Sarepta Therapeutics, Inc. Q2 FY2026 earnings call

New CEO Overview

• New CEO Michael E. Severino highlighted Sarepta's leading position in rare neuromuscular disease, with a stable commercial Duchenne muscular dystrophy (DMD) portfolio and high-potential siRNA pipeline, and confirmed the company has sufficient financial strength to advance all programs independently.
• Management recognizes existing investor concerns around ELEVIDYS adoption, upcoming competition for exon skipping therapies, and capital allocation, and noted multiple upcoming milestones will clarify the company's growth trajectory.

Commercial Operations

• Expansion of the commercial footprint for ELEVIDYS was completed in the first half of 2026, with the full sales team trained and deployed, and all growth initiatives fully operational.
• Q2 2026 saw a record number of healthcare provider interactions, with expanded site activity, increased returning site enrollment submissions, and new interest from off-network referral sites, confirming commercial initiatives are taking hold and rebuilding provider/patient confidence in ELEVIDYS' benefit-risk profile.
• EXONDYS 51 will mark its 10-year anniversary of US approval in September 2026, with a large body of real-world evidence confirming its benefits for DMD patients.

Research & Development

• The company uses a "biology-first" platform strategy: it selects targeted delivery architectures matched to each disease's biological barriers, with alpha v beta 6 integrin targeting for muscle diseases and transferrin receptor targeting for central nervous system (CNS) programs, combined with catalytic siRNA silencing for deeper, more durable target knockdown than antisense approaches.
• Cohort 8 of the ENDEAVOR study for ELEVIDYS (evaluating prophylactic sirolimus to reduce acute liver injury (ALI) in non-ambulatory DMD patients) is enrolling ~25 participants, with dosing ongoing; full enrollment is expected by the end of 2026, and 12-week full cohort data is expected in Q1 2027. Interim data shared to date shows zero ALI incidence in sirolimus-treated patients.
• Multi-ascending dose (MAD) study interim data for the lead siRNA programs SRP-1001 (FSHD) and SRP-1002 (DM1) is expected in H2 2026. The data will evaluate safety, pharmacokinetics, target knockdown, and biomarkers to inform dose selection for future development.
• The FDA accepted supplemental NDAs (sNDAs) for AMONDYS 45 and VVYONDYS 53 to convert their accelerated approvals to traditional approvals, with a PDUFA date of February 28, 2027. The applications are supported by ESSENCE confirmatory study data and extensive real-world evidence.
• The first patient was dosed in the Huntington's disease CNS program earlier in 2026, with proof-of-biology data expected in early 2027. A second-generation DM1 program targeting both muscle and CNS is also in development.

Financial Operations

• The company delivered GAAP operating income of $13 million and non-GAAP operating income of $86 million in Q2 2026, marking another profitable quarter. Combined GAAP R&D and SG&A was $199 million, and non-GAAP combined R&D and SG&A was $165 million, a 44% year-over-year decrease driven by prior cost restructuring and pipeline prioritization.
• End-of-Q2 cash and investments totaled $945 million, an increase of $197 million from the prior quarter, driven by strong operating performance and a $40 million Roche milestone receipt.

Total company revenue for Q2 2026 was $401 million, a 34% year-over-year decrease driven by lower net product revenue, with $72 million of collaboration/other revenue (primarily Roche contract manufacturing).

• ELEVIDYS: Q2 2026 net product revenue of $98 million, with stable quarterly sales and quarter-over-quarter growth in enrollment forms indicating growing demand. Revenue contribution to total net product revenue was 29.8%.
• PMO (exon skipping) franchise: Q2 2026 net product revenue of $231 million, with stable demand, 90%+ patient adherence, and over 1,800 patients treated globally. Revenue contribution to total net product revenue was 70.2%. Total Q2 2026 net product revenue was $329 million. Gross margin on net product revenue was 75% for the quarter and 78% for the first half of 2026.

