Okay, good afternoon, everybody. Welcome to day one of the Cantor Global Healthcare Conference. Really happy to have the PTC Therapeutics team here with me. We have Dr. Matt Klein, the CEO, and Pierre Gravier, the CFO. Thank you so much for being here today. Really appreciate it.
Thank you, Kristen. We're excited to be here.
So I'm gonna do something a little different with this fireside chat. I know you have a lot of children that you love, but I'd love to spend the thirty minutes really just spending a little bit more time appreciating your asset and PKU.
Sure.
Is that okay?
Absolutely. Sounds great.
All right, awesome. But before we do that, I do wanna give you the opportunity to maybe lay out everything you're excited for over the next twelve months.
To talk about all our programs that we love equally.
Yes.
Now, it's been an incredibly exciting 2024 thus far. We're executing across the board, achieving all of our planned milestones for the year. We are targeting a revenue of $700-$750 million a year across our commercial portfolio. We reported that we closed the second quarter with nearly $1.1 billion of cash in the bank, and that reflects our efforts to shore up our capital to ensure that we can take the company through the next stage of growth. We've already submitted three approval applications to the FDA, one for our gene therapy for AADC deficiency, for which we have an FDA action date of November 13. We submitted our NDA for sepiapterin, for the treatment of PKU, which I know you, we're gonna talk a lot about. That's incredibly exciting.
We expect to hear on that filing by the end of this month, and in the context of priority review, could be launching early next year. We resubmitted the NDA for Translarna for Duchenne muscular dystrophy in the U.S., and we're on track to submit our NDA for vatiquinone for Friedreich ataxia by the end of the year. We also shared data in the second quarter from our PTC518 Huntington's disease program. That's with PTC518 from our splicing platform. Those data demonstrated safety, biomarker effect, and early clinical signal at 12 months, and really now position us as a leading program in development for Huntington's disease, and we're on track to share data from our registration-directed trial of utroxastat in ALS patients in the fourth quarter.
So a lot going on, a great execution across the company, and we're really excited to continue to build forward towards continued success.
Okay, great. So let's talk about PKU.
Okay.
Maybe just remind us, in terms of a clinical setting, what's really important in terms of what the FDA wants to see to determine approvability, but then also translating that to commercially. More importantly, if this is approved, what does a patient and a caregiver and a physician wanna see?
Yeah, so really good questions, and so, you know, and there's a lot that's not well understood about the PKU space.
Yeah.
You know, PKU is about 20,000 patients in the United States, adults and children. We've said about 58,000 patients worldwide in the geographies in which we intend to commercialize sepiapterin. And while there's two approved therapies, the vast majority of patients are not well served by these therapies. In fact, it's estimated that even up to 90% of patients are not on therapy. So there's this very large number of patients who really need an effective therapy.
Now, on the other hand, since there are approved therapies, this is not your typical new orphan product launch because there's newborn screening, there's centers of excellence, there's a patient community that's very well aggregated, a physician community that understands what it's like to prescribe drug, and payers that understand, and importantly, regulatory authorities, where there's precedent for approval. So you had asked, what does the FDA, for example, would look for? And they've set the precedent that, statistically significant lowering of phenylalanine, so a blood biomarker, is sufficient for full approval. Given that this is a disease, PKU, that prevents patients from being able to metabolize phenylalanine, and therefore, they get elevated levels of phenylalanine in their blood.
And FDA said, "If you can lower phenylalanine, that is clinical efficacy." So we've certainly hit the bar with our phase 3 trial, the AFFINITY trial, where we had a highly statistically significant effect with sepiapterin. On average, we had a mean lowering of phenylalanine of 63%, in the treatment group relative to placebo, and in the subset of patients with more severe disease, so-called classical PKU, we had an average lowering of 69%. Again, really strong data. 84% of patients had phenylalanine levels that came within target guidelines for phenylalanine of less than 360 micromole per liter, and we had 22% of patients have normalization of phenylalanine levels, which is really not seen in these clinical trials. And I'll add that the drug was safe and well-tolerated.
