Sarepta Therapeutics (SRPT) Q2 2019 Earnings Call Transcript

SRPT earnings call for the period ending June 30, 2019.

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Aug 8, 2019 at 9:24AM
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Sarepta Therapeutics (NASDAQ:SRPT)
Q2 2019 Earnings Call
Aug 07, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and welcome to the Sarepta Therapeutics second-quarter 2019 earnings call. [Operator instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for this program, Ian Estepan, senior vice president, chief of staff and corporate affairs. Please go ahead.

Ian Estepan -- Senior Vice President, Chief of Staff and Corporate Affairs

Thank you. Thank you for joining today's call. Earlier today, we released our financial results for the second-quarter 2019. The press release is available on a website at www.sarepta.com, and our 10-Q was filed with the SEC earlier this afternoon.

Joining us on the call today are Doug Ingram, Sandy Mahatme, Bo Cumbo, Dr. Gilmore O'Neill and Dr. Louise Rodino-Klapac. After our formal remarks, we'll open up the call for Q&A.

I'd like to note that during this call, we'll be making a number of forward-looking statements. Please take a moment to review our slide on the webcast, which contains of forward-looking statements. These forward-looking statements involve risks and uncertainties, many of which are beyond our control. Actual results could materially different from these forward-looking statements, and any such risk can materially adversely affect the business, the risk of operation 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 quarterly report on Form 10-Q file with the Securities and Exchange Commission, as well as the company's other SEC filings. The company does not undertake any obligation to publicly update forward-looking statements, including any financial projections provided today based on subsequent events our circumstances. And with that, let me turn the call over to our CEO, Doug Ingram, who will provide an overview of our recent progress. Doug?

Doug Ingram -- President and Chief Executive Officer

Thank you, Ian. Good afternoon, and thank you all for joining us for Sarepta Therapeutics second-quarter 2019 results and corporate update conference call. As we passed through midyear, let us linger for a moment on our progress to date. As we enter into 2019, we set an ambitious path, requiring significant execution and with much sales approved for the RNA platform that we continue to drive based on this performance, could we consistently create new PMO constructs for other populations of Duchenne and we truly forged with the FDA an efficient pathway for approval of efficacious new RNA therapies, one that could bring new treatments to the community rapidly and without unnecessary controversy and contention.

For the gene therapy platform, with the stellar initial results that we've seen with our microdystrophin gene therapy truly read through any of the other 10-plus gene therapy programs that we possess. For microdystrophin gene therapy itself, could we quickly complete the dosing of the 24 patients in our placebo-controlled trial for microdystrophin? What will be the competitive landscape for microdystrophin? Would we remain ahead of others both [Inaudible] and qualitatively? And would we devote the resources, the talent and the energy necessary to build out a commercial manufacturing process for gene therapy? Well, over the course of 2019, the answers to these questions have been positive, in some ways, more positive than we could rightly have anticipated as we entered the year. EXONDYS 51 continues to perform. The FDA accepted our filing for golodirsen in the first quarter, and we have a PDUFA date of August 19.

We also will not have an advisory committee meeting a predicate to approval, which approval, if we obtain it by August 19, we'll have then one of the most efficient and rapid development and approval pathways in all of biotech. So in the consistency and precision of our RNA platform, we announced positive results for casimersen in the first quarter, and we tend to submit for FDA review in 2019, further added that through our PMA platform, and if it is successful, our next generation PPMO platform, we have the ability to replicate our success and to treat greater and greater segments of the Duchenne population. And the landscaping our gene-therapy platform has been no less positive. In the first quarter of 2019, we announced very positive results for the first cohort of our first limb-girdle program, the 2E or beta circle [Inaudible] gene therapy program.

As many of our programs share the same promoter in the same factor, the consistency of these results further validated our gene therapy engine. The exceptional work of Dr. Louise Rodino-Klapac and the world-class nature of our gene therapy center of excellence in Columbus, Ohio. As promised, with our partner Dr.

Jerry Mandell at National Children's Hospital, we dosed all 24 patients in our placebo-controlled trial in the first half of 2019, a remarkable feat when one considers that we only announced results from our first group of concept study in microdystrophin about one year ago. As we entered 2019, we appeared to be in the lead but with two other credible companies advancing microdystrophin programs as well. Unfortunately for those programs and more profoundly unfortunately for patients, initial results for both of those programs have been disappointing in terms of both safety signals and resulting expression levels. And both programs have suffered delays as [Inaudible] has announced their intent to dose escalate -- an official quantifiable amount of expression.

And Pfizer has recently disclosed that its program is on a protocol mandate as a whole while the ethics committee reviews its initial results. So it was completely landscape at the start of 2019, Sarepta's microdystrophin program appears to have further distanced itself from others in time, in substance and it would appear at this early stage, in probability of success. One of the risk that this changing landscape presents is that we might falsely believe that we no longer need to move with a sense of urgency, but such could not be further from the chance. Indeed, while our leadership position does give us the opportunity to bolster our program that we will discuss shortly how we will be doing this in both our current placebo trial and manufacturing, it leaves Sarepta with an advanced obligation to this community.

As we have so often said, our only real competitor in this space is this disease itself, Duchenne muscular dystrophy. As you know, a relentlessly foe that every day robs tens of thousands of children of their muscle and then invariably, of their lives. And we must now operate and make decisions with the very real possibility that we alone hold the hope for a transformative treatment that can battle this disease effectively. The decisions we make and the energy with which we work are fully informed by this responsibility.

So with that, let's review performance in the quarter and certain recent decisions that we've made. starting with our RNA franchise. In the second quarter, EXONDYS 51 continued to perform. Sales standing at $94.7 million and quarter over the same quarter last year growth of a very impressive 29%.

For our other PMOs, the PDUFA date for golodirsen, as I've mentioned, is August 19 2019. By the way, the brand name of golodirsen is now [Inaudible] 53, so I will often be using this date to follow-up. We will be ready to launch by August immediately upon approval. We will also submit for casimersen this year with an approval decision expected in the first half of 2020.

If we are successful, we will be, by early 2020, one of the very rare group of biotechs which has developed and launched three or more until he developed therapies. But more than that, we will have more than double the number of patients living with Duchenne who have available PMO therapy. Our next-generation automated program the PPMO is proceeding having initiated dosing at a whole new ascending to study for SRP-5051. Our goal is to obtain dosing and safety insight by the first half of 2020.

Now moving on to our gene therapy franchise, we have made significant progress this first half of the year and the second quarter. As noted earlier, due to the impressive work of Dr. Jerry Mendell, we have completed dosing of all 24 patients in this blinded placebo-controlled trial, the trial that call the study 102 or I call study 2. As you may recall, the study is being conducted with clinical material from National Children's Hospital.

Our internal statistical analysis and review for first proof-of-concept cohort suggests that this should be a sufficiently sized to study to see a treatment effect in one year, but it is also said that the study was dictated by the amount of study material available from National Children's Hospital. We are very pleased to announce that Nationwide Children's Hospital has been able to provide us with additional study material and on that basis, we have amended the study for this to increase the study and from 24 to 40 patients, increasing the size of the standing by nearly 70%. This will also increase the study power to significantly over a 90% confidence level. To aid in the rapid enrollment of these additional patients, we plan to open another U.S.

clinical trial site in the very near term. We believe between Dr. Mandel and the initial site, we should be able to complete enrollment in dosing in the fourth quarter of this year. With increased and Study 2 show externally of for the end of 2020.

Now the decision increase the straightforward and provide perspective at least for this. NCH has study material available, which will increase the power of the study to greater than 90%, and it is in the best interest of all patients to ensure that we have robustly powered trial as is reasonably possible. We must also acknowledge that the external competitive environment has changed over the course of 2019, and there is simply no exogenous pressure that would just by failing to take advantage of this clinical trial material. So if any there's doubt, there is nothing that has changed in our original power exemptions and certainly we assume nothing inside itself that changes her confidence.

And study 101 as you know continues to form very well. Study 102 is blinded and we will be unblinded there glad nor have we performed any sort of unblinded analysis, we are simply taking advantage of an opportunity to increase the probability of success in Study 2. In light of the increase in Study 2, there's less pressure to commence Study 3 in 2019, so instead we will use the remainder of 2019 to continue of the process at the end of development for our commercial process supply, and we plan to commence the study in the first half of 2020. As has been our goal, we still plan to have three-month biopsy data from Study 3 by the readout of Study 2.

To remind you, Study 3 is injected to be a study using our commercial process supply. On that topic, we continue to make very good progress on commercial process and on capacity. Our commercial facility in [Inaudible] is just about complete. We should be complete by the end of August and should be qualified about October of this year.

