Conference. I'm Tazeen Ahmad. I'm one of the senior SMID Biotech analysts here. It's my pleasure to have our next presenting company with us, PTC Therapeutics. Sitting next to me and presenting for the next 30 minutes will be Matthew Klein, who is the CEO of the company, as well as Pierre Gravier, who is CFO. Gentlemen, good morning. Thanks for coming over from New Jersey to see us.
Good morning. Thanks for having us, Tazeen.
I've been starting off all the conversations with macro questions. I'll ask you in the order of most recently occurred macro events. Can you talk about the executive order that was announced yesterday?
Sure.
To the extent that you can.
Yeah, I think, as you put very clearly in your note about the executive order, it was a lot of, let's just say, bark, without a lot of clear indication of what, if any, ramifications there would be for companies. This is going to be a, let's see what develops. I think from our standpoint, given, again, as you also highlighted in your note, our current revenue is more ex-U.S. than U.S. Also, as we think forward to our PKU launch, and this is a product where for a rare disease, there's a disproportionate high commercial mix. Whenever we think about pricing at a launch, we think very carefully about a global pricing corridor to ensure that we can be commercializing the drug and maintaining the value of the product. These are things we always think about.
All that is to say, while there are no details now, if there would be any potential impact, we imagine very little, if anything were to evolve in terms of more specific MFN-type pricing constructs.
Okay. So just to clarify, for PKU, are you expecting to price this at a narrow range?
We will have a pricing corridor that will keep, again, allow us to maintain the pricing that we've talked about and getting the value for the therapy.
Okay. Can you talk to us about tariffs in general?
Sure. Again, a lot not known. We think in any scenario, we're in a very good position. First of all, most importantly, the IP for our U,S. products is domiciled in the U.S.. That means there's no issues in terms of transfer pricing. It's a US-owned product. Even for those that are manufactured or have raw materials which come from outside of the US, at worst, you're talking about a tariff on COGS or a portion of COGS, which would be quite low. Really minimal, if any, impact to the bottom line.
Okay. Lastly, on your interactions with FDA?
We've had a lot of interactions with the FDA with three applications pending. As we've talked about, we have seen no impact, really, of any of the FDA changes. We haven't seen impact in terms of the people with whom we interact. We've also not seen any impact in terms of cadence or nature of interactions. Our PKU NDA, which is under review, we've talked about having the typical contact and back and forth with the agency. We've moved through most of the review. We held our late-cycle meeting with FDA last week on schedule. It was clear from there that we are mostly through the review with just agreement and alignment on post-marketing commitments left. For us, that's a really good sign that the review has progressed well, probably ahead of schedule.
We remain confident of an approval, if not before the PDUFA date, certainly by the PDUFA date. Similarly, with Friedreich's Ataxia NDA, the interactions have been very typical in terms of the cadence and nature for a priority review application. Inspections are ongoing. Everything is looking exactly as it should look, which gives us, again, confidence that we are not going to have an impact of any changes that have occurred at the agency.
Okay. When we spoke on Zoom a few weeks back, there was one thing that you had mentioned about you said all these things about hasn't really changed with FDA. In relation to adcoms, you had made a comment along the lines of potentially the folks who arranged for advisory committee meetings might have been somewhat impacted by changes. Is that something that you've been able to get color on?
We have not gotten color on that. That was just based on our understanding of some of the changes in staffing that had occurred. In terms of our programs, there was never an expectation of an adcom for PKU. When we had the application accepted for Friedreich's Ataxia, the agency said they had not yet decided on the adcom. They had given us the feedback in the mid-cycle meeting they do not anticipate an adcom. Similarly, we do not anticipate an adcom for the Translarna NDA, just in part because I think the neurology division understands the disease quite well, understands the endpoints quite well.
Okay. Let's talk about Translarna as it relates to Europe. It's a drug that doesn't exist, but yet exists, is what I like to say. You continue to record sales. How are those sales occurring now?
Yeah. So again, this is, once again, with Translarna, a unique situation. The negative opinion from the CHMP was formally adopted by the European Commission on March 28. As part of their adoption of the opinion, the Commission, as far as we can tell, for the first time invoked the ability of countries to leverage a pathway known as Article 117 of the European Parliament, which basically says that countries can import and sell a drug that's no longer licensed. What that has allowed us to do is to pursue a strategy that we had long planned for, which was to try to work country by country to see if we can continue to commercialize the drug. Now, to be clear, what Article 117 does is it enables the individual countries to find their own individual mechanisms by which the drug can be commercialized.
