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Sarepta Therapeutics Inc. (NASDAQ:SRPT)

Bank of America Merrill Lynch Health Care Conference Call

May 13, 2014 1:40 PM ET

Executives

Christopher N. Garabedian – President, Chief Executive Officer & Director

Analysts

Steve Byrne – Bank of America Merrill Lynch

Steve Byrne – Bank of America Merrill Lynch

This is Steve Byrne; I cover Biotech stocks for BofA Merrill. It’s my pleasure to introduce Chris Garabedian today; he is the CEO for the last few years. He has had a long career with a variety of drug development companies Gilead, Celgene, Abbott Labs and here he is to take us through the story of Sarepta. It’s all yours Chris.

Christopher N. Garabedian

Great, thanks Steve and thanks to BofA Merrill for inviting me to present here today. So this is an exciting year for Sarepta Therapeutics and that’s because we recently received some guidance from the FDA that really gave us some clarity about our path forward for our Duchenne Muscular Dystrophy program. I’m going to be making some forward-looking statements in this presentation please refer to our SEC documents and filings for risk factors associated with the company.

First I would like to start off with what was the main outcome of the recent FDA guidance letter that they sent us, which we announced on a call in April. There were three main takeaways from that guidance, all of which we believe provides us clear guidance for the pathway forward for our DMD program and we believe all of them were favorable to moving our products through the development pathway as expeditiously as possible.

First, we got guidance on the feasibility of applying for an accelerated approval of eteplirsen with the New Drug Application based on the existing data set and the emerging data set that’s coming from our current trials or anything we would gather over the next six to nine months.

To that end, they indicated that an NDA should be fileable with additional data that comes from our existing data set or our ongoing study or the early experience from our study that we would have up running later this year and would not require a follow-on data from a confirmatory study as it relates to clinical outcomes or dystrophin from new patients in our program.

So to that end, we decided that by the end of this year we would be in the strongest position to submit a New Drug Application to the FDA for approval of eteplirsen and the reason we decided that the end of this year would be the best time point is because we will have additional clinical data from our ongoing Phase IIb that would be in the form of 144 week data that would be clinical data such as six-minute walk and Pulmonary Function Test, it would be safety for exposure beyond 2.5 years almost three years and again we think that will bolster potential NDA.

We also will be looking for the feasibility of a fourth biopsy and adding dystrophin data to our data to already existing data set. And then we’ll have early experience data from our ambulatory study confirming eteplirsen’s benefit and we could use that just a bit as part of the NDA as well.

The second main area of feedback we got was what would be required in the event that eteplirsen was approved under accelerated approval, lets say in 2015? In this guidance, they said that there were two ways that we could confirm the benefit of eteplirsen if it were granted and accelerated approval.

The first way was through conducting in open-label historically controlled study with eteplirsen of which they would continue – we would continue to follow and gather clinical data and safety data we would also gather new dystrophin data in these patient. And the FDA did not provide any specific endpoint or specific time point in which they would deem that data set sufficient versus natural history or historical controls with a similar population to suggest that the benefit of eteplirsen has been confirmed from what we see in the earlier Phase IIb study.

Now with that study, although the FDA did not require us to do a untreated cohort of patients, we decided that that would be in the best interest of conducting the study, because where the FDA may feel that 48 week is too soon to show a benefit and are open to looking at 18 months or two years or beyond to show how this drug is working versus natural history.

We believe we can the show the benefit of eteplirsen in 48 weeks on a six-minute walk endpoint, comparing it to an untreated cohort patients that are not amenable to eteplirsen, but have the same inclusion criteria, who also have exon deletions of different genotpyes and where the natural history suggests that we see similar declines if you adjust for age or baseline six-minute walk.

Now if we fail to meet the endpoint at that 48 week, that doesn’t mean that we cant continue to follow these patients open-label and still use that study versus a historical control beyond 48 weeks to show that benefit. The second way which was completely independent and unique way of showing confirmation of eteplirsen’s benefit should they grant accelerated approval is through a placebo-controlled randomized study of our follow-on exon drugs.

They indicated that we would only need to show it in one and we said well, we may want to include more than one took bolster the powering and to have more experience with this technology beyond just the next exon. So, at this point we’ve announced we would do a follow-on exon-skipping drug study that includes exon 45 exon-skipping drug candidate and exon 53 exon-skipping drug candidate. This would be a placebo-controlled study and we would look at end-point like six minute walk after 48 week to show that benefit.

