All right, I think we're gonna go ahead and get started. Thank you everyone for joining us in the room and online today at TD Cowen's 2026 Healthcare Conference. I'm Joseph Thome, one of the senior biotech analysts here on the team at TD Cowen. It is my pleasure to have with me this morning for a fireside chat, two members of the PTC team. We have CEO Matthew Klein and CFO Pierre Gravier.
Thank you both for taking the time to be here, and obviously a good year of execution and development for the company. Maybe if you wanna just hit the high note, you know, what were the main standouts for 2025 and the beginning of 2026? What should investors be looking at for the rest of 2026? We can kinda jump into the individual programs.
Sounds good. Thanks Joe, for having us. 2025 was a very successful year for PTC, and the highlight of the year was the first approvals and global launch for Sephience for kids and adults with PKU. Within six months, we achieved approval in the U.S., in Europe, and Japan, and the launch is off to an incredibly strong start with over $111 million in the first 5.5 months. That's really a testament to the highly differentiated profile of Sephience, to the significant unmet need for PKU patients, and our team's ability to execute globally.
In addition to the Sephience revenue, we had strong contributions from our more mature products, exceeded revenue guidance for the year. Our OpEx came in below guidance for the year, and we closed the year with $1.95 billion in cash. A very strong cash position that gives us continued flexibility, as well as protection from external, let's just say, uncertainties.
2025, we also had significant developments in our R&D portfolio, advancing a number of programs, including those from our RNA splicing platform. We come into 2026 in a very strong position, given the strong start with Sephience, and we see continued momentum and continued success for a product that we clearly see as a multi-billion, we said $2 billion + global opportunity, and all indicators are pointing in that direction.
2026 will be about continuing penetration in the U.S., we said by the end of the year, we expect to have commercial patients in 20 - 30 countries. We also look forward to continuing to advance a number of our programs in our R&D portfolio. We've also said, given our revenue guidance and expense guidance, we have the potential to reach cash flow break even this year, which would be a significant milestone for the company.
Great. Obviously, we'll maybe start with Sephience 'cause that's where we're getting the most questions and I'm sure you are as well. As you mentioned, obviously an extremely solid start to the launch here. Maybe can you give us a breakdown as where you're seeing the early uptake? Maybe before we hit geography, we'll hit on the types of patients. Are these naive patients? Are they switch patients? Are they classical, non-classical? Kinda where are you seeing the most excitement for the drug since launch?
I think one of the key observations early in the launch is breadth. Breadth across patient subtypes. We're seeing less severe than severe classical patients with non-BH4 mutations. Full age range, patients who are getting on who are a few months old, up to someone who's 80 years old. All different segments, led by those who've tried and failed previous therapies, but we're also seeing early penetration into the therapy-naive patients. This was a segment that people said you may never penetrate, let alone early in the launch. I think the early traction there really reflects how significant an opportunity this is, how the total addressable market really includes, in the U.S., the 17,000 patients with PKU. We're also seeing breadth of penetration in terms of Centers of Excellence prescribing.
We shared that through the end of 2025, we had at least one start from over 80% of the Centers of Excellence. That is atypical this early in a launch. Usually, it's the 80/20 rule goes the other way, where you're penetrated into a small number of centers and have to work to get to the other not the case here, where we're in 80% of the centers and we'll continue to work to penetrate those centers.
When you put all of this together, the early breadth is what gives us such continued confidence that we're gonna have strong momentum through 2026 and beyond, and why we believe this is such a significant opportunity. Again, the fact that we're getting into those adult naive patients and those who failed therapies as the drivers early on just speaks to the true potential of this launch as we continue to move through 2026.
Maybe can you talk a little bit about what the sales force is hearing in terms of maybe patients that were almost waiting for something new? Obviously, there hasn't been a new mechanism in quite some time or a new option for these patients. Were there patients waiting? Maybe what is the key that the company needs to do to keep this interest, I guess, kinda going forward and expanding?
Yeah. I think the important point is the interest is there, as you pointed out, Joe. This is a community, 17,000 in the U.S., we've said about 58,000 globally in areas where we can commercialize, where there is a strong desire for a therapy that is safe and well-tolerated, effective at reducing phenylalanine, and potentially enabling individuals to liberalize their diet. There hasn't been such a thing in PKU yet. Yes, there was a great deal of excitement, and that excitement hasn't gone away. In fact, it's grown.
