PTC Therapeutics Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 3, 2023

There are 17 speakers on the call.

Operator

Good day and thank you for standing by and welcome to the PTC Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Senior Director of Investor Relations, Ron Aldridge.

Operator

You may begin.

Speaker 1

Good afternoon and thank you for joining us today to discuss PTC Therapeutics' 2nd quarter 2023 corporate update and financial results. I'm joined today by our Chief Executive Officer, Doctor. Matthew Klein Our Chief Business Officer, Eric Powells our Chief Commercial Officer, Kiley O'Keefe and our Chief Financial Officer, Pierre Grabier. Today's call will include forward looking statements based on our current expectations. Please take a moment to review the slides posted on our Investor Relations website in conjunction with the call, which contains our forward looking statements.

Speaker 1

Our actual results could materially differ from these forward looking statements as such statements are subject to risks that can materially and adversely affect our business and results of operations. For a detailed description of applicable risks and uncertainties, We encourage you to review the company's most recent annual report on Form 10 ks filed with the Securities and Exchange Commission as well as the company's other SEC filings. We will disclose certain non GAAP information during this call, Information regarding our use of GAAP to non GAAP financial measures and a reconciliation of GAAP to non GAAP are available in today's earnings release. With that, let me pass the call over to our CEO, Matthew Cline. Matt?

Speaker 2

Thank you, Ron. Good afternoon and thank you for joining the call. I'm pleased to share PTC's 2nd quarter results and our expectations for continued strong performance in 2023. First, I would like to extend a warm welcome to our new CFO, Pierre Gravier, I've had the pleasure of working with Pierre over several years and I'm confident his extensive experience in finance strategy and healthcare advisory will be incredibly helpful as we continue to build the PTC of tomorrow. Now let me begin with our 2nd quarter revenue.

Speaker 2

We achieved another quarter of strong revenue growth with total revenue of $214,000,000 This represents 29% growth over the Q2 of 2022. Our DMD franchise revenue in the quarter totaled 162,000,000 a 21% increase over the Q2 of 2022. This robust second quarter performance puts us in a strong position to achieve our 2023 total revenue guidance of $940,000,000 to $1,000,000,000 which would represent 34% to 43% year over year growth. In addition to our team's continued strong commercial performance, ABRISD is now approved in 100 countries with more than 8,500 patients treated globally. Continued growth is expected as access is achieved in countries where every IVRISV is approved.

Speaker 2

In addition, based on the recent positive opinions in the CHMP, the AVIZI EU marketing authorization will now include pre symptomatic infants, providing another important source of potential revenue growth. As we shared in May, we initiated a strategic portfolio review and With our previously announced decision to discontinue our preclinical gene therapy programs and other prioritization decisions, We now anticipate non GAAP R and D and SG and A expense for the full year 2023 of between $810,000,000 $860,000,000 versus our previous guidance of between $890,000,000 $940,000,000 In addition to the expected impact Of our May portfolio decisions on 2023 OpEx, we anticipate annualized savings of approximately $150,000,000 in 2024. Moving to our pipeline. Q2 was very busy as we reported results from several clinical studies, including Strong data sets from our APHINITY and PIVOT HD studies. Let me start with our APHINITY trial of sepia terra in PKU patients.

Speaker 2

In May, we announced that we met the study primary endpoint of bloodphenylalanine reduction with highly statistically significant and clinically meaningful results. CPAtaring demonstrated substantial fee reduction from baseline of 63% in the overall primary analysis population and 69% in the subset of classical PKU patients. In addition, the vast majority of patients were able to reach target fee levels in line with U. S. Guidelines of less than 3 60 micromole per liter.

Speaker 2

With these strong data in hand, we requested a pre NDA meeting with FDA, which has been granted and is scheduled for the Q3. Pending FDA feedback, we expect to submit an NDA in the Q4 of this year. In addition, as Professor Anja Muntau emphasized in our recent PKU commercial deep dive presentation, the physician community is excited about the potential for cepiaterin to fill the persistent large unmet medical need for PKU patients worldwide. Moving to CTC-five eighteen for Huntington's disease patients. In June, we reported interim 12 week data from the PIVOT HC trial.

Speaker 2

To summarize, All key objectives of this interim data analysis were met. PCC-five eighteen treatment resulted in dose dependent lowering of blood cell huntingtin protein with mean lowering of Huntington protein levels of 30% in the 10 milligram dose cohort. Treatment resulted in the targeted levels of CNS exposure with a ratio of CSF to plasma exposure of 1.5:one at the 10 milligram dose level. This suggests that greater lowering of HTT protein possibly up to 45% could be occurring in brain cells. Importantly, PTC-five eighteen is well tolerated with no treatment related SAEs, No reports of peripheral neuropathy and no treatment related CSF NfL spikes with an overall trend towards lower NfL levels in PTC-five eighteen treatment groups.

Speaker 2

With these encouraging interim data, we will continue to enroll Stage 2 and early Stage 3 patients into the PIVOT HD study. And of course, we look forward to the 12 month results of the initial treated subjects, at which time we can learn more about the longer term effects of PTC-five eighteen treatment on key disease biomarkers. EVE HD data along with the continued global success of IRISI further support the power of our splicing platform. Moving to betiquinone, we reported results from the MOVE FA trial in pediatric and adult Friedreich ataxia patients in May. While the trial did not meet its primary endpoint, the results of the MOVE FA trial did demonstrate evidence of meaningful clinical benefit on key aspects of Friedreich ataxia, including in pediatric patients for whom there remains a large unmet medical need.

Speaker 2

In particular, the data demonstrating vatiquinone's treatment benefit on the upright section of the mFAR scale support a potential long term benefit in slowing time to loss of ambulation. Given these results, We will establish safety profile of tatiquit on the pediatric patients and the remaining unmet medical need for pediatric F8 patients. We plan to share these results with the FDA to determine if there is a potential path to approval. We requested and were granted a Type C meeting with the FDA, which is scheduled for the Q4 of 2023. We expect a number of additional regulatory activities in the second half of twenty twenty three.

Speaker 2

Beginning with Translarna, we expect CHMP opinion for the Type 2 variation to convert the European conditional marking authorization to standard authorization in the Q3. In the U. S, we plan to submit a tight steaming request this month to the FDA to discuss the totality of data collected to date that could support an NDA resubmission for Translarna. For ObsEva, as we previously shared, we are awaiting feedback from the on additional bioanalytical data we submitted in support of comparability analyses between the clinical and commercial drug product. Based on the timing of this feedback, we expect to submit the Aphasa BLA in the Q3.

