PTC Therapeutics Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 17 speakers on the call.

Operator

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jane Hamlin, Associate Director of Investor Relations.

Operator

Please go ahead.

Speaker 1

Good afternoon, and thank you for joining us today to discuss PTC Therapeutics' Q3 2024 Corporate Update and Financial Results. I am joined today by our Chief Executive Officer, Doctor. Matthew Klein our Chief Business Officer, Eric Powell and our Chief Financial Officer, Pierre Gravier. 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 information about our forward looking statements.

Speaker 1

Our actual results could materially differ from these forward looking statements as such statements are subject to risks that can materially and adversely affect our business and the results of operations. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report on Form 10 Q and annual report on Form 10 ks 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 are available in today's earnings release. With that, let me pass the call over to our CEO, Matthew Klein.

Speaker 1

Matt?

Speaker 2

Thank you all for joining the call today. I'm happy to share the results of another quarter of outstanding commercial performance and pipeline execution. In the Q3, we achieved total revenue of $197,000,000 including $124,000,000 from the DMD franchise. I want to highlight the $52,000,000 in Emflaza revenue, which reflects our team's ability to effectively navigate the genericized and competitive marketplace in the U. S.

Speaker 2

With our strong Q3 revenue performance, we closed the quarter with over $1,000,000,000 in cash and are raising our 2024 total revenue guidance to $750,000,000 to 800,000,000 dollars In the Q3, we submitted 2 NDAs to the FDA, one for sepia Taryn and one for Translarna. Both applications have been accepted for filing. The FDA planned action date for sepia Taryn is July 29, 2025 and action date has not been provided for the Translarna NDA due to the regulatory context of the filing. The cepiaterin NDA includes the significant and clinically meaningful evidence of efficacy from the Phase 3 APHINITY study as well as data from the APHINITY open label extension study demonstrating durability of the sepia terran treatment benefit and the ability of patients to increase their protein intake while maintaining control of Phe levels. These data support that sepia terrine can provide significant benefit to PKU patients of all age groups and severity subtypes, including classical PKU.

Speaker 2

The impactful results from the INFINITI trial were recently published in the prestigious Lancet journal, a testament to the importance of the study findings. In addition to the FDA submission, marketing authorization applications for cepakaren are currently under review in the EU and several other countries, including Brazil. We remain on schedule to submit the JNDA in Japan in December of this year. These submissions will support our planned global launch of cepataren in 2025. Our launch plans are progressing well as Eric will detail shortly.

Speaker 2

We remain on track to submit an NDA for vaticlinone for the treatment of children and adults with Friedreich ataxia in December. This NDA submission will be the 4th approval application submitted to the FDA this year, an impressive testament to our team's execution. The vatiquinone NDA will be based on the findings of significant benefit on the upright stability subscale of the mPhARS disease rating scale in the MoveFA placebo controlled trial as well as results from 2 long term extension studies. As we recently reported, both long term extension studies met their primary endpoint with evidence of statistically significant long term benefit in delaying disease progression. Given the extensive safety data collected to date in both children and adults, vatiquinone has the potential to fill the unmet need for pediatric and adolescent FA patients as well as provide a promising therapy for adult FA patients.

Speaker 2

Moving to our PTC-five eighteen program for Huntington's disease, the program received fast track designation from FDA in September, reflecting the potential of PTC-five eighteen to be the first ever approved disease modifying therapy for HD. In addition, we requested 2 Type C meetings with FDA. One meeting is to discuss the potential for Huntington lowering to serve as a surrogate endpoint supportive of accelerated approval and the second meeting is to discuss the endpoint strategy for an efficacy trial in HD patients, whether that trial is completed as a Phase 3 registration trial or as a confirmatory trial in the context of an accelerated approval. The FDA has asked to combine the 2 into a single Type C meeting, which has now been scheduled for later in Q4. The ongoing Phase 2 PIVOT HD trial continues to progress well and we remain on track to complete the study in the Q1 of 2025 with results expected in the Q2.

Speaker 2

Turning to our eutrolocustat program for ALS, we remain on schedule to share top line results from the registration directed CARDINALS trial in the Q4. Neutreloxostat is the first compound being developed for ALS patients that specifically targets ferroptosis, pathway of oxidative stress and cell death demonstrated to be highly relevant to ALS pathology. Given the recent changes in the therapeutic landscape for ALS, positive results from the CARDINAL study could enable eutreloxostat to address the significant unmet needs of ALS patients. Finally, we remain on schedule for the November 13 FDA action date for the AADC gene therapy BLA. If approved, this would be the 1st ever direct to brain administered gene therapy authorized by FDA and open the door to a whole new approach to treating brain diseases.

Speaker 2

I am very proud of our team's ability to bring this pioneering therapy to patients. In summary, we have had a very busy and productive quarter as we continue to execute on all of our planned objectives and achieve our many significant 2024 milestones. I will now turn the call over to Eric to discuss our commercial performance. Eric?

Speaker 3

Thanks, Matt. Our global customer facing team had another strong performance in the 3rd quarter, delivering $135,000,000 of revenue across our 5 marketed products. Our global DNB franchise had a solid quarter with $124,000,000 of revenue. Despite CHMP's recent negative opinion on renewal, there continues to be strong support from physicians, patients and families throughout Europe for Translarna based on the positive totality of evidence in the trials and the real world experience. We continue to ensure that Translarna is made available to boys and young men living with nonsense mutation Duchenne muscular dystrophy in Europe, as long as it remains authorized pending review of the CHMP opinion by the European Commission.

Speaker 3

Outside of Europe, our commercial teams have worked effectively with healthcare professionals as we continue to add new patients and maintain those on existing Translarna therapy in Latin America, the Commonwealth of Independent States, the Middle East and North African countries. In fact, in the Q3, we obtained first time Translarna orders from 2 new countries in the Middle East and North African region. In Brazil, we delivered the remaining 50% of a group purchase to the Ministry of Health. As Matt mentioned, the NDA for Translarna is currently under review by FDA and our highly experienced U. S.

