Hello, thank you for standing by and welcome to the PTC Third Quarter 2022 Financial Results Conference Call. 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'll need to press star one- one on your telephone. Please be advised that today's conference may be recorded.
I would now like to hand the conference over to your speaker today, Kylie O'Keefe. Please go ahead.
Good afternoon, and thank you for joining us today to discuss the PTC Therapeutics third quarter 2022 corporate update and financial results. I'm joined today by our Chief Executive Officer, Stuart Peltz, our Chief Operating Officer, Matthew Klein, our Chief Business Officer, Eric Pauwels, and our Chief Financial Officer, Emily Hill. Today's call will include forward-looking statements based on our current expectations. Please take a moment to review the slide posted on our investor relations website in conjunction with the call, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements. As such statements are subject to risks that can be materially and adversely affect our business and results of operations.
For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent Annual Report on Form 10-K and quarterly report on Form 10-Q 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 to 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. Stu?
Thanks, Kylie. Good afternoon, everyone, and thank you for joining the call. I'm pleased to share PTC's strong third quarter results. We continue to demonstrate strong execution and are moving forward on our 2022 milestones. Our marketed products continue to generate strong revenue growth, and we are advancing our broad and deep pipeline of new therapies to treat diseases with significant unmet medical needs. Our mission at PTC is to discover, develop, and commercialize innovative therapies and to bring them to patients with rare disorders, and in doing so, to create significant value for all of our stakeholders. Today, PTC has five marketed products and seven development programs focused on treating diseases of high unmet medical needs. We continue to build a robust pipeline of potential new therapies that at steady-state we expect to deliver one therapy every two to three years.
Moving to our performance in the quarter, we achieved $217 million in total revenue, representing a 57% increase over the third quarter of 2021. DMD revenue was $131 million in the quarter, an increase of 15% year-over-year. Based on continued strong performance across all our commercial portfolio, we are increasing our 2022 DMD guidance. This allows us to raise the low end of the total revenue guidance, and Eric will go into this in more detail shortly. I'd now like to provide a regulatory update on Translarna. The robust results from our study 4041, as well as the continued evidence of long-term treatment benefit from our real-world data from the STRIDE registry, positions us well to convert the European conditional marketing authorization to a standard marketing authorization.
For the regulatory path in the E.U., as planned, we have submitted a Type II variation to convert the authorization to the European Medicines Agency in September. The Type II variation procedure typically lasts for several months, and as such, we expect a CHMP opinion in the first half of 2023. Turning to the U.S., we submitted a meeting request to the FDA to gain clarity on the path of filing an NDA. While the FDA has provided initial written feedback that study 041 does not provide substantial evidence of effectiveness, we are planning follow-up discussions with the agency to understand whether the evidence in the ITT population in study 041, along with confirmatory evidence from other studies could support approval.
Clear examples of this approach of using trial results along with confirmatory evidence to support NDA filing has been seen recently for rare neurological diseases with Amylyx and Reata. Let me now turn to discuss the first marketed product from our splicing platform. Evrysdi has established market leadership in all major markets and is on track to become the global market leader for SMA. Rapid growth is being driven by patient switches, naive patient starts, and label and geographic expansion. In addition, Evrysdi has a 90% retention rate in the first 12 months, demonstrating treatment satisfaction. Late last year, Roche submitted a Type II variation to the European Medicines Agency for use in pre-symptomatic infants with SMA under two months of age. A label expansion already approved by the FDA earlier this year.
The E.U. filing is based on the interim efficacy and safety data from RAINBOWFISH study in newborns, which showed that the majority of presymptomatic infants treated with Evrysdi achieved key milestones, such as sitting and standing, with half of the patients walking after 12 months of treatment. The label expansion in Europe is expected to be approved before the end of 2022. Let me now move to our Huntington's disease program with our next splicing compound, PTC518. As we said before, the global PIVOT-HD study is active and currently enrolling in many European countries and Australia. We expect to share results from the 12-week portion of the study in the first half of 2023. Matt will go into more PIVOT-HD trial specifics shortly.
Our robust pipeline of drug candidates continues to advance in clinical development towards commercialization. We remain on target to achieve three important data results over the next nine months. For sepiapterin, previously 923 in PKU in the fourth quarter, for vatiquinone from mitochondrial disease-associated seizures in the first quarter of 2023, and for vatiquinone in Friedreich's ataxia in the second quarter of 2023. We are also excited to announce that we have entered into a strategic financing collaboration with Blackstone Life Sciences. This collaboration will support our mission to build enough programs in our pipeline at steady state so that we can deliver at least one new therapy every two-three years, and so that we can continue to bring transformative medicines to patients globally and create value for all our stakeholders.
As part of the partnership, Blackstone provided an initial $350 million of low cost, low dilution capital with an option for additional $650 million in funding. Emily will describe the details of the financing. With sustained growth in our marketed products and many new products advancing in our pipeline, we continue to build our commercial platform for strong growth for many years to come.
I'll now hand over to Matt for an update on our development program. Matt?
Thanks, Stu. Over the course of the third quarter, we continued to make progress across all of our platforms and expect results from several of our ongoing registration-directed trials in the next six-nine months. I'll start with an update on our BLA submission for sepiapterin. We had a Type C meeting with the FDA in October to discuss the details of the submission package. Based on the discussion, FDA has asked for additional bioanalytical data in support of comparability between drug products used in the clinical studies and commercial drug product. We are currently working with FDA to address this request, and we now expect the BLA submission will occur in the first half of 2023.
