Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
Wedbush PacGrow Life Sciences Management Access Conference Call
August 14, 2012 2:30 pm ET
Chris Garabedian – President and Chief Executive Officer
Christopher N. Marai – Wedbush Securities, Inc.
Christopher N. Marai – Wedbush Securities, Inc.
Great. Good afternoon. Hi, guys, my name is Chris Marai, I work here as an analyst on the Wedbush biotechnology team with Greg Wade and Dr. David Nierengarten. It’s my pleasure to introduce Chris Garabedian of Sarepta Pharmaceuticals. Chris?
Thanks, Chris, and thanks for Wedbush for the invitation to present today I’m going to talk about Sarepta Therapeutics. We were formerly known as AVI BioPharma and we changed our name a few weeks ago, really for the interest of showing that we were really advancing our technology in the clinic and I’m going to show some data today with you that highlights some of the progress we’ve made.
I’m going to be making some forward-looking statements. Please refer to our SEC documents for risk factors associated with the company. Here’s our R&D development pipeline and the lead program in rare disease is eteplirsen for the treatment of Duchenne muscular dystrophy. We have a couple other products that are in IND-enabling work and we hope that those will enter the clinic sometime late next year, early 2014. We also have several infectious disease programs that have largely been funded by the federal government and Department of Defense. And we have active programs that are currently treating Ebola and Marburg viruses and I’ll talk a little bit more about this later.
Our lead program for Duchenne muscular dystrophy is the disease is marked by the inability of these boys, it largely affects boys, to produce dystrophin, the essential protein for healthy muscle. And we’re doing that through using our RNA-based technology to repair and RNA mutation that makes it in out-of-frame deletion of rendering unable to translate to produce dystrophin protein.
So our technology is repairing that RNA mutation and restoring reading frame effectively making an in-frame deletion to translate to the dystrophin protein. And we show our ability to do this with a Phase I, II study that was published in The Lancet last year, where you can see on the left hand side; these are top two dose cohorts of the six-dose cohort study. And each patient showing an increase in novel dystrophin, this was at baseline, this was at 12 weeks.
We show on the right that we confirmed this through September 3, western blot and RT-PCR. And what we were hoping to get was a consistent dystrophin level, this is dystrophin positive fibers, most of fibers as a percent of normal, and we were aiming for a 10% or greater. And, so while we were very encouraged by our ability to produce dystrophin, we wanted to figure out how we could produce higher levels that we believe will translate to a clinical benefit and we were aiming for a 10% or greater. So we designed a Phase IIb study to attempt to increase the levels of dystrophin that we saw in the muscle biopsies.
And there are two schools of thought that existed out there. One is, the simple approach of just increase the dose, and we will then at 12 weeks, you’ll see more dystrophin in the muscles and then you saw at 12 weeks in lower doses. But there was another camp that felt that a longer duration of therapy was needed and you might even be able to get away with a lower dose, but if you treat for at least 24 weeks, you’ll higher levels of dystrophin.
So this is the reason for the design, where we staggered our biopsies, the IRB only allowed us to do two biopsies per patient, because of placebo and we really wanted to understand this relationship between dose and duration.
And we got our answer; that the good news we did show a statistically significant increase in dystrophin essential protein at 24 weeks, we saw greater than 20% mean levels, so this was beyond our expectations in terms of the level of the dystrophin, we were hoping for, we did hit our p-value of 0.0002, compared to the placebo group, and again this was the 30mg cohort at 24 weeks, after 24 weeks of treatment. And the reason for 10% or greater was the literature on animal study suggested that should translate to functional improvement and the Becker muscular dystrophy, that’s a naturally occurring again inferring deletion. Many of those patients have 8%, 10%, 15%, 20% dystrophin and have much milder disease and Duchenne. There are also Dystrophin patients who have more than 30% or even more than 50% but all of them are marked by a milder disease and Duchenne.
But what we learned was that the earlier time point of 12 weeks despite looking at a higher dose did not see these robust levels of dystrophin in fact the mean average there was 0.8%. And so what we learned is that it takes a while of treatment to get those levels of dystrophin that we would be meaningful. And the response in the 30mg group was highly consistent that these are each of the four patients in that cohort. And the samples were very consistent these are the mean values change from baseline, each patient had 48 values that were average 24-pre, 24-post and again these were at a higher level so what we were hoping originally.
