Sarepta Therapeutics - Earnings Call - Q3 2025

Executive Summary

• Q3 2025 beat consensus on revenue and EPS despite operational headwinds: Total revenues were $399.4M vs S&P Global consensus $337.0M*, and non-GAAP diluted EPS was ($0.13) vs ($0.93)*. Net product revenue was $370.0M, comprised of $238.5M PMO and $131.5M ELEVIDYS.
• ESSENCE confirmatory study for AMONDYS 45 and VYONDYS 53 missed the primary endpoint (p=0.309), but post-hoc COVID-free and prognostic-score analyses showed clinically meaningful trends; Sarepta will meet FDA to discuss a path to traditional approval supported by real-world evidence.
• ELEVIDYS label discussions expected to conclude “soon,” with a boxed warning and removal of non-ambulatory from the Indications and Usage; Sarepta plans a sirolimus-based regimen study to potentially re-include non-ambulatory patients.
• Liquidity and cost actions: management reported Q3 positive cash flow; cash and investments were $865.2M; completed a convertible debt exchange (recognized $138.6M loss on debt extinguishment) and recorded $40.5M restructuring charges.
• Near-term setup: management expects Q4 ELEVIDYS infusions to be flat to slightly down vs Q3 (seasonality and restart frictions) but reiterated the ambulant ELEVIDYS annual revenue “floor” near $500M, framing 2026 as a re-acceleration year pending safety-label resolution and non-ambulatory pathway.

What Went Well and What Went Wrong

• What Went Well

  • Revenue/EPS beats versus consensus amid a disrupted quarter: total revenues $399.4M and non-GAAP EPS ($0.13) vs S&P Global estimates of $337.0M and ($0.93)*; “In Q3, we were cash flow positive” – CFO.
  • PMO franchise resilience and supportive evidence: Q3 PMO revenue $238.5M; ESSENCE showed favorable trends in COVID-free and high-risk subgroups; “These topline findings reinforce the potential impact of these therapies to slow muscle weakness” – Dr. Rodino‑Klapac.
  • Coverage and execution: “~220M lives have a path to coverage” for ambulatory ELEVIDYS, with no permanent coverage denials; 11 of 14 paused infusions were rescheduled in August – CCO.

• What Went Wrong

  • Year-over-year revenue decline and gross cost uptick: Q3 revenues fell 15% YoY to $399.4M, primarily from a $49.5M decline in ELEVIDYS due to suspending non-ambulatory shipments; cost of sales rose by ~$59.1M on inventory transitions, write-offs, and manufacturing deposits impairment.
  • ESSENCE primary endpoint not met (p=0.309), elevating regulatory uncertainty; while management cites totality-of-evidence and RWE, conversion to traditional approval is not yet secured.
  • One-time charges weighed on GAAP: $40.5M restructuring expense and $138.6M loss on debt extinguishment tied to refinancing 2027 notes.

Transcript

Speaker 1

Good afternoon and welcome to Sarepta's third quarter 2025 financial results conference call. As a reminder, today's program is being recorded. At this time, I'll turn the call over to Tam Thornton, Director of Investor Relations. Please go ahead.

Speaker 7

Thank you. Thank you all for joining today's call. Earlier this afternoon, we released our financial results for the third quarter of 2025. The press release and slides are available on the investor section of our website at sarepta.com, and our 10Q will be filed with the Securities and Exchange Commission on Thursday aftermarket. Joining us on the call today are Doug Ingram, Dr. Louise Rodino-Klapac, Patrick Moss, Ian Estepan, and Ryan Wong. After our formal remarks, we'll open the call for Q&A. I'd like to note that during this call, we will be making a number of forward-looking statements. Please refer to slide two on the webcast, which contains our forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond Sarepta's control.

Actual results can materially differ from these forward-looking statements, and any such risks can materially and adversely affect the business, the results of operations, and trading prices for Sarepta's common stock. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent SEC filings. The company does not undertake any obligations to publicly update its forward-looking statements, including any financial projections provided today based on subsequent events or circumstances. As noted on slide three, we will discuss non-GAAP financial measures on this webcast. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release and the slide presentation available on the investor section of our website. Now I'll turn the call over to our CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Speaker 5

Thank you, Tam. Good afternoon, everyone. Thank you for joining us for our third quarter 2025 financial results conference call. Next slide, please. We have much to discuss this evening, but let's begin by reviewing the completion of our confirmatory study for our two ultra-rare disease CMOs, Lyonandus and Amandus, before coming back to our quarterly update. Next slide. I'm going to turn the call over to Dr. Reno Klapac very shortly, but let me first give some broad conclusions. First, we are very proud to have completed our primary confirmatory obligations. Both Amandus and Lyonandus serve ultra-rare populations with total prevalence numbering for each no more than about 500-800 patients in the United States and an incident rate per year of maybe a few dozen patients. This disease is also heterogeneous and degenerates not over months or years, but literally over decades.

These together make the powering and conduct of a placebo-controlled trial particularly challenging. I want to give a huge thanks to our investigators and then, very importantly, to the brave families who have had the courage to enroll and risk a placebo arm for 22 months. Without this special community that we serve, we would not have completed this unusually onerous study. Second, when reviewing the evidence to support transition from accelerated to traditional approval of a therapy, one, of course, looks to the totality of the evidence. Here, the division recognized the challenges associated with this ultra-rare disease trial and set out a very specific standard for continuing marketing authorizations.

As referenced in our Lyonandus approval material, the FDA gave us a very specific written language about voluntarily withdrawing marketing authorization, which would only occur if, quote, "no relevant analyses find sufficient evidence of a clinical benefit." As you will hear from Dr. Reno Klapac, we believe that we have met that standard and that we have sufficient evidence to discuss with the agency transitioning from accelerated to traditional approval. Consider, as you will have seen in our press release, the study missed its statistical significance. However, the data demonstrated a consistent and clinically favorable trend across the trial population. Importantly, a portion of this study was conducted over the COVID pandemic period, and as with many studies over that period, the study results were impacted for a variety of reasons.

During the pandemic, the rate of missed doses was unusually high, with nearly all patients missing doses and approaching half of whom missed substantial consecutive doses. Participants in the study were also largely shut in and suffered deconditioning and loss of mobility. All of this appears to have confounded the results. When one excludes the COVID participants, we see a meaningful treatment benefit slowing disease progression by about 30%, which Dr. Reno Klapac will further explain. Likewise, to enroll this study, we were required to admit a broad population from as young as six years old to as old as 13 years old, including those who would clearly have confounding ceiling and floor effects. In a subgroup analysis of those likely to progress, there was a strong statistically significant benefit, and this was across not only the primary but the other endpoints as well.