• Total 2026 net product revenue guidance is narrowed to $1.2 billion to $1.3 billion, down from the prior range of $1.2 billion to $1.4 billion, consistent with prior expectations that results would trend toward the lower end of the original range. The midpoint of the new range is cited as the appropriate reference point.
• 2026 total collaboration and other revenue guidance is revised upward to $550 million to $600 million, a $75 billion increase from the midpoint of prior guidance, driven by higher-than-expected contract manufacturing revenue for Roche. This revenue increase will be offset by an equivalent increase in cost of goods.
• 2026 non-GAAP operating expense guidance is tightened to $800 million to $850 million, which is the low end of the prior guidance range, reflecting continued disciplined cost management.
• Management expects 2026 H2 total net product revenue to be modestly lower than H1 2026, and expects ELEVIDYS Q3 2026 revenue to trend lower than Q2 2026. Recent enrollment growth is expected to contribute meaningfully to revenue in 2027 rather than 2026 due to the ~6-month lag between enrollment and infusion/revenue recognition.

• Forward-looking statements around pipeline progress, revenue growth, and regulatory outcomes are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, per the company's Safe Harbor disclosure.
• ELEVIDYS sales face adoption challenges, and investor concern exists around its uptake and future revenue trajectory. The gene therapy carries a known class risk of acute liver injury, and success of the sirolimus prophylaxis protocol in Cohort 8 is not guaranteed.
• The PMO exon skipping franchise faces upcoming competitive entry for EXONDYS 51, which could impact future sales.
• Early-stage siRNA and CNS pipeline programs have not yet generated late-stage clinical data, and there is no guarantee that observed preclinical and early clinical benefits will translate to approved, effective therapies.
• The conversion of AMONDYS 45 and VVYONDYS 53 from accelerated to traditional approval is subject to FDA review, and regulatory outcomes are not guaranteed.

Q: What excites new CEO Severino about Sarepta's pipeline, specifically Cohort 8 and the siRNA programs? / A: Severino notes Cohort 8 has promising potential to improve ELEVIDYS' benefit-risk profile for non-ambulatory patients, with full data expected in Q1 2027. He adds that the siRNA programs have extremely strong early data, with well-understood disease biology and high predictive value from preclinical models. The platform delivers dose-dependent muscle concentration without dose-limiting toxicity and robust target knockdown, with opportunity across neuromuscular diseases and Huntington's to create long-term patient and shareholder value.

Q: Why would management not separate the mature DMD business from the early-stage DM1/FSHD siRNA pipeline, given investor concerns about DMD pipeline risk? / A: Severino explains the two businesses are highly synergistic. The mature DMD portfolio has a decade-long track record of delivering proven patient benefits, with stable, durable revenue that funds the early-stage siRNA pipeline development. He expects upcoming 2026 data readouts will clarify the long-term positive trajectory of both the DMD franchise and the siRNA pipeline, supporting continued combined growth.

Q: What is Sarepta's regulatory strategy for the FSHD and DM1 siRNA programs, and will the company pursue accelerated or full approval? / A: R&D head Rodino-Klapac confirms the programs are designed to support either accelerated approval or traditional approval pathways. The outcome of the ongoing MAD study, which evaluates multiple endpoints, combined with the competitive and regulatory landscape at the time of data readout, will drive the decision. Endpoint selection for Phase III trials will also be data-driven and informed by discussions with regulators after MAD data is released.

Q: Could competitor entry in the exon 51 skipping space impact the durability of Sarepta's PMO franchise, and how should the franchise be modeled for 2027? / A: Management notes Sarepta has extensive long-term real-world evidence confirming PMO benefits and safety, with 90%+ patient adherence and a mature, well-established infrastructure for reimbursement, patient support, and provider engagement. Any competitive impact from new entrants is expected to be gradual and would likely not become material until late 2027 at the earliest, and Sarepta is well positioned to maintain market momentum.