PTC Therapeutics, Inc. (PTCT) Earnings Call Transcript & Summary

Hi, everyone. My name is Gena Wang. I'm SMID cap biotech analyst at the Barclays. In this special situation, I first wish everyone, stay healthy, and I would like to thank all the participants, including investors, companies and especially our event team and our corporate access team who made this virtual health care conference possible. With that, I would like to introduce our next speakers, Marcio Souza, Chief Operating Officer; Alex Kane, Executive Director of Investor Relations from PTC. Marcio, I will hand over to you.

Hey, Gena, and hey, everyone, and thanks. I'm going to echo what Gena just said. I hope everyone is safe and will remain safe throughout this challenging situation we're having globally. Very glad for Barclays to organize this and to keep the conference running. And I think we're all a little bit of apologetic. I'm sorry for not being able to be face-to-face with most of you down in Miami. Gena, I think I would start with a little bit of a company view and the situation we are right now, if that's okay?

Yes. That sounds great. I think since you have a lot of progress in 2019, and we expect to see many updates in 2020, maybe could you give us a brief overview?

Oh, absolutely. I would be pleased to do that. So PTC, just like a quick update for some of you who are not that familiar with us, right, we're a global, commercial, diversified company. We're founded 22 years ago and been public for about 7 years at NASDAQ. Currently, the company has a presence really throughout all the regions in the world, with more than 800 employees, reaching about 50 countries in terms of patients we serve every day. For products commercially, globally, 2 in Latin America, 1 here in the United States and 1 globally outside of the U.S. and with an excess of $300 million in revenue as we expect. So quite robust in terms of the stage we are, and we're very happy with the progress. We have preliminarily, and in the past, guided for 2023, to reach $1.5 billion in revenue, and I'm going to go into details a little bit later, I believe, on how we expect to get there in the different platforms. Our core belief is sustainable innovation, and the way we look into that is we got to generate revenues to continue to invest on the pipeline. Historically, fairly agnostic on where the technology comes from, either internally or externally, we've been very active on the [ BD ] front. Some of the topics we're going to discuss today came from external problems but also very proud of the internal developments the company has. As the next milestone, I think everyone is anticipating, there's the launch of our partnered products with Roche and SMA Foundation. We used the plan for all types in SMA and then our gene therapy product for AADC later this year and next year. The platform right now, in terms of the integrated, all the way from discovery to commercialization, have the nonsense mutation, our redox platform, the splicing that we're going to explore, gene therapy, something emerging and moving fairly quickly internally, and most recently, we added, which I consider to be a very exciting part of the business, this Bio-e platform, which is used a number of redox mechanisms to address several types of disease. Our goal is to have 20 research programs in 5 years or by 2023, and the strong programs we have in development right now is to generate an excess of $1.5 billion, as I mentioned. So lastly, just go through some of the key things that are coming up in the next several quarters and months. So our dystrophin data for our Study 045 in the United States is coming -- is receiving in our next quarter. Our BLA for AADC is to be submitted on the same, I mentioned before, but the May 24 is the PDUFA for risdiplam, and we are entering on the Bio-e platform with 2 pivotal trials, 2 potentially pivotal trials, 1 for mitochondria epilepsy and the other 1 for Friedreich ataxia. And finally, our second program that should be in the clinic for the splicing platform is Huntington's disease, and we expect to be that in the clinic later this year as well right after we declare the [ GC ] later. So that's where we are, so it's a very exciting point to be for the company with a very complex pipeline and commercialization.

Thank you. So maybe I will start with risdiplam questions. So how is U.S. launch prep on going from your partner? And how should we think about the potential launch trajectory?

Sure. So Roche is in charge of the launch prep. We've been pleased and glad to have been involved us in the discussions. It's been a wonderful partnership with them. And I consider it like a best-in-class launch prep being done by the Roche and the Genentech team in the U.S., obviously, making sure that we're going to be ready whenever the FDA approved. Historically, if you look into -- Roche has been very good in executing launch in the U.S. and elsewhere. So my expectation, PTC's expectations that the launch trajectory is going to be very fast and very robust. When you look into the U.S. population, where the first launch should be, there's a huge unmet medical needs on the patients with Type 2 and 3 that are not being treated, less so on the Type 1s. There is still a large opportunity there. And that should really change the inclination of the curve in favor, risdiplam, when they look into a drug that is expected to have a relatively broad label Types 1, 2 and 3 with data presence across the segments and the oral distributing to all tissues. We expect that long trajectory should be quite positive.

