Sarepta Therapeutics, Inc. (SRPT) Q2 2026 Earnings Call Transcript

Good afternoon, and welcome to Sarepta's Second Quarter 2026 Earnings Results Call. As a reminder, today's program is being recorded. At this time, I will turn the call over to Tamara Thornton, Sarepta's Senior Director of Investor Relations. Please go ahead.

Thank you. And thank you all for joining today's call. Earlier this afternoon, we released our financial results for the second quarter of 2026. The press release, along with our slides and supplementary information, are available on the Investors section of our company website. We plan to file our Form 10-Q for the quarter today with the SEC. Joining me on the call are Michael E. Severino, our CEO; Dr. Louise Rodino-Klapac, President of R&D and Technical Operations; Patrick Moss, our Chief Commercial Officer; and Ryan H. Wong, our Chief Financial Officer. Additionally, joining us in the Q&A portion of the call are Ian Michael Estepan, President and Chief Operating Officer, and Dr. James Richardson, Chief Medical Officer. Before we begin the formal remarks, I would like to note that during this call, we will be making a number of forward-looking statements. Please refer to slide 2 of our presentation to view the formal text of these Safe Harbor statements. These statements involve varying risks and uncertainties, many of which are beyond Sarepta's control. Actual results could materially differ from these forward-looking statements, and such risks can adversely affect our business, our results of operations and the trading price for Sarepta's common stock. We strongly encourage all listeners to review the company's most recent SEC filings for a detailed description of these applicable risks. Sarepta explicitly states that it does not undertake any obligation to publicly update or revise its forward-looking statements or financial projections based on subsequent events. Furthermore, please note that we will discuss non-GAAP financial measures during today's webcast. Complete descriptions and reconciliations of our GAAP to non-GAAP financial measures are included in today's press release and the accompanying slide presentation available to investors on our website. And with that, I will now turn the call over to our CEO, Michael E. Severino.

Thank you, Tamara. Good afternoon, and thank you for joining Sarepta Therapeutics Second Quarter Financial Results Conference Call. This is my first earnings call as CEO of Sarepta, so today I will offer a few opening remarks and then turn things over to Patrick, Louise, and Ryan to discuss our commercial highlights, pipeline progress, and financial results for the quarter in more detail. As someone who has spent a career evaluating preclinical and clinical data and translating scientific breakthroughs into meaningful treatments for patients, it is an honor to be here. Sarepta is uniquely positioned within biotech and has tackled some of the most challenging problems in medicine. Our scientific achievements have helped redefine what is possible for patients with Duchenne. From pioneering work in exon skipping to the development of ELEVIDYS, a growing body of long-term data has established Sarepta as a leader in rare disease innovation. I see tremendous potential and untapped value in the opportunity we have in front of us, and that is what brought me to be a part of this team. We have a leading commercial portfolio in Duchenne, with four approved therapies that are making a difference for patients today. These therapies are backed by a growing body of long-term data and real-world evidence supporting their use. We have an siRNA platform that has already delivered strong preclinical and early clinical data. As a physician-scientist, I find these data compelling and have been impressed by both the potency of our siRNA constructs and our ability to deliver to the cell type of interest with high efficiency, as evidenced by our ability to achieve high muscle concentrations in a dose-dependent manner in our SAD studies. Based on these features and the strong predictive value of preclinical models in this space, I believe our pipeline has the potential to deliver best-in-class therapies across multiple neuromuscular and rare disease indications and drive our next phase of growth. Importantly, we have the financial strength to advance these programs independently, and we have a deeply experienced and talented team with a strong track record of delivering results. We recognize that concerns around ELEVIDYS adoption, competition on the horizon for exon skipping treatments, and capital allocation remain. However, we are prepared to meet these challenges and have multiple upcoming milestones that can clarify our growth trajectory. These include Cohort 8 data, new data in the second half from two of our most advanced siRNA programs in FSHD and DM1, and upcoming regulatory decisions around VVYONDYS and AMONDYS. Now turning our attention to the quarter. You will hear more details from Ryan shortly, but I would highlight three things from our quarterly financial results. First, we delivered another quarter of GAAP and non-GAAP operating profitability, reflecting the durability of our base business and disciplined execution. Second, we increased cash and investments by approximately $197 million during the quarter, strengthening our ability to fund future growth. And third, our commercial portfolio continues to provide a strong foundation as we invest in what we believe are significant long-term value and growth opportunities across our emerging siRNA pipeline. Commercially, our PMO franchise has remained stable and ELEVIDYS performed in line with expectations with improving enrollment forms providing early evidence that our expanded commercial initiatives are taking hold. Now that we are in the second half of the year, we have narrowed 2026 total net product revenue guidance to $1.2 billion to $1.3 billion with the midpoint being the appropriate reference. This is consistent with our prior expectation that results would trend toward the lower end of our original range. Patrick will provide more detail on our commercial performance outlook and growth initiatives in his section. Turning to R&D. We continue to make meaningful progress across both our Duchenne and siRNA programs. In Duchenne, enrollment and dosing continue in Cohort 8 of the ENDEAVOR study, and we expect to fully enroll the study by the end of 2026. We were also pleased to see the FDA accept our supplemental NDA submissions of AMONDYS 45 and VVYONDYS 53 for review. Beyond Duchenne, our emerging siRNA platform remains central to Sarepta's future growth strategy, with important data readouts expected later this year from our FSHD and DM1 programs. Louise will discuss the biology-first approach that underpins these programs and why we believe our platform can deliver differentiated, potentially best-in-class therapies across multiple rare disease indications. In summary, our focus is clear and our future is bright. Our financial footing is sound, and we continue to execute in Duchenne. Revenue from our approved products enables us to advance our pipeline independently, which we continue to do with discipline and urgency. I am excited to be on this journey with this team and look forward to creating long-term value for the company and the communities we serve. Thank you, and with that, I will turn it over to Patrick to discuss commercial performance for the quarter. Patrick.

