Good morning, and welcome to Sarepta's Conference Call to discuss the Update on Strategic Restructure and ELEVIDYS Label. As a reminder, today's program is being recorded. At this time, I'll turn the call over to Doug Ingram, CEO. Please go ahead.

Thank you, Lisa. Let's move to Slide 3, please. So first, before I begin, please note that we will be making forward-looking statements today. As always, please refer to our various public filings for the risks and uncertainties that come when making predictions about the future. Next slide. Also, we will be discussing 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 Investors section of our website. Let's move to Slide 5, please. All right. With that, let me thank you all for joining Sarepta's call today for an important update on our strategic priorities. Over the course of 2025, Sarepta has been faced with various challenging unexpected and impactful events. Based with these events in such a short period of time, it would be easy and indeed it would be tempting to simply stay the course without making significant change, all in the hope that things will self-correct and be fine. But that complacency would be irresponsible. We are a mission-driven organization, focused on patients and failure to adapt to current circumstances would risk our long-term viability as an organization and decrease the opportunity to bring the greatest benefit to the greatest number of patients living with rare disease. So we have chosen not to be complacent, but to act. As you will hear today, we are restructuring and making very significant changes to our strategy to ensure that we remain a vibrant enduring patient-centric organization focused on bringing a better life to those with rare genetic disease. In its broadest strokes, our strategy is threefold. First, we will support our 4 approved therapies and the Duchenne patients that they serve. Our 3 PMOs and…

Thanks, Doug, and good afternoon, everyone. Building on Doug's message of decisive action, I want to reinforce Sarepta's commitment to remaining a vibrant enduring and patient-centric organization. Today, I'll walk you through the strategic and financial decisions we've made fundamentally informed by our dedication to addressing our 2027 financial obligations and maintaining access to our revolving credit facility. Our overall goal is clear: to position Sarepta for long-term sustainable growth, strengthen our financial foundation, prioritize high-impact innovation and ultimately deliver enduring value to both patients and shareholders. Next slide, please. Let's begin with a brief outlook at our preliminary second quarter results. We reported total net product revenue of $513 million, comprising of $282 million from ELEVIDYS and $231 million from our PMO franchise. Importantly, we ended the quarter with $850 million in cash and cash equivalents, an increase of $203 million over Q1. Our total combined R&D and SG&A expenses on a GAAP basis were $338 million, and on a non-GAAP basis, were $294 million. Next slide, please. Before detailing our cost structure changes, I want to emphasize that our Duchenne portfolio continued to deliver a stable and robust revenue stream, firmly supporting our long-term growth strategy. We are not providing specific revenue guidance at this time because we're unable to fully quantify the impact of the second ALF event and lack full visibility into the non-ambulant opportunity. That said, with the ambulant population for ELEVIDYS remaining on the market, we can provide a floor for the opportunity. At a minimum, we expect annual revenues of $500 million from the ambulant ELEVIDYS population. This floor is based on conservative assumptions regarding both the incident population and the prevalent ambulant population, reinforcing our commitment and confidence in this baseline revenue stream. Our PMO franchise continues to perform well with expected…

Thanks, Ian, and good afternoon, everyone. Next slide, please. I'd like to start with an update on ELEVIDYS labeling settlement. We will agree to include a black box warning for ALI/ALF, alongside additional changes to ensure the communication of important safety information to prescribers and patients. With these changes, we will be resolving any material issues with the ambulant portion of the ELEVIDYS label. Discussion with FDA on the supplement is ongoing, but there appear to be no substantial issues for the ambulant patients to remain on market. We have also convened an expert committee to discuss ALF and the potential of adding an additional immunosuppression regimen for the non-ambulant population. The committee consisted of hepatologists, pathologists, neuromuscular experts, hematologists and immunologists. We greatly appreciate the collaboration and their expert input. The committee aligned on the regimen with sirolimus. We are proposing to test this in a clinical trial setting in non-ambulatory patients as cohort 8 in our 103 study. We are also considering a number of submissions we've received to support investigator-initiated trials to study ambulant patients in the real-world setting. Next slide, please. The proposed study design for Study 103 cohort 8 is a 6-month study to evaluate the addition of sirolimus in non- ambulatory Duchenne patients. Sirolimus will be given pretreatment 14 days prior to infusion and continue for approximately 12 weeks. This is in addition to our standard protocol for steroids. The primary outcomes include incidence of acute liver injury and 9001-dystrophin expression. Following 6 months of follow-up, patients will be enrolled in our long-term extension study, Study 305. If we are clear to proceed by the FDA, this study will be the fastest path to generating data with sirolimus and will be in addition to the amendment of Study 303 or our ENVISION study. We…

Thank you very much, Louise. Lisa, let's open the call for Q&A.

[Operator Instructions] Our first question for today will come from Andrew Tsai of Jefferies.