Great. What has been the payer feedback so far?

Yes. So Genentech and Roche involved and discussed with several payers. I believe they are like diversity and bringing new things to the markets. The, I would say, to keep at the level, I believe it's appropriate for the prelaunch, it's been quite positive, and I think they are welcoming one more alternative, especially one that expense towards the Type 3 patients that are really a need right now, and there is not much that can be done for those patients.

Okay. So do you expect pricing comparably to SPINRAZA? Or do you think it'll coup pricing at the premium?

Yes. So conceptually, right, I think this product has all the characteristics of a premium price. If you think about it, like it's the ease of delivery, the utilization of the healthcare system in general, which is very appropriate to talk about optimization of the healthcare system right now since we are in a healthcare crisis to start, and the fact that the data so far is very broad in all patients. Now we also had to acknowledge that there is a very competitive marketplace, and Roche has been thinking hard about this. I think there's a history from the company to price properly and to price to win, and I expect they're going to take all of business consideration as the final price is being defined.

Okay. Great. And for FIREFISH Part 2, could you remind us what kind of data will be presented at the AAN.

Yes, absolutely. So very excited about the presentation coming up at AAN in Toronto, in about a month or so. So we read out FIREFISH Part 2 before like other disease. Most of you might recall, there were 40 patients to be enrolled on that trial. We end up having 41 patients enrolled on that trial. 12.5% of the patients had to be able to sit at the 1-year mark for the trial to be positive. We announced that the trial has been reached its statistical significance, so we know that at least 12.5% of the patients have success. What we're going to be looking for AAN is a more complete disclosure in terms of the actual numbers that achieve that milestone and other milestones, the difference in the different scores, and obviously, the safety. While we mentioned previously, the sales continue to be quite positive for the program, we're going to give like a full picture of how this patient's gauged. It's an easier data set to compare with other trials because the daily development, and this is a little bit more well studied in SMA. So we expect that from an investor perspective, it's going to be a relatively easier to compare. And then from a physician's perspective, should add to their confidence that risdiplam should be the best-in-class here in the first-line treatment for patients.

Okay. So for SUNFISH Part 2, when should we expect additional data to be presented or published? And will we see also additional data in terms of the age breakdown for certain functional measurement?

Yes. So I think that's a good expectation to have to achieve in terms of continuous increasingly more data and different endpoints, different analysis to be shown in the near future. There are 2 major meetings coming up for SMA, so Cure SMA in the U.S. and World Muscle Society. There is obviously discussions about the data to be presented, but you should expect a stream of data being presented in the future meetings. I would say, at this point, probably WMS is a good meeting. It's a big meeting for physicians across the board, and that's something we always targeted to have, but there are meetings in between as well that we'll be able to make sure we give an update.

Okay. And regarding the RAINBOW pre-symptomatic data, should we also expect some update at the World Muscle?

Yes. That's another good question. The RAINBOWFISH, so it's -- for the people not familiar, it's trial enrolling presymptomatic patients. We have patients enrolled in that trial since last year. We had pregnancies we've been following to finish the enrollment there. So going really well. I think it's a reasonable expectation that as the data mature, would be at the time of WMS looking to present some of the initial data from that study.

How many patients do you expect from...

RAINBOWFISH?

Yes. RAINBOWFISH.

Yes. So we haven't discussed much about what's going to be presented, so I'm going to leave to balance right now. We want to make sure the site that enrolling still have an interest to enroll, but it's being exactly what we expect in terms of enrollments and patients that have been benefiting from the drug already.

Okay. Great. So maybe switching gears to Translarna. Yes. So you also mentioned a Study 045 data, the -- how should we -- like, will you have a press release? What kind of format you will share the data with investors?

Yes. So our practice has been to press release the top line. We did that on the previous trials, we expect to do that for the Study 045. So Study 045 is expected to read out next quarter, so no longer than 3.5 months from now, and we expect that to be first initial top line. And then as we understand more of the data, secondaries and things like that, we would be presenting more in a scientific meeting. But you should be able to read positive or not trial and then talk a little bit about next steps at that point in time.

Okay. Could you walk us through the analysis plan and also where and how the biopsies are taken?