Speaker 2

Overall, I am incredibly proud of our continued execution across both our commercial and R and D teams. Our commercial performance in the first half of twenty twenty three positions us well to meet our revenue guidance of $940,000,000 to $1,000,000,000 and the strong data sets from Affinity and Pivot HD position us well for continued future growth. I will now hand the call over to Eric and Kiley to provide an update on our commercial accomplishments.

Speaker 3

Eric? Thanks, Matt. It is exciting to see the progress of our pipeline and the future opportunities of new product launches, and our customer facing team is eager to bring these much needed treatments to patients around the world. We are extremely proud of the accomplishments of our global customer facing team, which has delivered another strong quarter in revenue. The team continues to accelerate the significant momentum built in the Q1 and is focused on executing on the growth strategy of our commercial portfolio of products.

Speaker 3

Our global DoD franchise continues to be robust and our strategy of geographic expansion continues to progress in Latin America, Middle East and Northern Africa and CIS regions, while we continue to build out the future foundation and growth of markets in Asia Pacific. Now let me turn to the DMD franchise. Translarna and Eflava continue to be an important growth drivers, delivering an impressive $162,000,000 in net revenue for the Q2, which is up 21% compared to the Q2 of 2022. With a strong first half for our DMD franchise, we are updating our 2023 DMD franchise revenue guidance from $545,000,000 $565,000,000 to $545,000,000 to 575,000,000 For Translarna, we achieved $96,000,000 in revenue this quarter, which is a remarkable 25% growth over the same quarter in 2022. Growth occurred across all major regions and we continue to see Growth from new patient starts being added in new growth markets.

Speaker 3

As mentioned previously, due to the unpredictability of large government orders In some of our regional markets, particularly in Latin America, Central and Eastern Europe, the Middle East and CIS regions, We expect to see ongoing lumpiness in quarterly revenue throughout the year. Now turning to Emflaza. The fundamentals of the Emflaza business continue to be solid. Quarterly net revenue was $66,000,000 which is 18% growth over the same quarter in 2022. We continue to see strong trends in the number of new patient start forms in the Q2, which will provide important momentum as we progress through the year along with continued high compliance, appropriate weight based dosing and a continued focus on broad access.

Speaker 3

Now I'll ask Kiley to update the progress on our current and future new product launches. Kiley?

Speaker 4

Thanks, Eric. Let me begin with UPSTASA, the first and only approved gene therapy infused directly into the brain. We continue our steady rollout across Europe, including treating our first patient in Italy in the second quarter. We continue to see transformative results for the patients that we have treated thus far, which we shared at the recent European Pediatric Neurology Society, EP and S Conference in Prague. New treatment centers of excellence are being opened internationally to support the treatment of patients as we continue the European rollout.

Speaker 4

We also continue to leverage early access programs and cross border treatment opportunities and expect to treat more patients both in Europe and other international markets throughout the second half of twenty twenty three. Moving to TEGSEDI and WAYLIVRA in Latin America. We continue to establish TEGSEDI as the treatment of choice based on its strong clinical profile and improved quality of life for hereditary ATTR for polyneuropathy patients. In Brazil, we completed delivery of the remainder of our second group purchase order from the Ministry of Health. We continue to see robust growth in patient identification as well as positive patient responses on treatment across the Latin American region.

Speaker 4

Lastly, we are extremely excited about the cepiaterin opportunity as discussed recently at the PKU deep dive presentation. With a substantial unmet need and strong differentiation from both the mechanism of action and the AFFINITY results, The customer facing teams are looking forward to bringing this differentiated therapy to physicians and PKU patients upon approval. As we discussed at the call, we were able to leverage our strong global commercial infrastructure and we have now established our internal global launch team. This team is actively working to prioritize the global launch sequence and key pre launch activities with the first step of bringing sebuterin to the U. S.

Speaker 4

Market, followed closely by Europe, Japan and other key international markets. With physician excitement as outlined by Doctor. Muntao and PTC's proven track record in commercializing rare diseases, The team is poised to achieve the market opportunity of over $1,000,000,000 In conclusion, our Q2 rounds out an excellent first half of for the commercial team. With significant progress across all our commercial products and across all geographies, We are well set to achieve our ambitious 2023 revenue guidance. Now let me turn the call over to Pierre for a financial update.

Speaker 4

Pierre?

Speaker 5

Thanks, Kylie. I want to begin by saying how thrilled I am to join the PTC team as CFO. I have known the PTC team as an advisor for several years, and it's a privilege to be working with such a patient focused company and bring my skills to continue to build the PTC of tomorrow. It is my pleasure to provide you with the financial highlights of our Q2 2023. Please refer to the Q2 earnings press release issued this afternoon for additional details.

Speaker 5

Beginning with top line results. Total revenue for the Q2 was $214,000,000 This consisted of DMD franchise revenue of $162,000,000 and other revenue of 52,000,000 Starting with the DMD franchise. Translarna net product revenue in the quarter was $96,000,000 reflecting growth of 25% over the Q2 of 2022, driven by strong performance across all geographies. And SLAVZA had net product revenue of $66,000,000 representing 16% growth in the quarter compared to the Q2 of 2022. Moving to Averisbee.

Speaker 5

2nd quarter global revenue of CHF342 1,000,000, which equates to about US380 $1,000,000 was achieved, earning royalty revenue of $37,000,000 for PTC. As Matt mentioned, the 2nd quarter performance puts us in a strong position to achieve 2023 total revenue guidance of $940,000,000 to $1,000,000,000 including an expected $100,000,000 milestone when average D surpasses $1,500,000,000 in annual revenue. Non GAAP R and D expenses were $170,000,000 for the Q2 of 2023, excluding $16,000,000 in non cash stock based compensation expense, compared to $143,000,000 for the Q2 of 2022, excluding $14,000,000 in non cash stock based comp expense. The year over year increase in R and D expenses reflects additional investments in advancement of the clinical pipeline. Non GAAP SG and A expenses were $75,000,000 for the Q2 of 2023, excluding $14,000,000 in non cash stock based compensation expense, compared to $66,000,000 for the Q2 of 2022, excluding $14,000,000 in non cash stock based compensation expense.