That can be an early access pathway and the inpatient pathway. What we've seen thus far, I think Eric alluded to this on our earnings call last week, is about 50%, 50% of countries have expressed an interest thus far in continuing to commercialize the drug. We have begun shipping the drug, receiving payments for the drug in several countries. Unexpectedly, we've also heard about interest in new patient starts, again, which is something we didn't anticipate. As you said, for a drug that doesn't exist, the dollars or the euros are real. They exist. We said, look, in terms of guidance, we said, look, we believe we can do somewhere around achieve about 25%-30% of European revenue the rest of this year. I think that's a number we're comfortable with for now.
As we see how this evolves, we can certainly update that.
I mean, it could be higher.
Sure. Look, again, I think it's sort of this moment where you say, with the fact that we're talking about revenue for a no longer authorized drug, is incredible. From our standpoint, we have really talked about wanting the European business, as well as the Emflaza business, to really bridge us to the PKU launch, which it's done. Now we're in a situation where we're getting ready for the global launch of Sepiapterin, which will be significant revenue for us and really the foundation for future growth. Yet this bridge still gives. I mean, we're continuing to garner revenue, which is great, and being able to provide patients with a drug because there really is nothing else in terms of therapy for nonsense mutation boys.
It's a great situation to be in, and we'll continue to bring the drug to as many patients as we can.
Okay. You talked about PKU, and that would have a large commercial contribution, both dollar-wise and in terms of how it's reimbursed commercial payers. DMD, on the other hand, does have a significant Medicaid component, right?
Yeah, I think that's a higher Medicaid population due to just the disability of the patients.
If approved, would that complicate the U.S. launch as it relates to that first question we started off with on MFN?
I think very hard to know. Again, I think one of the questions that has come up is if there's MFN. First of all, we welcome the opportunity to launch in the U.S. We have said we have about 150 boys on drug now that we could convert to commercial drug very quickly. With our implausibility database, we have insights into additional nonsense mutation boys and young men that we can get on the drug. Obviously, our team knows the community very well. That would be a very meaningful opportunity. In terms of a potential impact of MFN, look, I think it's unclear whether there would be anything for, would it be Medicare Part B, would it be Medicare, Medicaid, and Medicare Part B.
If it's Medicaid, what's not really clear is with this basically, would you end up charging the same amount as you would now taking into consideration discounts? It's because there's rebates that we do now for Medicaid patients. It's unclear if there'd be any impact.
Okay. Got it. So then how should we be thinking about expectations? You've talked about the strength of the Translarna data. I go back with Translarna to the very beginning of the field.
Yes, before my time, I know.
If this makes it, this last attempt to get it approved, does get it approved, how should we be thinking about investments of resources from PTC into this launch?
Yeah. Look, we believe the data set, as we talked about it last year, we've talked about it, that we believe it supports approval. I think the functional data for the drug are stronger than any Duchenne drug that's been approved by the FDA. The safety record is very clear. We've also been very clear that we're realistic. The history is long. It's challenged. You've certainly not seen any of us running out saying, "This is a high-probability event. This should be your investment thesis in PTC." We see it as a very valuable free call option. Because if it is approved, we know the community quite well. Our infrastructure is in place. There's nothing more we would have to do. We'd be able to ramp quite quickly having 150 patients on drug that we could convert to commercial drug. We understand their payers.
We understand how that works. We're very well connected with the Duchenne community. I think right now, in the Duchenne community, due to recent developments, there really is an increasing desire. It's always been there. The desire for a safe therapy that's known, that has shown to be effective and durable, I think is a very important, those are very important factors to the patients and families in the community.
What about the comments that Dr. McCarry has made about continuing to focus on rare disease? Do you find that encouraging for Translarna's prospects as well?
Yeah, it's funny the way I see it. I mean, it's, again, a long road. Yes, I mean, the short answer is yes. I think even, I think Dr. Persad's comments, which scared a lot of people when they were first made, and his subsequent comments softened quite a bit. I think that there is this desire to get safe therapies out to patients with rare diseases where there's unmet needs. I think that's important for Translarna. I think that's important for vatiquinone as well, where you have an unmet need and a drug that has a strong safety record for children.
Okay. So let's move on to the PKU launch, which is a much more traditional launch for the company. Can you just remind us on where you are with that?
Yeah. We've been planning for this. We're ready. We're ready for the global launch. We talked about how the CHMP opinion was a great first step. We expect adoption within 60 days. We will launch first in Germany to take advantage of the six months of free pricing. We expect shortly after adoption, the price will be published in Lauer Tax, and we'll begin commercialization to accelerate launch in Germany. We initiated an early access program. That's been very successful, both in terms of getting patients in Germany on drug who, by law, as soon as it's commercial, get turned over to commercial drug. It's also been great to get us into the top centers in Germany, increase physicians' awareness, get their use of the drug, all of which will allow us to ramp quite quickly in Germany.
