Good morning, everyone, and welcome. I hope you enjoy the beginning of the conference. My name is Alex Buckley. I'm with the Healthcare Investment Banking Group at J.P. Morgan. And it's my pleasure to introduce, firstly, Krystal Biotech. And joining us is Krishnan, CEO and Chairman, and Suma Krishnan, President of R&D. We'll have some time at the end for Q&A. If you could just raise your hand and a microphone will be passed around. And with that, I will pass over to Krish and Suma to kick things off.
Good morning, everyone. Thanks for coming. Thanks, Alex, and J.P. Morgan for having us. This presentation, roughly about 20 minutes, divided into two primary parts. I'll spend about 10 minutes or so talking about our thinking with respect to advancing Krystal over the next five years, and then Suma will follow up and talk about the specific deliverables and objectives for 2026. That's how the presentation is structured, and before I commence the presentation, I'd like you all to take a moment to look at the forward-looking statements and spend a couple of minutes looking through it. We will be making forward-looking statements. Before I talk about our ambitions for the next five years, it's good to spend a couple of minutes on where we are today, and I'd like to start with VYJUVEK , which we launched around September of 2023.
I want to spend a few minutes for the treatment of patients with dystrophic epidermolysis bullosa , and I want to talk about how differentiated this product is and how it completely changed the way people thought about genetic medicines. VYJUVEK is the first drug that was re-dosable in genetic medicines, and that was a first. VYJUVEK was the first drug that could be applied at home in a patient's home, and that was a first for gene therapy. VYJUVEK was the first. There was a topical gel that was easily, conveniently applicable to a patient's wound and now to the lung and other parts as we advance our pipeline. VYJUVEK was the first genetic medicine that could be applied by a primary care physician, a healthcare professional, a caregiver at a patient's home, or by a patient.
And the reason I mention the attributes of VYJUVEK today and how differentiated it is, is there's a read-through to a lot of products in our pipeline in terms of some of those attributes, in fact, many, if not all, of those attributes. And so it's important to understand VYJUVEK . And so we launched two years ago in the U.S. The launch has gone well. The patient experience, the physician experience on the drug has been really positive. The convenience has been really good for the patients, especially to the moderate and mild patients. To be able to get the drug at home, to be able to travel with the drug has provided a level of convenience. And that shows in the compliance in the drug. And it reflects in the number of patients on the drug and the number of reimbursement approvals we get.
And then last year, we launched in Europe in both France and Germany and in Japan. And then I'm working on a bunch of distribution agreements to tackle some of the countries where Krystal has no plans to self-launch. So as a company, we kind of decided that we were going to self-launch in Germany, France, I mean, the EU4 and the UK and Japan, and all the other countries with patients suffering from DEB, our strategies to use distributors to get the drug to the patients. So that launch has gone really well. And our objective with respect to VYJUVEK is to get one other European country launched sometime during the middle of this year and then work towards the remaining one or two. So overall, we're very pleased that the drug has provided a great benefit to patients with this debilitating disease.
What the launch has done for us is kind of put us in a really good financial position also. So, as you can see from the chart, ever since the launch, we've had almost 10 consecutive quarters of positive EPS. Our balance sheet is pretty strong, and when someone says balance sheet is strong, I think the implication is that we're not planning on any kind of financing in the company over the next, I mean, fingers crossed, over the next many, many years, if not forever. EPS is positive, but the more important thing on this slide is the two manufacturing facilities that you see on the top of the right side of that slide, and Krystal, even before we had our pivotal readout, realized that CMC was probably the most important function when you are developing genetic medicine.
And it is important not only to have control of CMC, but keep all the trade secrets in-house. And so we built one facility, about 20,000 sq ft or so, for B-VEC, but then immediately started construction on a much larger facility as a backup. And most of the CMC was in place even before the drug was approved. And what we're doing in the launch is trying to take control of more and more functions in the supply chain. We're trying to bring packaging in-house. In fact, packaging is in-house for the most part. Our drugs to Europe and Japan are being supplied from the two manufacturing facilities in Pittsburgh, Pennsylvania.
I also want to point out that the way the company, because this idea came from Suma and we built a lab and started with a handful of scientists working on the idea, we do not have any royalty obligations to any universities or any pharma companies. The idea was not licensed, and so Krystal has complete ownership of all its pipeline and all its products. With the CMC in hand, we feel we're really positioned to talk about ambitions over the next five years. Let me get to our dreams over the next five years. Our vision, and you got to take a stand somewhere, is about four marketed rare disease products. We say rare disease because one of the things the launch has done for us is to realize we're really good. Our capability, competence, is developing and commercializing rare diseases.
I think we're very convinced of that. And in our pipeline, anytime you see a rare disease in our pipeline, you should assume the intent of Krystal is to self-launch in the U.S., in EU4, and Japan. That's how we think about our pipeline. And when you see an indication that's much larger, you should assume that at the right time, Krystal intends to partner with somebody to commercialize that drug. We do have a strong balance sheet to take development as far as we have to before we get into a commercialization stage. And that's why when you look at our pipeline, while it looks like a lot of items in the pipeline, you can break it down simply into two buckets. There's a bucket called the rare disease pipeline, which we plan to develop, commercialize, and launch.
There is a bucket called the expanded pipeline that we're thinking about advancing to the extent possible before we can find a partner willing to commercialize with us, and so the focus of the four approved drugs and the 10,000 patients you saw is primarily based on KB803 for DEB, KB801 for NK, 407 for CF, KB111 for Hailey-Hailey, and any potential additional rare disease program that could come over the next four years. We're not ignoring or talking differently about 408 or 707. In fact, we're super excited about both those programs. We just feel at this point, given where Krystal is, we would advance them to the extent we need to be and then hopefully find a partner to get to patients worldwide, so let me talk briefly about the five indications and how we get there.
And it's pretty much the last one or two slides of my presentations because the story is simple. We have KB803, and Suma will get into the details. It treats lesions in the eye of DEB patients. It has a prevalence of about 1,000-plus patients in U.S. and Europe. And I kind of talk about the market potential of that drug. We feel really good about KB803 because it's not that different from VYJUVEK . And we've already had one patient with clinical data who has had tremendous benefit over many years. While it may be a singular data point, it is a clinical data point. And we do know about VYJUVEK , the way VYJUVEK operates and functions. And that ability to dose in front of the eye leads us to neurotrophic keratitis, KB801, which I know many of you are excited about. We are also enrolling for a registrational trial.
We have two studies that we are enrolling registrational right now. That's a much bigger market, but it's still a rare disease. There's prior evidence of a company self-launching the drug. The ability to self-launch NK is well understood, not just in the U.S., but in Europe and Japan. Then the exciting data we announced a few days ago for CF, where for the first time, a company has been able to deliver two full copies of functional CFTR to patients with a null mutation. Null mutation is an unmet medical need. We're super excited about the data. We're super excited about the level of safety we saw. Again, the concept is a simple nebulizer, maybe nebulized for a few minutes. Potentially, when the drug is approved at home in a patient by a patient.
So it affords all the conveniences that VYJUVEK enjoys for the most part and will work to get there. And the last drug on that list is Hailey-Hailey, which just phenotypically is very similar to VYJUVEK . I mean, it's not the same indication. It's not the same complication on the patient. But Hailey-Hailey is a skin disease with lesions. And we feel really good about being able to tackle that. It's an unmet medical need and has a lot of the common attributes of DEB. So I'll close with saying, look, the market potential is over $4 billion. The patients are over 10,000. Most of these registrational studies either have started or are planning to be started in 2026. So we feel really good about getting the drug launched over the next four years.
A lot of the pricing negotiations we've had in Japan and Europe has really helped us refine the pipeline a lot better because you start learning about how people in other countries would pay for a drug, reimburse a drug, the distribution of a drug. And so VYJUVEK Global Launch has been instrumental for us in figuring out how to prioritize the pipeline. With that, I'm going to turn it over to Suma to talk about much more specifics on 2026 and what we're going to do over the next 12 months. Suma.
Thanks, Krish. So here is just basically our outline of our platform. I think many of you guys who have been following us, I mean, understand our platform. I think Krish has touched upon it again. The advantage of HSV is it's got a large payload capacity. It's got broad tropism, as we have now recognized.
And as you'll see, the additional indications that we are going after because of the broad tropism. Flexible administration, re-dosable, low immunogenicity. This is pretty important because we can repeat dose. Now we have, in commercial setting with VYJUVEK , we have dosed a large number of patients over several years. And immunogenicity is something that is, again, never comes up. Pretty safe. And again, we have a very scalable manufacturing. And that's very important because CMC is one of the biggest, most important things in a gene therapy because a lot of the nuances with all of the assays, the manufacturing, the process validation, I think we've got a very good handle on this. So this makes it very easy for all our pipeline products. Now I'll start with KB803. Again, Krish touched upon it. We are very excited for this particular indication.
I mean, as you know, dystrophic epidermolysis bullosa, I mean, though it's recognized as a skin disease, it's not that simple because, I mean, again, collagen 7 is essential to hold the basement membrane zone together. So these patients not only are just impacted by the skin, but it's also the eye and internal organs, like the epithelia inside the esophageal and airway regions and all of the internal organs. All of those areas get affected. So this is why this disease is very severe. Now, eye is pretty. I mean, these patients, again, eye is impacted in these patients. It's pretty bad, as much as the skin. I mean, you hear from patients that they get constant blistering. As a result of the blistering, these patients, it can really impact days of their lives because they're not able to open the eye.
In addition to all of the skin and the other complications, this can, again, affect the quality of their life. And what happens is with repeat scarring and blistering in the eyes, these patients can have extreme scarring. And in a subset of these patients, because of extreme scarring, it can lead to blindness. So this is an example of one patient that we treated on a compassionate basis. This patient was five years old when he went completely blind in actually both his eyes. I mean, he had severe scarring. He underwent surgery to remove the scarring, was treated with plasma-derived and all the other topical treatments that were available to him. But none of that helped. So right after his surgery, he would go blind again because, I mean, again, because of the underlying molecular correction was not addressed.
