Sarepta Therapeutics, Inc. (SRPT) September 2026 Conference Transcript

All right, good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Michael, one of the biotech analysts here, and it's my pleasure to introduce the team from Sarepta Therapeutics. To my left, Michael Severino, CEO, and to his left is James Richardson, the CMO. Just a reminder, the format for today is the fireside chat, but if anyone in the audience has a question, please raise your hand, and we can try and address it in our discussion. But before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com backslash research disclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'll turn it over to Michael to make some introductory comments, and then we can hop into the Q&A.

All right. Well, thank you, Mike. It's a pleasure to be here with you all today. And James and I are happy to tell you a bit about what's going on at Sarepta. I've just recently joined Sarepta. I've been here going on two months now. But it's been a very exciting and very rewarding two months. I think Sarepta has a story that is very unusual, and I think we can actually say unique, even though that word is often overused in our industry, because it's a company that has a cadre of marketed products that are serving patients today and have been doing so for many years that offer us a number of benefits. First of all, they offer patient benefits, which is what's most important in our industry, but they also generate revenue that gives us a very strong and stable financial position and a very strong balance sheet. And we can use that strong financial position to drive a very innovative and very promising pipeline that has the potential to expand our therapeutic footprint, to drive growth, we believe, in the near term and long term. And I'm sure we'll talk about that pipeline and everything that we're doing, for example, in the siRNA space. But as I said, this is a setup that you don't find in our industry. And as someone who's spent more than 25 years discovering, developing, and commercializing therapeutics, when I looked at this opportunity, I was compelled by the interplay between those marketed products and a pipeline that I think holds tremendous scientific progress and can make a real difference for patients. And so I look forward to speaking to you all a little bit more about that as our session continues today.

Great. Thanks for that introduction, Michael. I guess just, as you mentioned, you've only been there for about two months, and maybe just talk us through your strategy near term, what's the focus, and then maybe just how that might evolve longer term.

So near term, there are a number of important areas of focus. First of all, we want to continue to support and drive the business for our marketer products. As I mentioned, we have a cadre of marketed products, Elevitus, people obviously are very familiar with, and our PMO franchise, both very important to the company. We recognize that there was some disruption, particularly on the Elevitus side in 2025. And whenever you have a disruption caused by safety events like those that were disclosed in 2025, attention shifts very, very considerably towards safety, towards risk. And it's important in our industry and our business and for patients to focus on benefit risk. And Elevitus clearly demonstrates a strong benefit for patients. You see that in the initial registrational trials. You see it in the long-term studies. And we released three-year data earlier this year that I think strongly makes that case for long-term benefit. And so getting that conversation shifted back towards benefit risk is absolutely essential Because we need to keep in mind that, unfortunately, the condition that we're treating with Alevitis is progressive, debilitating, and, unfortunately, life-shortening. And so one needs to look at benefit-risk and the benefit that is delivered. And so we focused on re-centering that conversation. We've expanded our commercial footprint. We've expanded our medical support for the product. And I think we are in that process of re-centering, stabilizing, and continuing to support that business. And driving that business as well as driving our PMO franchise is important to that longer-term strategy that I described. But equally importantly, continuing to drive the pipeline is going to be absolutely essential. We have been serving DMD patients for a number of years, and we want to continue to serve DMD patients in the near and long term. But we want to expand our footprint, as I've said, and we have a very promising siRNA pipeline. I dug in deeply to the data behind our siRNA pipeline before I decided to join. I think it's truly differentiated. I think the delivery technology that we have available to us drives very high muscle concentrations for programs where that's relevant and also gives us the opportunity to penetrate deep brain nuclei in the CNS, For example, in our Huntington's program, we have extremely potent constructs that can knock down genes effectively. And in our space, where target validation is not an issue, in other words, we know what causes these diseases, the ability to deliver a therapeutic to the cell type of interest, to do it with high efficiency, to do it with good safety profile, and to efficiently, in the case of the conditions, We're talking about knock down the gene very efficiently. That is what's crucial to driving long-term success. Those sorts of data translate into the clinic and translate into late-stage development with a much higher probability than most areas of drug discovery and development. So continuing to focus on that pipeline, driving it forward, driving through the near-term readouts, which we have coming later on this year, and beyond as we move those programs we believe into registrational studies is going to be a core focus. And if you look at those two elements of the strategy, supporting the ongoing business and driving the pipeline, we believe those can create a significant amount of value. Everybody believes that they're undervalued, but I think we can make a strong case based on our cash flows, based on our pipeline, that there is tremendous untapped potential in this company. And those two areas of focus are what will unlock that in the near term and then give us the license in the longer term to continue to think about how we grow and expand our business. So that's what we're focused on right now.

