Ladies and gentlemen, thank you for standing by, and welcome to the PTC Therapeutics 2019 third quarter corporate update and financial results. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Alex Kane, Head of Investor Relations. Thank you. Please go ahead, sir.
Thank you, and hello, everybody. Good afternoon. Thank you for joining us to discuss our 2019 third quarter corporate updates and financial results. Joining me on today's call is our CEO, Stuart Peltz, our Chief Operating Officer, Marcio Souza, and our Chief Financial Officer, Emily Hill. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Please take a moment to review our slide on our simultaneous presentation, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements, as any and such risks can materially and adversely affect our business and results of operation.
For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission, as well as the company's other SEC filings. We will disclose certain non-GAAP information during this call. Information regarding our use of GAAP and non-GAAP financial measures and a reconciliation of GAAP to non-GAAP is available in today's earnings release. With that, let me pass the call over to our CEO, Stuart Peltz.
Thanks, Alex. Thank you for joining us this afternoon as we provide an update on the third quarter. As you heard, on the call with me today will be our COO and CFO, Marcio and Emily. Marcio will provide commercial and clinical development updates. Emily will provide update on our Q3 financials. In this quarter, we have continued to advance our mission of creating a diversified, fully integrated biotech company with multiple platforms. As we have previously described, our strategic vision is to be a leading diversified rare disorder company that, through the combination of both using our internal innovative scientific platforms as well as business development, we will have multiple products and programs and anticipate approximately $1.5 billion in revenue by 2023. Today, we will continue to discuss our efforts in building out this vision of the company and how we are executing across a number of programs.
We will also review the results presented during the World Muscle Society that highlighted the continued clinical benefit and competitive advantage seen with Risdiplam. I'm proud to report that in October, Tegsedi was approved in Brazil by Anvisa. Along with Translarna, this marks the second approval that we have successfully achieved in Latin America in this year. The opportunity to treat hATTR in Latin America is important because the disease has a Portuguese founder's effect. Brazil is the largest country with Portuguese ancestry, with one of the largest markets worldwide, with approximately 5,000 patients. Additionally, Tegsedi has the advantage of being delivered by subcutaneous injection, as infusion centers in Latin America are often saturated or hard to access. Through our early access programs, we are seeing that there is a high unmet medical need in Latin America.
We have continued to educate the community on the importance of identifying patients and ensuring that these patients gain access to medicine. The Anvisa approval will allow us to initiate Tegsedi's launch, giving us the opportunity for direct physician outreach. We have also been continuing to grow our DMD franchise. As you will hear about this in more detail, we reported top-line combined commercial revenues of $71.4 million in the third quarter of 2019 when compared to previous year third quarter of $53 million. We have also shared results from the STRIDE registry this quarter, which is the first international registry for patients with DMD due to a nonsense mutation receiving Translarna. I'm also pleased to announce that we have acquired a late-stage asset from BioElectron Technology Corporation that will be integrated into our portfolio. This asset targets a key enzyme involved in the regulation of oxidative stress and inflammation.
The compound is ready to be in pivotal trials for select CNS rare disorders and has the potential to be used in combination with existing programs in our pipeline. We have agreed to pay success-based milestones that are due one year after certain regulatory approvals. We believe this is an exciting opportunity because of the novel approach in treating rare CNS and anti-inflammatory disorders. I'd now like to turn to our programs in gene therapy. As we previously mentioned, we are on track to submit a BLA to the FDA by the end of the year for our AADC gene therapy program. I'm happy to report that we have successfully completed the necessary manufacturing run of AADC gene therapy product required for the BLA submission.
We also plan to file an MAA in Europe for AADC deficiency following our submission to the FDA. We are proud to potentially be in a position to launch one of the first gene therapy programs worldwide. As Marcio will discuss with you in more detail, we have ramped up our patient-finding efforts and expect to be in a good position to have a strong launch for this product next year. Our gene therapy program in Friedreich ataxia continues to move forward. Because of manufacturing timelines, we now expect to enter the clinic mid-next year. Let me now switch gears to update you on the progress we have been making using our splicing platform. Our collaboration with Roche and the SMA Foundation on Risdiplam for the treatment of SMA is progressing very well. Recently, we shared updated clinical information from the pivotal FIREFISH and SUNFISH studies.