Speaker 5

As Matt noted earlier, we now anticipate non GAAP R and D and SG and A expense for the full year 2023 of between $810,000,000 $860,000,000 Cash, cash equivalents and marketable securities totaled approximately $338,000,000 as of June 30, 2023, compared to $411,000,000 as of December 31, 2022. Cash increased by $52,000,000 from the end of the Q1, mainly due to the addition of $50,000,000 from restricted cash as a result of the positive septiaptera data readout based on the Blackstone agreement. I will now turn the call over to the operator for Q and A. Operator?

Operator

And thank you. And one moment please. And our first question comes from Kelly Hsieh from Jefferies. Your line is now open.

Speaker 6

Thank you for taking my questions and congrats on a great quarter. My first question is, So regarding the Translarna sales, in Q1, you mentioned the sales benefited from large government order in Europe. Can you comment and how did the government order impact the Q2 and how should we anticipate for the future Q3, Q4 sales? Thank you.

Speaker 2

Kelly, thank you very much for the question. Obviously, it was another strong quarter of Translarna revenue. I'll let Eric provide Some more details on the differences between Q1 and Q2.

Speaker 3

Thanks for the question, Kelly. First of all, we're really pleased with the quarter. I mean, we generated $162,000,000 of DMD franchise, that's 21% growth year over year compared to last year. And I think as you've seen in the past years, we've actually invested in geographic expansion. It's been very consistent that we know that lumpiness will occur quarter to quarter and it's really nothing new at this point in time.

Speaker 3

But since we've expanded in many of these regions, Large government orders, particularly in Latin America, Central and Eastern Europe, in the Middle East and our CIS regions, as we've seen, Consistently, those orders and the size of the orders and the timing is relatively unpredictable. However, unlike Western Europe And the U. S, which tend to be more predictable from week to week and month to month, I would say that the fundamentals are still the same. And we've received large orders and the timing of those orders will continue. Our base business in even those markets continue to grow new patient starts, High levels of compliance, dose adjustments and very low discontinuation rates have occurred.

Speaker 3

So the fundamentals for both the new markets as well as our mature markets are really solid and in place. We anticipate Orders in the second half of the year, and we've raised, if you will, the upper end of the guidance at this point in time to reflect that. The timing and the size of those orders will likely be more defined in the Q3. And as we get closer and closer to the Q3, we'll be able to, if you will, adjust and confidently So just stay tuned, Kelly, for an update around Q3 as we provide a little bit more color and we'll have more visibility on the timing of group purchase orders in the second half. But right now, we feel very confident And we have very good tailwinds in the DMD franchise remaining throughout the year.

Speaker 6

Thank you very much. And I also have 2 quick follow ups. First, can you guide out any trigger for PTC to start reporting Ustasa's quarterly revenue?

Speaker 4

Absolutely. Thanks, Kelly. So as we've spoken about, while we did provide guidance last year, I think the intent With providing that guidance was to ensure that we clearly indicated that we expected to treat patients very rapidly into The launch, we weren't expecting a delay from launch to treatment of those patients. As we've said previously, it's very difficult to Understand the true forecast in the 1st 12 months of launch. And so as we move through that period and we garner a much clearer understanding on How we're seeing patient throughput, pricing and reimbursement, particularly in Europe being a country by country process, Gaining more clarity into that and a number of registrations ex U.

Speaker 4

S. Will be able to provide more granularity and more clarity. So hopefully that answers the question.

Speaker 6

Yes. Thank you. And one last one, if I may. So regarding the TEP C meeting with And Ataxia's filing, just curious what kind of strategy you could share, like whether you have There are some group analysis and also and a focus on like improved efficacy maybe on some genetic marker and also certain group of patients? Thank you.

Speaker 2

Yes. Can Can you clarify the Type C meeting for which indication? FA. FA, yes. So as we said, we requested that Type C meeting from the FDA and it was granted and that will take place in the Q4.

Speaker 2

And as we talked about while we didn't hit the primary endpoint, we had very strong data on a number of important aspects of the disease, in particular the upright stability subscale. When you think about Friedreich ataxia as a disease and drug development for Friedreich ataxia, one of the main goals of any therapy would be Slow the time for patients to lose ambulation. That is one of the key, if not the key morbid transition point of the disease and every drug At Target's altering progression, it seeks to try to slow that time to loss of ambulation. The upright stability subscale of the mFARS has been shown to be a key predictor of time to loss of ambulation. So the fact that, 1, we had pre specified that particular subscale and as an endpoint and 2, the fact that it is a component of the primary endpoint and we showed strong signal of effects with A difference of about 1.3 points between treatment and placebo, and we've done some work to show that, that Should translate to a delay in loss of ambulation of at least 8 months and perhaps more with some other analyses that we've been able to do.

Speaker 2

So we're able to come to SBA and be able Talk about the potential path to an accelerated approval where we've been able to demonstrate on an intermediate clinical endpoint upright stability that we're able to Delay, likely delay, a longer term significant morbid transition point of the disease loss of ambulation and The fact that we showed statistical significance and a strong magnitude effect, we can demonstrate that we are able to likely provide a long term clinical benefit with regard to really the key goal of FA therapy, which is delaying loss of ambulation. We look forward to having that discussion with the agency. Obviously, with the SKYCLARIS approval that's directed towards adult patients, we have a a study that was included primarily pediatric patients, a very strong safety record of the tikoyl in pediatric patients and then again now a data set that has many Positive aspects, but in particular, very strong data with regard to ability to slow the loss of ambulation, which is really the key goal of FA-ten.

Speaker 6

Very helpful. Thank you.

Operator

Anne, thank you. And one moment for our next question comes from Sami Corwin from William Blair. Your line is now open.

Speaker 7

Hi, guys. Thanks for taking my questions. I guess first, Do you have any clarity as to why the CHMT opinion for Translarna got pushed? I thought that was originally supposed to happen in May. And is there any contingency plan there if it doesn't get approved?

Speaker 7

And then I have a follow-up question.