My question is around the ELEVIDYS side. I mean, for you to agree with the FDA to include a black box warning for the ambulatory and then FDA to continue to be open to discussing the pathway for nonambulatory and then maybe based on your other FDA interactions so far, too, possibly with [indiscernible], is it fair to assume that the FDA at this juncture has no attention -- intention to pull ELEVIDYS from the market at this juncture even on the nonambulatory side? I just wanted to gauge your confidence about that.

Yes. I mean, first of all, as you note, the FDA recently requested of us that we include a black box safety warning and we frankly think that was imminently reasonable and we have agreed to that. So that is resolved. So on the general question about whether ELEVIDYS as a therapy will remain on the market? The answer is, I think, pretty clear, yes, there's no good reason to believe it wouldn't and frankly, it would be unreasonable to consider it otherwise. As it relates to the non-ambulant patient population, we have more work to do and more discussion to be had. Remember, we have proposed an immunosuppression regimen, and that's based on expert panel that we held with experts with deep knowledge and understanding of these areas. That just concluded. I don't believe we've even submitted that information yet, but we will before the end of this week, submit that information to the agency. Our plan and protocol is to use this sirolimus protocol as a prophylactic measure, our preclinical data justifies our conviction that this may very well significantly reduce signals of elevated liver enzymes and other liver biomarkers, which could greatly enhance this therapy and reduce risk. As you also know, we voluntarily not required by the one, but voluntarily chose in the ultimate interest of patients to pause shipments for dosing of nonambulatory patients. That was a very painful decision on our part because I think, as we all know, any of us who have worked with Duchenne muscular dystrophy, time is never on the side of patients with Duchenne muscular dystrophy and that is particularly true of nonambulatory patients. So we have a lot more work to do. We obviously don't even have a response yet from the FDA on this issue because we are just submitting it after having just concluded our expert panel but we certainly have a lot of conviction to get and gather the necessary data on this immunosuppression protocol to provide it to the FDA as fast as possible and work with the FDA to get back to shipping ELEVIDYS for nonambulatory patients. So more to come there. We have more work to do and more dialogue to be had with the FDA there.

And the next question is coming from the line of Ellie Merle of UBS.

Thanks for the update. Just to clarify, when you say that you expect a floor of $500 million for ELEVIDYS, do you mean for this year or the remainder of the year, just how should we think about the second half of the year in terms of sales? Specifically, I guess, can you elaborate on what you've seen in terms of dosing since the update in June in the ambulatory patients? How we should think about revenues for the second half? Any color on sort of how new start trends have been looking?

So a couple of thoughts on that. First, just to absolutely remind everyone, we're not providing updated guidance right now. We'll continue to monitor. And when we have more information, we can consider whether to guide that likely would be a 2026 event -- for full year 2026, but we'll look at that again at Q3 and make a decision about where we are. There's lots of uncertainty in all of this, given that we need to really assess the impact that's occurred from hesitancy associated with these events and the ability to get information out and fact-based information. And second of all, of course, we need to have a better understanding of when that day will come when we can begin to ship for these weighting nonambulatory patients. So when you think of this $500 million number, don't think of that as a guidance. It is not guidance. It is a stress test. One of the things we had to do when we thought about updating our strategic plan, cutting costs and really focusing our pipeline is to ensure that on the other side of that, we were a very financially strong and very viable organization. And one of the ways to do that is to take very conservative assumptions and use them as a stress test to determine even in the very conservative situation would we be profitable, cash flow positive, able to maintain our revolver, able to drive our programs and able to retire our 2027 debt. And the answer is at $500 million, we can do that. So I don't want to suggest I'm giving you any guidance on the rest of the year or that you should consider that $500 million is some sort of reasonable estimate of the rest of the year. It's really a downside stress test to ensure that we're in a good place. Now generally speaking, I can tell you that there -- as a result of these 2 events, there has been some hesitancy. You can see that people are still getting dosed. We had, I think, reasonable in light of where we are reasonable Q2 but we saw a significant hesitancy afterwards in a drop and as a result of that, we have work to do there. And Patrick -- Dr. Moss and his team are very well positioned to do that work along with our medical affairs organization and to start getting the right kinds of information out to patients. So they're properly armed as well as, of course, to physicians. So they're properly informed to have those discussions and that's what we're going to do over the course of this year. So apologies, we're not in a position to provide forward guidance at this point. We would love to be in a place to do that, but we need more information and more work needs to be done there.

And the next question will be coming from the line of Brian Abrahams of RBC.

I appreciate the updates and congrats to the team members who have increased responsibilities. I'm curious what you guys are looking for in the ENDEAVOR Cohort 8 to reestablish ELEVIDYS used to nonambulatory patients. Any sense of the timelines it will take to generate sufficient safety data to ensure that this immunosuppressive protocol is mitigating the risk? And I know you haven't specifically discussed this with the FDA yet, but just wondering, have you had any initial signals from them as to whether something like this could be sufficient or whether they would need functional data out of ENVISION?

