Good morning, and welcome to the forty-second annual JPMorgan Healthcare Conference. I'm Eric Joseph, Senior Biotech Analyst with the firm. It's great to be back here with you all to kick off what's my favorite week of the year, with an exciting slate of presentations, and also what I expect to be a constructive set of discussions over the course of the week. Our first presenting company this morning is PTC Therapeutics, and it's my pleasure to welcome CEO, Matt Klein, to take us through the company. Just a quick programming note. There is a Q&A session after the presentation, so for folks with questions, just raise your hand. We'll get a mic over to you. For folks joining online, you can also submit questions via the portal. Just click the Ask a Question button.
With that, Matt, thanks for joining.
Thank you, Eric. Good morning, everyone. Before I get started, I refer you to our forward-looking statements and other SEC filings for information related to our risks and uncertainties. One year ago, I stood on this stage and explained how 2023 was going to be a transformational year for PTC. Indeed, it was, with a number of ups, but also a few downs. As PTC celebrated its 25th anniversary, it was a perfect time to reflect on the company's many pioneering and impactful contributions, including pioneering RNA-directed therapies, establishing the field of drug development for Duchenne muscular dystrophy, discovering and developing the first-ever small molecule splicing agent, Evrysdi, which is now a global leading therapy for SMA, and successfully developing the first-ever direct-to-brain administered gene therapy.
However, it was also a time to make important changes so that we could mature into a leaner, stronger, and well-capitalized PTC positioned for future success, and we did that. We made a number of significant changes to our leadership team, our R&D strategy, and capital structure, providing us a strong foundation for the future. In building the PTC of the future, we emphasize focus. We focused our R&D portfolio on small molecule drug development in core therapeutic areas. We focused our research efforts on scientific areas where PTC has unique expertise to discover and develop impactful therapies. We prioritized programs through a prism of return on investment and made the decision to discontinue programs that had a low probability of technical success and/or commercial success.
We completed two reductions in workforce to rightsize the company, reducing headcount by over 30%, while maintaining elements of our infrastructure critical to ensure execution across our commercial and R&D teams to bring therapies to patients faster. Through our portfolio prioritization and workforce reductions, we reduced 2024 projected full-year OpEx by approximately 25%, reversing years of market OpEx growth. The OpEx reductions fundamentally changed the trajectory of the company, such that we can now envision for the first time being cash flow breakeven in the not-too-distant future. Finally, we significantly strengthened our balance sheet through a royalty financing transaction that not only provided us with sufficient cash to advance the next set of PTC product candidates, but importantly, enabled us to retire a debt facility with a very high cost of capital that also significantly limited our financial and operational flexibility.
We made these significant changes relatively quickly. Now, I want to emphasize one thing that hasn't changed: our mission. We remain a patient-focused company that will continue a legacy of discovering, developing, and commercializing transformative therapies for patients with rare disease. This will not change, but we will now pursue this mission in a much more efficient, thoughtful, and effective manner. Our strategy will leverage our innovative science, our drug development expertise, and robust global commercial infrastructure. As I mentioned, we have focused our research efforts on two scientific platforms, splicing and ferroptosis, where PTC has unique expertise to discover and advance to the clinic innovative therapies. We expect these platforms to be a source of PTC-developed and marketed therapies, as well as a source of external R&D partnerships for indications outside of our core interest.
Our development efforts will be focused in two therapeutic areas, neurology and metabolic disease, two areas in which we have extensive experience and a track record of success. We will sustain our accomplished global commercial organization through a combination of PTC-discovered and developed products and other innovative therapies in licensed through business development transactions. In terms of specific programs, we remain with a diverse commercial product portfolio of important therapies our world-class commercial teams deliver to patients with rare disorders around the globe. We have a robust development portfolio with a number of promising therapies for rare neurologic and metabolic diseases, including PKU, Huntington's disease, and ALS, that I'll detail shortly. Our research pipeline includes programs, a few of which are shown here, with highly innovative compounds at varying stages of preclinical development....
I will now discuss the outstanding performance of our commercial teams in 2023, delivering $946 million in unaudited total revenue, meeting our overall 2023 revenue guidance. Our DMD franchise revenue exceeded guidance, with unaudited revenue of $610 million, representing 20% growth over full year 2022. Our commercial teams continue to deliver year-over-year, and I'm confident in their ability to succeed with new product launches. In addition to our corporate restructuring and commercial success, we had a number of other important achievements in 2023. We made significant progress on our development programs with several strong data readouts, positioning us for an exciting 2024 as we advance these programs closer to potential registration.