Speaker 3

Team is very well positioned to bring Translarna to nonsense mutation DMD patients rapidly pending potential FDA approval. Now turning to Emflaza. 3rd quarter net revenue was $52,000,000 We continue to work closely with healthcare professionals, payers and specialty pharmacies to dispense the brand. Our PTC Cares team provides white glove personalized services and programs supporting each patient with co pay assistance, brand information and timely shipments from our specialty pharmacies, greatly enhancing the experience for both new and continuing patients. Our customer facing teams are extremely excited about the potential upcoming global launch of ceptiaterin for PKU patients.

Speaker 3

Based on the feedback from patients, families and physicians, we believe septiaterin has the potential to generate significant revenue, including an over $1,000,000,000 opportunity in the U. S. Alone. PKU has a large addressable orphan disease population of more than 58,000 patients in markets with access and reimbursement. And the vast majority of patients are not receiving medical treatment due to the limitations of current options.

Speaker 3

We look forward to providing physicians with this important new differentiated treatment option to address these high unmet needs in PKU patients. As Matt mentioned, ceputeren is under review in the U. S. And Europe, which are important steps in bringing this important new therapy to children and adults living with PKU. Further submissions are under review by regulators in Brazil, Canada, Switzerland and Australia with the filing plan in Japan by the end of this year, positioning PTC now for potential global launch in multiple major markets in 2025 and beyond.

Speaker 3

I will provide some details on our launch efforts, which have been ongoing for several years. We have been working closely with key PKU healthcare providers, including geneticists, pediatric metabolic specialists and dietitians around the world to better understand the unmet needs and build a strong relationship with the PKU patient advocacy community. Our teams continue to develop a deeper understanding of the PKU landscape with many of the key treatment centers and prescribers. As you know, PKU is the most prevalent inborn era of metabolism disease with reliable epidemiology via newborn screening available since the early 1960s. PKU patients receive their care from well defined treatment centers and clinicians around the world.

Speaker 3

We have mapped these treatment centers and healthcare providers in key markets globally. Since the recent publication of Affinity data, awareness of septiaterin has rapidly increased in many of these centers of excellence, highlighting the compound's differentiated efficacy profile seen in clinical trials as a convenient oral treatment, getting more patients to phenylalanine goal levels and enabling potential diet liberalization. Our field based teams have met frequently with PKU stakeholders who have expressed their excitement about a new treatment option to address their unmet needs potentially available next year. Importantly, patients highlight optimism with the ability of septiaterin to liberalize diet and this is an important motivator for patients to seek new treatment options earlier from their healthcare providers. Now in addition, we are leveraging our established rare disease global infrastructure, which has a footprint in over 50 countries.

Speaker 3

We will sequence the potential country launches of sepiaterin to maximize access in key markets and maintain a narrow pricing and reimbursement corridor globally. Our research benchmarking of many rare disease analogs indicates a premium pricing strategy can be obtained based on the differentiated profile of septiaterin compared to current branded treatment options available, especially in key markets where PKU treatments are reimbursed and where we are planning our initial launch sequences upon potential approvals. Our customer facing teams understand the complexities of managing rare disease treatments as well as the regulatory and payer access landscape. These core capabilities developed at PTC over the last decade along with Septuaterin's highly differentiated profile should facilitate rapid adoption for PKU stakeholders and reinforce our belief in the potential $1,000,000,000 plus opportunity not only globally, but in the U. S.

Speaker 3

Alone. Turning to vaticlinone, with the NDA submission planned for December of this year, our commercial team is excited for the potential opportunity to launch vaticlinone for FA patients in 2025. We believe that vatiquinone is well differentiated from current treatment options and could benefit all FA patients, in particular pediatric and adolescent patients. KOLs who treat FA believe there are significant unmet needs in this devastating disease. They tell us that vedicinone's unique mechanism of action, its compelling efficacy data in highly relevant functional parameters for FA patients, along with its favorable safety profile provide a strong rationale for treatment as early as possible in the course of the disease.

Speaker 3

Our experienced neurology team is focusing on key projects in preparation for the U. S. Launch of vatipronone. Now moving to TEGSEDI and WAYLIVRA in Latin America. We continue to make good progress across these franchises with growth in both newly identified and treated patients across the region.

Speaker 3

Our geographical expansion continues with a recent approval and positive HTA assessment of TEGSEDI in Mexico, following which we have initiated reimbursement discussions. In Brazil, we delivered a new government purchase order for TEGSEDI in the Q3. In conclusion, we continue to execute on all fronts based on the strong 1st 9 months of revenue this year. As Matt mentioned, we are updating guidance with a 2024 total revenue guidance of $750,000,000 to 800,000,000 dollars Our customer facing team is thrilled by the opportunity to potentially launch 4 new products, AADC gene therapy, Translarna, septiaterin and vaticinone in the U. S.

Speaker 3

As well as septiaterin globally in 2025. I will now turn the call over to Pierre for a financial update. Pierre?

Speaker 4

Thank you, Eric. I'll now share the financial highlights of our Q3 of 2024. Please refer to the earnings press release issued this afternoon for additional details. Beginning with top line results. Total revenue for the Q3 was $197,000,000 including DMD franchise revenue of $124,000,000 Translarna net product revenue in the quarter was $72,000,000 while Emflaza net product revenue of 52,000,000 Moving to Everti.