Well, a couple of thoughts. First, on the answer of dialogue with the agency, we're not in a position to have that dialogue yet. We haven't even submitted the protocol yet and that will happen. Again, as I said, this week, I can't provide you with any clear timelines right now for a number of reasons. One, we're just submitting the protocol to the agency to get their blessing. We'll have to have some dialogue there. And number two, we'll have to think about the pace of enrollment and the like. What we're looking for in all of this is to look for signals of reductions in elevated liver enzymes and other biomarkers. We obviously can't look for this ALF because that is an unbelievably rare signal that would take years and years. But if you can significantly reduce even liver stress and liver injury through things like liver enzymes, bilirubin and the like, one would obviously pause it, you've done a significant -- you've reduced that risk very, very significantly. What it will look like is something will -- and the timing of all that, we'll talk about later, but you should remember that if you see elevated liver enzymes, you tend to see it fairly rapidly. This is an event that occurs really in the first 4, 6 maybe as long as 7 or 8 weeks, and that's it. So this should be a very efficient approach. And finally, while we haven't had discussions with the agency, there is no logical basis using any form of critical thinking to ENVISION that you would need functional data because this isn't about functional data. This is dealing with a very specific issue, which is with respect to older patients and we're using nonambulatory is kind of the marker for that. We have seen a very rare, but very unfortunate situation where we've seen out of more than 150 patients. We've seen 2 very serious acute liver failures, and the goal here is to reduce that risk. We have preclinical data that would strongly suggest that the prophylactic use of sirolimus in connection with the infusion of an AAV-mediated gene therapy. And in the case of our data, it was, of course, rh74 would very significantly reduce that risk. And so we're going to pause as painful as that is for patients. We're going to take a look at that, and we're going to get comfortable that this, in fact, significantly reduces that risk. And assuming that it does, we're going to -- with the blessing of the FDA begin to ship ELEVIDYS for the treatment of nonambulatory patients.

And our next question is coming from the line of Tazeen Ahmad of Bank of America.

This is Daniel on for Tazeen. We had a question on the siRNA platform. So you had mentioned you were planning to host an R&D Day later this year. Is that still the plan? And is that where we should expect to see the updates for FSHD and DM1? And maybe more broadly, given the reduction in OpEx you're expecting, how many programs do you think could move forward at the same time if you see positive data earlier this year?

Let me answer the latter question first. We are planning for success. Our plans for these development programs assume that we can move at speed with all of these programs. Now there -- we also have a bunch of research programs as well. And in the event that we are successful with all those research programs, we're going to have to find the budgets for them. I'd love to believe that we're going to have a significant problem with our research programs. But -- so we're fully funded with all of our research, and we're fully funded with our development programs. We are not going to pump the brakes on the pipeline. Our goal is to go as fast and as hard as possible to gather data. So the way we looked at this pipeline was not to slow things down, but rather to get focused. And we've had to make a lot of very painful choices and that it goes without saying that it was an extraordinarily painful decision for instance, to not proceed with these limb-girdle programs that we're not proceeding with them and instead to find, hopefully, if all goes well, partners for those programs that can advance them. So our goal is to really get narrow, really get focused, focus on really high-end PV, high-impact programs, dealing with disease- modifying therapies that are going to bring a better life to patients that have no disease-modifying therapies available to them today and to go as hard as possible on those. And that's the way we're funding this budget. We're not fiddling around or going at half pace with these programs are going to go as fast as possible. On the issue of data updates and R&D Day, I will turn the call over to Louise, who can provide an update.

We do not plan to hold the R&D Day, but we will plan to update you as soon as the data is available, which will be the second half of this year.

And the next question will come from the line of Gena Wang of Barclays.

Thanks for the update. I know there is still tough path down the road, but at least ELEVIDYS is still on the market. So regarding the Cohort-8, given it's only 25 patient study, so Doug, you just mentioned 2 patients out of 150, that translated to 1.33% death rate. So with 25 patients, like how can we learn from this outcome? Like what kind of data or what percentage of patients show what kind of ball market because 25 patients death will not be able to -- sufficient to show the death benefit or the survival benefit there, safety benefit there, but then what will be the data you'll be looking for so that you think it will satisfy FDA to put the nonambulatory patients back on the market?