Turning to our ongoing registration-directed APHENITY phase III trial of sepiapterin, previously known as PTC923 in patients with PKU, we remain on target to share results by the end of the fourth quarter. The APHENITY trial is a six-week placebo-controlled study with a primary endpoint of reduction in blood phenylalanine levels. To enrich the randomized study population for likely responders, the study includes a run-in phase during which potential subjects are treated with sepiapterin for two weeks, and only those demonstrating response to sepiapterin are randomized. Following completion of the six-week placebo-controlled study, all subjects will be eligible to enroll in a long-term extension study. Turning to the Bio-e platform, we have three ongoing registration-directed trials. Two with vatiquinone, the MIT-E study for mitochondrial disease-associated seizures, and the MOVE-FA study for Friedreich's ataxia. One trial with utruloxostat, previously known as PTC857 for ALS.
Both the MIT-E and MOVE-FA trials are now fully enrolled, and we continue to expect results from the MIT-E trial in the first quarter of 2023 and from the MOVE-FA trial in the second quarter of 2023. Enrollment is ongoing in the CardinALS global placebo-controlled trial of utruloxostat in ALS patients. The CardinALS trial is a six-month placebo-controlled study with a target enrollment of approximately 215 subjects. Subjects will be randomized 2 : 1 to receive utruloxostat or a placebo. The primary endpoint of the study is change in the ALSFRS-R disease rating scale from baseline to six months, with secondary endpoints capturing other aspects of disease morbidity as well as mortality. Turning to our splicing platform, as we recently shared, we are actively enrolling the PTC518 PIVOT-HD phase II trial at our European and Australian study sites.
Enrollment in the U.S. is paused as the FDA has asked for additional data to support the proposed PIVOT-HD dose levels and duration. As a reminder, PIVOT-HD is a 12-month placebo-controlled trial of PTC518 in Huntington's disease patients and initially includes two dose levels, 5 mg and 10 mg, with the potential to study a third dose, which will be based on the findings from the 5-mg and 10-mg dosing groups. You will recall that in phase I, we observed a ratio of plasma to CSF exposure of approximately 1- 2.7, a relationship that could potentially allow us to treat patients at a lower dose and still achieve the desired 30%-50% HTT protein lowering in the brain.
We have been asked why we have selected 5 mg and 10 mg as the starting dose levels for the PIVOT-HD trial since we studied higher doses in the phase I healthy volunteer study. The PIVOT-HD dose selection was based on both the percent lowering of blood HTT levels and the ratio of plasma to CSF exposure observed in phase I. In the phase I NAV study, we observed approximately 40% reduction in blood HTT levels at the 15-mg dose and approximately 60% reduction in blood HTT levels at the 30-mg dose. Given the observed ratio of 1- 2.7 of plasma exposure to CSF exposure, we would expect to have an even higher level of CNS HTT protein lowering at the 15-mg and 30-mg dose levels.
Accordingly, given our stated target HTT protein lowering of 30%-50% in the brain of HD patients, we have selected 5 mg and 10 mg as starting dose levels. If the plasma to CSF ratio in HD patients observed in PIVOT-HD is consistent with what was demonstrated in healthy volunteers in phase I, dosing at 5 mg and 10 mg may very well achieve the desired 30%-50% HTT protein lowering in the brain. Of course, if the ratio of plasma to CSF exposure in HD patients is closer to 1:1, we have the ability to study higher dose levels in the PIVOT-HD study. We can also confirm that the protocol approved in Europe and Australia for the 12-month PIVOT-HD study includes the ability to potentially study a 20-mg dose level if needed. In terms of study design, the PIVOT-HD study includes two parts.
An initial 12-week placebo-controlled phase focused on PTC518 pharmacology and pharmacodynamic effect, as well as CSF exposure, followed by a nine-month placebo-controlled phase focused on biomarkers, including CSF HTT protein levels, brain volume changes on MRI, and plasma and CSF neurofilament light chain levels. We look forward to sharing results from the 12-week portion of PIVOT-HD in H1 of 2023. Overall, we are very excited about our continued progress across our development programs and look forward to sharing results from several of our studies in the near future.
I'll now hand the call over to Eric to provide an update on our commercial portfolio. Eric?
Thanks, Matt. It is exciting to see the progress from our pipeline, and the commercial team is eager to bring our innovative treatments to patients to address a high number of unmet medical needs worldwide. Our global customer-facing team has delivered yet another outstanding quarter. DMD revenue was $131 million in the quarter, an increase of 15% year-over-year. Our DMD franchise continues to be a key revenue driver and remains robust and geographically diversified. As a result of consistent strong quarterly revenue, we are raising our 2022 DMD revenue guidance to $490 million-$500 million. Starting with Emflaza, net product revenue for the second quarter was $55 million, which represented 16% growth over the third quarter last year.
Continued strong execution by our Emflaza team drove new patient starts supported by continued favorable access, high compliance, and appropriate weight-based dosing for DMD patients in the U.S., which drove the growth. Translarna delivered $77 million in net product revenue for the third quarter, which represents a 14% increase over the third quarter of 2021. This was driven by growth in all regions. Overall, Translarna revenue continues to be globally diversified, and we continue to make good progress with our expansion into newer markets in Eastern Europe, the Middle East, and Latin America, as well as additional markets in Asia Pacific, which is of strategic importance for future growth. Moving to Upstaza and our ongoing launch activities. Following the approval in Europe for the treatment of AADC deficiency, Upstaza was launched at the recent 2022 SSIEM meeting in Germany.
Our team is actively executing on all strategic initiatives of the launch. We are pleased to have already treated our first commercial patient this year under the French Early Access Program, and we anticipate treating additional commercial patients in Germany, France, and Italy in Q4. Treatment center readiness is on track, as well as further preparation for surgical treatment carried out at key European centers. Patient identification is continuing to accelerate, and we are also strongly focused on markets that have early access programs and others via cross-border healthcare. Based on the clinical results and the feedback from the KOLs treating patients to date. We are confident that the durable efficacy and safety data we obtained from up to 10 years of follow-up with Upstaza will support HTA dossier submissions for reimbursement as the first and only treatment approved for AADC deficiency patients 18 months and older.
