All right. Welcome, everyone, to this session of the Morgan Stanley Global Healthcare Conference. I'm Judah Frommer, one of the mid-biotech analysts here. We're very excited to have Matthew Klein and Pierre Gravier with us from PTC. I'm just going to read a quick disclosure and then we'll get started. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. With that, welcome again, guys. Between your commercial products and pipeline, there's a lot to talk about. Before we dive in, maybe give the audience just a quick intro to the company for those who may be less familiar with the story and how PTC has evolved over the last few years.
Absolutely. First, Judah, thanks for having us.
Sure.
Great to be here. PTC is a global rare disease company that discovers, develops, and commercializes innovative therapies for diseases of high unmet need. We have a robust commercial portfolio with six marketed products that we deliver to patients around the world, as well as a broad R&D portfolio, including two scientific platforms, including our oral small molecule platform, which has already demonstrated to be quite valuable and well-validated. So far in 2026, we're off to a great start with the continued strong momentum of the Sephience launch that continues in the U.S. and worldwide. We remain on target to achieve the important milestone of being cash flow breakeven this year. I think that really is an important milestone for the company, and is something that we've been working for over the past couple of years as we transform PTC into a diversified, sustainable, profitable rare disease company.
Great. It's been a big evolution that we've noticed. M aybe we'll start with that Sephience launch. We're a little over a year in. Sephience revenue is already annualizing above what we've seen for Kuvan and Palynziq in the PKU space. W hat's made this launch different from prior PKU and rare disease launches? Have there been any surprises along the way for you?
Yeah, absolutely. Look, we're incredibly excited about the success of Sephience thus far, and we remain incredibly bullish on the overall opportunity and we're very much on track to reaching that $2 billion-plus level of revenue we've been talking about. I think there have been a number of surprises for everyone, but I'd say first and foremost, what we're not surprised about is the success.
I think this marketplace was quite misunderstood, and there was a belief that since there were two approved therapies that didn't reach that billion-dollar mark, it was hard for a PKU therapy to get there.
That's simply not true.
The success is really attributable to a number of important factors. First, Sephience, the drug itself. It's a differentiated molecule with a dual mechanism of action that uniquely allows it to have benefit for the full spectrum of PKU patients, regardless of severity. It's classical and non-classical underlying mutation, regardless of age, as well as being oral, convenient, and having a very favorable safety and tolerability profile. That's differentiating.
Second is the fact that all the pillars for commercial success were there.
Right.
There is newborn screening, there are centers of excellence. It is a well-aggregated community. All that was missing was a therapy that could address the broad 17,000 patients in the U.S. and 58,000 patients in global markets where we could commercialize. Next is our team. We are an experienced team in terms of delivering rare disease therapies to patients, not only in the U.S., but globally. We have a patient services team that is very well accustomed to helping manage through a competitive landscape, providing necessary patient support. Quite simply, we are very good at executing on commercializing rare disease drugs. W hen you put that combination together of the marketplace, the quality of the product, and the execution of our teams, this is what you get.
Right. Okay, great. You guys had a significant presence at the SSIEM meeting last month, where you shared some new data and analyses for Sephience, including data on Phe normalization. What were the highlights from your data, and what do they mean for PKU patients in the real world?
We were certainly excited to have 17 presentations, to be able to continue to reinforce the differentiated nature of Sephience, as well as to bring forward real-world evidence that is substantiating that Sephience has been able to deliver meaningful benefits, not only in terms of phenylalanine lowering, but diet liberalization, increased protein intake in the full spectrum of patients. I think a couple of things I want to point out. One is we are still early in this launch. I think when we think about all the success we have had to date, we still believe we have a very long way to go just given the size of the population and the market opportunity. The SSIEM and these kinds of conferences are part of the launch playbook.
You basically come in a year into the launch and be able to continue to support product differentiation and help foster uptake for the large number of patients who we believe can benefit from Sephience. I'd say some of the key data points were the fact that people have asked, "Well, we know that your data show that any individual who is on sapropterin and a Kuvan brand or generic has a much better response with Sephience, whether in terms of Phe lowering or diet liberalization. W hat about more severe patients in your trial?"