Thank you, Mike. And welcome to the team. Today, I will review our second quarter commercial performance, the progress we are making to support physicians, patients, and families across our four approved Duchenne therapies and our outlook for the remainder of 2026. For the second quarter, total net product revenue was $329 million consisting of $98 million from ELEVIDYS and $231 million from our PMO franchise. PMO performance continues to reflect stable demand and sustained patient and physician confidence supported by extensive real-world experience and evidence. ELEVIDYS' performance was in line with our expectations for the quarter, with sales remaining relatively steady and quarter-over-quarter growth in enrollment forms signaling that demand is increasing. We view that trend as an encouraging sign that momentum is building. Our focus is on sustaining that progress and supporting informed treatment decisions through continued science, education, and engagement. Throughout the first half of the year, we completed the expansion of our commercial footprint. The strategy is set, our sales team is trained and deployed, and our initiatives are now fully operational. Our focus is now on execution: improving patient identification, expanding education for patients and families, and continuing to strengthen health care provider confidence to drive demand. At our recent midyear meeting, the energy across the team was clear. They are reaching more referring physicians, engaging more deeply at treatment centers, and participating in a more balanced discussion about the totality of evidence demonstrating ELEVIDYS' benefit-risk profile. In Q2, our sales team delivered a record number of health care provider interactions. HCPs are engaging more deeply on the sustained functional outcomes and durability supported by ELEVIDYS in BART Part 2 and, more importantly, the 3-year data. Enrollment form activity provides early evidence that these efforts are taking hold. A majority of Q2 enrollment forms were from HCPs who had interacted with our sales team in the prior 90 days, including a meaningful portion within 30 days. This pattern was consistent with Q1 and reinforces the importance of focused, timely engagement. The breadth of site activity expanded in Q2 as well through both reengagement and new interest. More returning sites submitted enrollment forms than in Q1, while submissions from referral sites outside our current network signaled broader interest in ELEVIDYS. Taken together, these indicators support our view that our sales team initiatives are taking hold: understanding of ELEVIDYS' benefit-risk profile is improving, and confidence is rebuilding across the Duchenne community. In addition, our patient education team is bringing that same commitment directly to families, connecting with many who have turned to Sarepta seeking information that will help them navigate Duchenne and the treatment decisions they face with greater clarity and confidence. Turning to our outlook. As Mike mentioned, consistent with our previous directional model towards the lower end of the $1.2 to $1.4 billion range, we are narrowing our 2026 total net product revenue guidance to $1.2 billion to $1.3 billion. The timing of revenue reflects how patients progress from enrollment form through the treatment journey. ELEVIDYS revenue in the first half of 2026 was supported by patients who entered the pipeline following the late-2024 label expansion and progressed to infusion during the first half of the year. As a result, first half revenue benefited from the conversion of that backlog of demand. ELEVIDYS revenue in the second half of 2026 will reflect a period when enrollment form activity was lower before expanded commercial initiatives were fully deployed and began to take hold. We are encouraged by the quarter-over-quarter improvement in enrollment forms we are seeing today. However, given the length and variability of the treatment journey, that activity is expected to contribute more meaningfully to revenue in 2027. As a result, we expect total net product revenue in the second half of 2026 to be modestly lower than in the first half. We also currently expect ELEVIDYS revenue in the third quarter to trend lower than Q2, acknowledging that the quarter-to-quarter variability is the reality of a one-time gene therapy. We do remain confident in the long-term opportunity for ELEVIDYS and our team remains focused on sustainable execution. Now turning to our PMOs. Stable demand, extensive real-world experience, a well-established safety profile, and adherence rates exceeding 90% continue to underscore the durability of this business. More than 1.8 thousand patients worldwide have been treated with Sarepta's exon skipping therapies, underscoring their enduring value to patients and families. This year marks an especially meaningful milestone for Sarepta and the Duchenne community. On September 19, EXONDYS 51 will celebrate 10 years since its U.S. approval. For us, this is more than an anniversary; it represents a decade of Sarepta's leadership, close partnership with the Duchenne community, and progress that has helped us transform the treatment landscape. Over that time, Sarepta has helped establish exon skipping as a foundational treatment approach and build a substantial body of real-world evidence across important outcomes including ambulation, pulmonary function, cardiac function, and survival. We are proud of the progress made over the past decade and deeply honored to have served the Duchenne community throughout that journey. In closing, our priorities remain clear: execute with discipline, support informed treatment decisions through science and education, and drive sustainable growth across our Duchenne portfolio. We remain confident in the long-term opportunity for ELEVIDYS and the strength and durability of our PMO franchise. Most importantly, we remain deeply committed to transforming what is possible for patients and families living with Duchenne and bringing that same commitment to patients across other serious rare diseases. Thank you. And with that, I will turn the call over to Louise.