So really, a safety and efficacy package that more than satisfies what the FDA has accepted or approved in the past. Now, when you think about what's important for patient adoption and physician adoption, certainly, phenylalanine lowering is important, and the fact that we have phenylalanine lowering that's multiples of what was recorded, for example, in the Kuvan pivotal trials and a much, much higher proportion of patients coming under control, that's important to patients. But what also really matters is, can patients liberalize their diet? Patients who have PKU can't metabolize phenylalanine. What does that mean? That they can't tolerate regular protein in a diet, and therefore, they're on these highly restrictive protein diets. Patients will talk about the most protein they could have in a day, might be a piece of toast. That's it.
Otherwise, they have to take medical foods that are very expensive, taste horrible, and also are highly stigmatizing. Could you imagine being a child, teenager going to school and not being able to eat lunch like everyone else, or not being able to go to a party and have pizza and hamburgers and things? So what patients really want in a drug is something that can change their lifestyle, free them up, or liberalize them from these highly restricted diets. So this is where the data we've collected and our open-label extension study really is impactful.
Following the placebo-controlled studies, patients were able to go into a long-term, open-label extension, where we looked at two things: first, durability of effect, but then second, whether or not patients can tolerate increased protein in their diet and still have control of phenylalanine levels and still have phenylalanine levels below that target number of 360 micromole per liter. The answer is a clear yes. We have now about 60% of patients who are able to increase their protein levels so much that they're beyond the level of protein recommended in the diet for you and I.
Mm-hmm.
That's transformational for these patients, and we can see now on social media postings of kids eating hamburgers, you know, hashtag sepiapterin and the idea that what we're hearing from the patients is that they have been able to free themselves from these highly restricted diets. So to summarize, we have the data package from our clinical trial, which clearly meets the requirements for authorization, and then we're collecting that really important data on diet liberalization, which is what will drive patient and physician adoption in the commercial.
So is it your opinion that despite having newborn screening, easy patient identification through centers of excellence, the reason why the current drugs on the market aren't utilized higher is because there's not much diet liberalization?
That's right. It, if you think about it, and you emphasize those two points again about centers of excellence and newborn screening. Typically, for a lot of orphan diseases, those are things we have to build. We have to find the-
Yeah
... patients, and we have to find the centers where they're treated. That's all set up, and what's also a little bit misunderstood is that these patients have a standard of care. It's not a drug, but it's a diet, medical foods and a special diet that keep them tied to these centers of excellence. They require ongoing nutrition consultation and following, so they're all identified, and they're tied to these centers, but what's missing is a drug that can free them from this diet. Because why would you take a therapy if you can't be, now you're just taking a drug, and you're still on your restrictive diet? That doesn't make a lot of sense.
Right
... for the patient.
Roughly, like, what % of the PKU market in the U.S. is on one of the existing therapies?
So we've heard it's a low number. We've heard estimates as low as 10% of patients-
Okay
... are on existing therapies. And of course, you know, when we think about the opportunity for sepiapterin, there's that large, unmet, that population that's not on the therapies, but we've also heard that there's a lot of interest in switching patients who are on existing therapies. When you know, we talked about the greater magnitude effect we recorded in our studies, relative to the Kuvan approval studies, and we also had, within the AFFINITY trial, twenty-nine patients who came into the study already on Kuvan. So that gave us the unique opportunity to look within patient and understand the differential treatment effect of sepiapterin relative to BH4. And what we found in those twenty-nine patients is that we recorded their baseline phenylalanine level on Kuvan or BH4. They then got washed out and put on sepiapterin.
They had, on average, about a 50% greater reduction in phenylalanine on sepiapterin relative to BH4, and on average, those 29 patients fell within that below that 360 micromolar threshold. So really supporting that, we were able to provide a superior effect, in terms of Phe lowering.
Okay, so the data are clearly superior. Do you have any mechanistic rationale to support this?
Yeah, and I think that's what's so solid here is when we think about the mechanism of action of sepiapterin, it makes perfect sense why we're seeing these greater effects. So, as I mentioned, PKU is a disease characterized by a broken enzyme known as phenylalanine hydroxylase, and the initial therapy, Kuvan, was the cofactor for that enzyme. And the idea was, by giving more cofactor, BH4, you could drive more function out of that broken enzyme and reduce phenylalanine levels. Now, it turns out that when you give BH4 itself, it's not well absorbed from the gut, and that which gets absorbed doesn't get into the cell very well. So there's not optimal bioavailability for the cofactor to do what it's intended to do.
