Everyone, I think we're going to go ahead and get started. Thank you for joining us in the room and online at TD Cowen's 45th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen. And it is my pleasure to have with us today for a fireside chat the team from PTC Therapeutics.
We have President and CEO Matt Klein; and CFO Pierre Gravier. Thank you both for joining us. Maybe, Matt, if you want to take a couple of minutes just at the beginning. Obviously, a ton of progress at PTC over the past year, a lot more to come over 2025. But if you want to do maybe just a brief state of the business and kind of what investors should be looking for over the next kind of six months here.
Yeah, absolutely. 2024 was a transformative year for the company. We spent a lot of time transforming what we were doing, focusing the company and positioning ourselves for future success. On the commercial front, it was another year of outstanding revenue performance with total revenue of $807 million, including contributions from all of our inline products, again demonstrating the abilities of our customer-facing teams to execute around the globe, even in competitive and genericized markets.
We delivered on all of our clinical and regulatory milestones on time. That included the submission of four approval applications to the FDA, all of which were accepted for review. The first was for our gene therapy, which was approved in November. We have a PDUFA date for our PKU program, which we'll talk about, which we really see as a foundation of significant near-term and longer-term revenue.
The Translarna NDA resubmission was accepted for review, and we most recently had our NDA for vatiquinone accepted for review with priority review. We also worked hard to strengthen our balance sheet through our revenue performance, our continued effective OpEx management, the rapid and robust monetization of the priority review voucher received with the gene therapy approval for $150 million. Put us in a position that we closed the year with over $1.1 billion on the balance sheet.
A nd then, along with the billion-dollar upfront we received as part of the Novartis PTC518 collaboration, which closed in January. T oday we have greater than $2 billion pro forma, so as we enter 2025, we're in an incredibly strong position, strong balance sheet, continued strong revenue performance, and look forward to the potential of four commercial launches in the U.S. within 12 months.
A nd then have sufficient capital to execute on all those goals, as well as continue to advance our R&D programs and strategically do business development, whether that's to complement our commercial portfolio to drive short-term revenue or to complement our R&D portfolio for intermediate to long-term growth. So I would say with our ability to execute across every part of the business, the strong cash position, several potential approvals, and the optionality and stability with our strong balance sheet, we look forward to a successful 2025 and beyond.
Perfect. Maybe we'll start with the commercial franchise and then dive into the pipeline. But the company did release revenue guidance of between $600 million-$800 million for fiscal year 2025. Maybe can you go into a little bit of detail about what that assumes on the top end and the low end, kind of what factors we'd be looking for this year?
Yeah, sure. Can you join with the revenue guidance?
Yeah. So it's a wide range, right? Given we still have a lot of cards to turn, the $600 million-$800 million, really the delta is on flat year as the main factor. There's very limited contribution of Translarna in Europe. So there's clearly a lot of upside. There is contribution from new product launch. PKU is in there. But obviously, the PDUFA is in late July, so there will be contribution, but it's only really a quarter of sales or so, right?
Perfect. And maybe can you touch a little bit about Emflaza? What are you seeing? Obviously, generics have been able to launch, but the brand has been pretty sticky, and that's what we're hearing from our KOLs as well. Kind of what are you seeing in the commercial setting?
Yeah, I think this was something we talked a lot about, how we expected brand loyalty, not only because of rare disease launch. Generic launch, we don't see the race to the bottom that you see with larger drugs. Also, with the support services we're able to provide with our PTC Cares program, not only are patients receiving Emflaza, but their families get a lot of support and help in navigating the system. So we did see some switches to generic early.
We see a lot more coming back, and we've been able to protect the brand with $207 million of revenue last year. We said that probably with another additional entrant, we believe we can maintain that revenue, but clearly if there's several additional entrants into the market, we could see a decline. But this is really about the dynamics of the rare generics marketplace, but also about the brand loyalty and the hard work our teams have done to maintain patients on the drug.