So for this patient, after his surgery, we started treating him with B-VEC on a compassionate basis. And what we noticed was with treatment of continuous use of B-VEC , this patient's scarring was addressed. I mean, his blisters did not come back, and he got his vision back. And as you can see from the table, with time, he got his complete vision back. And this patient has been on the drug for almost three years and has his complete vision. So very exciting. So based on the results and outcome of this compassionate use study, we decided that we should explore using B-VEC in patients' eyes prophylactically to prevent blisters. So again, as you know, KB803. I mean, we have an ongoing registrational study where we have discussed with the agency on the study design, is a patient-reported outcome. The drug is administered in the patient's home.
I mean, it's a crossover design where we start the patient with either drug or placebo. And then we look, and the patient fills out a diary and reports how many blisters are blistering during the treatment. And then we look at analysis where placebo versus treated. And so we hope we are actively recruiting patients in the study. We expect to finish enrollment pretty soon, and we'll make an announcement once we finish enrollment. And we expect to have data from that study by end of the year. The next program, 801, again, pretty exciting, neurotrophic keratitis. Again, this can be a pretty debilitating disease. I mean, we have one approved drug called Oxervate, which is a recombinant protein. The problem with it's a recombinant NGF. The problem with the protein is it's got a very short half-life. So within minutes, the protein, it degrades.
The outcome of using Oxervate is, as a result, you have to administer it very frequently. If you look at the label for Oxervate, it's six times a day. These are usually older patients, very inconvenient. They are not compliant. It's very inconvenient for them to keep applying six doses frequently throughout the day. This is where we believe that our platform would really help these patients with using our platform. We could deliver an NGF in a more consistent way because, and again, hopefully in a durable manner so we can avoid frequent application. This was based on an animal study where we did with a wounding study in mice where we compared recombinant NGF with our KB801 vector that, again, is coded for two copies of NGF. We have good release of NGF.
As you can see, we see in the wounding model that you see within the first 10 hours, all of the NGF from the recombinant NGF is gone. And at 34 hours, we consistently still see the same levels of NGF. So again, the main goal for this study for us is to differentiate us from Oxervate with infrequent administration and hopefully with a durable response. And so where do we stand with this study? Again, this is going to be a registrational study. We have increased the number of N for this study based on the animal study. And we have had our discussions with the agency on the protocol design. We have got agreement with the agency. And this is a registrational study. So this study started out as a phase I, phase II study.
Looking at the robustness and the pharmacokinetic profile of the data, we believe that we could translate this into the clinic. We turned this from a phase II phase to a registrational study. This study is recruiting. Hopefully, we are aggressively looking at multiple sites and getting patients enrolled. The goal for this study is to finish enrollment by end of the year. Hopefully, we can announce some data by end of the year. 407, for cystic fibrosis, again, we very recently announced very exciting data on our null patients from this study, again, from our cohort three. I mean, clearly, we have shown robust expression of CFTR in the lung, I mean, across the entire lung. I mean, we have biopsied these null patients, top of the lung, top lobe, middle lobe, and the lower lobe across all of the different lobes.
Consistently, in all the biopsies that were usable, we saw robust CFTR expression, and the expression was in the right area. Again, very exciting because we know that if you can produce the full-length CFTR, hopefully, we know that will translate into clinical benefit. I mean, again, we have this confidence because, again, from our VYJUVEK , this is exactly what we did. We started with our phase I study where we showed molecular correction. We were able to show full-length collagen 7 and anchoring fibrils, which in our first few patients, I mean, based on that, we designed our registrational study, and obviously, phase III study was very successful, so we believe that if you are going to express the right protein in the right location, that should translate into clinical, so based on that, we are working with the agency to design our registrational study.
So hopefully, we hope to get concurrence with the agency shortly on that study. And once we have that, we are going to proceed into the registrational study and start enrolling patients first half of this year. Last but not least, this is another exciting program, Hailey-Hailey. I think this is an exciting program because there's a real unmet need. There is no therapy available for these patients. I know as Krish mentioned, it's very similar to dystrophic epidermolysis bullosa. But this is a genetic disease. The onset of disease is usually in adolescence. That's when the disease begins. And it's a dominant disease. So it's very interesting. Usually, this disease is if one member in the family has it, you'll see multiple family members have this disease. People don't talk about it.
I mean, there is Facebook, even for us as we explore and we learn to understand and study this disease a little more because we are beginning to now engage with patients and try to really understand. We realize there's a lot of patients, but they do not talk about this disease. Though, I mean, it's estimated 10,000- 15,000 patients in the U.S. We expect even more because, as I said, this is usually because the areas that are affected by this disease is usually in the groin or under the arms where there's excessive sweating. And patients usually suffer in silence because they're a little bit embarrassed about the disease. And it's pretty painful. And it never goes away. It keeps recurring. And it's a constant, just like EB, it's a constant chronic disease for these patients. Again, unmet need.
Patients just, and as you can imagine, adults with areas it's affected that can really affect the quality of life and can be pretty miserable. So we hope with our approach, very similar. We use the HSV vector. We're going to formulate into a gel. We have learned a lot from VYJUVEK . So hopefully, we can come with even a clever, right? Instead of mixing the drug with the gel, we'll hopefully come with clever ideas of prefilled syringes so application becomes very easy. And again, so we are pretty excited. Again, we have filed the IND. We've got clearance from the agency. We are in communication with the FDA. We have agreed upon a clinical endpoint, which is going to be a patient-reported outcome. The FDA has given us guidance on what's needed. The scale that we have presented is acceptable to the agency.
Now we are in the process of validating the scale, again, because this is a pretty new indication. Again, there is nothing that's out there. The scales are not developed specifically for this indication, so we are in the process of actively validating the scale, which we hope to finish in the first half of this year, and once the scales have been validated, we hope to get into a clinical trial, and we hope to get directly into a registrational trial because we know based on some of our animal model, and we can capitalize what's based on VYJUVEK , the expression profile. We hope that we can accelerate this program, and there's a lot of patients. Again, the good thing is if one person in the family has it, there's multiple people that are involved.
So we hope with the nature of this disease, we will be able to enroll, create more disease awareness, and enroll these patients pretty quickly. So again, very exciting clinical program. We have potentially three registrational trials, KB803, KB801, and hopefully KB407. And also KB111, we think we can get into registrational trial by this year. So four exciting registrational trials this year. And then with KB408 and with our KB707, those are also exciting programs. But I think we are continuing to do additional clinical studies and hope to announce some data in the future. I mean, again, I want to really make this point. The clinical study is one aspect, but there is the whole CMC aspect of it. And I think as we have announced with KB111, we have the platform technology. And we hope to apply for the platform technology for all of these programs.
And I think it makes a big difference because, again, we interact with the same division. A lot of our manufacturing and process validations, all of that, we can really capitalize on what was done with VYJUVEK so we don't have to do those extensive validation. And especially assays, they're very tricky. I mean, we have 12 different assays to release each of these products. I know people don't understand it, sometimes underestimate CMC. Even if you have one assay that does not work or fail, you're stuck. They will not clear you because they're very picky on these kinds of things. And fortunately, there's an overlap on all these assays. 90% of assays are very similar across all of the programs. Again, that makes it very easy so that we don't have to spend excessive time and effort.
And we have a team that's very well-versed that we can use, for we don't have to build expertise for every program because of the platform technology. Again, so we're very excited with all our clinical programs and hope to execute all of them as we promised for this year. So 2026 is an exciting year for Krystal. That's it. And that concludes my talk. Thank you.
Thank you very much for the updates. And fantastic to see the progress. It certainly sounds like an exciting 2026. I'll open to questions from the room. If not, I've got some here. Maybe just to start, could you speak a bit more about the global launch for VYJUVEK and particularly, I suppose, in the rollout in Europe and how you expect that cadence to go?
Yeah, I think... Can you hear me? Is that my mic? Yeah.
I think we launched first in Germany and subsequently in France, somewhere, I believe, around Q3. Each country, what we learned, that the distribution and the reimbursement is a bit nuanced, and it takes a certain amount of time to understand how to get a genetic medicine to a patient's home because across the world, as I mentioned, VYJUVEK can be applied at home by a patient, and some of these countries, you have to work with the existing infrastructure to make this amenable or possible, so it's a little bit of growing pains, but I think we had thought about this way before we got the approval, and so both the launch in Germany and France have gone really well. We also launched in Japan, which is very different from both the U.S. and Europe.
We also spent a lot of time negotiating a reimbursement price in Japan, which gave us a lot of insight into the clinical data of VYJUVEK . The pivotal data of VYJUVEK was really, really strong. That helps a lot. It's also good to understand local nuances as you negotiate a price in all these different countries. We were fortunate to get a good price in Japan. We hope that that provides a window into a potential outcome in Europe, which is traditionally a bit difficult to get the extent of pricing that a sponsor usually requires. We're on track to launch in Italy sometime mid this year. All the efforts, now that we've done a couple of countries in Europe, I think we seem to have the recipe to kind of how to go about launching in all these different countries.
And then our plan, obviously, the two remaining ones are Spain and UK. And we'll get that in time. So overall, the launch has gone really well. We're also aggressively going after distributors to get this medicine out to patients in countries that are outside the EU for UK and Japan. And so other countries like Eastern Europe, Israel, South America, Canada, Australia. So all these countries, there's a big effort in the company to get them genetic medicines.
Fantastic. And moving maybe to the rare disease pipeline, which you spent some time speaking to, could you maybe speak about how those indications were nominated and maybe the potential differentiation there, of Krystal, within those spaces?
I'll say, and I'll have Suma add a few things. Look, there's a burden and a curse with platform technology. On one hand, you could do a lot. You get a lot of ideas. On the other hand, you got to be careful you pick the right ideas because everything in drug development takes many years to realize you made a mistake. But I will say one of the good things at Krystal is if we start realizing that either on the clinical side or on the reimbursement side, we're not going to be successful, we stop quickly because we have a lot of ideas.