At the World Muscle Society meeting, we reported that SMA patients demonstrated continued improvement, including observing babies that are beginning to walk and stand. These are milestones that would have otherwise not have been achieved. Additionally, Risdiplam continues to be well-tolerated, with no dropouts reported from adverse events. Given that Risdiplam has been studied in a broad cohort of SMA patients, we would expect a potential approval to be for a broad label to include all SMA patients for a launch next year. The importance of the SMA program is that it's the first small molecule drug that is orally bioavailable, that is systemic, that goes to all tissues affected that lack the SMN protein. This is the first small molecule that has been shown to be selectively affecting splicing and leads to modulating gene expression, therefore validating our splicing platform.
We anticipate this to be widely used in all types of SMA patients. Based on success of this program, we have used our platform to identify other splicing modulators that affect splicing to treat diseases. In particular, we have discussed two programs that have identified molecules that selectively and specifically impact splicing that have the potential to treat orphan disease disorders. One compound was identified to treat patients suffering from familial dysautonomia, or FD, and the other program is to treat patients suffering from Huntington's disease, or HD. I will now discuss these programs. PTC-258 is an orally bioavailable, highly potent splicing molecule that has been shown to effectively correct a splicing defect in FD. This is an ultra-orphan disorder with a small patient population of only a few hundred patients in the U.S. and Israel, resulting from a founder's mutation predominantly found in the Ashkenazi Jewish population.
The FDA recently indicated that the clinical development path of FD would require a long and complex 2 years or greater placebo-controlled trial. This trial design is not feasible in this small patient population. At this point, there is not a development path that allows us to move forward in FD. Unfortunately, in drug development, we have to make difficult decisions, and as such, we have discontinued this program. We are disappointed for the patients and their families that suffer from familial dysautonomia. We will continue to work with the rare disease community to advocate for the regulatory process that would allow for ultra-rare disorders and difficult diseases to move forward. Let me now switch to discuss our HD program. We are highly focused on rapidly advancing our Huntington's program.
The compounds identified are exciting and have shown to be selective splicing modifiers and shown reduction of the HTT protein in all areas of the brain, as well as other tissues in the HD mouse model. We are now in the process of performing larger-scale GMP production of one HD compound to perform GLP safety toxicology. As the program is advancing rapidly, we continue to expect that the Huntington's disease program will enter the clinic in 2020. Like SMA, there are a number of advantages in having an orally bioavailable compound that is systemically delivered through the blood and has broad distribution to tissues, including all tissues in the brain. We believe that a therapeutic that is systemic and simple to deliver will bring a strong competitive advantage to the Huntington's disease landscape. As you can see, we have a number of exciting milestones coming up.
We will be hosting an analyst day on March fifth, and we look forward to sharing more detailed information on our pipeline at that time. I'd like to turn the call over to Marcio so he can provide an update on the commercial and clinical development programs at PTC. Marcio?
Hey, thanks, Stu. Let me start with our DMD franchise. EMFLAZA, our treatment approved for all DMD patients two and older in the U.S., reported revenues of approximately $68 million year to date. In the third quarter, we saw strong prescription growth. The net sales were impacted primarily by two factors. The first related to our specialist pharmacy transition to Accredo, where we faced challenge while processing all the new case transitions. We have completed the transition, and we do not expect to have any further impacts in the following quarters. The other factor that affects net sales was the mix of Medicaid's utilization. This drove us to make a change in our gross to net assumptions in order to align with our expected privates to public payer mix, both now and in the future.
In the market access fronts, we have been working diligently to educate payers on the benefits of EMFLAZA. Recently, we have seen an improvement in the conditions by which some important plans are operating, including removing requirements for prednisone treatment as a step edits. To further demonstrate EMFLAZA's benefits, during WMS, data collected at Cincinnati Children's on more than 400 DMD boys was presented. This data showed clear motor and pulmonary benefits of EMFLAZA when compared to other corticosteroids. This is one of the largest cohorts ever observed and studied in DMD. The data reinforced the importance of correct use of steroids in the management of this disorder. We continue to work with physicians and payers to understand the benefits of EMFLAZA. Now switching gears to Translarna. We have seen a strong year-to-date performance, with revenues of approximately $141 million.
We continue to see growth in demands and support from physicians and patients in all territories Translarna is available. We continue to execute in our geographic expansion, most recently with addition of a PTC subsidiary in Russia, which we believe will enable the growth in the region. In addition, as Stuart mentioned, we are excited with the body of evidence supporting Translarna's effectiveness, including the data coming from the first Duchenne product registry, STRIDE, which is following up more than 200 patients with nonsense mutation DMD who are receiving Translarna globally. We reported real-world long-term evidence from Translarna-treated patients coming from this registry. The data shows that long-term treatment with Translarna slows disease progression by preserving both pulmonary and motor function in all patients observed in the registry. As you know, patients die due to respiratory and cardiac failure.