We have achieved very good yields in the iCELLis unit -- the iCELLis nano units. We are in the process of scaling up and working to achieve optimized sales in the commercial iCELLis 500 units, and that is going very well to date. So we are making good progress on analytical development. Based on the work that we have done to date, we could reasonably have anticipated commencing Study 3 with commercial supply by the end of 2019, but given the additional time available to us, it is simply not prudent to do so for a number of reasons.

As noted, the change in competitive landscape creates significant responsibility for Sarepta. We must plan for the increasingly likely possibility that we will be launching the microdystrophin gene therapy alone or at least at a very significant advantage. And this means that for planning purposes, we must ensure that we have optimized years and process to potentially satisfy alone to be at the DMV community at large. To that intent, -- to that end, we have to continue to improve process and yields, effectively allowing approximately to commence Study 3, and thereafter, continue to improve processing yield, that would be our attention.

We would have unnecessary risk of having to conduct another bridging study to show comparability between the Study 3 supply and the ultimate commercial supply, this is an unacceptable risk in the lines of timelines and competitive landscape today. The approach we have taken with our microdystrophin program is informed by the external landscape and most importantly, by obligation to communities there. First, we are going to take advantage of additional study material to further improve the powering of our placebo-controlled trial and to enhance the probability of success. We are going to take the time available to us to maximize yields at commercial process with the goal that when they are successful, we are in a position to satisfy, alone, the requirements of the DMD community that we are sure.

And we are willing in a Study 3 political that is designed with the goal of providing sufficient evidence to support the rapid access for Duchenne patients, regardless of age, regardless of [Inaudible] status, regardless of mutation and regardless of country of citizenship. So now let's move on to other gene therapy programs. Following excellent results for our limb-girdle E2 cohort, we will be using Nationwide Children's Hospital supply in dosing one additional three [Inaudible] dose escalation cohort this year. To remind you, our prior record was -- and we obtained gene-positive fibers of 51%, 250% of the predefined milestone of success of the study.

We also had mean intensity of an impressive 47%, and we had mean less Western Bloc quantification of 36%. And we dosed one initial 3-patient cohort for higher dose and then based on the results, we'll choose between the two doses for a pivotal trial. With our manufacturing partner, Paradigm, we'll also chart out a pathway for all five of our limb-girdle programs for excess, and we will report data back out to you early next year. With our partner Lysogene, we have so far dosed seven patients in our Phase II/III gene therapy program to treat MPS IIIA, also known as the sanfilippo syndrome, a devastating neurological disease that robs the life of children before the age of 15.

And we are working to obtain material to commence dosing this before the end of the year in our CMT Charcot-Marie-Tooth program with sanfilippo syndrome at Nationwide Children's Hospital. We have also taken significant steps over the course of 2019 to ensure that we are properly building our vision to become the world's leader in gene therapy and rare genetic disease. Toward that end, our gene therapy team has secured an 80,000 square foot facility in Columbus, Ohio. We have also expanded our footprint in [Inaudible], Massachusetts from 26 acres to 36 acres.

In addition to taking additional space in our [Inaudible] facility, we have taken significant space in Burlington, Massachusetts, where we have some 10 [Inaudible] units that we use only to process the analytical activity. Brammer is near completion of our 75,000 square foot gene therapy facility in Lexington, Massachusetts. This will be a single-use site dedicated to microdystrophin commercial supply. We have also taken out additional capacity at Paragon, and in fact, we have sufficient space at Paragon to more than double the capacity that we have at our Brammer Lexington facility.

We have also not been sitting idle for business-development perspective. We have entered into a number of important partnerships and alliances is for new technology that we will begin to discuss in more detail as we advance on preclinical into clinical focus. For instance, these include the following: we have entered into a partnership for the University of Massachusetts Medical School and gene therapy leaders, Drs. Good morning, Michael Green and [Inaudible] to advance novel gene therapy to treat RET syndrome, a rare and fatal brain disease that nearly exclusively affects girls.

We have also entered into agreement with University of Florida College and Medicean to advised Dr. Sweeney's gene therapy for the treatment of cardiomyopathies. Our gene therapy center for excellence in Columbus has built an innovative gene therapy consent to treat ember and tried muscular dystrophy type 1, a life-limiting and often life-ending rare neuromuscular disease that affects skeletal and cardiac muscle. We have entered into a collaboration with Columbian University with Dr.

Howard Morgan, the world's leader in the study of my will muscular dystrophy to assist us in rapidly advancing [Inaudible] program. And importantly, we have entered into a very exciting agreement with the University of Florida College of Medicine to advance Dr. Brad Hoffman's innovative gene therapy to treat multiple sclerosis, the most common immune-mediated disorder affecting the central nervous system. This is our first program outside of rare disease as MS affects some 2-plus people worldwide and is responsible for about 20,000 deaths each and every year.

And while this may seem to venture beyond the core area of focus, I would remind you that our Head of Research and Development, Dr. Gilmore O'Neill, has a rich and every successful background in the development and the approval of novel treatments for MS. We are also providing additional tools for our gene therapy center of excellence. For instance, we have entered into a collaboration with University of Massachusetts Medical School at the lab of Dr.

Good [Inaudible] to develop novel vectors. And we have also entered into a relationship with Institute of Myology to assist in the exploration of the combination of or PPMOs and microdystrophin. And we have the resources to execute on plans. When I joined Sarepta, we were 200 employees.

Today, we are nearly 700, and we are tracking to approximately 900 employees by the end of this year. It is a dedicated, seasoned group with commercial stage fully integrated genetic medicine leader, and many for employees are among the most accomplished and genetic medicine today. As of the end of Q2, we are also well resourced with about $1.1 billion in cash. Although things have gone well in the first half of the year, we have much to do in 2019 and 2020.

And we cannot take or leadership position for granted. or take your foot of the accelerator, and we will not. For the remainder of 2019, we must continue to serve the community with EXONDYS 51 and if approved prove this much by [Inaudible] 53. We must submit for casimersen this year.

We must rapidly enroll and dose the remainder of our increased study 2. We must continue our yield optimization, process development and analytical development work and be in a position to commence dosing of Study 3 in the first half of 2020. We must dose our next cohort of 2E and build out our plans for all of our limb-girdle gene therapy programs. We must also first cohort of Charcot-Marie-Tooth or CMT.

And we must continue to build out a gene therapy engine and advance the remainder of our ever-increasing genetic medicine pipeline. I would like to take this opportunity to thank all of the hard-working employees at Sarepta for their education and for their passion to this mission. I would also like to thank all collaboration partners for the litigation to this mission, with a very special mention to Dr. Jerry Mendell, who's working tirelessly to advance our microdystrophin program in the clinic.

And I'd also like to thank the families with rare disease who believe in us and who have taken the step of participating in clinical trials with Sarepta. It isn't easy to look upon those in our studies as the lucky few, but make no mistake about it, participating in trials an unapproved therapy requires courage and requires dedication. Much is asked of the children and their families in our trials, and it is through your participation, families Duchenne muscular dystrophy in our trials that we advance promising programs, ultimately to the benefits of tens and thousands, perhaps even hundreds of thousands of families around the world living with rare diseases that are fighting. And with that, I will turn the call over to Sandy to provide an update on our financials.

Sandy?

Sandy Mahatme -- Executive Vice President, Chief Financial Officer and Chief Business Officer

Thanks, Doug. Good afternoon, everyone. Let me start by saying that we had another strong quarter. Revenues continue to grow well with Q2 net revenue at $94.7 million.

From a business-development perspective, as Doug mentioned in the call, we have continued to selectively add to our pipeline and capabilities via external alliances. The year-to-date activity, including the acquisition of Myonexus, has significantly bolstered our pipeline and further positioned Septra for long-term growth. While we remain selective, we are continuing to find opportunities to partner with the best in the field to bolster our pipeline and add to our capabilities, expand our overall network and gene therapy and RNA technologies. Partnering with leading organizations and researchers allows us to maintain our focus in the near-term value of our DMD pipeline, while assisting our collaborators in advancing their programs and simultaneously, giving us the flexibility in determining whether to bring these programs in-house as they become de-risked.

As our gene therapy program in multiple sclerosis demonstrates, for the right technology, we are willing to make targeted investments beyond rare [Inaudible] diseases. We expect to continue to invest in building our pipeline and adding technologies in areas currently in our pipeline as with DMD. And continue compete against ourselves to deliver better and better therapies to patients in need. Now move into the financials.

This press release provides teachers for the second-quarter 2019 on a non-GAAP basis, as well as GAAP basis. The press release is available on Septra's website. Please refer to a press release for a full reconciliation of GAAP to non-GAAP. I'd like to add a quick reminder here that are 2019 non-GAAP financials exclude net interest expense and depreciation and amortization expense in addition to one-time expenses and stock-based compensation.

Net product revenue for the second quarter of 2019 was $94.7 million, compared to $73.5 million for the same period in 2018. The increase primarily reflects higher demand for EXONDYS 51 in the U.S. We reported non-GAAP net loss of $61.2 million or $0.83 per share, compared to non-GAAP loss of $28 million or $0.43 per share in the second quarter of 2018. In the second quarter of 2019, we recorded approximately $15.9 million in cost of sales, compared to $6.7 million in the same period in 2018.

