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Executives

Chris Garabedian - President and Chief Executive Officer

Analysts

Geoffrey Meacham - JPMorgan

Sarepta Therapeutics Inc. (SRPT) 32nd Annual J.P. Morgan Healthcare Conference January 15, 2014 7:30 PM ET

Geoffrey Meacham - JPMorgan

Okay. Welcome to the final session of day three of the 32nd Annual JPMorgan Healthcare Conference. My name is Geoff Meacham. I am the Senior Biotech Analyst here at JPMorgan.

It’s my pleasure to introduce Sarepta Therapeutics one of the leaders in the DMD space and speaking on behalf of Sarepta is CEO, Chris Garabedian. Chris?

Chris Garabedian

Thanks, Geoff and thanks to JPMorgan for the invitation to present today. So I am going to be presenting an update on Sarepta Therapeutics. We have an RNA-based technology that we have been advancing for Duchenne muscular dystrophy.

We also have some products in the clinic for infectious disease and it’s been quite a year, so for RNA therapeutics, even quite a week for the RNA space. And we've been at it for a long time and we've really seen a lot of success in recent years. I am going to share some of that data with you today.

These are our forward-looking statements. So please refer to our SEC filings for risk factors associated with the company.

This is our pipeline for DMD, Duchenne muscular dystrophy and we've been focused on developing our drug eteplirsen for exon 51 amenable populations. It’s a very fragmented disease with a lot of different genotypes that require a lot of drug. And you can see we've been developing follow-on drugs for our drug eteplirsen to target exon 45, exon 53 and others.

We're announcing this morning that we have three other exons that we are bringing in through sequence optimization; exon 52, exon 55 and exon 8. So right now you can see we have eight drugs that we are doing screening or preclinical development or in the clinic for Duchenne muscular dystrophy.

This has been a big year for us in that we've continued to show good stability with our drug eteplirsen on walking, by the six-minute walk test. We had our 48-week data published in the Annals of Neurology and just today we announced stability on six-minute walk test through a 120 weeks including a placebo group that crossed over has been stable since week 36.

Duchenne’s a devastating disease, again it’s an X-linked chromosome disease that's marked by deteriorating muscle. It usually begins with a progressive decline in ambulation beginning at the age of seven, usually leading to wheelchair dependence in the pre-teens or early teen years. And then progresses further with pulmonary function being compromised and requiring ventilation, upper arm mobilities then compromised and cardiac failure ultimately leads to death or pulmonary function failure in the 20s typically.

The disease is marked by a lack of dystrophin and dystrophin is an essential protein for helping muscle function and growth. It almost acts like a shock absorber to the muscles. And the Duchenne boys are lacking the ability to produce this dystrophin because of mutation in the dystrophin gene that is out-of-frame and does not allow that translation to the protein.

So we have a drug eteplirsen that is a antisense oligomer [platform] with a unique backbone we call morpholino or phosphorodiamidate morpholino oligomer. And it has very good drug-like characteristics, it clears the plasma very quickly, it’s charge neutral, it’s cleared through the kidney and we’ve been testing this in the Duchenne population up to 50 mgs per kg now beyond two years.

And its mechanism of action allows it to repair this RNA mutation. We refer to it as exon skipping. There is a natural genotype and phenotype that exists, called Becker Muscular Dystrophy that is a much milder natural course of disease. So what we’re essentially doing is turning a Duchenne out-of-frame deletion in the dystrophin gene to an in-frame deletion that’s akin to Becker. And we hope to look for the phenotypic changes associated with the Becker population.

So here’s an example of a patient, Duchenne patient with the deletion of exons 49, 50. We identify the bad actor, in this case it’s exon 51 and by having sequences targeted to exon 51 to hybridize that out of the reading frame it essentially skips over it and allows our translation to be restored and what we intended, which is protein production.

So our Phase IIb study basically was designed to understand how long it takes to produce dystrophin and does that dystrophin increase over time. And so this is a scheme of our study design. And we enrolled patients who were at the time of initiation were over nine years of age on average.

So these were a relatively older population as it goes for the ambulatory population. And you can see the weight and height averages here. And the baseline six-minute walk was consistent to many studies and natural history studies that have been done in Duchenne somewhere between 300 meters and 400 meters walk.

