Sarepta's Q3 2025: Contradictions Emerge on ESSENCE Study and FDA Interaction, Infusion Center Capacity, and Prophylactic Sirolimus Use

Date of Call: November 03, 2025

Financials Results

• Revenue: $399M total revenue; $370M net product revenue (ELEVIDYS $131M; PMOs $239M) and $29M collaboration/other revenue
• Operating Margin: Operating loss of $103M GAAP and $36M non-GAAP in Q3 2025

Guidance:

• Q4 non-GAAP R&D + SG&A expected ~$420M to $430M.
• Full-year combined non-GAAP R&D + SG&A guidance ~$1.86B.
• Underlying expense guidance excluding Arrowhead costs and DM1 milestones ~ $976M.
• Expect Q4 infusion volumes flat to slightly down vs Q3 due to restart/seasonal dynamics.
• Ambulatory ELEVIDYS population represents an annual revenue floor of ~$500M (stress-test, not formal guidance).
• Meeting request with FDA on ESSENCE planned by year-end; meeting expected in Q1.

Business Commentary:

• PMO Franchise Performance:
• Sarepta's PMO franchise delivered strong demand, with PMO net product revenue of $239 million in Q3.
• This performance was despite disruptions due to the temporary pause in ELEVIDYS shipments to ambulatory patients.

• The demand was resilient, with many infusions resuming soon after the lifting of the pause.

• ESSENCE Trial and COVID Impact:

• The ESSENCE trial, a double-blind placebo-controlled study, did not reach statistical significance on its primary endpoint, the 4-step Ascend at 96 weeks.
• However, a post-hoc analysis of participants not impacted by COVID showed a least square mean difference of 0.11 steps per second with a p-value of 0.09.
• The COVID period, which fell in the middle of the study, led to twice as many consecutively missed doses and compressed clinical evaluation schedules, affecting study results.

• ELEVIDYS Label and Market Dynamics:
• ELEVIDYS net product revenue was $131 million in Q3, with a notable impact from the voluntary shipping pause to non-ambulatory patients.
• The company expects the ELEVIDYS label process with FDA to be completed soon, which will remove non-ambulatory patients from the indication and usage section of the prescribing information.

• The company is also exploring a trial for the prophylactic treatment of sirolimus for non-ambulatory patients to mitigate the risk of liver function abnormalities.

• Financial and Strategic Actions:

• Sarepta reported total revenues of $399 million for Q3, with cash and investments increasing from $850 million to $865 million.
• The company monetized strategic investments, completed a debt exchange, and reduced maturities to strengthen its financial foundation.
• Actions were taken to align resources with strategic focus and advance the siRNA platform towards potential near-term value inflection points.

Sentiment Analysis:

Overall Tone: Neutral

• Management highlighted solid Q3 product revenue ($370M) and improved liquidity (cash up $15M), while ESSENCE missed statistical significance on the primary endpoint but showed favorable trends and supporting RWE; CEO and R&D stated they will meet FDA to seek transition to traditional approval and reaffirmed confidence in portfolio and pipeline execution.

Q&A:

• Question from Anupam Rama (JPMorgan Chase & Co): What other endpoints should we expect in publications/agency packages beyond the primary ESSENCE results?
  Response: Management: final CSR and submissions will include secondary functional endpoints and biological endpoints (expression/biopsy data) plus extensive real‑world evidence to support sNDA filings.

• Question from Huidong Wang (Barclays): How will FDA view the COVID‑impacted analyses (p=0.09) and could the drugs be pulled from market or achieve full approval?
  Response: Management: confident FDA will not pull authorization; view the p=0.09 COVID‑free result and supportive RWE as a strong argument to meet and seek transition from accelerated to traditional approval, but final outcome requires agency discussion.

• Question from Tazeen Ahmad (BofA Securities): What level of data to expect from the Arrowhead (siRNA) programs for comparability with peers?
  Response: Management: expect SAD and early MAD safety/PK data plus muscle and serum PK and validated PD assays (knockdown/splicing/FSHD gene) — initial results anticipated in Q1 2026.

• Question from Kevin Meli (RBC Capital Markets): Any outstanding design issues for the prophylactic sirolimus study and timing for readouts?
  Response: Management: protocol largely as presented, minor agency refinements pending, ready to enroll quickly; initial effectiveness data expected H1 2026 and full dataset H2 2026 if started soon.

• Question from Joseph Schwartz (Leerink Partners): How many infusion centers are active post‑pause and variability across centers?
  Response: Management: top/experienced sites continued treating throughout; majority of less‑experienced sites are restarting and beginning to submit enrollment forms.

• Question from Lin Tsai (Jefferies): Timing and success definition for the MISSION EXONDYS 51 dose‑ranging study?
  Response: Management: MISSION readout in 2026; it's a dose‑ranging (30 vs 100 mg/kg, up to 200 mg/kg explored) post‑marketing study—success is identifying an optimal dose balancing incremental benefit versus infusion burden.