And if you see on the right hand side, you see the pre and post treatment, Immunohistochemistry for each of those four patients. And we’ve also confirmed this again through WESTERN BLOT and through RT-PCR as I showed you in the previous study. In one question that that comes up a lot is how do you know this dystrophin is a functional dystrophin and one way we like to test this is to see if it connects to the other glycoproteins that comprised the dystroglycan complex.
And so we have seen evidence of restoration of the dystroglycan complex in two studies now where we were dosing our drug and the dystrophin we produced showed that we could see staining for NOX, neuronal nitric oxide, synthase as well as alpha-sarcoglycan and beta-dystroglycan. And then most recent study, the Phase IIb, we showed in the 24-week, 30 mg/kg biopsy stating for beta-sarcoglycan and gamma-sarcoglycan. So again, we see evidence here of a functional dystrophin. But what was interesting is that, what we originally hoping for clinical benefit at 24 weeks, we saw some signals, but it wasn’t robust and that was before we knew that we have to treat at least for 12 weeks maybe up to 24 to see levels of dystrophin that will translate to clinical benefit.
This slide just shows the safety profile for a lifelong chronic disease to be able to administer this and so it’s well tolerated and no safety signals. Again, this is through 24 weeks, we also looked at the profile through 36 weeks now, and again, we are seeing no treatment related adverse events. And all of the bullets on the right-hand side are knowing things to occur with competitive chemistries in the space, the (inaudible) type chemistry where ours is a very different backbone chemistry, and we’re not seeing the dose from toxicities that you see with other all the good chemistries.
So study 202 was designed as a rollover extension study from our study 201 that I described earlier. And all of the patients were rolled over to open-label study drug at 24 weeks, including the placebo patients. We maintained the patients who are on 30 mgs to continue on 30 mgs maintain those that were on 50 mgs and the placebo patients we had two that were randomized up to 30 and two that were randomized to 50.
And so we continue to follow these 12 patients on treatment indefinitely to measure safety and efficacy. We search some data a few weeks ago that with an interim analysis where we’ve looked at the 6-minute walk test, which is the primary clinical outcome measure of ambulation that is typically studied in Duchenne and other neuromuscular rare diseases. This was the same primary endpoint that was used by PTC in their pivotal study in Duchenne. And is often looked upon as the marker you want to see for clinical outcome.
This is our intent-to-treat population where we looked at our 50mg/kg cohort and compare this to the placebo group. And again the placebo group was rolled over to open label study drug at 24 weeks. However, I showed you the biopsies that showed that they are not producing Dystrophin until beyond 12 weeks. And so we believe that week 36 time point is a very good time point to really understand what’s happening on the 6-minute walk test, because we would not have expected those placebo patients to have seen any clinical improvement or benefit because we know that through 12 weeks at least we are not seeing Dystrophin from the previous biopsies.
And what we should hear was a really good stability in this 50mg cohort where again they lost a nine meters this was the, it’s a mixed model repeated measure that applies ANCOVA ranked data test, this was the primary statistical analysis identified in our Study 201 clinical outcome measure.
And nine meters (inaudible) perspective is about 2% loss from the baseline score of about 395 meters at baseline. While the placebo/delayed-treatment cohort dropped a 78 meters in this analysis which is about 20% decline from baseline, again the baseline 6-minute walk test averages were almost identical 395 and 396 meters long.
I didn’t show you the 30 milligram cohort, because we had two patients who were randomized for the 30 milligram cohort that were rapid progressors within the first month, within weeks of enrollment they should rapid decline particularly on these ambulatory measures like 6-minute walk, and before we had a chance to produce levels of dystrophin they want to describe fell off the cliff, they really dropped significantly and their ability to ambulate by week 12 they were a 100 to 200 meters below every other point of study, and by the end of the 24 weeks they could not complete the 6-minute walk test and are clearly not in ambulate state.