In this cohort, we observed that 32% of patients receiving standard of care had an FVC of less than 50%, which is in line with the decline in lung function expected in this disease. It compares with only 2.2% of patients who received Translarna achieving such milestone. Additionally, patients receiving Translarna had a prolonged ability to stand from supine by three years when compared to untreated patient population. Continuing with our commercial portfolio, we're happy to have received regulatory approval by Anvisa for Tegsedi this week. It's an important milestone which enable pricing, registration, and negotiations with the Brazilian government to make Tegsedi available to all patients who may benefit in the country. We had the team in place for market developments and medical support since the beginning of this year, and now intends to start launching activities for Tegsedi immediately in Brazil.
We are proud to add this important regulatory approval and are committed to serve all the patients in need in Latin America. Our next major regulatory step in the region is to file for the approval of WAYLIVRA. Focusing on AADC deficiency. We're preparing for a successful launch in the U.S. next year with the expected FDA submission this quarter and subsequent approval in 2020. Market preparation is well underway with a clear plan to cover both the prescribing population, but also the centers of excellence conducting the neurosurgical procedure. In terms of patient finding, our approach involved multiple channels. First, our field-based personnel are distributing, at no cost, testing kits for any clinicians that suspect an AADC deficiency patient within their practice. A protocol-driven, broad-based screening programs of cerebral palsy is also advancing, and our social media initiatives have launched with good success rate to date.
Additionally, we have recently established a partnership which would add AADC deficiency to a second-tier newborn screening panel in the U.S., and we are working together on the test validation. We expect more than 200,000 babies to be screened at birth for AADC deficiency next year and more than 1 million in 2021. Our goal is to have more than 300 addressable patients available before launch to be converted to commercial in key territories. We are on track to reach that goal. Turning to our clinical development pipeline. We have completed enrollment in Study 045, which is our dystrophin management study in the U.S. for Translarna. This study, if positive, will serve for the NDA resubmission in the U.S. We have also had the last patient, last visit for our aniridia study for Translarna, which should read out at the beginning of next year.
Our Friedreich ataxia clinical development program is progressing well as we prepare to dose the first patient next year. Lastly, Stu just mentioned, we have acquired some assets from BioElectron. We intend to initiate a clinical trial in mitochondrial epilepsies with the most advanced compound early next year. The trial has been designed based on scientific advice received from the European Medicines Agency. We also intend to explore other uses considering the anti-inflammatory properties of these compounds, which we're going to be disclosing in the near future. I'll now hand the call over to our CFO, Emily Hill. Em?
Thanks, Marcio. I also wanted to take a moment to acknowledge a new member of the investor relations team, Alex Kane. Alex joins us from the agency side and Nasdaq, where he spent almost a decade focused on biotech companies. We are very happy to have him join us at PTC. As you know, our third quarter press release was disclosed shortly before today's call, which summarizes the details of our financial results. Please see that release for further details. I'll start with a few comments on our financial performance in the quarter and our guidance for the full year 2019. Starting with our top-line results, we reported $71.4 million in combined net revenue across our commercial portfolio in the third quarter of 2019, compared to combined net revenue of $53 million for the third quarter of 2018. Translarna net product revenues were $48.3 million for the quarter.
This compares to $30.4 million in the third quarter of 2018. This growth includes the expansion of Translarna ex-U.S., including regulatory approval and an annual contract with Brazil. For EMFLAZA, we reported net product revenues of approximately $22.9 million for the third quarter of 2019, which compares to $22.6 million reported in the third quarter of 2018. We are working towards establishing EMFLAZA as a standard of care for all patients in the U.S. and are happy to be able to bring EMFLAZA now to patients as young as two years of age. Continued growth of the DMD franchise and our annual contract with Brazil for Translarna give us confidence to reiterate our 2019 DMD franchise revenue guidance of $285 million-$305 million. We have also outlined the opportunity for our pipeline to generate potential combined revenue in excess of $1.5 billion by 2023.
Non-GAAP R&D expenses were $58.1 million for the third quarter of 2019, excluding a non-cash stock-based compensation expense, compared to $49.9 million for the third quarter of 2018, excluding $4.4 million in non-cash stock-based compensation expense. The increase in R&D expenses reflect our strategic investment in advancing the gene therapy platforms, splicing programs, and other research programs, as well as the advancement of the clinical pipeline. Non-GAAP SG&A expenses were $43.8 million for the third quarter of 2019, excluding $5.5 million in non-cash stock-based compensation expense, compared to $33.9 million in the third quarter of 2018, excluding $4.5 million in non-cash stock-based compensation expense, reflecting continued investment in support of our commercial activities, launch preparedness in Latin America, and global patient finding efforts.