In the case of sepiapterin, it's a precursor to that cofactor, and it's readily absorbed from the gut and is actively transported into the cell, where it has a dual mechanism of action. One is that cofactor mechanism of action, where the sepiapterin is converted into BH4, and we have much higher quantities of BH4 in the cell because it gets there. And the second is a chaperone effect. Sepiapterin itself has an effect on the enzyme that stabilizes its shape. It actually corrects its shape a bit so that it functions better.
So now you have a dual mechanism of action, including greater bioavailable cofactor, and what we've seen in the data is exactly what you'd expect to see, which is greater effect in lowering phenylalanine levels and also the ability to lower phenylalanine levels or keep phenylalanine levels low in the context of more protein in the diet.
Okay, so you have this great data. Let's assume the drug is approved. If I'm a brand-new patient taking the drug, what guidance is my nutritionist gonna give me in terms of saying, you know, like allowing for more protein in my diet?
Yeah. So this is a little bit of a new world for everyone-
Yeah
that they're really excited about, and the important thing is what you mentioned, that there's nutritionists at all of these centers who work closely with the patients. They work closely with the patients from birth, right? Once the patients are diagnosed with phenylalanine on newborn screening, they begin this lifelong relationship with nutritionists and dieticians who help make sure that they're getting the right nutrition despite having low protein. Well, now the paradigm's shifting. The role the job's going to be to ensure that patients are getting protein in their diet, sort of through eating food, maintaining still appropriate levels of phenylalanine and understanding how that's all gonna work. But I can tell you from a lot of the seminars and symposiums we've had over the past year, the physicians are excited.
The nutritionists are really excited now being able to work with patients on introducing regular foods into their diet for the first time. So it's incredibly exciting for everyone who's involved in the life of kids or adults with PKU.
This food diet is essentially the standard of care because it's essentially used for the 90% plus of patients not on a drug. I mean, what does it taste like? Or, I mean, it's a silly question, but if I'm gonna understand why patients are gonna be-
Yeah
... so reluctant to go on a therapy, like, is their life miserable eating this?
Yeah.
How do you do that?
You know, being that we've heard a lot about this diet and how difficult it is.
Yeah
... one, because it's expensive. The food can have a bad odor and taste terrible.
Right.
We've actually brought it into the company so that we can actually-
Yeah
... speak from experience and understand how horribly tasting this is. And then again, the stigma effect, right? Which is, you know, for this is a disease that you're born with, so for kids, they may go through childhood and adolescence having to have this as their food in school.
Yeah.
That's really tough.
You got to try some?
We made sure that we would all try it, yeah.
So one being, it was so terrible, I could not fathom-
Oh, I...
Me, it was a-
Yeah
... gourmet dinner. Where do you rank it?
No, I won't quantify, but I'll say that I think we all certainly appreciated when the patients-
Yeah
... say that this is terrible, tastes terrible, and it's a miserable experience.
Yeah.
We certainly got that, understood that sense.
All right, understood. All right, so, you know, one question we do get is generic Kuvan. Why isn't this a threat to your business?
Yeah, it's a good question because one would typically think that you're entering a genericized space, that's gotta be hard. But again, it's a genericized space where the therapy doesn't have great uptake. So it doesn't have great uptake because of its branded. No, it's related to perceived efficacy for the patient. So, in the event that there's patients who are on generic therapy, we, you know, believe that we can provide a superior product, and if there is a step edit required, I think unlike other more complicated diseases, in case like PKU, it's very easy to document response. After a few days on generic, you can see what the phenylalanine level is. On a few days of sepiapterin, you can see if there's a greater response.
So even if there were that requirement to step through a generic, we believe we can easily do that, and, you know, we have a very strong existing commercial infrastructure in the United States that is well experienced in a competitive market, well experienced with step edits and all of that. And so our teams are all set and ready to go, have already had a lot of discussions with payers, and understanding what may or may be required.
Yeah, would love to talk a little bit now more about the commercialization. Clearly, you have a great drug in front of you, and there are all these wonderful boxes. The patients are known. It didn't work well for other drugs, but in a sense, it also helped pave the way for better drugs like, like this one. So do you have a team in place that's ready to go, assuming you get approval, and anything specific to this strategy that maybe is a little bit different from some of your other commercial launches?