Yep, makes sense. And maybe we could focus to start a little bit more on the pipeline because there's some near-term updates, as you mentioned, and maybe just if we start with 101, that's your FSHD program, and maybe talk about some of the early data you've shared this year and kind of what it means to the program.

Yeah, certainly. So earlier this year, we shared data from the single ascending dose portion of the phase one trial. The trial has two components, the single ascending dose and the multiple ascending dose components of the trial. Earlier this year, we shared single dose data, and we saw good PK, not only systemic PK, but delivery to muscle. We saw dose proportional increases in muscle concentration. So as we go up in dose, in a proportional way, we get more of the therapeutic into the muscle, which is not always the case. There can often be a point of diminishing return as one escalates systemic concentrations. We saw a very good safety profile. We saw no dose limiting toxicity. And for the FSHD program, we saw very good early evidence of knockdown of the gene of interest, Dux4 knockdown in the biopsy samples. And that's critical because, you know, that's what drives that condition. And so we're going to continue to extend on those data. We're going to have more data from that study coming later this year. We're going to have data from the multiple ascending dose portion. We'll have data from higher doses as well, both this year and even higher doses next year as that study continues. And so that's a program that we're very excited about.

You mentioned the Ducks 4 knockdown. Can you maybe put that in the context of maybe what some competitors have shown?

Certainly. James, do you want to take that question?

Yeah, absolutely. So, I mean, what we showed were the Ducks 4G regulated panels. So they can be expressed in a number of different ways. but we looked at both the panel used by abidity so the same gene panel and then the same gene panel used previously by fulcrum and we had seen in excess of 90 percent correction within the pooled signal ascending dose data versus around 40 to 50 percent seen with the abidity program I think that that's super exciting I think the other thing just to highlight from a PD perspective in the second half of this year is that there is an underlying challenge in FSHD with stochastic nature of expression that makes muscle biopsy a little more challenging from a PD perspective, so we're looking forward to showing some circulating data around ducts for knockdown as well. That's just another compartment that balances out some of that stochastic nature you see in the muscle. When you share updated data later this year, can you maybe comment on what endpoints what cohorts etc. you might share and what do you think the focus should be yeah you can go ahead and take that so we are going to see six months out up to the eight milligram per kilogram dose for FSHD so there's one higher dose from that clinic that we won't be showing us by this release just because of timing I think the important thing is just to repeat what we saw at a higher dose level the first half of this year. So again, just continuing on that hypothesis that Mike laid out that you can safely dose escalate. We know that's not something that has been shown across different programs in this space that have been dose-limiting toxicities. But we continue to see this differentiating muscle concentration. And then from a PD perspective, as I've said, we'll look again at the Dux4 gene panels. I think that exciting new data will be circulating biomarkers of Dux4 correction.

Maybe just one thing to add, completely agree with everything that James has said. This is a condition where we know that more is better with respect to knockdown, because Dux4 is a gene that should not be expressed outside of development. In a normal adult or even child after the period of development, you shouldn't have Dux4 expression. And the expression of that gene is, by definition, therefore abnormal. And the Dux4 regulated genes that are a consequence of that abnormal expression are what cause the pathophysiology, the morbidity, the long-term consequences of FSHD. So if we can knock that down harder, we're quite confident that we're going to see that translate into very strong clinical results, and that's one of the things that I was referring to in my opening remarks when I say target validation is very solid in this space, and the ability to predict from either preclinical data or early clinical data what one is likely to see in later stage studies is much more solid in this area than it is in most drug discovery and development.