Now, the FDA said either one of those would be sufficient to confirm the eteplirsen benefit, should eteplirsen to be granted and accelerate approval in let’s say 2015. And, we think this is encouraging and that they are extrapolating the benefit of the eteplirsen data and what we’re seeing with this technology to the next exon skipping target.

So, we believe strongly that these drug have the same drug like characteristics, the same safety profile and pharmacokinetics profile, we would expect to be similar, we see that similarity in the animal studies that have been conducted and again we see safety let’s say for example, in our monkey studies up to 320mg/kg. So, we believe that we can extrapolate and we’re very encouraged that the FDA believes we can use the follow-on exon studies to confirm the benefits of eteplirsen.

In the third take away is really just that that they want us to proceed as quickly as possible into a well powered study with these follow-on exon’s, which means we need to get to that standard dose we’ve been talking about a 30 mg/kg per week and we will look to do that as soon as possible and we expect initiating enrollment in that study by the end of the year with dosing to begin in the first part of 2015.

So, importantly what was most encouraging about this FDA guidance was is really provided us multiple shots on goal to get eteplirsen approved early under the accelerated approval format. So, they mentioned as I indicated that either dystrophin could be used as a basis for that accelerated approval or what they describe as an intermediate clinical end-point that’s outlined the FEDASIA guidelines that is under the accelerated approval regulatory guidelines.

But, let takes this dystrophin first, so they did indicate that the existing dystrophin data set could be sufficient on its own to qualify for accelerated approval, particularly after a collaboration with the company to go through a detailed review of exactly what was done to generate that data set.

So that means they have the data, they have all of the methodologies that we’ve used to conduct the analysis, but they’ve not yet gone and actually talked to the pediatric neurologist in-charge of the histopathology lab. They’ve not talked to the reviewer, they’ve talked to the technicians, they did not completely understand how did we control for this analysis. What conditions was ensuring the quality of this analysis? How was the blinded review handled?

We are very confident in the sight we selected and the entire staff, who led the dystrophin analysis, I believed they are world-class. And we think once the FDA meet this team and understand exactly how it was done. They will have the same confidence we have in our existing dystrophin data set.

They also said that we may want to explore the feasibility of a fourth biopsy. This is not the mandate, they are not requiring this, but they did indicate if we show yet another biopsy with dystrophin, but this time with their input and understanding they could even go visit the lab while they are conducting the analysis on any fourth biopsy. So this is why we are pursuing this, we’re encouraging the parents to participate and in the coming week we’ll know more about the feasibility of that and how many of the patient may agree to participate in a fourth biopsy analysis.

The safety data base continues to mature on our current Phase IIb study, but we will be collecting safety data of course on any new study that’s initiated with eteplirsen. In a moment, I’ll go over the studies that are planned to roll out this year. And then finally, we believe that we can submit data after the NDA submission, as we get continued emerging data. So for example, we highlight year the week 168 week clinical data and safety data set from our Phase IIb, we would have that in early 2015.

The FDA showed flexibility to be open to accepting data after the NDA is submitted or filed, but in time for a review of the data before a decision on approval and ideally in time for discussion at an advisory panel and Open Public Advisory Committee Panel. And then the post approval confirmatory evidence again as we described, would be doing that open-label historical control and following those patients indefinitely and then the placebo controlled clinical study on the follow-on skipping candidates.

Two ways that they provide shots on goal to confirm the eteplirsen accelerated approval if they decide to grant eteplirsen accelerated approval. This is a schema that just shows the data that we would be generated over the next six to nine months and where that falls as it relates to NDA submission that we've indicated we would have by the end of this year. To just walk through the process after we submit an NDA within 60 days the FDA would either accept the filing or issuer refuse to file. So they deem the NDA acceptable for filing that would happen 60 days after submission, if we are granted a priority review that would mean the PDUFA date would be six months following an NDA filing.

So just to walk through a hypothetical in terms of timing, if we submitted an NDA by the end of the year lets say December 15, then 60 days later or by February 15, they could accept the NDA for filing then it would be six months after that in which FEDASIA has highlighted would be the date that they need to announce, whether they approve the drug or not. That would put us in August 15 as a decision date for approval of eteplirsen.