The increase was driven by inventory costs related to higher demand for EXONDYS 51 during 2019, the previously expensed material, as well as the accrued royalty payments to BioMarin and the University of Western Australia. On a GAAP basis, we recorded $286.5 million and $122.8 million of R&D expenses for the second quarter of 2019 and 2018, respectively, which is a year-over-year increase of $163.7 million. This increase is primarily related to $173 million payment and accrued expenses related to Myonexus. I'll note here that our 10-Q breaks out this figure as acquired in process research and development cost.

In addition to the Myonexus cost, there was an additional $15.1 million in upfront milestone and other expenses. On an non-GAAP basis, R&D expenses were $87.5 million from the second quarter of 2019, compared to $57 million for the same period in 2018, an increase of $30.6 million. The year-over-year growth in non-GAAP R&D expenses was driven primarily by advancement of our PMO, PPMO and microdystrophin clinical trials, ramp up of manufacturing activities related to our gene therapy platform as well as continued expansion of internal research and development within Sarepta. Turning to SG&A.

On a GAAP basis, we recorded $67.4 million and $47.2 million of expenses for the second quarters of 2019 and 2018, respectively, a year-over-year increase of $20.2 million. On a non-GAAP basis, SG&A expenses were $52.3 million for second quarter of this year from [Inaudible] $37.3 million in the same period last year, an increase of $14.9 million. The year-over-year increase was primarily driven by significant organizational growth and continued expansion to support our commercial launch plans globally, as well as almost 30 therapies in various stages of development across several therapeutic modalities. On a GAAP basis, we recorded $900,000 in other expense for second quarter of 2019, compared to $5.2 million of other expenses for the same period last year.

The favorable change is primarily driven by the payoff of certain debt instruments during the fourth quarter of 2018 , as well as a higher return on investments in the second quarter of this year. We have approximately $1.1 billion in cash, cash equivalents and investments as of June 30, 2019. With that, I'd like to turn the call over to Bo for a commercial update. Bo?

Bo Cumbo -- Executive Vice President and Chief Commercial Officer

Thank you, Sandy. Good afternoon, everyone. Admittedly, on the commercial organization has continued to execute on our 2019 goals and is on track to hit our revenue forecast for the year. After a successful quarter, delivering net sales of $94.7 million, we expect continued interest in EXONDYS 51, driven by our ongoing efforts to ensure existing patients remain on therapy, for those who may be facing unnecessary access and reimbursement materials and identifying new patients who can benefit from EXONDYS 51.

We are pleased with the success of EXONDYS 51 as we are in the final months of completing three full-years post FDA approval. Our commitment to community rates on our goal to treat all eligible individuals with Duchenne. Toward that goal, we are fully prepared to launch our next RNA-borne product should the FDA grand by -SRP-4053 or golodirsen market clearance. We have an operational plan in place for compendium, contracting, distribution and reporting requirements within 24 hours of approval.

We will leverage our current distribution partners and our Sarepta network to help get patients access as soon as possible. In addition, our teams will be trained on SRP-4053 label immediately so that we can have important conversations with KOLs. Rapid execution on market access initiatives will be essential, and we are prepared. Our goal is to reach patients as soon as possible following the approval.

We expect commercial plans to provide faster access than government payers such as state Medicaid payers. But both types of payers will follow normal, new drug approval our new NDC processes for each plan's last state. We also expect the commercial to mitigate patient mix to be similar to that of EXONDYS 51, which is roughly 50-50. If approved, we expect most patients will start therapy in the hospital and transition to home infusion at a similar rate as we've seen with EXONDYS 51.

The knowledge we've gained over the past three years with the approval and launch of EXONDYS 51, potentially one of the most successful ultrarare disease launches in history, has informed the new -- the strategies we now have in place for SRP-4053. SRP-4053 is a [Inaudible], or BMO-engineered to treat those individuals with addition from genetic mutations amenable to skipping exon 53 of the DMD gene. As a reminder, EXONDYS 51 treats approximately 13% of the Duchenne population. And if approved, SRP-4053 will potentially treat up to 80% of the community.

Moving on to exon 45 or casimersen. We remain on track to submit our NDA for casimersen this year, with the target approval decision by the first half of 2020. If approved, casimersen will patients to skipping exon 45, which is approximately an additional 80% of the Duchenne community. While this means that by mid-2020, we could have three approved drugs borne out of RNA platform, doubling our PMO-based opportunities in the United States.

By the end, we will have a plan strategically important earnings from the EXONDYS 51 and SRP-4053 launches to place casimersen and in a position of strength at launch, if approved. We will have teams preparing for launch operations immediately for exon 45 if the FDA approves SRP-4053. As for gene therapy, preparing it for the required execution and operational excellence needed for global gene therapy launch of this magnitude is necessary, but we have the season team in place, experience and navigating apparently what could be one of the most transformative therapies in medicine. We will ask the question, challenge convention for payer well and be ready for the opportunities and challenges for us.

And doing so, we will be prepared for launching what could be the first gene therapy to serve the Duchenne community and pave the way for Sarepta's many other gene therapy pipeline of products. Reaching the regulatory finish line is just the beginning of what we need to accomplish. We are now focusing on finding new and innovative ways for patients to get access to gene therapy. We continue to meet with the largest commercial and Medicare peers on pricing.

And again, help multiple meetings with payers across the U.S. over the last quarter on topics regarding gene therapy excess and finding ways to partner together so that all patients will have access to potentially life-altering therapies as quickly as possible. At Sarepta, we can make quick decisions that are best for patients. We have an extensive gene therapy portfolio with microdystrophin, limb-girdle, CMT, MPS IIIA as well as additional programs, and we will adapt with lessons learned the pain along the way so we can define our strategies accordingly.

Outside of the U.S., we are thoughtfully and strategically expanding globally into key markets. While there is no single key to unlock the whole market access, tackling common barriers at the country level is a good place to start and will building toward the school. We have hired the right people, individuals who know the importance of pursuing and partnering with the best leaders globally, who we will continue to work with to discuss access reimbursement and site readiness. In closing, the commercial and medical affairs teams are focus and operational excellence, and we will be ready for future potential launches.

We are committed to improving the lives of those suffering from earlier intramuscular and seamless diseases. From RNA, gene therapy, gene editing and the potential modalities, we remain focused on patients, keeping them at the center of all conversations from discovery to global commercialization. And with that, I'll turn the call back over to Doug.

Doug Ingram -- President and Chief Executive Officer

Thank you, Bo. Please open the call for questions.


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Questions & Answers:


Operator

[Operator instructions] And our first question comes from Alethia Young with Cantor Fitzgerald.

Alethia Young -- Cantor Fitzgerald -- Analyst

Congrats on the progress so far. Two question from me. One, just wanted the if one plan to your recent around increasing the sample size for Study 102 now? Like if there's anything incremental color that you can give us? And the second question is just curious I want around confirmatory trial for the [Inaudible] ?

Doug Ingram -- President and Chief Executive Officer

Sure. This is [Inaudible]. So I mean, the sample size, the said before, we were comfortable with the size of the trial before, and our analysis gave us some comfort. And certainly, there still we're give us some comfort.

But it is not that -- it doesn't require a lot of [Inaudible] to realize that 24 patients is a relatively modest-sized trial. And it was, in fact, limited by the fact that we had 12 dosages from National Children's Hospital at the time. So we now have an opportunity, nationwide has material available for us. As we considered that material earlier in the year, we were in a different landscape, competitively, then we are today, for a host of reasons.

And so obviously given what we've seen from the other programmers and Pfizer's, we are confident that the right decision is to increase the probability of success and confident no therapy to want to make sure that in a 12-month period, we'll be able to see the difference between the active group and placebo group, so increasing the trial from 24 to 40. So from my perspective, it just really makes sense from a risk perspective. But beyond that, it would have been a question about portals we could use without the what might have imagined this newly, which zero would want to, for instance, [Inaudible]. But the issue on that is a simple.

Our preclinical data did not suggest to us that we should escalate those right now, which is using super [Inaudible] methods to ordained, would give us the best answer without creating undue burden on the kids. And certainly, the first four children in our first cohort supported that conclusion. Now it does turn out that there was another company that was running an experiment essentially for us. Pfizer was at a very -- significantly higher dose than ours.

And while they use a different flavoring method than we do, they ruthlessly do something that was multiples higher than ours, it made sense lesser look and see what that looks like. And of course, what we saw there was an issue organic to Pfizer's program. And then both from an [Inaudible] perspective and from a [Inaudible] perspective, we didn't see any significant benefit from dose escalation. We didn't see much of a dose response.