And so it has taken us, honestly, a couple of iterations to get at this pipeline that we showed today. That hasn't come on first guess. For example, the CF program has been around for six years. But we were so convinced that it was a great program that against all odds, and some odds were not our doing, we got to this point.
We were relentless in the pursuit of CF because we believed we had a differentiated product. We finally have arrived at a good pipeline. The basic criteria, as Suma mentioned, large genes. We try to stay in areas where other vectors can deliver genes. We like the re-dosability concept. We like the idea that a patient can dose at home. And so we look for indications that have those.
Yeah. I think, Krish, you covered most of it. But as Krish said, the big thing for us is getting this. I mean, we are the first ever gene therapy that can be home-dosed by patients. I mean, it took us extensive working with the agency, collecting the data. So again, once we have done that for one product, it becomes very easy. And we are a re-dosable gene therapy.
So again, we need to work on indications that differentiate, right? If there are indications that this one and done, if you have an integrating virus and that can suffice, then that's not the area we'll play with. Skin is a very interesting organ, again, because it turns over. So one and done solutions are almost impossible because it'll turn over unless you go into stem cells or something. So it's complex. So that's where we look at those indications that we can really our platform can work, and there are no other products before. And lung is another same as the skin. I mean, usually one and done solutions don't work for the lung. So again, that's an area that we are very deliberate when we pick indications.
Again, from platform, we can make all of them, and we can scale them. That's not an issue. And again, I work with Krish and Krish's team with Stipan to really understand the market and the competition and the landscape before we fully put our engage.
Super. And I want to open again to the room for questions. It's just a mic from there.
Thank you. Pablo Osuna from Laboratorios Sophia . For your ophthalmic assets, KB803 and KB801, have you considered any kind of global partnerships or regional partnerships? What is your strategy behind that?
As I mentioned, because KB803 and KB801 are rare diseases, and it's something we strongly believe we can handle if we can self-launch, we have not looked for partnerships in either of KB801 or KB803 at the moment.
There have been occasional inbounds on interest, but not specifically for KB801, KB803. Yeah. I think we're running.
If there are no further questions, I think we can wrap up. Thank you very much again for your time.
Thank you. Thank you.
Okay. Thanks, everyone, for coming today. My name's Allen Gong here on the J.P. Morgan MedTech team. I'm really excited to have the management team of iRhythm here today this morning. We're going to start off with some prepared remarks from CEO Quentin Blackford, and then we're going to tag in Dan Wilson, CFO, for some Q&A after that. Quentin, if you could start us off.
Terrific. Can you guys hear me okay? Thanks for having us, Allen. We appreciate the opportunity to be here.
We're excited to be here coming off of an incredible 2025 for iRhythm, and we're looking forward to an even more exciting 2026. As we look ahead, just a quick reminder, I will be using forward-looking statements during the course of this morning's presentation. I'd refer you to our company website, company filings, for any further information that you might be looking for there. When a signal changes everything, when we talk about signals in arrhythmias, we're not talking about just any one particular thing. Signals show up in a variety of different ways, and it's the complexity of that that creates the challenge for players in this space. For us, it also becomes the opportunity. We think about how these signals show up in practice on a daily basis.
Sometimes it's a story like Krish, who finds herself in the dealing with severe health issues, only to have an EKG performed and told her that everything's perfectly fine. She's sent home, no issues. She finds herself back there less than a week later, again, another EKG performed, told that everything's fine, but this time she's sent home with a Zio. And we find over the duration of monitoring during those 14 days that she does, in fact, have a very dangerous arrhythmia that needs to be dealt with and treated. Or we find a story like Julie, who has all the symptoms in the world that would indicate an arrhythmia is present, only to find out after monitoring for 14 days with Zio that there are, in fact, no arrhythmias present. We can rule out that we need to put her down that pathway.
Or somebody like Woody in the upper right-hand corner here, by all means, a very healthy individual, very active individual. He's in his 60s, outgoing, loves to golf, would never have suspected that there was an arrhythmia present, but his physician at his annual physical decided that he should wear a Zio, and we find out that he does, in fact, have arrhythmias underneath the surface that are lurking that need to be treated. Or more recently, in our efforts to move towards predictive capabilities, we're starting to take our 3 billion hours of heartbeat data, couple it with external medical records and data sets, and find in those medical records where patients likely have arrhythmias but have never been diagnosed before, and in this case, Louise, we find out that she does, in fact, have arrhythmias.
Somebody who would never have been monitored had we not identified through the proactive approach of looking through medical history files and finding those folks. The reality is a symptomatic, reactive approach to monitoring for cardiac arrhythmias is not sufficient. It's why we have 27 million folks in the U.S. alone today who are undiagnosed with cardiac arrhythmias. We have to change that, and we are changing that. That's how iRhythm is changing the game. This is our 20th year as a company, our 20-year anniversary. We've had an incredible impact. We've been a terrific company in terms of addressing an unmet need in the marketplace, but the reality is the market is coming together with two forces converging at the same time. On the one hand, we've got demand that is growing tremendously. You've got an aging population.
You've got a silver tsunami of folks moving into the Medicare-age population. We've got data that's telling us more and more every day that these arrhythmias are showing up in younger populations. You've got technology that's advancing with tremendous success, like PFA, that needs to be monitored both pre and post. You've got to move towards value-based care, population health. All of these things are lining up very well for the iRhythm story, and we meet the need in this very significant way. But at the same time, we have an access issue in this marketplace. There's not enough cardiologists and EPs to see the patients that need to be monitored. Nearly 50% of all counties in the U.S. alone have no cardiologists. That climbs to nearly 90% if you go into rural communities. We have to change the way we think about monitoring.
This is why moving to primary care is so important. It's a big effort on our part, and we're having tremendous success as we open up that channel. When you think about who iRhythm is today, we've got really three pillars that we focus on as we build out the platform of our capabilities. We've got a biosensor aspect to it where we've got a wearable device. Patients today will wear that device for 14 days at a time. We'll record every single heartbeat. Most of our patients will wear it the duration of 14 days. On average, we get 13.8 days out of wear out of each patient's experience with us. We'll capture nearly one and a half million heartbeats from that patient, and then we'll leverage the power of our AI.
We're on our second generation of an FDA-approved algorithm to comb through all of those heartbeats that we capture and identify with precision exactly what's going on. 99% of all of our physicians will agree with the findings that we put into the reports that we provide back to them. We've now got our third-generation algorithm in the hands of the FDA. We're excited by what that brings for us into the future and looking to get that into the market. And then we bring that all together in a digital capability, a digital workflow, a digital ecosystem, Zio Suite , which makes it very easy to prescribe for physicians, but also monitor the patients throughout, and then in the final report, prescribe, diagnose off of it, and store that in the EMR. It's a highly unique, differentiated capability.
More than 50% of all of our volume in the company today now flows through integrated accounts, and nearly 80 of our top 100 accounts are now fully integrated. A snapshot of who we are from a financial perspective and the market opportunity ahead. We'll deliver more than $740 million above the high end of our guidance for 2025 revenue. Notably, we'll also be profitable for the first time in the company's history and, importantly, free cash flow positive for the first time in our company's history in 2025, both meaningful milestones for us. Yet at the same time, we only have about 40% of the overall ACM market as we define it today, which in the U.S. is about 7 million tests being performed. In the international spaces that we're now in, just the countries we serve, there's about 3.2 million tests being performed.
We have less than 1% of that market opportunity. But we believe the market is very different than how we think about it today, particularly as you open up the ability to monitor for undiagnosed, unaware, the asymptomatic population. In the U.S. alone, we believe there's 27 million folks, the majority, which overlap with comorbid disease states, and I'll talk about this in a bit, that we need to go find, that we need to identify proactively, diagnose, and then get the proper treatment to avoid the downstream cost that these patients bring into the healthcare system, and then finally, we have a tremendous amount of research that stands behind our product. We've got more than 135 research manuscripts that have been published, nearly 40 of them independently peer-reviewed. We have no issue letting the data sort of stand behind our product.
We publish more data than any other player in this space. It's a competitive advantage for us. Here recently, the Camelot, the Avalon studies, the two of those have been meaningful as we sit down with payers, and we can show through head-to-head analysis that Zio is, in fact, better than the competitive players in this marketplace. Faster time to diagnosis, higher diagnostic yield, lower healthcare resource utilization. When we think about the market, today we serve a market of roughly 10 million tests being performed each and every year. That consists of 7 million tests in the U.S. and 3 million tests outside the states, just in the markets that we're serving. So there's six countries that make that up. However, we believe the future looks very different. So back to the market expansion, we think there's a near-term opportunity of roughly 30 million tests.
That's represented by 27 million undiagnosed folks that we believe exist in the U.S. alone and the 3 million tests in the international space in the markets that we serve. We think about the drivers of how we will continue to grow our business and where that growth comes from within the core market. Today, we've got about 72% market share in the long-term cardiac monitoring space. Think about that as patch-based monitoring beyond sort of three days. We target 14 days in everything that we do. That's the majority of our business. But we have 72% market share in that segment that's growing high teens. With that, we believe the majority of the undiagnosed population, the 27 million folks that are out there, ultimately will be monitored with a long-term patch. That is the ideal way to find these folks.
We know that 65% of all arrhythmias are found after 48 hours of monitoring. Short-duration monitoring simply just does not work. It does not meet the need, and you think about it, though, there's still nearly two million short-duration tests that are being performed in the U.S. marketplace every single year. That's a $500 million market opportunity for us to continue to go after. We will continue to take share in that space, and we're having great success with it today. Another really exciting opportunity for us is in the MCT space, so within this category, there's about one million MCT procedures being performed. Today, we've got about 15% market share within that category compared to the 72% market share in the long-term cardiac monitoring space. The reason for that, more than anything else, is first, we came into it as a follower.