As I mentioned we took this guidance and we have planned our continued program across the DMD portfolio, including three additional studies with eteplirsen. Of course, we will continue to follow the patients the 12 patients in our ongoing Phase IIb study for safety and clinical outcome measures. We are collecting clinical outcomes every 24 weeks so the next update in that studies with a 144 week data in the second half of this year. We hope to present that data World Muscle in Berlin in October.

We have three other studies that we have planned and are in the stages of planning which are the first one the confirmatory historically controlled study with eteplirsen and ambulatory patient. This will be about 60 to 80 patients sample size, we will include patients in that study that can walk between 300 or more than 300 meters and we will have a primary analysis on six-minute walk for those who are between 300 meters and 450 meters at base line, but we will still include those who may have healthier walking times above 450 we would not exclude them if they meet the other inclusion exclusion criteria for the study.

We will have free and post treatment biopsies in these patients and the post treatment biopsies will happen at various time points 24 weeks, 48 weeks or later. We are also planning a pop study in a younger population; these would be voice between four and six years of age, who would be amenable to eteplirsen and this would be also an open label study, much as I described the untreated cohort that we’re designing as a control for the ambulatory patients, we are looking into a similarly matched population of untreated patient that are younger not because we are powering the study on a clinical endpoint, but it will help inform us on the understanding of the exploratory measures that we may collect under this open-label.

But this would be design simply for safety and in this younger population we would also be collecting dystrophin pre and post treatment biopsies, because this could be a very important cohort to follow over the ensuing years to see if we can change the trajectory of the natural history by starting eteplirsen in a younger population before they see significant muscle deterioration.

The third new eteplirsen study is in patients who have limited or no walking ability. So it’s a patient did not qualify for ambulatory study, because they could not walk at least 300 meters or if they were in a non-ambulatory or wheelchair dependent state, we want to follow these patients for safety, we would not be requiring biopsies, these are more advanced population, they have more fibrotic tissue, but we want to be able to restore dystrophin in whatever muscle they have and whatever muscle groups.

That maybe the dystrophin muscle, it maybe another important muscle that can maintain pulmonary function. We will be assessing exploratory measures like pulmonary function in this population. For the other two studies that where we’re capturing safety and exploratory measures and in the case of the younger patients’ dystrophin, we expect to enroll approximately 20 patients in each of those studies.

Then as I mentioned we are pursuing our broader DMD portfolio with the follow-on exon-skipping drugs in development. The two that are closest to having an open IND which we will be submitting INDs later this year our exon’s 53 and exon’s 45 these are exon-skipping drug design to skip exon 53 and 45. We will be using these drugs to dose patients in our randomized placebo-controlled other follow-on exon study that would be powered on a six-minute walk endpoint and would be collecting dystrophin.

We mentioned to the FDA that although they would only require us to do a placebo-controlled for one drug as a follow-on exon to confirm eteplirsen’s benefit, we want to use this protocol as an opportunity to get experience dystrophin production, safety and clinical outcomes across a collection of follow-on exon-skipping drugs.

The first two of which will be exon 45 and 53, but this protocol could be amended to include other exon-skipping drug, they would all still be randomized to drug or placebo, but we think that will boost the power and the understanding of our broader technology platform and to show that at a standard dose of 30 mg/kg per week, we can produce dystrophin of a sufficient range, we can show safety at that dose and we will collectively show clinical outcomes that are different than placebo.

We also have been planning an EU study just with our exon 53 drug, with collaborators based on a European Union grant we received. And that study is expected to start dosing in the fall, and we can use some of the safety exposure data from that to inform our exon 53 study, which we hope will accelerate into a 30 mg/kg dose as quickly as possible or maybe directly into 30 mg/kg dose. We still need to determine the final designs around that study and how we’ll ramp-up to that 30 mg/kg dose.

Lastly, we did announce that we’re going to be designing and preparing for a natural history study, because we need a lot of patients not only to enroll all of these treatment studies, but also for the untreated cohorts that we talked about, that will be matched with the treatment arms in the eteplirsen ambulatory study and the younger patient study. We also need patients to be the ones that would be selected for our treatment studies as we bring new drugs on besides exon 53 and exon 45.