So it sounds like with multi-dose and higher doses, you might be able to drive that knockdown Is that very high knockdown even higher? Is that kind of a potential outcome here?

90-plus is very high, and so you get to the very desirable point where there's just not a lot of dynamic range left. But the ability to knock down, you know, very, very substantially, we believe in the long term, and to maintain that knockdown over time, we believe in the long term will translate into improved outcomes for patients.

Can you talk about some of those functional or outcome measures and when might we see data on those endpoints?

Yeah, we can certainly talk about them, and I'll let James give a little bit more detail in a second. The one thing that I would say is that we will look at functional endpoints in our early-stage studies, both in FSHD and DM1. I would really caution folks who look at the data not to over-index on those functional measures early on in a drug discovery and development program because you have trials that just simply aren't large enough and aren't designed to show a difference on functional inputs. What these studies are designed to do is to look at the chain of events from PK, systemic PK, to muscle exposure, to target engagement and biochemical knockdown at these targets and what is the consequence of that knockdown. When one looks at functional endpoints too early, you can essentially fool yourself by making decisions based on the variability. So we'll look at those endpoints, but I would caution folks not to over-index on them until we get into larger, later-stage trials. But, James, you might want to talk about some of the endpoints that we will be looking at, both now and in the future as we move forward.

Absolutely. And, I mean, this is an evolving field, endpoint generation validation in FSHD. What I would say as a company, we are extremely experienced in neuromuscular development and in working neuromuscular outcomes. So I feel confident that we're going to... I guess what our answer really is right now is what are the best outcomes we can get for our Phase 3 development? I'm very confident that we have the expertise in-house to use these data and use natural history data to make that decision. To be specific on that question, I mean, endpoints we're looking at are things like Leachable Workspace. I think that was obviously a challenging outcome in the fulcrum, Phase 3, certainly will give it its due diligence. I'm not sure whether that's something they're still going to be persisting with long term. And then measures of strength, then measures of mobility, so time's up and go, 10-meter walk, run. And I think what's going to be really interesting from these data is, as Mike said, not so much that we're going to really be picking out signals from noise, but we will get an idea of how responsive these endpoints are for use in a larger, more homogenous trial population. That makes sense.

Maybe we can shift gears now to 1003, that's your DM1 program, and maybe just talk about, you shared some early data this year, maybe highlight some of that and what you learned there.

Yeah, certainly. So earlier this year as well, we shared data from the single ascending dose portion of that study. That study, while there are subtle differences, conceptually has a similar design to what I described before, which is there's an integrated single-ascending dose and multiple-ascending dose portion. And earlier this year, we showed data that had many of the same themes that we talked about in FSHD, good PK, good relationship between systemic PK and muscle concentration, the ability to see dose proportional increases in muscle exposure with a good safety profile, also with no-dose-limiting toxicities identified, and we showed very early evidence of target engagement. And so we will have the multiple ascending dose portion of that study reading out later this year as well, and that will continue to extend those observations and give us the ability to extend observations around target engagement, target knockdown, and the consequences of target knockdown, the PD consequences of target knockdown.

Maybe you can talk about, you know, what's a good outcome on some of those endpoints, you know, knockdown, for example, you know, other endpoints that are important there.

Well, principle for DMPK, the gene that is responsible for myotonic dystrophy, for DM1, again, we're in a situation where more knockdown is better. The exact specifics of how these genes are regulated are a little bit different, but still that basic theme that more knockdown is better I think is quite clear and shown in the data. And so we want to be able to drive knockdown that clearly differentiates us from others. We'll have more data later on this year, as I said. As I mentioned, we have even higher-dose cohorts coming early next year. And so making that PK-PD correlation showing DMPK knockdown and the correlation to splicing correction, because what the abnormal form of DMPK does is it alters the machinery that regulates splicing and gives a detrimental and sort of a fetal splicing profile in a setting where that should not be the case. and that's what's responsible for the downstream consequences in DM1. So showing that chain of events will be an important part of the data. It will be coming later on this year. Showing that PK-PD relationship will be important. And that's important also as we have an eye towards even higher doses that can come early next year. And so it's going to be an important data set for us.