I think you've seen there have about 700 [Inaudible] cohorts and they left to the next level and it was 900 [Inaudible] at multiples higher [Inaudible] than our [Inaudible]. So from our perspective, the best use of that material was clearly, to increase the trial. It does create an enormous amount of additional timing and study at all and that can increases the probability of success. For this anymore, I wanted to make sure I remind you once again when I said in the script, which is, we haven't seen anything in the study that has changed our confidence about the trial.

This is an opportunity. That National Children's Hospital has the material that allows us to go to 40 patients and increase the probabilities we saw against confidence level and power level at well over 90%, and I think it's the best answer for the patients as well. On the confirmatory style, I'll turn that over to Dr. Gilmore O'Neill to talk about the status of that.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

So the conformity trial is actually moving well. We have our protocol is well naturally well developed. We are in discussions with regulatory authorities around the world about it, and we actually are on track with regards to site justification, regulatory dialogues and sector. So I'm confident that we are in a good position to be able to execute as soon as possible.

Doug Ingram -- President and Chief Executive Officer

One other thing. The people understand that is there is well done. The confirmatory trial for establishing is unusual, it is not a simple trial versus a placebo. It's a confirmatory trial for [Inaudible] securing.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

And the trial for something. I think it's a trial for this.

Doug Ingram -- President and Chief Executive Officer

I apologize.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

My apologies. I'm so sorry.

Doug Ingram -- President and Chief Executive Officer

On the television we are so quick to question you can see and current dose of the [Inaudible] versus a high dose of our campus and commercial is a little unusual in the sense that we have to first do a study in healthy, [Inaudible] volunteers is to ensure that consistent with the preclinical data that we successfully and save that, which introduces. We actually completed all of the annexed report to court initially will be September and assuming everything goes well I think and it will. It will go well paced and all the of our will have confirmatory trial before the end of this year.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

Yes. And we are as forgiving for the question, just I apologize. We are actually initiating sites now, etc., so we'll be ready to execute for that.

Doug Ingram -- President and Chief Executive Officer

It was my fault because I felt the first question.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

My apologies.

Operator

Our next question comes from Tazeen Ahmad with Bank of America Merrill Lynch.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Doug, I'm sorry if you've already said this, I just want to be clear that I understand all of this correctly. Can you remind us what data you expect to be in this package for DMD gene therapy? So what time points you need from Study 3 to get approval and when should we expect that data? And we will follow up on that, what, when interaction you have had with FDA since Pfizer might have shown a data at PPMD? And did FDA influence your decision to upsize your study?

Doug Ingram -- President and Chief Executive Officer

So let's start with the last question first. No, the FDA didn't play a role in upsizing the study. This is regular decision properly filed with the city that we had simply looked at the opportunity and in front of us, the last entries most patient. So when you think about it, nothing would be more tragic than to find that you have application therapy, but you missed out seeing by a [Inaudible] small margin because you didn't take the time to actually do the study was dosed.

It was a fairly easy decision when we had 12 doses, but now we have more doses, it makes no sense for this important. And now let's talk about the time lines because it's important to consider time lines and now you'll see why it makes so much sense to upsize it because -- let's start with Study 2 itself. We will be [Inaudible] certainly in the fourth quarter dosing entire study. Dr.

Jerry Mendell did a really good job earlier this year in dosing those first 24 patients. I will remind you, the fourth patient was analyzed in our first cohort and it was at the -- it was either October, November, I'm forgetting when we had the Argentina meeting, but it...

Louise Rodino-Klapac -- Senior Vice President, Gene Therapy

October. So it was last October. And from there, we literally designed the agency started placebo-controlled trial and Dr. Patient dosed.

So we will -- between those and 70 site have been running very shortly, we will have all of the next cohort of patients they get to 40 dose before the end of the year, which means Study 2 will read out before the end of 2020. So we really haven't taken any significant delay by increasing the end. We only always increased the probability of success. Now with Study 3, our goal is start as early as possible in 2020 with Study 4 and then we'll have a cohort.

One of the goalies right now that we have is to have a subset of Study 3 that we are going to look at first question and the free level from a biopsy perspective. And our goal is to have well available by the time Study 2 would readout as well. That was our goal before and that's still our goal, and we're on track before the. So before the end of 2020, our goal is to have two things -- to have a number of things: to have Study 2 available before the end of this year, to have a readout on functioning study to before the end of 2020, to have Study 3 up and running early next year, to have the subset of patients with expression levels for biopsies readout at the same time and study to before the end of this year.

And then our goal, at least, is to approach the agency with the view, assuming that we're successful in all of these, that we would be able to submit on that basis and obtain an approval on the basis that we've shown the constants that we have is functional and beneficial to children with Duchenne muscular dystrophy and that the commercial supply that we're using is comparable to the clinical supply. As far as what the discussion we've had with the agency, we've had very good discussions with the agency around C&C of manufacturing issues for this Study 3 and then we are very essentially Study 3. And then we'll take that to the agency and talk through with the agency, whether they accept all of that confidence that were in the right direction. And then we'll start that study ready for next year.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK. Sure seems like just with the time lines are clear, are you going to start to the course of study in the first half of 2020 because it seems to be -- you seem to be giving yourself a wide band on that? Is it the first half or is it really 2020?

Doug Ingram -- President and Chief Executive Officer

It's -- so we've given ourselves a little bit of some breathing room. We want to be as early in 2020 as is possible. There is a number that will get done for that. We want to -- couple of things.

Of course site planning and up and running and we need to get that done before the end of this year, so we all intend to do that. Finishing the design of Study 3 and getting the blessing of the agency and agency on that, we can get that done before the end of 2019. And getting the commercial process at the right place. And that, from our perspective, we can get to a place before the end of the year will be reduced commercial process supply and start the story.

But as I mentioned, in my script, our goal is to really get the yields in a good place so that as we start study 3, we're going to continue to improve, we don't still improve years after that we find ourselves in a position that we have to do some additional bridging study for approval. So the short answer is, our official word is obviously is the first half of 2020 that we would commence Study 3 and will that surprise you. But those who know Sarepta and our [Inaudible] emergency that it is as early that in 2020 as is reasonably possible, so we might do this early 2020 if possible, first quarter if possible.

Operator

And the next question comes from Brian Adams.

Brian Adams -- Analyst

Congratulations and all the progress. Any comments you can make on the safety that you're seeing from the ongoing 24-patient study? I realize, it's blinded. But just wondering if there's any safety events that would be considered reportable that would be a bar for stopping -- or what we've been apart for stopping or pausing that study? And get to that change over the course of time your competitor talks as it becomes known to the FDA?

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

Yes. Thanks, Brian, for that. It's Gilmore here. So I think we have streamlined and, we do, as you quite rightly inferred, have staffing rules and regulars over size of the study.

We have crossed the schedule for that study continues. And so from that point of view, we are actually very happy with the ongoing study. It is worth noting that in our 101 study, you're well aware of this, that we had no evidence of significance adverse our serious adverse events, and so we actually are very happy with that. And with regards to the readout from the other companies, Pfizer and [indiscernible], we have not seen what they had described.

But I wasn't real estate one thing, which is that we have not -- we do have staffing rules, we have not staffing rules and one or two is progressing well and remains fully blinded.

Doug Ingram -- President and Chief Executive Officer

One of the things I would also add is that obviously really all to those to Dr. Jerry Mendell for this with study's went pretty well, it's progressed well, regarding rudimentary patients. And that he was a lot of confidence to increase the end of the study from 24 to 40, and still ensure ourselves that will be able to comfortably base and losing study at the end of this year, not creating significant delays in our cohorts.

Brian Adams -- Analyst

That's helpful. And then secondly, as you work to optimize sales and margins, curious what shifted confidence that you will be able to ultimately get to a point that you can potentially supply the whole DMD market and with material that is indeed comparable to the NCH product?

Doug Ingram -- President and Chief Executive Officer

Thank you. There's with lot of things that give us coverage. We've got a lot of good data in front of us now. We have a lot of work.

So there are three groups right now working on the process developments and also the analytical development and yield optimization. We've got process developments experts at Brammer. We've got process development experts at Paragon. And we've got our own process development experts.

In fact, we have probably one in the worldly that single word leader across development, Dr. Reed Parco I think very diligent in gene therapy will find as possibly is biology and process development that exists right now. So we do a lot of good work. We will get there.

We are putting a lot of telecommuter, let's start here. We've got the talent and we start internal to get it done. We've got the resources. We have, like I said before, we'll spend a good $600 million to $650 million in the next [ 15 ] months or so making not only the process but with element done right, but then we get the capacity necessary to fully serve this community.

And we think the progress to date. We have very good results from the [Inaudible] nanos, the [Inaudible] regulars. We've scaled up already to [Inaudible] 500, and we are in the process of optimizing yields with [Inaudible] 500. We still have much more to do there, but then it's just a matter of time from our perspective.