So, if we have patients who need exon 50, or exon 44, or exon 52, or exon 55, or exon 8, not only could they be followed in our untreated cohorts in the eteplirsen study. They could be included in our natural history study, but they could be selected to go into our randomized placebo-controlled study once we have open INDs for this follow-on exon and have a chance to get on a treatment as soon as possible.

So, we’ve got a lot going on over the course of the next year to two years, as we prepare for an NDA, as we prepared for the multi studies I’ve described and as we prepare to advance our overall DMD development program forward. And, we’ve been building a strong team, we’ve a strong infrastructure we just add recent financing, which we added almost $100 million more to our balance sheet on a cash balance of approximately $233 million at the end of the first quarter.

We’re based in Cambridge, Massachusetts where we open new space, including new lab space to continue to advance the research and we’ve again been hiring an experienced management team, as you can see here from a variety of companies that have shown success in the biotech and pharmaceutical space. So we have a team that understands how to manage this type of drug development multiple activities like we have going on over the next year and what its going to take from a regulatory standpoint to get these across the finish line.

In many other presentations I’ve described in greater detail Duchenne as a disease and our data set. So, I’ll briefly go through this section quickly. We are restoring this dystrophin with our technology that’s the reason the exists is they lack the ability to make a dystrophin protein or truncated dystrophin functional protein because of mutation in the gene, the dystrophin gene that is out of frame.

Our technology with our lead program eteplirsen works by alternative splicing or what we call exon-skipping that basically restores the reading frame. Our chemistry, we believe is best in class in the RNA space, we believe it’s differentiated from an activity and safety profile and we believe our clinical benefit bares that out in our current study.

This is the same technology, the same drug components that would be used for every follow-on exon-skipping drug that could treat the other mutations in the DMD. So far, we’ve done previously clinical work with two additional drugs exon 45 and exon 53 that look very similar to what we saw with eteplirsen’s preclinical and we expect the same drug like characteristics to apply across the platform.

The technology is very elegant and that we can target the specific bad actor in the dystrophin gene that’s causing it to be out of frame. And our technology is designed to work at the pre-messenger RNA level to produce an messenger RNA transcript that is in frame. Albeit is not a complete transcript of the dystrophin gene, so its not generating a full dystrophin protein, but we’re producing a truncated, internally truncated dystrophin that’s akin to Becker like this dystrophin, Becker muscular dystrophy is a much milder phenotype that is characterized by the ability to produce this truncated like functional dystrophin.

Our Phase IIb study that I mentioned earlier was a placebo--control study for the first 24 week. All the patients were rolled over including the placebo patients on to open-label drug. They weren’t unblended until after the 36 week timeframe the time point that we showed a market difference between the early treatment group and delayed eteplirsen treatment group and delayed eteplirsen treatment group.

And we showed that dystrophin did not materialize a meaningful levels based on dystrophin positive fibers until after 12 weeks and until we had 24 week biopsies that we collected. This is important to understand how to interpret our data set and when to expect a clinical benefit to be conferred. And our 48 week data showed continued increases of dystrophin with further dosing. So we believe we may be able to see continued dystrophin levels or at least to maintain the levels we see at 48 weeks if we were to get that fourth biopsy, which would be about three years after dosing.

This is our baseline characteristics, we enrolled in all their patients that its typical Duchenne Muscular Dystrophy studies, these were over nine years of age on average; today they are over 12 years on average. Our last time point they were over 11 years of age at the last 120 week time point.

Here is our clinical data on the six-minute walk, as you can see through that 36 week time point we saw the separation between the early treatment and delayed treatment cohort. As soon as dystrophin was proven in these muscle biopsies, we see that stabilization through more than year and half in the placebo crossover group and more than two years in the early treatment group.

This is just a mean score, so we took two measures at key time points and regardless of how we calculate the six-minute walk score, we see the same effect of stabilization. And this what all of the natural history studies and the treatment placebo cohorts have performed across a similar greater than seven year old population. The slope of the curves look identical, they are all declining over a year to two years. Some of them significantly so, notably the GSK during the person study placebo arm declined 83 meters for those boys who were over seven. Again, our boys were over nine years of age on average when we started our study more than two years ago.

And this just overlays our data to these natural history studies to give you an example, these are not direct comparison studies, but shows that the slope of curves in both treatment groups are very markedly different than what you would see in natural history studies of an adjusted age appropriate population and this is from the time point in which we the last time point before we confirmed dystrophin at that 48 week time point or after that 24 week time point in those placebo crossover patients, again we see no differentiation between the placebo-controlled crossover and the treatment group.