In addition, we expanded the geographic footprint of several of our commercial therapies with a number of regulatory approvals that support revenue growth in the short term. For 2024, we are providing a wide revenue guidance of $600 million-$850 million, with the higher end reflecting a potential positive CHMP opinion on reexamination of Translarna, and the lower end reflecting a potential negative opinion. We plan to update guidance once we have greater clarity. As mentioned, we have significantly reduced 2024 OpEx relative to years past and are guiding to $660 million-$755 million in total non-GAAP OpEx, which includes up to $65 million in regulatory milestones. Now, I'm aware that the pending CHMP opinion is in the front of a lot of your minds.
As I have mentioned, we believe the data support the continued authorization of Translarna, and we have seen a tremendous outpouring of support from the physician and patient communities who want to ensure that a safe and effective therapy remains available to boys with nonsense mutation DMD. In addition, we recently shared that we will be meeting with FDA in the first quarter to discuss the contents of a potential NDA resubmission for Translarna. But I want to be very clear that while we believe in Translarna, we have not made hope our base operating assumption. Our restructuring and financing activities were done to enable PTC to withstand the downside scenario of a negative CHMP opinion. A positive opinion in Europe or an NDA submission in the US would be potential upside.
In other words, regardless of the outcome of Translarna, we are poised to continue to advance our next set of promising programs. Indeed, beyond Translarna, we have a number of important regulatory and clinical activities in 2024. Following a recent successful pre-BLA meeting with FDA, we plan to submit the BLA for Upstaza in the first quarter. In addition, following a successful pre-submission with EMA, we plan to submit the MAA for sepiapterin in Europe also in the first quarter, and we expect the NDA submission for sepiapterin to be no later than the third quarter. We also look forward to readouts from the PIVOT-HD trial, with a 12-month interim data report in the second quarter of 2024, and we'll report top-line results from the CARDINALS-ALS trial in the fourth quarter. I'll now discuss some highlights from these important programs, beginning with our sepiapterin program for PKU patients.
Last summer, we shared the very strong results from our phase 3 APHENITY trial of sepiapterin in adult and pediatric PKU patients. The study results were not only highly statistically significant, but also clearly clinically meaningful and supportive of how differentiated sepiapterin is from existing therapies. In the placebo-controlled phase of the trial, there was a 63% reduction in mean Phe levels in the overall patient population, and an even higher reduction, 69%, in the more severe subset of classical PKU patients. The vast majority of patients met established criteria for phenylalanine control, and over 20% of subjects had normalization of phenylalanine levels, which is virtually unheard of in PKU clinical trials. Importantly, sepiapterin was demonstrated to be safe and well-tolerated, with no treatment-related serious adverse events.
Following completion of placebo-controlled trial, subjects enrolled in a long-term open-label extension study to confirm durability of treatment effect and long-term safety. In addition, a subset of patients entered a Phe tolerance protocol. In this protocol, patients progressively increase their dietary protein intake, and we check to see if they can tolerate this increased intake by measuring their phenylalanine levels and ensuring they remain in control, defined as less than 360 micromoles per liter. I'll now share with you the most recent results from the Phe tolerance protocol. I have to say that as we get more and more data, the overall sepiapterin data set becomes stronger and stronger. First, shown on the purple line, is the average increase in protein intake over the six-month protocol period.
For reference, the average recommended daily allowance of protein for non-PKU patients is 40 mg/kg/day ... So as you can see in this protocol, patients are taking in higher levels of protein than is the recommended daily allowance for non-affected patients. Now we see in orange the average phenylalanine level of patients at each level of protein intake. As you can see, patients are able to tolerate far beyond the RDA and still maintain control of phenylalanine. This is an incredibly important result. It confirms that sepiapterin not only controls phenylalanine levels on a restricted PKU diet, but it allows patients to liberalize their diets and still have controlled phenylalanine with significantly increased protein intake. In fact, over 60% of the subjects who have entered the PheTolerance protocol thus far have met or surpassed the RDA for protein intake.
Again, this is incredibly meaningful for PKU patients who want a therapy to allow them to liberalize their highly restrictive diets. These data are also very important for physician uptake as well as payer negotiations. Based on the strong data from AFFINITY and the data collected so far from the PheTolerance protocol, sepiapterin demonstrates the potential to fill the remaining high unmet medical need for the majority of PKU patients who are not served by available therapies. The data support that we can access three key segments of the PKU global population. Those that are therapy naive, including classical PKU patients, those who have failed on current therapies, and those that are not well controlled on current therapies.