So this is a build slide that shows you what we learned about the evolution of dystrophin production. This is the placebo arm and the change from baseline at both 12 and 24 weeks. And you can see essentially no increase in dystrophin positive fibers. What we also learned was even at the highest dose tested after 12 weeks we saw really no difference than placebo.

So this was the spike having 100% of the patients showing exon skipping by RT-PCR. So we think it was important to show that the mechanism was working but we weren’t seeing a material or meaningful level of dystrophin produced as defined by dystrophin-positive fibers.

However when we looked at 24 weeks of treatment we did start to see the materialization of dystrophin in the muscle biopsies. So what this told us was there a delay of dystrophin production, that it takes anywhere from 12 to 24 weeks before you can expect dystrophin to be produced with this exon skipping technology.

We rolled over all of the placebo patients and continued to follow the treated patients and took biopsies at 48 weeks and we saw increased dystrophin beyond the 24 week time period. And so again this was very encouraging to us and we believe was above the threshold of dystrophin that’s needed for a meaningful clinical benefit.

And you can see this outlined in the muscle biopsy samples we have on the bottom where what a pre-treatment biopsy looks like, you can see the 12 weeks, looks not much different than the pre-treatment biopsy. But then at 24 weeks you start to see the dystrophin materialize, 48 weeks you see even more dystrophin and it’s pretty well defused and distributed throughout the muscle tissue here.

And you can see what a normal tissue looks like. And so we believe that dystrophin we’re producing, while it’s not a normal vial type dystrophin it’s akin to a Becker Muscular Dystrophy dystrophin, a truncated dystrophin type and we don’t believe we’ll get to levels in a healthy normal muscle but you can see after 48 weeks it starts to look closer to what a normal healthy tissue would look like or what a Becker tissue would look like.

And so we think this very encouraging and we also looked at other measures such as dystrophin signal intensity. So this is a summary of both our dystrophin positive fibers and our dystrophin signal intensity. And it’s important to say that we subtracted any values from baseline to make sure we were only reporting what was created by the drug.

So any noise or revert in fibers that have been referred to as natural exon skipping would be subtracted out in these reported figures here. And you can see we have statistical significance both on dystrophin positive fibers and dystrophin intensity for fiber.

On the bottom here what we’re highlighting is that for every patient that was dosed eteplirsen systematically regardless of dose, as low as 0.5 mgs per kg or duration from 12 to 24 or 48 weeks we see a 100% evidence of exon skipping by RT-PCR. And this was with a rigorous methodology. The first 24 weeks were completely blinded to dose duration whether it was pre-treatment, post-treatment, the 48 week was blinded to dose duration and if they were previously on placebo or not.

We also had further validation by looking at other glycoproteins that make up the dystroglycan complex. So we had evidence that we're sustaining through these other glycoproteins that suggest it’s a functional dystrophin we are producing. And besides RT-PCR that I just mentioned we also had a sample that was tested for dystrophin expression by Western Blot using the DYS1 antibody that showed positive for dystrophin as well.

So then we wanted to look at the clinical outcomes and this is an example of a collection of the natural history study or published reports from clinical studies in Duchenne muscular dystrophy and you can see consistently in boys that are over seven years of age we see a decline over the course of one year and two years here for certain natural history studies that have gone out to two years. And there maybe variability on this depending on they are based on six-minute walk, the age of the patient, we do know that boys less than seven years of age is very confounding.

So looking at a population less than seven is difficult to interpret any results because many five and six year olds are still improving even not on treatment. But in the greater than seven year old population we expect a progressive linear decline that again continues into year two.

This is our clinical data now out over two years. So 2.3 years now we followed the early treatment group, the placebo control group. We know have more than a year and a half of stability data after dystrophin was produced. And you can see this was our primary end point using the maximum score of two time points that we tested six-minute walk at baseline, two measures and then week 120.

You can see over the course of over two years only 14 meters were lost in that time frame. When you look at the mean score again you see a similar stability in that only 10 meters was lost using the combination mean of the best score and both measures of six-minute walk.

Importantly the placebo group that was not confirmed to produce dystrophin until week 48, we saw that decline, that I showed you which would be expected on a six-minute walk in the greater than seven age population. And so here we see they declined a mean of 55 meters from baseline to the last point before dystrophin was confirmed and we see them generally stabilize.