So we wanted to modify the intent-to-treat analysis, which you see here, which takes the other two boys that were in the 30 milligram cohort and combine those with the four patients in the 50 milligram that I showed you earlier, and we wanted to look at subset group analysis to see if the treatment effects holds up, upon greater scrutiny or slicing and dicing the population in a number of ways. And you see for the part that in every sub group that we looked at there was a treatment effect most of these hit statistical significant and really the shows the robustness of this treatment effect, and that the integrated data holds up, it wasn’t a outliner or two they drove the significant difference that we saw in the overall treatment effect.
I’ll just point out on the second line here we have the two 30 milligram patients who were still ambulant we’re able to continue to measure on 6-minute walk test and you can see it barely crosses the zero line. We almost pick statistical significance just on the 230 milligram patients. The treatment benefit numerically was not as great, and it was closer to 40 meters compared to just the 50 milligram cohort, but we had a 0.6, so again just barely miss statistical significance, but when we combined all of the eteplirsen patients, the benefit holds up.
We looked at age cohorts. We were fortunate in that, there was a pretty good distribution across placebo and treated. So it cut, this was a post-op analysis, but when we divided the top half and the bottom half of these 10 patients, it turns out that there was three treated and two placebo that were below 9.5 at baseline and three treatment and two placebo that were above 9.5.
And again you see that the treatment affect was there in both of these cohorts, and but it was more pronounced and we hit statistical significance in the older population. We also look at 6-minute walk test baseline and again we divided that the top half and bottom half and so three treated, two placebo in each of these cohorts and again we saw treatment effect in both of these groups, but a more pronounced effect in fact over 80 meters, where patients had started a higher baseline 6-minute walk test.
It’s a small sample size, so it’s hard to make any strong decorations from this data set, but this would suggest that the earlier you treat, the younger patients, the healthier patients are defined by 6-minute walk have a more pronounced effect. It’s not a thing that we don’t show a benefit in the older patients for the lower 6-minute walk, it just wasn’t as pronounced as the younger healthier 6-minute walk scores.
We had five genotypes represented across this study and there was nothing to suggest that there were any differences in terms of treatment of placebo responses by genotype, we have one genotype that has both treatment and placebo patients in it and it was the most common genotype in the study genotype 4950 and again the treatment effect was kind of away in the middle of where was sort of the broader population. So we were very encouraged by that as well.
So, what we wanted to show here is that there are other drugs that have been approved that look at 6-minute walk test as a outcome measure. And some of these also look at pulmonary function as a co-primary endpoint. But if you look at the bottom list here, there is three drugs that were approved for rare genetic diseases, and this was the 6-minute walk differential that they showed versus placebo, you can see all of them started with baseline on 6-minute walk test between 300 and 400 meters much like our population. And at very high point, we are able to show benefits between 28, 38 meters versus placebo.
We think our treatment difference that we are seeing here at 36 weeks an relatively early time point, compared to some of these studies, is very meaningful, clinically meaningful and a good marker of showing that we may be slowing or halting the progressive disease. And one is on here as well, it’s the most advanced DMD drug that’s been studied the clinic, and again just to compare in the DMD population with a 365 6-minute walk test baseline over 48 weeks they showed a 30 meter improvement, on 6-minute walk test. So we believe that our data set albeit in a small population holds up and stands up well to other genetic diseases and DMD drugs that have been studied on 6-minute walk.
This is also encouraging because of the potential that this technology has to go after other exon target in the DMD population. The only difference between this drug that’s in development and future drugs that were target other exons is the sequence that is attached to our backbone chemistry. The backbone chemistry would be the same. The way it’s manufactured would be the same. We have seen historically the same backbone, you see similar pharmacokinetics and it’s a very safe profile, no matter what disease it’s been studied in and the various dosing and dosing regimens that have been used.
So we think this is highly reproducible and leveraged across other exon targets. And we already have two collaborations ongoing to advance approximately the top five or so exons. And we have collaborations in place to do the IND enabling work on exon 45 and exon 50. We are in discussions with granting authorities to support exon 53 in preclinical development and to initial clinical development and then exon 44, we’ve heard some interest from our foundations to support that work. So again, we are very encouraged by this and (inaudible) but also in terms of the implication it has to treat the broader DMD population.