We getting everything we do rounds and optimize beginning with the results. So we do feel very confident and we'll go to get a place where we're going to appeal to subsequently. We have always envisioned the world invites might be the case that we need to service community alone. But today, I think being direct, and these are early days, but dot be direct, we believe that there is a very enhanced probability that when we launch this product, we are going to be launching product that has service in our community from day one and for probably a very long time thereafter alone.

So we have to take very seriously the issues that we have to have the capacity available to us, which means we have to have the right yields, the right investment, the right capital, the right manufacturing facilities, and we're working on all those as we speak. Process development is going on, it's going well right now. The capacity issues are going well. We have the Lexington facility, which will be complete as I mentioned, some of them probably in the next 30 days or so and will be qualified certainly before the end of this year at [indiscernible], Lexington.

That's a single-use facility at 75,000 square feet. At Paragon, actually, we have taken out sufficient space to more than double that amount of capacity at Paragon, and we could use that space both for microdystrophin as well as our limb-girdle programs. So we are very confident about the process right now and about the path we have to satisfy the community, assuming our trials work out.

Operator

And the next question comes from Martin Auster with Credit Suisse.

Mark Connolly -- Credit Suisse -- Analyst

This is Mark on for Marty. I guess first question is, you announced that you're expanding your interview pipeline by cardiomyopathy, the muscular dystrophy program and multiple sclerosis. I'm sure you're looking at multiple targets. I guess I'm just curious how you settled on this specific programs? And if there any unifying themes that made these indications completely attractive? And then my second question is, with WMS less than two months away, I'm curious what data, if any, you plan on presenting at the conference?

Doug Ingram -- President and Chief Executive Officer

Sure. First -- on the first one, I'm going to take the question on the resale program picture from Dr. O'Neil and Dr. Miller only because I don't want to spend time going into the underlying programs themselves.

They're at research stages right now. I want to focus on the clinical programs for the time being. We have very excited about these programs and the northern. We have been set for a while will be related to programs transactions like this to both our pipeline.

There are a number of things without this program some excited. First of all, there are very serious diseases. We are company focused on the use of the next medicine both for gene therapy and being able to let the people who dying with serious with focus on their disease and certainly is a big part of us, but MS is not a rare disease, it's a serious disease. And we have the expertise internally with our own Dr.

Gilmore O'Neill to progress that, so we're exited about it. So the seriousness of these diseases part. That the constructs in these various programs, without going into the most detailed, that elegance of the approach and elegance of the constructs is something that is given us a lot of excitement and makes sense to pursue. So we're excited about these approach that's being taken at these line with many of the ideas that we have and recent has about this genetic medicine.

And beyond that, we have the opportunity and all of the equal terms to work with some of the best and brightest in gene therapy and genetic medicine. The -- because I've listed in the text of my initial comments the gene therapy leaders that are running many of these programs are good in gene therapy luminaries in this area. So it's all of those together excitements. And MS is a really concept since.

It does take us into different than real results, I get that. And we will continue to look at things like that over time. We are a number of at the same time. First and foremost, we are a genetic medicine company.

So we are focused on genetic medicine, RNA and gene therapy. We are today a neuromuscular community disease company, but we are a gene therapy leader. We are, as we entered [indiscernible], the world's leader in gene therapy. And so we are going to a lot of opportunity in the end to do it.

And we are going to take gene therapy as far as it can go and that means we are going to without busting our balance sheet, we are going to do interesting things that this will all of the leaps and bounds of a genetic medicine gene therapies and take us in this program with Dr. Brad Hoffman for MS, is a very, very interesting one. It's a research program right now, preclinical, but not human gene, but we're excited about it, as we're excited about our RET program, as we're excited been asked about her the other program and that's when playback and the team develops and accepts for some resale about these pipeline programs and think they align with our strategy, particularly the strategy we have about building an enduring gene therapy engine that can do good in the world and be successful for investors in this field.

Operator

And our next question comes from Chris Marai with Nomura.

Chris Marai -- Nomura Instinet -- Analyst

Just a couple here on the new study to side and up of assumptions could you maybe talk about some of the sites you're expecting see there, numbers that went into that powering assumption? And then on study , thinking about the subset that you're going to look at, the three-month biopsy, what biopsy data will you specifically be looking at? And then when we think about the size of that subset, is it sort of three patients, 32 patients, sort of like your current -- or your new Study 2 size? How should we think about that? And then just a quick answer on your last question, do you expect any data our anything offset on the muscle even safety data on a program like that or CK?

Doug Ingram -- President and Chief Executive Officer

Let me ask the last question first because I failed to answer the muscle question from the last question, and that was an error on my part. And thank you for mentioning that. That is likely think that will be presented with muscle. Several things we're looking at right now, is a following Dr.

Mandel is very interested and excited about the possibility of presenting data on the first functional data on the first cohort of limb-girdle [Inaudible] that we announced expressing results and safety results for earlier in the year. And while he hasn't been in town right now, I would suspect that, that is going to be something that's going to be presented at [Inaudible] Muscle if Dr. Mandel is available at them and ask the data is available and in an appropriate place by that time. With that, I'll turn it over to Dr.

O'Neill to talk about the powering.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

Great. Thanks very much for that question about powering. Gilmore here. So I think you understand that many reasons others that we booked the specifics and details of our powering assumptions, particularly the effect size.

I would say is that the assumptions around variants, etc., are strong. They haven't changed since our original calculations. And they are backed by a very strong data set of raw data both internally generated and externally generated from various registries. So I think -- what I can say is that we really confident about the dispense of our calculations there.

And forgive me for disclosing the effect size. There's obvious reasons for that. And regards to these subcohorts in Study 3 from which we can do the muscle biopsies, those muscle biopsies will be formed the muscle. They are name.

And the thing right now, is that they are just over extremity of Castro's. With regards to size of the cohort, and as you can imagine based on the strength of the expression data we've seen to date, we don't believe that you need a large number, but final numbers going to be a measure of discussions with regulatory agencies what they want to see. But we believe that, that number will be small and represents really a small fraction of the global population that will enrolling in both of the countries in that study. I think that will have question.

Operator

And our next question comes from Matthew Harrison with Morgan Stanley

Max Skor -- Morgan Stanley -- Analyst

This is Max Skor on the call Matthew Harrison. Regarding the PPMO program, could you talk about the safety profile with single doses and how we should think about your ability to release data from the multidose study? When will you be taking muscle biopsies and will you wait for all patients?

Doug Ingram -- President and Chief Executive Officer

So I'll give you the broad strokes on it. The -- on the PPMO program in the MAD study by early next year. So that is our goal. What we know from preclinical will choose that if we get to good dosing levels with our program then we should get significantly enhanced expression versus the PMO, in fact, in animal models, we get an order of magnitude greater expressions.

We're very excited about that. Particles you we're talking about the area of the issue of the safety profile in their sport we're going to find out, although, of course this year into early next year, things are going very well so far. We been working closely and getting great results so far and we single-ascending dose study, and we're getting great results there as well. But by one of the courses that it's too early to say that because we're not at the dose levels that we really want to get to to be correlated with grand expressions.

So this is still, in a very real sense, too early to declare victory. We started I think, I think, the NASH study in 4 -- what it was 5 mgs per kg, 4? Started at 4 mgs per kg, and we're going to continue to therapeutics. Things are going really well with the study, for the little so that I would've anticipated a year ago and the friendly, for it. Dr.

[Inaudible] got that in order. And below by early next year if what we've seen pre-clinical models where certain these kids and so far things are looking very good. So we'll give you an update on it early next year.

Operator

And the next question comes from Anupam Rama with JPMorgan.

Unknown speaker

This is Matt on for Anupama. Congrats on the progress. So just some high-level questions from us. You mentioned that you'd be placed by year-end, soldiers as you expand your processes and potentially geographical reach, where do you see this number going over the next two years? And then on your gene therapy manufacturing efforts, can you just remind us of how much cash you've earmarked on this front in the same time frame?

Doug Ingram -- President and Chief Executive Officer

Yes. Good questions, great questions, actually. So we are going to end the year at around 900 -- maybe a little shy of 900 employees worldwide. But we will to begin to moderate the growth of our employee base, we already are over the course of this year, for a host of reasons.

The reason that we do -- we didn't grow from 200 to 700 simply because we have the ability to, we had the need to. We really stranded our ambition, and we have probably going on now the programs both disclosed and undisclosed will probably well over 30 programs in RNA and gene therapy together right now. So we really needed to bolster in all areas, but specifically, in the research and development and manufacturing and see areas. What we're going to a place now will comfortably -- we are getting a very comfortable place with clear perspective are quantitatively and qualitatively, we've got great people here right now, and we are a magnet for great people right now, I'm proud to say, and we'll start monitoring that will.