Yep, makes sense. And there's a lot of companies developing treatments for DM1 and Novartis actually had shared some data recently from their Phase III study, missed the primary endpoint, which was VHOT. So maybe just comment your thoughts there, how it impacts your thinking relative to your program, thoughts around VHOT, et cetera.

Certainly, I'll start, and then I'll turn it over to James to provide some additional detail and color. Obviously, we're paying close attention to the space, and we're well aware of the top-line outcome of the Nevada study. One important caveat is there weren't a lot of data yet, and that's typical in this space. What we know is that that study fell to hit its primary endpoint. There was also a comment made that there were favorable indicators of movement in secondary endpoints. The details of that will have to come out at a later time, probably in a scientific meeting is the way these things would typically proceed. So we'll learn a lot more. But when we think about that outcome for that program and its potential implications for our program, we think about a couple things. The first is what degree of knockdown were they able to achieve? And I certainly don't know within that specific study what they were able to achieve. But if you look at the earlier data, you would estimate that they're somewhere between about 30% and 40%, which is the range of knockdown that they've shown. And as I mentioned, this is a condition where, with respect to knockdown, more is better. So the first thing that we would look at is can we drive higher levels of knockdown with whatever dose it is that we ultimately carry forward into later stage development, whether it's one of the two doses that we'll update on later on this year or whether it's an even higher dose, you know, that we can update on early next year. And I think there is a very real opportunity for something that can deliver a greater degree of knockdown to have a larger benefit, to be able to show that benefit in late-stage studies. Because the one thing I can tell you the Novartis result doesn't do is it doesn't shake our confidence in target validation. And in so many areas of drug discovery and development, you can't say that. If you're working in immuno-oncology or some other area and there's a major failure, the first question that comes to mind is, is this even the right target? That's not a question that we worry about in these conditions because we know that the DMPK mutations are causal. So the question then becomes, can you knock down the abnormal form to a sufficient extent? Can you do it consistently? Can you do it with a good safety profile? And so we're going to be focused on that PKPD and picking a dose for later stage trials that we believe will be truly differentiated with respect to the ability to achieve knockdown. After that, then one has to think about questions regarding study design. So was VHAT, video hand-opening time, was that the right end point? I'm not saying it was or it wasn't, but we'll learn more when those data are released more completely. Are there other features of study design? Stratification. You know, so what was the nature of, you know, the baseline, you know, dystonia, you know, that existed in those patients? Does one need to control for that in ways that are different than was done in the, you know, in the Novartis trial? Those are all things that we'll learn as the data come forward. Those are all things that we can build into our program, but ultimately we think the opportunity is very clearly there. And in particular, it's very clearly there for a differentiated program that can drive maximal or near-maximal levels of knockdown. So, James, I don't know if you want to talk more about the specifics of study design and some of those endpoints.

Yeah, I mean, I think you said a lot of it, really, Mike, in that clearly there's very little doubt in the fundamental biology of DM1, which then leaves the speculation on the vartists around the drug, is it study design? From a study design perspective, I think it's quite likely that they've paid a pioneer's penalty here. We did it enough times in DMD. You're using outcomes often for the first time in a trial of treatment, and you learn a lot from those studies. And I think that that is a distinct advantage for companies like ourselves who are not yet locked down in our development plans. We're clearly doing a lot of work in this space. We have, as I said, a very experienced in-house team in the neuromuscular space. We have well-networked in the KOL space and have plentiful natural history data, our own in-house clinical data, all of which to build on whatever we get to understand from the Novartis study to make sure, to Mike's point, that we are picking the right primary outcome for our study and the right population to show a change in that primary outcome. I think it's too early to throw out VHOP as an end point. It has a lot of appeal. it clearly does show drug response on a very subjective nature. You hear patients, you hear your PI, patients know the myotonia changes. How it responds in a larger study over a longer time period is what I think we're learning at the moment, what Novartis have probably learned in this piece. And so I think we need to make a decision now, what is our best primary endpoint based on all of these data and our expertise and the population in which to provide a change in that. But as said, I am, for once, happy to be in a position a little behind so we can learn on some of the others' experiences. Makes sense.