Thanks, Patrick. And let me add my welcome, Mike. We are happy to have you on board. As we move into the last months of 2026, we remain excited by the science that underlies our rare disease portfolio and the data we are preparing to share with you soon. Before turning to the individual programs, I want to briefly frame how we think about our next-generation RNA platform. Our strategy is built on a simple premise: biology first. Rather than applying one delivery approach across all tissues, we select the receptor and delivery architecture that is intended to best address the key biological barrier in each disease. In muscle, that means leveraging alpha v beta 6 integrin targeting, which was selected for its strong muscle exposure and delivery characteristics. In the CNS, where the dominant barrier is transport across the blood-brain barrier, we use a unique transferrin receptor-based approach. Across both settings, our goal is the same: to move beyond systemic exposure and achieve productive intracellular delivery, target engagement, molecular correction, and ultimately the potential for functional benefit. Combined, we believe this approach will distinguish our therapies from others in earlier and later-stage development. This is also where siRNA biology is important. siRNA uses catalytic, multi-turnover RNAi activity that can continually silence target RNA. We believe this enables deeper and potentially more durable suppression of disease-causing RNA than approaches that rely on antisense mechanisms that require RNase H, a rate-limiting enzyme. Together, biology-driven delivery and catalytic siRNA potency creates the foundation for our belief that these programs have the potential to be best-in-class. Building on the positive SAD data from our lead programs to treat FSHD and DM1, we remain on track to announce interim results from our multi-ascending dose study, or MAD study, in the second half of this year. We believe these programs are differentiated through a unique targeting mechanism and high muscle bioavailability, positioning them as potential best-in-class therapies compared to more mature competitor programs in the space. To remind you, data from our readout this year showed high muscle concentration with alpha v beta 6 and a strong safety profile. Beginning with SRP-1000, which is our siRNA-based treatment designed to reduce or knock down the production of the DUX4 protein in skeletal muscle in patients living with FSHD. FSHD is caused by abnormal activation of the DUX4 gene, leading to expression of the DUX4 protein. DUX4 is a transcription factor that affects the expression of multiple genes within muscle. It is normally expressed during embryonic development, but when reactivated later in life, it creates a toxic intracellular environment that contributes to muscle degeneration. This underlying pathology is well understood, and the pathological role of DUX4 in the progression of the disease is well accepted. Our therapeutic thesis is that deeper DUX4 knockdown in muscle should translate into greater molecular correction and, over time, the potential for improved functional outcomes. The MAD data we plan to share will include safety, PK, DUX4-related gene panel, circulating DUX4-related biomarkers, CK, and preliminary functional assessments. Importantly, because FSHD is a slow progressive disease and this is an early study including six months of follow-up, the objective is not to definitively demonstrate functional benefit at this time given the trajectory of the disease. Rather, the goal is to establish the biological chain from tissue exposure to target knockdown to molecular biomarkers known to drive the underlying pathology of the disease, and also to select an appropriate dose to take on to the next stage of development. In summary, our goal is to generate the highest levels of knockdown that improves biomarkers and leads to best functional outcomes. Confirming our ability to safely dose escalate and deliver a drug with proven biological efficacy efficiently to the target tissue would strengthen the evidence supporting SRP-1000 as a potentially best-in-class treatment for FSHD and provide an important foundation for our discussions with FDA as we prepare to advance a registrational study. Moving on to DM1. SRP-1001 is our siRNA-based treatment for DM1 designed to target and knock down or silence the DMPK mRNA in target cells. The early data we generated for DM1 is important for two reasons. First, our preclinical models are predictive of what we have seen in the clinic with respect to muscle concentration. Of note, an increase in plasma exposure has translated into enhanced dose-dependent delivery to the muscle, resulting in robust target engagement. And second, the DMPK knockdown observed to date has been directionally strong and supports the potential of siRNA to address the root molecular driver of disease. As you are aware, DM1 is driven by an expanded CUG trinucleotide repeat in DMPK transcripts, causing mutant DMPK mRNA to accumulate in the nucleus and disrupt normal RNA splicing. As a result, for any therapy to be therapeutically effective, it must reach the target tissue, enter the cell, and reduce nuclear-retained DMPK RNA. SRP-1001 is being developed to achieve exactly that with the goal of driving downstream splicing correction. The results we plan to share from the MAD study will include safety, serum and muscle PK, DMPK knockdown, CLCN1 splicing index, and RNA-based analyses. The importance of these results, should they be positive, would differentiate SRP-1001 as a best-in-class treatment for DM1 and offer a clear path to a registration study. It is important to note that our FSHD and DM1 programs demonstrate why we believe delivery efficiency is a primary competitive advantage. The key differentiator is not simply reaching the bloodstream. It is reaching enough muscle fibers, maintaining exposure long enough, achieving sufficient intracellular siRNA concentration, and driving meaningful target knockdown in the nucleus. Further, our nonclinical data show that targeting integrin receptors via small peptides leads to enhanced skeletal muscle uptake compared to using a much larger TFR1 antibody-based approach. It is also important to note that, based on data to date, our alpha v beta 6 integrin targeting ligand provides superior muscle concentration compared to current transferrin-based approaches, without dose-limiting toxicity. More specifically, due to its role in intracellular transferrin trafficking, only approximately 5% of expressed TFR1 receptors are available on the cell surface for binding at any one time, versus alpha v beta 6 with approximately 40% of expressed receptors available at any one time. This high level of surface availability and high levels of expression leads to a greater potential for ligands targeting alpha v beta 6 to drive significantly higher muscle uptake than TFR1. These delivery characteristics help establish the rationale for advancing SRP-1000 for FSHD and SRP-1001 for DM1 in first-in-human studies and continue to spur our confidence in the platform. In summary, we believe Sarepta's next-generation RNA is differentiated by biology-driven tissue targeting, efficient intracellular delivery, and the catalytic potency of siRNA. Our focus is on connecting the full chain from tissue delivery to target engagement to molecular correction and ultimately to the potential for functional outcomes. We are applying the same biology-first framework to our CNS programs. Our Huntington's program is ongoing, having dosed its first patients earlier this year. In these programs, our receptor selection is driven by the biological requirement for transport across the blood-brain barrier. If successful, the early CNS data would provide important validation of our transferrin receptor-based blood-brain barrier delivery approach. Our second-generation DM1 program is the first example where we aim to impact the CNS in addition to muscle to address the significant unmet need. We look forward to sharing this data as soon as it becomes available. Now turning to ENDEAVOR. We are pleased to announce in March that screening and enrollment were underway in Cohort 8 of ENDEAVOR for Study SRP-9003-303. To remind you, the purpose of Cohort 8 is to assess prophylactic sirolimus treatment as part of an enhanced safety protocol during treatment of ELEVIDYS in non-ambulant individuals with Duchenne. Data from Cohort 8 will be used to determine whether administering sirolimus prior to and after ELEVIDYS infusion helps reduce acute liver injury, or ALI, a known risk associated with AAV gene therapy as a class effect. The cohort is enrolling approximately 25 participants in the United States who are nonambulatory and dosing is currently underway. As a reminder, the immunosuppression regimen will include 14 days of peri-infusion sirolimus prior to ELEVIDYS administration and will continue for 12 weeks after ELEVIDYS administration. Primary endpoints include incidence of ALI and ELEVIDYS dystrophin expression at 12 weeks. Participants will be followed for safety and functional outcomes for 72 weeks. The approach with sirolimus is based on preclinical data and shaped by real-world clinical experience, including guidance from independent specialists in Duchenne and liver health. The evidence base continues to build. As previously shared, there have been independent published reports on the use of sirolimus to mitigate ALI with AAV gene therapy. Dr. Soslow and colleagues very recently published a study in Human Gene Therapy demonstrating that none of the patients treated with prophylactic sirolimus had ALI. We will also present what we believe are encouraging interim safety data from our Phase 4 ENDEAVOR study at the Neuromuscular Study Group meeting in September that showed zero incidence of ALI in patients treated prophylactically with sirolimus. We expect to fully enroll the ENDEAVOR Cohort 8 study by the end of 2026. Based on observations that our study investigators are dosing sequentially, we now expect 12-week data from the full cohort in the first quarter of 2027. Further, we continue to plan to meet with FDA in early 2027. In addition to safety, we continue to build the ELEVIDYS evidence base through upcoming disclosures. At the Neuromuscular Study Group meeting, key disclosures include microdystrophin and muscle MRI correlations with function, the impact of treatment delay modeling, ENDEAVOR Phase 4 interim safety and liver safety, U.S. post-marketing safety, and mobility outcomes versus external controls. At the World Muscle Society meeting, we will highlight expression and safety data in ELEVIDYS-treated patients under 4 along with ENCORE presentations that will include 3-year outcomes, cardiac functional data, pooled safety, and early intervention preclinical data. We look forward to sharing this data with the community. Moving now to AMONDYS 45 and VVYONDYS 53, our exon skipping therapies to treat Duchenne. At the end of June, we were excited to announce that the FDA had accepted our supplemental new drug applications for both therapies, assigning a PDUFA target action date of February 28, 2027. The sNDA submissions seek conversion of the accelerated approvals of AMONDYS 45 and VVYONDYS 53 to traditional approvals. The applications are supported by the data from the ESSENCE confirmatory study as well as substantial published real-world evidence and the favorable and consistent safety profiles of both exon skipping therapies. We look forward to sharing important updates with you in the coming months, including readouts from our FSHD and DM1 MAD studies, proof of biology from our Huntington's disease program, and data from the ENDEAVOR Cohort 8 study. Thank you, and I will now turn the call over to Ryan for an update on our financial performance. Ryan?