Because if you look on social media and you see the stories that folks are sharing of getting on the drug, enjoying foods for the first time that they never enjoyed, moms being able to have the same breakfast, you know, kid being able to have the same breakfast as they have for the first time ever, being able to go to school and have the same lunch as the other kid, There's no greater endorsement of the potential transformative ability of this drug than these patient testaments.
These resonate throughout the community, and they're incredibly helpful in continuing to fuel excitement of patients getting on drug, fueling the market pull, as well as reaching some of those naive patients or patients who are sort of far from the clinics to wanna come back and try a therapy that could be important in changing their lives.
The other part outside of patient finding is keeping patients on drug. Obviously, it's early in the launch. Are you able to share what you're seeing in terms of patients refilling their prescriptions? What proportion of patients do you think will and won't, I guess, just based on the clinical data itself and maybe how are you tracking on that?
Absolutely. As you point out, the keys to a launch are find the patients, get them on drug, keep on drug, and we're in the scenario here where you have Newborn screening, so the patients are identified. It's a well-aggregated community with 104 Centers of Excellence, which makes these patients tractable and ability to get them in. What we're seeing, early days, but we're seeing very high refill rates, very low discontinuation rates. We shared recently as of the end of the fourth quarter, we were in the low single-digit percent. Again, early days, but I think this speaks to the motivation of, for physicians to keep, or prescribers to keep individuals on the drug if they're seeing a response, and response we're learning can take many forms.
It absolutely can be the quantified, or quantifiable reductions in phenylalanine, the ability to liberalize diet, also feeling better. We're hearing stories of individuals getting on the drug, anxiety is decreasing. Brain fog, that cloudiness of thinking individuals get, with PKU when their phenylalanine level's high, that's getting better. What we're hearing also from payers, we've talked about we now have policies from payers covering over 200 million lives in the U.S. No step edits, we can talk about why we believe that is, but also an idea that renewals can be based on Phe response, protein intake, also overall feeling better, medical benefit. We are hearing adherence is coming from all those different sources.
Maybe just because you alluded to the step-through component, I think that was one of the worries going into the launch, especially with the availability of generic Kuvan, is that you would have to start a patient on generic Kuvan, follow them for a certain period of time, and then maybe have access to your drug. Maybe, A, is even the process of failing a generic Kuvan that challenging because it seems like you know pretty quickly, and B, what are you seeing in the real world?
Look, I think one thing we can say, there were a lot of misconceptions heading into this launch. You know, number one was that there are these adult patients who'll never come back. They're coming back. Two was you're gonna have to get through Kuvan before you can get on Sephience. What we've seen in the policy so far has been no step edits. Part of the reason for that is our AMPLIFY study.
We were able to go to payers with a study that was a head-to-head crossover study that demonstrated as what we've seen in previous studies, that any individual who responds to BH4 or sapropterin branded or generic has a better response with Sephience in terms of either Phe lowering or diet liberalization. The head-to-head study quantified that looking within individuals, showing that on average, there was 70% greater reduction in phenylalanine with Sephience than with BH4.
When you can put that in front of a payer and say, "Look, if they're gonna respond to one, they're gonna do better on this, and this is how much better on average," it really takes away that need to prove or fail one to get to the other. I think this was a good example of us, you know, being prepared with having very important data early on that's meaningful not only for prescriber uptake, but also for payers.
Maybe can you talk a little bit about the progress of the launch in Europe and ex-U.S. geographies specifically. Obviously, at the beginning of the German launch, there's a little bit of a you set your price, but you've indicated that you wanna maintain a narrow pricing corridor. I guess, how should we think about pricing ex-U.S. and maybe the overall ex-U.S. opportunity?
We were very clear from the beginning that this was a significant global opportunity, and we have a global commercial infrastructure that has proven itself time and time again to be able to effectively navigate government reimbursement, political challenges, depending on what region of the world you're in, and done that quite well. As you pointed out, we did launch in Germany in July, where we were able to set the price for six months period. We're now in that pricing and reimbursement period.
We did see early interest, and we're seeing continued interest in Germany. Outside of Germany and Europe, we've also been able to leverage Named Patient Program. Being able to set a price and get paid drug in other countries in Europe while we go through the sometimes lengthy formal pricing and reimbursement procedures.
Outside of Europe, we prioritize Japan as a high-value market. We achieved approval in Japan in December. We expect to launch in early Q2 or no later than early Q2. Pricing and reimbursement is just about done there. It's a very formulaic approach. In fact, BioMarin's drugs there had the highest prices in Japan than anywhere in the world, and we expect that our price in Japan will be on par with the price in the U.S. Importantly, once you have that pricing agreement in Japan, it's set for 10 years.