And maybe last sort of pipeline question before we move on. Just any updates around the timing of the MAD data readouts for DM1 and FSHD and whether those readouts will be together or separated?

So as we've said, we expect data readouts in the second half of this year. We're in the second half of the year. So, you know, in the coming months, we'll read out both of those studies. They're independent programs. They each have their own considerations, and they each have their own unique value propositions. And so our expectation is we would release each as it is ready. And so I think there will likely be separate data releases. We want to make sure that folks are able to look at the data and absorb those data and understand what they mean for each program individually. They also have their own unique time frames. With respect to the FSHD program, as James mentioned, we're going to be focusing on a number of circulating biomarkers, including some novel biomarkers, and so there's acid validation work that we're doing to make sure that we can bring forward a very comprehensive and high-quality data set. So that program may be shifted a bit back in time within that window, so later on this year, but likely to be the second of the two. I think the DM-1 program is likely to be the first. The exact timing is not yet determined because that's based on the progress in those programs, but we're well on track to release data from both studies in the back half of this year, as we've said.

Yeah, great. We're all looking forward to those data. Maybe shifting your commercial program, you talked a little bit about, you know, kind of the history over the past couple years and some of the challenges, But if we start with Elevitus and maybe talk about some of the dynamics you're seeing, it sounded like you're getting to some stabilization and maybe some positive dynamics there as well. So maybe you could talk about those.

The key for Elevitus is moving back to a balanced conversation around benefit-risk, as I described. And a number of factors have enabled us to shift that conversation back to that balanced conversation of benefit-risk. One is just time from the events. It takes time for folks to absorb new data. There's sort of a natural arc of people's understanding of new data, like the safety data that were released last year, and an arc of their ability to sort of integrate that together with the revolve thinking about the benefit-risk of the program. We've also released new data, long-term data, the three-year data, as I described, which helps reinforce that long-term benefit for both prescribing physicians and ultimately families, patients, and their caregivers who are making these decisions. We've put a number of initiatives in place to expand our field force, to give them the new data that are available to facilitate those conversations. Those conversations are going well. We've dramatically increased the number of physician discussions that we've had. And subjectively, you know, those have been very balanced with focus not only on safety but also on benefit. And so those benefit-risk conversations are improving and, I think, becoming more centered in their focus. And with that, we're seeing stabilization of demand in early positive signs, as we said, on our last earnings call. And so overall, I would say that's going well. We would view it as a build-off of the space. and sort of a gradual build. So we're not expecting any dramatic inflection point in any particular moment in time, whether it's later on this year or early next year. But we do see signs of stabilization and forward momentum.

And that growth that you're seeing or sort of expect over time, is it kind of, you know, you said, I don't want to put words in your mouth, but like some growth here, and then does it sort of stabilize at some point in the future and that becomes just a recurring revenue stream that's stable at a certain point in the future?

We would see it as a gradual build over time, as I said, and that's with respect to the currently indicated population. So nothing that I've described contemplates yet whether we return to the non-ambulatory population, and we can talk about that in a second. But with respect to the currently indicated population, We would see that gradual build over time. We certainly think there's durability in this franchise. We know that there is unmet medical need. We know that there are patients who can benefit from therapy. And so we would see long-term stabilization. We're not in a position today to give long-term guidance, but we do see that positive momentum, and we see Elevitus being a very substantial contributor in the long term as well.

And as we think about what to expect the remainder of this year, or should we be thinking flattish, or how should we think about the progression there?