We're also exploring other countries where we can avail ourselves of early access. In terms of infrastructure, this is the Translarna infrastructure. They can easily handle PKUs. There's a lot of center overlap. I think, based on our earlier discussion, there's no question about the ability of this team to execute under the most challenging circumstances with a data package that probably is not as strong as the PKU data package. I think all that bodes really well. In the U.S., we have built the team. It's in place. We have everything ready to go, not only in terms of the sales team, in terms of our patient services team. This is a really important component of what we do.
People have asked us, "How have you been able to maintain implausible revenue in the face of generics and also other competitors, non-generic competitors?" One of the secret sauces, if you will, is this patient services team that's well integrated with the patients and the families and the physicians, walking them through prior edits, walking them through step edits. That team we've bulked up and is ready for PKU. On the medical side, we've been working not only with the commercial teams to map the 103 centers of excellence in the U.S., understand the dynamics at those centers, who are the decision makers. It's often not only the physician, but also nutritionists and dieticians.
We've added the nutritionists to our medical team so we can do a lot of peer-to-peer interactions and support, appreciating how important those folks are in the decision-making, understanding at each center how are the teams at those centers viewing the priority for launch. Is it the existing Kuvan patients, since they know that we're going to have a superior effect in terms of Phe lowering based on our data? It's basically switching a one-month daily therapy to one that should be much better for patients. Or is it the therapy-naive patients who are classical patients who we believe we can treat based on our data to date in the trial and our mutation data? Just understanding where each of those centers want to go. This is way down the road.
In fact, we've said, if the approval were to come early, we're ready.
Now, can you talk to us about the competitive landscape, as in what do patients currently take? We'll talk about some potential advantages.
Yep, absolutely. There are about 17,000 individuals with PKU in the U.S. It's newborn screening, so there's no patient identification. These are patients who are diagnosed at birth. There are the two therapies. There's sapropterin, which is basically giving BH4 directly. It's both the branded form of Kuvan and now the generic forms which are available. And Palynziq, which is indicated only for adults, which is an injection which has become, I've thought of as a second line or last line therapy. What we understand is about 10-15% of patients, most are on one of those therapies. You're talking about 85-90% of patients not on those therapies.
Why is that?
For any number of reasons. I think first, for patients with PKU, the goal is to be able to liberalize diet, to be able to get off or at least have a break from their highly restrictive low-protein diets. If you're going to take a therapy, it's got to be able to bring you a benefit in terms of diet liberalization. Our understanding is the experience with sapropterin, either branded or generic, hasn't been such that it's allowed patients to do that. That's why not a lot of patients are on that. In terms of Palynziq, first of all, it's adults only. While it has efficacy that's been shown, its tolerability profile is challenging. I think all patients have to carry an EpiPen with them due to the high risk of anaphylaxis.
I think somewhere between 80-90% of all patients have adverse events with the drug. It can sometimes be a two-year period for titration to actually get to maximal therapy. It is a very hard drug to use. When you think about Sephience or sepiapterin, this is an oral drug once a day, well tolerated, with very strong evidence of Phe reduction and diet liberalization. It is all there in terms of what the patients would want in a therapy.
Yeah. As you describe it, this seems sort of like a layup in terms of launch, but nothing ever is.
It's ever, yeah.
Right? So what is it that you're focusing in on? Are you trying to switch patients from the two drugs that you just mentioned initially? Or are you trying to get to those, let's say, 85% of patients that are not on anything?
Yeah. The short answer is yes. I think if you think about this launch, and we've talked a lot about the opportunity and believing that it could be a billion-dollar-plus opportunity because of the size of the population, the percentage of patients on drug A therapy currently, which is quite low, so a significant unmet need, the strength of our data set in terms of showing that anyone who's been on sapropterin, whether branded or not, and had a benefit, those patients consistently have 50+% greater benefit on our drug. The team, we talked about the team, the ability to execute in a competitive and generic size environment, which we can do. We think we have the data to support our ability to penetrate each of those segments.
We've heard some physicians say, "Look, for us, the switches will be the easiest thing to do." Patients who are on sapropterin can switch very easily and get into another once-a-day therapy. It could be that large segment of those who've tried and failed, didn't get enough benefit so that they could liberalize their diet. Those patients want a drug. The therapy naive, who are typically the classical PKU patients, are those with what are known as non-VH4 responsive mutations, mutations that don't allow them to have a benefit from sapropterin. We've shown in our trial, most recent data from our pivotal trial, that over 70% of the patients in that trial had those types of mutations. Of course, we had a tremendous response rate and magnitude of response.
