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Chris Garabedian - President & CEO


Sarepta Therapeutics Inc. (SRPT) UBS Global Life Sciences Conference Call September 20, 2012 4:00 PM ET

Unidentified Analyst

Good afternoon and thank you for coming to the 2012 Global Life Sciences Conference. My name is [Marina] and I am happy to be the host for this session. Our next presenter will be Chris Garabedian, President and CEO of Sarepta Therapeutics. A break down session will follow in (inaudible) immediately after this presentation.

Chris Garabedian

Thank you Marina and thanks to UBS for the invitation to present here today. I am Chris Garabedian, I am CEO of Sarepta Therapeutics and we have RNA based technology that is being applied in the areas of rare and infectious diseases. I’ll be making some forward-looking statements. Please refer to our SEC filings for risk factors associated with the company.

This is our pipeline. Our lead proprietary program is for the treatment of Duchenne muscular dystrophy. The drug is called Eteplirsen and Duchenne is a genetic base disease. It's very fragmented and our lead program is targeting the most prevalent set of mutations that can be treated with a single drug. We have other exon targets that are in preclinical development now that we believe are highly reproduced to support our lead program.

We also have infectious disease programs that have largely been funded by the Federal Government. We have two active programs against the Ebola and Marburg fever viruses. These are lethal hemorrhagic fever viruses and they are being developed under the animal rule for medical countermeasures for endemic areas as well as against the weaponized threats.

I’ll be talking about our Duchenne program and Duchenne muscular dystrophy is a devastating rare disease that has 100% mortality. It’s a progressive disease that affects about one in 3,500 male births around the globe. These boys typically get diagnosed around the ages of three to five. They end up seeing progressive disease until the pre-teen years where they typically lose ambulation or end up in a wheel chair. They then start to lose their basal muscle function and lose pulmonary and cardiac function. They typically need full time ventilation in their late teens, early 20s and typically pass away in their 20s rarely living beyond the age of 30.

The disease is marked by the boys’ inability to produce the essential protein dystrophin, which is the essential protein to keep the muscle strength and vitality it’s almost a shock absorber of the muscles. And what our technology aims to do is to repair the RNA mutations that occur and fix that so they can restore translation and produce the dystrophin protein.

This is a schema of the dystrophin gene; it’s the largest gene in the human body that produces one of the largest proteins and it manifest itself in two ways; one is a deletion that is in-frame and this leads to a phenotype called Becker muscular dystrophy and this is a much milder muscular dystrophy than Duchenne; often times patients aren’t diagnosed until later in life, often times they live into their adult lives without requiring a wheelchair, sometimes never, sometimes they live a long healthy life.

Duchenne is marked by outer-frame deletion where they cannot translate to produce the protein, whereas Becker’s produces a protein, it’s a functional protein albeit shorter; it’s truncated. So what are technology is aiming to do is to fix the bad actor, the exon that makes it out-of-frame and if we can silence this or hybridize it out of the reading frame or essentially skip over it, we can restore translation and ideally produce the dystrophin protein.

So here is an example of the patient who would be in one of our studies with Eteplirsen that has a deletion of exon 49 and 50. So exon 51 is what is rendering it out-of-frame. And again, with our PMO drug, we can silence or hybridize 51 out of the reading frame and you can see how translation is restored to produce the protein.

We tested this hypothesis initially in an inter-muscular local injection study where we showed good dystrophin production locally, but we did another study following that that was published in The Lancet last year which was the Phase II study conducted in the UK where we showed with systematic delivered therapy once weekly infusions, we were able to see at the highest dose groups tested 10 and 20 mgs/kg weekly we saw every patient show novel dystrophin. We validated this by western blot and RT-PCR and you see an image in the lower right hand corner of one of the pretreatment biopsies looked like from a boy in our study and the post treatment that starts to look like normal muscle tissue.