Well, as we said on our last earnings call, the first half of the year benefited from a large number of patients that were already in queue from 2025. Obviously, there were safety disruptions in 2025, and some patients dropped out, but many did not. And in particular, in the short term, there may have been a delay in making treatment decisions as those data became absorbed by the community. So that bolus of patients worked its way through the first half of the year and results in the first half of the year benefited from those patients. What we're going to see in the second half of the year is demand that was generated earlier in 2026 at a period in time before we had our commercial initiatives in place, before we had centered that benefit-risk conversation. So we're expecting that to be modestly lower than the first half, but stabilizing over time. And again, we're seeing that long build off of that base. What I would caution is that there's about a six-month journey from enrollment form to treatment on average. And so the effects that we're seeing on enrollment forms, the positive momentum that we're starting to see in the marketplace, it's going to take time for that to translate into revenues. That's more something that we'll see in 2027 than in the back half of this year.

Great. And you talked about sort of label expansion into the non-ambulatory patients with Endeavor data later this year. Maybe talk a little bit about that and your confidence in being able to expand the label.

So the non-ambulatory population is not currently in our label. And we have a study ongoing, we have cohort eight of the Endeavor study, which is looking at the impact of sirolimus on hepatic safety in that population. And that will be an important component of future discussions around labeling for that non-ambulatory population. The hypothesis in that cohort eight is that sirolimus can be effective in reducing the incidence of acute liver injury in the non-ambulatory population. The specific hypothesis we built into that study is a 50% reduction in the incidence of acute liver injury, which would be quite meaningful. And when you broadly decrease the incidence of acute liver injury, what you're also going to do, although it's hard to study in a clinical trial, is you're going to reduce the likelihood of those severe cases, which are the ones that we're really worried about. So we're essentially looking at the base of the pyramid to determine whether we can improve hepatic safety, and that should, based on everything we know about drug discovery and development, reduce the likelihood of those more severe cases. That study is underway, so we don't have data yet. It's enrolling as we speak. We expect to have it completely enrolled this year with 12-week data in the first quarter of next year. And those will be important data for us and important data for us to discuss with the FDA around the potential to return to the non-ambulatory population. And those data will form the centerpiece of those conversations. As we've said, we'll reach out to the agency. Our plan is to do that in the first quarter of next year with data in hand to have those conversations. And those discussions will really define what the path is to a return to the non-ambulatory population.

Makes sense. And maybe we can last two minutes here. Just the PMO business looks like you've got some nice stability there, but you may be facing competition next year. So maybe just talk about some of the near-term dynamics and how you think things might evolve next year.

It is a durable franchise. These are products that have been on the market for a number of years. They've delivered clear patient benefits. Over that time period, we have extensive real-world evidence, which we've published in a number of settings, which demonstrates that, which shows, for example, prolonged time to ambulation, decreased rate of pulmonary decline, cardiac decline, even overall survival in a real-world setting based on that published evidence. And those are things that matter to patients and to their physicians. And so we feel good about the benefit that those have brought long-term. We also have supported those products extensively in the marketplace in terms of establishing reimbursement pathways, helping patients navigate a very complicated reimbursement landscape, other patient support systems, home infusion. All of those things matter as well and are contributors to that 90-plus percent adherence that we've demonstrated in the real world. And so we think that all matters to patients. There are programs that are moving forward in this space. In 2027, DINE will have a Pidufidate. We welcome drug discovery and development in this space as innovators. And we understand that over time we will move into a competitive marketplace. We think we're well-positioned to compete in that marketplace. So, for example, all of those things that I mentioned, the long-term experience, the data that had been published, the reimbursement pathways, the patient support systems, the home infusion, which is critical for these patients to maintain them on therapy in a way that is not disruptive to their lives or their caregivers' lives. We think all of those things matter and will add stickiness to this franchise. So we think we're well-positioned to compete in that longer-term marketplace.

Okay, great. Looks like we're just about out of time. I'm Michael and James. Thanks so much. Really appreciate your time today.

It's been a pleasure.