Speaker 2

Hi, Tammy. Thanks for the question. Actually, the initial timing Was end of H1, that timeline was put together based on how we thought the typical back and forth At 1C during the CHMP process such as a Type 2 variation, obviously, there was one more turn of questions back and forth and that pushed the H1 into the Q3. So we remain highly confident of our ability to achieve the conversion from conditional marketer authorization to standard marketer authorization, Knowing that really the bar here is being able to, as the European statute states, confirm the benefit that existed at the time of registration, which of course was in 2014 based on our first placebo controlled study, Study 7, and now we have a data set in over 700 boys that not only confirms that benefit, but actually expands with our ability to have shown Study 41 statistically significant benefit on the all comer ITP population, which is the indicated population as well as showing significance on a number of different endpoints, including NorthStar Ambulatory Assessment and Time Function Test. This is really

Speaker 7

And then Given you have about $330,000,000 in cash, how are you guys kind of thinking about capital deployment in terms of Either focusing on your commercial franchises and products and that will be going through regulatory submissions in the near term versus your earlier stage research pipeline.

Speaker 2

Yes. I think as we've talked about, Sandy, we are well capitalized to take us to the next Take us through this year and get us to the PKU launch. We've talked a lot about having the infrastructure in place to launch PKU and other products. We also have a Robust discovery and development infrastructure, so all the pieces are there. And so we're well positioned and well capitalized to move forward the programs

Operator

And our next question comes from Kristin Kluska from Cantor Fitzgerald. Your line is now open.

Speaker 8

Hi, everyone. Thanks for taking my questions and welcome, Pierre. First, just wanted to ask what the main questions will be at PKU pre NDA meeting and essentially what feedback you're looking for here?

Speaker 2

Sure, Kristen. Thanks for the question. So obviously, pre NDA meeting is often focused around the structure of the NDA, how the components are put together, how we do Clinical standpoint, efficacy standpoint, safety database, non tox package, CRC package. So it's a fairly standard approach to the pre NDA meeting. Obviously, we are Quite gratified just to have the meeting granted and our expectation is that we'll be able to align with the agency and move forward with the submission in the Q4.

Speaker 8

Okay. Thanks for that. And we've often talked to you about the synergies with the splicing platform, Especially now that you're progressing along with Huntington's disease, but maybe just kind of wanted to ask a question from the sense of How much overlap you think there is with the neurologist community and in particular the adult community with the experience with RISD, given the launch has been pretty substantial here and then if you have any initial feedback that you've heard from Some leaders in the space based off your early data.

Speaker 2

Yes, I can give a little bit of color and then I'll turn it over to Kiley for a bit more Detail on this, obviously SMA just in general is both pediatric and adult, but Huntington is obviously going to be mostly adult till We're able to initiate and complete our work in juveniles. But I would say there is broad recognition in the scientific position as well as the patient communities, Importantly, about the power of the splicing platform and obviously we talked a lot about Ambusy being able to provide us with a blueprint of how to successfully discover, optimize, develop an oral compound for oral splicing compound for a whole brain disease such as SMA, And I would say in many ways, the RISD experience has also set a path for us as well as we think about Getting this out and doing clinical trials in both the patient and physician communities because of their recognition of the power of splicing platform, the ability to deliver an effective oral So I'm asking that is not only safe, but be able to deliver meaningful results. Heather, I don't know if you want to provide any more color on how we're thinking about working with this position.

Speaker 4

Yes, absolutely. I think what I would add, Kristen, in addition to what Matt said, I think one of the things that we do as a commercial team, which we take very seriously, It's making sure we take learnings across all aspects of our business as well as making sure where there are overlaps between physician Specialties and physician target call points that we're sharing that amongst our different teams. So if we look at Huntington's disease specifically, as Matt said, obviously, it's more adult. One of the things that is consistent is the movement disorder subspecialty within neurology has overlapped between Asthiza and other parts of our business. And so we're making sure it's not an entirely overlap, but there are some components of overlap.

Speaker 4

And so in that case, we're making sure that we're having

Operator

And our next question comes from David Lebowitz from Citi. Your line is now open.

Speaker 9

Thank you very much for taking my question. When you think of the guidance for Duchenne, for full year, the implication is that at the high end of the guidance, The revenues would actually decline by 27% in the second half. Are we to assume that Guidance is just making the most conservative possible assumptions here, and that things could very well work out differently as the year progresses? Or should we expect a decline in the second half?

Speaker 2

Yes. Thank you, David, very much for the question. Obviously, Eric had talked a bit about how much growth we've been able to achieve and the reasons for that growth

Speaker 3

Yes. I think first of all, I think we continue to see growth. So David, I think what we're trying to do is to really modulate a lot of these group purchase orders in countries where we have established ordering patterns that are relatively inconsistent. And so while we're being a bit conservative in certain areas, the unpredictability of the timing and the size of the orders can certainly play. But What we've seen fundamentally in all of these markets, particularly in the Latin American markets where we continue to see orders and orders from new countries As well as the Central and Eastern European Markets and Middle Eastern Markets, which in the last few years have started to sort of stabilize much In terms of their ordering patterns, there are still some unpredictability.

Speaker 3

And because the number of patients that we have, A large amount of patients in certain markets, such as Brazil, Russia and a number of other key areas, The timing and the size of these orders can have fluctuations between 1 quarter or the next. But the fundamentals are still very strong. And I think we're very positive Given the fact that we have seen quarter on quarter growth, so I think we as I mentioned, I think we have some very nice tailwinds. I think we're going to continue to see good growth and we're very confident that we're going to be able to achieve the guidance that we've set out or at least exceed it.

Speaker 9

Got it. Thank you very much for that. And just jumping over to PKU, Given the trial, the pivotal portion of the trial utilized a diet as a part of the protocol. And I know the OLE that you are adding fee into the diet. From a labeling perspective, Can the OLE serve as a component to allow diet to not be a requirement for a patient or will the labeling ultimately include on top of a diet?

Speaker 2

David, it's a good question. Obviously, we've talked a lot about all the different aspects in your question. The importance of having a stable diet in the trial so that we don't confound the trial results, it's incredibly important that we have an understanding of the effects of C glucan relative to placebo in the context of stable diet. But we also know, as you referred to, that being able to liberalize diet is really the Holy Grail for PKU patients. Their diet is highly restrictive and obviously takes an enormous impact on patients and their families in many, many ways.