So we don't have growth next year over the 900 that we have this year, but we will be doing what we did this year. We don't imagine that we're going to double yet again this year, the size of this. We'll start moving more toward rational growth rate on employees after this year or otherwise, we're to get too many ]fixed costs and looking forward going to be comfortable with the number of employees we have in place in the place that we are. With a strategy to become as I said before in broad strokes, within milestones, capital expense and prepaying cost of goods, so we'll actually benefit from a lot of these expenses there and that simply reflects the expenses.

We'll spend something [Inaudible] $600 million over the next -- well, for the -- including what we've already spent this year into the end of next year and the following year in the [Inaudible] $600 million range

Sandy Mahatme -- Executive Vice President, Chief Financial Officer and Chief Business Officer

I would agree and slowly we were starting to ramp up our goods and effectively, we'll be going to inventories our some portion of that will be cost of goods, if you will.

Operator

And the next question comes from Gena Wang from Barclays.

Unknown speaker

This is Peter on for Gena Wang. Just couple from us, if we may. I guess first is I guess this it's been asked before but just to make sure were there any like measurements from study to that prompted the expansion? And would you be able to measure anything that may inform the pivotal study design our lower? Or is that completely independent?

Doug Ingram -- President and Chief Executive Officer

So thank you for getting the off chance to get it to answer this question it is very good, peter. So let me be very clear, so there's no an adult, there's nothing and the analysis glandular unblinded our otherwise out of Study 2 that motivated the increase in the -- at all. In fact, the only data that we've had a stellar from the first four patients of Study 1 of those given us tons of confidence in where we are. The reason that through increased the and is quite simply because we have opportunity in front of us.

And I think this is a small price to pay, literally measured in week and maybe months, couple of months to be in a position to feel that we have a study that's really robust and powered [ over ] 90% now, which increases the probability of success and gives us really comfortable with Study 2 as we plan for Study 3. And this is just to say something that is obvious without being over snarky about this, there's no reason where we wouldn't do this right now. We are the race we're doing this right now is a race against the disease itself. It's not a race against another company as it stands right now.

We are, I think, significantly in the lead us. Those but frankly maybe more importantly, qualitatively. And so we need to think about these families ad these patients first and foremost. And while it may delay us some number of weeks or maybe even a month to, that ensure that we have the right power of the study, it increases the probability that we won't have additional delays in the back end because we powered the study of the right level.

So the program is more important than all of that the best answer for the families around the world is what we need to transform it there for Duchenne muscular dystrophy. So we really help just really think about it. We feel really, really good about this opportunity to increase the end, and I think it's a real opportunity for the program a real opportunity for the families.

Operator

And our next question comes from Vincent Chen with Bernstein.

Vincent Chen -- Bernstein Research -- Analyst

Congrats on the progress. A couple of specific ones on study 2. First, about your statistical assumptions, how would you expect the main effect size from the gene therapies to compare to the likely standard deviation? Because in some ballpark numbers, would you say that simply about the same size, would you say it's really larger, smaller? And then second question would be, if you had wanted to, could you have increased the study sites for silly to even further than 40 patients? How much longer would the trial be extended, for example, if you decide increased to say, 50 or 60 patients?

Doug Ingram -- President and Chief Executive Officer

Ask for the last question and I'll turn it over to Dr. O'Neill for the [Inaudible] question. No, we could have you see this, we could have honestly increased the [Inaudible] are even greater than you did with material available, but we were very comfortable with 40-patient study that it's the right level for us. And we weren't -- we didn't start a compromise issue, wasn't a lot of timing issue.

We feel that -- we felt good about the [Inaudible] 24, we feel good about the [Inaudible] 24. And frankly, the data evolves. In study 101, as you know, the data from this is in study 101 is it only confirmed even more than we feel very good about the assumptions we were making in the power that we have for study 2. But for 40 patients in getting to the significantly over 90% power just gives us even more confidence that we're doing the right thing for these families.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

And to that end, Vincent, thanks for the question. You know again, I'm not sure the specifics our assumptions around the fact sizes and standard deviations. But [Inaudible] the standard deviations is that based on our raw data, the standard deviations are for sure are in the ballpark of what we're seeing for the Northstar, etc. But forgive me for again for not going to specific details as we get there internal right now.

Vincent Chen -- Bernstein Research -- Analyst

I see. Maybe on follow-up then. You mentioned that the data using from the initial study corroborated what you expected in terms of your powering the effect sizes and so forth. Is it fair to say that the data you've seen from the first four patients is pretty much in line with what you would've expected in terms of the likely gene therapy effect size?

Doug Ingram -- President and Chief Executive Officer

So I would say a couple of things of that. One, we were that's, one, we took -- we've taken the results from the first study what we've seen and then we been more conservative. I will give with the qualitative answer, we've been very conservative in our power with that. So we not taking has been attending all of our subjects and the directions and now we don't impress that fully ourselves it is the power and made the obvious given within the skin and things like that.

And if you want to know or refuse, it's hard to say what one should have anticipated, study we did because frankly, in the history of all Duchenne muscular dystrophy, no one has ever seen this -- these kind of transformative results before. So I think probably people may have different views. And broadly speaking, the results we saw from the first cohort of kids was pretty shockingly positive. It was probably greater than one could have normally anticipated.

We usually with therapies that pique our differences from background over a long period of time. And what we saw with these kids case was a fairly dramatic benefit, although, courses and understand, understand that as well, but early days, both qualitatively and qualitative we saw a fairly dramatic change in these cases. Array of preclinical models generally support that same kind of concept if he ever wanted that gene therapy microdystrophin golden retriever models, you might have anticipated this kind of transformative effect. But we were very pleased with -- very pleased with study 1, still very conservative approach and providentially to are now taking heading and appropriate, not only conservative approach to increase that and increase the public of that study and increase the chance for Duchenne muscular dystrophy therapy as fast as possible but with the highest POS for patients beating around the world, frankly waiting and degenerating all the way and making the decisions as intelligently as possible.

Operator

And the next question comes from Rita Brown with Cowen.

Rita Brown -- Cowen and Company -- Analyst

Going back to study 3, Doug, is it still your idea to keep that up placebo-controlled study? In that case, how would you handle placebo biopsies initially like that? And you mentioned that the biopsies are going to be taken from a subset of patients. How are you thinking about the other patients as part of Study 3 in your FDA negotiations, like who else are you going to include age range, etc.? And then I've got a follow-up.

Doug Ingram -- President and Chief Executive Officer

A couple of issues there is lot of said. I've got a abilities and a subset of patients into a biopsy and then I want to say I can give you some proof and that's possible we just a picture vigilant and we didn't do it. So it is possible to do without unblinding the study.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

So this is Gilmore. So as Doug said, with regards to the biopsy, intent is to biopsy all patients. Because that is not a subcohort of biopsy patients, it's just a cohort in time. That is the first thing of it as a peak in the second thing ever said about placebo-controlled is that we do anticipate some new placebo-controlled study.

And I think to Doug's point, there are couple of important lessons that work, which is one that we actually have our successfully running placebo-controlled study in Duchenne patients context for person and a person and in Study 2 cohort you can actually execute on that. And of course, that's when it comes down to a very important thing that we have built and we built in a position with strong relationships with patients, strong relationships with investigators and a very good patient [Inaudible] group, where we actually sit down and explain in detail the rationale, the thinking and the importance of this work to patients and their families.

Doug Ingram -- President and Chief Executive Officer

And you've got placebo-controlled nature of the main Study 3, as it was in study 2, is a difficult one. And it's one that takes a lot of thought because their price attack for this placebo trials, and everyone understands that we're mindful of that. But our goal -- one other thing I said in my text you may have noted is that our goal is to have such a whole robust set of evidence at the time that we launches therapy and vision to get of all ages and mutations and status on therapy rapidly. And to do it around the world not just in United States and support this United States of America is, to us and the company to the families United States.

We want to have a program that is fit-for-purpose around the world and so we do believe as difficult as the description is to make, placebo trial, at least for the main trial, is appropriate. The main trial will very likely be that will match the cohort that we're [Inaudible] right now for the seven-year-old range. we respect other cohorts, different age ranges, some people are still talking about. But as it relates to that name cohort of patients, we will actually will almost be a placebo-controlled trial.

Maybe that helps their?

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

Yes. I agree.

Operator

And the next question comes from Brian Skorney with Baird.

Brian Skorney -- Robert W. Baird -- Analyst

Just a couple of quick ones from me. Just one, bringing our question with of the religious about issues with accessing therapies on gents. And just wanted to know given the similar origins of the programming on -- if you've been to the issues there? And what level of confidence you can give in your contract this resulted issues and specific to this? And then as you talk about ramping up inventory with the competitors in gene therapy seemingly falling behind. I think you had previously anticipated having a couple of thousand doses at launch.

And just wondering if these efforts do meet demand and change to higher number now or you're thinking maybe get a higher number? And she response to the manufacturing costs of these tools is effectively experienced into R&D over the next two years?