Speaker 4

3rd quarter global net revenue of approximately US460 $1,000,000 was achieved by Roche, resulting in royalty revenue of US61 $1,000,000 for PTC. Non GAAP R and D expense was €152,000,000 for the Q3 of 2024, excluding €9,000,000 in non cash stock based compensation expense compared to €150,000,000 for the Q3 of 2023, excluding €14,000,000 in non cash stock based compensation expense. Non GAAP SG and A expense was €63,000,000 for the Q3 of 2024, excluding €10,000,000 in non cash stock based compensation expense, compared to €68,000,000 for the Q3 of 2023, excluding €13,000,000 in non cash stock based compensation expense. Cash, cash equivalents and marketable securities totaled €1,000,000,000 as of September 30, 2024, compared to €877,000,000 as of December 31, 2023. Our strong financial position provides PTC with the necessary resources to execute on our strategy and achieve our milestones over the next several years, including the anticipated launch of ceptiaparin and other products.

Speaker 4

I will now turn the call over to the operator for Q and A. Operator?

Operator

Thank you. At this time, we will conduct the question and answer session. Our first question comes from Kristen Klasek of Cantor Fitzgerald. Your line is now open.

Speaker 5

Hi, this is Rick on for Kristen. Thanks for taking our question. We got 2 for you. So first of all, thanks for the update on the Type C meeting in Huntington's. Do you have a sense for when you could update the community on any clarity that might come out of the meeting?

Speaker 5

Is there any chance that we'll learn more about a potential path forward here?

Speaker 2

Yes. Thanks for the question. So the we know there's a lot of excitement around the discussions we're going to have with FDA, both in terms of understanding the endpoints for an efficacy trial, but also, of course, the discussions around Huntington lowering as a surrogate endpoint. As we've talked about, when we think about surrogate endpoints and accelerated approval, what the FDA really wants is for us to be able to present a package of scientific evidence of why lowering huntingtin protein is likely to provide clinical benefit ultimately and are there specific thresholds of lowering that have been associated with that benefit. So we have been able to provide them with the rich scientific literature, including in vitro and vivo in human studies, which show that if you lower Huntington protein 20% to 50%, that you're likely to have a significant benefit in slowing disease progression.

Speaker 2

And of course, as we've shown in our 12 month PIVOT HD update, we are achieving that threshold of lowering of Huntington protein. We expect to have these meetings with FDA in December of this year. And as always, as soon as we have clarity, which sometimes comes around at the time of the meeting or shortly thereafter or once we receive minutes, we'll be sure to share that with the broader community, including The Street. As we know, there's a lot of interest in hearing about this path forward for accelerated approval of PIVOT HD.

Speaker 5

Excellent. And maybe just one more if we have time. We've seen a lot of regulatory flexibility in the rare disease space recently. So given the FDA resubmission and for Translarna, can you talk about how you think the FDA might sort of weigh the STRAT registry data and study 41 that were submitted and just kind of looking at these new evidence given sort of how things have been going in terms of regulatory flexibility? Thanks.

Speaker 2

Yes, sure, Rick. So as we've talked about before, the NDA resubmission for Translarna was based on 2 things. 1st, the evidence of significant benefit in the overall enrolled population of 359 boys in Study 41. This is where we had significant effect on 6 minute walk distance, NorthStar ambulatory assessment, time function test, time to loss of 10%. That data set in a broad nonsense DMD population showing significant benefit across all those endpoints is actually pretty unique with flexibility or not.

Speaker 2

I think this is really a first dataset that has in an ITT population significant effect across all these endpoints. In addition, as confirmatory evidence, which the agency likes to see in addition to a single adequate and well controlled trial, we have the STRIDE registry. And what the STRIDE registry is able to demonstrate is these significant benefits we're seeing on ambulatory function and other aspects of disease in the short term of Study 41 are manifesting cumulatively over several years as a delay in loss of ambulation of 3.5 years. So, of course, any flexibility the agency can bring to the assessment will be the package will be great. But on its own, we have an efficacy package with evidence of clinical benefit in both the short term and the long term in nonsense DMD patients, which is quite a unique and compelling package of data.

Speaker 2

Thank you.

Operator

Thank you. Our next question comes from Eric Joseph of JPMorgan. Your line is now open.

Speaker 6

Good evening. Thanks for taking the questions. I have one on the CARDINAL trial. We noticed recently that you updated the or changed modified the primary endpoint to use a participant ranked combined assessment of ALSFRS and also survival. Can you talk about what some of the motivations were behind changing to that endpoint and what their what that impact might be from a statistical powering perspective?

Speaker 6

And I guess, I think you've also now over enrolled the study. Was that meant to accommodate the change in endpoint? Or would you in fact now be sort of slightly overpowered versus prior expectations? Thank you.

Speaker 2

Thanks for the questions, Eric. So those 2 are not related. Your two questions are not related. The first is really a way of analyzing the results of the study. The outcome of interest remains the ALSFRS score, which is a continuous variable that rates disease progression over the course of the trial.

Speaker 2

However, it's well known that patients will die over the course of the study. And the FDA has recommended in order for us to account for death in the primary analysis, they would like us to use their preferred analysis method in ALS, which is known as the joint rank test, which is the statistical test that's able to incorporate the information of decline on the ALSFRS as well as any deaths that occurred during the course of the study. So it's really just a change in the way we're analyzing it to include deaths in the primary statistical analysis of the data. And again, this came from feedback from the FDA on the analysis plan as they have said that that is really their preferred analysis method. And certainly, if you look back to their reviews of other ALS drugs, you'll see that that is in fact the test that they like to use because it's able to incorporate information from all subjects.

Speaker 2

Regarding your second question, as we've talked about, we had a target population for the primary analysis population based on our rate of progression observed during the 2 month run-in of the study. So in this 2 month run-in study where we observe patients and calculate how many points they change on the ALSFRS scale. We need to enroll a certain number of patients in order to achieve the targeted number of patients in that primary analysis group. So what you see in the increase enrollment was really just because we had a slightly lower yield of screen subjects who actually met the criteria for the primary analysis population.