There is also a wealth of published real-world evidence for the PMOs. As just a few examples of the multiple real-world studies across our PMOs, we see that when tracking Vyondys 53 over six years, there is an 88% reduction in risk of loss of ambulation with a Kaplan-Meier analysis of delay of about three years. Likewise, with both Vyondys 53 and Amondys 45, we see over time a significant attenuation in pulmonary decline and a significant delay in time to cough assist and ventilation. We see the same trend in our own study, ESSENCE. As part of the benefits they are seeing, patients are required to be infused weekly, a fairly onerous protocol, and yet their compliance rate has been well over 90% commercially year over year over year.

When one considers all of the evidence for benefit and then weighs a favorable stable safety profile as tracked over many years, we believe the risk-benefit remains positive. We not only anticipate continuing marketing authorization, but we believe we have a good argument for traditional approval. Our plan is to schedule a meeting with the division to review the totality of the evidence. Dr. Louise Rodino-Klapac will now discuss those results in more detail. Louise?

Speaker 7

Thank you, Doug. Can I have the next slide? Today, we announced the top-line results from our ESSENCE trial. The first placebo-controlled phase 3 study of exon-skipping therapies for Vyondys 53 or golodirsen and Amondys 45 or casimersen to treat patients with Duchenne muscular dystrophy amenable to exon 53 or 45 skipping, respectively. To remind you, Vyondys and Amondys are designed to address the underlying cause of Duchenne by restoring the messenger RNA or mRNA reading frame. The therapies use Sarepta's proprietary PMO chemistry and exon-skipping technology to skip exons 53 and 45 of the dystrophin gene. Promoting the synthesis of a shortened functional dystrophin protein is intended to slow decline in Duchenne patients. Vyondys and Amondys were approved by FDA via the accelerated approval pathway in 2019 and 2021, respectively. Next slide, please.

As shown on this slide, initiated in September 2016, the 225-person ESSENCE study was designed as a double-blind placebo-controlled trial spanning 96 weeks, followed by a 48-week open-label extension, reflecting the scale, rigor, and long-term commitment required to validate targeted treatments and select rare disease populations such as Duchenne. The trial was conducted across 75 centers in 24 countries. Next slide, please. In terms of baseline demographics, patients were well-matched with two-to-one treated versus placebo, with numbers of exon 45 and exon 53 amenable patients consistent with the prevalent Duchenne population. Functional baseline characteristics were also well-matched. Now, turning to the top-line results on the next slide. ESSENCE demonstrated numerical superiority across the primary and most secondary endpoints. However, the study did not reach statistical significance on the primary endpoint, the four-step ascend at 96 weeks.

Let me first highlight the key results, and then I'll provide more detail on each. First, and as mentioned, we believe COVID impacted study results. A post-hoc analysis of participants not impacted by COVID improves study results on the four-step ascend, with a least square mean difference of 0.11 steps per second and a p-value of 0.09. Second, when a prognostic score is applied to identify the subpopulation at risk for decline on four-step ascend, a meaningful and significant treatment response is evident, with a least square mean difference of 0.186 steps per second and a p-value of 0.01. Importantly, there were no new safety signals with comparable AE rates between treated and placebo. AEs were largely mild or moderate. Next slide, please. As you will see on this slide, and as I mentioned previously, although the data showed numerical superiority, the primary endpoint of this study was not met.

Next slide, please. As Doug mentioned, COVID appears to have had an impact on study results. The study itself was challenged operationally during the COVID period, with twice as many consecutively missed doses during COVID versus COVID-free patients and compressed clinical evaluation schedules. 43% of COVID-impacted patients had consecutively missed doses with an average of eight missed doses. In addition, published studies specifically on the impact of the COVID pandemic and Duchenne have demonstrated a negative impact on function due to immobility, contractures, and increased weight gain. On this slide, I've highlighted the COVID period that falls in the middle of the ESSENCE study, which began in late 2016 and completed in 2025. We defined patients that began and completed their 96 weeks outside of this window as COVID-free. Next slide, please.

Notably, a post-hoc analysis of the COVID-free participants improved study results on the four-step ascend primary endpoint, as shown on the left, with a least square mean difference of 0.11 steps per second and a p-value of 0.09. This equates to an approximately 30% reduction in disease progression over two years on the four-step ascend. This is in stark contrast to those individuals impacted by COVID on the right. Had we seen this effect size in a sample size similar to the whole trial population, we would expect it would have reached statistical significance. Secondary endpoints also demonstrated improved study results in COVID-free participants. Next slide, please. Separately, we also performed an analysis using a prognostic scoring method published by the well-respected CTAP, or Collaborative Trajectory Analysis Project Group, which is focused on Duchenne.

This method, published after we commenced ESSENCE, is used to identify the population most at risk for decline and, consequently, where maximum treatment benefit can be identified by avoiding floor and ceiling effects. The method includes baseline age, four-step ascend velocity, rise from floor velocity, 10-meter walk-run velocity, and corticosteroid duration and type. The four-step ascend was the most sensitive endpoint and reached statistical significance with this prognostic score applied. With a clinically meaningful least square mean difference of 0.186 steps per second and a p-value of 0.01, this equates to a 35% reduction in disease progression over two years on the four-step ascend. Next slide, please. There were no new safety signals with comparable adverse event rates between treated and placebo, reinforcing the favorable and manageable safety profile observed with our exon-skipping therapies. Adverse events were largely mild or moderate.

We believe the totality of these data, along with the real-world evidence, are compelling for Amondys and Vyondys, and we'll be sharing these data with the FDA to support sNDA filings. Next slide, please. Of note, as you will see here, a number of factors generated from the real-world evidence supports casimersen, including a mean age of 15 years for casimersen-treated patients to need a wheelchair versus 9.5-12.3 years in the literature for standard of care. It also shows a 2.6-year delay in time to reach FVC percent predicted of less than 60% for patients 10 to 18 years old versus matched controls. And a 70% reduction in mortality rate for our PMOs. Next slide, please.

On this slide, you will see how the real-world evidence supports Vyondys 53, including a three-year delay in loss of ambulation versus external control, a 7.5-year delay in the need for nighttime ventilation, and a 70% reduction in mortality. Next slide, please. As you can appreciate on this slide, the real-world body of evidence supports the effect of our PMOs on the trajectory of Duchenne, including an impressive 5.4-year increase in survival, a three-to-four-year delay in loss of ambulation, and significantly slower rates of pulmonary and cardiac decline. Next slide. Further, it is important to note that our exon-skipping therapies have treated over 1,800 patients worldwide, from infants to adults in their 30s, providing a robust foundation with clinical experience and real-world evidence showing PMOs have been associated with slowing Duchenne disease progression, including delayed loss of ambulation, preserved pulmonary and cardiac function, and extending survival.