Well, there were a couple of patients who had a more outsized response generally across this study including dose groups that are listed here, the lower dose groups, we saw low and variable levels of dystrophin produced, and we were really aiming for something that was greater than 10% dystrophin positive fibers and that was based on the literature on animal studies, which show really above 10%, you really start see functional improvement and also the Becker’s phenotype, the studies that have been done in Becker muscular dystrophy show that even levels of 10% to 20% have a very different natural course of the disease and much milder disease even with levels of 10% to 20% dystrophin.

So this led us to design our Phase IIb study which was intended to determine how can we get to levels of dystrophin that are more robust, that are above that 10% threshold. And there were two schools of thought in the research community and one was the conventional wisdom well, if you didn’t see the high levels at 12 weeks just increase the dose and higher dose will give you higher dystrophin levels. But then there was another camp that said, based on the animal study this suggest you need to dose at least 24 weeks before you can see dystrophin materialize more diffusely and well distributed throughout the muscular group.

So what we did is we designed a study that was placebo controlled double blind randomized placebo controlled study where we looked at the highest dose that the FDA allowed us to test 50 mgs/kg at 12 weeks and then we looked at a lower dose 30 mgs/kg over 24 weeks of therapy to see if 24 weeks of treatment even at a lower dose could produce as much or maybe more dystrophin than a larger dose at a shorter time period.

We got our answer and this was presented at the American Academy Neurology Meeting in April of this past year and it surprised us because we saw the high dose really didn’t have an impact on improving the types of dystrophin levels we saw at the 12 week time frame with lower doses. So we again saw this low and variable response in the 50 milligram the average across the four patients were 0.8% dystrophin positive fibers. However, across the 24 weeks we had four patients again at 30 mgs/kg all of them were more than 15% dystrophin positive fibers; this is in contrast to the previous dose escalation study where we only had two out of 17 that had more than 15% dystrophin positive fibers. Here we had four out of four and three out of four had more than 20 for an average of 22.5% dystrophin positive fibers.

You will see each patient in that 24 week cohort is presented here by immunohistochemistry pre and post treatment biopsies. And this was further validated with supported data on western blot protein expression as well as RT-PCR evidence that we were producing the truncated protein and skipping the target exon that we intend to.

We have also previously reported in published literature and this was from our intramuscular study that was the dystrophin that was produced was also connecting to other glycoproteins that make up the dystroglycan complex. So we showed that we could express with the dystrophin we are producing nNOS, the neuronal nitrous oxide synthetase that can act as the acting filament in the cell as well beta- dystroglycan and for sarcoglycan which are essential glycoproteins in the sarcolemma the cell membrane where you would want to see that evidence that you’re restoring that functional dystrophin. And in recent study, the investigator had the ability to sustain for two sarcoglycans, gamma and beta sarcoglycan and they showed positively in those 24 week patients.

We rolled all of the patients over including the placebo patients on to open label eteplirsen. So we continue treating of the 12 total patients, six are now on 50 mix per kg, six are on 30 mix per kg and we’ve continue to follow them for safety and collecting clinical outcome measures such as the six-minute walk test.

We're planning a third biopsy which will give us a lot more robust information about dystrophin and the relationship of dose and duration. So we’ll have a lot of meaningful data of dose response of 50 versus 30. After [48] weeks treatment, we’ll have the placebo patients who will now be on drug for 24 weeks and we will have biopsies and dystrophin for those patients and we’ll really understand after 24 week data we saw, did that increase or did we plateau in terms of the dystrophin that was produced.

But what we did is we did an interim analysis on six-minute walk test to see if we start to see a separation between the placebo, delayed treatment cohort and the early treatment cohorts. And this is an intense treatment analysis that looks at the 50 milligram per kilogram dose cohort compared to the placebo dose cohort and here we saw a progressive decline in the placebo group and we see really a maintenance or stable function on this ambulatory measure in the 50 milligram per kilogram treatment group.

This led to a difference of 60 meters at 32 weeks and 69 meters at 36 weeks and again we are hopeful that the 48 week data will show a stable early treatment group.

Now that the placebo group has been on drug and they will be have been on drug for 24 weeks, we don’t know exactly what will happen but they could stabilize, they could rebound, they could continue to decline and we hope that if they are not too far along in the progression of disease where the drug would not have an impact on showing some kind of stabilization or improvement.