Again numerically they declined a little bit, if you see we had a downtick at week 96. This was because a boy who had broken his foot, was recovering and was not fully back to normal. It turns out that, that boy did better at week 120 than he did at week 96.

This is important to highlight because and many times a boy this age if they break a foot or a leg they are then wheelchair dependent. Very rarely do you see recovery and then being able to walk after the next time point, after week 84 when they had broken the foot and couldn't do the six-minute walk they were already recovered and then now they are already improving back to week 120.

This is the individual patient data on six-minute walk and we have a line there demarcating those who were the early treatment above the line and those four placebo groups all of which declined more than 15% from the baseline before dystrophin was produced. If you look at the far right column we see the majority of patients now who have declined less than 10% after two years of treatment from the early treatment group and after a year-and-a-half of treatment in the placebo group. Again we see that stability that we would not expect based on the natural history of six-minute walk that's been characterized -- that I showed you earlier.

Importantly also we have the best control group that we can think of which is the recent GSK study which had the same amenable population that we’re enrolling with eteplirsen in this study followed for 48 week had an 83 meter decline if they were over seven years of age. So we have a great example of what would typically happen to an exon 51 amenable population over 48 weeks. Well here we now have over two years where we’re not seeing that decline in any of the patients that we’ve been following here.

There has been a lot of debate around, of the health status of the patients and if they would be expected to decline and some suggesting that in patients who are over 350 meters they may not decline as rapidly as if they were under 350 meters.

So interestingly at 36 weeks which was the last timeframe before we confirmed dystrophin in all of these patients at week 48 we had half of the patients above 350, half of the patients below 350. This is the average of those five patients above 350 was 404 meters, below 350 was 317. And you can see regardless of where they were above or below 350 they stabilized and showed hardly any decline on average across these two cohorts. So again we think this is even further impressive that regardless of that six minute walk status they are able to show stability on the walking.

The safety continues to be very strong for this drug now out over two years. Again we have not seen any clinically significant treatment-related adverse events, no treatment-related serious adverse events. We did talk about the distal femur fracture in the boy but it did not require hospitalizations or discontinuations. And so we think this is very important as we consider a drug for a lifelong condition like Duchenne, especially in a pediatric population to have a safe drug that could be administered. And again this is just a summary of the more serious treatment-related adverse events; again very strong to date now out to over two years.

Importantly we are very excited about the application of our technology for other disease areas and we have been working on advancing the PMO chemistry to optimize both cell penetration and to make sure that if we have a more effective compound that it’s safe. So we’ve been doing this in basically three ways. PMO-X is a, what we call a category of compounds in which we’ve been making modifications, non-peptide modifications, let’s call it small molecule like modifications both internal and external to the morpholine scaffold and that’s a program that we believe will generate chemistry that can be better tissue targeting and be applied to certain diseases of certain cell types accordingly.

PMOplus is a chemistry that we have in the clinic as we speak, being dosed for infectious disease. In fact we are in a multiple ascending dose study against the Marburg hemorrhagic fever virus in which we have shown to date now through 16 mgs per kg, 14 day dosing with no signals of toxicity. And so we think this is a chemistry that we have good IP around that could be looked at to apply to other commercially relevant targets.

PPMO or Peptide Conjugated PMOs of which we did some early work where we showed with four 12 mg per kg injections we could convert a dystrophic mouse into essentially a healthy mouse in all muscle groups including the heart muscle. And unfortunately this was found to be toxically dosed in monkeys. But it started a program internally where we started to mitigate that toxicity and retain a lot of that potency we saw with the PPMO. And so that’s something we’ve been advancing as well.

And with that platform I am pleased to announce that we have hired Art Krieg as our Chief Scientific Officer. We announced this last week, he started on Monday. And Art has a long history in the RNA space. After coming out of academia he joined and was a co-founder of Coley Pharmaceuticals and did some great work there to attract the interest of Pfizer which bought Coley and then Art became the leader of the RNA therapeutics group at Pfizer.

After Pfizer decided to get out of the RNA space at that time Art then went on to be a Co-Founder and Chief Executive Officer of RaNA Therapeutics and was with RaNA since 2011 before he joined, I am sorry, since 2011 and joined Sarepta again this past week. So we’re very excited to have Art on board. He knows the space, he’s very well networked and he is very excited about this chemistry and believes, as I do this, that could be a best-in-class chemistry in the RNA space.