We have guided to $20 million -$40 million in revenue from Upstaza and continue to work towards this in the fourth quarter in France, Germany and Italy. Shifting gears in Latin America, our team continues to progress with Tegsedi and Waylivra. In Brazil, following the innovative classification for Tegsedi, we delivered the first group purchase order from the Ministry of Health earlier this year. Furthermore, patient identification continues to be strong, particularly in remote areas where Tegsedi's self-administration is a significant advantage over the competition. We anticipate to receive an additional group purchase order in the fourth quarter. Finally, discussions continue to progress with Conitec, the National Commission for the Incorporation of Technologies, for inclusion of Tegsedi in the essential drug list, which will simplify the access to hATTR amyloidosis patients.
For Waylivra, we continue to grow our patient base across Latin America for the treatment of FCS. Patient identification continues to progress, and we are pleased to have received the first group purchase order from the Ministry of Health in Brazil, which we anticipate to deliver in the fourth quarter. This is an important milestone for our FCS patients awaiting treatment. As a reminder, last December, we submitted an application to ANVISA in Brazil for approval of Waylivra for the treatment of FPL. If approved, Waylivra will be the first approved treatment for FPL in Brazil. This will mark the first approval globally for this indication. We anticipate a decision later this year. In conclusion, this is a very exciting time for PTC, and in particular for our global customer-facing teams. We are laser-focused on delivering a strong finish to 2022 and setting the foundation for an even more successful 2023.
Now, let me turn the call over to Emily for a financial update. Emily?
Thanks, Eric. Before turning to third quarter financial highlights, I would like to describe the strategic financing of up to $1 billion that we have just closed with Blackstone Life Sciences. This transaction allows PTC to accelerate our revenue and innovative pipeline. This partnership also puts PTC in a strong position to pursue future BD opportunities, and moreover, to execute without near-term dependence on market dynamics. The financing consists of $350 million upfront. This includes $300 million in senior secured debt at 7.25%+ SOFR, with a seven-year bullet term and an additional $50 million of equity. Additionally, the term loan includes another $150 million in delayed draw debt that can be accessed in the first 18 months after close. Lastly, the total financing includes a potential $500 million credit line for mutually agreed upon business development opportunities.
Importantly, the term loan investment by Blackstone will be secured by a limited assets collateral bucket, including and limited to Translarna, Emflaza, Upstaza, sepiapterin, and vatiquinone. We look forward to continuing to deliver on our mission of developing and commercializing breakthrough therapies globally. I'll now take a few minutes to review our third quarter financial results. Please refer to the earnings press release issued this afternoon for additional details. Beginning with top-line results. Total revenues were $217 million for the third quarter of 2022, a 57% increase over the third quarter of 2021. This was driven primarily by net product revenue from the DMD franchise of $131 million, Evrysdi royalty revenue of $33 million, and an Evrysdi milestone of $50 million from Roche for surpassing annual sales of $750 million.
Our total revenue from the first three quarters of 2022 was $531 million, and consequently, we have narrowed our revenue guidance range to $710 million -$750 million from $700 million -$750 million. This includes DMD revenue of $490 million -$500 million, raised from our previous revenue guidance of $475 million -$495 million, and also includes $20 million -$40 million in revenue from Upstaza, our recently launched gene therapy. Turning now to our DMD franchise. Translarna net product revenues were $77 million, representing year-over-year revenue growth of 14% compared to the third quarter of 2021. This growth was despite FX headwinds and would otherwise have been approximately 30% growth year over year. Emflaza had net product revenues of $55 million or 16% growth year over year.
Non-GAAP R&D expenses were $150 million for the third quarter of 2022, excluding $15 million in non-cash stock-based compensation expense, compared to $118 million for the third quarter of 2021. Excluding $13 million in non-cash stock-based compensation expense. The year-over-year increase in R&D expenses reflects additional investment in research programs and the advancement of the clinical pipeline. Non-GAAP SG&A expenses were $67 million for the third quarter of 2022, excluding $14 million in non-cash stock-based compensation expense, compared to $56 million for the third quarter of 2021, excluding $13 million in non-cash stock-based compensation expense.
Cash, cash equivalents and marketable securities totaled approximately $288 million as of September 30, 2022, compared to $773 million as of December 31, 2021. We're happy to report our recent financing increases our cash balance to approximately $635 million on a pro forma basis.
I'll now turn the call over to the operator for questions. Operator?
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Brian Abrahams with RBC Capital Markets. You may proceed.
Hi, this is Joanne for Brian. Thank you for taking our question. Just could you provide us a little more detail about the initial feedback on Translarna and, you know, what do you plan to include in the data package to address this issue? Thank you.
Yeah. Thanks for that question. What we did was, as you know, we had submitted a meeting request to the FDA, so we gained clarity on the path to the NDA. This was a written one. While the FDA provided us initially some written feedback that study 41 does not meet the substantial evidence of effectiveness. We're now planning to follow up on the discussions with the agency to understand whether the evidence in the ITT population in study 41, along with confirmatory evidence from other studies, could therefore then support approval. I think, as usually is the case with the agency, especially with initial written feedback, it can involve some conversations and some live conversations that we expect to have, where we can have some back and forth.
You know, particularly given some of the long history of the program, you know, the really unmet medical need of the disease and the interest of the patient in the patient community. The fact that really most recently there's been regulatory precedent with other companies in similar situations. I think a clear example of that, which we've seen recently with NDA submissions, especially in the rare neurological diseases you saw from companies like Amylyx and Reata, where initially they weren't accepting the submission and subsequently they then did after conversation. We're looking to, you know, this is the beginning, the first inning of the game here, in which we'll be going back and forth with them.
Makes sense. Thank you.