I would also like to update non-GAAP R&D and SG&A expense guidance for full year 2019 to $380 million-$390 million, excluding non-cash stock-based compensation expense of approximately $40 million, an increase from $360 million-$370 million, excluding estimated non-cash stock-based compensation expense of approximately $35 million. This increase in operating expense is due primarily to business development activities and investment in gene therapy manufacturing. Net loss for the third quarter of 2019 was $60 million, compared to a net loss of $51 million for the third quarter of 2018. Cash, cash equivalents, and marketable securities totaled $708.6 million at September 30th, 2019, compared to $227.6 million at December 31st, 2018. In September, we completed a financing that amounted to $287.5 million in convertible bonds and $100 million in equity for a total consideration of $387.5 million, resulting in net offering proceeds of approximately $376 million.
This financing puts us in a strong position to execute on many fronts towards achieving our $1.5 billion 2023 revenue target. I will now hand the call over to the operator to start our question and answer session. Operator?
Thank you. As a reminder, to ask a question, you will need to press *1 on your telephone. To withdraw your question, press the # key. Please stand by while we compile the Q&A roster. Our first question comes from Alethia Young from Cantor. Please go ahead.
Hey, guys. Thanks for taking my question. Congrats on all the progress. Maybe two for me. Just one, I feel like you snuck in this BioElectron. I was looking on the website. Are you guys using this EPI-743 and using this in combination with other assets? Maybe can you talk a little bit more in detail as it relates to your platform? I'm not sure if it's too early. On the second side of things, I wanted to check on the U.S. DMD study, which it sounds like it's still reading out sometime relatively soon. I guess, how are you thinking about potentially filing? I know some people have paid attention to what's happened with Sarepta in the case of golodirsen. Do you feel confident in the agreement in which you have with the FDA around dystrophin here at this point? Thank you.
Hey, thanks, Alethia, for the question. BioElectron, we thought was a
A very interesting company with a strong scientific platform that's hit oxidative stress and redox. This turns out to be quite important for mitochondrial function and neural inflammation, or inflammation in general. We were very excited about it, and EPI-743, as you see, is their most advanced program that we think is, in a sense, pivotal-ready program, a study ready for potentially a number of different disorders. Maybe I'll have Marcio talk a little bit about that. That's what we thought was really quite exciting and what we're going to be focused on and is what I talked about in the script originally. This is really success-based milestones on success of approval on trials to move forward. We're excited.
We think it's a very important asset that can complement not only new diseases but can work in inflammation, we can explore in other diseases like DMD as well. We're excited about that. Marcio, you want to talk a little bit?
Absolutely, Stu, thanks, Alethia, for the call. First and foremost, extremely excited, as Stu just said, about bringing the portfolio here through this asset agreement with BioElectron. I specifically wanted to call out that some of the team members are coming as well and are joining PTC. I'm especially proud to have Matt Klein, who is the CEO now of BioElectron, joining the team and leading the efforts with 743 and other assets here. We're going to be focusing on some of the diseases I mentioned on my prepared remarks. The first one is mitochondrial epilepsies. We see a very high unmet need there. Several thousand patients in the U.S., several thousand patients outside of the U.S., relatively large market opportunity, yet relatively small clinical trial to get to development. Very interesting phase II proof of concept already in-house with this.
We're going to move that quickly and then going to go through a very rigorous process to prioritizing the other indications to see what makes sense. Obviously, inflammation's in the core of a lot of the things we do right now, like DMD, and you're going to take a look at what really matters in terms of patients and whether or not we should move forward in other indications as well.
In terms of the DMD, we're pretty confident. We had long discussions with Jen and Woodcock on what was required. Just to remind you that it was anything above background with the clinical data that we currently have on hand should be sufficient for approval. We've had substantial discussion there and feel comfortable that we have an agreement to move forward based on that.
Great. Thanks.
Thank you.
Thank you. Our next question comes from Vincent Chen from Bernstein. Please go ahead.
Great. Congratulations, and thanks for taking the questions. A couple of them on the Huntington's disease program. First, I was wondering if you could provide some detail on what are some of the assays that you use to assess the risk of off-target splicing in different cell types and so forth. What preclinical studies are the potential candidates subject to? I guess which of these have been completed to date? What remains to be done on this front? Secondly, how do you think about the target product profile you'd be aiming for? In particular, I guess if you think about you've shown pretty substantial knockdown in the preclinical studies. What level of knockdown would you be looking to target in a clinical program?