Right.
We had an abstract that showed that in all of our studies, individuals who came in with an over 900 umol/L phenylalanine level had the same response rate as those who had lower Phe. Really addressing that question.
Right.
We then had real-world evidence showing that severe patients with classical PKU were able to enjoy significant Phe reductions and liberalized diet with significant protein intake. That was really important. It's just these opportunities to show again and again why Sephience can be an important therapy for the full spectrum of patients, and also to support the Kuvan switching, to reinforce the fact that if you're on Kuvan and getting any benefit.
Right.
Switching over to Sephience can bring greater benefit. Then finally, you mentioned the normalization abstract. That was really cool. That was from some of our clinical trial data where we showed in those patients who respond, a majority of them are getting to normal.
Right.
Phenylalanine levels. We know that lower is better in PKU.
Just being able to have presentations not only by us, but by KOLs doing their own independent analyses of their data, just further strengthen the value proposition of the therapy.
Okay, great. Heading into the launch, you estimated about 70% of PKU patients had tried Kuvan, and you have seen Sephience uptake among both treatment-experienced and treatment-naive patients, including in adults. How much of the PKU population do you think Sephience could ultimately reach?
It is a good question. That segmentation is something we did early on, and I think a couple of very important things to note there. First, the fact that our estimates of 70% of patients trying Kuvan. Tells us that we should expect that.
Right.
That's why we say we got a long way to go.
Yeah.
On this launch in the U.S. and worldwide. What's also notable, and to your first question about surprises, is early on, we had a number of patients from the naive bucket, that other 30%.
Right.
Who have been tried on the therapy. I think that was a little bit of a surprise because a lot of KOLs who were interviewed prior to the launch said, "Oh, these naive patients are the more challenging patients. Many of them are remote to clinic, and we don't anticipate that they're going to come back to clinic." We ourselves believed that we could help these patients.
Yeah.
We thought that we'd be penetrating that segment a little later in the launch. That's not what happened.
We actually had 30% of patients.
Yeah.
To date have come from that therapy-naive bucket.
Right.
Who tend to be the more difficult to treat patients, classical patients. That's why they're therapy naive.
Right.
Because it was believed that based on their genotype of having BH4 non-responsive mutations or classical mutations, they were not likely to respond to sapropterin, so therefore they weren't tried.
Right.
I think what we are seeing thus far, the data we see, and what we are hearing continue to support that Sephience can be a drug for the full spectrum of patients. We are seeing this, and we are hearing from prescribers saying that this is moving to become first-line therapy and a standard of care. We are also now seeing physicians thinking a lot about saying, "Okay, we have newborn screening for PKU. Maybe we should be now moving Sephience to be starting shortly after birth." We had a very young child start in the U.S. recently with a severe mutation with great result.
We know in Germany, recently there was the first patient who went from newborn screening directly to Sephience therapy.
Wow, yeah.
Again, this is all really exciting for us and reinforces the potential value of Sephience across the full spectrum of patients, whether you bin them by severity, by age, or previous treatment experience.
Okay, excellent. You have achieved, I think you have said 100% penetration across the original 100 or so centers of excellence in the U.S., and you have seen prescriptions from other centers as well. How much of the PKU opportunity is contained within these original 100 centers? How should we think about penetration from a center perspective?
Good question. I think the estimates we had is that about 80% of patients were tied to these centers, and then we found that we had additional centers that were not in the center of excellence.
Right.
Again, this is what happens at a launch.
Right.
You make new learnings. I think for us, some of the important factors, getting to 100% COE penetration this early in a launch is great.
Because in every launch you deal with early champions and those who it takes a little while to get on, but being in every center allows you then to focus on a center by center basis and say, "How do we penetrate deeper and deeper?"
This is just stuff you do in a launch. We have an analytics team that now is able to say, "Okay, we're in 100 centers, and we can now map within these centers what are the key points to reinforce in center one, and what about in center six?" This is exactly the work we're doing in order to penetrate deeper and deeper into these different centers. They come in different sizes, and a lot of these centers, one of the other learnings we've made is that while physicians may be sort of the spokesperson for a center and the individual.
