscle concentration perspective, a knockdown perspective, a downstream gene splicing perspective, and as it relates to FSHD, whether you can actually directly see the knockdown of DUX4. So while there’ll still be lots of work to do from there, and we don’t want to oversell the data, this is a really, really important moment. And it should give at least signals of potential future product profiles versus other potential approaches to FSHD and DM1. But Louise, you can provide more detail.

Yeah. Just to add to that, I would say that, what we know from the Arrowhead platform that we’ve seen in their other programs and from the preclinical data is the translation from preclinical to clinical. And so we’ve been excited to see that and that’s what we’ll be looking for is that translation into the clinic. So it’ll certainly be a good indicator in terms of the knockdown that we’re seeing, the muscle concentration. Those are the things we’ll be looking for as robust clinical developers who are obviously looking to the MAD data to come following that. But certainly we’re excited to see the SAD data and the translation from preclinical and just an extension of their already promising data across the platform for Arrowhead.

Thank you. One moment for the next question. And our next question is coming from the line of Kostas Biliouris of BMO Capital Markets. Please go ahead.

Thanks for taking our question and congrats on the progress. A question on ELEVIDYS from us. Given that it’s been about eight months now since the label expansion, can you comment on whether you have seen any reinvestment for PMOs in ELEVIDYS treated patient? And if not, are you hearing anything from payers around their willingness to reinvest PMOs following ELEVIDYS treatment? Thank you.

Yeah. So let me say, Kostas, thank you for your question. In broad strokes, I will still note that it’s still very early days. And so, trying to draw broad conclusions is challenging. As we’ve noted, one of the most interesting, I think, data points we should linger on for a second is while we’ve had all this success, we’re still only treating less than 5% of the addressable on-label patient population for ELEVIDYS. And so, you’ve got to really test this issue. You’ve got to have a ELEVIDYS and then you have to have the fact that ELEVIDYS is treating a patient previously on a PMO. But we do have instances of reimbursement of both. So we’ve already seen that. I don’t want to oversell it right now and I’m sure we also have instances where that wasn’t possible. But it’s not black or white or binary right now. What -- I will reiterate, one of the things that we’re very excited about is that, so far, we haven’t seen significant net cannibalization. We’ll see some cannibalization in the U.S. We’re seeing very good growth of our PMOs. Ex-U.S., of course, the overlap is modest, given that we only treat 29% of patients with Duchenne muscular dystrophy with our PMOs. And it’s nice to see that we have seen some payers interested and willing to put kids on sequential therapy, post-gene therapy. But it’s still very early days and I wouldn’t over read that. Dallan, am I right?

No. That’s absolutely right. That’s absolutely right. Yeah.

Thank you.

Nothing to add. Thanks.

The next question will be coming from the line of Mike Ulz of Morgan Stanley. Your line is open.

Hey, guys. Thanks for taking the question. Maybe just a quick one on the $500 million share repurchase program. Can you just remind us what the time frame is there, and then some of the considerations as you decide when you might deploy that? Thanks.

Sure. I’ll turn this to Ian for his thoughts.

Sure. So the time period is 18 months. Like I said, obviously, we just completed the Arrowhead transaction. And so we’re going to be build -- quickly building back our cash reserves over the course of the year. Like I said in our prepared remarks, we’re going to be back to the same level at the end of 2025 as where we started where we ended in 2024. So it just talks to the strength of the launch. And so as we continue to build our cash reserves, we’re going to look to be opportunistic around potentially deploying that capital and buying shares. So obviously, we’re not going to telegraph when we will be doing it specifically, but we certainly have it at our disposal and we’re looking at the right time to execute.

Thank you. One moment for the next question. And the next question is coming from the line of Joe Schwartz of Leerink Partners. Your line is open.

Great. Thanks very much. So since approval in 2023, it seems like the ELEVIDYS launch has had a few different stages with great growth early on following accelerated approval, then a couple of flat-to-down quarters in early 2024, followed by a really nice return to growth following the expanded label in mid-2024. So since your 2025 guidance seems to imply that growth this year should be more moderate, I’m just wondering if you can give us your view about the stage of the launch that we’re in now and how you see it evolving this year. Are there any important constraints to growth that we should keep in mind this year?