With a patient adherence rate of more than 90%, the sustained use reflects the clinical value of our exon-skippers. We were also pleased to announce at this year's World Muscle Society meeting that a clinically meaningful attenuation of pulmonary decline was demonstrated in patients with advanced Duchenne treated with Amondys 45 compared to matched external controls. It is also important to note that most of our post-marketing requirements, or PMRs, have been completed. Next slide, please. In terms of next steps, with the completion of ESSENCE, we have submitted the top-line results to the agency. We plan to submit a request to schedule a meeting with the division by the end of the year to review the totality of evidence and discuss the path to a traditional approval.

Our findings will also be shared at future scientific forums with plans for publication in a peer-reviewed journal. I would like to take this moment to thank the Duchenne community, clinical trial investigators, and KOLs for their unwavering support these past years. Drug development often poses what can seem like unmovable obstacles. In the face of those obstacles, particularly in rare and ultra-rare disease, we remain steadfast in the science and focused on taking the best, albeit at times the more challenging path forward for the benefit of patients. We remain committed to our exon-skipping therapies and to the benefit they have provided and continue to provide to those living with Duchenne. I will now turn the call back to Doug.

Speaker 5

Thank you, Louise. All right, next slide, please. Let's move now to performance. Notwithstanding unprecedented disruptions in the quarter, Elevidys and the PMOs together posted solid net product revenue of $370 million for the quarter. Our Chief Commercial Officer, Patrick Moss, will provide more color on that in a moment. As to the Elevidys label, we have had very productive dialogue with OTP, and we expect the label change process with FDA to be concluded very soon. Dr. Louise Rodino-Klapac will discuss our expectations for the label very shortly, along with our planned trial for the prophylactic treatment of psoromas. As it relates to our portfolio, we are very enthusiastic about our siRNA platform, as the rest of biotech appears also to be enthused with the increasingly big risk potential of siRNA. Louise will discuss our progress on that in a bit.

Finally, I would note that in the quarter, we took several important actions to strengthen our financial performance and align our resources with our strategic focus on supporting our current therapies while we advance our largely siRNA-based pipeline. Our CFO, Ryan Wong, will provide color on those actions in his remarks. With that, I will turn the call back over to Louise again to make some remarks on Elevidys and on our pipeline. Louise.

Speaker 8

Thank you, Doug. Now to the next slide, please. Moving now to our Elevidys and pipeline updates. Next slide. To update you on the safety label process for Elevidys, as previously discussed, we've agreed to a black box warning for ALI and ALF. Also, consistent with the action we've already taken to pause shipments to non-ambulatory patients, we've agreed with the FDA that non-ambulatory will be removed from the indication and usage section of the prescribing information. Once we have an understanding of the risk-benefit analysis for psoromas, we will discuss with FDA if data are sufficient to resume dosing non-ambulatory patients. Next slide, please. As you're aware, we convened an expert committee to discuss ALF and the potential of adding additional immunosuppression regimens for the non-ambulant population.

Earlier this month, the committee, which consisted of numerous globally recognized, highly experienced medical specialists, including neuromuscular physicians with Elevidys treatment experience, hepatologists, and specialists experienced in immunosuppressive therapies, shared their findings at WMS, in which they analyzed and reviewed ALF safety data to identify early indicators of ALI and define populations at elevated risk for ALF. They evaluated and recommended strategies to prevent and mitigate ALI and ALF, emphasizing early risk recognition and patient stratification, a focus on intervention, clinical pathways, and risk-based management. Optimized clinical management approaches for ALI and ALF, including prophylactic immunosuppression and monitoring parameters. Based on these discussions and analyses, the committee endorsed modifying hepatic biomarker thresholds in ALI to facilitate timely intervention. They also recommended enhanced liver characterization at baseline to better understand risk factors of developing ALI.

In terms of ALI prevention, they recommended adding prophylactic psoromas as a second agent to the current corticosteroid regimen versus increasing corticosteroid doses, and this is one to two weeks prior to infusing Elevidys. In terms of ALI management, the committee recommended prompt initiation of IV corticosteroids if patients do not respond to oral corticosteroids. Lastly, they emphasized the need to generate real-world and clinical data. Toward that end, and as we've communicated previously, cohort eight of our ENDEAVOR study is designed to demonstrate the effectiveness of additional prophylactic immunosuppression in non-ambulatory patients receiving Elevidys. We are in discussions with FDA about the design of the study and hope to be able to commence it soon. Next slide, please. Also of note at this year's WMS meeting were the results of an independent study led by Dr. Jonathan Soslow from the Department of Pediatrics at Vanderbilt University Medical Center.

The study included 20 Duchenne patients who received Elevidys. The first 14 patients received Elevidys with a standard protocol, including corticosteroids, but no additional immunosuppression. The six subsequent patients underwent a modified immunosuppression protocol with psoromas. The objective was to show the initial safety, tolerability, and efficacy of psoromas prophylaxis. What the results demonstrated was that a low dose of psoromas prophylaxis appeared to be safe and well tolerated in the Duchenne patients receiving Elevidys, and there were no observed increases in liver enzymes in the six patients treated with psoromas. Next slide, please. Moving now to our pipeline updates. Next slide, and beginning with our LGMD Type 2E program. Regarding SRP-9003 for LGMD Type 2E, we recently presented positive phase 3 emerging data at the WMS meeting. The study met its primary endpoint, demonstrating a significant increase in beta-sarcoglycan expression.

In addition, restoration of other sarcoglycan complex proteins in both ambulatory and non-ambulatory patients was demonstrated. Further, our safety and tolerability results were consistent with previous results. We are encouraged by these data to support SRP-9003's clinical benefits in patients living with LGMD Type 2E. To determine the path forward, we have scheduled a meeting with the FDA this quarter. Following this regulatory dialogue, we will assess the requirements and determine the appropriate next steps for the program. Lastly, we turn to our promising siRNA pipeline. The recent activity in this space underscores the significant opportunity for this modality, and we are excited by our potential best-in-class approaches. Our DM-1 and FSHD programs continue to advance rapidly. Enrollment is progressing well in both trials. For DM-1, enrollment in the SAD study is complete, and cohort four of the MAD study of 6 mg per kg is currently enrolling.

For FSHD, enrollment of the SAD study is complete, and cohort six of the MAD study for 12 mg per kg will begin enrolling this month. While we previously expected to release single-dose ascending data by the end of the year, our team is currently prioritizing the transfer and validation of assays necessary to provide high-quality PD data. As a result, we now anticipate sharing these initial results in the first quarter of 2026. We also plan to initiate our trial for Huntington's disease by the year-end. This program utilizes a subcutaneous route of administration, allowing for deep brain regions like the striatum, particularly affected by Huntington's.