Thank you. One moment for questions. Our next question comes from Kristen Kluska with Cantor Fitzgerald. You may proceed.
Hi, good afternoon. Thanks for taking my questions. How do you think that this deal with Blackstone and some of your upcoming potential commercial opportunities, if successful here with your late-stage pipeline, could help frame you towards reaching self-sustainability? And I know Emily mentioned potential BD opportunity exploration as well. Can you give a general framework about what you might be looking for and the future balance of in-house innovation as well as outsourcing? Thank you.
Sure. You know, as I think I'll start and then pass it. As I said, you know, and what our plan has been is we've been building through the combination of both external business development as well as internal growth of our drug discovery and development pipeline to bring a product to the marketplace every two-three years. That's what we're building to. We're gonna use a combination of both of those to be able to both accelerate those processes.
The way we look at this from Blackstone gives us a great opportunity to, you know, to accelerate, to take molecules that we have and have additional indications in them, as well as to look, which we always do, for assets that are later stage assets or commercializable or near term commercialization efforts to be able to bring in also to increase revenues and add to our later stage pipeline.
Em, do you have anything extra you want to add?
Yeah, I'll just reiterate that we're obviously very excited about this deal. You know, as you pointed out, it does really provide incredibly attractive financing at favorable terms and allows us to create strategic flexibility to drive innovation, the growth of the business and business development. We obviously want to look for further opportunities to leverage our existing commercial drug development infrastructure. We will look to utilize some of this access to capital for those business development opportunities.
Thank you both. For Upstaza, is the agency now comfortable with the cannula and the surgical procedural items? I guess what gives you confidence that this is essentially the last item that you need to check off before submitting?
Yeah, sure. Matt, you want to take that one?
Yeah, sure. Thanks, Kristen, for the question. The cannula issues appear to be addressed. You know, the issue in the past was that there was a desire for us to have experience using our specific drug product with the cannula for the delivery of the product into the brain of the children. There had been no prior experience with that, and so there was a set of data that included both the benchtop testing showing the compatibility of the product with the device, and then of course, importantly, those surgical procedures where we now have been able to provide them the data that the drug can be delivered safely to the children with that device.
In terms of the ask regarding additional data in support of the comparability analysis, we're well-positioned to provide what they want, which is just some additional samples from the clinical batch material to be included in the BLA. We are fully confident that we can provide those data and be able to move the package forward with the submission, as we said, in the first half of 2023.
Thanks, everyone.
Thank you.
Thank you. One moment for questions. Our next question comes from Eric Joseph with J.P. Morgan. You may proceed.
Hi, good evening. Thanks for taking the questions. I have just a follow-up on PTC518. I'm curious to know whether readout, if the data suggests moving to a higher dose, how confident are you that the clinical pause in the U.S. could be resolved at that point, allowing you to recruit U.S. sites as part of that cohort? Then, secondly, on Upstaza, I guess from following the progress of other new gene therapy launches, it sounds like some European countries are expressing a desire to reimburse over time. I'm wondering if you've encountered that kind of resistance with Upstaza at all and how that might impact revenue recognition if so. Thank you.
Great. I think, Eric, you asked, you were going in and out a little bit on the 518, but I think your question was the ability to go to a higher dose. Is that right?
Not only that, if you have to go to 20 mg at that time point, would you be able to recruit U.S. sites? I guess, would the pause in the U.S. be resolved at that time if you need to go to 20 mg?
Maybe just for everybody, I'll start and remind everyone that PIVOT-HD is a global study that's up and running outside of the U.S. in multiple sites in multiple countries at the dose levels and for the durations that we desire. Just to remind everyone, that includes the 5 mg, the 10 mg, and the 20 mg. All of those went through the regulatory bodies throughout Europe and in Australia. In a sense, that's mainly it. It was only the outlier, there was the U.S. in terms of that. You know, obviously what we're doing is our top priority now is really to get the study enrolled and keep the program moving forward and get the results as rapidly as possible.
In parallel, we'll work with the agency to address their concerns. From our point of view, the most likely thing that we could do in terms of the concerns would be to show them a subset of the data from the results that we get from there. What we're doing is that we're moving. You know, our goal is to move incredibly rapidly, and the good news is that we're able to complete all doses of the groups within those that are approved within Europe and Australia. There's nothing in our view any more telling than actually human clinical data.
We'll obviously bring them results on the subset of patients to try and move forward, but our real priority is really is to move it as rapidly as possible in Europe. The good news is we don't need their permission to be able to go there, but we'll be able to get the results as a consequence of being able to do the trial in all these other sites.
In terms of Upstaza, maybe Kylie and Matt, you can talk about the European in terms of pay as you go.
Yeah, absolutely. Thanks, Eric, for the question. If I heard you correctly, Eric, your question was just around sort of from a contracting perspective, understanding the discussions we're having in Europe at the moment.
Yes, also, there's been some discussion that some countries might prefer a pay-go. Paradigm rather than upfront paying all upfront for some gene therapy products. I'm just wondering if that might apply also to Upstaza and how that might impact your revenue recognition if it is, in fact, a pay-go structure going forward.
Yeah. I think from our perspective, obviously, we're under discussions with a number of health technology assessment agencies in Europe at the moment. I think one of the things that's really important for Upstaza is not just the strong data package that we have that shows the treatment benefit across all patients, but also the durability data. I think this is what's really important for the pay-as-you-go or pay-for-performance perspective. I think that's gonna be what we put our emphasis on as we continue these discussions. Because it's not only that we're able to have that transformational benefit in the patients in the short term, but also the durability of that.
As we've talked about in the past, we have durability with up to 10 years of follow-up. I think that coupled with the strong clinical and safety package, clinical efficacy and safety package that we have allows us to believe that we can focus on single upfront payment.