So, Joe, thank you for your question. And I will say with due respect, I do not characterize our launch exactly the way you do. I would say we had a brilliant launch in 2023 with a very thin label. Then we had, we achieved something that I’ve never achieved, which is a very, very broad label. But, of course, the cadence for that broader launch requires the natural cadence of kids getting on therapy, which, to remind everyone, even though we had done a brilliant job in site readiness and accident reimbursement, we’re all ready, there’s just a cadence to getting the kids on therapy. It takes about four months and there’s really no magic to fixing that because it’s the cadence of the single-case contract and the scheduling and the infusion beds and the amount of follow-up and the assay work and the like. So there’s a certain cadence. We had anticipated exactly what we saw in 2024, which was we would see this hockey stick ramp towards the back half of the year, which is exactly what we saw. And as you know, we grew in the fourth quarter by 112%. And then I would note for this year, I mean, with respect against the statement that the growth is modest this year, we’re going to grow with ELEVIDYS over 160% year-over-year. And I would put that up. Well, first, I can’t put it up against any other gene therapy, let’s be clear, because we have blown away every other gene therapy cumulatively. But also I think for launches, this is just about as successful a launch as one could have imagined and we’re still in the robust growth phase of this launch.

Thank you. And our next question will be coming from the line of Gil Blum of Needham & Company. Your line is open.

Hi. Good afternoon, everyone, and again, congrats on all the progress. So maybe a question here on the move to suspension manufacturing with a bridging study later this year. Can you remind us what are the potential associated cost savings and also how broadly applicable is this? I mean, you guys use a lot of different programs for this gene therapy. Is this translatable just outside of DMD or is this very narrow? Thank you.

Yeah. So let me answer the last question first. So our goal, if successful, is to evolve almost all of our gene therapy programs to suspension. In fact, if I’m not mistaken, Louise, you’ll correct me if I am, the only program that will remain in adherence, just the timing of it and we didn’t want to slow down the approval as kids are waiting for it, is 9003. All the -- even all the other sarcoglycans will be in suspension. And broadly speaking, of course, it’s very dangerous to try to estimate the COGS impact. We’ve got more work to do, but it will be very, very significant. We’re seeing upwards of 5 times, even greater times, more time -- more yield efficiency. So you could envision a margin significantly over 90% eventually with this and also the ability to really bring this therapy to the far reaches of the world, and that’s, of course, one of our big goals. So to remind everyone, we said it already in our prepared remarks, but our goal is to complete our GMP runs and to start our bridging study before the end of this year, certainly. And then the goal, of course, is if all goes well and we’re successful to evolve to suspension in 2027, which would be really, really elegant timing for us as we think about our global plans.

Thank you. And the next question will be coming from the line of Ritu Baral of TD Cowen. Your line is open.

Hi, guys. Thanks for taking the question. Doug and Louise, I wanted to ask your current thoughts as you understand the landscape on the potential for splicing biomarker-based accelerated approval for your FSHD and DM1 programs. I know it’s far in the future, but obviously this is a hot topic of the space. And then, actually, if I could follow up on Gil’s question. He asked about the bridging study. Can you describe what that bridging study is? It sounds like it’s going to go fast?

Yeah. On the bridging study, it’s a relatively, I don’t know who’s given the actual letter, it’s a relatively small study looking at -- empirically looking at expression and safety to confirm that it’s substantially similar to the adherent approach. So it should go relatively fast. Everything’s at work, but it should go relatively fast and we intend to start that bridging study later this year. And then with that, I’ll turn over to Louise if you have any thoughts or comments on the potential for an accelerated approval approach with either FSHD or DM1.

Yeah. We’re in the early stages, I would say, for FSHD. And Doug alluded to it, but we’re in a unique position with FSHD where we have an assay that actually can quantify the knockdown of the primary defect in the indication, which is DUX4 and so that gives us unique opportunity in terms of potential biomarkers as well. In these early studies, we are looking at multiple biomarkers and functional outcomes, and that’s really what these Phase 1 studies are intended to do, so then you can optimize and pick the best path forward. I think it’s an opportunity to evaluate as far as splicing. I think it is one of many biomarkers, so whether it would be the sole biomarker is something left to be explored.