Yes, it's a great question, Gena. Let me explain. Your point is very well taken. The signal for this ALF is extraordinarily small. If you take the entire population, it's a small fraction of a percent if you just limit it to the nonambulatory patients to your population, to your point, it's a little over 1%, which by the way, that's lower than really most other full-body infusion gene therapies. You would see a higher rate of fatal events and other ones. So your points are very well taken there, but that's not what we're going to be looking for. In fact, what we're going to be looking for is elevated liver biomarkers, liver enzymes and bilirubin and obviously, it goes without saying, if you can avoid even stressing significantly the liver or causing liver injury, then you have not only probably greatly reduced the risk of ALF. You probably just completely eliminated the risk that you would have an ALF if you don't even have liver injury. So that's what we're going to look for. And what you'll find with AAV-mediated gene therapies and certainly ELEVIDYS is no different than others, is that when you dose these full-body infusions you will see something in the range of 30% to 40% significant increased elevated liver enzymes. Most of the time, almost all of the time, in fact, until this year, 100% of the time, they didn't have any long-term impact. They responded very rapidly to modest increases in steroids. Now we've seen that there are ones that can go beyond that. But if you can knock those down, you can knock that 30% to 40% down to a much smaller percent, you clearly have increased the safety margin of the therapy, and that's what we're going to look for. And when you think about that and you consider you're going to see 30% or more typically than in 25 patients, you should have an ample data, at least our preclinical data, which would predict and rely on preclinical data only up to so much and then you need to see it in patients. But a preclinical model would predict that we will see a very significant reduction in elevated liver enzymes in 25 patients in -- give us a lot more comfort as we begin to dose and ship for dosing nonambulatory patients.

Our next question will be coming from the line of Mike Ulz of Morgan Stanley.

Maybe just a follow-up on ELEVIDYS. You mentioned some hesitancy there to prescribe post the second event. Just curious if maybe you can provide a little bit more color on the types of feedback you've gotten from physicians more recently?

Well, some of it is in direct feedback. It's just we see hesitancy in start forms. We saw some canceled appointments after the second event, and that obviously results in some hesitancy. And it is more of what we've talked about before, which is with a disparate patient population across the United States and different levels of information and sophistication and the same with the physicians, we've got these very sophisticated well understood -- very in the no physicians and then you've got a lot of other secondary referrers and the like that have less information and need more information. There's just hesitancy. And there was clearly some additional hesitancy. There's hesitancy after the first event, there was clearly an additional hesitancy after the second. You can still see through our performance that patients are still getting dosed and we're still doing generally well, but we need to do more work there and fully assessing that and understanding the needs of the physician community and getting the right kinds of information to the physician community and supporting the patient communities work really need to do over the course of this year. And hopefully that will all put us in a great position to begin to provide guidance for 2026 and beyond. But what we did, again, for purposes of this call and purpose of our strategy was to say, okay, you've got to have a target to look at -- to know what you're going to do, both from a focus perspective, a prioritization perspective, a cost-cutting perspective and the like. And what we did is take a very conservative view. So essentially, think of this as a sort of a theoretical stress test. I don't think of this as guidance. And we said even at $500 million, what would it take for us to be comfortable that we would meet our revolver, we could satisfy our 2027 obligations. We could drive these programs and that's where we got to. And how do we get the $500 million? We back into it just looking at the really conservative approach. We've got -- the incident population alone is about 420 patients a year, that would more than cover this, but we won't get all that every incident patients. So -- but we'll get a significant number of them. And of course, we're going to get the prevalent population. And one would assume that you could use $500 million very comfortably to act as a stress test, we did that, and that's how we got to our strategy. And that's why we -- as painful as it is, frankly, to lose programs that we really were committed to and also even more painfully to lose some colleagues of ours that really talented human beings that we're very committed, we feel very, very good about our strategy. We feel great about our forward performance as an organization, and we have a vibrant future and a very viable future with this strategic point.

And our next question will be coming from the line of Salveen Richter of Goldman Sachs.

This is Tommie on for Salveen. At this point, what are your updated thoughts behind the driver of this being only in nonambulatory patients so far? And why it could remain and not affect ambulatory? And wondering if the expert committee spoke about potential effects in the ambulatory patients or if you've had any FDA feedback to this end?

On the feedback, we haven't had feedback to that effect from the FDA. I'm going to turn this call over to Louise to comment. But broadly speaking, you should understand -- we've seen it in non-ambulant patients. It's really a continuum issue. The ambulatory status by itself is very likely not the issue. The real issue is just level of debilitation. And there may be other elements to this that explains why out of 950 or more patients, we've seen it in these 2 and none others. But Louise, you can touch on that more if you'd like.

Yes. You captured most of it. The ambulatory status is really just a surrogate for disease progression and the nonambulatory patients have more significant comorbidities. The expert committee -- I agree with that in terms of the severity of the disease being the likely factor in these patients as well.

And our next question will be coming from the line of Uy Ear of Mizuho.

Maybe just help us understand, in 2027, you have about more than $1 billion of debt that's due and based on your not guidance, but your lower threshold, it seems that you'll probably generate something about $300 million a year, like help us understand how you would sort of may repay that or find a way to be not in default of the debt? And just a housekeeping question, what proportion of the 2Q ELEVIDYS sales was in nonambulatory versus ambulatory?