Speaker 2

And obviously, one of the key differentiating factors is the ability of Cpeterin to maintain Phenylalanine levels within control and still allow for the liberalization of the diodes. We saw in the early fee data fee tolerance data that we I presented thus far both in the first study readout as well as in the PKU commercial deep dive a few weeks back that we're seeing that Signal of the tolerance in the face of the intake that exceeds RDA levels in many patients. And As we're looking at the data that are continuing to come in through the open label extension, we're seeing that to continue to be the case as more and more patients are going through that protocol and we look forward to sharing those data at the SSIEM and in future and forms in the future. As to what the label would say, we're not sure. It is likely since The protocol talked about stable diet that, that will be in there.

Speaker 2

But nonetheless, in all reality, in everyday life, patients will have Possibly some component of diet control, but obviously what they do in daily life and really to liberalize their diet is going to be much more impactful in Not in how it's not how the drug is necessarily prescribed, but just in what the perceived value is, the increased physician uptake and the broad patient interest Finally, being able to have oral tolerable therapy that not only provides them control, but finally allows them to liberalize their diet, which is so very important to patients.

Speaker 9

Got it. Thank you so much for taking my questions.

Operator

And thank you. And one moment for our next question. And our next question comes from Eric Joseph from JPMorgan. Your line is now open.

Speaker 10

Hi, good afternoon. This is Hannah on for Eric. Thanks for taking the questions. Just wondering when we might be able to see maybe a fuller update or presentation of data from the Phase 3 MOVE FA study As you guys are considering and conducting additional analyses to take the FDA, just wondering if there's a plan to present these to The Street?

Speaker 2

Yes, Jaime, thank you very much for the question. So obviously, we prepared we shared the key top line data from the study, including the positive results Number of the secondary endpoints and the two important components of the MFR is the bolvar subscale as well as the upright stability subscale. But Obviously, we have done additional analysis, particularly around being able to quantify the likely long term benefits So we're going to continue to do some more work in that area, and we will look forward to showing those sharing those analyses in the future as part of

Speaker 10

Okay. And then this may be a little bit more of a niche question, but The tolerance that patients might achieve that would be considered clinically meaningful to both physicians and patients?

Speaker 2

I think I would say that we highlighted and Professor Muntow highlighted very nicely in our deep dive a few weeks back How burdensome the restricted C. D. Is to patients. So even slight increases in intake would be an incredible benefit Both gratifying for physicians, but obviously important for patients in their quality of life. Of course, when looking at our data and Seeing that patients are able to get beyond the recommended daily allowance of protein that unaffected individual would be able to Have as part of their standard diet and still maintain control.

Speaker 2

I think that those are incredibly powerful data because that Far exceed what anyone would even hope for in therapy. So for us to be able to observe that has been very encouraging to us. Obviously, something that the patients have gotten very excited about. And as Doctor. Moonkha said herself, she and other physicians are very excited about what they've seen so far in those statements.

Speaker 10

Okay, great. Thanks for taking the questions.

Operator

And thank you. And one moment for our next question. And our next question comes from Jeffrey Stanley, your line is now open.

Speaker 11

Hi. This is Michael Riad on for Jeff Hung. Thank you for taking our questions and congrats on the quarter and the progress. So if you have favorable U. S.

Speaker 11

Regulatory outcomes in all your late stage programs, presumably we'd see them launch in a close timeframe. So How is the company thinking about preparations for multiple simultaneous launches, especially in the context of the annualized $150,000,000 in Savings in 2024 and would you launch them immediately if that was an option? Thanks so much.

Speaker 2

Yes. Michael, thanks so much for the questions. We would look forward to that opportunity. We have been building for that. We're well set up for that.

Speaker 2

We're well funded for that. I'll let Kylie provide a little bit more color. But let me just say the short answer is, we would welcome that activity and work

Speaker 4

Yes, absolutely. Thanks, Matt, and thanks, Michael, for the question. As Matt said, I think we definitely welcome that problem to have. But As we've talked a lot about, we have a really strong commercial infrastructure in place globally, and this includes both capabilities and capacity to focus on urology and Metabolic. And obviously, the team is gearing up very quickly for a potential PKU launch.

Speaker 4

In addition to that, obviously, we don't start on day 1 of launch. The team has done a lot of work While trials are ongoing to build relationships with KOLs, to build relationships with patient advocacy groups, to ensure that we understand the needs of the payers, to ensure that we understand what's necessary to be successful at launch. And all of that takes place sometimes often up to 2 years prior to launch. So We're in a good position to be ready upon successful regulatory discussions and positive movement towards NDA submissions, And it wouldn't require additional resources or infrastructure to be successful there. So we have the footprint in more than 50 countries around the world And we are definitely ready to go.

Speaker 4

And I know I speak to many of the colleagues that we are excited for the opportunity to be able to bring a lot of these differentiated therapies

Speaker 11

And then maybe last one, more of a housekeeping question. Could you comment a little bit on the royalty rate for Avisti from Roche? It seems like it's been trending a little bit down in the last few quarters. Any comments here on what we should expect? And thanks so much.

Speaker 2

Sure. Caroline, do you want to fill that in?

Speaker 4

Absolutely. Yes. So the royalty rates from Roche for Auryxia tiered between 8% to 16%. So that is on an annualized basis. So every year they start at the beginning, which is the 8% and they're tiered up to 16%.

Speaker 4

So from that perspective, throughout the year, they progress through the different tiers. We're up towards, as we've seen with CHF701 CHF1 million of sales in the first half of the year, we're tiering up towards the second and almost near the third here of royalty rates. So I wouldn't say that they're going down, if anything they go up, but that's on an annualized basis.

Speaker 11

Thank you. Thanks for the clarification. Thanks so much.

Operator

And thank you. And for our next question, we have Brian Abrahams from RBC Capital Markets. Your line is now open.

Speaker 12

Hi, this is Joe on for Brian. Thanks for taking our question. Just going back to Translarna, can you talk about some of the potential Outcomes of the CHMP opinion, is there a possibility that Translarna can remain on the market with Additional authorization with the annual renewal? And I have a follow-up.

Speaker 2

Hey, Joe. Thanks for the question. So Obviously, the Type 2 variation that we're submitting is to convert the conditional authorization to standard Authorization and as we've talked about, we're confident in the ability to do that given the strength of the data and our ability to meet the requirements of Confirming, and as I answered earlier, building on the data that already existed at the time of registration. Obviously, if the CHMP were to decide that they want us to continue to collect data, whether that's as part of the longer term Open label section of Study 41, which was included in the 72 week placebo control portion and 72 week open label portion. Obviously, the analyses we presented and the analyses are performing the basis of the conversion request far on placebo control A portion of that's a possibility.