And of course, we recognize, yeah, we know amongst others there’s a lot of open discussion and dialogue and even some differences of opinion regarding the pathway for approval. This is one of these really rare moments. Maybe in my time it’s for up to the first time where we get to be informed by others and so we’re going to get informed by not only our direct conversations with the FDA, but what others are seeing when they’re looking with the FDA, and that will help inform our path forward. So it’s an interesting place to be where we get to be informed by others as opposed to with most of our other therapies having been the ones to inform the world and chart the path forward.

Thank you. And our next question will be coming from the line of Brian Skorney of Baird. Your line is open.

Hey. Good afternoon. Thanks for taking my question. I was hoping you could kind of walk through what you sort of perceive as the current order of potential rate-limiting steps to commercial ELEVIDYS revenue recommend -- recognition. I’m just trying to understand. It doesn’t seem like it’s demand in any sense right now. So what’s sort of the step-throughs that are kind of creating blocks from realizing the full demand? Would one be, like, insurance authorization? Would two be center capacity? Could you, like, kind of rank order those?

Rank ordering is hard. I’m going to turn this over to Dallan and force him to rank order. But let me say a couple things. I don’t want to call them blocks because it’s just a cadence issue. It’d be like saying, Dallan, often uses a metaphor that this is often like, think of this more than, this is not like prescribing a drug. This is almost more like an organ transplant. There’s just a lot of steps that have to go through to get from here to a kid’s dose. That’s why it’s about a four-month process. And I’ll give you some data on that. There are something like 25 individuals at a site of care that touch this therapy moving from the start form to the infusion and that goes through lots of different departments. It’s not just the internal pharmacy and the infusions that are in the nurses and physicians. It’s also all the way back into the financial area and the CFO of the organization and the like and so there’s just a cadence. Let me give you an example. Brian, there is, it’s about a, it can be as much as a four-week or longer process to do the single case contract. Almost every time a patient gets dosed, the site and the payer enter into a specific site contract. It’s an administrative step. It has to be done. It is done. It’s done very well. We understand the process exceptionally well. I’m quite confident now I can say it without fear of being arrogant. There’s no organization in the world that understands this process as well as we do. But there’s just a cadence to this. And it is all the things you’re mentioning. It’s the very process of getting the first meeting and then getting to the assay and then getting the infusion site ready. At the same time, it’s the start form and the single case contract. It’s negotiating with the payers if you have to. It’s the, when necessary, negotiating with the payers around it. Remember, I will comment on this. There’s been certainly some misunderstanding regarding payers in some relatively superficial surveys that were done. Look, we’re doing really great with payers right now. We’re doing better with payers with ELEVIDYS than we did with the PMOs. And I would note, we’ve done really, really well with the PMOs over time, I think, as anyone would agree. The policies really set themselves into three buckets. Policies, there’s a lot of policies that are just those to label, give access to label. More than there were with the PMOs. So we’re really excited about that. Some of our bigger payers are in that camp. There are some payers that have restrictions and there are some payers that have a lot of restrictions. The interesting thing is that those different policies will not affect, today, the ultimate kid getting on a therapy. What they do do is, internally, they define the amount of time to get a kid on therapy and the amount of work that needs to be done to get a kid on therapy, but they get on therapy. So I just want to get everyone’s head around that idea. And our PMOs, with eight years of battle-hardened experience, our win rate, if a payer is going to be very resistant and take us to an internal or external appeal, is over 90%. With ELEVIDYS right now, we’re sitting right now at 100%. So no kid has been permanently denied therapy thus far. So, in any event, all of these things describe this broad cadence that is about a four-month process. Dallan, if you want to rank order them for us.