We led with LTCM, and then we brought a product into the MCT space. That's what we call our Zio AT product. Frankly, that product is not as competitive as it needs to be. We know there are some gaps relative to the competitive offerings. We only monitor out to 14 days. Physicians are looking for a longer duration of monitoring, wanting to get out to north of 20 days. We're addressing those with the product that we have on file with the FDA as we speak, which I expect will be making its way into the market in 2027. We'll talk more about that in a slide or two. But for every 10 points of share that we can capture in this MCT category, it's roughly $80 million-$100 million of incremental opportunity to us on an annual basis.
Again, I don't think we get to 70% market share in MCT. The majority of our competitors, this is where they play most significantly, but I do think we can move that to 20%, 30%, 40% market share, which represents a significant growth opportunity for us. And then finally, on the international side, just again to reiterate, we're in six countries. We have less than 1% market share in the countries that we now have entered into in a market that's serving up 3 million tests each and every year. So tremendous opportunity to grow in that particular area. I talk about moving into the undiagnosed, asymptomatic space. I talk about the capacity constraints of the existing system, some of those structural challenges. The only way to address that is to continue to move up the care pathway into primary care.
We're having an incredible amount of success in doing that. We began this effort several years ago to open up the primary care segment. If you look at it, total claims across the entire marketplace, more than 20% of prescribing is now coming through primary care. The vast majority of that is being led by iRhythm. So for us, well over a third of our business comes through the primary care channel. It is, in fact, opening up. This is a great leading indicator of where things are going. Primary care is comfortable prescribing, comfortable diagnosing. If they aren't comfortable diagnosing, through the Zio Suite tool, we can bring virtual capabilities to the forefront that can help them get to a diagnosis, and it helps them understand where they're going to route their patient through their health networks in terms of where that care journey goes.
We're approaching primary care in two different ways. Sometimes we get asked, "Are you looking to build out a significant primary care commercial force?" We are not. That is not how we're approaching this space. We've come at it in two ways. One is we leverage the relationship we have with our cardiologists and our EPs and the large independent health networks that we're already in. We're in the vast majority of these across the nation. These cardiologists, these EPs will bring primary care to the table, to educate them, to inform them of how easy it is to prescribe. In some cases, in these large networks, primary care will prescribe. The report will get published and produced into Zio Suite. The cardiologist, the EP will come into the digital tool. They'll read that report.
They can diagnose electronically and then determine where that patient's going to move throughout their network. It's becoming what we like to call a rule-in and a rule-out tool within these large networks. The other approach that we're taking is through large national accounts. We call them innovative channel partners. The majority of these are large national primary care partners that ultimately we contract with at the very top level, sort of a central point, and they push us down through their national networks. So from a sales rep perspective, we're able to cover the entire country quite well. This approach for us, as we've done the math, we think we can approach roughly 65% of all primary care physicians with this approach.
As I think the momentum grows and the awareness around prescribing and primary care grows, I think word of mouth is going to continue to pull more and more folks into here. When we think about how we're approaching these innovative channel partners, the majority of these programs that we're launching, and this has been a significant growth driver for us over the course of 2025, most of these folks will target these comorbid disease states . So the overlap of arrhythmias within Type 2 diabetes, within CKD, CAD, COPD, sleep, heart failure is enormous, and so when these innovative channel partners start with us and really target an unaware, undiagnosed population, usually it's in one of these disease states, and they'll start in one of these, and then they'll start to branch out into other particular areas.
We know that arrhythmia folks within these disease states, when there's overlap, are incredibly more costly for the payers to manage. Hospitalization rates are incredibly higher. Length of stay in the hospital is incredibly higher. Visits to the ER are incredibly higher. We know we can bend the curve from a cost perspective if we can find these arrhythmias before they result in a patient showing up in the emergency room. What's really fascinating with this approach is the accuracy at which we've been able to identify these patients in these large channel partner programs that likely have arrhythmias and then get a patch onto them and find out that they do, in fact, have an arrhythmia that the clinician would find relevant, that they would make some sort of decision from. We started to partner with a company.
We made an investment in an AI firm by the name of Lucem this last year, combining our three billion hours of heartbeat data together with external medical records, history files, other indicators. What we've been able to do is produce algorithms that can very proactively go into a patient population with these partners, look across it from a digital perspective using the power of AI, and identify who we think, which patients we think in their population likely have arrhythmias, and then we get a patch on, proactively monitor. What we're finding is more than 85% of the time we're accurate. That, in fact, where we think arrhythmia is present, there is an arrhythmia present. Again, these are folks who have never been diagnosed historically. It's a game changer. It's getting a lot of traction.
We're actually starting to see this move beyond just the innovative channel partners into some of these health networks that we're partnering with, where they're wanting to launch the same sort of approach within their comorbid disease states in the populations that they're managing. MCT. I talked about this. This is an incredibly exciting opportunity for us. Again, we've had great success here. Probably 15% market share in this category today compared to 72% market share in LTCM. But the reality is our current product just is not as competitive as we need it to be. The new product that we have on file with the FDA as we speak will move to a consistent common form factor as our long-term cardiac monitor. So it's going to bring with it a much better patient experience. It'll go out to 21 days versus the 14 days that we have today.
What's interesting today is most MCT, competitive MCT products, when you look at the duration of monitoring they're getting, they're only getting around 14 days themselves. And that's because you're changing patches or the physician will find what they were looking for earlier and won't patch third or fourth. With our product, you're going to get a full duration of 21 days. You're going to get a lot of data to analyze through that the AI work and we believe produce superior outcomes. Excited to get that through. Again, so with the FDA as we speak, expect that this will be a product that you'll see us bringing to the market in the 2027 timeframe. International, another big opportunity. We talk about being into the UK We've been there for a few years now. It's growing incredibly well.
Japan, we just entered into that market, second largest market in the entire world, 1.6 million ACM tests being performed each and every year. We're about seven months into that effort. Tremendous progress so far. In both of those countries, we're working through reimbursement as we speak. So we decided to go into those markets underneath the Holter rate code while we work directly with the government agencies there to get a more favorable rate established that we can work with into the future. In the EU countries here in the center, these four countries have very favorable reimbursement. That's why we chose them out of the gate. Good progress in the early stages of launching into those markets as well. I talk about AI. I mean, at the end of the day, AI is what sets iRhythm apart.
What I find really fascinating and exciting about the future of our company is historically AI was really embedded in the product itself. It's how we really look through the heartbeat data that came off of the patch. But we're starting to leverage the three billion hours of heartbeat data that we have connected with external data sets that can get us to the point where we're starting to become much more predictive in identifying where these arrhythmias exist, particularly in comorbid disease states, but also finding other health factors that are very interesting to our payers and our partners. Getting to the place where we can predict the onset of AFib. If we don't see it in the patch that you're wearing today, we can see through the markers you're likely to have it in the next six months, 12 months, 18 months.
If you've never been diagnosed before, where we can predict that you likely do have it, need to be monitored. Opening up opportunities in sleep, hypertension, other adjacent markets. These are all things that AI is opening the door for us and we're excited about into the future. Which brings me back to the platform. We're really investing in every one of the pillars of this platform. So when you think about it from a hardware perspective, excited by what we're moving forward with MCT alongside our long-term cardiac monitor. We're adding other sensing capabilities onto it as we speak. So we're bringing PPG onto the sensor. We'll shortly have SpO2 capabilities, hypertensive capabilities, heart rate variability, respiratory rate. All of these things open up new opportunities to diagnose other disease states as we move into the future.
Then on the AI side, I've talked about it a few times. Just connecting our data sets with external data sets, leveraging the power of AI and the massive information that we do have, I think puts us in a really unique position to continue to advance there and then continue to drive integrations and workflow efficiency. It's so critical. If you're going to move into primary care, the workflow burden has to be incredibly light. We're focused on how we can make that as little, as light as possible. We talk about EHR. We announced a collaboration with Epic a little over a year and a half ago. We know the power of integration. So when we get fully integrated with an account, we usually see volumes increase roughly 20%-25% post-integration. Epic is not the only system that we're working with.
We work across all EHR systems, but our goal is to be integrated with every one of our major customers. And again, I said it earlier, 80 of our top 100 accounts we're now integrated with, nearly 52% of all of our volume is flowing through these integrated systems. Comprehensive evidence generation is another thing that sets us apart. Last year was probably, well, it was a record year for us in terms of evidence generation. We had nearly 28 publications that came out, continuing to articulate the difference between Zio and any of our competitors. We're publishing head-to-head data. We're showing through review of medical history files, whether that's with CMS and claims, commercial claims that we've far and away superior from a head-to-head perspective, diagnostic yield, time to diagnosis, healthcare resource utilization.
We're also showing in these comorbid disease states that if we can identify an arrhythmia earlier and prevent one of these patients who might have Type 2 diabetes as an example from ever making their way to the ER, we're going to save that payer roughly $17,000 per patient. Or for every 1,000 patients we can find, it's roughly $15 million-$17 million of savings that's getting a lot of attention from these payer partners, and then sleep. We've talked about sleep for a little over probably two years now. We're now launching into sleep with dedicated pilots. We've got over 40 pilots that are now launched with accounts early, early in the effort here, but very pleased with the early indicators of the success that we believe we can have here. We know that over 20% of our current prescribing physicians of Zio are prescribing home sleep tests.
We believe right through the integrations that we've built, a seamless workflow that we can make it very easy for these folks to ultimately look for sleep disease at the same time that they're looking for cardiac disease. Nearly 80% of all folks who have AFib have obstructive sleep apnea or sleep apnea. There's a tremendous amount of overlap. There's a real opportunity to win here. We're excited by what we're finding in the early stages here, and this will continue to grow over the course of the year. Just looking back on 25 as I wrap up, obviously just a tremendous year for the company. We saw growth accelerate across every aspect of our business, the core business, innovative channel partners, MCT, international. Every one of those segments of the business grew quite nicely and accelerated from where they've been in the past.
Again, more than 50% of all volume now moving through integrated accounts. That's incredibly important to us. We think about FDA remediation. We don't talk a lot about it now because it's behind us. We spent a tremendous amount of time over the last 18 months really focused on addressing the questions of the FDA, making sure that we got a quality management system that is sufficient, if not above and beyond the expectations that they have with us. We've completed all remediation activities. We're now in the process of having a third party come in and audit ourselves, which we're more than happy to share with the FDA findings that come out of that, just demonstrating that we are holding ourselves to a different standard, and for the most part, those things are in our past.