Each of those are playing out as groups of patients that the physicians want to treat. The patients themselves are speaking. We see them on social media. We hear their feedback of wanting to try. Exactly which will be the first segment to get on drug is going to vary center by center and physician by physician. We know we have the data to support each of those segments and are going to obviously work to get as many patients on as quickly as possible.
Most recently, you talked about just general ideas about pricing. You talked about pricing at a premium to Palynziq. To me, that was a little bit on the new side relative to what you'd been talking about historically. I guess what's changed that gives you the confidence that that kind of price premium is justified and would be reimbursed?
Yeah. I think that our talking about it came as a result of our discussions with payers. The payers' realization is that for payers, it's all about value. For PKU, it's a known entity. Phe lowering equates to value for the payers. When you look at our data showing 63% lowering in the pivotal trial in the overall population, 69% lowering in the classical patients, 84% of patients coming in with the guideline of target Phe level of less than 360 micromole per liter, that's value. When you take that efficacy along with the safety and tolerability profile, that package together supports the pricing at a premium to Palynziq.
If you do the math, I mean, you only need low double-digit % penetration into this population to be not that far away from $1 billion in sales.
Yeah. That is why we have said we obviously will be more granular about pricing once we get the label and approval. That is why we said we believe this could be a potential billion-dollar-plus opportunity in the U.S. alone. If you do the math on the size of the population, what would be typical penetration for a differentiated orphan product, multiply that by price, and know that we have a team that is able to execute, those numbers become very real very quickly. That is the U.S. alone. Then you say, "Look, we have a global commercial infrastructure. We are going to be very thoughtful about launch sequence and pricing corridor." We have talked about what we are doing in Europe. We have the JNDA for Japan pending and we expect approval in December of this year, which would enable a Q1 Japan launch of 2026.
That's a very valuable market as well. You start appreciating that the global opportunity here is very strong.
How are you thinking about, well, what is the IP estate for this as well?
Yeah. We've guided that we have IP out to 2038, and then with patent term extension even conservatively to 2039 and potentially beyond. We're continuing to build it.
How is the population split US and ex-US? Is it equal?
It's about 58,000 globally in markets where we commercialize. We said it's about 17,000 in the U.S. For our own forecasts, we've said we believe the ex-U.S. revenue opportunity could be close to 50% the U.S. opportunity.
Okay. Are you going to be ready to launch on day one after approval?
We're going to be ready to go. Again, this is a lot having the experience of the teams and understanding what we need to do and what start forms look like, what prior auths might look like in the cases where there are payers who are going to ask for step edits, how that can look. We're ready for it.
Okay. Maybe let's move on to PTC 518, which actually a lot of people say if you're excited about PTC, this is the reason to be excited. Would you agree with that comment?
I think there's a lot to be excited about. I think if you're talking about a product the size of PKU and the opportunity of PKU and our commercial engine, that's a revenue level for a company like us you should be very, very excited about. I think PTC 518 is a product of our splicing platform that could be the first-ever disease-modifying therapy approved for Huntington's disease. I'd be excited about that too. I think there's a lot to be excited about.
Can you maybe just talk to us about there's several companies that are trying to do treatments for Huntington's, and it's kind of been a graveyard. It's a challenging disease to really drug. Can you talk to us about the data that you've presented so far? The most recent data set, do you think that there was did the market not appreciate to a certain level what you were going to show versus what they expected you to show?
Yeah. Very good questions. I think your premise, Tazeen, is exactly right. This is a hard, hard therapeutic area, and it has been a graveyard. When we started the PTC 518 program, we believed that this could be a promising therapy because we have a drug for neurodegenerative disease that is targeting the cause of the disease. It's very rare in neurodegenerative, first, it's very rare in a neurodegenerative disease that we actually know what causes it in the majority of patients. In this case, it's a toxic mutant Huntington protein. We have a drug that can directly address that. That was a very promising start.
When we designed this program, it was really about saying, "Look, this is going to be tough." As we move through the development program, let's make darn sure that each step of the way, we're learning the things we need to learn to increase our probability of success. When we designed the PIVOT HD study, this was all about understanding, does the drug work? Does it do what it's supposed to do in terms of lowering cellular Huntington protein? Does the drug go where it needs to go to have that effect? In other words, are we seeing CNS exposure that we need to see for it to work in the brain? Three, is it safe and well tolerated? That's been a big question in Huntington lowering therapies. Fourth, can we learn how to study it? What is the optimal population?