Well, Brian, I think, you can summarize everything that Doug is saying with one word, which is time, right? Everything here takes time, and so you really, therefore, cannot point to one thing. As I said in my prepared remarks, we have robust patient demand. We have more demand than can be treated today. We have ample site capacity. We have enough site capacity to treat our peak forecast. We’ve got positive trends in access and reimbursement that we’re allowing to convert patients within that consistent three-month to five-month timeframe. So those together, then, when you layer in what Doug said, is just -- it’s just a game of time to get these patients on therapy and that is all fact. Because we’ve got a deep and very detailed line of sight into all of this, this is what informs our quarter-to-quarter growth and our guidance for the year.

And I will say, it’s probably two things. It’s time and an insane attention to detail, which Sarepta is really good at. We are -- I am sitting here, I will tell you, at our national training meeting today with all of our folks focused on this, and they, the amount and attention, obsessive to detail, and the passion to make sure a kid never slips through the cracks but can get on this therapy and benefit from ELEVIDYS is insane. And that explains why we’ve been so successful, and it explains why we are so comfortable with our guidance for 2025, which I would say it’s very robust guidance. $3 billion is a 70% growth overall for the year, and as relates to ELEVIDYS over 160% growth year-over-year, which speaks to the execution ability of this team out here in Scottsdale.

Thank you. And our next question will be coming from the line of David Hoang of Deutsche Bank. Your line is open.

Hi there. Thanks for taking my question. So I just had one on if you have any thoughts on a recent data set that was generated by a next generation DMD gene therapy competitor and do you have any insights from your field force on how family patients might think about receiving treatment with commercial ELEVIDYS versus enrolling in a clinical trial for one of these other products? Thank you.

Well, first, there are no next generation gene therapy programs, so I’m going to correct the record on that. That’s a misstatement. But look, a couple thoughts on it. We do understand that Solon put out some very, very early first in human data. A couple thoughts. First, fantastic. We are thrilled that a number of organizations are looking at researching new therapies for kids with Duchenne muscular dystrophy, and to be honest, we take a lot of pride in it because I think but for the success that we’ve had with our PMOs and with the ELEVIDYS, they wouldn’t have this robust focus on finding new therapies for kids. So we’re very excited about that. I do want to note that we have to remember that the families with Duchenne muscular dystrophy have to make difficult decisions today and they need accurate information to make them. That’s for the families to make. Clearly, there is one absolute overarching fact, which is there is one approved therapy that is transformative in nature that is a disease-modifying gene therapy, and that is ELEVIDYS, and that can treat 80% of children with Duchenne muscular dystrophy and young men and occasionally women with Duchenne muscular dystrophy, and our goal is to ensure that families have the right information so they can make the right decisions, which is often a very difficult decision. Do you get the current therapy? Do you look at a clinical trial and take a therapy that’s been tested less and the like? But I just want to make sure the only thing, I’m very thrilled with others focusing on this. I think it’s really positive for the Duchenne community and everybody should applaud it, but I do want to make sure people are providing the right, balanced, reasonable information so people can make intelligent decisions and not make the wrong decisions, and the actual decision that people make between entering into a clinical trial for a new experimental therapy versus getting on an approved therapy that’s been shown to be safe and efficacious is a difficult decision that’s going to be made between the families and their healthcare provider, hopefully properly informed with all the current data.

Thank you. And…

Maybe just one thing to add to that, and I’ll turn it to Louise to go into more depth, but I do think it’s important for people to recognize, and certainly Louise has done a lot of work, empirical work for over many years looking at constructs and seeing their functionality. And certainly as we’ve seen with other development programs that different constructs have different efficacy and safety profiles, and therefore when Louise tested all these programs, she really moved forward with the optimized construct from a functional perspective, and that’s why we were able to see data based on our expression lead to functional outcomes. And so that’s really important when patients are thinking about therapies that it’s not just only expression but actually the functionality of the construct, and to Doug’s point, we’ve been able to show that in clinical studies, but Louise, since you did the work, you probably have the best point of view on that.