Then I would just say from a financial perspective, a tremendous year from a profitability perspective. Again, first time in the company's history that we'll be profitable from an adjusted EBITDA perspective. First time that we will be free cash flow positive as well. Excited to see that and see that continue to grow into the future. Thinking about 26, we put out expectations this morning, which more or less reinforced where we were at a little over a quarter ago. Again, we'll deliver in 2025 north of $740 million in revenue. We expect $870 million to $880 million in revenue in 2026. That's about 17%-18% growth off of where we expect to finish this year.
From a profitability perspective, we expect to be around 11.5% adjusted EBITDA to 12.5%, which continues to be roughly 300 - 400 basis points of improvement, demonstrating the significant leverage opportunity that we have in the P&L as we continue to grow. Importantly, still make the investments that will open up the new market opportunities for us into the future. I'll wrap with this. I think iRhythm's in a terrific position. We're in a wonderful spot when you think about where the future of healthcare is going. Aging population, value-based care, population health, younger generation wanting to more proactively manage their health. These are all things that accrue very well to where iRhythm is positioned. We've got several core markets that are expanding as we speak. 27 million folks undiagnosed. We've got several new adjacent markets like sleep, hypertension that really excite us.
And then we've got international opportunities as well, where we're very early, less than 1% market share. And of course, doing all of this while focused on the bottom line, making sure that we do it in a profitable way with a clear path to 15% adjusted EBITDA margins that we put out as we approach $1 billion in revenue. I think there's a potential for the company to get into the mid-20s. And you'll see us talk about that once we get the historic goal of 15% achieved and set our sights on something new in the future. So thanks for your time. Allen, I'll turn it over to you. We can jump into Q&A.
Thanks, Quentin. So I guess just to start off, you pre-announced the results today. I also provided initial 2026 guidance. So just looking at the $740 million plus, there's obviously a lot of room up there. And we'll find out more about that in February, March, I imagine. But just for that record volume comment, can you help us break that down between Zio Monitor, between Zio AT, between innovative partnerships and other drivers? What drove that record volume quarter?
Yeah, that volume continues to be strong, Allen, across really every aspect of the business. The core business is growing incredibly well. We had several large competitive conversions early in the year that continue to contribute very, very well and grow nicely. We continue to sign up more innovative channel partners in the fourth quarter, which quite honestly, I suspected, and it did slow a little bit from what we had seen in a prior couple of quarters. But as you came into the holiday period, from the last time we spoke with you guys, we shared that we were at 18 innovative channel partners. That continued to grow, but that grew through the holiday period. Most folks aren't going to turn on those programs in the middle of holidays. They'll wait till the new year.
But we did see continued progression within the channel partners, which was very nice to see. And I think AT, it continues to demonstrate there's a real opportunity in that market to capture share. Whether that's new accounts that are coming on, prescribing both long-term cardiac monitoring, so Zio Monitor and Zio AT at the same time, or even legacy monitor accounts that are beginning to prescribe AT as well. There's a lot of great data out there that would articulate our AT product is as good as anything else out there. But we understand some of the customer feedback in terms of what they want to see enhanced in the product. And we're committed to getting that to them with the new product that's with the FDA now. But I don't know if there's anything else, Dan, you'd add. It was across the board, Allen.
It was a strong quarter.
And then I guess looking at the guide that you provided today, I believe $870 million-$880 million, around 17%-18% growth. Though we'll have to see where that falls once you get the final numbers. You had previously talked to around 16%-18% growth. So this comes in a little bit better than that. And I think one of the drivers that I definitely want to touch on a bit more is on the pricing side, especially with physician fee schedule updates. But just what gets you a little bit more bullish and what's keeping you conservative into the new year?
You want to take it?
Yeah, sure. You did note price there. So when we originally kind of provided that preliminary 16%-18%, there was some CMS pricing benefit factored in. What ultimately landed was a bit better than that. That is contemplated in the 17%-18% that we gave today. And then from an absolute dollar standpoint, with Q1 preliminary results we provided this morning, obviously that absolute number going up as well. Similar to Q4, really good momentum across all of those different vectors. You've heard us talk about this many times as we set guidance. We want to put in what we have high confidence in, certainly our core business and the momentum maintaining there. AT continues to grow really, really nicely for us. And innovative channel continues to open up in a meaningful way. There is some lumpiness to that part of the business.
So we'll be thoughtful in terms of what we bake into guidance there. But all of that's factored into the numbers we gave this morning.
Got it. And then when we think about the innovative channel, you had mentioned that you'd reached 18 heading into the holiday period. I think you had added around six in the third quarter. It sounds like with the holiday period being a little bit more challenging to really start up these programs. How much, again, how much contribution are you expecting in 2026 from, let's say, the programs that have been ramping up, the newer programs that you added this year? And what are your assumptions around continuing to add programs in 2026, like new partnerships?
Yeah, we'll definitely add more partners in 2026. That pipeline is incredibly strong. Feel very good about it. I think we've got a good line of sight to what we expect to start in the first part of this year. The reality is through the holiday period, folks just aren't going to start up these programs. They're going to wait to the beginning of the new year. So we like what we see there. I think part of the challenge with each one of these innovative channel partners is everyone's a little bit different in terms of how they come out of the gate, how they start up.
And with that approach, or sort of that being the fact that how they start up, our approach to it has been a little bit conservative to say, let's see how they come out of the gate, let's see how they contribute, and then we can start to roll those into our forward-looking guidance. So I think with the channel partners that we've got a good deal of history with, we feel very good about how to forecast those. We can forecast those nicely. They're going to continue to grow very nicely in 2026. We've rolled those expectations into our guidance. But it's the new folks coming on or folks that we have less duration of experience with that we're a bit more hesitant to bake into the formal guidance. And we'll let that play out. And we'll update expectations along the way.
As Dan said, we're not going to get ahead of ourselves. I think we want to make sure we put a number out there. We feel very good that we can deliver. I feel good about that in terms of what we've put out there at this point in time. AT continues to perform quite well. But quite honestly, it's another year of competing in that market that we don't necessarily have the best product there. So we've ratcheted down some of the expectations around that. If we can continue to grow that as we have, great. There's going to be a terrific opportunity with it. But we're just trying to be thoughtful in terms of how we set these expectations. We're not going to get ahead of ourselves.
So you mentioned AT. And I guess with MCT submitted in third quarter of last year, I think 2027 is on the later end of when we would have hoped for a launch. So is that just we've seen a bit of the approval and submission of MCT has gone through some challenges? So should we just think of that as conservatism around the timeline for the FDA getting back to you? Is there any reason why you expect that it might take a little bit longer to get that approval through? Or is it the launch process going to be a little bit more strenuous for you?
Yeah, I think, look, we're in active dialogue with the FDA on MCT, encouraged by what we're seeing in the back and forth. There's clearly a lot of questions from the FDA around cybersecurity. No question at all. I think as we think about the long-term scalability of how to meet some of their questions and their expectations, we wrestle with, do we design or do we develop anything incrementally in the existing form factor or should we look at something different? A good example of that is take the gateway. And I don't have it here, but we've got a gateway that's been with us for over a decade. As we move to a mobile gateway, would that give us more scalability if we did that from a development perspective? Are we talking about adding another month or two to the approval timeline?
Those are the things we're considering as we go through it. We really want to make sure that we set this up for long-term scalability in the best way possible, and clearly, with the success of AT that we're having, I don't feel a rush to have to sort of make a poor decision long-term for the betterment of the near term, quite honestly, so looking through some of that, but the other challenge that we're running into, to be honest with you, is the success of AT has been beyond what we anticipated. We're having to make inventory purchases to keep up with that demand, which now means you got to work through that before you can convert over to MCT, and so from my perspective, the best way to think about MCT is early part of 2027, and that's the way to set expectations at this point.
I hear a lot of folks talk about 2026. I don't expect it to contribute in 2026. It's not in our numbers. I think 2027 is the right way to be thinking about that.
I guess just talking about the MCT market more broadly, I think for the Zio Monitor, it's very well understood where the growth opportunities are at between symptomatic and now asymptomatic AF. MCT, there's a lot more potential conditions that you could be treating. You mentioned pre and post AF ablation, especially with PFA helping to accelerate that market. But where else should we think be looking for growth opportunities for Zio AT and eventually Zio MCT above and beyond just taking share in the market?
I think one of the greatest opportunities is in the core legacy long-term cardiac monitor markets, the Zio Monitor space, where our customers have just shared with us, look, 14 days is not going to be sufficient for what we're looking for. We want to get beyond at least 20 days as a minimum. And this new product will do that. It'll get to 21 days. But those folks, they're not going to prescribe Zio AT. They've been clear. They want something with a longer duration. And so I think we'll meet that expectation with the new MCT product. And so the ability to convert the opportunity with our Zio Monitor customers into them now prescribing our product for their MCT needs, I think is a real opportunity. We're having great success on the competitive aspect.
The new accounts coming in and converting from competitive MCT products into our Zio AT product. I think that we've done a great job. The teams have done a great job being able to articulate the value of Zio AT sort of compared to other competitive offerings and demonstrate that it's as good, if not better, and these new accounts are seeing that data. They're leaning into that data. They're experiencing it themselves. They're prescribing. It's the legacy accounts that we've had a harder time sort of flipping over. They're sort of stuck in that longer duration of monitoring, so I think that's where the majority of the opportunity is going to come from. I think you get out beyond 21 days. I think even from a competitive perspective, it's going to be able to open up more doors than what we have today.
There are some competitors or customers who are using competitive products who you knock on the door and it's just not long enough in terms of duration. They don't want to take that call. So I do think it'll open up some additional opportunity for that competitive conversion. But 15% market share in that overall market compared to 70% in LTCM, I think there's an incredible opportunity there. I don't expect that we're going to deliver 70% market share in that MCT space. But again, if we can capture 10 points, it's $80 million -$100 million of revenue. So if that 25 can get to, or sorry, 15 can get to 25%-35%, 45%, it's going to be a significant driver for us.