Doug Ingram -- President and Chief Executive Officer

Yes. So a couple -- so let's go to the first question, the [Inaudible] Novartis issue has that occurred yesterday. So we know [Inaudible] than others know who have been able to read this documents that currently exist and look directly at the  4 83, just so we're all on the same page, there's nothing about that issue that reads through anything that we're doing at all. It appears to be a very specific issue with very specific person or a couple of people at that company on the particular data entry issue.

Not something to do with us at all and nothing do with any of our programs. So the there is just will an equivalent on zero -- beyond zero readthrough and anything that may have occurred there to anything that we're doing so. Nothing -- no correlate whatsoever at all. And then with respect to dosing.

So two things in getting yields right with [Inaudible]. One is the target we have for the number of doses available and ability to the community and the other is just probability of success that we'll have that on the dose at the time. Getting the yield right gets us both. So place where we feel confident not only in the number of doses appropriately of success that we can also make around the more busy.

I still think a couple of thousand at launch is a good aspirational target for us but will take a more careful look at that and over the next couple of months, and we might have some initial decision depending on what yields we achieve, and we have lots of room for capacity as well. So the short answer is that we want to be in a position, if at all possible, to fully serve this community, first in the United States and then around the world, at launches without any risk that patients will have to wait for therapy and that's where we're taking the time, now that we have the time with Study 2 to ensure we continue to cross enhancer process melting, to enhance our yields of the research there.

Operator

And the next question comes from Danielle Brill with Piper Jaffray.

Danielle Brill -- Piper Jaffray -- Analyst

A quick follow-up to a previous one. When you decided to expand enrollment in study 2, did you consider included other patients, older patients with signs of functions decline? And any specific reasons why you stuck with that seven -- four to seven-year-age range? And then I think you mentioned you planning to open additional side. Is that also for study to? And I'm just curious from a safety perspective, how you get comfortable with someone other than Jerry administering the drug?

Doug Ingram -- President and Chief Executive Officer

Well. That last one is an agreement. He is fantastic and we're going to have to -- we have some of the sites on that. The good news is that Dr.

Mandel is very committed to ensuring that we maintain consistent quality as you bring other sites along as well, and that very detail discussions about the fact that we need to have essentially Mundell University around the way we approach of gene therapy and the way we approach these infusions and other Dr. Mandel is very much on what a follow-up. so we will talk about this and we decide to be bringing are really top-quality neuromuscular sites we're expressing a. As it relates to study 2, they will be in the four- and seven-year-old and will be exactly the same cohort and then they must be and there must be with our goal is to increase the probability of success and increase power and we went to other agencies will be ever actually freeing more energy patients and we were doing power packed we could and would because we went to for instance, all torches we have using this revision than the assay.

So for this study, we have to narrow the focus and ensure that we have the same population then we have to listen confidence around the powering in [Inaudible] the 90%. And study 3, you're right, and study 3, we are going to have a number of different studies and Dr. Mandel gives us this always for material and I told them one study will be in IIIa, it will be a main cohort of step and will have older probation in the separate study as well, but we will have suffered larger age ranges and different [Inaudible] in the next step.

Operator

And the next question comes from Gil Beatty with Citi.

Unknown speaker

This is shown on patrol. I have a few more specifically on yields and capacity. So first have your initialized satisfied your yield goals? And at this point, it is the expectation that the extra yield optimization process time you described today will raise the maximum capacity estimates will help you reach your original estimates? And I have a follow-on question as well.

Doug Ingram -- President and Chief Executive Officer

Yes. So we reached very good yields and the manners we are in the process scaling the [Inaudible] 500 right now. And [Inaudible] 500 we are not optimized number yet, but we're getting there, we'll get there. The issue with understand why that's what that means.

This process is just takes time. Every time you do run, you find opportunities to enhance and you may change do another run and the rent take somewhere in the month or more time frame. So just takes some time. So the short answer is, where getting very good yields and the [indiscernible], we scale nano, we made a number of 500, we have made and a number of improvements significant improvements every time you do with a confident beginning at to the same kinds of yields [Inaudible] 900 and [Inaudible] 500 over time.

And then 200 and there sitting optimized target and that's where we want to go and of course, if you can get even beyond that, fantastic if you could give us, which will give us more capacity as well as lower cost of goods. So the goal here is to get to as optimized as possible yield, really before we start to do it at all possible.

Operator

And the next question comes from Salveen Richter with Goldman Sachs.

Salveen Richter -- Goldman Sachs -- Analyst

Doug, can you elaborate a bit further on the current manufacturing with Teresa here? So like regardless recorded dynamics that you mentioned earlier, you're going to need to have your yields fully maximized and your process fully optimized. So can you just define what this looks like today versus what it looked like previously? And then I have a follow-up.

Doug Ingram -- President and Chief Executive Officer

I'm trying to -- we're kind of midway through a process. I say we're midway through a very so far successful process and for a number thing to do from a manufacturing perspective and your place to launch the therapy. The first day of course is for capacity itself. We record the actual building facility with crime but with just about done with that and they speak the next issue talk much about they will talk about it over time analytical development we doing very good progress there, as I said we've got record on board to be fully confident and we have the talented place to get energy developments done in a way that's effective.

And then the final one is process development and yield optimization. And as I said, step wise, when we are forcing to do is work a small universe of merciless we've done that, we record in the good numbers there. Now we are moving up to [Inaudible] 500, we've done a number of translated weird in the food absolutely in the middle of the process. Our goal number of things you have to go to before the commercial trial and no one suggest that there is no opportunity to figure optimize after the trial, but want to get as follow-on as possible before restart the trials so that even if we are making additional improvements in years, for instance, there's no reason one but could lead to do that, we don't want to find ourselves in a position that was so dramatically increased yield that we have an argument around that product and we have to deliver today to get again through that same product.

So we are in the middle of the process, things are going very well, you know, will go to great partners and we've got a lot of folks putting on a lot of really smart excellent folks. Record grammar doing the work at Paragon, Paragon is fantastic frankly. They we're behind a lot of the excess has come back to Paragon, but all of that we've got that. We've got Dr.

Reed Clark car, we've got 10 [Inaudible] commercial record talking very well. It's going very well so far.

Operator

And our next question comes from Tim Lugo with William Blair.

Tim Lugo -- William Blair and Company -- Analyst

And of the new gene therapy are now in the quarter, we'll any of those being the clinical the next year? And can you argue maybe emphasize some of the other previously announced preclinical programs? And I might've missed it, but do you have a total number for gene therapy programs currently in the pipeline?

Doug Ingram -- President and Chief Executive Officer

We have I can throw number of gene therapy through accounts and will appear public. We are [Inaudible] or more programs and between preclinical and clinical. I think he'll give you believe in etiquette number.

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

[Inaudible]

Doug Ingram -- President and Chief Executive Officer

As I said before I was going to make an error on trying to do that. It was always going to be that sweet over the [ inaudible] I would've done. Well over [ inaudible ] programs, clinical and preclinical. We are not emphasizing the preclinical programs, that isn't preclinical programs that we have.

One of the things you need suggested some time ago that we're building an engine and we have an aspiration to continue to feel that pipeline, and we're going to continue to do that. So we are very similar about burger. We don't want an a lot of time talking about the death right now, so really good preclinical and we don't have promotional but we are currently really excited with that but, which is programs but needless to say these will create various focus with great leaders behind them. We've got regresses the leadership there.

This is a later, Dr. Roman on that, we've got around gene therapy Center of Excellence and Louise Rodino-Klapac and still very there. With portraits and troubles were actually about credit syndrome as a focus and align properly with we've got a very caring Gene Therapy Program there. We were excited about our target for the well and Dr.

Sweeney is a busy one of the beginning of gene therapy, supervising about that and it is a maximum extension of the area that prevented neuromuscular and of course, as I'm saying we shall about MS and we were actually about working with that and he could a very innovative approach commercial research, but still very innovative approach and we will be noted that as well. So we feel about that recent and we want them.

Operator

Next question comes from Joseph Schwartz with SVB Leerink.

Joseph Schwartz -- SVB Leerink -- Analyst

Just two quick questions from us. There, so just going back to an earlier question on Zolgensma and the revelation yesterday, I guess given the numerous similarities, I was wondering how we see that Ledesma revelation affecting the way that the agency will review adjudicator scrutinize your CMC model or even as she continued optimization work year? Second is strategically speaking as we look forward, you mentioned the status update on AP more the SRP-5051, so congrats on that. I guess the school corporation in DMD with gene therapy, gene editing as well as antibody conjugated ASOs emerging. So I guess as you think about your base business as occupant gets ago, but a strategy is there, given how PPMO's may have little bit of delay with safety here and you only have 5051 ? Do you have alternatives to maintain that base business? And if so, what would that be?