Got it. That's helpful. Thanks for taking the questions.
Thanks, Eric.
Thank you. One moment for questions. Our next question comes from Joseph Thome with Cowen. You may proceed.
Hi there. Good afternoon, and thank you for taking my question. Maybe on PTC 923 into the end of the year data. I guess ahead of a submission, does all we need here a positive pivotal study? Is there any CMC work that you need to conduct given that this came in from Censa ahead of a submission? Then if you can just kinda lay out, you know, under the context of generic Kuvan and Palynziq from BioMarin out there, what does success look like in this study at the end of the year? Thank you.
Sure. Thanks for that question. Yeah, we're pretty excited about the you know about 923 for PKU. Part of it is because I think we've discussed this before is one of the advantages is that really it's the it's really a better Kuvan. It is that that's because it's far more bioavailable, and you can get it to higher concentrations, which at the end of the day makes this far more effective. That you're able to see that in a You're able to see that in even patients where Kuvan was not shown to be effective in those sets of patients. Right.
I think that's an exciting aspect of the drug and that is that the early results show that we're able to treat more types of patients and show greater reductions of phenylalanine within the blood. You know, we think that in itself because, you know, to remember while Kuvan is there's a huge patient population that hasn't been well treated, and mainly because for those patients it doesn't work. I think we're gonna show that, you know, within this drug and what it's already shown is that it can actually target more patients. I think there's a real commercial advantage there.
Matt, you wanna add something else in terms of the PKU enrollment and how it's progressing?
Yeah. Joe, I would just say that to answer your question, we expect the positive data will be well positioned to move forward towards NDA. All the other components for the package will be ready, and as Stu mentioned, there is clearly a significant unmet medical need for patients with PKU. We're seeing that manifest in the tremendous enthusiasm for participation in the trial in the U.S. and around the world across all levels of severity, including, as Stu pointed out, the classical PKU patients.
Great. Thank you very much.
Thank you. One moment for questions. Our next question comes from David Lebowitz with Citi. You may proceed.
Hi. This is Debanjana on behalf of David. About Translarna. When you say that FDA says that study, zero--
I think we lost her.
Are you there? Hello?
Maybe we can get her back. Maybe we'll switch to the next one and then go back when she's on.
Hi. Sorry. I believe there was something wrong. What I wanted to ask was that, about Translarna. When FDA says there isn't substantial benefit in study 041, are they looking at the benefit in the primary analysis set, along with the real world data or the ITT population? And when can we hear further updates about this?
Yeah. Yes, they took the feedback really that what they took is a pretty rigorous view of saying that you did not hit in terms of the mITT population. Now what we want to talk about is the evidence that would go with to get approval on the ITT population study along with confirmatory. There's the other way we can get approval on this, and there's evidence of this out there, that is on the ITT population in study 041, along with the confirmatory evidence from other studies certainly could actually have approval. We expect you know to be able to have a series of conversations about that to be able to have that particular conversation.
That's, I think, you know, when you look again, what we did is I think you can look back and see some of those examples where minds were changed once clarity on the pathway to discussion, like with Amylyx and Reata, where you see minds were changed after discussion.
Thank you. Maybe one last question on the PKU program. What kind of responder rate are you expecting in the upcoming update in patients who have greater than 600 micromoles per liter phenylalanine levels?
Okay. Matt, do you wanna?
Yeah, sure. We haven't provided any specific information on what we're seeing in terms of responder rates other than to emphasize what we've seen in the phase II study and what we expect in this study, which again, what we saw in phase II was responses across the full spectrum of patients, not only with those with a baseline phenylalanine level of greater than 600 micromole per liter, but importantly also in that subgroup of patients, the classical PKU patients with baseline phenylalanine levels greater than 1200 micromoles per liter, where historically there's been no response in these patients to Kuvan, and we've been able to demonstrate marked reductions in blood phenylalanine levels.
We look forward to seeing robust effects across the full spectrum of severity, as well, at baseline, as well as the different genotypes that can impact PKU. Again, we look forward to sharing those data by the end of fourth quarter, when we have them.
Thank you. Thanks for taking my question.
Thank you. One moment for questions. Our next question comes from Alexander Xenakis with Truist. You may proceed.
Hi, thanks for taking my question. One on Translarna in Europe. Can you remind us if you get full marketing approval, does that change anything with the story as far as, will you be forced to go and renegotiate price perhaps, or do you expect, you know, additional uptake in patient identification or treatment? Does the story change at all, if you get full marketing authorization? Then a second question on Upstaza in Europe. Can you remind us as we progress from the launch, what types of metrics you're considering providing in addition to revenue? Will you be providing the number of patients treated or active sites that are full and ready to go? All that would be appreciated. Thanks.
Sure. Thanks for the question. For the transition in Europe from a conditional approval to a full approval. You know, it's interesting. We've been pretty good about, you know, identifying patients and bringing them on to Translarna. So we have a large number of patients already on. I think the transition from the conditional approval to the full approval also just prevents us all from having to report every year for five years. I think in terms of HTA and such, maybe Eric, you may want to comment.
Yeah, sure. Thanks for the question. I think full marketing approval only helps of course, but every country [audio distortion] actually has their own systems by which they will evaluate the HTA assessment. In many cases a full or conditional approval doesn't really affect too much any of those discussions. We believe that the 041 results along with STRIDE and along with all the previous studies combined, will not only strengthen the current value proposition that we have, but I think it'll give us even stronger position to continually add new patients and strengthen our current pricing structure throughout Europe and the international corridor.
Essentially, while this is primarily, as Stu said, a regulatory where we don't have to file every year for five years, it certainly does strengthen our value proposition, and we'll continue to leverage all of the data to ensure that we maintain the best possible price at this point in time.
Does that answer your question?
It does, yeah. On the Upstaza launch, any additional color on future metrics would be helpful.