Moving forward, we’ve also advanced our chemistry to go after antiviral targets and we call this PMOplus we’re adding positively charged moieties to our mutually charged backbone chemistry. And we are being supported by the Department of Defense to go after one of eight category bioterrorism agents that are deemed the highest risk to national security.
Our Ebola and Marburg programs are viral hemorrhagic fever programs and ultimately the goal is to protect the Warfighter in endemic areas, but also the mitigate concern against potential weapons, weaponized versions of these viruses. We are seeking FDA approval through the Animal Rule and we have a program mapped out to get road, which would be one of the first drugs approved expressly being developed for diseases under the Animal Rule. It’s not a drug that’s already used for another disease area, or being developed for some other purpose.
And here are the data that we’ve seen to-date justifying the dose and drug product that are in development for Marburg on the left here and Ebola on the right. And we’ve seen 100% survival against the Marburg virus with a single agent dose to 15 mg per kg. We refer to this AVI-7288. And on the right Ebola, it’s been a harder virus to treat. We see with a single agent at 40 mg per kg, which we refer to AVI-7537, we saw 75% of survival against Ebola. Again these are very (inaudible) virus that typically end in mortality within 10 to 14 days.
Importantly, we did single ascending dose study with over previously combination agents in development for Ebola and Marburg. And we looked at the dose components of these combinations, so what you see here, are PK curve for Cmax and AUC with four different components all using our PMOplus backbone chemistry, but all with different sequence targets, targeting different [conserve] sites on the viral genome. And what you see here is beyond the first dose cohort, which is 0.005 mg per kg. We see high level of conformity across the PK profiles here, despite different sequences that are being used. So, we believe this supports the platform approach, which we described as sequence independence safety and pharmacokinetics with sequence dependent activity or efficacy.
And we think this have broad implications for the future of a platform technology like this, in that we can’t foresee what virus might be around the corner or what these thread might emerge whether it’s organically, is down or whether its manufactured or manufactured virus. So, again we are highly encouraged by this and this is something that the government has written about in terms of their hopefulness for is that there might be a platform that could respond rapidly to emerging infectious disease threads and can be used almost like a vaccine type technology, where depending on what the virus is retreated, you can quickly identify the sequence target attached that to a chemistry that’s already proven safe that we know about the pharmacokinetics that is being produced and manufactured the same way.
Now recently, we announced that the government put or Ebola program on a stop work order, they did this in conjunction with another stop work order for another Ebola program. And the communication that we have with them was certainly that it was related to funding constrains.
We will find out by September 1st, if they will remove the stop work order, if they will delay it, and you know keep the program on hold until they remove the stop work order or cancel the program. We are very encouraged with the synergy that exists between our Marburg, and Ebola programs and that if they’re able to keep both programs funded, we think this idea of a platform technology approach for the future is still intact and has a lot more value to the government and to these programs collectively than any similar program by itself. So we hope they choose to remove the stop work order, but we will find it out by September 1st. Here is a list of milestones that we hit this year on both our DMD program, on the top that our effects programs on the bottom.
For the DMD program, the plans moving forward are to look at our 48 week data this is from our extension study, our 48 week data we should have ready for presentation in October, we are presenting at the World Muscle Society meeting in Perth, Australia, the second week of October. And we expect to have 48 week data on – with biopsy results with the additional 6-minute walk clinical results and with the safety profile that’s characterized through 48 weeks of treatment.
We will take that data and we will prepare a briefing document for an End-of-Phase 2 meeting with the FDA, which we hope will be scheduled on the calendar around year end, either December or January. And we hope that we will see even a more consistent and robust Dystrophin that we saw after 24 week time point that we hope that the safety profile holds up with no treatment related adverse events and well tolerated profile. And we hope that the 6-minute walk benefit that we showed at 36 weeks is maintained in these patients or that we see stability or less decline in the treated group and the placebo/delayed-treatment cohort.