Speaker 6

Okay. Got it. Thanks very much for taking the questions.

Operator

Thank you. One moment for our next question. Our next question comes from Kelly Hsieh of Jefferies. Your line is now open.

Speaker 7

Thank you for taking my questions. Given the revenue bid for this quarter, could you help us to set up expectations for Q4, maybe also into 2025, what would be the dynamic DMD franchise also versus relatives from Everest? Thank you.

Speaker 2

Yes. Thank you for the question, Kelly. So as we said that we were the revenue was quite strong this quarter, which allowed us to raise the overall guidance this year to $750,000,000 to $800,000,000 We expect in the Q4 continued contributions from across our portfolio of inline products in terms in both the DMD franchise revenues we talked about and Emflaza continues to perform incredibly well. Our teams have done a great job protecting the brand in the face of generic competition. And Translarna revenue, we expect to be stable over the Q4.

Speaker 2

Certainly, it remains available in Europe. We will have the typical lumpiness that we see quarter to quarter with Translarna, but overall, we expect strong DMD revenue contribution in the 4th quarter.

Speaker 7

Thank you.

Operator

Thank you. One moment for your next question. Our next question comes from Jeffrey Hung of Morgan Stanley. Your line is now open.

Speaker 8

Hi, this is Michael Reade on for Jeff Hung. Thank you for taking our question and congrats on all the progress and all the programs. Ahead of the Cardinals top line in 4Q, do you plan to share like baseline characteristics maybe like time since diagnosis? Or can you comment on maybe what percent of patients are going into the OLE?

Speaker 2

Yes, Michael, thanks for the question. So typically with our top line results, we'll give the key baseline characteristics and results with regards to the key endpoints. We've seen excellent continuation of patients as they roll into YOLI once they finish to cardinals. Study.

Speaker 8

Okay. Thank you. And then maybe for the long term FA extension studies of vatigranone, why do you think you start to see the meaningful separation more in the extension studies? Was it like a rapid impact on mfAR as expected? Or could you perhaps like add some more color on how like vatipronone is like influencing the trajectory there?

Speaker 2

I think what we're seeing is a continued benefit in terms of preservation of function. As we reported when we read out the 72 week placebo controlled study, we saw an approximate 50% slowing in progression in the treatment group relative to the placebo group. And at 3 years, we're still seeing that 50% benefit, 50% slowing the progression. As we reported in the patients who started on vaticlinone, they had a 3.7 point decline, whereas in the natural history cohort, there was a 7.5 point decline. So we're seeing a continuous benefit in terms of preserving function and slowing disease progression.

Speaker 2

Thanks so much.

Operator

Thank you. One moment for our next question. Our next question comes from Brian Abrahams of RBC Capital Markets. Your line is now open.

Speaker 9

Hey, good evening. Thanks for taking my questions. I guess one on cepaeptaren and one on Translarna. Just for cepaeptaren, I'm curious if you could maybe talk a little bit more about the reactions from providers, patients and payers to The Lancet data and in particular maybe elaborating on some of the payer research and communication that's giving you confidence in the potential for the premium pricing? And then on Translarna, just wondering if you could had any sense of the potential timelines for the next review steps there both in the U.

Speaker 9

S. And Europe and whether you think we might hear some updates in 2025? Thanks.

Speaker 2

Yes, sure, Brian. Thanks for the questions. Let me tackle Translarna first and then I'll pass the second question on the CVTARRA over to Eric. So first on Translarna, so you've asked about the U. S.

Speaker 2

And the EU. In the EU, we're of course in that period now of approximately 67 days following the CHMP opinion where the European Commission does its assessment of whether or not they want to adopt the opinion. So we don't expect to hear anything further for at least approximately 67 days. And as we've talked about, TransAlta remains authorized in this period. And of course, we're making sure that we continue to provide the drug to patients and make it commercially available while authorization remains.

Speaker 2

In the U. S, as we've talked about, given the fact that this was a resubmission of an NDA that had initially been filed of a protest in 2016 many, many years ago. Nonetheless, the FDA is not bound by a clock in terms of doing this review. However, we expect just given what's involved in the evaluation of a resubmission, which is just the portion really the efficacy package, we would expect that they'll get to the review in the next few months. So as soon as we have more information on the specific timeline and can provide any clarity, we will.

Speaker 2

Regarding cepotaren, let me just make the first comment that obviously we were quite excited about the Lancet publication. I think that's a true testament to how differentiated cepotaren is with its dual mechanism of action, not only in its ability to act as a precursor to the BH4 cofactor, but the fact that it has a second chaperone mechanism of action, which allows it then to provide benefit to patients who are not BH4 responsive, which again is a really important element of why we're seeing such significant effect across the board in PKU patients of all severity and a variety of genotypes. The physicians are very excited about this. I think they see The Lancet publication as being consistent with what they believe, which is that this is a potentially transformative therapy that can meet the significant unmet need for PKU patients. Let me turn it over to Eric to talk a little bit more about our payer discussions and how we're thinking about potential pricing?

Speaker 3

Yes. Thanks, Matt and thanks, Brian, for your question. As you can see, we're really pleased with the publication of Affinity. We've been able to engage in a lot of payer activity, including market research, but also doing a lot of landscape research in many of the countries where we're sequencing it. Clearly, what payers have told us is that they see a differentiation based on its efficacy profile and seeing that more than 8 out of 10 patients can actually achieve therapeutic goals and importantly that fee levels and those goals can be measured rapidly.

Speaker 3

With a very high unmet need, we know that there is close to 90% of the population that is not on medical therapy at this time. There is a high unmet need and payers see that and they're willing to pay a premium price both in Europe as well as in the U. S. Because they know that they can achieve or they can actually see the levels of therapeutic gain literally in a matter of weeks with septiaterin. So obviously, our pricing strategy is evolving.