• Question from Tommie Reerink (Goldman Sachs): Any updated guidance or changes to the FDA standard for ESSENCE (move the goalpost)?
  Response: Management: no broad financial guidance now; reiterated $500M ambulatory floor stress‑test; confident FDA standard (documented at time of prior approvals) will be upheld and not arbitrarily changed.

• Question from Gil Blum (Needham & Company): When will expression (biopsy) data from prophylactic sirolimus studies be available and were biopsies in the Dr. Soslow ISD?
  Response: Management: if study starts soon, biopsy/expression data would be expected late next year; Dr. Soslow's initial ISD did not include biopsies.

• Question from Yanan Zhu (Wells Fargo): Could FDA's reaction to ESSENCE affect EXONDYS 51 or is there precedent (NS Pharma) that matters?
  Response: Management: ESSENCE outcomes do not automatically read through to EXONDYS (different post‑marketing commitments); NS Pharma precedent shows the division evaluates PMO data thoughtfully but each program is considered on its own totality of evidence.

• Question from Unknown Analyst (H.C. Wainwright): How many ELEVIDYS infusion cancellations vs postponements and number of start forms filed in Q3?
  Response: Management: using revenue as primary metric, but disclosed 14 cancellations during the pause with 11 rescheduled/redosed in August; company will not provide detailed start‑form counts.

Contradiction Point 1

ESSENCE Study Interpretation and FDA Interaction

It involves differing interpretations of the ESSENCE study results and interactions with the FDA, which are crucial for the company's regulatory strategy and future product approval.

好的，我现在需要处理用户的请求。用户是一位专业的金融文章作者，他们的任务是将美股上市公司财报电话会议中的冗长问题简化为简洁、精准的英文问题，同时保持原意，并符合美式英语习惯。用户特别强调输出要仅包含简化后的问题，且以问号结尾。首先，我需要仔细阅读用户提供的原始问题：“How do you think the FDA will look at the data sets here? Should we also be worried about the drug could be pulled off the market as a potential worst-case scenario?” 这个问题有两个部分，第一部分是询问FDA如何处理数据集，第二部分是担心药物被撤市的最坏情况。接下来，我需要分析如何简化这两个问题。第一部分中的“How do you think the FDA will look at the data sets here?”可以简化为“How will the FDA evaluate the data sets?” 这里，“look at”可以替换为更专业的“evaluate”，更符合金融或药审的语境，同时保持原意。另外，“here”可能指当前情况，但可能冗余，可以省略。第二部分的问题：“Should we also be worried about the drug could be pulled off the market as a potential worst-case scenario?” 这里的结构有些问题，因为“could be pulled off”应该用“being pulled off”或者“could be pulled off”。但用户可能想表达的是药物被撤市的可能性。可以简化为“Is there a risk the drug could be removed from the market in the worst-case scenario?” 这里将“worried about”改为“risk”，更直接，同时“as a potential worst-case scenario”调整为“in the worst-case scenario”，更简洁。然后需要检查是否符合美式英语习惯，比如使用“removed”而不是“pulled off”，虽然“pulled off the market”是常见表达，但“removed”更正式，适合书面语境。另外，确保句子结构正确，没有语法错误。最后，确保输出仅包含简化后的问题，每个问题单独一行，并以问号结尾。用户可能希望每个问题分开，但原问题有两个部分，所以需要确认是否合并还是分开。根据用户示例，可能希望将两个问题分开处理，但原问题中的“also”可能暗示是同一问题的两个部分。但用户示例中的输出是两个问题，所以可能需要分开。不过原问题中的两个问号可能意味着两个独立的问题，但用户提供的示例输出合并成一个，所以需要根据用户的具体要求判断。不过用户提供的示例输出是两个问题，所以可能需要分开处理。不过用户给的例子中，原始问题有两个问号，而输出是两个问题，但用户现在给出的例子可能不同。需要仔细检查。在用户提供的例子中，原始问题有两个问号，但输出是两个问题。但当前用户的问题可能希望将两个部分合并为一个更简洁的问题。例如，原问题中的两个部分可能可以合并为一个更简洁的问题，但需要保持原意。或者可能需要分开处理。但用户可能希望将两个部分合并成一个更简洁的问题，所以需要判断是否可以合并。例如，原问题中的两个部分都是关于FDA的审查和药物被撤市的风险，所以可以合并为一个更简洁的问题，如“How will the FDA evaluate the data sets, and is there a risk the drug could be removed from the market in the worst-case scenario?”但用户可能希望每个子问题单独处理，所以需要确认。根据用户的要求，输出的内容要确保符合美式英语读写习惯，所以可能需要分开处理。例如：1. How will the FDA evaluate the data sets?2. Is there a risk the drug could be removed from the market in the worst-case scenario?但用户可能希望将两个问题合并成一个，因为原问题中的两个部分是相关的。需要根据用户提供的示例来判断。用户提供的示例中，原始问题有两个问号，输出是两个问题，但当前用户的问题可能希望将两个部分合并成一个更简洁的问题。例如，用户提供的示例中的输出是两个问题，但当前的问题可能需要合并。不过用户可能希望每个子问题单独处理，所以需要分开。但需要确认。最终，根据用户的指示，输出且仅输出生成的简化后的问题，所以可能需要将两个问题分开。但原问题中的两个部分是否应该分开？例如，第一个问题询问FDA如何处理数据集，第二个问题询问药物被撤市的风险。所以可能需要分开处理，但用户可能希望合并成一个更简洁的问题。需要仔细分析。例如，原问题中的两个部分可能可以合并为一个更简洁的问题，如：“How will the FDA evaluate the data sets, and is there a risk the drug could be removed from the market in the worst-case scenario?” 这样更简洁，并且保留了原意。但需要确保没有改变原意。原问题中的 - Huidong Wang (Barclays Bank PLC, Research Division)