Yeah. Thanks for that. Yeah. I think it’s important in the fact that the dystrophin space is unique for gene therapy and that in the small dystrophin space that you are looking at different functional contributions from these constructs and so the quality of the dystrophin that you’re producing is extremely important. Just one of the things that we noted in our studies when we compared it to other constructs was the inclusion of spectrin repeat 3 for stability of the construct and we found that over time that this was critical to the functionality of our construct and the corresponding functional improvement that we saw that corresponded from preclinical work to clinical work. And so it was, as you all know, you’ve been on this journey with us, hundreds of patients over many years and multiple clinical studies showing the same thing in terms of the expression leading to functional benefit, and obviously, with a traditional approval now and over 600 patients treated both clinically and commercially, so certainly the quality of the construct and the functional data that’s demonstrated in the clinic is critical to making the decision about the therapy that a patient chooses with their family.

Thank you. And the next question will be coming from the line of Ry Forseth of Guggenheim Securities. Your line is open.

This is Ry from Debjit’s team. We have two questions. Number one, how is Sarepta modeling the impact of competitive gene therapies in DMD, especially on the annual incidence population under the assumption that the prevalence pool is saturated? And number two, for the 2E program, should we expect higher vector genomes per nucleus relative to historical Sarepta data and protein expression above 50%, and is there a threshold for regulatory submission?

I think I’ve answered the threshold question. Thank you for that and I think if we get expression consistent with what we’ve seen before with 9003 and before that with 9001, and I would remind you, we have really extraordinary vector genome copies per nucleus, and I -- and we do it with a very rigorous approach, fairly unassailable approach to looking at things like vector genome copies and expression, ones that we’ve worked on for years and years with input from the FDA. One has to be very careful about that because it’s very easy to do these things in ways that give false information. But if we get those levels of vector genome copies per nucleus and we get the kind of expression that we’ve seen both in 9003 and 9001, we’re very confident that we’ll get an approval assuming the safety is there, and we’re very confident about that. As far as modeling, you know, it’s way too early to be modeling, competition from people that have one, two, and three patients in these early experimental therapies, probably haven’t even figured out manufacturing at that point. Certainly we wouldn’t be modeling anything this decade in any event. It’s something we can look to if people will actually start progressing.

Although I would say, thank you for that question, because the size of that incident population is really underappreciated. It’s really double the size of the

Thank you. And the next question will be coming from the line of Anupam of JPMorgan. Your line is open.

Hi, guys. This is Priyanka on for Anupam. Thank you for taking our quick question. As the R&D Day is in the second half of the year, can we assume potential new data to be presented there from Arrowhead or other non-Arrowhead pipeline programs? Thank you.

Yeah. I’ll turn that to Louise to comment.

I don’t think we’ve said exactly the timing of when we will present the Arrowhead data. It’ll all depend on the timing of the data release and how that lines up with R&D Day and we’re excited to talk about the platform generally, I would say that, as part of R&D Day and our deep pipeline that we haven’t really been able to share in detail. So we look forward to that and as we have more timing, we’ll share with you.

Thank you. And the next question will be coming from the line of Biren Amin of Piper Sandler. Your line is open.

Yeah. Hi, guys. Thanks for taking my question. For the emerging trial, I think, you’re enrolling both ambulatory and non-ambulatory patients while the Phase 1 enrolled ambulatory. So should we expect expression would be similar non-ambulatory patients to what was observed in the Phase 1 ambulatory data? And then when you report these data, will you be comparing these to the NCH natural history cohort?

Louise?

Yeah. A couple of things in there. So we’ve treated both ambulatory and non-ambulatory patients and we see similar levels of expression. So the EMERGENE, the analysis will analyze those two populations separate. From a functional perspective, that will be the follow-on study, the confirmatory study, but from an expression level, yes, we will evaluate both. In terms of what we’re comparing it to, we have our own journey natural history study and that will be the comparator for the confirmatory study.

Yeah. And just our history has shown that we get great expression across the continuum of disease from very young to very advanced.

Thank you. And our next question will be coming from the line of Gavin Clark-Gartner of Evercore. Your line is open.

Hey, guys. Thanks for taking the question. I just wanted to focus on terminal value. So if I look at the outer year of consensus estimates, take 2033, I see about $2.2 billion in U.S. ELEVIDYS sales, so that implies about 850 to 900 treated patients annually. Maybe, Dallan, you could just remind us, like, specifically what you’re seeing on U.S. incidents, but more broadly, do you believe this consensus estimate is plausible and maybe explain what has to happen for ELEVIDYS to reach and stay into that range into the next decade? Thank you.