Thank you, Louise, and good afternoon, everyone. We delivered a strong financial performance in the second quarter, and we are pleased with the continued operating discipline reflected across the business. Our results underscore the durability of our commercial DMD franchise, the progress we are making with our pipeline, and our ability to fund our most important commercial and R&D initiatives from a position of financial strength. In my remarks, I will walk through the quarter's key financial highlights and how we are positioned for the second half of 2026. Beginning with second quarter revenue performance, total revenues were $401 million, a decrease of 34% year-over-year driven by the decrease in net product revenues, primarily ELEVIDYS, due to lower demand. Total revenue in the quarter included $73 million of collaboration and other revenues, consisting primarily of contract manufacturing revenue from our partnership with Roche. Through the first half of the year, we have now reported $659 million in total net product revenue and over $1.13 billion in total revenue. Q2 year-to-date total revenue decreased 17% compared to prior year, driven by lower ELEVIDYS product revenue partially offset by higher collaboration and contract manufacturing revenue. Moving next to gross margins. Total cost of sales for the quarter were $149 million, a decrease of 2% compared to the prior year period. The change year-over-year is reflective of lower cost of goods due to decreased product sales partially offset by higher cost of goods related to contract manufacturing revenue. On a year-to-date basis, total cost of sales were $248 million, a decrease of 11% year-over-year driven by similar dynamics. Gross margins on net product revenues were 75% in the quarter and 78% for the first half of the year. Operating expenses continue to reflect our focus on disciplined cost management. Combined R&D and SG&A expenses in the second quarter on a GAAP and non-GAAP basis were $199 million and $165 million, respectively. Non-GAAP expenses in Q2 decreased 44% compared to the prior year period, reflecting the benefit of our cost restructuring initiatives and the prioritization of our promising siRNA program in our R&D portfolio. First half combined R&D and SG&A expenses on a GAAP and non-GAAP basis were $462 million and $388 million, respectively. Year-to-date, non-GAAP expenses were down 66% compared to the same period prior year, also driven by the restructuring and pipeline reprioritization as well as the Arrowhead collaboration upfront expense recognized in the prior year. This operating discipline translated into meaningful profitability for the quarter. We delivered GAAP operating income of $13 million and non-GAAP operating income of $86 million. For the first half of the year, GAAP and non-GAAP operating income came in at $372 million and $484 million, respectively. In addition to the results I just highlighted, our GAAP results include a $39 million litigation contingency charge to potentially resolve certain outstanding patent claims. From a balance sheet perspective, we ended the second quarter with $945 million of cash and investments, growing $197 million from the prior quarter. The robust cash increase in the quarter is a result of our strong operating performance and includes receipt of $40 million from the Roche commercial sale milestone earned in Q1. For the first half of the year, if you exclude $250 million of collaboration payments made to Arrowhead in the first quarter, our base business has generated over $240 million in cash. In closing, I will provide color on our outlook for the second half of 2026. First and foremost, we remain focused on disciplined execution and improving capital allocation as we advance our commercial and pipeline priorities. As you heard earlier on the call, we have narrowed our net product revenue guidance to between $1.2 billion and $1.3 billion with the midpoint of this range an appropriate reference. In addition, we are revising upward our total collaboration and other revenue guidance to between $550 million and $600 million, which is an increase of $75 million from the midpoint of our previous guidance. This is driven primarily by higher contract manufacturing revenues. I would like to highlight for modeling purposes this increase in expected contract manufacturing revenues will also result in a roughly equivalent increase in cost of goods for products sold to Roche. Now moving to expenses, given we are halfway through the year, we are tightening our non-GAAP OpEx guidance to $800 million to $850 million, the low end of our previous range. And finally, from a cash flow perspective, looking back at the last 12 months, we have reset our cost structure, fulfilled our large collaboration obligations to Arrowhead, and refinanced a majority of our 2027 debt. While the base business generated nearly $400 million in cash, on a forward-looking basis, given the strength of our execution, we believe our medium-term liabilities and remaining 2027 notes are well funded. We remain in a strong financial position to fund our promising pipeline using cash flow from our business. And with that, I will turn the call back to Mike for Q&A. Mike?