Yeah. I think the major metric that we were trying to get was revenues. Right. Kylie, do you wanna comment any more on that?
Yeah, absolutely. I think as we've shared in the past, we were able to identify a number of patients globally, and I think as we achieved approval, the team is working full steam ahead in being able to work with the different centers that we have in Europe to be able to schedule these surgeries and have these patients treated as soon as possible. We were extremely pleased to have already treated our first commercial patient this year under the French Early Access Program, and we do anticipate a number of additional commercial patients in Germany, France and Italy in the fourth quarter.
I think we've done a good job of having treatment centers ready to go across a number of countries, and this has been crucial to ensuring that we have the patients identified, the treatment centers ready to go, and being able to schedule the surgeries so we're able to treat the patients, and making sure that we have the right market access environment to be able to do that. From that perspective, we're focused, shifting the focus towards revenue. We have shared that we will hope to achieve or anticipate achieving $20 million-$40 million in revenue this year, and we're still on track to do that.
All right. Thanks for taking my questions.
Thank you.
Thank you. One moment for questions. Our next question comes from Raju Prasad with William Blair. You may proceed.
Thanks for taking the question. Just want to get some clarity on the FDA strategy with regards to Translarna. So did you guys re-request like a Type A or B meeting, or has it not kind of been clarified what type of interaction you'll have at the agency? Then, you know, going into this meeting, if there's a request to run a supplementary study or something of that nature, would that be something that, you know, you'd be willing to do to try and support approval, or is it really just trying to get the FDA to understand the data set as it stands today? Thanks.
Yeah. Maybe I'll start out in a couple points. You know, clearly what's critical here that we believe is that A, that it's you know just ever since COVID has hit, it's been very difficult to have actually in person to person or for that matter even calls. Most things have been through written communications. You know, that's a relatively slow way to exchange of ideas and make some changes. I do want to emphasize however that the comprehensive nature of the data set that we have, right.
If you think about it, 359 patients, we saw statistically significant results in the ITT data in the six-minute walk test, the timed function tests, the North Star, the registry data demonstrating, you know, some of the hard endpoints like ambulation, preservation of ambulation and lung function. It's a pretty strong package in our view. I think if we in a sense show that, you know, in a way that one of the first studies to have a statistically significant endpoint in the overall population, and then with the data sets that we have, not to mention, you know, a pooled data set of all the patients and how massively statistically significant it is that we think we can certainly have a discussion with them on getting an approval for that. That's the way we want to work towards getting approval for Translarna in the U.S.
Matthew, is there anything else you want to add to that?
Yeah. Well, I would just say that, you know, as Stu mentioned, the things have been a bit different in COVID. The traditional cadence with the agency was always you get written comments that are often quite conservative and maybe don't completely address all aspects of a data package. Then you have the advantage of that in-person meeting to really volley back and forth and find sort of a middle ground and make sure that the agency is fully understanding of the data package. I think that's particularly true in one as complex as the Translarna data package.
We're in a position now where we've gotten that first written feedback that seems to have focused on a potential interest of using study 41 alone to meet that stated substantial evidence of effectiveness criterion that the agency has held out for rare disorders where a single study can suffice, rather than seemingly focus on the clear evidence of benefit in the overall ITT population, along with the confirmatory evidence we can clearly offer, whether it be from the pooled analysis of 07-21 and 20 and study 41 with a p-value of 0.002, showing that the findings of significant treatment benefit clearly are not occurring by chance.
Of course the STRIDE registry where we can confirm that what we're observing in the clinical trials in terms of the slowing of progression are manifesting themselves in important delays in the key morbid transitions of the disease, whether that be the four-year delay and loss of ambulation compared to a matched natural history cohort, the 1.8 years in terms of loss of pulmonary function. Where we are now is really, I think, in the early innings of what could very well be a series of back and forths where we are certain that they're seeing the data and the potential with the data to satisfy what has been used for other sponsors and other rare disorders to meet the criteria for allowance of a submission.
Thank you. One moment for our next question. Our next question comes from Gena Wang with Barclays. You may proceed.
Thank you. Maybe just a quick, you know, follow what you just comment. I wanted to have clarification. For your initial interaction with the FDA, regarding the study 041, did the FDA see your ITT analysis along with the other analysis?
Yeah, go ahead, Matt.
Yeah. To clarify, all of the data were submitted. I would say their comments seemed to focus on the primary analysis group and primary analysis method, which was in the MITT population, emphasizing the fact, as we all know, that we did not achieve significance in that pre-specified subgroup of 300 and greater than five, and stating that given that that did not meet significance, statistical significance, we didn't meet the criterion of substantial evidence of effectiveness. I think where we didn't see clear feedback is on that superset of ITT population. Again, this is the limitations of written feedback, and that's why we look forward to having a conversation with the agency.
Okay. Another question is regarding the PIVOT-HD study. Since you submit the nine-month non-human primate data to the FDA after you initiate clinical study. Just wondering, any concerning safety that could trigger FDA pause the clinical trial. In other words, you know, what was the highest dose you dosed in the nine months non-human primate study? And then what was the toxicity you've seen so far?
Look, I think what's important is, you know, obviously when thinking about how, you know, the role of safety toxicology is always to identify the no-observed effect level and then to have multiples between that and the drug. While we don't really give the details of toxicology program, we were multiples from the NOAEL. We felt pretty comfortable. That you could see was consistent with the same feelings from the regulatory bodies from all the countries that we're in, as well as Australia. I'm reminded those, you know, obviously the role of safety toxicology is to get an idea and to know, you know, what you want to be looking for.
