Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sarepta Therapeutics Inc (SRPT, Financial) achieved net product revenue of approximately $361 million in Q2 2024, a 51% increase over the same quarter last year.
- ELEVIDYS, their gene therapy for Duchenne muscular dystrophy, received broad FDA approval in June 2024, making it available to over 80% of Duchenne patients in the U.S.
- The company has become profitable and cash flow positive as of this quarter.
- Sarepta Therapeutics Inc (SRPT) anticipates strong revenue growth in Q4 2024 and projects 2025 net product revenue to be between $2.9 billion and $3.1 billion.
- The company has a robust pipeline and has established itself as a leader in RNA and gene therapy for rare diseases.
Negative Points
- The process from enrollment form to infusion for ELEVIDYS typically takes between three and five months, which may moderate revenue growth in the near term.
- There is a potential for modest cannibalization of their PMO franchise by ELEVIDYS in the coming quarters.
- The company expects to record approximately $55 million to $65 million in additional research and development expenses due to the termination of a development and supply agreement.
- There are concerns about the capacity of treatment centers to handle the unprecedented demand for ELEVIDYS, leading to potential long wait times for patients.
- The company faces risks and uncertainties that could materially and adversely affect its business, results of operations, and trading prices for its common stock.
Q & A Highlights
Q: What is the actual bottleneck in getting patients from prescription to drug administration? Has the timing changed since the approval for four- to five-year-olds?
A: Douglas Ingram, CEO: There is no bottleneck. The process typically takes three to five months, which is normal for these therapies. The demand from patients and physicians is high, and everything from manufacturing to payer interactions is going well. The process is consistent with our other therapies like EXONDYS, VYONDYS, and AMONDYS.
Q: Should we expect linear growth over the next few years, or how should we think about the time to peak sales?
A: Douglas Ingram, CEO: Peak year sales will occur in the back half of this decade. We will be treating the prevalent population through the entire decade and moving to the incident population in the early 2030s.
Q: Can you confirm if you expect modest growth in Q3 despite the three to five months it takes for start forms to infusion? Also, is the 2025 guidance of $2.9 billion to $3.1 billion in line with your assumptions?
A: Douglas Ingram, CEO: Yes, we expect about 30% growth in Q3 and doubling in Q4. The 2025 guidance aligns with external expectations, and early signals from the launch exceed our optimistic views.
Q: What are the limitations at the center level for administering ELEVIDYS, and how do you expect capacity to expand over time?
A: Dallan Murray, Chief Customer Officer: We have more than enough capacity today to accommodate peak years of sales. The centers are working through unprecedented demand, and we are supporting them as they ramp up their ability to serve the patient population.
Q: How are you thinking about the cannibalization of the PMO side of the business in your 2025 guidance?
A: Douglas Ingram, CEO: There will be some cannibalization, but it is expected to be modest in 2025. We have seen fairly modest cannibalization so far and expect it to remain modest next year.
Q: Can you provide any updated thoughts on potentially in-licensing new programs?
A: Ian Estepan, CFO: We will continue to leverage our capabilities in neuromuscular and rare disease spaces. We are keen on looking at valuation and making sure it makes sense based on market opportunities. We will use the same financial discipline that has gotten us here today.
Q: How are you leveraging FDA platform designation to accelerate the development of the LGMD gene therapies and other early pipeline assets?
A: Louise Rodino-Klapac, Chief Scientific Officer: We are leveraging the ELEVIDYS experience to help accelerate the LGMD platform. We have received fast-track designation and are using every lever possible with the FDA to move at the fastest speed.
Q: How are you addressing the potential bottlenecks at the treating centers?
A: Douglas Ingram, CEO: We don't have a fundamental bottleneck. We have a significant number of sites and treating physicians, and we are seeing robust demand from patients and physicians. We are in a very good place from a capacity and supply perspective.
Q: What feedback have you received from centers about post-administration monitoring of patients?
A: Douglas Ingram, CEO: Post-administration monitoring is important, and we are seeing a very stable safety profile. The amount of infusions relates to both the infusion appointments and good follow-up.
Q: Does your 2025 guidance assume anything related to European approval?
A: Douglas Ingram, CEO: The guidance does not assume European approval. The numbers provided are related to our US sales. The revenue curve is a function of the process, site infusions, payer interactions, and more.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