Thank you, Ryan. Operator, can you please open the call for Q&A?

Thank you. At this time, we will conduct the question and answer session. To ask a question, you will need to press 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1-1 again. We do ask that you please limit your questions to one question. Our first question comes from the line of Anupam Rama of JPMorgan. Your line is now open.

Hi, Mike. How are you? Congrats on the new role. When you look at the pipeline, what really excites you about what you have going on in the pipeline? Is this something particular about the Arrowhead products or something like what Cohort 8 could do for the ELEVIDYS franchise? Could you expand on that? Thanks so much.

Certainly. Thanks for the question, Anupam, and I am very happy to be here. There are a number of things that excite me about the pipeline, and maybe I will talk about them in two parts. The Cohort 8 data, I think, are very promising. The potential for sirolimus to improve benefit-risk in the nonambulatory population, I think, can have a big impact over time. Obviously, we are still in the data generation phase there, and as we said, we expect to complete that cohort's enrollment by the end of this year and have data in the first quarter of next year. But I think that is something that we are very much looking forward to. When I look at the earlier pipeline and the siRNA programs that we are advancing, I believe they have tremendous potential. Preclinical models and early clinical data in this space have a high degree of predictive power, which is different than many areas of drug discovery. We essentially know the biology that drives these conditions. If we can achieve high levels of knockdown, we have a high degree of confidence that we can achieve a benefit for patients in the long term. I see both when I look at the preclinical data and the early clinical data: the delivery aspects of the technology are performing very well, with dose-dependent increases in muscle concentration up to the highest dose tested in our SAD studies, without dose-limiting toxicities. We have very potent RNA silencing technology and are able to achieve very robust knockdown. I think there is a real opportunity to bring forward tremendous therapies not only in neuromuscular conditions but also potentially in conditions like Huntington's where our delivery technology also plays a key role in getting to deep brain nuclei in the preclinical models that we have studied. That clinical trial is now underway to see how those data translate into the clinic. So I just think there are a wide range of opportunities that can drive value for the company and value for patients in the future.

One moment for our next question. Our next question comes from the line of Costas Bilirits of Oppenheimer. Your line is now open.

Thank you for taking our question. Congrats on the progress, and congrats on the new role, Michael. Based on our discussions, a number of investors are interested in the DM1 and FSHD programs but hesitating to underwrite the DMD pipeline risk. Although it may be early, how are you thinking about the potential separation of the two businesses: the DMD pipeline and the DM1/FSHD programs? Thank you.

I think there is tremendous synergy between those aspects of what we do at Sarepta. We are very committed to Duchenne; we have been in Duchenne for more than a decade. Our marketed products are making a favorable impact on patients' lives, as seen in the long-term data: preservation of function, increased duration of ambulation, reduction in progression of cardiac and pulmonary disease, and improvements in survival across various aspects of our DMD portfolio. Those programs are real assets to the company. The revenue they generate allows us to drive the earlier parts of our pipeline, the siRNA programs in particular. They are complementary to each other. As we move through the year, a number of data readouts will clarify the long-term role of our DMD portfolio and open new important data cards on the siRNA pipeline, which can create new avenues for the company's future growth. So, again, I think these areas are very synergistic.

One moment for our next question. Our next question comes from the line of Ryan Abraham of RBC Capital Markets. Your line is now open.

Hey, good afternoon. Thanks for taking my question. Mike, congrats on the new role. On the expense side, it looks like you have lowered your OpEx guidance for this year. You have talked in the past about the $800 million-ish range being a good steady state to think about. Could you talk a bit more about the puts and takes around the OpEx run rate? Is there further wiggle room? And how will investments in ELEVIDYS commercial efforts as well as competitive dynamics for the exon skippers potentially influence how you think about long-term OpEx? Thanks.