On the last one, it looks like it's a small fraction of Q2. And then Ian, I'll turn it to you.

I'm sorry, can you repeat that?

Basically, what's the way to satisfy the 2027 obligations?

Yes. Obviously, we're not going to necessarily outline our exact pathway. I mean I think we spent a significant amount of time on the call showing our stress test that Doug has reiterated several times. And so we're going to look to be proactive as we manage it prior to the maturity.

And our next question will be coming from the line of Yanan Zhu of Wells Fargo Securities.

Just wondering, sorry, just to further clarify. For the $282 million in the second quarter, how much is nonambulatory? And also, I was wondering when you provide this stress test floor level of $500 million, I think you depicted it as through 2027. And I was wondering, so for this hesitancy and potential impact, when do you think is the labor level? Is it fairly near term? And you would have go back to growth for an ambulatory population? Or is it really it could go as far as 2027?

Well, again, we're not providing guidance. So obviously, we're much more aspirational than our stress tests are. And Patrick and his team have great plans and a lot of work to do to get the right information in front of the right folks. And at the same time, Louise and her team have some important work to do with the use of immunosuppression so we can support getting the nonambulatory patient population dose. So certainly, we have many goals there. And then on the first question, I don't have the exact number, but a minority of patients, it was under 50% of the patients would have been nonambulatory in this sector.

Yes. The reason why it's not 100% clear, historically, we did not track by ambulatory status. We track by age. So to Doug's point, the best we can back into is around 30% to 40%.

Our next question will be coming from the line of Biren Amin of Piper Sandler.

On the last call, I think the company mentioned that the FDA was proactive in its communications to the company regarding potentially adding sirolimus as part of the enhanced immunosuppression regimen. So given these communications, do you believe your proposal for nonambulatory are aligned with those communications with the FDA? And if I could ask, were those communications with FDA team members that continue in their position at the agency currently?

Well, the first set of questions came when [ Dr. Berdan ] was running the division. So I don't know with precision who precisely change. The short answer is, I can't speculate nor can Louise speculate on the FDA's response to our submission because we haven't even submitted it yet in fairness to the FDA. We'll be submitting that protocol on Friday. I certainly think I can editorialize and say, I think it's a very reasonable, thoughtful approach informed by some of the best experts that are hepatologists, neuromuscular specialist immunologists and the like. It's supported by both anecdotal dosing that's occurred in the real-world setting in other places, but also supported by our own preclinical work in the nonhuman primate, the use of sirolimus prophylactically is done, at least in the non- neuro primate, just fantastic work in both knocking down signals of liver stress and elevated liver enzymes. And also, interestingly enough, enhanced expression dramatically, which would be another potential benefit. But with all of that said, I can't speculate on the FDA's response to it because we -- in fairness to them, we haven't even provided it. We just completed the expert panel and compiled the protocol and we will submit it again this week. And I'm very hopeful that given that patients are waiting that the FDA will respond with rapidity and we could get moving on this, and then we'll provide an update than we are.

And the next question will come from the line of Gil Blum of Madam Company.

I hope not to spend a ton of time on this going back to the -- you mentioned increasing the safety margin on the additional study here. And I mean you guys have some feedback from the committee that you just conveyed. How much would be enough of a reduction in enzyme the elevations to kind of make you feel comfortable or at least what I'm asking what the experts said?

Louise, do you have any comment on that? Or is that too difficult to answer at this point?

I mean, we're looking for a significant reduction in liver enzymes in comparison to historical. I think we have, as Doug mentioned, 30% to 40% of patients have elevated liver enzymes. And so with 25 patients, we should be able to see a significant reduction there, and that's what we're looking for. As we've mentioned, AOI and the incidence of ALI leads to ALF. And so if we show a meaningful reduction there, that's what we're looking for in terms of improving the safety margin in nonambulatory patients.

And maybe one of the challenges with that answer is we're trying to do what's right for patients by enhancing the risk benefit of this therapy even more than it already exists. But I do want to point out that we're starting from a place where the actual signal is very, very low. I mean you look at CAR-Ts -- you look at CAR-Ts and you're more in the -- you're a few multiples higher than this as a risk profile. You look at other full-body infusion gene therapies, you're at a higher risk. So we're going from a very rare risk, but we want to reduce it even further so that we are doing the most we can for patients. And we're doing it in particular because we have available to this really fabulous preclinical data that gives us a lot of conviction that we can actually do that and actually enhance even more the safety margin of a therapy that's shown historically a good safety margin.

Our next question will be coming from the line of Anupam Rama of JPMorgan.

I was wondering if you could dig in a little bit more on that $500 million year floor for ELEVIDYS based on the ambulant population. What are the key assumptions going into that by -- based on what you already know from -- by age or functional status or are you assuming patients in the decline phase or more likely to go on therapy? Any more color on that?