Sure. Thanks for that. In general, our approach is really we use, in a sense, a chemical genomics approach in terms of identifying molecules first in a high-throughput screen and then going into cell and animal-based molecules. They're always counter-screened against a number of other what we think are similar, yet not identical splicing events to watch. We look very carefully at that as well. Also use, in a sense, safety toxicology as an important measure as well, because at the end of the day, whether it's on target or off target, we tend to want to find that out. This occurs quite early within our screening tier. We build a screening tier both at looking at, in a sense, the effectiveness of the compounds for selectivity and specificity.
We also do deep sequencing and RNA-seq to monitor what else within the genome they may hit. We continue to try and improve not only the efficacy but the selectivity of that. We find that we're capable of doing that, and as the molecules become more effective, you tend to be in the low nanomolar range. They tend to be far more selective as a consequence of that. Obviously, we put them in through pharmaceutical, not only do the efficacy and safety but look at the pharmaceutical properties that go along with that.
That's a long laundry list of things that we look at, whether it induces CYP, whether in Ames assay issues, all the things that is known to look for that if we find some issue with it, we work it out and try and get that out until finally we get a compound that we want to move forward on to do what we say is to move forward like a development compound. That we then do larger GMP scaling of the product, so we have that synthesized in the GMP manner, then thus do GLP safety toxicology studies. What we've talked about in the past for Huntington's disease is that we think that an orally bioavailable product, much like analogous to SMA, would really be the most competitive product.
This is a very important program for us, where we would anticipate as need be to continue to have as many compounds to move forward as we can. As I said in my prepared remarks, we already have a compound that we are doing GMP scaling and going to be moving into safety toxicology, such that, as we've always said, we anticipate to have it in the clinic next year. I think that's an exciting point here, that we're moving forward on a compound, continue, obviously, to build out the patent IP profile around all of that. We've already shown in animal models that it reduces HTT, not only in the brain but also in other tissues as well. We'll have the advantage that we'll be able to look into blood and see a reduction of that. These compounds are highly effective.
We're shooting for probably between a 50% and 60% reduction. These molecules are effective enough to go pretty low. I think the nice thing about a small molecule also is that not only do we know it penetrates the blood-brain barrier and gets into, and obviously, because of the blood exposure, gets to all cells within the brain, but it also gets into blood and skin. We're capable of actually monitoring with the effect of what exposure causes a reduction, and the fact that is that we could then go and figure that out to what effect reduction you see in brain. We have a very good ways of titrating what the appropriate exposure is to get a 50%, 60% reduction. That's the way we pick the compounds and begin to define what would be the appropriate dose of that.
We can go into humans and really, as a consequence of being able to measure it in the blood, we're able to say what reduction we're able to see. I think one thing that we probably didn't push hard enough in the SMA program is that very early on in healthy volunteers, we were able to show that there was a reduction of SMA. Analogous to that, we're going to be able to show that the molecule we chose, we'll be able to say with the hypothesis, do you reduce HTT, and can you observe that in the blood? That we did that in SMA, and that gave us a lot of confidence to be able to move forward because what you see in the blood is what we saw in the brain.
That's in the sense one of the first, even in healthy volunteers, I think we're going to have a good idea whether we hit the target we want, affect the splice, reduce the splicing, and then move on. In terms of the product profile, I think we'll be sort of talking about that in more detail over the next call.
Great. Thank you very much. Appreciate the insight.
Thank you. Our next question comes from Joseph Thome from Cowen and Company. Please go ahead.
Hi there. Congratulations on the quarter. Thank you for taking my questions. A first one on the acquisition of the new products. I know you mentioned there was a success-based milestone associated with the programs. Was there any upfront costs associated with the development? A second on the dysautonomia program. I know you outlined the reasons as to why you're not moving forward with that. Is there any read-through to your oral splicing platform as a whole? How has this interaction changed your future development plans for rare diseases? Thank you.
Sure. I'll take the second one first, then I'll have Emily discuss the cost. I think this is an important point. Early on when we chose to look at FD, it was unique in that it had a founder's effect in terms of the mutation. It had a single point mutation that actually affected splicing of the IKBKAP gene that prevented the production of the protein and that led to disease. It was very much a consequence of altered splicing. Just based on our understanding of where we could fix it. We knew that it was a relatively small patient population. We thought it was just strategically important to see if we could find another molecule, which I'm excited to say that we did, and it's highly effective.