You touched on the competitive landscape there. And I think this is kind of a two-part question, one for Zio Monitor, one for Zio AT. But when we first, quite a while ago now, when Zio XT was really starting to do quite well, we saw a flurry of patch competitors entering the market. A lot of them were then acquired by much larger competitors in the med tech space. And it's quite difficult to track how the strategy there has evolved. So just from a competitive landscape, your competitors are seeing you having great success with your innovative partnerships. Has there been a competitive response?
Is there a reason why your competitors couldn't go try to undercut you or get ahead of you and try to make these same kind of deals with these partners and with the benefit of scale and maybe some bundling or what have you and really compete on that front?
Yeah. We hear some noise. I mean, we hear some noise at times of competitors talking about launching programs into innovative channel partners, comorbid disease states, the overlap. The challenge, and this is why I love the position that we have, is we led out of the gate as a company with a product that targeted sort of that 14-day monitoring, not the continuous feedback loop. It wasn't an MCT product. So it led with a lower cost, lower price profile that could be applied as easily in primary care as it could in cardiology and EP. Whereas our competitors, they lead with MCT. And for them to step from MCT down into long-term cardiac monitoring, their cost profile of their product is incredibly prohibitive to do that. So you don't see a lot of folks do it.
As a matter of fact, when we started to push primary care two years ago, I was met time after time after time by folks who said, "That will never work. It'll never get prescribed in primary care. Your cost profile is never going to work. You can never make money down in that segment of the market." Look, we're prescribing more in primary care than we ever have before. We're more profitable than we ever have before. And I'll take that financial profile all day long. We will drive hard into primary care because we have the right product, feature, cost profile to go there where our competitors do not. I think for so long, the reimbursement, quite honestly, was so much higher in MCT that everybody focused on MCT and that's where they wanted to go. We took a very different approach. We went after long-term cardiac monitoring.
We feel like that's better for the patient, and the patient gets better answers, faster answers, and it's better for the healthcare system from a cost perspective, for sure, so we don't see a lot of folks coming down here. We're trying to go as fast as we can, lock it up. That's why the integration aspect of what we do is so, so important. When we get integrated in and locked into an integrated system, the stickiness there is incredibly high. I couldn't give you the name of a single account where we've got an EHR integration that's been completed that has walked away from doing business with iRhythm. Integrations are powerful. We've got to get them completed. I'd love to see 100% of the business. The reality is we won't ever get to 100%, but we make good progress there and excited about what we see.
With the time we have left, I do want to touch on the P&L, the profitability side of things. Feels like a lifetime ago, but you laid out long-term targets for 2027, getting to 15% EBITDA. I think we've definitely seen more focus and more improvement there over the last year or two. That's definitely been appreciated, and now you're set up to get to 11.5%-12.5% next year, I believe, or this year. So that seems like a pretty good bridge to get to 15%. But what is getting you to that 11.5%-12.5% between gross margin? We saw that get to 70% plus. Hopefully, it had stayed there in fourth quarter. You've always talked about having room in G&A. So what is driving the expansion this year, and then what gets you that final 250, 300 basis points next year before we start looking longer term?
Yeah, sure. So really pleased with the progress we're making. You noted it. 2025 was tremendous. First year of profitability in the company's history, as well as free cash flow positive. So really pleased with that. 2026 will be a continuation of that. Certainly opportunity within gross margin. You've heard us talk about investments into manufacturing automation. Our clinical operations team being really efficient and executing really, really well there. It starts with gross margin. We'll continue to see expansion there. And then down the P&L, you noted G&A. That is our preferred kind of focus in terms of driving leverage. And importantly, I would say guidance that we've put out, as well as results historically, is a balanced plan where we are continuing to drive profitability, but importantly, continuing to invest in the opportunities we see in front of us.
And you heard Quentin's remarks on all the different growth opportunities and growth levers that we see. And we want to make sure that we're investing into those opportunities while continuing to drive profitable expansion. And we like that setup.
Yeah, you kind of touched on the next question I had, which was you do have a lot of future growth opportunities, sleep apnea being one of the biggest ones. You've talked about 20% of those. Patients are already kind of customers of yours. But then there's obviously the 80% that you aren't targeting yet. So when we talk about 15%, and I think you had mentioned getting to 20% beyond that, that contemplates continuing to invest in those opportunities. Revenue is upside, but the costs are kind of baked in there.
That's right. I mean, it's how we run the business, quite honestly. We factor in the ability to invest in these opportunities without factoring in the revenue contribution to the full degree of it. That way, we've got the bandwidth to be able to invest, and as the revenue comes, it should be upside, which can fuel further investment out in the future, so costs are considered in that without the full revenue contribution coming through.
Okay, I think we have about a minute left. Quentin, Dan, I'm going to turn it over to you for any closing remarks, any last thoughts you want investors to leave with today on the iRhythm story.
Look, we couldn't be more excited about where the company's at. Obviously, 2025 was a terrific year. We saw momentum pick up across all aspects of the business, and the momentum on the profitability side was terrific as well. I think getting to free cash flow positivity was a big milestone for us, and hats off to the team for getting there, but I couldn't be more bullish on where the future is going. I think the market is so much bigger than what we've looked at historically. I think we're just in the front end of opening that up, and we'll have an opportunity to enjoy it. 2025 was a great year. I think 2026 is going to be another wonderful year for the company.
We appreciate the support and look forward to catching up with each of you guys over the course of the day, if not over the course of the year. So thank you.
Thank you.
Good morning, everyone. Thanks for joining us for another session at the 44th J.P. Morgan Healthcare Conference. I'm Brian Cheng, one of the senior biotech analysts here at the firm. At the podium, we have the CEO of PTC Therapeutics, Matt Klein. I'll now pass the mic to Matt for a short presentation followed by a live audience Q&A.
Thank you, Brian. And thank you, everyone, for joining us this morning. Last year, I stood on this stage and talked about how 2025 was going to be a year of focus and execution for PTC, positioning us for future success.
We set a number of objectives for the year, including gaining the first approvals for Sephience for the treatment of children and adults with PKU, ensuring a strong start to the Sephience global launch, continue to drive revenue, and effectively manage expenses as we continue to move the company towards cash flow breakeven, and advance our innovative early-stage programs, including the PTC518 Huntington's Disease Program. I'm pleased to report that we achieved all of these objectives. We gained approval for Sephience in the U.S., Europe, Japan, and a number of other countries in just six months' time. The Sephience launch is off to a strong start with broad uptake across all key patient segments. We had another year of outstanding revenue performance and effective expense management and closed the year with over $1.94 billion in cash.
Last May, we shared the positive results from the PIVOT- HD phase II study of PTC518 in Huntington's Disease patients, as well as advanced a number of our early-stage programs, including those from our RNA splicing platform. Overall, 2025 was a year of many significant successes. This morning, I'll review our 2025 performance and provide an outlook for what we expect to be a very exciting 2026. As I'll be making forward-looking statements this morning, I refer you to this slide, as well as our recent SEC filings for a full explanation of risks and uncertainties. I'll start with our 2025 revenue performance. Our revenue for the year was $823 million, exceeding our guidance of $750 million-$800 million. This outstanding revenue performance included $588 million of product revenue, driven both by our Sephience launch revenue as well as our more mature products.
For Sephience, in the fourth quarter, we achieved $92.5 million in net revenue, bringing the total since launch to $112 million. As of December 31st, we had 946 patients on commercial therapy worldwide. And in the U.S., we had 1,134 patient start forms with a payer mix of approximately 70% commercial. We continue to see contributions from every patient segment, as well as the full range of age groups, from infants to older adults, as well as the full spectrum of disease severity. In addition, while still early days, we're seeing very high prescription refill rates and very low discontinuation rates, with low single-digit percent in the U.S., This strong start to the Sephience launch reflects both the highly differentiated safety and efficacy profile of Sephience, as well as the outstanding performance of our field teams and our PTC Cares case management team.
I'll be providing more details on the Sephience launch and the overall market opportunity later in the presentation. As we move into 2026, we're providing revenue guidance of $700 million -$800 million. We expect the majority of this to come from Sephience as we continue the strong launch momentum with smaller contributions from our more mature products. I want to emphasize that our product revenue guidance for 2026 does not include Evrysdi royalty revenue, as we sold the remaining portion of the Evrysdi royalty for $240 million in milestones to Royalty Pharma, as we shared in December of 2025. This product revenue guidance represents a 19%-36% year-over-year growth from our product revenue of 2025. In terms of expenses, we're providing OpEx guidance of $680-$720. The midpoint of this guidance represents an approximately 6% decrease from the midpoint of OpEx guidance in 2025.
Looking at product revenue guidance and OpEx guidance, it's clear that PTC has the potential to reach cash flow breakeven in 2026, which would be a significant milestone for the company and position us for the potential of sustainable profitability in the future. In 2026, our main focus is going to be continuing the strong Sephience global launch momentum. We also look forward to continued progress in the PTC518 Huntington's Disease Program, as well as to advancing a number of our early-stage R&D programs. We'll also continue to work to move the company towards reaching that significant cash flow breakeven milestone. Let's dig deeper into this 2026 outlook, starting with Sephience. As we've discussed, Sephience is the foundational product for PTC's near-term growth.
The launch is off to a really strong start with over $112 million in revenue and over 940 patients on drug within just the first five and a half months, and every sign points to this strong momentum continuing into 2026 and beyond. One of the factors supporting the broad uptake of Sephience and its potential to become the standard of care for PKU is its highly differentiated dual mechanism of action. This dual mechanism of action allows for the benefit for the full spectrum of PKU patients, even those with more severe subtypes known as classical PKU. The first mechanism of action is Sephience's ability to serve as a precursor to BH4, which is the cofactor for phenylalanine hydroxylase, the enzyme implicated in PKU pathology.