Honestly, there's no more color to be had because you're kind of -- to be fair, Anupam, I understand why you're over-indexing on the $500 million and assuming that that's our guidance. It's not our guidance. That is a number that says, okay, what would be a number that, frankly, I'd be livid at Patrick for? But if you want to know the truth. But what would be a number that would be kind of the basement that we could use as a stress test so that we could do work. Like remember, we have to go through a strategic planning process, and we have to determine what programs can we afford? What should we focus on and what expenses should we reduce? And so we use this $500 million number. And you can back into sort of how one would see this as a baseline number by just looking at the first look at the incident population. There's 420 patients. You're not going to get all 420, but you're going to get a lot of them. That alone might get you pretty close to the $500 million, and then you've got the prevalent population. And even if one assumes a fairly significant hesitancy, you're not getting 100% hesitancy. So you would assume that you should comfortably be -- $500 million would be a very comfortable number. And then we use that as the basis for driving a strat plan. Again, we're not providing a guidance right now and don't consider either $500 million, even our conservative guidance. It's not guidance. It's a stress test to put ourselves in a position so that we can feel comfortable executing forward that we have a really strong strategic plan. We can continue to focus on the highest NPV programs that we have, ones that will change the lives of patients that we can remain viable that our revolver will remain in place and that we'll be able to comfortably address our 2027 convertible and be a long-term viable independent organization. That's it.

And just to add, obviously, this is not the traditional way that we typically would position the opportunity. That said, the reason why we're doing it is because our bonds are trading at distressed levels. And we wanted to make sure the bondholders saw a clear pathway to be able to repay the notes. I know everyone is able to run the calculations based off of a $1.4 billion run rate and see a very achievable path for us to pay that off. So this is the reason why we did it to assure the bond markets that we are able to meet our requirements and access to the revolver and have liquidity.

And the next question will be coming from the line of Ritu Baral of TD Cowen.

A question on supporting ambulatory sales and boosting ambulatory sales going forward. Maybe this is for Louise. How do you think about the potential for maybe off-label use or independent use of sirolimus in the ambulatory patient population or clinical studies around reduction of mobile events or liver enzyme elevation in that sort of stage cohort to, I guess, support safety and comfort of ambulatory and other diseases? And just given our discussions with experts suggest that they are very familiar with sirolimus, they've used it for a lot of things. Is that something that can be explored to support those. And then a quick housekeeping follow-up. As we think about the headcount reduction, can you give the breakout between R&D and any impact on the commercial force?

Yes. I'm going to handle both of those just because -- the issue on the sirolimus for ambulatory, you need to understand that we cannot promote the use of sirolimus in ambulatory patients. So I want to be careful about that issue. It's not our goal to be promoting its use. We are aware, as you are also aware, the anecdotal opportunities that physicians have found to explore the use of sirolimus. We actually have in our possession, some requests from physicians for investigator-initiated trials to explore the use of sirolimus in the ambulatory patient population. And we're considering them and actually we're very actually interested in seeing what that might look like in a controlled investigator- initiated clinical trial. But I don't want to speak too much about that because we have to be very careful that it is not our goal to be out promoting that use with physicians. That really is something that physicians are going to have to consider in their expert medical judgment and they can have their own dialogue on 1 other on that. On the cuts, so it's 80-20. It's 80% R&D, which is R&D and tech ops R&D, and 20% G&A-ish, according to the gentleman sitting to my left.

The ultimate point in question, though, is any cuts that were across the entire -- the customer across the entire organization, to Doug's point, heavily weighted to R&D. Ultimately, what I think you're trying to get at, though, is, are we making cuts that could impact our sales efforts, and that's absolutely all of the initiatives that we -- all the initiatives that we have outlined last quarter are fully funded. We have all -- Patrick have all the resources available to support patients getting on both ELEVIDYS and our PMOs.

We're not impacting customer-facing parts of the organization at all, of course.

And our next question will be coming from the line of David Hoang of Deutsche Bank.

I just wanted to ask on the PMO franchise, your level of confidence that you would deliver $900 million in revenues this year? And then any insight you can provide on how that franchise might evolve going forward? I know in the past, there were some thoughts about cannibalization of the PMOs. And then obviously, there are some competitor programs on the horizon as well.

Yes. So we're generally very comfortable with our broad guidance of $900 million. On a go-forward basis, we had always said that there was -- there might be some modest cannibalization associated with ELEVIDYS. Obviously, with lower forecasting ELEVIDYS than we had envisioned at the beginning of this year, you would see less of that, not more of it. So actually, it's not a significant issue right now. And part of that comes from the fact that we have ex U.S. sales that tend to do very well. So we feel good about where we are. And from a competitor perspective, we'll see when we get a competitor, whether that has any meaningful impact or not. But right now, we feel very good about where we are.

[Operator Instructions] And our next question will be coming from the line of Mitchell Kapoor of H.C. Wainwright.