This is the incident population. You’re sort of looking at what the terminal incident population would be. In the U.S., the incident population will be somewhere in the low 400s, 420, 430, so you can do the math on that. And then, of course, we’ll have the PMOs on top of it because the PMOs are enduring as well. And then by that point, although, this might be speculative until we’ve solved it, we will likely have solved the re-dosing issue by the 2030s as well, so you’ll have to add to that concept as well. And, of course, if you’re talking about the terminal value on ELEVIDYS, it’s not the terminal value on the company. As you know, if all goes well, we’ll be launching three limb-girdle programs in the next literally every year for the next few years. We have new ones coming. We have new INDs, and if all goes well, we’ll be launching FSHD in 2028. We’ll be launching DM1 in 2029. Both of those are multibillion-dollar peak-year sales opportunities, so obviously the terminal value will be significant on the organization as a whole.

Thank you. One moment for the next question. And the next question is coming from the line of Sami Corwin of William Blair. Your line is open.

Great. Thank you. Congrats on the progress and thanks for taking my question. I was curious how you’re thinking about the evolution of your growth margins in 2025 and 2026 as ELEVIDYS begins to compromise a larger percentage of your revenue. And then a quick question on your FSHD program. Is this DUX4 assay new or was it developed in-house, and could you just elaborate on it a little more? Thank you.

Sure. I’ll turn the evolution question to Ian and then Louise can touch on the DUX4 assay issue.

Yeah. So from a margin perspective, what we’ve said is that, obviously, we’ve already expensed the inventory already and so that’s starting to come off. And then over time, as we continue to treat heavier patients, you’re going to see the margin go down. We expect it to be in the kind of high 70s as we continue to penetrate into the non-ambulant patient population. But as Doug said, as we continue to work on our suspension manufacturing process, we expect that to start getting much significantly higher, trending towards 90%. So as we’re treating the heavier population, we expect the margins to improve in the 2027 timeframe.

Thank you.

Yeah. And just on the DUX4 assay, this is a quantitative assay developed by Arrowhead. As we’ve mentioned, DUX4 is expressed at low levels, somewhere around the incidence of one in 1,000 nuclei, so it’s difficult to measure. But Arrowhead has successfully done that. And so this is an assay that we’ll be onboarding as well. But we’re excited to see it, because it’s not something that’s been able to be accomplished in the field.

Thank you. And the next question will be coming from the line of Mitchell Kapoor of H.C. Wainwright. Your line is open.

Good afternoon. This is Dan [ph] on for Mitch. Thanks for taking our question and congratulations on the positive cash flow for the year. So parents we’ve spoken with have said that they have had patients experience two rounds of appeals and were ultimately denied. Would an IRO denial not count as permanent denial? And if not, what qualifies as a permanent denial? Thank you.

I’m not sure. I know that you did. I’m not sure who you spoke to. I know you did a survey. One was actually not a payer. It was PBM. And I think you might have talked to one payer. We have no kids that have been permanently denied therapy. I’m not suggesting that it will always be 100%. Our PMOs trend above 90% over the last eight years. But we’re seeing even a better response than the PMOs of the ELEVIDYS. So we’re doing quite well. We don’t have any kid that’s been permanently denied therapy. Some are still in process, but no kid’s been permanently denied therapy. Dallan?

Yeah. Yeah. Dan, we’ve dosed patients in the plan that you’re talking about. We’re not going to provide you any more details other than that.

Thank you. And the next question will be coming from the line of Uy Ear of Mizuho. Your line is open.

Hi, guys. This is Leo on for Uy. Thanks for taking our question. Could you provide some detail on the learnings from the pre-BLA meeting with the FDA on 9003 and how these learnings might be applied to the follow-on limb-girdle programs? And then also, based on the recent changes within the agency, how do you think FDA interactions might change going forward? Thanks.

So, Louise, do you want to touch on the sort of pre-BLA discussions broadly?