Perfect. And maybe jumping over to Translarna, I guess what are your expectations for next steps as it relates to Europe? It seems like physicians are trying to find mechanisms to keep patients on therapy that are at least already on. Kind of what are your expectations for what you'll hear next and how that kind of feeds to the street?
Yeah, timing is hard to predict. However, what we are hearing from Europe and hearing from the European Commission itself is right now they're working to see if there's an outcome that will ensure that current patients can remain on drug, which would be clearly a terrific outcome for patients in Europe. There remains no other approved disease-modifying therapy for Duchenne muscular dystrophy and certainly none for nonsense mutation DMD.
In fact, in this period of time, we're seeing new patient starts even, which is a little bit surprising, but speaks to really what has been the consistent physician and patient view that this is a highly effective drug and a safe therapy, and I think the fact that we're hearing the European Commission wanting to find a path to keep existing patients on the drug, which obviously would also have impact on revenue, would protect the revenue.
We've commented that so far this year we're seeing continued revenue as we saw last year. When that decision comes down, I'm not sure, but we think it's going to look something like that. As we've said, as Pierre said, we gave the wide revenue guidance initially because there's a lot of unknowns in the first part of the year. Once we have more clarity, we'll be able to see if we need to update guidance.
All along we have said we will continue to provide therapy as long as it's authorized. In the event that it's withdrawn, we will work as hard as we can to ensure we can keep as many patients on using whatever mechanisms might be available to us in Europe.
Perfect. And maybe on Translarna in the U.S., as you indicated, they accepted the filing. We don't have a specific PDUFA date, but can you kind of qualify your interactions with the FDA? Kind of what gives you confidence that the application that you submitted will hopefully eventually be successful?
Yep. And so there's no official PDUFA date because of the particulars of the history of this file and some of the earlier events that occurred back in 2016 and 2017. But what we've seen is first very constructive discussions with the agency prior to submission, aligning on what an efficacy package could look like, the data from the ITT population study '41, along with the evidence from STRIDE of long-term meaningful impact on loss of ambulation, loss of pulmonary function, and then the acceptance of the package.
And then during this period, while we don't have a PDUFA date, we know there's reviews ongoing. We've gotten questions. We know they're doing global clinical site inspections, all of which tell us that we're making progress on the review.
Perfect. And maybe the last in-house revenue-generating commercial product, we do have the approval for the gene therapy for AADC. Obviously, we've seen gene therapy launches go a couple of different ways, but it seems like when there's a rare CNS condition and you have an efficacious gene therapy, they tend to go a little bit better. I guess can you kind of tell us how this launch is going and how can you make sure that it's more Zolgensma-like than maybe some of these other ones that are going on?
I think, of course, as you mentioned, we're in the context of an ultra-rare disease, and our teams have done a lot of great work around the globe to identify patients and find countries where we both have patients who need treatment as well as centers of excellence capable of performing the neurosurgical procedure as well as providing the necessary preoperative and postoperative care. I think we fall into that group that has done well. And I think part of that is due to the data, the strength of the data showing the transformative nature of this therapy for children who are born with very little motor activity and through the gene therapy able to suddenly acquire milestones and in some cases have almost normal motor development, which is really the promise of gene therapy. And I think the data really support that.
We're seeing things go very well in terms of launch and gaining reimbursement. We've talked a lot about how we invested over the past several years to position us now, and the focus really now is on leveraging the cost that we've put in already and looking to provide drug in countries where there are a lot of patients. We got an approval in Taiwan last year. We're working now on pricing and reimbursement. We gained an approval in Hong Kong recently. Really looking at countries where there are larger numbers of patients to take advantage of the opportunity.
Perfect. Maybe moving on to some of the pipeline opportunities. We'll start with sepiapterin and PKU. You have the EU opinion slated for the second quarter and then the July 29th PDUFA date this year. Maybe can you touch a little bit on your launch strategy? How can you emphasize some of the differentiated data that you've seen versus maybe what's seen with Kuvan?