Speaker 2

Could the CHMP say STRIDE is really great. It's for the first time provides direct measurements The long term benefits of a therapy for DMD and also is able to capture the fact that we're having an impact on the 2 key morbid transition points of the disease, Loss of ambulation, loss of pulmonary function, and they say we want more real world data to convert, that's totally possible. So there absolutely is that possibility That they say continue with the conditional authorization for now, which of course would be in business as usual for Translarna.

Speaker 12

Got it. Thank you. That was very helpful. And also to touch on the U. S.

Speaker 12

Pathway. I guess if I'm not mistaken, Type C meeting has been requested this month. Is there a typical response time from the FDA to get back to you once the meeting has been requested? And also how much additional back and forth can you expect to have before the meeting is scheduled?

Speaker 2

Yes. Thanks, Joe. And we had said that meeting request came based on a recent discussion with The division with the Neuro division, where we talked about the potential pathways to an NDA resubmission in the U. S, particularly now given the volume of data we have not only from the 3 placebo controlled studies, Study 7, Study 20, Study 41, but importantly those slide data that I recently mentioned, which provide very strong evidence that the benefits that we're recording over the course of the time of the clinical trials are translating to long term meaningful benefit In the most significant way as possible, that's slowing time the loss of ambulation and loss of pulmonary function. The agency said, well, why don't we get all of our data together, including some of the That would be suitable for resubmission.

Speaker 2

As mentioned, we have not yet submitted that request. We will be submitting that request in August. They typically respond within a couple of weeks to let us know if the meeting is granted or not. And typically, the time line for Type C meetings following Meeting request to meeting date is roughly 75 days.

Speaker 12

Got it. Thanks for the clarity.

Operator

And our next question comes from Collyn Bristow from UBS. Your line is now open.

Speaker 13

Hi, this is Yihan on for calling. Congrats on the quarter and thanks for taking our question. So I guess our question is on the PTC-five eighteen HD program. So in terms of the U. S.

Speaker 13

Partial clinical hold, Just wondering if you have already submitted the Part A data as well as the additional safety data to FDA yet? And if there's any feedback of further requirement from FDA to potentially lift the hold. And also the second part on the same program. So for the dose escalation, So based on your data, it seems like the 10 milligram will be very likely to reach your targeted HTT reduction goal of like 30% to 50% in brain. And you previously noted you need some more data at low doses to further determine for the dosing escalation.

Speaker 13

So just wondering, Could you please let us know what kind of data set you might need to see to make this decision? And will this potential dosing escalation be included in our conversation with FDA for the clinical holding team, and when will we expect to see the data, the next data update? Thank you so much.

Speaker 2

Thank you very much for the questions, Yaa. Let me I'll start with the first question regarding FDA and the partial clinical hold in U. S. Obviously, we were Very pleased to see that the data that we presented in June on the first cohort of patients Coming through the first part of PIVOT HD, demonstrated the drug was safe and very well tolerated, no serious adverse events, no evidence of peripheral neuropathy, No canine health spikes that have been observed in other therapies. So overall, it's strong as a safety record as you could have hoped for.

Speaker 2

Obviously, we're Continuing to monitor safety, we also mentioned that we have an independent DSMB that continues to meet and continues to support continuation of the study as it is I also indicated based on looking at the 5 milligram and 10 milligram data as part of our interim cuts that they would support if we will decide to do so escalating to a 20 milligram dose. We have submitted to the agency the safety data and our argumentation in support of We are opening the study in the U. S. That process is still ongoing and obviously we'll provide an update at the appropriate time. Regarding your second question on the doses, you're correct.

Speaker 2

We were as we shared, we believe a 10 milligram dose both based on what we observed in terms of blood reduction in mutant Huntington protein of approximately 30% as well as again seeing higher exposures in the CNS to the blood with the ratio of CSF to plasma of 1.5:one gives us every reason to believe that we're within that targeted range a 30% to 50% lowering within brain cells. And so what we said is REDUCE, since we believe we are in the range, We continue to collect data on the 5 milligram and 10 milligram dose cohort, importantly, some of those biomarker data over the second part of PIVOT HD that we will present with the 12 month data cut later once available. And that will confirm if we are at the dose level we want. And then we'll probably use that time point to inform any additional decisions regarding going to that higher dose level of 20 milligrams. Of course, it's important to note that we're in an incredibly favorable position with the oral molecule that we can titrate and to be able to have peripheral biomarkers such as Blood Hunting Syn Protein that can provide important information regarding target engagement and pharmacoeconomic effect is an incredibly important factor in being able to steer this clinical development program forward and taking us to a right dose level That's not only safe, but it provides important benefit potentially to patients.

Speaker 2

So as for now, we're continuing with 510. We will expect to have that next data update, the biomarker 12 month data update, approximately 9 months from when we had the 3 month data update. And again, in terms of that decision, it will be based on what the data look like. And as I mentioned, the DSMB has already provided us their

Speaker 13

That's very helpful. So just sorry, just one quick clarification. So do you Like will you provide, for example, additional 12 weeks data from Stage 2 or early Stage 3 patients in terms of the program or the next update will just be the 9 months data? Thank you.

Speaker 2

Yes. So good question. So we have a few more data updates to go, right? So obviously those first patients that we presented The Part K data on or the first 3 months data on in June, we'll expect approximately 9 months from then to have the 12 month data, Right. And then obviously, we'll be able to provide the 3 month data update on the additional Stage II and the early Stage III patients We haven't given that time yet.

Speaker 2

We'll provide the timing for that once we have more clarity on the percent date.

Speaker 13

Okay. Very helpful. Thank you

Operator

so much. And thank you. And our next question comes from Joseph Thome from TD Cowen. Your line is now open.

Speaker 14

Hi there. Good afternoon. Thank you for taking my questions. Maybe one on UPSTAYSA. It seems like companies are having various ability to Treat patients after the approval of gene therapy in the U.

Speaker 14

S. And very helpful to success here. So I guess is there anything that you can do during the hopeful FDA review process Kind of prime payers to be ready to reimburse Apsesa upon potential U. S. Approval, which I expect will come sometime in the back half of next year.