One of the things we wanted to do was to show that this data set was not driven by one or two patients that had some type of outsize response or outsize decline and it’s important to note that I didn’t show you the 30 milligram per kilogram cohort on the previous slide and that’s because we had two patients who showed rapid progression of loss of ambulation immediately after enrollment in the study.

They were both below 250 meters on the six-minute of walk test, by week four, they were both 100 meters to 200 meters below the rest of the boys in the study by week 12 and I just showed you that dystrophin was not produced even at the higher dose and they were on the lower dose at 12 weeks.

So we saw their decline occur really before we could produce enough dystrophin and to show an impact on the treatment effect. They were not able to complete the six-minute walk test at the end of the 24 weeks and are currently in a non-ambulant state.

Having said that, they continue to take the drug safely. We did see dystrophin levels in that 24 week timeframe and we are capturing non-ambulatory measures like upper arm extremity, strength, (inaudible) test, pulmonary function to see if we can establish the disease even though they've lost ambulation.

We took the other two 30 milligram patients combine them with the four 50 milligram who were all stable and compare that to the placebo groups in a variety of sub group analysis. And that’s why you see here depicted in the (inaudible). We saw a treatment benefit numerically in everyone of this sub groups that range from around 40 meter benefit to up to 80 meter benefit for an average again between 60 meters and 70 meters in most of these cohorts.

The 30 milligram two patients, we barely see the confidence and I'll just cross the line we had a 0.6 so we just missed our [key] value on the 30 mg. But again we saw a benefit in both high and low age cohorts in high and low six-minute walk baseline cohorts.

And there seems to be a trend that there is a more outsize response when you see earlier patients treated or healthy or higher baseline six minute walk. Again small sample size but it’s a signal that maybe its better to treat earlier and you may have a bigger treatment effect the younger and healthy of the patients are.

We also had five genotypes represented in the study and there was on genotype that we had representation in both the placebo in the treatment arms. And again, we saw a consistent treatment effect that was consistent with the rest of the population. And looking at the other genotypes there is nothing to suggest that there is any differential by genotype in terms of response of the drug.

This is slide that shows other rare neuromuscular conditions in which six-minute walk was used as a component of the efficacy end point. And you see the bottom three drugs here, all showed between 28 to 38 meter improvement over placebo or benefit versus placebo and those occurred in the (inaudible) of between 26 weeks or 78 weeks.

We believe our treatment effect is unprecedented; this is a very encouraging signal in as little as 36 weeks. Ataluren was the most advanced Duchenne product to be in development. Their pivotal study showed in one of the dose cohorts a 30 meter improvement with a similar baseline of score a six-minute walk over a 48 week timeframe.

So even in the same patient population, we think this is a very robust encouraging treatment effect. Our safety profile has been very (inaudible) to-date. This is the 24 week treatment emerging list, but we saw no treatment related adverse events through the 36 week timeframe and we expect to update this chart for the 48 week timeframe and we listed here a series of bullet points where that are associated with other chemistries in the RNA space and many of this are occurring with another product that’s been developed for Duchenne where we are seeing with other chemistries [proteinuria] injection side reactions thrombocytopenia.

So we think we have a very favorable and comparatively differentiated safety profile. We have some upcoming events; we have one of the largest muscle diseases meetings of the year World Muscle Society in Perth, Australia in the second week of October. We expect to have 48 week data presented at that meeting including dystrophin positive fiber the additional six-minute walk and the validated safety database through 48 weeks.

We have an industry symposium that Thursday night and we are co-executive sponsor with Genzyme and we have a lot of exhibits and dinners and other activities to engage the muscular community. We plan to take this data and prepare briefing documents to request an end of Phase 2 meeting with the FDA.

We expect that would be about 60 days to calendar which puts us toward the end of December calendaring may be difficult that may push us toward a January meeting date but really our intend if the data is supportive and we see dystrophin, we see a maintenance of clinical benefits and we see the safety profile we’ve seen to-date. We would want to talk to them about the fastest past to approval. We know this is a progressive disease and we know many of the parents believe that they can’t wait two years or three years to wait for a confirmatory study where that’s a timeframe where many of these patients will either loose ambulation or if they are non-ambulant, they may require ventilation or again it’s a very progressive disease.