It's a very small patient population, and we said to ourselves that, and it's a dwindling population that they now no longer have additional patients because they screen for this. We said that we thought that the best approach for such a small patient population would be a biomarker study that is every show that you reduce the level of the protein. If possible, then to go into a registry where you would follow it over time. We measure as we have in the past for about a year, but then go on and do a post-marketing registry study. Unfortunately, the FDA wanted to have or suggested to us that we have a placebo-controlled study on perhaps look for other endpoints.
In this case, and selective specifically for FD, the small patient population, the fact that it would be placebo-controlled, we just didn't think there would be enough patients to be able to power and be able to do this in the long-term two or three-year study. We just didn't think it was viable. That's why that stopped. In the case of other things, we don't think that's the case. I mean, Huntington's disease is a much larger population, and we think there's the good news is that there's others who are doing substantial amount of work ahead of us, so that are helping to find what are the best endpoints, what's the best way to power it. We feel in a much better position in the case of Huntington than unfortunately for HD. I think that's relatively sad for the FD patients.
One of the causal laws I think we want to work at the company is trying to think of a way where there's, in a way like the Europeans have, an exceptional circumstance that can allow for these extremely small patient populations to have a means to try and get approvals on drugs that could be beneficial. That would obviously take time to change direction and laws for the company. That's something I think we're going to try to work on in the long run.
In answer to your question about the upfront for the assets acquired from BioElectron, we were pleased to have structured that as a success-based deal. The transaction has very little upfront payment, $10 million upfront for these assets, obviously, as Stu mentioned, there are success-based milestones due one year after certain regulatory approval.
Great. Thank you.
Thank you. Our next question comes from Gena Wang from Barclays. Please go ahead.
Hi. This is Peter for Gena. I just had two quick questions. First, on SUNFISH Part 2, could you give a sense of what format you would release the data? Would it be a press release followed by a medical conference, and if so, what kind of information would be included in the top line? I have a quick follow-up.
Yeah, go ahead.
Hey, Peter. Marcio here. First, as you might recall, the trial is reading out in Q4, so we're trying to do this real time. It's going to be the intent is for us, and we understand from Roche as well, to press release the top-line data. As it's practice, both for us and Roche, is the more complete results are going to be shown early next year in a scientific conference. We should be having this before the end of the year, the top line, and then next year, a more complete response.
I've got it. I guess my follow-up question is, given that Part 2 data would be available before the approval decision, would that be part of the discussion as well? Thank you.
Yeah, absolutely. I believe we mentioned something to this regard on the previous call as well. While it's not required for the submission, as we made clear, it is courtesy and obviously, we would be doing, and Roche in this case, who are leading the submission, would be submitting that to the FDA, the top-line data. What is not required here is to have a CSR format and all the data transfer and everything else that normally, if it was a new submission, would be done. The top line, again, as a matter of courtesy, but also as a matter of practice, to be shown to the agency, presented to them if they have any questions and so on. Obviously very excited.
I think the results of Part One and what we just showed at WMS and before that at many conference shows incredible activity for these compounds in these patients in Type 2 and 3. Looking forward to these results later in the quarter.
Great. Thank you very much.
You're welcome.
Thank you. Our next question comes from Martin Auster from Credit Suisse. Please go ahead.
Hey, all. Thanks for taking the question. Had a couple. One was just from the press release, you talked about the Risdiplam NDA filing on plan for back half of the year. Just wanted to confirm, are we going to just hear about this filing once FDA has accepted it? Is that something we can expect by the end of the year? The second question was just on the Friedreich's ataxia gene therapy IND. Just wanted to see if you could add a little more color to the process that kind of led to the slight push out from end of this year towards the middle of next year, and how confident you feel about the revised timeline. Thanks.
Yeah, sure. I think the Risdiplam, I think we feel pretty confident that you're going to hear something by the end of the year. We feel good about that. In terms of the FA, I think, unlike AADC, it's a much larger population. We think about 25,000 patients. What we did is we decided that we wanted to optimize the cell line a bit to get larger quantities produced. We decided to take the time to get that moving forward and to get that appropriately completed to be able to do that. Our timelines now have moved. What we're saying is we still think that we will have IND next year for FA.
Okay. I'll just do one quick follow-up. On the Risdiplam NDA, there will be an announcement when FDA has accepted the filing or when the filing has been submitted?
Accepted.
Okay, great. Thank you.
Thank you. Our next question comes from Brian Abrahams from RBC Capital Markets. Please go ahead.