Right.
Who gets interviewed, in many of these centers, particularly the larger centers.
The prescription decisions are being made by nurse practitioners and physician assistants. Then you also have dieticians who are a point of contact for those not getting medical care.
Right.
Being able to understand that on a center- by- center basis helps us then cater our field tactics specifically to each center to help continue to drive penetration deeper and deeper and deeper. Also understand, okay, in a center with seven prescribers, five are prescribing. Why aren't the other two? Okay, what's the data now that our teams have to have to go in and get that? Not only do we think we're well-poised to penetrate deeper into these centers, but we're getting smarter in a way of actually what is that tactical map to achieve that?
Right. Okay, that makes a lot of sense. Heading into the second quarter earnings print, we sense a lot of consternation about discontinuation rates being at this point in the launch. It seems like you guys clearly cleared your own internal bar, and I think investors' bar as well on that front. Maybe talk a little bit about discontinuation rates you're seeing in the real world, how those compare to what you saw in clinical trials. Do you have any anecdotal cases of patients returning to Sephience after having discontinued?
Yeah. We said coming into the launch that in our clinical studies, if you set a bar about 15% phenylalanine lowering, we had 75% of patients got to that level.
We thought all along that in the real world, our discontinuation rate would be in that 25%.
Right.
Neighborhood, plus or minus. We got to Q2, and we said we're about 20%, which is really good for a couple of reasons. One is we believe we're getting close to steady state.
Yeah.
Two, as I mentioned, early on, we've had a number of these more difficult classical patients. To be able to be having that level of adherence said differently than the other side of discontinuation, is really impressive in the most difficult patients.
We know now in the next phase of the launch, we expect to be penetrating deeper and deeper into the switch opportunity.
Right.
The switch patients, those who are on Kuvan, have already demonstrated themselves to be adherent on a once-daily therapy.
Right.
Now you're basically going to be switching individuals from a similarly tolerated once-daily therapy to a superior one with potentially superior efficacy.
Definitionally, these should be more adherent patients.
All this gives us a lot of confidence that we're getting to that flat part of the discontinuation curve, which is really great.
Yeah.
I mean, especially in a disease like PKU, where patients, first of all, you can objectively measure response.
Which you can't do in a lot of diseases. Second, patients use very burdensome dietary supplements and diet restriction in the absence of.
Yeah.
Medical therapy. T hey're only going to come on a therapy if they perceive that there's going to be some benefit.
Yeah.
Or feel better. A gain, it's not the kind of thing where people are going to just stay on the therapy because they have nothing else. In terms of coming back on therapy, we do have that.
Yeah.
A gain, this is one of the things, we talk to folks who say, "Well, how much further can this launch go?" We're in the first inning.
Right.
Right? O ne of the things you do in a launch, and our teams do, is we make learnings.
We've had discontinuations, two main buckets. One is lack of efficacy.
Yeah.
We know that not 100% of patients are not going to respond to Sephience.
Sure.
Then we had other things like patient preference, taste and texture, and things you commonly hear. We were able to take that data point and get a couple of folks on our patient services team to focus specifically on taste and texture. Now we have programs before an individual prescribes Sephience, they can now talk about that.
Right.
Talk about different foods you can mix Sephience with.
Yeah.
We've now had a number of patients come back on therapy.
Got it.
I think that's just a great example of what an experienced customer-facing team can do as you go deeper and deeper into a launch. Leverage the learnings, bring that back, and continue to drive adherence and penetration.
Okay. M aybe just the reimbursement component of compliance. How has that been trending?
Very good.
Yeah.
I mean, the payer policies have been very favorable. Part of this is, coming into the launch, we had the AMPLIFY study.
The AMPLIFY study was a head-to-head study of sapropterin versus Sephience.
It was a crossover study, so we were able to say, for each specific individual.
Right.
What were we seeing. Again, we saw that 100% of individuals who had a response to sapropterin had a better response to Sephience. We quantified that. It was, on average, 70% greater phenylalanine lowering.