Yeah. Broadly, it was an extremely positive meeting, I think, across all of the different things that you would speak to in terms of the non-clinical data. The clinical plan for the clinical trial was endorsed CMC in terms of our plan and so that was endorsed. Using beta-sarcoglycan as a surrogate biomarker for accelerated approval was endorsed. So it was a very positive meeting. The agency certainly understands in ultra-rare diseases the challenges that are faced with that in terms of trial design, in terms of manufacturing. So we’ve already set the stage for the other follow-on sarcoglycan. So I think it bodes well for the entire platform. And we were certainly encouraged by it and certainly seen a change in the agency over the last two years and really promising. And that’s something we look forward to as we complete the other two sarcoglycan as well.

I do want to say, we are very proud of -- I am very proud of the work that Louise and her team have done working with the agency to evolve and modernize the approach to ultra-rare disease and its paid dividends for the limb-girdle programs, not only 9003 be and beyond. But I also want to give credit to the division itself. I have to say, the Center Director, Dr. Marks, has had a vision for being thoughtful and modernizing the division and comporting with modern science and not creating barriers that make it unviable to treat ultra-rare disease patients. And I think that Dr. Verdun, the Head of OTP, has done really an exceptional job of taking that vision and operationalizing it in ways that we’re seeing and I think others are seeing as well, which is, as we think about Rare Disease Day coming up on Friday, and I think we said some really brilliant thoughts on that. I mean, just poignant that I think we’re moving in the right direction as a people to be able to bring a better life to patients with ultra-rare disease. And I give enormous kudos to OTP for playing their part in that.

Thank you. And our next question will be coming from the line of Salveen Richter of Goldman Sachs. Your line is open.

Thanks for taking our question. This is Tommy [ph] on for Salveen. Just overall, what do you see as Arrowhead’s differentiation in terms of kind of their chemistry or structure versus some other RNA approaches in DM1 and FSHD? And on a ELEVIDYS, is there flexibility to expand upon existing infusion center capacity, including, for instance, staffing needs? Thank you.

I’m going to turn the first part of the question to Louise. Let me briefly talk about a ELEVIDYS. So what we really need to understand is that this is a very detailed cadence from beginning to get a kid dosed. So if site capacity isn’t alone the issue, people often say, well, what if you found a way to have more infusion days? That’d be great. But then you need infusion nurses. Then you need follow-ups. Then you need more single case contracts. Then you need to think about back in the finance function, what are the credit limits associated with all of that? So it really is just a certain cadence. So the thing that I’m excited about is this team has unlocked this opportunity and really become experts in that cadence and that’s why we’re able to provide guidance of $3 billion for the year because the team’s figured it out. But that is, the cadence is the cadence. And I don’t think the opportunity for dramatically changing that exists. And with that, I’ll turn the first part of the question over to Louise.

Yeah. On Arrowhead, the -- I think the comprehensive answer is that Arrowhead is focused on every aspect of the construct and so we like the diligence of their approach. I would like to call out their targeting ligands as being a differentiator because getting to the right tissue, in the case of muscle for FSHD and DM1, using the alpha-v beta targeting ligand that we use the same one with Myo-AAV, for example, we know that it works well in muscle. So that’s a differentiator. But they focus on the design from the siRNA, from the targeting ligands, from every aspect of the construct. And so we just like their comprehensive, diligent approach. It’s something that we model with gene therapy, for example. And so I think it’s all of the above, but we certainly appreciate their targeting ligands for the various tissues.

Thank you. And that concludes today’s Q&A session. I would like to turn the call back over to Doug Ingram for closing remarks. Please go ahead.

Well, thank you, everyone, for your questions this evening. Appreciate them. We’ve had a really tremendous 2024 and a great Q4 of 2024. And as we track into 2025, things are going very well. A couple things. You know, we’re obviously going to continue to drive this launch of a ELEVIDYS and the team’s done a really great job on that, and I think they will continue to do that. We’re going to continue to focus on our PMOs and ensuring that patients are benefiting from our PMOs over this year. And then we have more milestones to read out in 2025 than any other time in our history. And so I look forward to updating folks across this year as we move forward with girdles, as an example, and we get the FSHD data and we get the DM1 data, and we keep driving as an organization. So thank you all very much and have a wonderful evening.