Yeah, I think the first point is that the data have proven that sepiapterin is a highly differentiated therapy. From everything we saw in APHENITY in terms of the two-thirds of patients responding with greater than 30% reduction, over 60% reduction in phenylalanine levels, including 69% in classical PKU patients. Again, that's a population who traditionally have not been served by current therapies.
Having 84% of patients come within targeted guidelines, 22% with normalization of Phe levels. Again, these are things that have not been seen before with Kuvan or BH4, whether it be generic or branded. And then the data we're reporting out in the long-term extension study, I think, is really showing that sepiapterin can meet the number one desire of patients, and that is to be able to liberalize their diet.
We shared on our earnings call last week that the most recent data cut from the long-term feed tolerance protocol shows that over 97% of patients, 97%, are able to liberalize their diet, and two-thirds of patients are able to get to the recommended daily allowance of protein for someone without PKU. What that means is the protein level that you or I would be recommended to take on a daily basis, patients with PKU who've never been able to do this are doing it and going beyond that. And we're hearing a lot from patients and physicians.
That's a really big deal. And we've seen on social media as well that parents of kids talking about how, "Oh my God, my child can go to a pizza party and have a hamburger", do things they could never do before. This is life-changing. And so it's this combination of data, the superiority to what was observed with Kuvan, the fact that every patient who's been on BH4 previously, whether branded or generic, is having a much greater response to sepiapterin. Classical PKU patients with mutations that were thought to be not responsive are responding.
And when you think about a disease with about 17,000 patients in the U.S., 58,000 globally in markets where we could commercialize the therapy, you understand how this is really a significant opportunity. We've talked about how our discussions with payers support that we can price at a premium to Palynziq given the strength of the data package and how easy it is to demonstrate valuable benefit with Phe lowering.
And so we've talked again about this being a billion-dollar-plus opportunity and how we believe we can reach that in the U.S. alone, just given the size of the population, the strength of the data, the strength of our commercial teams. This will be the same team that's succeeding with Emflaza. They know a lot about a genericized market. They know a lot about step edits. They know a lot about working with patients and families as well as our PTC Cares and support network. So everything is really in place for us to have a successful launch in a rapid ramp.
Maybe can you talk a little bit about the commercial sales force efforts? Are you going to be able to sort of essentially completely use obviously the EU force that's been in place for Translarna and obviously U.S. with Emflaza? Will you have to build out any additional members?
Very little build. Where we have done some building, particularly is in the medical team. And the reason for that is there's about 109 PKU specialty centers in the U.S., and clearly the physician is an important part of that, but so is the dietitian and the nurse practitioner who spend a lot of time with the patient, particularly the dietitians, especially for the patients not on therapy. There's less they get from the doctor, but they need the ongoing nutrition and diet management.
So we've added a number of dieticians to our medical field team so we can make sure that we're engaging with every part of the care team, particularly those who would be driving prescriptions and would need to counsel patients on therapy because all of a sudden it's going to be a whole new world where you're able to meet your dietary requirements with our therapy and what does that mean for other dietary things. So we're doing a lot of work to make sure that we're fully engaged in every way and every part of this community.
Perfect. And we can always come back on some other questions for this, but obviously a lot else to get through. Most recently, the FDA did accept the vatiquinone NDA for Friedreich ataxia for priority review. Can you kind of just walk us through maybe what are the remaining questions for the application? I know the Day 74 letter should be coming out at some point soon. Can you kind of walk us through what you'd be looking at that, if anything?
Yeah, I could check my email, but we haven't gotten it yet. Look, I think this is a very exciting opportunity given the fact that there remains a significant unmet need for children with Friedreich ataxia. And vatiquinone is a therapy that has accumulated a very strong safety record in children, as well as evidence of efficacy on the part of the disease rating scale upright stability that matters most for children. In addition, we have safety data and efficacy data in adults.
So while this would be the only therapy if approved for children, it also would provide a safe and effective alternative therapy for adults with Friedreich ataxia. And we know that the vast majority of patients are not currently on Skyclarys. So we see a very large opportunity there. We expect the review process to focus on upright stability and the efficacy package from MOVE FA.