Speaker 3

But as we know, we've actually looked at a number of different analogs, including many that have been recently launched that are clearly differentiated. And we believe that having a premium price over existing branded therapies can be achieved in many of these markets. Finally, I'll just say the pricing strategy really is not going to be announced until we get much closer to launch and then when we have the final label.

Speaker 9

That's really helpful. Thanks, Eric. Thanks, Matt.

Operator

Thank you. Our next question comes from Ellie Merle of UBS. Your line is now open.

Speaker 10

Hey, guys. Thanks for taking the question. Can you talk a little bit more about the potential path forward and potential range of outcomes in terms of the feedback that you could specifically get from this Type C meeting? And if the FDA is not supportive of the use of Huntington lowering as a surrogate, I guess, what would the potential range of outcomes from there be in terms of what the clinical endpoint study and path forward for registration could look like? And I guess, in that scenario where the FDA is not supportive of the use of a surrogate, how are you thinking about your strategy around whether you would run, a full Phase 3 on your own or, look for a potential partner?

Speaker 10

Thanks.

Speaker 2

Thanks for the question, Kelly. Obviously, we're optimistic about the ability to have a productive discussion with the agency regarding the potential for Huntington lowering to serve as a surrogate endpoint because it really meets what they ask for in terms of a surrogate endpoint. That is there's evidence that shows that reductions in Huntington protein can have clinical benefit. There's a specific threshold associated with that, which we're able to achieve. And just taking consideration of the disease itself, that it's a monogenetic disease that's caused by a toxic mutant huntingtin protein and we're able to address that, I think fits very squarely in the way they have thought about surrogate endpoints and other disorders, where there's an implicated protein and a drug targets that protein, for example, dystrophin and DMD.

Speaker 2

We also believe that the agency has had an interest in leveraging the accelerated approval pathway for neurodegenerative disorders like Huntington disease where there's significant unmet medical need and establishing efficacy takes a bit of time. So if there's a safe therapy that has shown that the ability to impact a marker of disease that is known to be important to that disease pathology that certainly could open the door for an accelerated approval. And again, we believe that PTC-five zero eight and lowering hunting protein certainly fits. At the same time, we're also having a discussion about endpoint strategy for an efficacy trial because what we want to do is be in a position to move forward with that efficacy trial as quickly as possible regardless of their the outcome of that meeting. For example, we could meet with FDA and they could say these initial data from the first 30 or so patients with PIVOT HD look very good.

Speaker 2

Why don't you come back with a complete data set from PIVOT HD and when we visit the surrogate endpoint discussion in the spring, that's a possible outcome. And if that occurs, we still want to be ready to put in place and get started on the efficacy trial because we're going to need that efficacy trial to be initiated either as part of an accelerated approval or as you say it in the situation where the doors shut on a surrogate endpoint, we want that study up and running so we can get to the finish line as quickly as possible. In terms of conducting the study, look, we said all along that we have positioned the company and built that balance sheet to be able to conduct that Phase 3 study. We have the infrastructure and capital to do that. Obviously, our team has worked incredibly closely with the Huntington's disease community, including the patient groups and the physicians around the world, who are incredibly enthusiastic in participating in the study, whether that's as an investigator or the patients who want to be in that study, either because they didn't have the opportunity for the previous study where they've seen the data now and really want to be a part of a Huntington lowering trial of an oral therapy, which is easily administered and has shown to be safe and well tolerated.

Speaker 2

So we look forward to being able to advance that trial. Again, we'll do it either way, whether we have whether it becomes the registration trial or the confirmatory study in the context of an accelerated approval.

Speaker 7

Great. Thanks. And just a quick follow-up.

Speaker 10

I think you mentioned that you had requested 2 Type C meetings with the FDA, but that the FDA asked to combine the 2 into a single meeting. Maybe this is just logistical, but can you share maybe any context around this or maybe what this might suggest? Yes. Thanks.

Speaker 2

Yes. Again, this is purely logistical. We submitted the media request roughly the same time. And as you know, it's going to be the same people who review and discuss and provide their feedback. And as proud as we are of how well we've been collaborating with the agency in the Neuro division, I think they for logistical reasons would rather just have one meeting rather than 2 where the issues have such overlap and it's the same people involved.

Speaker 2

So we look forward to having that one meeting in December.

Speaker 10

Got it. Thanks.

Operator

Thank you. Our next question comes from Joel Beatty of Baird. Your line is now open.

Speaker 11

Thanks. For Translarna, what percent of the current ex U. S. Sales would not be affected by any potential European Commission decision? And also how long those sales potentially last into the future?

Speaker 2

Yes. Joel, thanks for the question. As we've talked about in 2023, roughly 46% of TransAlarmNet revenue was from Europe itself. That would be the revenue that we think that would be at risk in the event that the EC adopts the CHMP opinion. Now we've said going forward that there's a possibility in certain countries that we can leverage inpatient or other individual country pathways to still make commercial product available.

Speaker 2

But obviously, that will be something that will play out on the other side of an EC adoption. But again, it's that European revenue that we would see at risk and only that revenue.

Speaker 11

And how long would exclusivity be in those other regions?

Speaker 2

It varies. We have in many regions exclusivity out to 2029.

Speaker 11

And then one last question for SPUDERIX ataxia in the U. S, do you expect ADCOM?

Speaker 2

Hard to know. Obviously, we'll submit the package. We expect to submit it in December. We would expect there to be a priority review. We'll find out at that point whether or not there'd be an AdCom.

Speaker 2

Certainly, the FDA is quite familiar with Friedreich ataxia having already approved the therapy for that disease. And there's obviously a number of therapies in development, so they should have a great deal of understanding of the endpoints. And particularly, we know they have a very good understanding of the importance of the upright stability subscale with our discussion. So I'm not I don't know that they would need to have an AdCom from the standpoint of this being novel in terms of the first in disease therapy or first time they've looked at the same point. But if there is an AdCom, we'll be ready for it.