So we will talk to the FDA about what’s the most expeditious way to get this drug approved. We have already begun activities to scale up manufacturing to prepare not only for any confirmatory clinical studies that would be required but also in the prospect of accelerated approval to be ready for a commercial launch.

We think this eteplirsen data is highly reproducible across the other exon targets that I mentioned earlier. It’s a very fragmented disease that requires a couple of dozen drugs to treat all of the patients who would be amendable to exon skipping and we already have collaborations with two of the top five additional exons, exon 45 and exon 50, we are in late stage discussions to finalize a grant for exon 53 and we had some foundation interest in exon 44.

So we will pursue these other exons and we think if we were able to develop clinically a handful of these top five exons that could enable a class approval at some point to be able to allow these rare exons to be treated with the same backbone chemistry standard dose as long as we show similar pharmacokinetic safety and manufacturing would be the same.

We have other advanced chemistries that we’re applying in other therapeutics areas and most notably PMO plus is what we're using for anti-viral. These are being used to treat viral hemorrhagic fevers which are part of top six category bioterrorist agents by the CDC. The goals are as I mentioned earlier to protect the warfighter in endemic areas, but also to mitigate concern against potential weaponized versions of these viruses.

We are in the first clinical stage of this program. This is being developed under Animal Rule and we expect to complete the first modules of this by around the middle of next year and then we would have a milestone meeting it’s called where we would get approval to proceed into pivotal animal efficacy trials.

We have seen very good activity to-date. We now have two single agents which we’ve just recently announced. We received fast-track approval from the FDA on. The Marburg drug as a single agent at 50 mgs/kg has shown pretty consistently a 100% survival and the Ebola has been pretty consistently between 60% and 80% survival, again with a single agent at 40 mgs/kg.

We see similar pharmacokinetics, both Cmax and AUC with the same backbone chemistry regardless of the sequence that’s attached. So again, this lends itself to the idea I was describing of kind of a platform of class approval where we think the government has an interest in broad application of this backbone chemistry to attach any sequence that could target any lethal virus that might emerge or might be even manufactured in a garage somewhere.

And there is publications from that government that highlight the ability to have a platform that can be applied to various targets, but also that can respond rapidly and we have completed several formal rapid response exercises where we could turnaround drug candidates in a matter of days to weeks.

We have done this with dengue, fever, H1N1, two undisclosed targets one viral, one bacterial and the original real world test was Ebola. Again, all of those were turned around between five days and 18 days where we could attach the sequence produce drug for animal studies in that timeframe.

And then very encouragingly, we saw the first delayed time to treatment study where we infected primates and waited to try to treat them and we did a treatment at one hour post infection 24 hours, 48 hours and 96 hours and this was recently presently at (inaudible) and we saw a 100% survival even after 48 hours and 96 hours of infection. In fact, we had a 100% at the end of treatment at 96 hours. We lost one of the primates in the follow-up period. So it turned out to be 83% at the 40 day follow-up.

But this was very encouraging that it could be applied to ultimately a broader civilian population and the DoD recently awarded us another grant to do an intramuscular injection. This have been administered IV and this is so they can get more rapid deployment in the field but also this is a more feasible drug delivery for broader use in the civilian population.

We have several other studies as part of this program that are planned. We did receive a [stop] work order for our Ebola program as well as a competitive Ebola program and those are currently on hold until we hear the status and that we should hear more information by the end of this month.

A list of the milestones that I have described earlier for this year and lastly our financial overview we have 22.6 million shares outstanding. We've been trading at about $14 to $15 per share. Our average 90 day volumes is about 1.4 million shares daily for a market capitalization about $330 million.

We had $24.5 million of cash at the end of the second quarter but we also put an ATM in place at the beginning of this month facility for up to $40 million that we could raise add our discretion if we choose to do so at market prices and that's being led by Citadel Securities.

That's all for today, we do have a break out session and happy to answer any questions at the break out. Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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