I wanted to ask on ELEVIDYS. You mentioned the hesitancy and the canceled appointments in start forms. Are you seeing this hesitancy from the patient side or the physician side primarily. And with the black box warning update, can you talk about any new ways your sales force is communicating the new risk benefit profile with physicians?

On the canceled appointments, and I think it's driven mostly by the patient community. So I think we need to get to the patient community and make sure they're armed with the right information to have discussions with their physicians. And by the way, let me be very clear. The hesitancy doesn't surprise us nor do I think it's irrational at all. You hear about a piece of news. You don't have tons of additional information. It makes sense that a family might reflect on that issue. We just need to make sure that everyone has the right information so that when physicians sit down with their patients, they can have thoughtful, intelligent discussions. On the black box warning, I mean one of the reasons I think the black box warning will not have a significant impact as we're already communicating what's in the black box warning. That's already part of all of our communications. So we -- long before there will be a black box warning. We're already getting that information out. We're making sure that physicians and their patients have the right kinds of information so they can make intelligent thoughtful decisions for these patients. So I don't think the black box warning will have a significant impact for no other reason than we already provide that information to the world, and we're very careful about that.

And our next question will come from the line of Kostas Biliouris of BMO.

This is [ Yuri ] on for Kostas. Congrats on the update. I have 2 questions. First, as part of your expert committee discussion, have you discussed a recent report of SAEs linked immunosuppressive regimen that included sirolimus in a gene therapy trial with AAV-rh74 vector. If so, what lessons can be learned in the case of ELEVIDYS? And then the second question if we may, what kind of clinical data have you seen to guide prioritization of your DM1 and FSHD programs?

Louise, are you aware of what this gentleman is asking?

I'm not. I don't -- not that I'm aware of anything with our program. I'm assuming that with another program, but I'm not aware of it.

Sorry if I was not clear. It was a different program, but it was using the same vector as ELEVIDYS.

We're not aware. We can look into it, but we're not aware of this issue.

That being said, I mean -- and Louise obviously can speak to it, but there has been long-term exposure of patients being dosed with sirolimus and obviously, there are risks associated with an immunosuppressive regimen. But with the proper protocols, we have seen very good outcomes associated with it.

And our next question will come from the line of Kristen Kluska of Cantor.

This is [ Ianne ] on the line for Kristen. First, regarding the more than $100 million in cost savings that's guided through the year-end '25, should we be expecting that to be weighed more in the third quarter? And then second, if you could just provide any color around the timeline around the LGMD2 in data readouts ahead of the guided BLA submission?

I'll send the first question to Ian, and then I'll turn the second question to Louise.

Obviously, just because we're midway through -- we're already in the third quarter, obviously, where you're going to see those savings are obviously going to be back-end loaded, right, as we get closer to the end of the year.

Louise, any update on the timing of limb-girdle data?

Yes. So the IIa data will be scheduled for presentation at the World Muscle Society. It will be included in the BLA. We did guide that we did meet the primary endpoint for the study in terms of expression.

And our next question will be coming from the line of Sami Corwin of William Blair.

This is Caleb on for Sami. We just had one quick one. We were sort of wondering how you were thinking about ELEVIDYS peak sales going forward now? I know it's kind of early, but any color on that, that would be helpful.

Yes. Thank you for your question. I'm sorry, we're -- it's premature, we're going to have to do more work before we can provide that. We need to get back to being able to provide guidance before we can give you peak year sales. But thank you.

And the next question will come from the line of Brian Skorney of Baird.

This is Charlie on for Brian at Baird. We just wanted to dive more into the LGMD franchise. So in terms of pausing that, it sounds like that was mostly a financial motivation, but was there any thoughts on your part about AAV safety risk in the context of a less severe disease motivating this decision? And is there anything you've seen there so far? And then just quickly on 9003, if that gets approved, is that an asset you would plan on launching yourself?

Yes, on the last question, 9003, we certainly would launch it ourselves and we have the sales force to do that. On the first limb-girdle, the process we went through with respect to the strategic plan was to do essentially a risk-adjusted net present value, considering all the costs and the ultimate opportunity, some of the most painful decisions that we had to make. In fact, I would argue probably the most painful decisions we had to make was deciding that we couldn't justify continuing with the limb-girdle program. So it was on -- it was really on the viability issue and the cost issue for them. So our goal, our hope is that we can find partners for these limb-girdle programs. I'm quite confident that they have a great hope of bringing a better life to patients with these various limb-girdles, all of whom are in need of therapeutic intervention. But unfortunately, we aren't going to be able to pursue them ourselves.

And the next question will be coming from the line of Brandon Frith of Wolfe Research.

In regards to PMO's post-marketing studies, can you remind us what should we expect for those readouts? Or were they agreed upon endpoints with the FDA? And is there any risk here for the PMOs being pulled from the market?