In addition to the second-generation DM-1 candidate selected at the outset, which has the ability to cross the blood-brain barrier and address the cognitive aspects of DM-1, we have also selected three of our research targets, which we plan to discuss at a later date. We continue to be excited by our differentiated approaches with siRNA and look forward to updating you in 2026. I'll turn the call over to Patrick Moss for an update on our commercial performance. Next slide. Patrick.

Speaker 5

Thank you, Louise, and good afternoon, everyone. My comments today will focus on three areas: a review of our Q3 performance, my thoughts on the ESSENCE results, and our expectations for the trajectory of ELEVIDYS. Next slide, please. Total product revenue for the quarter was $370 million, including $131 million in ELEVIDYS net product revenue and $239 million in PMO net product revenue. The pause in shipments to the ambulatory population, which resumed following the FDA's recommendation, created meaningful disruptions to patient access. Some infusion dates were canceled, requiring some families to reinitiate the logistical process: antibody testing, rescheduling appointments, and reconfirming insurance authorization. New patient identification efforts were also delayed as a result of physicians requiring clarification on the reasons for the voluntary pause. Despite these challenges, our teams responded swiftly and decisively, working closely with sites and families to ensure continuity of care.

Importantly, demand for ELEVIDYS proved resilient amongst those patients that had scheduled infusions, with some infusions resuming within a week of lifting the pause on ambulatory shipments. We also continue to engage our key stakeholders, including payers. We've had productive discussions with payers since the pause and have not seen unfavorable shifts in coverage for ELEVIDYS. In the ambulatory population, approximately 220 million lives have a path to coverage. We continue to fight for our patients, and to date, we're not aware of a single permanent denial for coverage. Our PMO franchise delivered strong demand based on performance this quarter. Performance also benefited from additional shipping days in the Q3 calendar compared to the upcoming fourth quarter. Now, turning to the ESSENCE study, we look forward to connecting with physicians, patients, and payers to share the data at upcoming congresses and through additional compliant channels.

We believe the totality of the evidence demonstrating the value of our PMOs will be viewed by HCPs and families as proof of an innovative treatment option that can have an impact on the trajectory of the disease. Our PMOs have generated a significant amount of real-world evidence supporting the efficacy of these products. The real-world evidence, coupled with the dataset from ESSENCE, only solidifies our view about the importance of these treatment options for patients living with Duchenne. As evidenced by our Q3 performance, we have successfully restarted shipping for ambulatory patients, and we have begun to see new ELEVIDYS enrollment forms submitted. However, the disruptions in the market this year, combined with the typical seasonal dynamics in Q4, will temporarily impact demand generation and the influx of new enrollment forms.

Due to the resulting delays, we expect the Q4 infusion volumes to be flat to slightly down from Q3. Despite these near-term dynamics, we remain confident in the long-term opportunity for ELEVIDYS and are comfortable reiterating our guidance that the ambulant population alone represents an annual revenue opportunity with a $500 million floor. Our conviction is based on the wealth of data demonstrating the benefits of ELEVIDYS. Further, based on our ongoing dialogue with providers, we do not anticipate the inclusion of the box warning in the final label to have a significant impact on prescribing behaviors, and our field teams are fully equipped to support informed conversations with all stakeholders. The data continues to reinforce this long-term view. We are energized by the reception to our data presentations at this year's World Muscle Society.

In particular, the three-year functional outcomes data for Elevidys has resonated strongly with healthcare providers, reinforcing the durability of benefit and the therapy's potential to slow disease progression. Now, to remind everyone, we have now treated greater than 1,100 patients with Elevidys in both the clinical and commercial setting, providing patients with an effective therapy that is designed to impact the trajectory of their disease. Taken together, these results underscore the strength of our portfolio and the resilience of our commercial execution. This team has led an incredible launch through undoubtedly turbulent times, and I have the conviction that this team will continue to deliver results. We remain deeply committed to supporting patients and families, and we are confident in our ability to navigate the near-term dynamics while advancing our mission to transform the lives of those living with this devastating disease.

As I continue to meet with HCPs and hear family stories, I am moved by how our therapies are having a positive impact on the lives of patients living with Duchenne. I'll now turn the call over to Ryan Wong to discuss financial results. Ryan.

Speaker 8

Thank you, Patrick, and good afternoon, everyone. This afternoon's press release provided details for the third quarter of 2025 on a GAAP basis as well as a non-GAAP basis. Please refer to the press release available on Sarepta's website for a full reconciliation of GAAP to non-GAAP financial results. Next slide, please. I'd like to start my remarks today by thanking the Sarepta team for their commitment and diligence as we executed well against the revised strategy and refocused pipeline that we announced in July. Importantly, we took proactive steps in the third quarter to enhance our near-term liquidity and to improve our balance sheet and debt profile. We monetized strategic investments, completed a debt exchange, which reduced maturities due in 2027 from $1.15 billion to $450 million, and significantly reduced our go-forward cost structure. In Q3, we were cash flow positive.

Cash and investments increased from $850 million to $865 million, and from the strengthened financial foundation, we will continue to advance our pipeline and strategy. I will now touch on the key highlights from our third quarter financial results. Next slide, please. Total revenues were $399 million in the quarter, which consisted of $370 million in net product revenues and $29 million of collaboration and other revenues, which relates to contract manufacturing and royalty income from our partnership with Roche. Q3 cost of sales totaled $151 million, up from $92 million in the same quarter prior year. The increase reflects higher Elevidys cost of goods due to depletion of previously expensed inventory and increased filled batch costs. Additionally, we recorded $22 million in charges for write-offs of deposits tied to certain Elevidys manufacturing suites and take-or-pay shortfall payments.

Following the pause in shipping to the non-ambulatory population, we acted quickly with our strategic manufacturing partner to align Elevidys production with near-term demand. As a result, we have deferred manufacturing commitments and payments from the first half of 2026 to 2027 while maintaining what we expect to be sufficient inventory to meet global demand. Moving on to expenses, let me start with the restructuring charge reported in Q3. Following our July business and strategy update, which included a reduction in force and reprioritization of our pipeline, we incurred $41 million in restructuring costs, of which $35 million related to severance and other one-time termination benefits, and the remainder related to the accelerated depreciation of certain impacted assets. Moving next to R&D. In the third quarter, GAAP R&D expenses were $219 million and non-GAAP R&D expenses were $207 million, both essentially flat to prior year.