Yeah. So we do have PTC has a very strong global commercial infrastructure that's performed incredibly well over the course of years. In the United States, we have an expert team. This includes every element of commercialization: key account managers, regional managers. We have PTC Cares, which is a support network of social workers who work with patients and families dealing not only with getting authorization and insurance coverage of our therapy that we're prescribing, but also helping, in general, with a lot of the challenges patients with chronic diseases have. We have experienced market access teams that understand the payer landscape, have already started those key initial discussions with payers to understand what access may look like.
We also have expert medical teams who are working with key opinion leaders and have a well-designed publication strategy that's already underway. Our teams have also done a lot of the important early work, mapping KOLs, understanding where the centers of excellence are. We have about 113 of them we've identified. Who are the KOLs who have prescribed Kuvan or Palynziq in the past? Who's still prescribing? Who's not prescribing? Where are the patients at? What's their ties to these centers? How do we figure all that out? All that's underway. We also started an opt-in program earlier in the year, so we can continue to keep patients updated about the upcoming launch.
Basically, everything that you would do for a successful launch, we've already started to do, and it's well underway, and our teams are experienced, poised, and ready to execute.
Love it. So in terms of the opportunity. You've described this as being a $1 billion-plus drug potential. I don't think people doubt that this drug can do well. I think they sometimes say, "Okay, what makes this go from $500 million," roughly what the other two therapies are at, "to over $1 billion?" What math do we do to get there?
Yeah. I think the math is quite easy when you consider the total addressable market. You know, we said approximately 20,000 patients or so in the United States. The proportion of responders we've shown in our studies, which gets over 70-75%, that's who have a detectable, meaningful response. Our ability to find the patients, identify them, and then consider what could be the appropriate value or price for this drug. And so when you take that in the United States and also think about that globally, we think that that's easily can get us to over $1 billion, and we believe just with the math, it can work in the United States.
And if you consider 18-20 thousand patients in the United States and even take Palynziq pricing as a base, you're talking about a penetrance of about 20% to get to that number in the US. So we believe that's doable. We believe we can do much better than that, just given the data that we have and what we've seen to date in terms of proportion of responders and the ability to improve the life of a lot of the patients we've seen as documented in the clinical studies.
And then, Pierre, thinking about the balance sheet, I know that there's a couple filings in the process right now, and obviously how these work out is gonna depend different things about reaching profitability, cash flow, breakeven, et cetera. But what big role can PKU play in that if it gets approved?
Yeah, absolutely. I mean, look, it's a $1 billion-plus opportunity.
Yeah.
We closed Q2 with $1 billion plus of cash. We have, you know, runway to get us through profitability. You know, PKU gets us there, and obviously, any additional products will accelerate the timing of it, but we're very happy with where we are, where we closed Q2 and ready to execute on all our programs.
Great, thank you for that. And then can you talk a little bit about your IP around this drug? I think, you know, there's a little bit of uncertainty about what the base case at least can look like. Can you walk us through that?
Yeah, we've talked about the base case. Certainly, we have- we'll have orphan exclusivity and the pediatric extension on top of that. We believe we have the potential for a number of Orange Book-listed patents over time. We're continuing to work to expand the IP portfolio in every possible way, whether that be around manufacturing, around formulation, polymorphs, and all of that. And that's why we believe we can, you know, conservatively be close to ten years-
Yeah
... on the conservative end, but with a lot of effort still underway to extend that even further.
So we should be, if we wanna be ultra-conservative, assume ten years?
Yes.
Okay, thank you. And then ex-U.S., what's the plan about filing in other regions? I actually think in some regions, you're ahead of guidance than in the U.S. Walk us through that.
Yeah, we've said this is going to be a global launch. We submitted the European Marketing Authorisation Application in March. It was validated in May, and we're now moving through the CHMP process. We expect to have an opinion and approval in the first half of next year. In Europe, we've also submitted the marketing authorization to ANVISA in Brazil earlier in September. We're expecting to submit the new drug application in Japan by the end of the year. We have a number of other regulatory submissions planned over the course of this year and next year and the next several years to bring us to that true global launch.
Is the incidence rate similar in other regions?
By and large, it is. There's a few countries where it's reported as greater-
Okay, yeah
... incidence rate. For example, Turkey has a much higher incidence rate. But overall, this is something that you see equally in a number of the larger regions.