Operator

Thank you. Our next question comes from Sami Corwin of William Blair. Your line is now open.

Speaker 12

Hey there. Congrats on the quarter and thanks for taking my questions. As you look ahead for the launch of Cepiabtaren, are you envisioning specific patients to be early adopters? And what are your assumptions in terms of the percentage of patients that may go on the drug who would be classical? And based on your conversations with payers, have they kind of disclosed that many of their covered patients would have to step through generic Kuvan?

Speaker 12

And then I have a follow-up.

Speaker 2

Yes, sure. Let me start and I'll turn it over to Eric. So as we talked about, we see several segments of the population that would be early adopters, including those that are Kuvan non responders, which would be classical PKU patients or those not tried on Kuvan as well as those who've been on BH4 and not had optimal response. So those are 2 segments that we believe that we can easily access just based on the strength of data from the APHINITY study. And as we've heard from KOLs and our commercial detox last summer, they're saying they want to try all their patients on CPOTaren regardless of whether they fit into those buckets.

Speaker 2

But let me pass over to Alex who can talk a bit more about how payer dynamics can play into that.

Speaker 3

Yes, Sami, thanks for the question. It surely is an unmet need market. Right now, what we've seen is 90 percent of the patients don't get medical treatment. They've either tried, failed or discontinued for a variety of reasons. And the current standards of care are inadequate and physicians see that, but also payers see that.

Speaker 3

So it's not a very difficult conversation when you get when we discuss this with payers around the world in these key markets, also with U. S. Payers that one, there is a substantial number of patients that can benefit from treatment from a highly efficacious and oral treatment that can be easily taken. 2nd, as I mentioned earlier, we can have a premium pricing strategy simply because they recognize that these patients do not have adequate treatment, they're not controlled with diet, they're not controlled with current treatments and they can actually measure what efficacy is very quickly and rapidly. So this isn't something that is a burden in terms of the cost.

Speaker 3

They can see fee level reductions very rapidly. They can measure diet liberalization. They can also measure how many patients actually get to therapeutic goals. So everything that we presented has been supported by the affinity data and the head to head study so far has been well received by the payer community. And when we've talked about premium pricing strategy, we definitely know that physicians and patients already know the access pathway there will be able to get access to treatment quickly and rapidly.

Speaker 3

To your question about step edits, I think it's a very simple and easy thing because again, fee levels can be measured very quickly. So step edits can we can get patients quickly on to subcuterin to prior authorizations and rapidly through fee measurements. So overall right now, the response has been overwhelming by the APHINITY data and the PKU community right now is very excited to have a new treatment option.

Speaker 12

Great. Thank you. And I think the team has pointed out the $1,000,000,000 opportunity in PKU before and that was with the assumption of modest penetration. So I guess, what are your internal assumptions for penetration to breach that $1,000,000,000 opportunity in the U. S?

Speaker 2

Yes, I

Speaker 3

think, right now, I would say, first of

Speaker 2

all, we're preparing for global launch, all right.

Speaker 3

So there's going to be contribution everywhere, but we believe that there's $1,000,000,000 opportunity in the U. S. Alone. And if you look again, if you have somewhere between 17,000 to 20,000 patients and 90% of them are not on medical treatment, a very modest penetration even somewhere between 20% to 30% would get you there. And especially if it's supported by a premium pricing strategy, which we believe we can get and while we believe $1,000,000,000 launch in the U.

Speaker 3

S. Alone is an important opportunity, We're not ready to guide yet on the product. We're going to be as we get closer and closer to launch, we will be guiding on product revenue. We're excited with this opportunity because of the substantial unmet need and how many patients currently are not on medical treatments.

Speaker 12

Got it. Thank you.

Operator

Thank you. Our next question comes from Payton Bonsack of TD Cowen. Your line is now open.

Speaker 13

Hi, Andy. This is Peyton on for Joe and congrats on another strong quarter and thanks for taking our questions. I guess on the vaticumone application for December, what's outstanding for the submission? And then I know the FDA requested some stats for natural history when you were designing the analysis. Have you sent that to the FDA?

Speaker 13

Have they reviewed it and given any feedback? And then I've got a follow-up. Thanks.

Speaker 2

Yes. Thanks for the question, Payton. I'm not sure I heard the second part of your question about the statistical analysis plan, is that what you asked?

Speaker 13

I was asking, whether or not, after the readout came in October, you've, the FDA has reviewed that or you've sent that to the FDA and if they've given any feedback on it.

Speaker 2

Got it. Great. Okay. So in terms of outstanding items, we're just finishing up all of the summary reports and write ups from the long term extension studies. Obviously, we got those results in October.

Speaker 2

It takes some time to just write that all up format and get the table set and send it in. We had had our pre NDA interaction with the agency also in October where we reviewed with them the contents of the package, including what we were planning to show in terms of long range long term outcome data. They've seen some of the data. And importantly, they had previously agreed to the statistical analysis plans we were using both for the analysis of the MOVE FA long term extension as well as the long term extension data from the earlier placebo controlled study completed a few years ago. So they knew exactly how we were going to analyze the data, how we were going to do how we went about doing the matching, the endpoint strategy with the primary endpoint being change in MFAR scale over time.

Speaker 2

And so that we will fully align with them on that. And as I mentioned, they have seen some of the data. We don't expect any additional feedback from the agency until after we submit the NDA.

Speaker 13

Great. That makes a lot of sense. And then I guess really quickly pivoting to YUPESSAZA. Have all the necessary inspections been done for the manufacturing facility? And then assuming approval next week, how quickly could you launch the therapy and how is patient identification gone?

