Sarepta Therapeutics, Inc. Q2 FY2025 earnings call

Restructuring

• Goal is to reprioritize pipeline to high-impact development programs, reduce costs by ~$900 million through 2027, and reduce workforce by ~36% (≈500 employees).
• Portfolio reshaped to focus on DM1, FSHD, SCA2, IPF, Huntington's disease, SRP-9003, ongoing studies for EXONDYS, AMONDYS, VYONDYS, ELEVIDYS, and research programs for SCA1/3, etc.

ELEVIDYS Update

• Agreed to include black box warning for ALI/ALF in ambulatory labeling; ongoing discussion with FDA on non-ambulatory population with proposed sirolimus immunosuppression protocol from expert panel.

Pipeline Focus

• Prioritize high-impact development programs for rare diseases, leveraging siRNA platform for FSHD, DM1, SCA2, Huntington's disease.

Organizational Changes

• Dr. Louise Rodino-Klapac named President of R&D and Technical Operations; Dr. Rachael Potter as Chief Scientific Officer; Ian Estepan with expanded role overseeing commercial, finance, etc.; Patrick Moss as Chief Commercial Officer; Ryan Wong as CFO.

Total net product revenue for the quarter was $513 million. ELEVIDYS contributed $282 million, which is approximately 55% of the total revenue, and the PMO franchise contributed $231 million, accounting for about 45% of the total revenue.

Financial Stress Test

• Used conservative $500 million annual revenue floor from ELEVIDYS ambulant population as stress test to ensure profitability, cash flow positivity, and ability to meet financial obligations including 2027 convertible note.
• Aim to advance high-impact pipeline with cost cuts to sustain profitability and support future innovation.

• Uncertainty in FDA interactions regarding ELEVIDYS non-ambulatory labeling.
• Hesitancy in prescribing ELEVIDYS leading to potential revenue impact.
• Financial risks related to meeting 2027 debt obligations and maintaining revolver access.
• Risks associated with pipeline execution and finding partners for paused programs.

Q: On ELEVIDYS, is there confidence it won't be pulled from the market?

A: FDA requested black box warning is resolved for ambulatory, non-ambulatory still in discussion but protocol submitted to FDA.

Q: Is the R&D Day for siRNA platforms still planned?

A: No R&D Day planned, but data updates for FSHD and DM1 expected in the second half of the year.

Q: What's the breakdown of ELEVIDYS sales by ambulatory vs non-ambulatory in Q2?

A: Minority of Q2 ELEVIDYS sales were from non-ambulatory patients.

Q: How are cost cuts weighted across the organization?

A: Approximately 80% weighted to R&D (R&D and tech ops) and 20% to G&A.