Hi. Thank you very much for taking my questions. First one on Risdiplam and SMA. As the SMA market and the data continue to evolve, what's been your latest feedback from regulators, physicians, and reimbursers as to the magnitude of benefit that would really resonate from the SUNFISH Part 2? Separately, you mentioned that you're tracking on the AADC program towards your patient identification goal. Just wondering if you could give us a little bit more granularity around that, where the patients being identified are coming from geographically, through what channels that you're finding them, and how that can help. Thanks.
Sure. On the Risdiplam, I think people have seen the data that we presented from part one of that, and I think they feel pretty good about that. We're looking at the results, and in a sense, the payment from the gene therapy program that seems that they're getting paid for that. We feel pretty good about where we're at. We think obviously, not only do people like the efficacy and the fact that it's systemic and actually hits other tissues, in which the lack of SMN affects, like liver, bone, muscle, and other tissues as well. The simplicity and the oral bioavailability of the drug, I think, is a real important factor. We think the combination of the quality of the data that we've shown thus far, the ease of use, is going to really put us in a very good and competitive position.
In terms of the second question, let me pass that over to Marcio.
Sure. Hey, Brian. The AADC patient identification, as I mentioned in the prepared remarks, we're making some good progress here towards our goal to have 300 patients available at the time of launch to convert then to reimbursements. The main source of patients right now is twofold. One is our efforts on really connecting with families and physicians through social media, and that's been panning out quite nicely. The second is our grassroot approach in terms of visiting these physicians, understanding where the diagnosis is, and distributing kits. We had a very good number of kits distributed in the U.S., where we are providing these at no costs, and outside as well. You mentioned about geography in your question. The key focus obviously is the U.S. That's the majority of our focus right now. That's where we expect to launch first.
We are putting some real nice effort as well in some selective countries in Europe and in Brazil. We have a relatively, I would say, restricted in terms of focus, geographic span for now, for the next 12 months. We're going to build success on success, so trying to get to these patients on areas they're going to launch first. The last source is the identification through the screening programs. That's coming along. Now we have the sites open. As I mentioned, the previous quarter, we had a little bit of a slowdown there. That now is going to start to generate some patients. For next year, as we just mentioned, we expect to start newborn screening some patients in the U.S. This is on top of the Newborn Screening Program we announced last quarter.
We're going to be having as a pilot in Germany. It's all coming out quite nicely for a successful launch.
Thanks, Marcio, and thanks, Stu.
Thank you.
Thanks, Brian.
Thank you. Our next question comes from Raju Prasad from William Blair. Please go ahead.
Thanks for taking the question. Two for me. On EMFLAZA, you mentioned the mixed suitability of Medicaid. Is that something that we should anticipate moving forward? Just maybe some general color on how the label expansion is going so far for the product. Then on Tegsedi, it looks like in your 2023 projections, you have about $200 million for labeling for Tegsedi. Can you just provide some color on how we should anticipate that launch to go? Approximately what % of that $200 is earmarked for Tegsedi?
Sure. It is Marcio here. First on the question on EMFLAZA. Medicaid, we constantly monitor the use. As you can imagine, there's new patients pretty much being added every day. We need to look into that on a rolling basis so we can meet our legal obligations with CMS and pay the rebates and so on quarterly. When you look into that, in the last few quarters, it was trending a little bit higher in terms of the % than we expected. We had to make some adjustments to make sure we're okay in terms of gross to net. That results in a little bit of a negative impact on the net revenue this quarter.
You look into that, it's not only for the past, but very importantly, we revise our projections for the future based on the rate of patients that are coming in and what the insurance plans are. Our best expectation right now is that we should be covered for the subsequent quarters in terms of the mix we have, and we're going to update you properly if not. In terms of the label expansion, the key here is not necessarily to convert the patients. It's actually a relatively easy task. It's really these patients are not getting diagnosed, and they're not getting on steroids. Our field force is working a lot, and our medical science liaisons and our patient advocates are working a lot on getting the identification. Very nice early progress, it is still a long road to go. Lastly, on the Tegsedi.
Extremely excited. Let me just say that first, since your question is the first about Tegsedi. Officially published the approval today. We received an advance note from Anvisa that it would be coming. The very first approval in the world for any to include quality of life in the indication statements. As we talk about differentiation, competitive markets, we wanted to make sure we're always ahead of everyone. That's very nice. When you look into our long-term projections, Brazil is the most important market in the region. About 5,000 patients. It puts us ahead in terms of negotiations with the government, and that's what we're going to start now. Very importantly, while we've been preparing the market and we have a decent number of prescriptions for already, we couldn't promote, we couldn't say the word Tegsedi, we couldn't talk about the label.