If we see that that we want to talk to the FDA about what we need to do for a Confirmatory, pivotal trial. So we’re preparing already to think about the design, the powering, the size of that study. And in parallel depending on how robust the data set is we have been watching the legislative agenda and a lot of the communication is coming out of the FDA out of Congress around, their desire to see accelerated approval used by the FDA particularly in these types of very lethal rare generic diseases.
And we think Duchenne very much qualifies. There is no currently approved disease modifying treatment available. It’s a 100% fatal disease. It’s rapidly progressive, whereby pertain years, they’re typically in a wheelchair. They usually need a full time ventilation support by their teen and they typically pass away in their 20s. And we have evidence here that suggests that we can halt or slow the decline in these patients. So if that holds up then it is something that we to what have a very careful measure discussion with the FDA about is this a data set upon the 14 week data set would be a minable to an accelerated approval filing.
On the infectious disease side, I’ve mentioned the news that will be coming on the stop work order, the Marburg program continues to move forward very successfully and we have other studies that will be started and will generate data and communications moving forward. When we highlight recently we announced in the press release that we completed a delayed time to treat study against the Marburg virus. And we believe this produced a data set that was unprecedented.
We are still working with our collaborators to be able to share more full data set in a presentation like this, but let me summarize what was in the press release. We delayed the treatment after infection of this lethal Marburg virus. We did one hour post infection, 24 hours post infection, 48 hours and 96 hours.
In the 48-hour and 96-hour cohorts, we had a 100% survival, despite the delay of treatment at the end of treatment. We lost one of the non-human primates after treatment ended. So we ended up with an 83% efficacy survival rate in the 96-hour delayed treatment of cohorts, and still ended up with a 100% survival in the 48-hour delayed treatment.
This we believe is going to get the attention of other agencies beyond the DOD, where distribution and the delay of deploying a treatment in a general civilian population, it’s important to have us a wide of a widow as possible. And so this is very encouraging that our technology works even up to 4 days post-infection. So again, we are encouraged by these programs and think it has a broader locations for the anti-viral application of our technology.
Lastly, just a financial overview, we have about 22.6 million shares outstanding. As close of yesterday, we were at $8.49 per share. We have good volume and we are trading about 0.75 million daily. Our market cap is about a $92 million. We’ve provided guidance recently in our end of the second quarter earnings call, $37 million to $43 million in revenue, this year calendar year, with an operating loss of $25 million to $30 million. We ended the second quarter with about $24.5 million in cash.
Thank you very much. And I think we have just a minute or so for any questions.
Two of them had rapid decline.
Yeah, it’s a good question there’s nothing that, we seen in animal studies in our previous study where we had 19 patients that we are supposed to the drug, we also believe that when we look at the profile of those two boys that there were signals to suggest that they might be on a more rapid decline they were the lowest 6-minute walk baseline scores that we had across the whole study.
Again within four weeks of about 250 meters when again our average was 395, 396 anecdotally, the investigator in looking back at this, he seem to assess these patients say wow I kind of knew they were different than the other boys and what is predicted that these two would have been more likely to rapidly decline part of this is (inaudible) still no randomization in a small study like this, there is nothing we had our independent pathologists we’ll get the muscle biopsies.
You should no evidence that there was anything on toward happening in the muscle biopsies no evidence of information so we don’t think the muscle suggest anything is going on with the safety profile was very clean, we know what cleared in plasma intact in the year-end very rapidly voice safely tolerated it they continue to take the drug, they did show dystrophin at 24 weeks on the 30 mg cohort.
And remember this was simply on an ambulatory score, we continue to collect pulmonary function, cardiac function we are testing upper arm mobility they will – it will take time to see if we can stabilize the other aspects of the disease in these boys and we are hopeful I can tell you that the parents of these boys think that the drug is working want to keep their respective sounds on it and that’s ultimately what makes it believe that there is not something going on the with the chart chemistry.
(Inaudible) difference is 15% to 25%.
Yeah, 15% to 20%. So the range was 15.9% to 29% and again that was consistent across samples and again there is no reason to believe that there is about three of the four were over 20% there is no reason to believe there is big difference between 23% to 20% or anything like that. Thank you.
Christopher N. Marai – Wedbush Securities, Inc.
Okay, I think we are out of time. Thank you.
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