The ESSENCE program, which covers AMONDYS and VYONDYS, we'll have a readout late this year or early next year. And then once we have it, Louise can remind us of the primary endpoint or the collection of endpoints in that study. Once we have it, then the goal is to look at the totality of evidence and in connection with that evidence and all of the other evidence that exists, including real- world evidence, one would evaluate the therapies on that basis. I say that because I would remind you even before we unblind ESSENCE and look at it, we have a significant amount of real-world evidence on the use of these therapies and the impact of these therapies over time. With respect to EXONDYS, which obviously can read through to AMONDYS and VYONDYS. We've seen in the real world after 6-plus years of use a very rigorous look at the real- world evidence, we see significant additional years out of a wheelchair, reductions in contractures, reductions in emergency room visits, the Kaplan-Meier on mortality is pushed off by a year. So there is a lot of great real-world evidence. It didn't surprise us that much because one of the interesting things you'll know after 8 -- almost 9 years with these therapies is that physicians and their families who have used them have seen them as so valuable that the compliance rate is extraordinarily high, over 90%. But in addition to that, we'll have the readout of ESSENCE. We'll have to look at the trends in ESSENCE and what we see there. And then it will be the totality of evidence that will explain where we're going from there and whether we can turn those accelerated approvals into traditional approvals.

And maybe just one thing to add. Obviously, NS Pharma recently released results and their study wasn't successful. The agency has asked them for -- to do an additional study. We haven't seen any impact on prescribing with their therapy. And I think the reason is exactly what Doug just outlined, there's a lot of real-world evidence supporting these therapies. Remember this is a week infusion and the compliance rate is over 95%, patients wouldn't be going through this level of burden if they weren't driving benefits. So obviously, in heterogeneous rare diseases, it's not always straightforward from an endpoint perspective. But the wealth of data that supports these therapies and certainly the support within both the patient and physician community, certainly shows strong support for the efficacy of the therapies.

And one final thing I didn't mention, I should mention that there is a post-marketing commitment with respect to EXONDYS. EXONDYS which is the largest of the 3 therapies by population has a post-marketing commitment, but it's not a post-marketing confirmatory trial. It is a post-marketing dose ranging study. For those who don't know the history, actually, interestingly enough that Sarepta had proposed a post-marketing confirmatory trial, the FDA rejected it and wanted instead just a dose ranging study. So with respect to EXONDYS, in particular, the outcome of that study will determine whether we continue to use the 30 mg per kg dose, which we do now or whether we should do a higher one -- higher dose, either 100 or even 200, we'll have the results of that next year, I believe.

And the next question will be coming from the line of Joseph Schwartz of Leerink.

This is Will on for Joe. So back to ELEVIDYS, we've heard that another patient was hospitalized due to liver injury following treatment. And so could you just talk a little bit about what this overall situation looks like now? How many patients have had ALF cases? And how have these been managed? And what's the management entailed? And then maybe more broadly, how many patients have been hospitalized due to liver injury and how has that figure been trending over the past few quarters?

I don't have that -- I mean, we don't have that number available to us right now. I mean, if you're dehydrated, you get hospitalized, and that's considered hospitalization. The short answer is that the current prescribing information and the data that we have is consistent with the risk benefit of this therapy. We've seen 2 ALFs resulting in death, and we've reported them there haven't been any others with respect to ELEVIDYS. And so the risk benefit remains exactly as we have talked about before.

We know that there were a couple of cases that were on social media, which seem to have resolved. So that's what you might be referring to.

And there are no more questions in the queue, and I would like to turn the call back to management for closing remarks. Please go ahead.

All right. Thank you very much, Lisa, and thank you all this evening for spending time with us and for your very thoughtful questions. As I will just say again, what we've had to do with our strategic plan in many ways, is very painful, both because we've trimmed very promising programs that we need to find homes for. And by necessity, we've lost really valuable colleagues that I think are going to go off to do great things elsewhere. But we are left with a very focused strategy, focused on what I believe to be fantastic approved therapies. They're going to do a lot of good for Duchenne patients. And then using that performance, we're going to drive very high NPV, very impactful therapies, disease-modifying therapies for rare diseases that desperately need these treatments. And so I feel very good about where we're heading. We're going to be a lean, fast-moving and very viable organization going forward. I look forward to updating you as we move forward. But I would also note the following that we will have a Q2 announcement, of course, in our Q2 earnings release in August, in early August, but you will note today that we've gone into a lot of detail. We provided all of the financials here. We've provided all material information in this call. And so in our continuing efforts at efficiency, we will issue an earnings release in early August, but we won't burden you all with another earnings call in early August. And I look forward to updating you if something comes up earlier. But otherwise, I'll look forward to updating you on our performance towards our strategic goals at our Q3 earnings call. Thank you very much and have a good evening.

Thank you all for joining. This concludes today's conference call. You may now disconnect.