As of tomorrow, the team in Brazil is going to be talking about this to physicians. We're going to be seeing hopefully a very nice increase in demand and which is going to convert to revenues. The first year is normally low in terms of revenues, but we do, obviously, going to do our best and more than that even to deliver on results. I would try, if I were modeling, I was in your shoes, I would be putting a little bit of a slower first 12 months and then ramping up from there.
One small just point was the $200 million for Tegsedi was really, I think, what we put for Tegsedi when we laid. We had about $150 million for-
That's right.
Tegsedi. It's
That's right.
Great. Thanks.
Thank you.
Thank you. Our next question comes from Joel Beatty from Citi. Please go ahead.
Hi. Thanks for taking the questions. First one is, could you just discuss the importance of showing a statistically significant benefit in SUNFISH Part 2 compared to placebo, from both a regulatory standpoint as well as a commercial success standpoint? The second question is, could you discuss the confidence in DMD revenue guidance for the year? It implies a uptick from where it was at this quarter, and any thoughts on whether it could be towards the bottom or the upper end of the range?
Go ahead.
Sure. On the SUNFISH Part 2, right, and what we expect from that trial, obviously extremely bullish in terms of the program in general. This is based on what it looked into Part 1. The way the trial was powered is in relation to, obviously, it's always a ratio between the point estimate change and the standard deviation. In this case, we expect it to be three points change on the MFM32. That is the primary endpoint and a six standard deviation for that. This is pretty much what is seen with Part 1. In that regard, there is all indicators that the trial is going in the right direction. The good thing is this population should be more homogeneous. One would expect that the results are a bit more homogeneous as well.
It is important to have a positive trial. Obviously, that's what we are planning for, right? Both for the regulators, payers, patients, and so on. It's very hard for us to try to predict right now where it's going to land. This trial was well conducted, extremely well conducted. More 186 patients, or sorry, 168 patients. Always inverse the two numbers there, my apologies, and powered properly. All we could do to derisk was done. Again, we're excited to hear about that before the end of the year and inform you guys. In terms of the DMD guidance for the year, it is trending positively. You're absolutely right. Just like our approach for guidance as we always say, is to be realistic in terms of what can be achieved at this point in time, because we do have some ordering pattern fluctuation.
We didn't feel it was the right thing to narrow the guidance. Obviously excited and going to do our best, and we are all pushing here to be as high as possible, but the most responsible thing for us was to keep the entire range of the guidance open.
Great. Thank you.
Thank you.
Thank you. Our last question comes from Eric Joseph from JPMorgan. Please go ahead.
Hey, good evening. This is Turner on for Eric. Just to follow up on Huntington's and thinking about entering the clinic with healthy volunteers next year and getting some initial PD data. Do you have a sense yet of what level of plasma mRNA and HTT protein reduction would give you some confidence to meet the 50% or 60% reduction threshold in the CNS that would confer some efficacy? One other quick one. I'm just curious as to when we may anticipate updates for JEWELFISH and RAINBOWFISH and any particular recruitment update for RAINBOWFISH. Thank you.
Sure. In the case of HTT, obviously, we're looking to see some change of that. Obviously, what we're shooting for is somewhere between 30% and 60% reduction of the HTT protein. That's what we would consider important. We know that within the blood and brain, the blood-brain barrier, that there's a good almost a one-to-one ratio within the exposure that you see in blood is what you see in the brain. Again, I think the importance of that is that obviously, because it's in blood, it would get distributed to all cells within the brain.
Actually, I think that's actually an important point because there are certainly deep recesses within the brain that are difficult to get to, and we think by having the exposure in the blood really gives us a big advantage.
Maybe I can take the second on the other trials for SMA. RAINBOWFISH is probably the one we're the most excited to see next, right? You probably see our update at dosed the first patients there, are having really great interest, several sites open globally. That should, as it comes, we're going to be showing updates. I think it's being practiced for this program to be present in all the major scientific conference. There are obvious ones at the beginning of the year, like AAN, and that's where you should expect to have a general update for the program.
Great. Thank you.
Thank you.
Thank you. This concludes our Q&A session. At this time, I'd like to turn the call over to Stuart Peltz, CEO, for closing remarks. Please go ahead, sir.
Well, again, let me just thank you all for joining the call today. We really appreciate it. I think what you could see thus far is that we've really had a productive year thus far with a number of exciting milestones that will be coming, I think, in the coming weeks. We look forward to sharing those with you. Again, thanks for being a part of our call.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Good day.