Now, if one were to give BH4 itself, whether in the form of Kuvan branded or generic, it gets oxidized in the GI tract, and a lot of it gets excreted. So there's very little that is bioavailable to the cells. This is not the case for Sephience. Sephience is rapidly absorbed from the GI tract intact, actively transported into the cell, where it's converted into BH4, achieving very high levels of intracellular BH4. This is the reason why we continue to see in all of our clinical studies that any individual who has a benefit from Kuvan, either branded or generic, has a much greater benefit from Sephience. The second mechanism of action is Sephience's ability to serve as an independent chaperone, binding to the phenylalanine hydroxylase enzyme and stabilizing its shape, which then augments enzyme function.
It's this second mechanism of action that allows Sephience to have meaningful benefit in individuals with what is known as non-BH4 responsive mutations, such as those associated with classical PKU. The evidence for the broad, meaningful benefit that Sephience can provide continues to grow. We recently shared the results from the Amplify head-to-head study comparing Sephience with BH4. In this study, as in all of our previous studies, we again see that any individual who has a benefit from Kuvan branded or generic has a much greater benefit from Sephience. In this crossover study, Sephience provided an over 70%, 70% greater lowering in phenylalanine as compared to BH4. These results not only resonate with prescribers, but are also very important to payers and HTA authorities. We've also recently shared the continued evidence of Sephience's ability to allow for diet liberalization, probably the most meaningful endpoint for individuals with PKU.
In the Phe tolerance protocol of our APHENITY long-term extension study, virtually every subject was able to increase protein intake while maintaining control of phenylalanine. 69% of participants were able to reach or exceed the recommended daily protein intake for an individual that does not have PKU. Now, while these numbers sound great, and they certainly are great, perhaps even more meaningful are the stories we continue to see on social media of kids and adults with PKU being able to enjoy foods they never had before, like hamburgers and pizza and steak. We even see stories of moms who say for the first time they're able to have the same breakfast with their child. These are incredibly impactful stories and probably provide no greater endorsement of the potential transformative benefit that Sephience can provide for individuals with PKU.
We're also continuing to see important effects on other meaningful aspects of disease, including improved cognitive function and mood, as well as improvements in a number of different aspects of disease-related quality of life. Importantly, all these meaningful benefits are being delivered in the context of a consistent safety and tolerability profile, which is quite favorable. When one considers the highly differentiated Sephience mechanism of action, the evidence of meaningful treatment benefit across all age groups and disease severities, and the consistent favorable safety and tolerability profile of Sephience, it's clear that Sephience has the potential to address each key segment of the market, including individuals currently on treatment, those that have tried and failed existing treatments, and those that are therapy naive. Thus, the total addressable market is nearly the entire population of PKU patients, which is 17,000 in the U.S.
The evidence of early penetration into each of these segments thus far in the launch supports that physicians similarly see the potential for Sephience to be first-line therapy for PKU and become the standard of care. This market size, the significant remaining unmet need for PKU patients, even though there are approved therapies, and our commercial team's ability to execute all add up to a very large potential commercial opportunity for Sephience. In 2025, our launch efforts are really focused in the United States and in Germany, and as we move into 2026, we expect to significantly expand the global Sephience footprint. We're expecting to launch in Japan, in Brazil, as well as a number of other countries around the world, and we'll also continue to leverage early access programs where possible.
Our customer-facing teams around the world stand at the ready to be able to deliver Sephience to any individual with PKU who may benefit. In summary, the Sephience launch is off to a really strong start. We see no evidence of this momentum slowing as we move into 2026 and beyond. We also expect a number of activities from the PTC518 Huntington's Disease Program in 2026. PTC518 is the leading oral disease-modifying therapy in development for Huntington's disease. PTC518 is a highly differentiated molecule that was discovered from PTC's splicing platform and was partnered with Novartis in December of 2024. In May of last year, we shared the results from the positive PIVOT-HD phase II study of PTC518. The study met its primary endpoint with durable dose-dependent lowering of blood huntingtin protein levels.
Favorable and dose-dependent clinical effects were demonstrated at month 12 relative to placebo, and at month 24, we demonstrated dose-dependent significant effects relative to a well-matched natural history cohort. In addition, at month 24, dose-dependent effects on NfL were also recorded. Importantly, PTC518 continues to be demonstrated to be safe and well tolerated with no evidence of NfL spikes. In the first half of 2026, we expect the next data update from the open-label extension of PIVOT-HD as all participants cross the 24-month time point. In the fourth quarter, an end-of-phase II meeting was held with FDA where alignment was reached on the phase III study of PTC518. This study can serve as a registrational trial or, in the context of accelerated approval, serve as the confirmatory study.
The INVEST Global HD study will be a double-blind randomized controlled study with target enrollment of approximately 770 participants from over 30 countries. The primary endpoint will be change in the cUHDRS scale from baseline up to 36 months, and an interim analysis is planned for both efficacy and futility. Per the PTC518 licensing agreement, Novartis will be responsible for the conduct and full funding of this study. At the end of phase II meeting, we also discussed with FDA the potential for accelerated approval. As expected, FDA was supportive of the potential accelerated approval pathway given the significant unmet need for Huntington's patients. Based on the evidence of safety, early clinical effect, and biomarker effect, we remain enthusiastic about the potential for PTC518 to be the first approved oral disease-modifying therapy for Huntington's disease. I'll now provide a brief update on the vatiquinone-Friedreich's Ataxia program.
vatiquinone is an oral small molecule with demonstrated safety and efficacy in both children and adults with Friedreich's Ataxia. The MOVE-FA phase III study demonstrated a significant vatiquinone treatment effect on the upright stability score, the most sensitive and meaningful endpoint for children and adolescents with Friedreich's Ataxia, for whom there remains a significant unmet need. In the long-term extension study from MOVE-FA, significant effect was demonstrated on slowing of disease progression with a 50% slowing of progression relative to a matched natural history cohort after three years. Similarly, in the analysis of the long-term extension of an earlier placebo-controlled study in ambulatory and non-ambulatory adults, vatiquinone similarly demonstrated a significant effect in slowing long-term disease progression. Following the CRL for the vatiquinone NDA, we held a Type C meeting with FDA in December to discuss the potential next steps in the vatiquinone program.
Discussions with FDA are ongoing at this time, as the agency has asked for additional data and information from the MOVE-FA study before providing guidance on the next steps, and finally, in 2026, we look forward to advancing our early-stage R&D programs. As we shared at our R&D day in December, we have a number of innovative programs from our two scientific platforms, RNA splicing and inflammation and ferroptosis. PTC pioneered the field of oral small molecule splicing. The success of Evrysdi for spinal muscular atrophy and the early successes of PTC518 for Huntington's disease validate the potential for the splicing platform to produce highly impactful and valuable therapies for diseases of unmet need. Our teams have made a number of learnings from the early programs that have fortified our position as the leaders in small molecule splicing.
Our learnings have allowed us to significantly expand the universe of potential small molecule splicing targets far beyond what was ever imagined. In addition, we've significantly enhanced our small molecule chemical library with what we consider splicing-centric chemical motifs. We've combined our decades of know-how, the expanded list of potential splicing targets, and our chemical library with advanced bioinformatics to develop PTSeq. PTSeq is a proprietary platform engine that will facilitate and accelerate the next set of small molecule splicing programs for a variety of indications. As we have discussed, we expect the splicing platform to be a source of both PTC-developed and commercialized therapies, as well as a source of strategic partnerships for non-core therapeutic areas such as oncology and larger neurodegenerative diseases.
The PTSeq approach has already yielded a number of exciting and innovative programs that will look to advance in 2026, including our MSH3 program for Huntington's disease and myotonic dystrophy, and earlier stage programs such as our sickle cell disease program and neurodegenerative disease program. We also look forward to advancing programs from our inflammation and ferroptosis platform. As we discussed at the R&D day in December, this platform includes a number of innovative programs with differentiated molecules that target aspects of inflammation and oxidative stress closely linked to a number of different disease pathologies, including our ferroptosis-Parkinson's disease program, our NRF2 activation program, and our NLRP3 inflammasome program. In conclusion, over the last two years, we have transformed PTC into a strong, innovative, execution-oriented global biopharmaceutical company.
With our robust global commercial engine, including our foundational product Sephience, our innovative R&D platforms, including our RNA splicing platform, and our strong financial position with over $1.9 billion in cash and the potential to reach cash flow break-even this year, we are well positioned for success in 2026 and beyond. Thank you.
Thank you. Thank you, Matt. Thanks so much for the presentation. Let's start off with the Q&A. For those who are in the audience, if you have any questions, feel free to raise your hand. For those joining us virtually, you can submit questions on the portal. Matt, I want to start off with just the fourth quarter number for Sephience. Where are we now in the launch? What is in line with what you expected before the launch? And were there any surprises now that you're looking back at the third quarter and the fourth quarter performance?
Yeah. Thank you, Brian. Let's make no mistake about it. This launch is off to an incredibly strong start with $112 million in just five and a half months. Now, we understood from the beginning that there was a significant opportunity for Sephience. As we've discussed and shared in the presentation, PKU in the United States, there's a population of approximately 17,000 individuals. While there are approved therapies, both have significant limitations such that there remains a significant unmet need for PKU patients. Our data package substantiates what we understood to be true from the mechanism of action, that we have the ability to provide benefit to the full spectrum, the full spectrum of PKU patients, including those with more severe forms of the disease, this classical PKU.
I go back to this slide on mechanism of action, which nicely explains how, based on the ability to be a more bioavailable precursor, we're able to provide superior results than just giving BH4 alone. And then we have the second mechanism of action, which then allows us to address more severe mutations, including those that have the most severe genotype-phenotype scores. And then, importantly, this is an oral once-a-day therapy that's very well tolerated, easy to use, and has a strong safety profile. And I'd say the last part, Brian, is our team's demonstrated ability year-over-year to successfully commercialize, let's just say, more challenging products that don't have the efficacy differentiation of Sephience. So when you put that all together, we believe this could be a big opportunity, and we still do. And we're off to a strong start.