Ryan, do you want to take that? Absolutely. Thanks for the question. So we have talked previously about being very comfortable in that $800 million to $900 million range in terms of OpEx to fund our commercial initiatives and advance our pipeline. We believe in the durability of the DMD franchise. Although competitors are in the mix, we think there is high value in both our exon skipping and gene therapy programs, and we are continuing to invest in that durable franchise. Given the cash flow generation profile of our company, we feel confident that we can advance the siRNA programs to value inflection points. That being said, we remain prudent about capital allocation. We will prioritize where the science leads us in terms of highest probability of success and what will generate long-term value for the company. That focus will continue, even though we feel comfortable with the $800 million to $900 million range to advance our programs.

One moment for our next question. Our next question comes from the line of Andrew Tsai of Jefferies. Your line is now open.

Hi. Thanks. Good afternoon and congratulations, Mike. I have a question about the regulatory strategy for the siRNA programs. Given your desire to start pivotal studies, can you talk about your latest thinking and whether you plan to pursue accelerated approval or full approval for both indications, and what you envision the primary endpoint to be? Thank you.

Thanks for the question. For both FSHD and DM1, the way we have thought about the regulatory pathway is that we have the ability to apply for either accelerated approval or traditional approval depending on the regulatory framework at that time, the landscape, and the data that is generated. In terms of the outcomes we would use in a Phase III trial, the MAD study readout will help inform that. In these early studies, we are looking at a variety of endpoints and evaluating all of them, and it will be a data-driven discussion. We will also be looking at the broader landscape, which has many developers and a lot of activity. Our internal data and the external landscape will inform our approach to the next phase, and we look forward to having that discussion with regulators.

One moment for our next question. Our next question comes from the line of Eliana (Ellie) Merle of Barclays. Your line is now open.

Question and Michael, welcome to Sarepta. Just a clarification on some of your ELEVIDYS commentary. You mentioned you saw a quarter-over-quarter increase in ELEVIDYS enrollment forms. Just to clarify, are you also seeing an increase in start forms in Q3 versus Q2? If you could characterize that trajectory? And in your comments, you said you expect modestly lower ELEVIDYS revenue in the second half versus the first half but more contribution from start forms to revenue in 2027. Should we be expecting revenues to grow in 2027 from that? Thanks.

With respect to start forms, I will say a bit and then ask Patrick to provide more detail. We were encouraged with the trends that we see. We spent a good portion of the first half of the year expanding our commercial footprint and putting initiatives in place to ensure balanced communication of benefit-risk around ELEVIDYS. We are seeing those efforts start to take hold, and we are seeing improvement in start forms. We would expect those trends to continue. It is early to be talking about 2027, but we do feel confident in the nature of the benefit-risk discussions we are having and the trends we are seeing. Patrick, do you want to add more detail?

Absolutely. From a commercial perspective, the indicators we are seeing today are moving in the right direction. Our strategy is set, our sales team is trained and deployed, and our broader commercial initiatives are fully operational. Enrollment form activity has stabilized and improved. Returning sites are engaging, and we are seeing interest from new sites. All of the signals indicate that these initiatives are taking hold and strengthening the patient pipeline, even though the associated revenue will take time to materialize. The team is focused on consistent execution and helping those patients progress through the journey.

One moment for our next question. Our next question comes from the line of Caroline on for Yigal Nochomovich at Citi. Your line is now open.

Thanks for taking our question. With DM1 and FSHD data approaching, can you tell us what disease characteristics make a target particularly well suited for the alpha v beta 6 delivery platform? And what additional muscle diseases could become attractive expansion opportunities if the upcoming datasets are successful? Thanks.

Certainly. What got us excited about working on these indications was the alpha v beta 6 targeting ligand because of its wide distribution across muscle and its availability on the cell surface. We have talked about receptor availability for high muscle concentration, and that is exactly what we saw translating from preclinical data to early clinical data: high levels of muscle concentration in DM1 and FSHD without dose-limiting toxicity. The alpha v beta 6 is attractive because it broadly yields high muscle concentration. In terms of potential other indications, it would be those affecting muscle diseases with widespread muscle pathology. With siRNA, PM1 and FSHD have clear pathological roles driven by toxic gain-of-function mRNA or proteins where efficient reduction is expected to be therapeutic. So the combination of the targeting technology and potent siRNA is what makes other muscle diseases attractive expansion opportunities if the data are successful.

One moment for our next question. Our next question comes from the line of Ritu Baral of TD Cowen. Your line is now open.

Thanks for taking the question. Michael, great to have you in the seat. I have two questions. First, regarding the time lag to revenues for ELEVIDYS: given you mentioned a quarter-over-quarter increase in demand but that revenue increases may not happen until 2027, does this imply a longer time in the pipeline until revenue recognition than the previously indicated five to six months? Is that the lag we should be modeling going forward? And second, with your Cohort 8 data in Q1 next year, will you have expression data as part of that topline release beyond just liver safety? If so, what should our expectations be for expression and for liver safety? Thanks.

Happy to take those. With respect to the time lag between enrollment forms and revenue, it is generally around six months as we have said previously. There can be variability around that, but it is typically about six months and consistent with what we are saying: the enrollment forms improving now are likely to translate into revenue more meaningfully in 2027. Patrick, do you want to add detail on timing?

I would say the cohorts that have come in are not mature enough to conclude whether the overall journey is getting longer or shorter. However, we continue to use approximately six months from enrollment form to infusion for planning assumptions, knowing that timing is going to vary from patient to patient.

On the Cohort 8 endpoints and timing: the primary goal of the study is to assess ALI, and we expect to have that data. We are collecting biopsy data as well; the primary goal of the readout for discussions with the agency will be ALI, and we will provide the biopsy data, though I cannot be specific on the timing for the biopsy data release at this point.