Speaker 14

And then maybe second, we are going to know what the pipeline looks like by the end of this year based on the regulatory feedback you get in the next couple of months. I believe in your previous deal with Blackstone, there was like $500,000,000 earmarked for BD, I guess. Are you ever contemplating using that at all, depending on what comes over the next few months? Thank you.

Speaker 2

Yes, sure. Joe, thank you very much for the questions. First question On Auspiza, I'll let Kyle give some detail on how we're setting the U. S. Market in terms of payers.

Speaker 2

But I will add that we're obviously Incredibly gratified to see as we continue treatments in Europe as well as the treatments that we did as part of the CANYLA study that included sites in the U. S. We're continuing to see very strong data, again substantiating the fact that this is a transformative therapy. It's one of Those therapies where we did it and see the effects that what we hope for with the gene therapy taking kids who have virtually no dopamine reduction, no motor function and then Of course, that in and of itself does so much to preset the market and increase both patients and physicians' desire to get that therapy. So, Kyra, do you want to talk about our preparations for U.

Speaker 2

S.

Speaker 4

Yes, absolutely, Joe. We are engaging with U. S. Payers and we do this Well ahead of launch to understand what are the types of queries that they have and what are some of the roadblocks that might be put in front of us. And we obviously, Especially with AADC need to do education around what is the disease, the high morbidity and mortality rates, The lack of standard of care or any disease modifying therapies out there available and obviously budget impact.

Speaker 4

And all of that work happens ahead of approval and the U. S. Team has been actively engaged in that process to date. As Matt said, with a strong data package and transformative data, not just in the short term, but also in durability, which is one of the questions that a lot of payers have put in front of other companies with gene therapies. How well does your treatment perform not only in the short term, but also in the long term?

Speaker 4

We feel very, very confident around the data package that we have for UPSTASER. And the value proposition in totality has been Very well received by U. S. Payers and there has been a high willingness to pay.

Speaker 2

And Joe, on your second question regarding we'll learn a lot more about the portfolio in the coming months. And obviously, you've Programs as they move more towards a coherent strategy and focus, and obviously, P and D can be an important part of that. Pierre, do you want to add some more color on funding and BD opportunities?

Speaker 5

Absolutely. So as Matt said, It seems the company is well aligned about our capital and our strategy to leverage our expertise and being opportunistic On BD, as it comes to Blackstone, we're very proud to have partnered with such a strong group with life science expertise. And we will always evaluate our funding options as it comes to be there on our capital structure.

Speaker 2

Great. Thank you very much.

Operator

And thank you. And for our next question, We have Gina Wang from Barclays. Your line is now open.

Speaker 15

Hi, it's Tony on for Gina. Going back to the Huntington's program. Could you just add some more color potentially on what kind of threshold you might be looking for in terms of CSF Protein, I know you talked about 30% to 50% range, but is there kind of a specific cutoff you would be specifically looking for?

Speaker 2

Yes. Tony, thank you very much for the question. Obviously, there's been a lot of discussion about CSF Huntington protein, what it means And how do we measure it and many things like that. Look, we're in a position where there's many important biomarkers of that we're measuring in the study, we're measuring CSF protein. We're also measuring NfL, which obviously has been shown a neurodegenerative disease to be a very important marker, Obviously, safety in terms of potential nerve injury, which I mentioned you've not seen any signs of thus far in the PIVOT HD trial, But also efficacy, we can look to 1st and accelerated approval as an indicator that there is broad interest including from the regulatory authorities To look at NfL as an important marker of efficacy and neurodegenerative disorders that are characterized by neuronal injury and neuronal loss.

Speaker 2

CSF Huntington's protein has been a bit less well characterized. What we do know is that in early stages of Huntington's disease, there's no detectable Mutant Huntington protein is PSF. It's at levels that are so low that it's not detected by the assays that's been any longer use. However, Over the course of time as neurodegeneration progresses, there's a gradual increase in the level of mutant hunting Proteus and CSF. So that tells us that it is in a way a marker of neurodegeneration.

Speaker 2

So if that is true, and we believe it is, and that that CSF protein is likely coming from spilling from nerve cells, they become injured and died during The ability to lower CSF huntingtin protein is an important marker that we are having a favorable effect on the brain cells such That they're less injured and are spilling less Huntington protein into the CSF. So all that is to say that that's what we understand about it. Quantifying what change is meaningful is a bit challenging. I don't think anyone has an exact number other than to say, obviously, if you have a marker of disease That is increasing over time as the disease worsens. If you could stabilize, ultimately lower that marker, that's obviously very good.

Speaker 2

But I think the way we think about it is not in terms of any specific threshold, but being able to look at our effects on the trajectory of CSF protein with the goals we're deploying And we did share on the 12 week call that we are observing lowering in the dose cohorts at very early points in time before we know that we're reaching And we state in terms of what we'll ultimately be able to achieve in CSF protein lowering, but we're also going to look at that alongside other important markers such as NFL as well as the volumetric MRI and that together those will paint an important picture of the benefit that PTC-five zero three will be able to provide for Huntington's

Operator

And our next question comes from Tazeen Ahmad from Bank of America. Your line is now open.

Speaker 7

Hi. What would shift to a standard approval From the status that you're at now for EU practically changed in terms of either commercial opportunity, reimbursement Or does that kind of not really matter in the grand scheme of things? And then as far as the cost savings that you And about an annualized number of about $115,000,000 or so. To clarify upon what you might have said before, could there be room for additional Cost savings beyond what you just described, as we get closer to 2024 and you take a closer look at your portfolio? Thanks.

Speaker 7

Great.

Speaker 2

Thank you very much for the question, Sabine. On the first question regarding the conversion from a Regulatory standpoint, I think the impact is perhaps you don't have to go through a process every year of getting the renewal. But more importantly, and to the point in the question, The commercial impact, I'll let Haile to talk about this.

Speaker 4

Yes. So, Dazeen, In answer to your question around the benefit, I think what the team has done is a remarkable job of securing very favorable pricing and MarketAxess with conditional approval and not only being able to secure, but maintain a really favorable pricing corridor over the years of maturation of the product, which is not easy to do. I think from a benefit perspective, we don't see a huge upside when it comes to the countries that were already launched in with Pricing and market access, there are some smaller countries that would open the door to a discussion post conversion. But I think where the true upside is the countries that we don't have registration in yet.