We talked with FDA several times, and I think there's a very clear understanding of the, let's just say, the dynamic nature of the mFARS scale and that there are certain parts that matter for certain populations of patients based on their age and stage. I think there's a clear acknowledgement that upright stability is the optimal endpoint for the younger patients that were in the trial.
We also have data from within the study, whether it be looking at the specific items on upright stability, the evidence of benefit on the fatigue scale that really we believe provide that persuasive evidence of efficacy using FDA words that they would look for. And then, of course, we had the long-term extension data from both MOVE FA and from the earlier placebo-controlled study, both of which showed, based on pre-specified analysis plans agreed upon with the FDA, that we're having a significant effect on disease progression both in children and adults.
Perfect, and obviously the application is going to be for both children and adults or is, I suppose. But as you indicated, Skyclarys isn't yet approved for the pediatric population. So kind of how are you going to tailor maybe your initial commercial approach to that? Will you initially target maybe those that treat more pediatric patients or go broadly? How are you thinking about capturing the best as quickly as you can?
Yeah, and I think the dynamics of the pediatric patient market and the adult patient market are quite different. There's about 6,000 patients with Friedreich ataxia in the U.S. About a third of those are children. And the children tend to be treated at a relatively small number of specialty centers, all of which we know quite well. We've worked with for many, many years and all of whom have been involved in our clinical studies.
So I think that really is "low-hanging fruit" in the launch to be able to go into centers where we're well established, where the drug is known, the drug is supported, and the vast majority of pediatric patients are treated. Of course, a number of these centers also treat adult patients. S o we would logically see that be a good bridge in those centers to adults and then, of course, over time reach out to the number of adult patients who are treated in the community neurology setting.
Okay, perfect. And we've heard from our physicians that it would make sense mechanistically to, in adults, combine Skyclarys potentially with vatiquinone. I guess, do you feel the same way and do you think that would be reimbursed given the unmet need?
So I don't know. I can't speak to the reimbursement. I do know that we do have in our ongoing open label extension study, we did allow after 24 months patients to use both therapies. So we could have some data, importantly, to show that they could be safely co-administered, though we have no reason to believe they wouldn't be. But look, Friedreich ataxia is a complex neurodegenerative disorder. It would make perfect sense that it would take more than one therapy to help patients.
And of course, there's a number of therapies in development now looking at frataxin replacement. And one would surely believe that combining something like a frataxin augmenting therapy with something like vatiquinone that could reduce the inflammation oxidative stress, that's going to have to be improved for the genetic-directed therapies to work. So I think the FA community has always talked about a cocktail approach.
I do think it's possible. Obviously, the pediatric population is one that's harder to access because of needing to show the specific safety and tolerability. Again, that's why we think that that'll be a good place to start, given that we'd be the only therapy authorized there.
If you're successful with the FDA, do you think this would also be successful in Europe? Kind of, what are the status of your interactions ex-U.S.?
Yep. So when we think about ex-U.S., of course, we think about Europe, but we also think about LATAM, Middle East, North Africa, Commonwealth of Independent States, all where we have commercial infrastructure. Right now, of course, we're looking very carefully in those regions because a lot of those would leverage an FDA approval.
So we're getting ready to look at the commercial opportunities there. In Europe, we've said we're going to have another discussion with the CHMP, get scientific advice and see whether they believe the current package based on some of the recent literature that's come out in support of upright stability would suffice for approval.
Maybe jumping over to PTC518, and we'll start maybe with the partnership first and then kind of dive into the individual data. Obviously, the partnership did a great job at kind of helping the balance sheet and kind of funding for going forward. Maybe what made them the right partner and why was now maybe the right time to partner with PTC518?
Yeah, we had talked a lot about that we didn't have a need to partner with 518. We certainly have the infrastructure, the ability to develop and commercialize it. And I think for us, it was really a matter of saying, was there a partner who had strength in neuroscience, both from a development and commercial standpoint, so that they could bring more muscle to the effort and get the program further faster?