One moment for our next question. Our next question comes from the line of Michael Ulz of Morgan Stanley. Your line is now open.

Good afternoon and congrats, Mike. Regarding the RNA data updates expected later in the second half, should we expect those more toward year-end? Will you share those updates together or separate them? If I remember correctly, FSHD may be a little bit ahead of DM1. Thanks.

We have said those data will be available later in the second half of the year, but we are not able to be more specific about precise timing today. We will review each dataset as it becomes available and make them public appropriately. I cannot comment today on whether they will be released together or staggered; it depends on the availability of the data. Both are expected in the second half and we are on track to meet that timeline.

We do think about these programs as separate programs. The SAD data were close in timing, which made sense to release together, but generally speaking we treat these programs separately. When they become available is likely when we would release them.

One moment for our next question. Our next question comes from the line of Matthew on for Salveen Richter of Goldman Sachs. Your line is now open.

Thanks for the question. Could you provide any more color on the metrics beyond start forms that you are seeing that support deeper ELEVIDYS penetration in ambulatory patients? How are you thinking longer term, and how might you leverage your efforts to support nonambulatory use if that is eventually included back in the label? Thank you.

Our strategy is set and the sales team is out there; they have been trained and deployed and the broader commercial initiatives are fully operational. Enrollment form activity has stabilized and improved, with returning sites reengaging and interest from new sites. We see a directional alignment between HCP engagement and enrollment form submissions: when our sales team engages an HCP, we often see enrollment forms submitted afterwards, sometimes within 30 days. Those signals suggest that our initiatives are taking hold and strengthening the patient pipeline, though the associated revenue will take time. We will continue consistent execution to help patients progress through the journey. Regarding nonambulatory use, if regulatory changes or label updates occur based on data such as Cohort 8, we would leverage our commercial infrastructure to support expanded indications.

One moment for our next question. Our next question comes from the line of Biren Amin of Piper Sandler. Your line is now open.

A couple questions. On the AMONDYS and VVYONDYS sNDAs, has the FDA indicated any plans to hold an advisory committee meeting? Second, on FSHD, there is a direct transcriptional target of DUX4 that apparently correlates to clinical disease severity—are you looking at that in the current trial? And lastly, on Cohort 8 data, is there potential to revive the LGMD gene therapy programs after those data are available? Thanks.

With respect to AMONDYS and VVYONDYS reviews, the FDA has not indicated at this time that they intend to schedule an advisory committee. They can make that decision at any point, but today there is no indication that they plan to do so.

On the DUX4-related genes and biomarkers: we are looking at both a downstream DUX4 gene panel and multiple circulating biomarkers. Our team is actively validating assays and evaluating them in our models and clinical samples because having a circulating biomarker is a major advantage in these indications. Regarding LGMD gene therapy programs and Cohort 8: for LGMD we are currently on clinical hold. In order to move forward and potentially submit a BLA, Cohort 8 data will be part of our discussions with FDA. Once we have that data, we will discuss the pathway to submit with the agency.

One moment for our next question. Our next question comes from the line of David Hoang of Deutsche Bank. Your line is now open.

Hi, thanks for taking my questions. I want to ask about the PMO franchise and the perception of durability there. How should we think about modeling the franchise next year, especially with EXONDYS where we may see a competing Exon 51 skipper enter the market? Thanks a lot.

We have a tremendous amount of confidence in the durability of the PMO franchise. This franchise has a long track record—10 years since the first approval—and has delivered benefit to patients over that period. There is extensive real-world evidence supporting benefit and a favorable safety profile. We feel well positioned to enter a competitive market and maintain momentum in that franchise. It is early to predict exactly how competitive dynamics will play out, but any impact of competition would likely take time to become visible, given reimbursement pathways, patient assistance programs, and home infusion support that need to be established. The high rates of adherence we have observed, over 90%, and the mature infrastructure we have to support patients and providers are important advantages. We would expect any competitive impact, if it occurs, to be more visible later in 2027.

Our position is grounded in a decade of experience supporting patients, families, physicians, and treatment centers. We have a body of real-world evidence, established safety experience, adherence rates exceeding 90%, and a team skilled at working through reimbursement and authorization challenges to keep patients on therapy. We will lean into that mature infrastructure as we support our patients.

One moment for our next question. Our next question comes from the line of Jade on for Mitchell Kapoor of H.C. Wainwright. Your line is now open.

Hi, this is Jade on for Mitchell. Thanks for taking our question. On AMONDYS and VVYONDYS sNDAs, do you have any thoughts on timing for converting EXONDYS to full approval? Also, can you speak a bit about the recent Capricor advisory committee meeting—do you see increased scrutiny of post hoc data reevaluation as a negative readthrough for AMONDYS and VVYONDYS given that the data did not achieve traditionally accepted significance in the trial? Thanks.

Regarding the Capricor advisory committee, the issues there were specific to that sponsor's package and FDA's review of that package. We do not see a readthrough to our programs. Our applications are supported by clinical trial data and extensive real-world evidence, and we believe together those present a strong package for conversion to traditional approval. On EXONDYS, Louise?

For EXONDYS, we do not have a confirmatory study per se; we have a post-marketing commitment, our MISSION study, which is a dose-ranging study. That study will be completed by the end of this year. Following that study, we will have discussions with the agency in conjunction with VVYONDYS and AMONDYS. That is where we are in terms of potential conversion of EXONDYS to traditional approval.

One moment for our next question. Our next question comes from the line of Andy on for Brandon Frith of Wolfe Research. Your line is now open.

Thanks for taking the question and welcome, Michael. Regarding the MAD data in FSHD and DM1 with functional endpoints, Louise mentioned the goal is not to establish functional efficacy in these early datasets. Could you clarify why? Is it because sample sizes are too small or because the observation period is too short? Or is it related to empirical tracking relative to competitors? Thank you.