That being said, I wanna make it clear that if these are in, because you go to higher doses, we've not seen any treatment emergent SAEs or AEs thus far. You know, what was observed had nothing to be seen in the clinic. You know, part of the reason we think about that, like we've never seen an example with Evrysdi, I think is a great example where there was obviously a toxicological finding in non-human primates that everyone talked about for quite some time. You know, 7,000 commercial patients later, it turned out, as we suspected, to be specific to a non-human primate and wasn't seen in other species or in patients.
We try and be very careful and not try and tag a drug, you know, in terms of any safety, 'cause we have any issues because we haven't seen any right now. Our goal is, and our top priority is since, you know, it's a global study and it's opened up the sites around the world, is really to keep moving and keep this getting enrolled, and moving forward and, you know, get the results of the data because we think that's the key here. At some point with a subset of results, clinical data to talk to the FDA, that I think is the easiest way to do it, 'cause there's nothing like clinical data to trump everything.
Thank you. Our next question comes from Danielle Brill with Raymond James. You may proceed.
Hi, guys. Thanks so much for the questions. I have a couple on PTC518 as well. I guess first, are you planning to show CSF HTT protein levels now that the data are pushed to early next year? Since it sounds like you're running the full 12-month study outside the U.S. If PIVOT-HD shows a functional benefit, is there a mechanism or pathway for streamlined development path in the U.S. available still? Thanks.
Sure. Thanks for that question. Yeah, so I think just to remind you, we've again, the PIVOT-HD study is a two-part placebo-controlled study, where the first 12 weeks are really focused on the pharmacokinetics and pharmacodynamic effects, and the second part is focused on the biomarkers and outcome measures. You know, from our perspective, the first 12 weeks, what's really gonna be critical there is gonna provide the data on the relationship between dose exposure HTT mRNA and protein reduction in the blood at steady state. We'll also know the exposure in the plasma and the CSF.
I think that's ultimately critical because, you know, the 5 and 10 milligram doses are a reflection of what we've seen in healthy volunteers, which is basically a close to 3:1 ratio that we observe. That sort of tells us about the exposure if we're in that right range. The CSF protein, I think will be, you know, I think we'll have a longer time over the duration of the full year study to look not only at the HTT and the CSF, but also neurofilaments changes, MRI, and other outcome measures as well.
I think from that perspective, you know, you know, in a sense, though, I think it's important to realize is that there are, you know, patients in Europe and Australia are no different than patients in the U.S., and it's well accepted that they're similar patients. The results that you get with this study are no different than the results that you would get from treating patients in the United States.
The mere fact that you know you could use this data, and then if there's any way where we can use a combination of biomarker, whether it's neurofilament, HTT changes in the blood and CSF, as well as changes in brain volume as measured by MRI and other measures, if that's a means for a potential accelerated approval, that would be viable, I think, regardless of where you collected the data. That's our view of the world in terms of can this potentially be used for a potential either accelerated approval or to define what's the best way to do the phase III. We don't think it changes regardless of whether there's U.S. patients in there or not.
Understood. Thank you.
Thank you. One moment for questions. Our next question comes from Kelly Zou with Jefferies. You may proceed.
Thank you for taking my questions. Regarding PTC518, for the patients already enrolled from the U.S., have they all completed study of their first week portion? I just want to quickly confirm on that. For the MIT-E result in the first quarter of next year, can you help to set expectation on what kind of a percentage change in the numbers of observed motor seizures from baseline would be considered clinically meaningful? Thank you.
Sure. Matt, you wanna take that?
Sure. Thank you very much, Kelly, for the questions. Your first question was on PTC518, and the pause in enrollment to the U.S., the impact on U.S. patients. Now, just to contextualize the situation in the U.S., as we mentioned, we had started the three-month study as we had the three-month tox support that with the plan that we would be getting the nine-month tox results and look to amend the protocol not only in U.S. but globally for the full 12-month study to include the 5, 10 and potentially up to the 20 milligram dose levels. Now, obviously, we were very cognizant of not wanting to have any patients have a lapse between the first 12 weeks and the second nine months if there were delays in getting the clearance of the full 12-month protocol.
As such, we, while we initiated enrollment, got study sites up and running, we were able to limit enrollment and so that we had, you know, we had several patients that enrolled in the U.S. because we wanted to make sure that we didn't put too many patients in a situation where there could be a lapse. By the time the pause has occurred, the patients had completed the, they were completed with the 12-week portion of the study. There was no additional impact to those patients because of the way we paced enrollment until we were certain that we could provide enrollment the full 12 months without disruption.
Turning to the MIT-E question, as you mentioned, we expect to have results from the MIT-E study in mitochondrial disease-associated seizures in the first quarter. Maybe just as a reminder about seizures in patients with mitochondrial disease, they are common in about 30%-50% of all children with mitochondrial disease, highly morbid, and often the cause of death in patients with mitochondrial disease. Unlike other seizures, these seizures don't respond to typical anti-epileptic agents because they usually result from disturbances in the energetic pathways that are common in mitochondrial disease, and of course, that are targeted by vatiquinone. So you're in a situation where you have these children who are having severe seizure burden, including up to hundreds a day in some severe cases.
Given the lack of therapies for these refractory seizures, I think most physicians would view even a 25% lowering in daily seizures or monthly seizure rate, as we'll be reporting, would be of significant clinical benefit to these patients. We of course designed the study and powered for a change of a difference of 40% between treatment and placebo groups. We powered it around a 50% lowering in the treatment group, a 10% change in the placebo group, which is consistent with what's been observed in other pediatric epilepsy syndrome studies.
Again, I think even if we were able to capture a 25% reduction in seizure burden, that would be viewed as a really impactful clinical effect given the enormous seizure burden, high morbidity and mortality risk associated with the severe seizure burden in these children who have no therapies that are typically effective for them.
Thank you.
Thank you. One moment for questions. Our next question comes from Judah Frommer with Credit Suisse. You may proceed.