Speaker 2

And then, Devine, regarding your second question in terms of potential further cost savings. Look, as we talked about at the time of the CEO transition, one of the things that we really wanted to focus on, particularly As we were reading our studies and risk deposit in PKU data that we ultimately had, we were in a position to start really focusing down and looking at opportunities to reducing our OpEx and reducing our costs. So the team spent a lot of time In the spring looking into this, we obviously shared the reductions that we planned associated with the discontinuation of the preclinical gene therapy programs. Obviously, that involves reduction in headcount and made these decisions in late May, which Obviously, it gave a bit of a limit of time in 2023 to realize the impact in cost savings, which is why we shared that we expect those changes in 2023 to have a greater impact than the impact of approximately $150,000,000 in cost savings in 2024. Of course, we also are going to be in a position where we're going to continually looking at the portfolio, looking at opportunities to ensure that we're advancing programs that have a reasonable return on investment as well as taking opportunities to stay when that's not the case.

Speaker 2

But let's look at cost savings. We're looking at $940,000,000 to $1,000,000,000 of revenue this year, we're incredibly excited about that. We expect as we move our other programs forward and looking forward to The potential launch of the PKU program, which we believe to be an over $1,000,000,000 market opportunity, we're really in

Speaker 9

a position where we should

Speaker 2

be thinking about moving towards a breakeven point and ultimately one day in the future of being profitable. And to do that, we have to continue to be Very thoughtful and strategic about our utilization of capital and how we think about OpEx, how we think about program spend. So You're correct. This is going to be something that we continue to do over time as we build the company forward.

Speaker 6

Okay. Thank you.

Speaker 1

And thank you.

Operator

And one moment for our next question. And our next question comes from Paul Choi from Goldman Sachs. Your line is now open.

Speaker 16

Thank you. Good afternoon and congratulations on the quarter. My first question is on the commercial side with regard to EVRISI. Your partner Roche reported the 1st sequential Decline and basically since the early days of the launch. I'm just wondering if you can maybe comment on market trends there, given that your guidance embeds A milestone for 2023.

Speaker 16

My second question is also on Huntington's, just with regard to enrollment Progress pending the discussion with the FDA and just how you're factoring in the pace of enrollment contingent upon clarifying the clinical hold there. Thank you.

Speaker 2

Thank you very much for your questions, Paul. Let me take the second one first. So in terms of enrollment, look, we've said all along that we were in a position to enroll this study outside the U. S. So that's the benefit of having Our global development organization that can run get trials started and conduct trials in countries around the world.

Speaker 2

We have the study up and running in a number of countries in Europe as well as in Australia as well as what we do so in Canada. And there is a great deal of enthusiasm in all of these countries amongst the physicians and the patient groups to participate in this trial. Obviously, the interim data readout showing that the drug Today, it is shown to be safe, well tolerated and is having a desired pharmacodynamic effect has only heightened the interest in them. We're obviously very aware of the desire of patients in the U. S.

Speaker 2

To participate in the study and physicians in the U. S. To participate in the study. But I will say that we're going to continue to enroll that study without doing anything to Slow it down knowing that if we're in the position to reopen the sites in the U. S, there will be opportunities for patients to participate.

Speaker 2

Regarding your second question on EBRISD, Tyler, do you want to take that?

Speaker 4

Yes, absolutely. Thanks. I think one of the things, Paul, that we're seeing with Eversdi is we're continuing to see the growth in total patients treated and this is being driven by a number of different factors across the board. It's being driven by continued switches coming from both ZOLGENSMA and SPINRAZA as well as continued therapy naive patients being treated. In the U.

Speaker 4

S, you've also heard Roche talk about the infant Starting to be an increasing patient segment that we're seeing for AVERISD treated patients and with the recent CHMP opinion, We also expect this trend to continue ex U. S. They've also talked about the fact that they are global market leaders Well, sorry, they are market leaders in most major markets around the world and expect to be global market leader by the end of 2023. I think one of the things that you do see with Everesti, which is consistent to what we see with Translarna and what Eric touched on throughout this call is lumpiness to the business and that's directly related to the international business. Like us, they have large government based purchase orders that fluctuate throughout the And so it is expected that you will see that quarter over quarter lumpiness.

Speaker 4

I think we've seen growth from 2022 into Into Q1 of 2023 with a little bit of lumpiness in Q2, but we expect the growth to continue throughout the rest of the year. I think we're in a good position for the $100,000,000 milestone that you touched on. If you look at Sales through the first half of the year were past halfway, so that's a really positive sign. And so from that perspective, that's why we remain Confident with the full revenue guidance for 2023 including that $100,000,000 milestone. So just lumpiness that we see across our TransAlarm business as well.

Speaker 16

Okay, great. Thank you for the color.

Operator

And thank you. I am showing no further questions. I would now like to turn the call back over to Doctor. Matthew Klein for closing remarks.

Speaker 2

Thank you again for joining us on the call today. I'm extremely proud of our many achievements in the Q2 We look forward to a busy and productive second half of twenty twenty three. So thank you all again for joining the call and have a good evening.

Operator

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

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Key Takeaways

  • Strong Q2 Financial Performance: Total revenue reached $214 M (+29% YoY) with DMD franchise sales of $162 M (+21% YoY), positioning PTC to achieve its 2023 guidance of $940–$1,000 M (34%–43% growth).
  • Expanded Evrysdi Reach: The SMA therapy is now approved in 100 countries with over 8,500 patients treated globally, and a CHMP opinion will extend EU marketing authorization to presymptomatic infants.
  • Cost-Efficiency Boost: Full-year non-GAAP R&D and SG&A expense guidance was lowered to $810–$860 M (from $890–$940 M) following portfolio prioritization, with expected annualized OpEx savings of ~$150 M in 2024.
  • Positive PKU APHINITY Results: Sepiapterin met its primary endpoint in phenylketonuria patients (63%–69% Phe reduction), leading to a pre-NDA FDA meeting in Q3 and a planned NDA submission in Q4 2023.
  • Promising Huntington’s PIVOT HD Data: Interim 12-week results for PTC-5-18 showed dose-dependent mutant huntingtin protein lowering (30% at 10 mg), good CNS exposure and no treatment-related SAEs, supporting continued enrollment and a 12-month data readout.
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Earnings Conference Call
PTC Therapeutics Q2 2023
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