We had 100% increase in protein intake. To be able to go to a payer and have those data.
Right.
From a well-done study in hand goes a long way to addressing needs for step edits and things like that. In terms of reauthorization criteria, we have seen it pretty broad.
It could be phenylalanine response, protein response, and also medical benefit.
That is super important because what we are hearing quite often now is that individuals on Sephience are enjoying some of the cognitive benefits, less brain fog.
Less anxiety, improved mood, that may or may not directly correlate with phenylalanine lowering. T his is another opportunity to capture benefit aside from the two quantitative factors, like Phe lowering or protein intake.
Got it. Okay, great. Maybe can you help orient us on the progress ex- U.S.? It has kind of been fast and furious lately. H ow many countries has Sephience launched in thus far, and where are we in terms of access and reimbursement there as well?
Yeah, absolutely. We said this was going to be a true global launch.
Yeah.
We had the benefit of already having global infrastructure, with the exception of Japan, where we built that team, and they were ready and did a lot of market development work. W e were able to be in a pretty special position that within six months, we had European approval, U.S. approval, and Japan approval. The ex U.S. launch is going great.
We started in Germany. We are still in the process of finalizing pricing and reimbursement there.
The launch continues. Germany represents a pretty large opportunity for us.
We expect that once we have final agreement on the price, that we probably will see another inflection in patients, because there's a number of folks there who are waiting for an agreed-upon price before putting patients on Sephience because they worry that if the company's not happy, they may pull out, and they certainly don't want to start patients late.
Got it.
We're in named patient programs in a number of countries in Europe.
Including in the France ATU program.
Some of the countries in Southeastern Europe.
We are in pricing and reimbursement discussions, are starting them in a number of the larger markets in Europe. We started the launch in Japan at the end of Q1, so I think some of the growth that folks saw in Q2 came from that.
Yeah.
Strong early trajectory in Japan, and that is a great market. While there is maybe about 1,000 PKU patients there, we have an agreed upon price for the next 10 years that is on par with the U.S. net price.
That is actually great value country for us. We have [name] patient programs going on in Latin America. We are getting ready to launch in the Middle East, in North Africa. We have patients on in Canada.
Brazil, we got the approval. As you know, the Brazil access procedure takes a long time, but you also know that our teams are very experienced.
Yep.
Currently market three therapies in Brazil. We know very well how that system works. We have already laid the groundwork to get the first injunctions, which will lead to the first group purchase order. We expect a number of these other markets to really start kicking in in 2027.
Okay. I guess with that mention near term, is ex-U.S. expansion the most important driver for new patient starts? Or what would you say is most important in the U.S. versus ex-U.S.?
It is all important.
Yeah.
We expect global growth.
Yeah.
We say that we expect the growth in the U.S. to be steady and consistent.
Again, we've gotten over 2,000 start forms.
Yeah.
17,000 patients in the U.S. 70% of patients were tried on Kuvan. There's a long way to go in the U.S.
Yeah.
We expect that switch dynamic to start coming into play more and more as we go deeper. I think growth outside the U.S. is going to be steady with a number of inflection points. Each time we gain access in a market.
Right.
You are going to see an inflection of a larger number of new patients coming on. A gain, we expect growth globally to continue for a long ways.
Okay. M aybe tying this success with Sephience back to the raised guidance that you provided for the full year, I guess how much of that is Sephience versus the legacy DMD franchise? Maybe speak to high and low ends of the guide as well.
Yeah. I mean, when we came into the year, we were very clear there was a lot of unknowns for the year. We were very confident.
Sure.
That Sephience was going to do well, but we were a quarter into the launch, and we had the DMD franchise, which we know is declining. We just didn't know at what rate. We were very clear that as we moved through the year, that we would continue to raise guidance, and now we're at $850 million-$950 million. Obviously, a lot of that is Sephience.
Yeah.
Our confidence in continued Sephience's growth. We still don't have clarity how much more we're going to get out of the DMD franchise the rest.
Right.
Of the year. I mean, looking at it from Emflaza, there's 10 generics.