And look, we see no evidence of this launch momentum slowing. And I'd say in terms of surprises, I think the only—I'd say the only thing we're seeing now that maybe we didn't expect to see right away is the uptake by adult therapy naive patients. We knew that that's a significant unmet segment. We knew ultimately we would penetrate that segment, but I think we're seeing that earlier in the launch than we thought. And so when you think about those segments I highlighted, those on existing therapies, those that are therapy naive, those that have tried and failed, we're penetrating each of these segments.
And the fact that we're penetrating each of these segments, and we're hearing time and time again from physicians their desire to try every one of their patients on Sephience, tells us that we're just at the beginning of this launch, and we've got a long way to go in penetrating each of these segments. And that's what gives us the confidence that this momentum is going to continue far into 2026 and beyond. And that's true for the United States. And as we continue to launch in more and more countries around the world, and that global footprint increases, again, that's why we say we see this as a very significant potential revenue opportunity.
Great. I think we should just go ahead and address one of the most frequently asked questions this morning from your press release. Can you walk us through your thinking behind the guidance that you have laid out for 2026?
Yeah.
I think there's certainly that question of what do you expect coming from the DMD franchise for 2026? And certainly, there's also a question of whether there's a different way of thinking in terms of your way of guiding for 2026 versus how you guide it for 2025. So maybe just walk me through those pieces so that people understand how you're thinking about the guidance number as we're heading into 2026.
Yeah, absolutely. So look, we start 2026. What do we know to be true? We know that, and we fully expect continued momentum from the Sephience launch, continued linear growth as we're seeing in the Sephience launch. And we're also expecting to, unfortunately, see some continued erosion in the DMD franchise. Emflaza now has six, seven, or eight generics in the market. We're very proud of the revenue that we've been able to maintain, probably a level of revenue that people didn't expect. And similarly for Translarna, I mean, we had the withdrawal in Europe that happened at the end of the first quarter in 2025. And we've since seen an erosion of revenue not only in Europe, but in areas outside of Europe. And we fully expect then erosion to continue in the DMD franchise.
What I can't say for sure is how quickly that erosion is going to occur, what's the extent of that erosion, and also what's going to be the upward trajectory in the Sephience launch. I mean, we're five and a half months in. We're still relatively early, and I think that's why most folks don't typically guide for revenue, product revenue in the first year of a launch. We have to understand the dynamics better, but again, what do we know for sure? We see no signs of slowing in the Sephience launch. We see the evidence of the ability to continue to penetrate all those key segments, and for this to be a very, very large opportunity, and we expect to see continued erosion in the DMD franchise, so the specific product revenue guidance of $700-$800 reflects sort of what the knowns and the unknowns.
As always, as the year goes on and we learn more and understand more, we'll refine guidance. You asked, how does this compare to last year? If you remember in 2025, we gave really wide revenue guidance because, again, we sat there at the beginning of the year expecting a significant decline in the DMD franchise that, quite frankly, didn't materialize as much as we thought. And if that's the case this year, then look for us to adjust revenue up. But again, we can only deal with what we know to be true, which is the strong potential for Sephience and the declining contributions of the DMD franchise.
And how much potential erosion could we expect from the DMD franchise? And how does that balance out with the, I think you said that there's no evidence of the launch momentum slowing. So how do we estimate both of those buckets?
Yeah. Again, we gave the guidance of 700-800. I'm not going to be able to give you any more exact numbers. From Emflaza, we've said all along that rare disease drugs typically don't fall off a cliff. They have a slower erosion. But we're starting to see sufficient numbers of generic entrants that that could slow more. And I don't know that anyone has heard of a drug not being licensed in Europe and still having the revenues that we're having with Translarna, which makes it really hard to predict what's going to happen next. As we said, we expect that could decline over time. We expect with generic entrants in other regions of the world, we can see continued decline. We don't have exact numbers on that, Brian.
I think our range was the best effort to understand there's going to be puts and takes in the revenue. We're going to continue to do our best and get it, as we always do, to drive revenue as far and as fast as possible. And as we learn more, as we move into the year, we'll continue to refine the guidance.
And then when it comes to the fourth quarter number, can you talk a little bit about the holiday impact that you potentially saw? Was there a holiday impact? Because I remember that coming out of the third quarter, that could be one of the swing factors when we think about the number. So what did you see in the fourth quarter?
We did see impact. We did see some impact because for the obvious reasons, right? Clinics in the U.S. tend to close the week of Thanksgiving and the two weeks around Christmas and the New Year. We also heard that there were a lot of dietitians and physicians who said, "Look, there's so many meals and holiday things. This is not the context in which to introduce a therapy. We'll wait till the new year." So I think what makes the revenue performance in Q4 all the more impressive is it's in spite of those small holiday headwinds, again, which is why we're confident that we're going to continue to see growth and success in 2026 and beyond.
Okay. In your prepared remarks, you said that the payer mix is currently at 70%. I remember last year, you have guided around 65%-35%. That's the mix ultimately you think will land at for the Sephience franchise. Can you comment on the growth journey here? And are we still moving toward that 65%-35%? And when do you think we'll ultimately get there?
Yeah. The short answer is yes. We are still moving towards that two-thirds, one-third, which is the payer mix profile for PKU. And then, again, we'll expect the gross to net to move into that neighborhood that you typically see somewhere in the 20%-25% range. We're clearly not there yet, but that's where we think we'll be when we reach steady state.
Any questions from the audience? Okay. There is a question about how we should think about the trajectory. I think there's always that question of, is this a bolus effect? What's your take on that? I know that we only have two data points, right? And what's your take on that? I'm really curious how we should think about that.
Yeah. We have two data points that make a very nice line that we're intent on continuing that trend. Look, I think bolus means different things to different people. Did we see a lot of enthusiasm early on because there's a lot of individuals wanting to get on a therapy that could be safe, well-tolerated, and allow them to change their lifestyle? Absolutely. But to me, a bolus means you had a shot of patients in, and now it's going to just die down, and that's not what we're seeing at all. I think we saw a lot of early enthusiasm, and we're seeing continued enthusiasm. Look, I go back to this observation that we're seeing penetration into each of these segments in a really nice way, and we haven't given the exact numbers. I think it's still too early to do so.
But the fact that we're touching each segment now, and we're seeing very high refill rates and patients staying on the drug, suggests we have a very long way to go into penetrating each of these segments. And again, we're also hearing from so many physicians their intention to trial all of their patients on Sephience. That's becoming the first-line therapy. That doesn't mean all our patients are going to get tried on therapy tomorrow or in January. It means this is going to be a long go of continued penetration with what we're seeing is very high compliance and adherence rates, which makes us bullish about the overall opportunity over time.
On slide 17, you have this fantastic slide in comparing the geographical expansion of the Sephience franchise compared to 2025. Outside of the U.S., just when you look at the international contribution, which geographical region do you think will make the most sense for investors to focus on? Which one has the best potential to give you maximal growth potential?
I think, honestly, Brian, the strength is in the breadth and the fact that we have demonstrated capabilities in so many different countries and regions. So clearly, if you think about rare disease markets, the three largest countries are thought to be the U.S., Germany, and Japan. I think those will continue to be important markets for us. But we've also done very well with our other products in Latin America and in Brazil, in Russia, and the Commonwealth of Independent States, Middle East, and North Africa. And we've got teams in each of these countries that are well experienced in both regulatory commercialization and dealing with governments and payers. And that's why we're attacking this from two different angles.
One is, okay, where are countries where we can get approvals, launch quickly, and we think can be very valuable markets, such as the U.S., such as Japan, such as countries in Europe? Where can we leverage early access mechanisms where we can get patients on drug, maintain the narrow pricing corridor that we've already said very clearly is a priority while pricing and reimbursement discussions are ongoing? So again, yes, there's again, I would say the most valuable markets are likely to be the U.S., and then Japan and parts of Germany and other areas in Europe. But the strength here is in the breadth and our demonstrated capabilities to really execute and commercialize therapies worldwide. And I'm very proud of what the company has been able to do over the years with Translarna. But I point to that and say that's not an easy product.
And the success that we've had with Translarna globally, we're putting Sephience into the hands of those same teams. And that just bodes really, really well for the global prospects.
I have a question in my email inbox. That question is related to your Huntington's partnership. How should we think about the accelerated approval path? You could be at an early stage of understanding what the agency wants. But help us maybe paint a little bit about what we could expect.
Yeah, absolutely. I think the first point, which is probably clear to everyone, is that the agency is, of course, interested in leveraging these types of pathways for significant diseases of unmet need. We had talked about before this FDA meeting that our expectation was the neurology division, which has leveraged this pathway for other severe diseases like ALS, like Alzheimer's, would likely be open to doing so for Huntington's. And that's what we confirmed in our meeting. Now, FDA knows and we know that the next data readouts coming in the first half of the year. And I think both the PTC and Novartis teams remain similarly enthusiastic about the potential for accelerated approval and remain committed to trying to get PTC518 to patients as quickly as possible.
We'll clearly undertake the analysis in the spring, look at the data that we have in terms of evidence of target engagement with the dose-dependent blood Huntington's protein lowering, having evidence of placebo-controlled benefit in the short term, then being able to have evidence in the long term against natural history, which was a strategy that was pre-specified in the study protocol, bringing that all together as well, quite honestly, as the legacy of Evrysdi, which was another oral small molecule splicing therapy that came from our platform that's well known to the agency in being able to provide a safe and efficacious therapy for severe disease. So that's how we think about it. And I know the Novartis team's comments have been very clear. They're enthusiastic about starting the Invest HD study as quickly as possible. Why?
Because if we're thinking about an accelerated pathway, getting that potential confirmatory trial started is really smart. And in the event that that accelerated approval portal isn't open with the PIVOT long-term extension data, there'll be interim analyses in Invest HD that could allow for accelerated approval. And then, of course, just starting that study sooner gets to the finish line sooner if there's no accelerated pathway.
Great. Well, that's all the time we have. Thanks for joining us. Thank you. Thank you.
Thanks very much, Brian.