Matching with the orphan exclusivity, so there's no need to renegotiate price and regardless of what happens outside of Japan. Again, about 1,000 patients in Japan concentrating 12 Centers of Excellence. Once we had the approval in December, our teams were out in the field already promoting, so we're looking forward to that being an exciting contributor as we move into 2026. We had the approval in Brazil a couple weeks ago, and again, while gaining formal access and reimbursement through the CONITEC and CMED systems will take some time, our teams are very well-versed in leveraging the judicialization process to get patients on drugs soon. Again, we look for contributions there at the back half of the year. Similarly, Middle East, North Africa, Russia, Commonwealth of Independent States, we look forward to contributions in 2026.
Great. As we think about the cadence of the launch, obviously Q4 was spectacular and I think above everyone's expectations. Is there any seasonality in the business? Often with drugs, obviously Q1 can be a little bit seasonal with sort of insurance resets. I guess this is also in the context of a brand-new launch, so it's hard to know. I guess anything you wanna call out for investors that they should be on the lookout for.
I would just say we're expecting continued strong performance through the year. We've talked a lot about why we see this as such a significant opportunity. Again, just with 17,000 patients in the U.S., the significant unmet need, what we're seeing early on, the penetration rates we would need in the U.S. along with what we're doing ex U.S. to get to $2 billion+, we think are very doable. We have IP protection out to guided out to 2039, there's a long way to go here. We see this, again, as just a very strong opportunity and a continued strong momentum.
Great. Maybe one for Pierre, but we'll see. Obviously you have the product revenue guidance for the year. Didn't kinda specifically break out the components of that. Are you hinting at the proportion that would be Sephience? Maybe what are the most important things as we look forward to for the next year as to hitting sort of the top versus the bottom end of that guidance?
Yeah. Look, we said the vast majority of the 2026 guidance will be coming from Sephience. We were not more specific. If you look at the business, right? Sephience, strong launch momentum, as Matt mentioned, and we discussed, you know, we could do at least $2 billion+ globally. Not this year, of course, that's how we're thinking about the opportunity. In terms of the rest of the franchise, the more mature products, DMD, we expect some pressure. If you look at EMFLAZA, I mean, we did $146 last year. At peak was $255. That's, you know, two years post-generic, still doing well, but there's now 10 generics. You should expect a decline. They don't give us the heads-up.
Only takes one to, you know, to reduce their price further. We haven't seen it yet, but, you know, again, that's how we thought about it. Translarna, obviously last year in Q1, we still had full European sales, and then, you know, for the rest of the year, of course, we saw some decline, and you should expect, you know, some pressure in LatAm or the CIS countries. That's how we thought about the guidance, starting in 2026.
You know, and of course, based on how the franchise is doing early on, we'd be, as we've done years past, positioned to raise guidance as needed. I think the other important point, as we mentioned earlier, is that where we are with guidance to start the year and our expense guidance, we're in position to be cash flow break even for the year, which I think would be a significant milestone for the company.
Great. Maybe last question on the PKU side of the business. Is there any competition that you see coming that would be worrying or even potential use in combination? Obviously, we get some questions on Otsuka, but it seems relatively open in terms of development path. Kinda just curious how you're thinking about that.
Absolutely. I think there's a number of things out there in development as we know. Are we worried about any of them? No. Do we find some of them interesting? Sure. I think the kidney-directed therapies, it's a very interesting approach. There's a lot of open questions, well, as one would expect, while still in development. Otsuka started their late-stage trial in adults only. Their inclusion criteria allow for continued use of other therapies, which I think tells you very clearly they anticipate that the kidney-directed therapy is gonna be ones that are gonna be used in conjunction with other therapies, sort of as a cocktail approach. There's certainly earlier stage stuff we've heard about with other gene editing or therapy technologies.
Look, I think we can all agree those are interesting but have a very long way to go and have a number of significant questions in terms of broad applicability as we're able to have with Sephience. Just looking at the timelines for these other therapies and the early momentum we have and the market capture we have, I think we have, it will be established as the standard of care first line of treatment before any of these come forward to the market, if successful.