As Professor Ania Muntau, a global leading KOL, emphasized in our commercial deep dive last year, she intends to try all of her PKU patients on sepiapterin, even those currently on other therapies. When one considers the global PKU population of over 58,000 patients, the large number of addressable patients in each of these market segments, and the enthusiasm of prescribing physicians, we see the potential revenue opportunity as easily over $1 billion. With these strong data in hand and our existing global commercial infrastructure, we look forward to initiating global regulatory submissions and launch preparations for sepiapterin in 2024. We expect the submission for the sepiapterin MAA in Europe in the first quarter of 2024, and the NDA submission to be no later than the third quarter of 2024. We are also planning a number of regulatory submissions in additional geographies.
We expect 2024 to be an exciting year for our PTC-518 Huntington's disease program as well. As we have discussed, the PTC-518 program was built on PTC's unique expertise in splicing and the important lessons learned from the successful discovery and development of Evrysdi for the treatment of SMA. PTC-518 is a highly differentiated molecule, especially when compared to other HTT-targeted therapies. It's orally bioavailable, highly selective and specific for the Huntington target, readily crosses the blood-brain barrier and is not efflux, and has demonstrated uniform lowering throughout the brain, as well as dose-dependent lowering of HTT mRNA and protein levels in the blood. These factors support why PTC-518 is one of the most promising therapies in development for HD. As a reminder, the ongoing phase 2 PIVOT-HD trial is a 12-month study in two parts.
Part A is 12 weeks in duration and focuses on PTC-518 pharmacology and pharmacodynamic effect. And Part B is 9 months in duration and focuses on biomarkers of disease, including CSF levels of mutant huntingtin protein, NfL levels in the CSF and blood, and volumetric changes on MRI. Last summer, we shared the promising results from the initial cohort of subjects completing Part A. All key study objectives were met. We demonstrated dose-dependent lowering of HTT mRNA and protein in the blood, excellent CSF exposure that was higher than in the plasma, confirming that the current dose levels may be sufficient to reach goal neuronal HTT lowering. And importantly, PTC-518 was found to be safe and well tolerated, with no treatment-related serious adverse events, no evidence of peripheral neuropathy, and no evidence of treatment-related NfL spikes.
We look forward to sharing the data from the 12-month readout from the first cohort of subjects in the second quarter of 2024. This readout will include additional safety data and new biomarker data, including mutant huntingtin protein levels in the CSF, CSF NfL levels, and blood NfL levels, as well as brain volumetric data. We'll also share results from the clinical scales being collected in the trial. Later in 2024, we'll share Part A results for the remainder of the patients enrolled in the PIVOT-HD study. Moving to our vatiquinone program for Friedreich ataxia, the placebo-controlled MOVE-FA trial demonstrated several positive and important results on key aspects of Friedreich ataxia pathology, despite the study not meeting the primary endpoint.
We had the important finding of a significant benefit on the Upright Stability Subscale of the mFARS, the most relevant and sensitive component of the scale to treatment effect in pediatric and young adult patients. The Upright Stability Subscale has been demonstrated to be predictive of time to loss of ambulation, the most important disease milestone for ambulatory Friedreich ataxia patients. The magnitude of effect observed in MOVE-FA on the Upright Stability Subscale translates to a nine-month delay in loss of ambulation with 72 weeks of treatment, which is of clear clinical significance. In addition, there was significant benefit recorded on the Modified Fatigue Scale, with fatigue being the number one most burdensome symptom reported by Friedreich ataxia patients.
Following the written feedback we received from FDA in October, we are scheduled to have a live meeting with FDA in the first quarter of 2024 to discuss how the MOVE-FA data, along with additional clinical and preclinical data, could support an NDA submission. In addition, we expect to receive feedback from EMA on scientific advice regarding a potential conditional marketing authorization application in Europe. Finally, I'll discuss our utroxaostat program for ALS patients. Utroxaostat targets 15-lipoxygenase and the ferroptosis pathway. There is now extensive evidence confirming the key link between the ferroptosis pathway and adult neurodegenerative disease, including ALS. A number of in vivo and clinical studies have demonstrated abnormal levels of ferroptosis biomarkers in blood, neurons, and tissue of ALS patients.