Speaker 2

Yes. So with the PDUFA date of November 13, any inspections are long since done. Everything went quite well from an inspection standpoint and we look forward to hearing from the agency next week. We obviously remain optimistic about the potential for approval based on our interactions and we look forward to being able to bring this transformative therapy to patients in the U. S.

Speaker 2

As quickly as possible.

Speaker 13

Great. Thank you.

Operator

Thank you. Our next question comes from Paul Choi of Goldman Sachs. Your line is now open.

Speaker 14

Hi, good afternoon and congratulations on the quarter. Thank you for taking our questions. I want to maybe just follow-up on with regard to vatiquinone payer discussions here. Can you maybe just comment on what payer feedback has been and just sort of how you may be potentially sort of thinking about pricing relative to Skyclaris here for the adult population? And secondly, the cash position remains very healthy here.

Speaker 14

And Matt, I just wanted to sort of ask what your appetite is currently for potential external business development versus funding the upcoming multiple launches here in 2025? Thank you very much.

Speaker 2

Yes. Thanks for the questions, Paul. Obviously, we're a bit early to be having the payer discussions on vatiguino. We're focused now on getting the package in. But I would say that, look, there's a clear unmet need for pediatric and adolescent patients and we have a data package in terms of safety and efficacy that supports an important benefit for these patients.

Speaker 2

As we know as well, there's important proportion of patients who are pediatric and adolescent, but as diagnosis is increasing in the field, patients who are being diagnosed are increasingly young. And so that need, that unmet need for FA patients is getting strong and we look forward to being able to provide a safe and effective therapy for those patients. But as you raised, we also believe we can be able provide a therapy for adult patients. We have evidence in Move FA of benefit in adult patients. We have evidence on the upright stability scale, which speaks directly to the ability to reduce risk of loss of ambulation, which is incredibly important for any ambulatory pediatric ataxia patient of any age.

Speaker 2

And of course, in the long term extension studies of both MOVE FA as well as the earlier placebo controlled study, which was conducted only in adults, we have evidence of important long term benefit in slowing disease progression. Again, we also have a very strong safety and tolerability profile. So I believe we have really a differentiated product that we look forward to thinking about how the price and also having discussions with the payers on that. In terms of the cash position, look, we've worked very hard both in terms of restructuring the balance sheet towards the end of last year, our efforts to reduce operating expenses and move the company towards cash flow breakeven. I think having a strong cash balance not only enabled us to launch the products and we would love to be in that situation of having needing to have the capital to launch more products within a year in the U.

Speaker 2

S. And the global launch of Cepiaterin. But we also, of course, remain opportunistic about business development. And we have the cash we have on hand. We also have the ability if we needed to draw down some of the additional royalty monetization that we did with Royalty Pharma, if we saw an opportunity that fits well into our portfolio.

Speaker 2

Look, we're in a position where we could be launching many products in the U. S. In the short term. And so now we need to think about how we could use business development in a strategic way to help fill out the commercial portfolio ex U. S.

Speaker 2

And also think about any other opportunities that can set very easily into our existing commercial infrastructure or even development infrastructure.

Speaker 3

Great. Thank you.

Operator

Thank you. Our next question comes from Gena Wang of Barclays. Your line is now open.

Speaker 7

Thank you. I have a few quick questions. The first one regarding Cepeterian PDUFA day, July 29, 2025. Just want to confirm that FDA confirmed there will be no PDUFA no Adacam. My second question is regarding the Translarna.

Speaker 7

You mentioned that right now the 67 days in EU. So can you walk us through like say after 67 days, if the decision is unfavorable, what will be the next steps and how long would that take the process and then when we really will see the actual impact on the revenue in Europe? And related questions or maybe unrelated, Brazil, I know you are under independent assessment there. Do you have independent approval process back in April? Any update there regarding the renew process there?

Speaker 7

Lastly, very quickly regarding AADC next week, you will get approval hopefully, keep our fingers crossed. How ready are you regarding the manufacturing? How many doses you already stocked? And how quick you think that you can get ready to how many patients you already identified in the U. S?

Speaker 2

Gina, thank you for the questions. Let me walk through them 1 by 1. First, on the PDUFA date for cepiaterin, it is July 29, 2025. We do not expect it to be an ADCOM. There's been no indication of ADCOM.

Speaker 2

And again, we're in a situation where the endpoint of the trial reduction of phenylalanine is published as being one of the blood tests that can support full approval. Obviously, the agency understands PKU. They've approved 2 therapies before for PKU. So I think this is not one where we would expect to have an AdCom In addition, the clear efficacy of in the data package is also leaves very little question. I think that would need it to be brought to an AdCom.

Speaker 2

Your second question was about Translarna and the timeline in the EU. Look, the 67 days is an approximately 67 days as we learned the first time we went through this in the spring. We expected 67 days to take us from late January late March, early April and it wasn't until late May that we actually got confirmation that the EC had made the decision to not adopt opinion and send things back to CHMP. So I think that it's the approximate 67 days. And Gina, we can't say for sure what happens on the other side of that because it's going to depend what the European Commission says.

Speaker 2

They could adopt the opinion and say we're going to adopt it and adopt it and for immediate implementation or we're going to adopt it with delay implementation. We're in a situation here and it's important to realize that this has not been this has not come about gateway safety issues. So there's no patient risks here in terms of there being an urgency to get the product off the market. So I think that may also provide a little bit of flexibility as well in terms of what exactly happens in terms of the steps following adoption of the negative opinion. And then of course, it's sent back to the CHMP and that's a whole lot to see what those instructions are as well.

Speaker 2

So still a lot of unknown there. The 67 days is approximate and obviously we'll learn more as we reach that timeline. In terms of Brazil, it is an independent assessment. It has been ongoing. We have not gotten any additional feedback from ANVISA.