Nearly half of our reported R&D expense relates to the $100 million milestone paid to Arrowhead for meeting certain enrollment and safety thresholds in our SRP-5051 DM-1 program. Turning to SG&A, we reported $92 million and $77 million on a GAAP and non-GAAP basis, respectively, representing a year-over-year decrease of 28% and 23%, respectively. These decreases were driven by lower compensation expenses as well as lower commercial spend following our cost restructuring efforts. Looking ahead to the remainder of the year, we expect combined non-GAAP R&D and SG&A expenses of approximately $420 million-$430 million in the fourth quarter. This includes $200 million paid to Arrowhead for the second DM-1 milestone, which we anticipate recording in Q4 with payment due in the first quarter of 2026. For the full year, our guidance for combined non-GAAP R&D and SG&A expenses is approximately $1.86 billion.

Excluding the Arrowhead transaction costs and DM-1 milestones, together totaling $884 million, our underlying expense guidance is roughly $976 million. Recall, our 2025 guidance prior to our July business and strategy update was between $1.2 billion and $1.3 billion, which means we have reduced planned expenses by nearly $300 million from the midpoint. This reflects our commitment to disciplined capital allocation, and we remain on track to meet our restructuring targets into next year. Lastly, in Q3, we reported an operating loss of $103 million and $36 million on a GAAP and a non-GAAP basis, respectively. Adjusting for the $41 million restructuring charge and the $100 million DM-1 milestone, our underlying business would have reported a GAAP and non-GAAP operating profit of $37 million and $64 million, respectively.

Additionally, adjusting for the $584 million Arrowhead upfront transaction cost, our underlying business has delivered a robust year-to-date GAAP and non-GAAP operating profit of $436 million and $561 million, respectively. In closing, with our financial performance and the actions we took in the quarter to strengthen our financial foundation, we believe we are well-positioned to execute our strategy and meet our financial obligations even under revenue stress test scenarios. Looking ahead, our capital allocation priorities remain focused on investments that drive demand for on-market therapies and advance our S&IA platform for its potential near-term value inflection points. Now I'll turn the call back to Doug for closing remarks. Doug.

Speaker 5

Thank you, Ryan. Let's open the call for questions, and then I'll make some closing remarks.

Speaker 6

Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourselves to one question to allow everyone an opportunity to ask a question. We'll go first to Anupam Rama at JPMorgan.

Speaker 3

Hey, guys. Thanks so much for taking the question. I had a just quick question on ESSENCE. You guys talked a lot about some of the additional analyses and the COVID impact here. What other endpoints should we be looking for in a publication and/or medical conference presentation, FDA package, that you think that would be supportive of some of the data that you presented here today? Thanks so much.

Speaker 5

Yeah, thank you for that question. I'll turn this to Louise.

Speaker 7

Yeah, thanks for that question. First, we'll be looking at the totality of evidence. Essence will be one part of that, but as we mentioned, the real-world evidence data is significant over many, many years and showing a benefit. In terms of Essence, this is the top line. We have other secondary endpoints that include functional endpoints and also biological endpoints like expression, which are not complete yet. All of that will be in the final CSR, will be presented to the agency, and then that will be presented in a medical meeting. As I mentioned in my remarks, the primary and secondaries favored the PMOs. In terms of COVID, we saw the similar result that we saw with the primary, in which case you saw improvement with those endpoints when you looked at the COVID-free population.

Speaker 6

We'll go next to Jian Wang at Barclays.

Speaker 4

Thank you for taking my questions. Maybe I would just follow up regarding the COVID-free population. When we look at the p-value, it is still relatively high. It's a 0.09. How do you think the FDA will look at the data sets here? What could be the potential outcome with the FDA decision? One could be for approval. Should we also be worried about the drug could be pulled off the market as a potential worst-case scenario?

Speaker 5

Thank you for the question, Gena. I'll make a couple of comments, and then I'll turn it to Louise. First of all, 0.09, I know that the standard is typically 0.05. Interestingly enough, FDA leadership very recently noted with respect to rare diseases that 0.05 is relatively arbitrary and actually cited 0.09 as being potentially acceptable p-value, which says that 91% of the time you're seeing a drug effect. Particularly for rare disease. I would also note that one of the reasons that we're seeing a p-value of 0.09, and we're not seeing a p-value closer to or better than 0.05, is that while 168 patients are included in the analysis here, 57 patients were excluded because their results were affected by the pandemic. Of course, that lowers the powering of this study substantially.

I think in light of the fact that we had to significantly lower the powering of the study to look at 168 versus the additional 57 we would have otherwise seen, I think 0.09 is pretty darn impressive. The effect, of course, not just the statistical significance of 0.09, but the effect is really important as we were showing a reduction in decline of 30%, which over the long run will be very, very important to these families. One of the nice things about having these therapies commercially available for so long is that we get to see what happens over the long term, as you saw with respect to just one example of many. Vyondys. You look at that for six years, and these kids are seeing literally almost three years of delay in being in a wheelchair, and the time to ventilation is significantly different.

I think the outcomes are couple-fold when we talk to the FDA. I really do not believe that there's a risk of losing marketing authorization. It would make very little sense given both the benefits we've seen with this therapy and considering this extraordinarily beneficial safety profile that we've seen over many years. When considering the standard that the FDA was very specific with us about as they approved Vyondys in particular, and they were talking to ESSENCE, and they said, "The standard is you will commit to voluntarily withdrawing marketing authorization, but only in a scenario where no relevant analyses would confirm a clinical benefit." Of course, we don't have that between the real-world evidence and the evidence we see here. I don't really think that is in the cards in a rational world.

The real question is, can we transition this therapy from an accelerated approval to a traditional approval? We certainly think we have a good argument around that. We've been spending an enormous amount of time gathering data that supports this, and we think it would be the most efficient approach. That will require discussions with the agency, and I can't make a prediction on that in advance of having good, solid discussions and review of data with the agency. Now, I said, Louise, I'm going to turn it over to you, and I will do that, but I did go on a bit of a monologue there.

Speaker 7

Yeah, I think you covered it well in there. Thank you.

Speaker 6

We'll go next to Tazeen Ahmad at Bank of America.

Speaker 9

Hi, guys. Good evening. Thanks for taking my question. Mine's on the upcoming Arrowhead data. I wanted to get a sense of what level of data to expect from these early programs that you're looking at. Importantly, these indications, DM-1, FSHD, etc., are ones that other companies are pursuing. Can you give us a sense of what level of data to expect so that we can potentially start to compare and contrast with the other programs that are ahead of you in development? Thanks.

Speaker 5

Yeah, I'll turn this to Louise.

Speaker 7

Sure. Of course, we'll be sharing data with the single ascending dose study, and we'll be looking at safety, and then we'll also have safety data for the multiple ascending dose by that time. We'll have PK data, that's serum PK, muscle PK. As I mentioned in my remarks, we are working to validate and transfer the PD assays. That is knockdown for DM-1 and looking at splicing. For FSHD, we're obviously looking at downstream FSHD genes. These are assays that we want to validate and have through our pivotal studies. We're working hard to make sure that these are in a good place so that when we present our PD data, it can be carried through throughout our studies. We're excited to see this result and present it to you early next year.