And then, of course, on the economic side, we wanted to ensure that we had a significant upfront so that we were appropriately monetizing the risk of the program, but also wanted to be able to participate in the upside because this is a potentially very, very large commercial opportunity. So I think what you see with the $1 billion upfront, the $1.9 billion in commercial development milestones, as well as the 40% profit share in the U.S., we were able to achieve all of those with Novartis.
We also know, importantly, that from Vas, from the top of Novartis on down, this is a priority program. This is very important to them. They have a strong belief basis in the HTT lowering approach. They have had a previous program, so they know it. They believe in it. And that was really important to us too. This is still a very important program for PTC. And this partnership is constructed that is truly going to be a partnership.
While Novartis will assume all the development and commercialization costs and manufacturing costs going forward, there's still going to be a joint development committee where the experience we have with splicing and HD can be brought to strengthen the partnership and increase the chance of success.
Perfect. And in Huntington's readouts, there's a lot to look at. So obviously, you have the Huntington protein reduction, you have NFL, you have TFC, TMS, UHDRS. There's a lot of different things going on here. I guess maybe can you hit the highlights of what you've seen so far with 518 and maybe on the backdrop of that, what is most important to look at?
Yeah. So when we designed the PIVOT HD study, we set it up as a phase two study to answer the key development questions that we needed to answer at the right time. And we designed it to be in two parts. The first part was 12 weeks, where we believe that would be sufficient to give us important information regarding PK, PD, as well as biodistribution.
So we know we've designed a molecule that's highly selective and specific for the Huntington target. We know it gets across the blood-brain barrier. We know it's not efflux. We know that's essential for getting effective lowering in the entire brain, which is necessary given that Huntington's disease is a whole brain disease. So that first part, we want to make sure that the drug's doing what it's supposed to do.
Are we seeing at the dose levels we have reduction in blood Huntington protein levels between 20 and 50%, which is what we outlined as the optimum percentage lowering to have clinical benefit? Can we see the drug in the CSF? Are we getting those exposures? And of course, the short answer was yes.
Then as we got to 12 months, we said, okay, we're starting to see signals that the drug is doing what it's supposed to do in the brain. And to answer that question, we looked at things like CSF Huntington protein, and we looked at some of the clinical scales. So when we did the June data readout at 12 months, last June, the data readout, we checked the box on Huntington lowering. At both those levels, we were getting lowering within a desired range. We had about 22% at five milligrams, 43% at 10 milligrams.
We were seeing similar levels of reduction in the CSF, so that told us that not only were we getting across the blood-brain barrier, getting everywhere in the brain, but we were doing something really important in the brain, and we saw dose-dependent evidence of benefit on clinical scales, and that was a little bit unexpected given the heterogeneity of HD, the rate of progression of HD, and the small patient numbers, but that gave us a lot of confidence that we were starting to see the clinical effects that we would, in the short term, that we would need to see in the long term to ultimately demonstrate efficacy.
Maybe we're going to see some additional data from the trial in the second quarter here with 100 additional patients. Maybe can you set the stage for what investor expectations should kind of roughly be so that we don't get too far ahead of ourselves, but also obviously want to see efficacy? Should stats versus placebo be expected, or would that be great upside? What do you need to show, I guess?
Yeah, I think, again, that what the program needs to show is continued safety and tolerability, durable lowering of HTT protein at both levels, understanding that we see consistent huntingtin lowering both in the stage two patients as well now as stage three patients that we'll see for the first time. And then again, we should be looking for signals of favorable activity in the brain, whether that be in the biomarker front with CSF lowering or trends on the clinical scales.
I think stat-sig on the clinical scales and biomarker, now we're talking about full approval in a phase 2 study, which I think after 12 months in a heterogeneous, slow-moving disease like HD is unrealistic. That's why we've said that if we see trends or things that we saw last June, we believe that is a home run for this study data output. And also, we believe could position us to have a path with accelerated approval given based on our previous discussions with FDA.
Yeah, that was going to be my next question is if you could put that a little bit in the context with what have you talked to the FDA about in reference to accelerated approval here? And are they clear on kind of how you can correlate the biomarker to function, or is it going to take some conversations?