It is just a matter of time before someone drops that price, and then you get a race to the bottom. If that does not happen, we will continue to tick along. That is sort of been where we are with the DMD franchise, but our confidence in the top, and the guidance really comes from our continued confidence in Sephience.
Okay, great. I wanted to make sure we tick through several of the pipeline programs. Maybe we will start with vatiquinone. You were guiding toward initiation of a phase III open- label study this quarter. Where do we stand on study initiation there? Can you remind us just quickly the purpose of the study given the history with this asset?
Yeah, absolutely.
Yeah.
Following the CRL, we met with FDA, and they were quite clear that they wanted an additional study to support NDA resubmission. They offered the possibility of doing a study that was open label with a natural history comparator.
We expect that is in part because we had some evidence of efficacy. The safety of the drug is very well-established, and they have used the Friedreich's Natural History Registry as part of a previous approval for Skyclarys.
They knew that registry.
Yeah.
They have actually invoked it as an example of a very well-done natural history registry. We designed a protocol with a statistical analysis plan, and we met again with FDA to just make sure that they reviewed that and they were okay that we were doing this study and just to make sure that this could support NDA resubmission. They gave us some feedback, some things to address in the protocol and analysis plan. We were able to easily do that, and we are still on target to initiate in this quarter.
Okay, great. Given the different endpoints available in Friedreich ataxia, we've talked about mFARS and the upright stability scale, mFARS being the primary endpoint for this study. What's FDA going to be looking at in terms of primary and secondary endpoints that'll give them comfort given that it's a matched natural history?
Yeah. I'll try to make this as.
Yeah.
Not complex, simple as possible.
Yeah.
Look, the mFARS has four components, one of which is upright stability.
That mFARS, each of those different components of the scale kind of move at different stages of the disease in different ages of patients. Over the short term, in a younger population, short term meaning 12 months, maybe up to 18 months.
Most people believe that upright stability is probably the best place you're going to see effect, and that's what we saw.
Yeah.
In MOVE-FA. As you move out to a longer term, all of the natural history studies show that you start seeing as you get out to one and a half, two years, contributions from other components of the mFARS.
Yeah.
We designed a study that's single- arm versus natural history comparator. What we want to do is, by using the mFARS endpoint, allow for the ability to capture benefit on any component.
Right
Of the scale.
Right.
Understanding that the natural history is likely to progress two to two and a half points a year.
With contributions from different scales. R eally, it was a lot of thought that went into giving us the best chance to win in this study.
I think from the agency's standpoint, they want to see evidence of a statistically significant effect.
Right.
On disease slowing to really confirm, in a way, what we saw in a shorter time period in the younger patients in MOVE-FA.
Okay, great. At the front, you talked about your oral splicing platform. Maybe we'll switch to Votoplam for Huntington's. Maybe just remind us of the opportunity for this program and the 24-month data you reported earlier this year and kind of incremental excitement from those data.
Yeah, absolutely. We're incredibly excited about the Votoplam program. We've talked a lot about how the preclinical and clinical development programs for Votoplam followed in the successful development path established by Evrysdi, our first oral small- molecule splicing molecule. The development program was really designed in phase I to do typical phase I stuff, safety, pharmacology, as well as get evidence in healthy volunteers of target engagement in HTT, mRNA, and protein lowering, which we did. Then we moved to phase II, and in phase II, the first part was about, again, establishing PK/PD relationship in individuals with Huntington's disease, ensure that we're getting adequate CNS exposure to reach the desired 30%-50% HTT lowering throughout the brain.
Safety, obviously very important, as well as to get early evidence of clinical effect, and understand what the optimal clinical trial population would be, because that's a very big issue we saw again last week in neurological disorders.
Right.
By the time we got through the 24-month time point, we had a lot of really important boxes ticked.
Safe, well-tolerated. Drug was doing what it is supposed to do in terms of dose-dependent huntingtin protein and RNA lowering. We are getting excellent CNS exposure in line of what we needed to be confident we are getting the level of reduction brain cells that we are seeing in blood cells. Against placebo at 12 months, we had evidence of dose-dependent benefit. At 24 months against a well-matched natural history, we saw that we are having 52% reduction at the 10 mg dose level relative to natural history. I will also point out that Novartis is able to look both at the trajectory of the placebo group to 12 months, and the natural history group to 24 months, and they almost overlap.