Speaker 2

What we do know is that we had 2 orders in Brazil, bulk orders, 1 in the second quarter and 1 in the third quarter. We obviously view that as a good sign that there's obviously a strong interest for the Minister of Health to ensure that patients in Brazil remain on Transmora. And then in terms of AADC, we're ready. I mean, again, we had the EU approval in 2022. We've been we've had approvals.

Speaker 2

We had a decent approval in Brazil for AADC deficiency. We had approval in Taiwan, approval in the UK. We're doing cross border care. We're in the process of treating patients around the globe. So we have more than adequate supply.

Speaker 2

And again, once we see the label, we'll understand what the addressable patient market could look like in the U. S. And we have, we believe more than enough supply at hand to treat patients well through the next 1 to 2 years.

Speaker 7

Great. Thank you.

Operator

Thank you. Our next question comes from Danielle Brill of Raymond James. Your line is now open.

Speaker 15

Great. Thank you so much for the question. I just have a quick clarification from an earlier question. I'm curious why the Translarna NDA submission is technically a resubmission under protest. Why wouldn't it be a new NDA since you now have new data to review from Study 41?

Speaker 15

Thanks so much.

Speaker 2

Yes. Danielle, this goes back to 2016, 2017. In 2016, 16, the NDA was filed over protest. The agency reviewed it and issued a complete response letter. The main issue in the complete response letter was the need to conduct an additional adequate and well controlled trial to establish efficacy.

Speaker 2

Study 41 addresses what was in that CRL and therefore this was technically a resubmission of that NDA now fulfilling the deficiency identified that led to the complete response previously in 2016. Does that make sense?

Speaker 15

It does. Thanks, Matt. Appreciate the clarification.

Operator

Thank you. Our next question comes from Joe Schwartz of Leerink Partners. Your line is now open.

Speaker 16

Hi, thanks so much. I have a question about vitequinone and one on utraloxastat. So in FA, we've heard that while some patients think that they've benefited more patients seem to not be blown away by Cyclaris' efficacy. So we're wondering how that might influence how patients might feel about vityQuinone, which is following in its footsteps and works further downstream. How do you think this market is evolving now in terms of patient demand and retention for new treatment options as well as their potential to switch or try a combo with vityquenone?

Speaker 2

Yes. Thanks for the question, Joe. First, vatiquinone acts upstream of at least mechanistically of where SKYCLARIS is in terms of its effects in the ferritosis pathway. But I would say, look, I think in the clearly there's no option for pediatric and adolescent patients with Skyclaris given the age limitations of the label. And in terms of the adults, I think it's always hard with drugs that slow disease progressions and patients' perceptions of if they're getting better or not.

Speaker 2

It's always hard to know. But needless to say, I think that we would certainly be able to provide a therapeutic option where we believe we can provide benefit to patients. The data from MOVE FA is showing effect not only in slowing of disease progression, but also a significant effect on the fatigue scale, which we know is the number one symptomatic complaint of patients with Friedreich ataxia. Do I think that people will be interested in combo therapies? I do.

Speaker 2

A lot to be sorted out there, of course, in terms of payers and such. But I think, look, when anytime you have a complex disorder like Friedreich ataxia, it would make sense that you would likely would need more than one therapy. And it might be that 2 therapies could have a combined effect. But look, we look forward to being able to offer vatiguardone to FA patients, particularly the kids and adolescents who desperately need a therapy. I mean, look, if you're going to slow disease progression, the best thing to do is to start as early as possible so that you can enjoy the benefits of slow progression as much as possible.

Speaker 2

And for adults, we welcome the opportunity to provide them with a safe and effective therapy as well.

Speaker 16

Okay. Thank you. And then for targeting ferroptosis in ALS, can you give us some context for what you're trying to achieve mechanistically? Is there a particular threshold you're looking to meet based on any preclinical or natural history data that supports your therapeutic hypothesis? And have you done anything in the CARDINAL study to select patients that might best respond?

Speaker 2

Yes. It's a really, really good question, Joe. Obviously, this is the first disease study we have with etroboxastatin ALS and I expect we'll learn a lot on the other side about how we can how enrichment could possibly go. But look, the rationale for targeting ferroptosis is very well established in ALS. There's a number of different preclinical studies that clearly show that if you target ferroptosis, whether that's by inducing overexpression of GPX4, which is a key enzyme in the ferroptosis pathway, you have significant phenotypic benefit.

Speaker 2

Similarly, if you augment the therapeutic process through any number of insults, you can accelerate decline in ALS. The whole concept of SOD1 in superoxide dismase speaks directly to being able to affect oxidative stress and the relevance of oxidative stress in ALS. So there's a great bit of data to support the rationale for targeting ferroptosis. But look, ALS is an incredibly complex and aggressive disease. We hope to be able to provide a therapy that could slow that progression by targeting what's known to be a key pathologic element.

Speaker 6

Thank you.

Operator

Thank you. This concludes the question and answer session. I would now like to turn it back to Doctor. Matthew Klein, CEO for concluding remarks.

Speaker 2

Yes. Thank you very much, operator. Let me just follow on the last question to Joe and just share with everyone that as we are getting close to having data for the neutraloxicestat CARDINAL's ALS study, following this call, we're going to not be taking any questions and be in sort of a quiet period for the CARDINAL study just because of where we are in terms of being close to having data in the next period of time. Overall, again, thank you everyone for joining the call. We're incredibly excited about the strength of the quarter, the revenue performance, the ability of our teams to continue to execute at incredibly high level across all parts of the company, whether it be on the commercial side, on the clinical and the regulatory side and all around.

Speaker 2

We look forward to keeping you updated as we saw the number of important milestones this year. And again, thank you all for joining the call and have a good evening.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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Earnings Conference Call
PTC Therapeutics Q3 2024
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