Speaker 6

We'll move next to Brian Abrahams at RBC Capital Markets.

Speaker 0

Hi, this is Kevin on for Brian. Thank you for taking our questions. So we just had a couple on the proposed serolimus study. Maybe can you just provide a little bit more color on any key sort of trial design features left to discuss there with the agency, how confident you are in the protocol that you've previously presented? I wonder if anything could be tweaked there, and would you still anticipate a potential readout in the first half of next year for that study? Thank you very much.

Speaker 5

Sure. Louise.

Speaker 7

Sure. I think in a general sense, the protocol design will be similar to what we've presented. We haven't finalized it with the agency, but in general, in terms of the numbers of patients and the protocol for serolimus, that hasn't changed. It's been minor back and forth on the protocol itself. As soon as we get that study started, we are ready to enroll quickly. Patients are lined up. By, as you mentioned, the first half of next year, we'll start to have data on the effectiveness, and then in the second half of the year is when we'll have the full data set for the trial based on starting the trial soon. We're hoping to get that initiated in the near term.

Speaker 6

Our next question comes from Joe Schwartz at Leerink Partners.

Speaker 5

Great. Thanks very much. Previously, I think you mentioned that there were around 75 infusion centers around the U.S. that were up and running, although to different degrees. I was wondering how many are active once again after the pause, and how much variance is there across these centers in terms of the numbers of patients they're treating with Elevidys now? Patrick, you can take this one.

Speaker 3

Sure. When we look at the top sites, they've continued to treat. Now, those less experienced sites, during the pause, they wanted to understand really the information that caused us to pause. What we've seen now is the majority of those sites are also starting to submit enrollment forms as well.

Speaker 6

We'll go next to Andrew Tsai at Jefferies.

Speaker 2

Hey, thanks for taking my questions. Appreciate the update. Going back to the PMO franchise, can you remind us when the mission data is for Exondys 51 and how you would define success or failure in that study? Since I believe it is a dose response study, there is no placebo. Thank you.

Speaker 5

Yeah, thank you very much. That is a really interesting nuance. Louise, you are going to correct me. I believe the readout date for mission is 2026. To your very good point, mission is a post-marketing commitment that we have with respect to Exondys, but unlike ESSENCE and unlike Vyondys and Amondys, it is not a confirmatory study. There is no confirmatory study for Exondys, and that was purposeful. The FDA, in some of their memos, indicated that what they really wanted to see was not a confirmatory study, but rather a dose-ranging study. Essentially, it is dose-ranging between 30 mg per kg, 100 mg per kg, even up to 200 mg per kg. The result of that is really a dose. Is 30 mg per kg the optimal dose, or is 100 mg per kg the optimal dose?

That is the consequence of that study. It is not a confirmatory study. That will read out in 2026, and we will go from there.

Speaker 6

We'll take our next question from Salveen Richter at Goldman Sachs.

Speaker 1

Thanks for taking our question. This is Tommy Owen for Salveen. Just wondering about guidance, if there's anything that you can say on full year for Elevidys and about the stress tests that you've done in the past with the $900 million PMO, $500 million Elevidys. Separately, just on ESSENCE. In the context of recent events, we're just wondering if you're confident that the FDA won't move the goalpost here. Thank you.

Speaker 5

I'm sorry. What was the last question? Move the goalpost for?

Speaker 1

For Essence.

Speaker 5

For Alevitus.

Speaker 1

Thanks.

Speaker 5

Oh, yeah. I feel confident based on the fact that it was in writing. The standard that we were given was in writing. In fact, we had to commit back to them in writing that that would be the standard. It did not come from a reviewer. It came from, in the first instance, the head of the neuro division, and then it was cited by the supervisor for overneuro. I think this was a very well-established standard that we have. Plus, the fact is that these therapies have been on the market for a number of years. We have extraordinary real-world evidence on their use. As I think we mentioned before, this is one of the most onerous protocols for a therapy you could imagine for commercial therapy.

These young men and boys have to be infused on a weekly basis, and yet families, in recognition of the benefits they're seeing, have a compliance rate year over year over year that's greater than 90% commercially. The safety profile for these therapies is just exceptional, I think would be the fair way to say it. I don't imagine that there'd be any reason why the division would want to change its standard. It would seem to be unnecessary. As for at least the guidance, we're not in a place to give broad guidance right now, but we feel on the stress test concept, we continue to feel comfortable on that stress test we talked about. That is not our guidance for next year. We're going to come together on that. I'm looking at Patrick when I say that.

We certainly feel very comfortable about that kind of baseline concept of $500 million for Elevidys. Anything else you want to say about that for the rest of the year, Patrick?

Speaker 3

Nothing new to add. Thank you.

Speaker 6

We'll go next to Gil Blum at Needham & Company.

Speaker 2

Good afternoon. Thanks for taking our question. When should we expect to receive data from expression data from patients receiving prophylactic sirolimus? Would any be provided from the ISD that was conducted separately? Thank you.

Speaker 5

Louise.

Speaker 7

The expression data, assuming the study started soon, would be late next year, just in terms of obtaining the biopsies and analyzing them. In the study that Dr. Soslow conducted, the biopsies were not part of that. I think that is something that he's looking at, but that was not part of the original study design.

Speaker 5

I think that is a very good question and a very interesting one. The primary reason that we're looking at the use of prophylactic sirolimus is the evidence we have preclinically and some of the early clinical data that it will greatly enhance the safety profile of this therapy, particularly for non-ambulatory patients. One of the things we've seen preclinical, we have not seen clinically yet because no one's taken, performed a biopsy yet. Preclinically, we've seen the opportunity to potentially greatly enhance expression, which in turn may significantly enhance benefit and durability and the like. We are very interested in seeing, in addition to the safety issue, which is without a doubt the primary reason for conducting this study, seeing some of that expression data as well. That'll be a next year event.

Speaker 6

Next, we'll go to Yanan Zhu at Wells Fargo.

Speaker 5

Great. Thanks for taking our questions. Just maybe a quick follow-up to a prior question. To what degree does FDA's reaction to ESSENCE spill over, for example, to EXONDYS 51? Is there a possibility that the decision or reaction, positive or negative, is there a mechanism for it to also apply to 51 because there's no formal 51 confirmatory studies? Also wanted to be curious, in your mind, what is the relevance of the precedent of NS Pharma, their confirmatory trial and that outcome, whether that has any implication to your situation? Thank you.