Right.
What does that tell you? That gives you a lot of confidence that we have a well-matched natural history group, and that we can extrapolate the placebo group now out to 24 months to add to the robustness and the reliability of the finding of 52% slowing out at 24 months. Importantly, we also learned about the right population to study, and this is not a small thing. The hypothesis going into PIVOT-HD was that the stage two patients are probably the right group, especially if you are targeting HTT protein, which is a causative factor in the disease. You are going all the way upstream in the disease, earlier- stage patients are likely to enjoy a benefit or a more detectable benefit.
Right.
In a shorter period of time than more advanced patients. That is what really teed us up for the INVEST-HD protocol, where we are focusing on early symptomatic patients who have a normal TFC. Really looking very much like the stage two patients.
Right
From the PIVOT-HD study.
Okay, great. You and Novartis are planning to engage FDA later this year to discuss those data and a potential accelerated path. I guess related to accelerated paths in Huntington's and even rare disease more broadly, it's tough to handicap what anyone's thinking these days. I guess how is votoplam positioned for that discussion? Can you remind us of the potential path to approval? You do have the phase III study initiating, so I guess what are the potential paths here?
Yeah, absolutely. Look, Novartis has been very clear that their base case remains phase III. They've included an interim analysis that gives the opportunity to get to a win earlier.
Right.
On a smaller number of patients at an earlier time point. Nonetheless, FDA appears headed towards a precedent of accepting an application for approval for Huntington's disease based on cUHDRS as an intermediate clinical endpoint.
If that's going to be the case, I think the PTC and Novartis teams believe it's worth having a discussion.
Right.
When we're able to offer a data package with many more patients exposed.
Right.
Having placebo-controlled data, having biomarker evidence.
Yea
Of target engagement and protein reduction that's dose dependent, a better characterized safety profile because more patients have been exposed, a therapy that, in the worst- case scenario, could be withdrawn because it's oral. As you mentioned, the INVEST-HD phase III study has started.
Right.
But 100%, Judah, as you said, I'm not here to predict what FDA is going to do. No one should be confident in predicting that, but this is simply a matter of saying, hey, if this precedent is being established in CBER, then it's worth a conversation in CDER.
In parallel, keep moving forward on the phase III.
Okay.
That's the situation, and we've commented, Novartis has commented that that meeting will occur, we expect that meeting to occur in H2.
Okay, perfect. Maybe just sticking on Huntington's, you have another splicing candidate targeting MSH3, entering the clinic in 2027, that I think you've said could be developed in DM1 or Huntington's. From a mechanistic standpoint and also for commercial considerations, how might this program complement Votoplam?
We're really excited about the PTC303 MSH3 program for a number of reasons. I think it's the product of our renewed focus at PTC on the splicing platform. We always knew the power of that platform as a differentiated RNA platform, but a lot more intentionality and focused resources on trying to bring things forward, and the MSH3 program is the first result of that. It's also targeting a novel sequence that there's never been a splicing molecule for. A lot of exciting things.
Right.
As you mentioned, we're targeting MSH3, but it has application beyond just one disease.
We're looking at HD and DM1, both where triplet repeat expansion is an important part of pathology. In terms of complementing votoplam, you've heard us say that we believe it is complementary.
Right.
Votoplam is targeting HTT reduction, the mutant protein itself, whereas PTC303 would be targeting somatic expansion.
Which is another element in Huntington's disease pathogenesis. I also believe that juvenile HD, for example, might be a subset of the HD.
Right.
Population that may be particularly well suited. Why? Because juvenile HD, these individuals have rapid expansion.
That's why they get early onset severe disease. If you have a drug that slows expansion.
Right.
Targeting a population that has rapid expansion, kind of makes a lot of sense.
Okay, great. In terms of endpoints and what we could be looking for in terms of what might be meaningful de-risking for the program, what should we be thinking about for this one?