I think the objective of our meeting in December was to ensure that the agency was aligned on the scientific rationale for huntingtin lowering as a surrogate endpoint. I think there's been a lot of talk about different endpoints. And I think a misconception that FDA has that there's one endpoint and there's the endpoint. No, it's an endpoint.
Can you show them that there's a rationale supporting that lowering huntingtin protein is likely to provide clinical benefit, which is the definition of a surrogate marker for accelerated approval? And there's clearly a rich scientific literature that supports it. And it was comforting to us to see that the FDA was aligned scientifically on this.
They then asked the next obvious question, which was, with a data readout upcoming with over 100 patients, they said, "we would just like to see some association between changes in huntingtin protein and clinical scores." They didn't say highly statistically significant correlations. They said associations, which a lot of that's going to depend on the data.
I think if we have biomarker data that's kind of tight, then looking at the dose dependency on the clinical outcomes becomes meaningful because just looking at the June data cut, patients who had twice as much huntingtin lowering had greater clinical improvement. That supports that huntingtin lowering can have an effect on clinical outcomes. So it's those types of associations we believe would be important to advancing discussions with FDA.
Perfect, and maybe as it relates to the Novartis partnership, obviously they will take on the expense for running the phase 3 program as part of the deal. What will be the next step after this Q2 readout? How quickly do you think you could advance to a phase 3? And how involved is PTC in sort of that process?
Yeah, so I think this goes to your earlier question, Joe, about the timing of the deal. Novartis was, we believe, keen to get the deal done when we did because they wanted to start right away with us on thinking about that efficacy trial. Given the data we've already seen in PIVOT, the safety data, which we continue to see to date, the biomarker effect, the biodistribution, all of that supports, I think for both Novartis and PTC, the go decision to phase three.
So that's independent of this readout. We're already moving forward in designing that efficacy study. Clearly, the results that we report out in Q2 will inform elements in terms of inclusion criteria, stage two, stage three, and that will then inform the endpoint strategy. But I think both teams are working now full speed ahead and getting that study going. It's going to be critically important whether it's a phase 3 in the context of a standard approval or as the confirmatory trial in the context of an accelerated approval, so I think we're full speed ahead right now.
Perfect. And obviously you've been very successful with the Splicing platform with Risdi and now obviously PTC518. What's next for the Splicing platform?
Yeah, and this is something that's really important to us. I think what we spent a lot of time talking about over the past year or so is how we focus the company down and become incredibly execution-oriented, certainly in the development part of the company, the commercial part of the company. We're doing the same thing now in research. I think the Splicing platform has shown itself to be a golden goose of sorts.
And this is the team that's there. It's been the same team there for a couple of decades. We've made a number of key learnings. We have something new called PTCeq, which is a high-throughput screening device that now allows us to match targets with chemical matter that's likely to be a reliable hit. That significantly accelerates the preclinical development path. And we now have a number of targets and programs underway.
We'll be sharing more detail on that over time, but this is something that we really want to leverage in terms of bringing programs forward, both that PTC can develop and commercialize, as well as leverage splicing for other non-core indications such as oncology or larger neurodegenerative disease, where PTC may not have a role in those fields, but those can be a source of strategic partnerships because there's certainly splicing targets that can provide oral small molecule therapies that can be highly effective for unmet needs that are in larger indications.
Perfect. And you indicated you now have over $2 billion in cash after the Novartis upfront. How far does that get you in terms of your current operating plan and kind of what are kind of the pushes and pulls there?
We have years of cash. We can achieve all our milestones, launch PKU and all our other programs and get to cash flow breakeven and gain cash flow positive. So yeah, we have our reason. This is very important for us. That's also part of the reason why we did that transaction. We're in a very strong financial position. And I think from a macro environment, I saw a lot of Bloomberg terminals getting red this morning. I think we don't have to worry about that.
Perfect. Awesome. With that, we are out of time. So great execution over the past year, and we look forward to more. Thank you for joining us.
Thanks, Joe.
Thank you.