Yes. Yes, absolutely. So the -- so maybe we're start with the biopsies, right? So they're all taking at one site at UCLA. We chose to do that way to reduce the -- just the general variability that exists between sites. It's normally the case. We're using the VACORA system to remove this tissue. It's a vacuum-assisted biopsy system. It's instead of open biopsy, we feel that on a patient preference, from a physician's and from [ reliabilits], we could get very good results there. It gives sufficient tissue for everything we need to do. There's a number of sites we are collecting tissue from, but before, there are 6 main samples. And since you asked about the analysis plan, I just want to go into detail a little bit there. So 3 cores from each 1 of the main biopsies, upper limb and lower limb biopsies. And the way we are going to analyze this, the primary endpoint is the ECL chain. So we're going to measure that dystrophin as quantified by ECL at baseline and at 9 months. The analysis plan is such that we're going to have 6 samples at baseline and 6 samples at the end. We measure dystrophin in all of them and then the highest value at baseline, and the highest value at 9 months are the samples we're going to be comparing or going to be making the difference to be the difference change or the new change from baseline to week 40. We chose to do that way for many reasons. One of them is any issues that has with one [ quadrant ] to interfere with the general analysis. The hypothesis here is that there's going to be low dystrophin at baseline, and that's what is being seen in the pilot testing that we did and on the biobank analysis that we did. So in that circumstance, you increase the probability of success for the study by taking the change. Now when we look at into the biotest that we did, this is very tight, the correlation between these samples, the 6 cohorts, but we didn't want to take any chance here so make sure we have the most robust way to analyze the samples.

So Marcio, the -- is that possible you have a comparison from the same patient, the baseline and the 9-month biopsy that could from a different muscle?

Yes. That's super important. Yes. Sorry, go ahead.

Yes. So my next question is, is it from different muscles, how -- and we understand it's a muscle, the protein level expression could already have some variability, so how do you normalize that?

Yes. So we -- the hypothesis when we started validating the test and the biopsy itself is that we would not be able to compare, which was quite interesting because if you look into the literature, if you look into the attempts by others out there, they saw a pretty big difference when they sample 2 muscles. We cared so much about control from the beginning that we believe we really control for all those variables. So on the pilot studies that we did in the samples, it's basically indistinguishable the sites that we are sampling for the quantification, which is great because it allows us to do exactly what I just said. So when you look into -- in the studies that I mentioned, right, in these biopsies that we did, if you look into the TA or the VL or any other muscle, you basically cannot differentiate where it's coming from. So it was great, so there is no concern for us. You're technically never really biopsying the same issue because once you remove that sample, that sample's gone. There is no pre and post. But there was a general belief that you'd have to biopsy very closely to the original sites, and I think what our study showed is that, that's not necessary, at least on our hands with the techniques that we have developed.

Okay. Did you discuss all these analysis with FDA? Did the FDA sign off with the approach of selecting a baseline in 6 months -- sorry, 9 months biopsy as well as ECL testing?

Yes. So I will start with the last part. So the validation of the ECL testing was discussed several times with the FDA. They participated, and I have to thank [ Dr. Ash ] and the rest of his staff at the FDA and the rest of his staff at the neurology division. They were really terrific on partnering with us to get this done. And yes, we have a very like clear agreements with them on this being a good message to quantify dystrophin. All the other aspects of the protocol and so on, we'll obviously share with the agents as well, and we received feedback and we adapted to the feedback and so on. So there, we don't have an SPA for this trial. We don't have a sign off as you would say, but that as is stronger for endorsement, I would say, the one we have in the situation as we are from the agents, we went above and beyond to involve them, and we really appreciate the engagement they have with us.

Okay. And if positive data, what will be the next steps and the time line associated?

Yes. So we're being already engaging with the agency, assuming it's going to be a positive trial, as I believe one has to. So the -- obviously, you need to write a CSR for that trial. It takes a little while, but not too long. That is matters of other datasets. For example, the safety, like this is a drug that is approved in several countries. So [ safety kits ] piling up, which is very good. And we have to agree. And as we're in discussions with the FDA on when the sixth block is, for that, for example, and many other things that are more on the administrative side and on the structural side of the NGA. But we would expect that in a few months, after we have this [ CSR ], we'd be able to submit and then have that approval, hopefully, in a expeditious fashion. So anywhere in the beginning of next year to play a little bit of best case scenario is where we'd expect to be available to get the U.S. patients, if it's all positive.