In addition, there's evidence from a number of studies, preclinical and clinical, demonstrating that through targeting elements of the ferroptosis pathway, significant benefits in function and survival could be seen in ALS. Utroxaostat is the first clinical compound being developed for ALS with specific ferroptosis target-based activity. The registration-directed CARDINALS ALS study is a phase 2 study of utroxaostat in ALS patients. The study includes a 2-month run-in to assess baseline rate of change on the ALSFRS disease rating scale. Patients are then randomized 2 to 1 to receive utroxaostat or placebo for 24 weeks. The primary endpoint in this study is the change in the ALSFRS scale, with secondary endpoints capturing other important aspects of disease, including respiratory function and survival. We expect to complete enrollment in the CARDINALS-ALS in the first quarter of 2024, with top-line results expected in Q4 of 2024.
Look, 2023 was an eventful year. We made a number of significant and needed changes, focusing our R&D portfolio, reducing headcount, reducing OpEx, and significantly strengthening our balance sheet. We also had another year of outstanding revenue performance and had really great study readouts from our PKU and Huntington's disease programs, all of which position us strongly for the future. As we start 2024, we look forward to a successful year with a number of important expected milestones, including global regulatory submissions for our PKU program, data readouts from PIVOT-HD and CARDINALS ALS trials, and the advancement of a number of our promising preclinical programs closer to the clinic. But above all, we look forward to continuing to transform PTC into the company that we want it to be, our stakeholders expect it to be, and most importantly, patients need us to be. Thank you.
Thanks, Matt. I think, as we transition to the Q&A session, we're going to invite the PTC team up to the podium, to the dais. I'll just also note that the webcast, I guess we had some technical difficulties, so the webcast has been down. There will be a recording available on the PTC website after the presentation or later, later today. Of course, folks, who have questions, just raise your hand. We'll get a mic over to you. So taking the first question. Picking up on your financial outlook, Matt, at the top of the presentation, you anticipated cash flow breakeven in the not too distant future. I guess what time frame should investors kind of have in mind regarding that look?
Perhaps, if you could, maybe just take us through some of the key top-line contributors, kind of going into that look.
Yes, I'll say not too distant future means the not too distant future. I, I think what's really important, just big picture, is looking at the significant reductions in operating expenses we're projecting for 2024. As I mentioned, we did a lot of work to prioritize our portfolio. We conducted two reductions in workforce, and we project to have about a 25% reduction full year 2024 non-GAAP OpEx. When we look at our revenue as well, projected for next year in the range of $600 million-$850 million, and then consider the revenue that should be coming in the near future, particularly as we begin our PKU regulatory submissions and launch and, and really the, the tremendous size of that opportunity, as we talked about, you can envision very easily that it's not the too distant future.
It's really quite soon that we could be looking at cash flow break even.
... And, also just kind of digging in with, digging within the 2024 revenue guidance. Pretty wide range there, and obviously, I would think sort of the CHMP outcome with Translarna factors into that a little bit, into that range. I guess maybe you can just sort of, perhaps unpack a little bit, what perhaps, you know, variation in Translarna revenue we ought to be thinking about, and just also, how to think about the contribution by Emflaza, really the growth outlook for the, for the DMD franchise, for 2024.
Yeah. I'll make a general point, and then I'll let Kylie or Peter handle the other part of the question. The important thing is a lot of the work we did last year was to ensure that we could withstand the unflinching stare of the potential negative CHMP opinion. That was really important. So the restructuring efforts, the financing efforts, allow us to withstand that and still be able to move forward. That's very, very important. In terms of the specific impact on revenue and the DMD franchise, Kylie, do you want to start?
Yeah, absolutely. Thanks, Matt. As Matt said, I think we're incredibly proud of the continued success of the commercial team year-over-year, and despite the mature franchise, we're continuing to grow double-digit. The revenue guidance that we provided for 2024, as Matt talked about in the presentation, the low end of the guidance represents the potential of a negative CHMP opinion and incorporates that, and the high end of the guidance looks on a more positive opinion. Within that, as we've talked about with Translarna, we've continued to geographically diversify the business, and that was with the intent of ensuring that we have somewhat of an even distribution of contribution of regions across the board. Making sure that as we look to growth in outer years of Translarna, that we're able to grow in regions that are more new growth regions.
As we look to Europe, which is a more mature region, we see a lowering contribution over time. You touched on Emflaza also, that still has a contribution and a substantial contribution in 2024, as we continue to spend time focusing on protecting the business. So you see across the board a contribution from Translarna on the low end, the impact of a negative CHMP and a higher end impact of a positive CHMP.
I don't know, do you want to comment on Emflaza as well and the work we've been doing?