And the reason we believe that is because of the differentiation from other backbone chemistries. And specifically compared to 2-'O-methyl chemistry of which we’ve been developing a product against in the Duchenne muscular dystrophy space but this is also true with many phosphorothioate chemistries that are negatively charged adhere to that nucleic acid type structure.

And we think these drug like characteristics which allow dosing to much higher doses than we’ve seen possible with the 2-'O-methyl or the phosphorothioate chemistries. And this is a publication that came out of the University of Live Researchers which looked at the PMO chemistry compared to the 2’-O-methyl chemistry controlling for all other variables. So this is the same sequence, same dose in a dystrophic mouse model and you can see across all of the multiple muscle groups, the Morpholino chemistry showed higher protein expression in the gastroc, in the quadriceps and the triceps, tibialis anterior and the diaphragm, neither chemistry showed good affinity for the heart muscle.

But again all of these levels by western blot were quite significant with the PMO and again five to 10 fold greater protein expression than with the 2’-O-methyl. And we’ve done some work internally at Sarepta which tried to highlight the activity of PMO chemistry versus 2’-O-methyl. And here is a basically a chemistry cytokine screen that shows that with the PRO051 sequence with the 2’-O-methyl chemistry you can see the induction of the Cytokines, IL10, IL6, another a T-cell expression TNF versus the same sequence of PRO051 with the PMO, again we don’t see that cytokine induction.

And we’ve shown AVI-4657 which is similar, we didn’t want to use the identical sequence as eteplirsen because of the reporting to the FDA et cetera to the IND. So we just had a slight modification, five [days per shift] to show that a similar sequence as eteplirsen with the PMO also showed no induction of these cytokines.

So we’re very pleased about that and did some additional work on the sequence to sequence because there is a lot of confusion out there that these are the same drugs and these would behave similarly. So I’ve shown you examples of how the chemistry is superior but here is the sequence controlling for all other variables, these were PMO, use of eteplirsen versus the PMO version of the same sequence being used in exon skipping with 2’-O-methyl. And you can see we see a markedly higher potency with the sequence that is in development.

So again we’ve heard a lot of confusing comments about lumping, drisapersen for example with the eteplirsen and calling them the same and expecting the same activity level and expecting the same outcome. And all of the data that we’ve generated and we’ve seen published suggest that these are very differentiated compounds.

Lastly as I mentioned earlier the new PMO-based chemistries that are in the clinic which we call PMOplus, we’ve dosed influenza, we’ve dosed Ebola drug and we have both dosed Marburg. Now the Marburg drug has dosed up to 16 mgs per kg for 14 days with a good safety profile. We have a DSMB that will have that final review in February of 2014 and continue with single ascending, multiple ascending dose with our influenza compound that’s only gotten through the third cohort up to 2.5 mgs per kg with our flu compound.

And this is our broader pipeline and we are focusing on our early research programs and with Art Krieg on board we have been doing a lot of academic collaborations. We want Art to continue to focus on how we could optimize this chemistry against new targets and so we expect some data to emerge on some of these undisclosed targets on 2014 and look forward to getting updates on how the Morpholino chemistry can be applied beyond DMD and beyond our current infectious disease targets in which we have other collaborations in the anti-bacterial space that we hope to see data emerge in 2014 as well.

So with that we got a lot going on, on the DMD front, we had FDA communications ongoing, there’s been no meeting minutes that have come out of our meetings that took place in November or December. So no new update since the November communication that we put out with the FDA. Again the manufacturing continues apace and we have completed one batch at mid-scale to fill and finish. We are doing the analytical testing that we hope to submit to the FDA in the first quarter of this year. And again we hope to resolve any questions around the confirmatory study design to start dosing patients in the second quarter of this year.

And again we still are on track for the follow-on exon skipping drugs for DMD where we hope to have an IND submitted for one of those additional compounds by mid-year and at least a second by the end of the year.

Again Sarepta, we are based in Cambridge, Massachusetts now, we have about 130 employees, we have a healthy cash position, about $265 million on the balance sheet as of year-end, strong infrastructure, we are building an experienced management team that’s just been enhanced with Art Krieg, our CSO and we continue to progress the technology in our programs forward.

Again we have about 37.6 million shares outstanding, trading about $20 a share or about a $750 million market capitalization and thank you for your interest in Sarepta Therapeutics.

Question-and-Answer Session

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