Great. Maybe we'll jump over to votoplam or PTC518 and the deal with Novartis on Huntington's, which was obviously excellent, especially given the context of kind of the evolving Huntington's landscape. I guess maybe can you hit the highlights of the data that you've seen that is most exciting maybe for the phase I, II experience? You've designed the phase III study, maybe what are the key trial design metrics there?
Yeah, look, I think we're very excited about what we've seen so far with votoplam, and we've talked a lot about how votoplam follows on the heels of the successful development and approval of Evrysdi. We understood what it took to discover and develop a small molecule for a CNS disease. There was a blueprint. We followed it. Everything we've seen early on in the votoplam data support that we're on that same path. You know, the readout from PIVOT-HD thus far has shown really a number of important things. The drug is doing what it's supposed to do. We've evidence of dose-dependent blood Huntingtin lowering. That validates the mechanism of action, that we're getting target engagement, again, we're doing what we need to do.
The biodistribution data showing that we're getting greater CSF exposure than plasma exposure tells us not only is the drug doing what it's supposed to do. It's going where it's supposed to go to do those things. The early clinical effects we're seeing, both in the placebo-controlled portion at 12 months and then what we shared early on at 24 months, these signals of early clinical effect now say, "Okay, the drug is doing what it's supposed to do, it's going where it's supposed to go, and it's moving things clinically, as well as from an NfL standpoint, from a biology standpoint, that it's gonna need to do to ultimately have efficacy," and then the drug is continuing to demonstrate to be safe and well-tolerated.
When you put it all together, that's about as good as it gets for a neurodegenerative phase II neurodegenerative disease asset, which is why we're enthusiastic about moving into phase III. Novartis has moved quite quickly in aligning with FDA on the design of that trial, setting it up so that it could serve either as a confirmatory study if the accelerated approval portal were open. If not, it's set up to be a registrational trial. They're moving quite quickly to get that trial up and running.
Maybe on that point, because I think at phase III was obviously the messaging of a base case scenario, which I think is great. It came out that maybe there is this still opportunity for an accelerated path. When might we know more about that? Would that be based maybe on the phase II experience? We've also mentioned an interim in the phase III. Would that come from the interim in the phase III? Kind of, what are next steps on a potential accelerated pathway?
Yeah. I'm sure, Joe, that question's on everyone's mind this morning, more so than any other morning. Look, I think we have what's very important to understand is we're in a very different framework than a gene therapy, for example. We're in a center for drug development. We're in CDER, where there's experience approving small molecules or for neurodegenerative disease through the accelerated pathway using surrogate endpoints. We have placebo-controlled data. We have objective biomarkers of target engagement that validate that we're having dose-dependent lowering in huntingtin protein.
Again, this point that the drug is doing what it's supposed to do, and we have early signs of clinical effect, which are important. There'll be the 24-month... and also a significant greater exposure, right? I mean, we had over 130 or so patients in the phase II study who've been exposed to the drug, which gives you a much broader understanding of the therapy.
We'll have a data readout in the first half, which will be once all participants cross the 24-month time point. I think that'll give us another look at the longer-term efficacy data. We had pre-specified in the open-label extension protocol that we'll be using the natural history database to contextualize the treatment response. We also have the ability to look at not only matching to the treatment group, but also leveraging the placebo data to further inform what the placebo group could have done over 24 months. We'd be looking at that as supportive of the biomarker effect of reducing Huntingtin protein, which is the disease-causing protein.
The plan would be to get those data, look at them, and if the data support it, have the discussions with the regulators around a potential path for small molecule approval. Then, as mentioned, the phase III study is already moving towards getting up and running in the first half. That could be a registration study, could be a confirmation, confirmatory study if there is an accelerated approval. There's been, Novartis has shared there'll be an interim analysis of that trial as well, which could be another opportunity to potentially collect data that could support an accelerated approval. A number of different options here. I think we are comfortable that now we are sitting in a leading position for disease-modifying therapy for Huntington's disease.
That's great. Maybe we'll jump over to Friedreich's ataxia and vatiquinone. Obviously, you had the recent Type C meeting, and seemingly, maybe a couple options came out of that, but the most important was that this could be open label. I guess what do you know in terms of what an open label study would need to do? What do you still need to understand with the FDA?
This was something that came from the neurology division in CDER to us, a suggestion saying that based on what they've seen so far, that they would like additional data for us to resubmit the NDA for vatiquinone, and they suggested that those data could come from a well-matched study with the FA-COMS natural history database of Friedreich's ataxia, which they used as well in the Skyclarys approval years ago. Obviously, that would be a very high POS opportunity for a phase III. There's still a significant unmet need for pediatric and adolescent patients with FA, and I think there's clearly a need for other treatment options for adults as well.