Doug Ingram -- President and Chief Executive Officer

OK, let's take into order. So Zolgensma has zero effect, zero -- and more than that, I'm confident will have zero effect on the adjacency looks at our programs. And one look past the really headlines about the still worse that and actually look at the [ inaudible] because this is a very specific issue, not about gene therapy, but about individuals who may have done something with data manipulation as of late was used, a respected study and something we've given effect integrity apparently we did the study and affect the actual outcomes, safety, efficacy and poverty of the full crowd was concerning because I think we need [Inaudible] question about the attention at the end of that. It this is a very specific issue and specific of us being specific company, does not relate in any way to our program, nor do I believe that there is any reason to believe that they will change how the agency will approach other fronts on this program, and it is that she goes without saying one has to be very thoughtful and careful and follow recipes, good clinical practice and research and data and that's the same answer the day before yesterday, it's the same answer is actually.

I'm not at all concerned that this impacts agency of purchase programs. It is a very specific issue. The status of SRP-5051, I want to be clear we haven't been in the stack if you can say that. The issue that we've always had the operation with prospective PPMO is can you get safely to a high level? If you can get safely to an acceptable high dose, we are very confident that statistically that produces significant increases in discipline production over RPM most common fact as I said before, we should literally have order of magnitude with the request.

So there was a lot of reason to be excited about PPMO's, the reason that we don't promote that concept is that I want to see how high we get in the multi-sending those before he started to declare victory on their. As it relates to the base business and what that means from gene therapy and the like, I would say couple of things initial picture first, we'll start with this about increasing competition, isolating the competition has moderated over the last six to nine months, frankly. The biggest competition to our PMO and PPMO franchise is our own gene therapy. And so frankly we think there is a real possibility that there is cream for both the PMO or PPMO successful on the one hand and an effectively when gene therapy by Christopher program on the other, and we are doing work write-up takes a look at that and actually partnership looking at that is well and will have that information about that probably by the middle also next year.

If it turns out in the long run that the gene therapy is so transformative that there is room for Primo or PPMO thereafter, then so be it, the patient has benefited from that but we think it's the answer to that there may very well be good syllogistic benefit of having a PPMO on one hand and our special program on the other, so be very careful about where we're going.

Operator

And our next question comes from Justin Came of Oppenheimer.

Unknown speaker

May be just wanted to circle back on the excess gene therapy supply in DMD. We're there any thoughts to leasing the age criteria in order to establish a longer-term safety experience and the order patients before our regulatory review?

Doug Ingram -- President and Chief Executive Officer

I apologize I'm not sure the question there. I could do and study to because the Study 2 we have to get Study 2 the powering right. We will be looking in order patients for Study 3 as well, so we will have the evidence both from efficacy perspective and I think energy perspective on a military patients in older patients and have a patient's and what study agreement Dr. Gilmore O'Neill might be dosed is actually a series of substance.

Unknown speaker

OK, got it. And is the target goal for proportion of the initial locations would come from second critical site?

Doug Ingram -- President and Chief Executive Officer

We're going to those that as we can. So the only second site to those as far as possible, there's the target, we'll take him home from document in the from Randy to live and in the second site we're refuted, we're repeated second site to assert that goes to make sure there's no risk having all those before we make sure.

Operator

And an exposure comes from Robert Hadley with Evercore.

Robert Hadley -- Evercore ISI -- Analyst

I haven't question but wanted to clarify the very specific functional endpoint for the words 102 study from which increased and never gives you get confident and planning as in the pre-assuming the specific from this NSAA. And you can just confirm that? And can we presume that the site and point NSAA will be when using Teresa primary function and point. And there is a continuation for the 103 study, when will you be able to give us specifics on the and number within the main cohort for several in the initial calls?

Doug Ingram -- President and Chief Executive Officer

So couple, first of the two continuing from infinity and Study 2, it will be the final and Study 3 as well, given that Figure 2 Study 23 as early as is rationally possible in 2020 that will get that in early 2020 and give you an update with more particulars around what we can do in this.

Operator

And our next question comes from Tim Chiang with BTIG.

Tim Chiang -- BTIG -- Analyst

I think you mentioned Dr. Mandell might be presenting some data with WMS. The functional data would be just the three patients that have been our is the data that you fill in the three patients that produced and buy a 101. Is that right?

Doug Ingram -- President and Chief Executive Officer

It was a function of that. Yes. So you may recall, we did -- I asked her the first quarter of this year on the reprogramming we are very pleased with the results of special level and with safety perspective as well, Gwen says of these kids and one of the restricting we do have launched a skit that have never been dosed as far as I'm aware of full gene therapy there and all of them. But there was too early and just those the trials that we could get functional and so the goal and role muscle would be to present functional data on this first three kids.

Operator

And a final question comes from Lisa Benaise with GMP Securities.

Lisa Benaise -- GMP Securities -- Analyst

Just to clarify, study to well capture the functional endpoint but you use for filing in relation to Study 3 showing expression and at that point when the expression that, combined with study to functional your file you're not going to wait for the functional data from Study 3. Is that correct?

Doug Ingram -- President and Chief Executive Officer

That is our goal. What the Study 3 in our plans is to then with agency to go through with agency and get thereby into the process facility but or current goal is to have virtually three will have functional that as well and actually put to have data as of cohort and Study 3 extra look at a special level and so comparability between critical supply and commercial supply. And the other we're talking about FDA issues right now, and best proceed in the U.S. assuming that the FDA agrees with the post with taking and then of course will have to consider we take because as you sure now our goal is to bring this therapy to around the world as a benefit from it as rapidly as possible.

Lisa Benaise -- GMP Securities -- Analyst

OK, great. And then just to also that's just how do we think about our how do you think about what is comfortable? Because obviously there is variability in expression for patient to patient, and this is kind of not exactly like to buy a cool and sisterly. So what is the tolerance around some of those things to say exactly the same? I'm curious about how you think about that.

Doug Ingram -- President and Chief Executive Officer

Wealth that will be honest several discussion with the agency obviously and this is gene therapy. So will have a lot of way to talk about that. But there's a lot of risk look at measurements because safety related issues and we also have what others work none of the programs for instance, if you had it in as in a we have biopsies. So we do have a good way to triangulate our comparability between commercial supply and critical supply, then reports a lot of the agency about what level of tolerance is permissible between critical supply and commercial supply.

Operator

Ladies and gentlemen, this concludes the Q&A portion of today's call. On the election the call back over to Doug Ingram, CEO, for closing remarks.

Doug Ingram -- President and Chief Executive Officer

Well, thank you all, very much for spending this evening with us. As we are ready for the second quarter, on the performance of the second quarter and our flight path we have a lot to do in 2019. I hope I made impressive everyone on the respective on this. We have -- we are in a privileged position as an organization with respect to some of our programs right now.

We don't take their privileged position for granted. We don't intend to slow down as a result of that, and we don't intend to develop any form of a question exactly one of her approach all of the work we have to do in front of those in enormous amount and we have a lot to do this year, we have to continue to perform with EXONDYS 51, we have to bring forward something, and we are successful by August 19, we have to submit and do this and really can do to push forward already gene therapy programs, get these kids toasted the market, which was 22, get a process developments and capacity for on my -- gene therapy program done by the end of this year so we can start the sting patients in a Study 3 and we'll give you additional updates over the course of the year as you progress against all goals. For thank you very much. Thanks for your support and have a lovely evening.

Operator

[Operator signoff]

Duration: 119 minutes

Call participants:

Ian Estepan -- Senior Vice President, Chief of Staff and Corporate Affairs

Doug Ingram -- President and Chief Executive Officer

Sandy Mahatme -- Executive Vice President, Chief Financial Officer and Chief Business Officer

Bo Cumbo -- Executive Vice President and Chief Commercial Officer

Alethia Young -- Cantor Fitzgerald -- Analyst

Gilmore O'Neill -- Executive Vice President, R&D and Chief Medical Officer

Gilmore ONeill -- Executive Vice President, R&D and Chief Medical Officer

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Louise Rodino-Klapac -- Senior Vice President, Gene Therapy

Brian Adams -- Analyst

Mark Connolly -- Credit Suisse -- Analyst

Chris Marai -- Nomura Instinet -- Analyst

Max Skor -- Morgan Stanley -- Analyst

Unknown speaker

Vincent Chen -- Bernstein Research -- Analyst

Rita Brown -- Cowen and Company -- Analyst

Brian Skorney -- Robert W. Baird -- Analyst

Danielle Brill -- Piper Jaffray -- Analyst

Salveen Richter -- Goldman Sachs -- Analyst

Tim Lugo -- William Blair and Company -- Analyst

Joseph Schwartz -- SVB Leerink -- Analyst

Robert Hadley -- Evercore ISI -- Analyst

Tim Chiang -- BTIG -- Analyst

Lisa Benaise -- GMP Securities -- Analyst

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