I think the only thing I'd say about NS Pharma, and we don't know a ton about the details other than I think it is certainly proof that this division is being rational and isn't being excessively punitive. For those who may not know, NS Pharma had a study for a PMO. That study did not hit stat sig. I think there were some reasons for that. I think the division's been quite thoughtful about that. That happened some time ago, and they certainly don't seem to be moving to do anything irrational. To your first question, the question is an interesting one. Do you think the outcome of ESSENCE has some read-through in some way to Exondys? The short answer is no. It doesn't, either positive or negative.

I don't think it gives us a great mechanism to immediately make Exondys traditional approval if we're able to get traditional approval for Vyondys and Amondys. Likewise, I don't think it has any other negative read-through to Exondys at all for the simple reason that ESSENCE is specifically for two therapies, Vyondys and Amondys, that were in that study, and Exondys doesn't have that kind of study. Again, Exondys was approved with a post-marketing commitment to look at dose ranging. We'll have an opportunity to talk about transitioning to a traditional approval with Exondys, but only after we've completed our post-marketing commitment to look at that dose-ranging study of the 3,100 and even up to 200. Then look at the benefits of that versus the downsides of extra dosing and the time that it takes to infuse.

We'll look at all of that, and that'll be its pathway to a traditional approval if things go well there. ESSENCE doesn't have a read-through there as far as we can see logically.

Speaker 6

We'll move next to Mike Oles at Morgan Stanley.

Speaker 5

Good afternoon. Thanks for taking the question. Maybe just to follow up on ESSENCE in terms of timelines here. When could you potentially meet with the FDA, and when would you expect to roughly have a final decision on that on the PMO franchise? Thanks. Louise, do you want to take that?

Speaker 7

Sure. So the meeting request will go in by the end of the year. The meeting will take place sometime in the first quarter based on that request. Later in the spring, the final CSR will be submitted. The outcome of the meeting with the agency will determine next steps. We'll update when we have something new to share, but the meeting will happen in the first quarter of the year.

Speaker 6

We'll go next to Brian Skorney at Baird.

Speaker 3

Hey, good afternoon. Thank you for taking the question. I guess the study's been running for 10 years now. The original design was six-minute walk. I don't think it was changed to this four-step ascend velocity until just under a year ago. Prior to that, it wasn't flagged as a key secondary endpoint. I guess with switching the endpoint a mistake, what does the six-minute walk data look like, and what was the rationale last year for changing the analysis?

Speaker 5

Louise, do you want to take this?

Speaker 7

Sure. Yeah. So. We evaluated the endpoints following our Elevidys EMBARK data. And so we did an analysis of endpoints and engaged external KOLs to help us do that. Moving to an endpoint that was perhaps more sensitive in this. And based on the data. Picking the four-step climb versus the six-minute walk test was the right decision in terms of it was determined to be the most sensitive endpoint in our hierarchy. I think the additional analyses we did from both a COVID perspective and a prognostic scoring method also showed that when you applied those thresholds, we see that the. In terms of COVID, we see almost reached significance. Then when we did it with prognostic scoring method, we did see that we reached significance. So it was certainly the right endpoint for the study.

Speaker 6

We'll go next to Ritu Baral at TD Cowen.

Speaker 4

Good afternoon, guys. Thanks for taking the question. I wanted to dig in a little further on the dynamics that will drive the down quarter next quarter. Can you elaborate on, I guess, the changes in shipment? I mean, is this sort of a lag on the delay that the disruption or the shipping disruption caused, or is it something more fundamental? And sort of wrapped in all of this is how is safety monitoring around ALIs changing for the ambulatory patients? Are you finding that clinicians are sort of adopting these new monitoring suggestions that were detailed in World Muscle for ambulatory patients, and is that slowing things down? Thanks.

Speaker 5

Yeah. I'm going to turn this over to Patrick. I mean, let me say in the broadest of strokes, too, it is the downstream tail that occurs when you have this massive disruption. I know people were a bit surprised that we were resistant to this temporary pause. You can see the impact. We had a temporary pause for a very short period of time, but that really creates a significant downstream disruption. We've said many times the process to go from start form to infusion can be four to six months. There is just a resonating impact when you have a complete pause, and then you have to restart everything. Patrick, you can provide more nuance than I can on this.

Speaker 3

Absolutely. I'll add, in addition to what Doug just shared, we have really three dynamics this quarter. One, the medical conferences to where many of our HCPs are out of their offices for many days, weeks at a time. We've got also the major holidays that are going to impact infusions. The third is the inevitable illnesses that can pop up this time of the year. All that comes together, and it's what we've seen last year as well, could impact this quarter's infusions. That's why we're projecting this quarter to be flat to possibly down in the fourth quarter.

Speaker 6

We'll go next to Gena Wang at Deutsche Bank.

Speaker 3

Hi. Thanks for taking my question. I guess maybe following up on some of the Elevidys dynamics that were already asked about, are you at a place where you can kind of provide a little bit of color on when you think Elevidys demand would be normalized and we might see an inflection in revenues? As you think about some of the other competitor gene therapy products out there, one of which I think is seeking accelerated approval sometime next year, does that factor into kind of how you think about how Elevidys demand may play out? Thanks.

Speaker 5

I'm not going to comment on or editorialize on other people's claims with their drugs. As it relates to commercial performance, Patrick, perhaps you want to provide some commentary on that?

Speaker 3

Yeah. The early view is that based on our commercial execution and the trends that we're seeing, it does support that floor that we talked about. As we get further into this quarter, we'll also see additional demands and additional enrollment forms come in, and we'll be able to give an update at a later time, more likely the JP Morgan time frame.

Speaker 6

Next, we'll go to Mitchell Kapoor at H.C. Wainwright.

Speaker 7

Hi. Thanks for taking our questions. This is Jade on for Mitchell. You stated today that the majority of previous Elevidys cancellations were reordered, but can you provide the actual hard numbers on the infusion postponements versus the number of cancellations you've gotten? Do you have an actual number of start forms that have been filed for this third quarter?

Speaker 5

Yeah. We're going to use revenue as our metric, so we're not going to provide that level of detail. If you have anything to say, Patrick, about the canceled doses, you can certainly touch on that.

Speaker 3

Yeah. During the pause, we had 14 cancellations, and we have seen 11 of those patients reschedule and were redosed within the August time frame. The remainder are still working through the system.

Speaker 6

Next, we'll go to Biren Amin at Piper Sandler.

Speaker 5

Yeah. Hi, guys. Thanks for taking my questions. I had a question on ESSENCE. If some patients miss doses due to COVID, then you should expect dystrophin production on Western blot and % of dystrophin-positive fibers to also be impacted between COVID and non-COVID patients. However, there was an analysis that I think the company presented interim data on at the World Muscle meeting in October 2022 at week 48. That analysis showed no impact for 43 patients that were randomized to either Amondys or placebo on exon skip and dystrophin production, dystrophin-positive fibers, dystrophin intensity. Each of these endpoints were p-value stat SIG. I just want to kind of understand how do you correlate that interim Amondys data on these biomarkers to the final functional data where you did see a COVID impact? Thanks. Louise, do you want to comment on that?