Okay, so we should be, you know, kind of doing the same math to map out these, but obviously depending on how big that region is in general.
Yeah, and exactly. We've said we think about 58 thousand patients in these markets that we plan to access.
Yeah. You know, it's, it's funny you talked about the, the social media. I think you're absolutely right. I've gone to a couple of rare disease conferences this year. I don't appreciate how closely committed these patients are. I mean, they're the best advertising you can get, right? Because they care about each other so much, and they want to share their stories with each other because at the end of the day, they're the ones that understand what they're going through better than any of us. So obviously, you work very closely with a lot of the organizations in the US. Do we have a sense of that level of commitment and interest is similar in some of these other regions?
Oh, absolutely. Globally-
Yeah.
... we're very well connected with the patient communities globally. You know, a couple points. You're absolutely right. I mean, the experience for an individual with a rare disease can be very lonely.
Mm-hmm.
They often will never meet another individual in person who has the disease that they have, and-
Yeah
... that can be a very scary and lonely thing. So when you think about the power of social media to aggregate patients, that's clearly happening. And then when you think about the power of that well-knit, closely communicating community can have in spreading the word about a therapy, it may be one of the most powerful marketing tools one could have because it's directly from individual to individual. And again, this is something we see in the US, but we also see it internationally and, of course, are working with all of the patient communities.
PTC has a long tradition of not only supporting communities because we're trying to get them to prescribe our drug, but we believe it's an important part of what we do as a rare disease company to help the community, even for patients who aren't on our drug, increase disease awareness, education, resources that are needed to improve the lives of all patients affected by the rare diseases on which we work.
... What else should investors know about PKU that I didn't ask?
Yes, a lot of questions, all the good ones. You know, look, I think this is incredibly exciting opportunity for us. I think as we highlighted, the regulatory pathway is clear, that you don't often have that in a lot of the diseases we work in. It has all the benefits as a disease space of being a follower. That is, there's endpoints established, you know, patients are identified, centers of excellence are there, there's a culture of prescribing medications, a well-organized community, but doesn't have the one drawback. It's a very large, open opportunity that we're well positioned to access, and we believe that's why this can be such an important and significant revenue opportunity for the company.
So maybe to close, why should investors consider the opportunity in PKU alone to invest in the company? And beyond this, what are some of the other near-term levers where there may be more upside on the table?
Yeah, look, I think we're incredibly proud of our company. We have a number of valuable products we commercialize now, and I mentioned, you know, we're projecting $700-$750 million this year in revenue, a strong cash balance. But when you consider PKU alone and the potential for a billion-dollar product coming in in the short term, you know, that significantly increases the value of the company beyond what we have today, and one could say that's not even accounted for where we are today in terms of share price. So that's a huge upside that's near in and, you know, this is biotech, so it's hard to talk about lower risk or low risk.
Yeah.
But I think we can say from a regulatory standpoint, this is as well de-risked as we can be, and I would say from a commercial opportunity, it's also a known entity and fairly de-risked. And then if you think beyond the opportunity for PKU, of course, we're incredibly excited about the Huntington's disease program, and while that's known to be a difficult space, we feel very strongly about the data we've collected so far. We look forward to talking with FDA about the potential for using huntingtin lowering as an accelerated approval biomarker.
You know, then on top of that, if we're able to succeed with our Translarna submission in the U.S., or the Friedreich's ataxia submission in the U.S., and our ALS trial, which is reading out, all those have significant upside from an investor standpoint.
Pierre, what does the balance sheet look like to get through some of these near-term inflection points?
Yeah, I mean, look, as I mentioned, we're set to go. If you take a step back, when we did the restructuring and the royalty financing last year, we prepared to execute on all our programs. In, you know, in our model, we had Translarna going off in the first quarter, and actually, now we're riding the upside. So we are much better positioned, and now PKU is around the corner. It's coming in twenty twenty-five, so we're ready to execute, and we do not need anything else.
Great. Well, thank you both so much. Really appreciate you letting me focus on this program-
Oh, thank you.
... in particular. We can meet again tomorrow to talk about Huntington's.
Sounds good. Looking forward to it. Thanks very much, Kristen.
Thank you.
Thank you.