Votoplam followed the Evrysdi playbook. PTC303 will follow the Votoplam Evrysdi playbook.
Great.
As we're right now doing the IND-enabling studies. The plan would be to get into phase I in 2027, and again, use the phase I study to give us important information on pharmacology, but also substantiate CNS exposure and leverage again the fact that we have systemic exposure and can interrogate peripheral blood cells to confirm that we're having target engagement and the desired effect on MSH3. We're again in a situation where based on our preclinical research and the published literature, that we need to be achieving approximately 30%-40% MSH3 reduction.
To deliver a therapeutic benefit. In terms of de-risking, it's seeing in that phase I study that we're able to get to that level of mRNA protein reduction, at doses that are safe and well-tolerated. Just again, going back historically, same with the SMA program early on being on the show that we were able to have dose-dependent increase in SMN protein especially at doses that were safe and well-tolerated in blood cells, and we had CNS exposure. That ticked a lot of the key boxes. Votoplam phase I, similarly.
We will show that we were getting into the brain, getting adequate CNS exposure had dose-dependent mRNA reductions in phase I. R eally that phase I study becomes important de-risking in terms of all the things we know that need to be in place to have clinical success.
Okay. Excellent. I want to make sure we get to ST-920, the gene therapy for Fabry that you recently acquired in a bankruptcy auction, if I'm not mistaken. M aybe just tell us a little bit about the stage of asset that you're acquiring here, why this was attractive to you, a bit about the development history for this one.
Yeah, absolutely. We were very clear that we have a significant cash balance.
Yep.
Of over $2 billion. We have global commercial capacity and a team that has demonstrated that it can execute on rare disease commercialization, and we were interested in trying to find products that could deliver $500 million-$700 million top-line revenue, so we can really accelerate top-line growth as we cross over to profitability. This was not on the radar screen, to be clear.
Right.
It came to our attention that it was going into a bankruptcy, that it was BLA stage, so the approval application had already been initiated.
The company didn't have the resources to take it across the line. We started looking at this, and we said, first, does the drug work? On diligence, it does. Fabry disease is a disease where the standard of care is enzyme replacement therapy.
If you can provide the enzyme, there's clinical benefit that's been approved therapies on that. We're able to see that the gene therapy is producing the enzyme. There's enzyme activity out to five years. It's safe and well-tolerated. There's no need for immunosuppression. You're seeing benefits in terms of stabilization of renal function. Those who came in on ERT are coming off ERT. All that is really, really strong. The CMC package, we have experience. We've gotten an AAV gene therapy approved. We know exactly what that takes, so we had comfort that we could get the CMC package where it needs to be for approval. From a commercial standpoint, we're in an interesting situation where our Chief Business Officer, Eric Pauwels, who runs our commercial group, launched Replagal.
Right.
We have several people on our team who were involved in the Replagal launch. We have a board member who launched Fabrazyme. We've got a lot of in-house knowledge on Fabry disease. In fact, our folks helped build that marketplace. We're pretty confident on the commercial opportunity. The deal should close in the next week or so.
We'll work to complete the BLA by the end of the fourth quarter, and if all goes well, this could be a commercial launch next year.
Okay, great. I guess post that acquisition, maybe just to round out the conversation, where does that leave you from a capital allocation perspective? How are you thinking about uses of cash? Is this transaction a good benchmark for what business development might look like?
Yes. Look, as Matt mentioned, we closed Q2 with $2.2 billion cash. The transaction was $111 million upfront, we still have a lot of firepower available to us. Obviously, we're laser focused on executing. We can develop our pipeline, then obviously continue to be opportunistic and be disciplined with external business development transaction. We have a global infrastructure. We can feed cassettes in assets in the orphan space. That's very important. We said we could be cash flow break- even this year. We're still on track. After that, we're going to manage obviously OpEx based on revenues. We said all along since 2023, the goal is to build a global rare disease, diversified and sustainable. You achieve that by being profitable, that's how we're going to look at it going forward.
Okay, great. We could keep going, but we're out of time. Thank you very much for being here.
Thank you, Judah.
Thank you.