Yeah. Hi, guys. Thanks. Just a quick one on the Blackstone collaboration. Could you give us a little color on the genesis of the arrangement? Were there other financing transactions being considered and kind of this was the most attractive? You know, did you feel that this was the time to raise capital or did this kind of fall into your lap? Thanks.
Yeah, thanks for that, Judah. Emily, you want to take that one?
Yeah, sure. Happy to take that one. Thanks for the question. This is a long competitive process. We evaluated several options, obviously looking at options that were equity related, further royalty options and secured debt options. Frankly, you know, this came out as the best, in cost of capital and lowest dilution option for the company. We were also very happy to be able to structure a tailored deal with Blackstone that holds a limited collateral basket, and therefore excludes some of our, other assets in pipeline. I guess, you know, as far as it comes to timing, as Stu mentioned, we have identified assets in the pipeline where we wanna extend their indications.
You know, the sooner the better to be able to accelerate that innovation and develop the pipeline.
Okay. Perfect. Just on that $500 million in potential credit facility, when you say mutual agreement, does that mean that Blackstone will potentially take ownership with you or it's just that they need to, you know, approve business development that you're planning on taking on?
Yeah, I mean that was an important part of the transaction and I think that's where we're, you know, really excited to have such a highly respected partner with such a broad network. We will, you know, work with Blackstone. We've obviously demonstrated our ability as a proven consolidator to create value through business development. We'll work with Blackstone to further those efforts to leverage their network. Then yes, they will be mutually agreed upon transactions that can be structured in a number of ways, you know, through either upfront funding or royalty financing that will allow us to accelerate our momentum.
Got it. Thanks.
Thank you. As a reminder, to ask a question you will need to press star one one. Our next question comes from Tazeen Ahmad with Bank of America. You may proceed.
Hi, good afternoon. Thank you for taking my questions. Just on PKU, can you give us a sense about how you're thinking about the market opportunity? I know you know, the goal is to present data that is looking to be a better Kuvan but given that Kuvan is generic, where do you think at least initially the drug would place in terms of where in the treatment regimen it would fall? Maybe it's early to talk about that but to the extent that you have a view, would love to hear it.
On the Blackstone deal as a second question, was the Translarna path to U.S. approval part of the discussion and did they get a chance to see that written feedback from the FDA under CDA? If so, thanks.
Great. Maybe let's start with the PKU. Maybe I'll start and then pass. I think that the PKU. I think one thing that we should make very clear is that while there is Kuvan, and maybe this isn't as well known as it should be, but the majority of patients, PKU patients remain either untreated or are not really well controlled while on Kuvan, even with the two commercial products available. There's a large population of patients, that's about 58,000 PKU patients globally, of which a very small percentage are actually controlled by Kuvan. The consequence of that is that there's a huge opportunity here.
The huge opportunity is with a better Kuvan, more patients will be treated and therefore that's really the big opportunity here. Maybe to go through in more detail the market and why that's the case, maybe Kylie do you wanna go through and sort of explain how you think about slicing and dicing the patients who respond and don't.
Yeah, absolutely. Thanks, Tazeen, for the question. I think as Stuart said, we see this as a really unique opportunity. While there's about 58,000 PKU patients globally and two approved therapies, there's still substantial unmet need. We sort of think of the marketplace in broad strokes in the sense there's around 30% of patients that are therapy naive today in the U.S. Of those patients, that includes the classical PKU patient, those that are typically severe and have baseline Phe levels of 1,200 micromolar per liter or more. In the past, these have not been able to see benefit from Kuvan or other treatments. From that perspective, they remain therapy naive. In addition to that, the remaining 70% of the patients that have tried Kuvan, many of them, as Stuart said, are not on Kuvan.
That could be because they either initially fail or because they're poorly controlled over time. There's a substantial opportunity when you look across those three main segments. If you think about the data that gives us confidence going on from the phase II into the phase III study from the phase II head-to-head, PTC 923, sepiapterin, was able to demonstrate benefit in that classical PKU patient, which has not been able to be seen with Kuvan previously, opening up an opportunity for the therapy naive. We were able to see 50% more responders with 923 than Kuvan, opening up the opportunity for those that initially failed on Kuvan. Then even in those that were previously treated with Kuvan, we saw a 200% greater Phe reduction than Kuvan.
Demonstrating data points across all those different patient segments. If you think about requirements for step edits, for example, in the U.S., it's obviously normally around providing documentation for trying a treatment and failing on certain aspects of that. If you look across that 70% of the population, they've already done that. It's a market opportunity that's able to be captured very quickly upon launch. Obviously, as I mentioned in the therapy-naive, there's no mechanistic reason why they should be put on Kuvan to fail. We think there's a unique opportunity, and we think we're able to capture upon it very quickly upon launch.
As for the Blackstone deal, Emily, you wanna talk about the due diligence and--
Yeah, sure. I'm happy to. Thank you for the question, Tazeen. I think everyone on this call can attest that Blackstone conducted very thorough due diligence on the company. Obviously standard diligence on the data we have to date, our regulatory correspondence, our forecast, our commercial assessment. Yes, they have reviewed all of our regulatory correspondences that we have received in writing. I think this is really a testament to you know, Blackstone's belief in the robust long-term potential of our pipeline and our commercial products.
Okay, great. Thanks, Emily.
Of course. Thank you.
Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Stuart Peltz for any further remarks.
Yes. First of all, let me thank you all for joining us on the call today. Obviously, what you can see, we've made significant progress this year and moving forward and delivering on a number of milestones throughout this year in the last three quarters. We also have a number of critical registration-directed studies that are ongoing now, and we look forward to sharing the results of these in the next six-nine months that I think are gonna continue to really both transform and create value for all our stakeholders. As you can see, we're working hard to continue our mission to both discover and develop innovative therapies for rare disorders.
Again, thanks for joining the call.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.