Great. Maybe switch gear to gene therapy. For the AADC BLA filing, I'm just wondering if you can give a little bit latest update regarding the status?

Yes. Yes. So we've been talking to the staff at [ Ciber ], and to a lesser extent, but also to the staff at [ CDRH ] or here, understanding as we continue to advance and collect data to make sure we are satisfying their needs, productive conversations so far, and we expect to continue that way. Our understanding and what we've been planning to do based on conversation we had in Q4 with the FDA is that they are looking for some safety data on the commercial device. We established multiple pathways to collect that. We explained to the FDA the multiple pathways that we are doing, and we are executing on those multiple trials, so we have a Plan A and a Plan B, to some extent, to get there. And it's all the indications right now that we would be able to submit next quarter, as we mentioned before.

Okay. And for the 200 patients you identified to date? Are these all from U.S.? And also, how many of these actually could be addressable by the product?

Yes. So the over 200 patients that we have identified, they are in the key geographies that we mentioned before. So some select countries, Europe, the United States and Brazil, it's going pretty well and picking up the pace, and I'm very happy with how this is going now, and it's just like selecting new techniques and new ways to find patients there. The -- so it's going well. We did not break up in terms of geographies, so stay tuned. We're probably going to talk more about this at our June 16 Science Day in New York. So that's going to be a great opportunity to discuss everything we're doing and the progress we are making. In terms of the addressable, the key part of the population that is not addressable for us right now is the patients younger than 18 months of age. And when you're looking to the percent of patients on that segment, it's very small right now. Now it's also the ones that we expect to grow the most in the outer years. So if we are putting a lot of efforts to develop surgical techniques because that's basically what it is, that need to address those patients. At the time of launch, we expect the addressable to be around 85% of the identified patients, and we are accounting for that as well on all the projections we have.

Okay. Great. Is it fair to say like half of these 200 roughly will be from U.S.?

I think it's fair to say that when you look into right before the launch, it's going to be a very substantial number of patients in the U.S. And I'm going to make sure we give an update since that time is there. But right now, I would prefer to say U.S. is an our most important markets. We are putting a lot of efforts, it's where biggest investments is, we have more people in the ground in the U.S. than anywhere else in patient identification, and we are confident we're going to be successful there.

Okay. And then just quickly, what is your current thinking about pricing?

Yes. So we're discussing with a lot of payers. We've been very open on the discussions with them, and their stance, a drug like AADC deficiency gene therapy candidates here has a very long period of observation, these patients, right, the first patient dose just had the 10th year anniversary or follow-up. We have a very long safe database for those patients and every single one of them responded. When you're looking to that, a response rate of 100%. It's not -- the effect is not being reduced throughout the years. It's very clear from the feedback we got from the payers that they understand this is going to be premium or is going to be a high price as one would call, specifically as we account for the small patient population. So we know what the price is for the gene therapies in the market now, a little bit north of $2 million per patient. I think it's not unreasonable to expect that it's going to be there as well or higher, and we're making sure all the mechanisms are in place to get not only at like the price in place but access throughout every possible patient and every possible geography. The payment systems might have a little bit different way to pay for these drugs, and that's what we are discussing and learning and proposing. But for the most part, the acceptability of the concept for AADC deficiency and just how robust the results are being generating extremely positive conversations with the payers.

I know we are running out of time, but still wanted to quickly ask you about Huntington program.

Sure.

Can you walk us through the steps you need to take in order to file R&D by the end of this year?

Yes. So very excited about that. It would be the second product that will be in the clinic. Our goal is to have this product in the clinic by the end of the year. We are full-blown right now, and SMA has on the ING-enabling talks are on the definitive talks for the program, finalizing everything else around it, having interactions with regulators and key opinion leaders on the design for the first trial. But the expectations by the end of the year, we should have the single ascending dose started or initiated, and so they're going to multiple ascending and how volunteers, we should learn a lot, about not only the dosing or the PK, but also the PG because you're going to be able to measure the transcripts and the protein in different tissues, which should enable us to move very quickly to patient next year. So very excited about this program. It's a big indication. It's a huge unmet need, and we feel that orals are very differentiated to be able to move into these markets.

Thank you very much, Marcio; also, Alex.

Thank you so much. It's a pleasure. Take care.

Thank you, everyone. This concludes our call.