Speaker 7

Yeah. A couple of points on that. Once we have all of the final data, we can certainly do a sensitivity analysis to look at this. I think one thing to remember is that the patients did not have—there is not a single patient that had biopsies at each time point, so it is difficult to track. All patients had baseline biopsies, and then a subset had them at 48 and another at 96. Once we have all of the data, we can go back and look for sensitivity to see if there was an impact on dystrophin expression. It is complicated by the fact that not every patient had sequential biopsies in the study in terms of 48 and 96 weeks. They were separate patients.

Speaker 6

We'll go next to Gavin Clark Gardner at Evercore.

Speaker 9

Hey, guys. I just wanted to follow up on the Elevidys trajectory question. Acknowledging there could be a four- to six-month lag, as you noted, have you seen a pickup in start forms over the last one to two months that gives you confidence there will be a notable revenue pickup in 2026?

Speaker 5

Patrick?

Speaker 3

We're starting to see sites identify patients and send in their enrollment form. Every patient has a very distinct journey that they have to go through. It is the antibody screening and the testing and their pre-screening before they even start the authorization process. The early trends are supporting the positive outlook. As we get more data, we'll share at a later time.

Speaker 6

Our next question is from Michael Gomovitz at Citi.

Speaker 0

Hi. This is Juwon Kim on for you as well. Thanks for taking our question. Maybe just two quick ones from us. Regarding Elevidys, can you speak on what you're currently seeing for scar-reduced thrombus prophylactically for ambulatory patients? For non-ambulatory patients, can you remind us of the latest thinking around balancing the potential higher risk of infection for these thrombus? If there was any discussion amongst KOLs or the FDA to not utilize thrombus prophylactically in all non-ambulatory patients given this risk? Thank you.

Speaker 5

All right. With respect to the latter question on the non-GAAP, that'll be the outcome of our study. We feel pretty confident going into it that the risk-benefit is going to justify the prophylactic use of scar elements. We will only know that when the study reaches out, and we will look at those issues versus potential issues associated with risk of infection. I will say that to your first question, we do not have a systematic look at what physicians might be using prophylactic scar elements. We definitely have anecdotal evidence that a significant number of more sophisticated physicians have used it. What we are hearing, at least anecdotally, is that they are not having a lot of problems with the use of scar elements prophylactically.

What we have at least heard anecdotally is that some are using it, and they are finding it very manageable and can benefit from it. This all has to be confirmed. We have a study that we are going to start when we get the go-ahead with the FDA, which hopefully, again, will be very soon. We will be awesome, and we will get the data back, and we will get to review it. If we are confident that it is going to change the risk-benefit, we certainly have a lot of conviction that it could, then we are going to talk to the FDA and start testing on ambulatory patients again.

Speaker 6

We'll go next to Sammy Corwin at William Blair.

Speaker 5

Good afternoon. Thanks for taking my questions. Given the turnover at FDA, I understand that you had written guidance previously from the head of neuro, but I guess when was the last time you interacted with a division regarding the ESSENCE trial? Just curious on the % of patients that missed consecutive doses in the ESSENCE trial that were in the non-COVID group. Thank you.

Great. As it relates to that second issue on the consecutive doses, I think it more than doubled or around doubled in the COVID period versus the COVID-3 period. We have not had any specific discussions other than administrative-related discussions with the agency regarding ESSENCE over the last bit of time, certainly not in the last six months, I do not believe, unless Louise corrects me. Again, I think we are working with the—I know you have seen the editorial on it, that you saw this sort of turmoil at the FDA leadership level recently over the last few days. I think at the division level, that is where this decision is going to be made. I am confident that the professionals in the division are going to take a careful look at this. I think we are going to be in good shape with respect to marketing authorization.

I am hopeful that we will actually be in good shape when we talk to them about transitioning from accelerated approval to traditional approval.

Speaker 6

Next, we'll go to Kristen Kloska at Cantor Fitzgerald.

Speaker 0

Hi. This is Rick Miller on for Kristen. Thanks for taking our questions. Just one here to follow up on the mission trial you said could read out next year for Exondys. Do you have any insight on how the FDA might look at any of these dose-ranging data you could generate there? Would you plan to meet with the agency after that trial and just any insight you can give on what that conversation might look like?

Speaker 5

Yeah. I think it's going to look at the totality of the evidence from that study and just ask the question, "Is there a benefit to these patients by increasing the dose, perhaps to 100 mg per kg versus the 30 mg per kg?" It's going to be a totality of that evidence about whether that occurs or not. On the one hand, there might be a benefit. We might see some benefit, either functional or expression. On the other hand, it has to rise to a certain bar because we are seeing a benefit from Exondys at 30 mg per kg. That already takes nearly an hour a week. If you start increasing the dose to 100, 200 is probably not actually viable for these patients. The amount of time that you're infusing these kids is enormous, and the imposition is extraordinary.

That's the whole thing we're going to look at. Then together decide. I mean, the good news is we're going to be completely aligned in our view of the agency and us. If 100 mg per kg was superior to 30 mg per kg for these kids, and the risk-benefit and the administrative issues justified it, we'd be fine doing that. We need to look at that data very carefully. Again, the mission is not a confirmatory study. The results of mission will either be we're going to be continuing to distribute Exondys at 30 mg per kg, or we're going to be distributing Exondys at some dose higher than 30 mg per kg. If it was higher, we'd be likely to be 100 mg per kg.

Speaker 6

Next, we will go to Andy Chen at Wolfe Research.

Speaker 5

Thank you for taking the question. This is Brendon on for Andy. Regarding your floor assumptions on Elevidys sales, to what degree are you factoring competitive pressures from emerging therapies? Thank you.

We've considered emerging therapies. Again, this is just a stress test. It's not our guidance. It's just this is a number that we would be very comfortable with being fine financial shape. We'd be able to make a revolver and pay our debts and advance all of our programs. We feel very comfortable about that as a floor.

Speaker 6

That concludes our Q&A session. I will now turn the conference back over to Doug for closing remarks.

Speaker 5

Thank you all very much for spending some time with us this evening. We all look forward to continuing to update you as we get through the rest of this year and we'll have some additional milestones. As we look forward into next year, we'll provide updated guidance next year, of course. We are really excited early next year to provide you an update on the actual clinical data from our SIRMA programs. That's enormously important to us. With that, have a lovely evening.

Speaker 6

This concludes today's conference call. Thank you for your participation. You may now disconnect.