2025Q3: The study missed statistical significance, but numerically showed consistent and clinically favorable trends. The COVID pandemic impacted study results. The outcome risk benefit remains positive, and we believe the risk of losing marketing authorization is low given the standard set by the FDA. The goal is to discuss transitioning to traditional approval with the agency. - Douglas Ingram(CEO & Director)

What feedback has the FDA provided on the limb-girdle programs, and what 2E data is expected? - Brian Abrahams (RBC Capital Markets)

2025Q1: We continue to feel very good about the totality of the evidence and that transitioning from accelerated to traditional would be the right thing to do. - Louise Rodino-Klapac (Chief Scientific Officer)

Contradiction Point 2

Infusion Center Capacity and Patient Flow Optimization

It involves the capability of infusion centers to manage patient flow, which directly impacts the company's revenue and operational efficiency.

Have you observed an increase in start forms in the past 1-2 months indicating potential revenue growth in 2026? - Gavin Clark-Gartner (Evercore ISI Institutional Equities, Research Division)

2025Q3: We're starting to see sites identify patients and send in their enrollment form. Positive trends support our outlook, and we'll provide more data as it becomes available. - Patrick Moss(Executive VP & Chief Commercial Officer)

How do you plan to direct patients to higher-capacity sites? Is the issue site capacity or staffing? - Ritu Baral (TD Cowen)

2025Q1: It's not a purely staffing or capacity issue. Top sites are often fully booked, and it's challenging to redirect start forms. Efforts focus on educating secondary sites on the therapy's benefits and expanding patient flow to these sites. - Doug Ingram (President and CEO)

Contradiction Point 3

FDA Interaction and ESSENCE Study Discussion

The company's response to questions about interactions with the FDA and discussions about the ESSENCE study seem to have changed, which could impact investor expectations and regulatory strategies.

Considering FDA staff changes, when was your last interaction with the FDA division regarding ESSENCE, and what percentage of non-COVID patients missed consecutive doses? - Samantha Corwin (William Blair & Company L.L.C., Research Division)

2025Q3: We haven't had specific discussions with the agency on ESSENCE for at least six months. - Douglas Ingram(CEO)

Can you provide an update on FDA feedback for the ESSENCE trial and the current timeline for results? - Shantanu Narayan (UBS Investment Bank)

2024Q4: We had a great meeting with the FDA, and they seem to be supportive of the endpoint. - Douglas Ingram(CEO)

Contradiction Point 4

Revenue Outlook and Patient Enrollment Resumption

The company's outlook on revenue and patient enrollment resumption seems to have evolved differently, which could influence financial expectations and market perception.

Have you seen an increase in start forms in the past month or two indicating a significant revenue increase in 2026? - Gavin Clark-Gartner (Evercore ISI Institutional Equities, Research Division)

2025Q3: We're starting to see sites identify patients and send in their enrollment form. Positive trends support our outlook. - Patrick Moss(Executive VP & Chief Commercial Officer)

How will recent site pauses due to COVID and potential resumption in three days impact your Q4 revenue outlook? - Yigal Nochomovitz (Citi)

2024Q4: We see significant opportunity in the coming quarters as we expect to see a resumption in net new infusions. - Douglas Ingram(CEO)

Contradiction Point 5

Prophylactic Use of Sirolimus

It involves the company's stance on the prophylactic use of sirolimus, which could have implications for patient safety and treatment protocols.

Are prescribers prescribing sirolimus prophylactically for ambulatory patients, and how do you balance infection risks in non-ambulatory patients? - Yigal Nochomovitz (Citi)

2025Q3: Prophylactic sirolimus use is up to individual physician discretion. We're studying it in non-ambulatory patients as we believe it can enhance safety, but we will confirm with upcoming data. - Douglas Ingram(CEO)

What is your view on using sirolimus prophylactically in non-ambulatory patients? - Gil Blum (Needham & Company)

2024Q3: We continue to recommend against prophylactic sirolimus use. We believe the risks outweigh the benefits. Importantly, we have presented that, and it is in our label. We're going to follow that. - Louise Rodino-Klapac(Head of R&D and Chief Scientific Officer)