For FSHD, it is primarily about timing. FSHD is a slowly progressive disease, and the data at six months from this early study are not expected to show a strong functional signal. The goal is to establish the biological chain—tissue exposure to target knockdown to downstream biomarkers—and to select an appropriate dose for later studies. Functional outcomes require more time to manifest in a slowly progressive disease.

I agree with Louise. FSHD is slowly progressive; we expect treatment to stabilize or improve symptoms over time. We need time for disease progression to be measurable to demonstrate therapeutic effect, and that aligns with how other developers are approaching the field.

One moment for our next question. Our next question comes from the line of Luke on for Brian Skorney of Baird. Your line is now open.

Hi, this is Luke on for Brian. On the Huntington's program, when might we expect the Phase 1 proof-of-biology data? Are you measuring protein knockdown and do you think the study could support an initial biomarker proof-of-concept? Thanks.

We expect the first proof-of-biology data early next year. This is an early single-ascending dose study focused on safety and early signs of efficacy, particularly whether the candidate gets across the blood-brain barrier. We will be looking at knockdown of huntingtin in the CSF as a surrogate for CNS target engagement. That will be the key biomarker for validating the platform along with safety and the ability to dose escalate.

One moment for our next question. Our next question comes from the line of Yanan Zhu of Wells Fargo Securities. Your line is now open.

Hi, thanks for taking our questions and congrats to Mike. For Cohort 8, is the ALI data all that is needed from FDA to make a decision, and if so, could the decision reinstate the nonambulatory indication? Also, regarding the VVYONDYS and AMONDYS sNDAs, the review time seems to be eight months—could you comment on whether that is standard review and the implications? Thanks.

On Cohort 8, our strategy is to complete the study and, once we have the 12-week data, approach the FDA to discuss the regulatory path. We cannot comment today on what the regulatory path will be, but we will engage with the agency with data in hand to define it. We believe Cohort 8 data, together with other data sources like ENDEAVOR, can make a compelling argument on benefit-risk in this population, but the exact path will be defined through discussions with regulators. Regarding the AMONDYS and VVYONDYS review timelines, that is a standard review.

To clarify, the PDUFA time frame for those sNDAs is 10 months from submission, not eight months.

One moment for our next question. Our next question comes from the line of Tazeen Ahmad of Bank of America. Your line is now open.

Hi, thanks for squeezing me in. I wanted to clarify a comment about the potential for an accelerated path for, say, DM1 in the future. If a competing program ahead of you, for example, Novartis, were to get accelerated approval, would that lessen Sarepta's chances of receiving an accelerated path even with compelling data? Thanks.

We will evaluate the regulatory landscape as we proceed, and our studies are designed to be able to support either accelerated or traditional approval. Certainly, if a traditional approval exists in the space, it can change the landscape for accelerated approval, so it will be fact- and data-driven. We will consider both our data and the broader landscape in discussions with the agency.

I agree with Louise: these are data-driven decisions. It will depend on the nature of any approval in the space and the specific strengths of our data relative to that approval. We will be prepared to pursue the most appropriate pathway at the time.

One moment for our next question. Our next question comes from the line of Joseph Schwartz of Leerink Partners. Your line is now open.

Hi, thanks for taking my question and welcome, Mike. For SRP-1000 and SRP-1001 updates, what quantitative benchmarks does each program need to clear to justify pivotal advancement rather than continued exploration?

We are looking for a few things in these studies. We want to be able to dose escalate safely to a dose appropriate for Phase 3 with very strong muscle concentration and significant target knockdown. We want the highest levels of knockdown possible to affect biomarkers and predict functional improvement, benchmarking back to our preclinical data. So concentration, knockdown, and the ability to dose escalate safely without safety signals are the key benchmarks we are evaluating.

One moment for our next question. Our next question comes from the line of Yuan Zhu of Wedbush. Your line is now open.

Hi, good afternoon. Thank you for taking the questions. First, I wanted to confirm because I thought the original guidance was for Cohort 8 data to be available by year-end. Was there a delay in enrollment, and did you have any challenges enrolling nonambulatory patients given safety concerns? Second, can you remind us the efficiency of your Huntington's candidate crossing the blood-brain barrier and what magnitude of knockdown you would like to see? Thank you.

On Cohort 8 enrollment: the study is progressing well, but investigators are dosing patients sequentially rather than in parallel. Given that pacing and the timing of when all participants will reach the 12-week timepoint, we now expect the complete 12-week data from the approximately 25 patients in Q1 of next year. Regarding the Huntington's program, what got us excited in preclinical studies was the ability to achieve knockdown in deep brain regions such as the striatum and caudate. In humans, we will assess CSF knockdown as a surrogate for CNS target engagement. That is what we will be looking for in the early readout.

I am showing no further questions at this time. I would now like to turn it back to CEO Michael E. Severino for closing remarks.

Thank you, operator, and thanks to everyone on the call for your time and attention today. As I said in my opening remarks, my first few weeks with this talented team reinforced my view that we have a bright future ahead of us and my confidence in the potential of Sarepta has only grown. We have four marketed products that make a real difference in patients' lives today. We have a compelling pipeline of siRNA therapeutics that will drive our future growth, and we are executing from a position of financial strength with the ability to advance our pipeline and initiatives independently as evidenced by our strong balance sheet and operating profitability. A number of important catalysts are on the horizon which we believe can unlock long-term value for patients and shareholders alike. We appreciate your continued support and look forward to updating you on progress in the months ahead. With that, we can end the call, and I hope everyone has a very nice evening.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.