Yeah, absolutely. So I think from an Emflaza perspective, protecting the business has been an important work that the team has had ongoing, and it's not something that starts in 2024. The team started this a long time ago, and this has been focused on a number of different areas, including, of course, partnering with specialty pharmacies, partnering with payers, contracting with payers, contracting with manufacturers. We've also started a Dispense As Written program, which we've seen substantial uptake and increased success with, and these are all activities that will continue into 2024 and beyond. We talked a lot about stickiness to Emflaza and how important this is. We've seen a lot of brand loyalty when it comes to physicians, patients, the advocacy groups, and we don't expect that to shift.
That's driving a lot of the prescriptions and the growth that you've seen sort of moving into 2024, and we expect this to continue.
Can you talk a little about sort of the tablet formulation patents related to Emflaza, and how important they are for, you know, extending the, you know, lifecycle management or exclusivity of that franchise?
Yeah, I think, from our perspective, we've talked about loss of exclusivity in 2024, and there's no patents at this point that's going to change that. But I think as we've talked about, the team's effort has been focused on ensuring that we're protecting the longevity of the business and that stickiness to brand loyalty and making sure that we have these programs in place that allow the Dispense As Written , for example, an Emflaza prescription is written and limits the switch at the pharmacy taking place. So from a patents perspective, we are where we are, but from a program perspective, we're focused on the longevity of the business.
Switching to PKU, you laid out really, you know, backed by some of the physician feedback, sort of the broad commercial potential with the asset. I guess one of the things that I'm sure investors would be keen to understand is just how that TAM or that revenue opportunity kind of breaks down geographically. I guess, how should one be thinking about, yeah, the sepiapterin revenue opportunity in the US versus combined with Europe?
Yes, I'll start, and then I'll pass it over. I think the important thing here that people are beginning to realize is how despite the fact that there are two available therapies, the vast majority of PKU patients are either not on those therapies, and if they're on those therapies, they're not well served. So there really is this very significant unmet medical need for safe, effective, well-tolerated therapy for kids and adults. And with sepiapterin data from AFFINITY, the Phe tolerance data continue to demonstrate that we can meet that need for the full spectrum of PKU patients, mild to classical, as well as patients of all ages.
So again, as we mentioned in the presentation, when you consider the prevalence of 58,000, the vast majority of those not being well served, the fact that these patients are identified, timed with specialty clinics, the infrastructure's there, and the incredible execution of our existing commercial infrastructure, this is a huge potential opportunity for us. Kylie, do you want to provide more details on the geographic breakdown.
Yeah, absolutely. I think- As Matt said, 58,000 patients globally provide a very unique opportunity, and then when you layer upon that the fact that there, despite two therapies, there's a huge unmet medical need. Even if you look at the U.S. and you sort of take a, a snapshot of the U.S. market. So there's about 21,000 PKU patients in the U.S., and less than 10% of those are well-served on existing therapies. So roughly speaking, that's around 18,000 U.S. patients that have unmet medical needs. So even if you are able to capture a small fraction of those, and then you layer that with Palynziq pricing, you're easily above the billion-dollar opportunity that we've talked about.
And that's without even looking at outside of the U.S. geographies, where we have a proven track record, and as Matt talked a lot about, we have infrastructure that's ready to go and is set out to be able to launch this drug. So I think, you know, we haven't talked about sort of split between U.S. and ex-U.S., but I think the simplest way to sort of frame it is we can get there in the U.S., and then we have a huge amount of outside ex-U.S. as well. And so from that perspective, you know, if you look at the unmet need, it's representing about 90% of the PKU population.
Got it. That makes a lot of sense, and so, very helpful. I guess maybe just from a regulatory standpoint, I mean, you're anticipating or guiding to a NDA filing no later than third quarter, right? The urine carcinogenicity study being a pre-NDA requirement, let's say. I guess, where does that study sort of stand currently? And I guess if there have been any incremental communications with FDA regarding perhaps you know, an earlier filing in a mid-review of that non-clinical study?
Yeah. So as you point out, the regulatory package is set. I mean, too. It was submitted in Europe in the first quarter, the clinical package, CMC, everything else is set. It's just a difference in the regulatory bodies wanting us to complete this non-clinical study. We started the study as scheduled in December. So it's a 6-month in-life portion, a 26-week in-life portion study. We expect once we have this final study timelines established in terms of end-of-life portion, histopathology done, we'll then have a commit discussion with the FDA about what we can promise in terms of timing of the study report with, in relation to, the submission. Since we've not had those discussions yet, we're still guiding to it no later than third quarter.
Makes a lot of sense. Any questions? I'll hold here for any questions from the floor. All right, then I think we'll leave it there for time.
Great. Thank you very much.