We have developed a protocol and analysis plan that would outline how we would do the matching and how we would meet all of the FDA criteria for such a study, and we'll plan on meeting with the agency in the second quarter to align on that protocol and analysis approach. If we're aligned and we have the opportunity to move forward with such a study, then we're well-positioned to move quickly to get that up and running.
What do you think about the opportunity in Friedreich's ataxia for the therapy if it is successfully developed? I guess where is the unmet need kinda remaining with what we have with Skyclarys and, could you do combinations? Kinda how are you thinking about that?
Yeah. Look, I think right now there is no approved therapy for individuals under the age of 16. That is about one-third of the patients in the U.S. with Friedreich's ataxia. That's a significant unmet need. We also know from the treatment experience there's a significant number of adults who've either not been on Skyclarys or have not stayed on Skyclarys, I think there's a really a need for a treatment option that is effective and safe and well-tolerated. I think there's a significant market opportunity even with the approved therapy, not only in the unmet need of the pediatric and adolescent patients, but for the full spectrum of Friedreich's ataxia patients.
Which is why, again, if we're able to align with the agency on this protocol in what we believe could be a very high POS trial, it's a high POS phase III trial for what we believe would be a significant market opportunity.
Obviously the company has done a good job with BD, with Agilis and BioElectron and obviously Censa with sepiapterin or Sephience. What's your appetite for doing maybe any more BD? We'll get into the earlier pipeline, kind of is there anything standing out that you wanna tuck into the story?
Yes, there is. First of all, you know, we closed, you know, we have $1.95 billion cash, and that's, you know, very important for us. We can all agree macroeconomics are, you know, unstable these days, so that gives us all the flexibility to, one, focus on executing on Sephience, you know, the global launch going in 20 - 30 additional countries this year, develop our pipeline, you know, on both the splicing and inflammation platforms. You know, we have a global infrastructure with capacity and obviously we have appetite, and we've been successful in the past. There's no rush. We are laser-focused on Sephience and unlocking the full potential of the drug and the $2 billion+ opportunity. We'll be opportunistic. Are there things that, you know, we can leverage and be synergistic with our commercial sales force? Absolutely.
Great. Obviously at your Analyst Day last year, you unveiled quite a few early-stage programs across ferroptosis and splicing and others. I guess we don't have time to get through all of them today, but, do you have, I guess, a favorite child in the early pipeline? What one do you think maybe will yield data first that investors should maybe be paying most attention to? Just how should we prioritize that?
You know, we love all of our children equally, of course, Joe, as you know. Look, it's exciting. One of the things we've done in research is really focused on the science that PTC uniquely has. I think the splicing platform is an RNA technology platform that's already, you know, it's a goose that's laid two golden eggs already. We've made a number of learnings that allow us to continue to advance programs forward. We have the MSH3 program, which we expect a development candidate on soon. We think that could be a very important mechanism for HD, for DM1, and other diseases as well.
We've talked a lot about how we believe that platform, as any other important, validated, valuable platform would be, is a source of not only PTC-discovered and commercialized therapies, but also potentially strategic partnerships for non-core therapeutic areas such as larger neurodegenerative disease and oncology, where there's certainly splicing targets that could be very valuable to those whose, you know, those areas are in their wheelhouse. On the inflammation side, we're very excited about the NLRP3 program. We've talked a bit about that molecule and how it compares favorably in terms of specificity and potency compared to others that are out there. We look forward to moving that into phase I in the second quarter, we're looking forward to advancing other therapies into development candidate stage and clinic in the near future.
Great. I know at the beginning, you indicated obviously coming in under OpEx guidance and the guide for 2026 is solid. I guess how should we think about expenses moving forward, and is the sales force right-sized? Is there any sort of additional movement between DMD and Sephience that you could do, want to do? How are you thinking about that and as it relates to expenses?
No. As we said, we're fully leveraging the existing infrastructure that was in place for the global launch. You should not see increase there. Actually, you know, OpEx were reduced. As we continue to develop an R&D pipeline, you should not see changes there. We showed and demonstrated we're gonna be very disciplined. Our goal is obviously to, you know, to have the potential to be cash flow break even this year and then go to profitability and accelerate that. That's how we should think about OpEx.
Great. Awesome. Well, with that, I think we're at time, but really great progress, and look forward to seeing-