Because when we started this program, we said, "Gosh, a lot of therapies are going really late in Huntington's disease, and it's hard to think about modifying the disease if it's been churning along for 50 years in a patient's at end stage." We set this up studying stage two patients who we thought would be the optimal population, adding a cohort of early stage three patients to really test that hypothesis. When we look at the data readout, including last week, we've ticked all those boxes. I mean, this is a data set now that's shown that the drug is working how it's supposed to work with those dependent cellular Huntington protein levels. We're getting exposures in the CSF greater than in the plasma. Great. It's safe and well tolerated, and the data out the 24 months shows that.
We have early signs of clinical effect at 12 months, seeing things move that should move in the stage two patients. We learned that probably stage two is the right population. I think people's reaction to those data were, "Oh my God, it doesn't work in stage three. There's no way they're going to get it." No, that's actually an incredibly valuable learning in what you need to learn in phase two, who to study the drug in. That was a great learning for us and our partner, Novartis. When we got out to 24 months, we say, "Wow, we're seeing continued trends of clinical benefit versus natural history.
We're seeing NFL, a well-acknowledged marker of neuroprotection, going in the right direction in a dose-dependent fashion. We walked away from this saying we did everything we needed to do in phase two to give us confidence of phase three. I think a lot of people were looking at these data as a mandate on accelerated approval. We all would like to get this approved as quickly as possible. I think we have to bear in mind this is a hard disease, but I think in many ways, it was underappreciated. This data set gives us more options to think about evidence that Huntington lowering is having an impact. We continue to see the early 12-month dose-dependent clinical signal we saw earlier.
We are seeing stuff at 24 months that not only shows in probably the optimal patient population, stage two, we are having clinical benefit, but we are also having clear objective biological evidence of neuroprotection, which is absolutely supportive of what we think Huntington lowering needs to do if it is going to ultimately be efficacious.
Yeah. You brought up Novartis. That's your partner in this program. I guess given the timing of when that partnership was announced, some had thought that was based on maybe Novartis feeling a sense of confidence, if you will, on an accelerated path being a highly likely scenario. When you were in discussions with Novartis, where was that in the mix outside of them looking at the science and trying to understand the product?
Yeah. I don't think our understanding was this was a deal done based on the base case being a full development program. Novartis had a therapy in branaplam, which was an oral small molecule splicing agent that had a lot of issues in terms of lack of selectivity and specificity, which we know is really important for splicing. They clearly, with Zolgensma, have had a front row seat to Evrysdi and the potential for oral small molecules for CNS diseases. For them, they were interested in having a safe Huntington lowering drug. That's what their diligence focused on. That's what they paid for, and that's what they had. I think the partnership, the joint development committee, is continuing to think about how we can look at accelerated approval pathways. I think that's still there. That's all on the table as we move forward and think about phase three.
This was a deal done, we believe, by Novartis, believing that this is a potential first-ever disease-modifying therapy for Huntington, assuming that the standard phase three trial would be the base case and accelerated would be a great upside.
Okay. How do you, just to wrap things up, think about the competitive landscape for HD? If you have to take a traditional path to approval versus accelerated, how does that change where this product could be relative to the competition?
Yeah. I think probably when we think about the competitors that could be in a position for earlier approval if an accelerated path is open, which, again, I think the accelerated path for the gene therapy is based on 24-month natural history in adrenal valve, which, by the way, our data set now has in addition to the peripheral biomarker. If they were to get ahead first, I continue to believe that having an oral therapy that gets to the entire brain that has durability—you can't redose a gene therapy—is going to be safe and well tolerated. I think will always be a more attractive therapeutic option for this very large population. Keep in mind, in HD, you're talking about 40,000 diagnosed patients. There's multiples of that that are undiagnosed that are earlier stage. That's really where there's a significant opportunity.
Having an oral small molecule that can be given to individuals in their very early stages, maybe even before they are showing symptoms, that is what the physicians say would be the holy grail for the patients and what the patients want. I do not see that ever being a population where gene therapy is going to go. When you add on top of that, there is always a concern with gene therapies, even ones infused in the brain, which we clearly know a lot about. The durability long term is a serious question. You cannot redose. I think this therapy would still really be able to be the leader in terms of disease-modifying therapies.
Bear in mind, this will be commercialized by Novartis. This is a bone-crushing machine, right? Good luck getting against them.
Okay. With that, we're out of time for today. Thank you for joining us on stage. Everybody in the room, thanks for listening, and we'll talk soon.
Thanks. Thank you, Tazeen. Thank you.