Importantly two boys went non-ambulant early on in the study before we confirm dystrophin and their biopsies, they would not able to complete the six-minute walk test and we’re essentially in the non-ambulatory state. Of the additional – of the remaining 10 patients who are still ambulant, this is how they performed from the week 36 time point through week 120. Again the last time point before we confirmed dystrophin in all of the patients and you can see the majority of these patients have either increased or lost less than 10% of their six-minute walk test in that timeframe.

Importantly, even one of them that decline the most at 14.6% from that week 36 this was a boy who had a foot fracture a distal tip fit fracture as it describe when in often time this would be the last point that they would still be walking and they would be confined to wheelchair from that point on. The fact that this boy recovered was able to do the six-minute walk test again, more than once and again at levels that were still remarkably stable given the foot fracture. Then we also look that pulmonary function and this is the other most well characterized under endpoint Duchenne and the most validated endpoint for the type of confirmatory studies and studies in neuromuscular condition.

Here is the summary of all the Pulmonary Function Test, we saw increases in maximum inspiratory and maximum expiratory pressures, over this 120 week timeframe we saw increases in forced vital capacity. We saw a slight decrease in the forced vital capacity percent predicated, this is age and height adjusted. We would typical see much greater decline over a more than two year timeframe some suggest more than 10% a year, which would be more than 20% to 25% we would have expected if they were not on treatment.

And then lastly, the MIP and MEP percent predicted showed incredible stability actual numeric increases, but this is something that would not be expected over to plus year timeframe in this population. And this is evidenced by the natural history where even at ages as early as seven years of age they start to declines, and is an early predictor of pulmonary function decline before they are on ventilation or support and just the MIP and MEP for the entire cohort, this included the two non-ambulatory patients so this would be the ITT analysis on pulmonary function.

The safety profile continues to hold up beyond two years and again we see no significant adverse events that are treatment related and clinically significant, we saw some transient protein areas associated with the drug treatment, but these resolved on treatment and again were only in a selected number of patient.

Lastly, we think the chemistry in platform technology has a lot of promise and has the drug like characteristics that could be best in the RNA technology field. This is what is driving our confidence in applying this to the follow-on exon-skipping drug and again we think this is a great opportunity, not only to treat all the patients who can benefit from this technology, but we want to get those rapidly through the development stage, so, we can commercialize those and move on to the next applications of our technology to treat other diseases that might benefit.

And we’ve got a lot ahead for us over the next year, as you can see here in terms of the activities related to our vision Duchenne program. And again, the technology has a lot of applicability with conjugates and modifications to our backbone chemistry that’s has beings used in Duchenne and stay tuned as we get emerging data and other disease target, we’ll share those when we have additional data.

And, here is our overall pipeline including our infectious disease applications of the PMOplus technology in that case. And as I mentioned, we’ve showed up our balance sheet recently, so we ended first quarter with over $233 million, and now we have an additional almost $100 million on top of that as we entered the second quarter.

With that, I’m happy to answer any questions you may have.

Question-and-Answer session

Steve Byrne – Bank of America Merrill Lynch

Actually, I think we’re out of time, but can you just quickly comment on your view as to what changed with the FDA between November and April?

Christopher N. Garabedian

Yes, great question Steve. So, well first from the November communication in the pre-meeting comments we’ve received; it was 5.5 months that went by before we received our guidance letter. In that 5.5 months we had for distinct meetings with the agency, we had shared a lot more additional data from our data set that they had requested including the data came outside of our existing data set. They had two independent panels, with independent experts in the Duchenne field and patient’s advocates, one in December, one in February.

And of course they had interactions with a lot of focused at all hierarchy of the FDA, including members of congress who were engaged in the dialogue and discussion around FDASIA and are we applying it in this case. So, there was a lot of information shared, a lots that they considered and we believe that’s what led to the very detailed and clear guidance we received in April.

Steve Byrne – Bank of America Merrill Lynch

Okay, I think we have to call it there. I’m sure Chris is available after this. Thank you.

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Source: Sarepta Therapeutics' (SRPT) CEO Christopher Garabedian on Bank of America Merrill Lynch Health Care Conference (Transcript)

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