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

Ladies and gentlemen, thank you for standing by, and welcome to the PTC Bio-e Deep Dive. [Operator Instructions] I would now like to introduce your host for today's conference call, Mr. Alex Kane. You may begin, sir.

Thank you, and good morning, everybody. Hello, and thank you for joining us today for our first Deep Dive webinar on the Bio-e platform. With me on today's call is our Chief Executive Officer, Stuart Peltz; and our Chief Development Officer, Matt Klein. We are excited to be hosting today's deep dive, as well as the upcoming series of deep dive webinars on our platforms and programs throughout the summer and the fall. In today's webinar, we will provide a detailed overview of the Bio-e platform, review prior clinical results for the lead Bio-e compound and outline expectations for the 3 upcoming Bio-e clinical trials. With that, let me pass the call over to our CEO, Stuart Peltz. Stu?

Yes. Thanks, Alex. Thanks all for joining. Appreciate it. As Alex said, it's unfortunate that we can't be all together and have a day of going through these platforms and programs in the science that we're doing. But this will be the beginning of webinars on deep dives. And today, we were going to be starting with the Bio-e platform. We will be making some forward-looking statements. So I suggest that you look at our filings. So let me start and say, from the beginning, is we've been an innovative science company, you can see the pipeline here. And you can see the pipeline is really built as a consequence of having multi platforms. That really has been leading us to a diverse pipeline through all stages, including discovery, development and commercialization. And so we have an expanding research profile here. And so today, we're going to talk to you about the Bio-e program. And we've been, I think, very strategic. This is, I thought, a strategic platform that we've built upon, and you'll be hearing about the other platforms as we move forward. And we've done this both through a consequence of really internal innovation as well as through strategic business development. And just to remind you, what we are building at PTC is really a multi-platform approach in which we think this is going to really drive sustainable innovation, but also in turn to continuously have value creation for all our stakeholders. And I think it's going to allow us to reach our goal of generating more than $1.5 billion in revenue by 2023 and continue to create substantial value and revenue as well past that point. And so what you could see on the next slide is the products that we have been commercializing or will be near commercializing and what we anticipate is what [ with a ] target -- as a consequence of these products that we will -- the revenues will get to the $1.5 billion that were -- of what we said. And these are the commercial products and potential SMN, AADC that -- as well as the U.S. dystrophin are all coming on this year and during the near-term launch. What's interesting about that is really that when you look at the pipeline, what you can see is the vast majority of our pipeline, including the Bio-e platform, is not included in the revenue target by -- of a $1 billion -- of greater than $1.5 billion by 2023. And this is actually a very important point because it allows us -- you'll see that this substantial value that's going to be created in the near term. And today, what we're going to be focusing on is the Bio-e platform. So this is a -- has, I think, very important, has 2 potential registrational trials that are kicking off this year with readouts by 2022. So this is really quite exciting for the potential of this platform, and we think can create substantial value for our shareholders in the coming years. And the other point, obviously, is that this is not included within the $1.5 billion of revenue. So when you think about why it was that we were so excited about this platform. So we think that the -- and the reason is we think it has very much a broad potential across a number of different indications. And most importantly, I think -- we think it's a truly novel approach where it's using -- the platform really uses against oxidative stress and it could be used against a number of different indications. And it takes advantage of novel targets, but also novel chemistry that is not only the lock-and-key idea of the small molecules, but it also has electronic transfer chemistry that modulates these key biological processes. And I think these are quite unique in the sense of -- these have -- this approach is -- that we've built on is really quite unique and novel. And when you look at the number of enzymes that regulate, in a sense, the oxidative stress processes, there's probably well over 500 targets of which 100 of them look like they could be quite interesting. So we'll be talking about 2 molecules, 743 and 857, that have validated mechanisms, extensive pediatric safety and exposure. And the other interesting aspect is, is that it really has -- the platform also has really a diverse number of targets. But also, I think what's unique about this platform is that we have a diverse set of redox small molecule library that we can use to target both CNS and non-CNS targets. And so what you're going to hear about today is about 3 programs, PTC743 for -- to treat refractory mitochondrial epilepsy and then -- as well as 743 for Friedreich's ataxia. And then we'll be -- and this targets the 15-lipoxygenase that you'll hear about. And then another molecule, PTC857 that's going into Phase I trials that we will be doing against GBA Parkinson. So I think you can see this is actually, I think, a quite exciting platform. And I think what's so interesting, when you think about how do you put the thoughts of this together with the oxidative stress pathway, I think it's interesting to think about that in that -- what we're doing is when there are pathways that are key mediators for processes, it -- I look at it as somewhat analogous to, in a sense, inflammation, where normally you have inflammatory response against an immune response that is turned off after it's completed its task, and disease often occurs as a consequence of dis-regulation of the -- and chronic activity of an inflammatory response. You could think of sort of oxidative stress as another one of those key mediators where in a sense it modulates electrons. And so -- which is why you see the mitochondria being at the center of this, but also measures damage, examples include to the membranes. And so when you can say well, how does these -- look at maybe the fact these disparate diseases all go through the oxidative stress pathways. Because if you think about mitochondrial epilepsy, ATP or energy, right, that the brain uses more -- utilizes more energy than any other organ in the body and dis-regulation of that, you can see how that can cause epilepsy. Friedreich's ataxia, you could see it's a similar DNA damage and oxidative stress goes through that pathway. And then the GBA Parkinson is -- similarly is a kind of GBA in lysosomal storage disorder causing DNA damage. And it's all dis-regulation of the number of electrons that turn on the oxidative stress processes leading to disease. So when you look at it from that's the key pathway in which this is regulating, this makes it a very important pathway to treat a wide number of diseases. So that's what I think makes this such an interesting set of targets. So with that, I want to just introduce Matt Klein. Matt's been with us as the Chief Development Officer. Many of you have already had the pleasure to speak with him in his new role as the Chief Development Officer. He has a -- he is a physician with a background both in treating patients and also in industry. And so he really has a very unique perspective and a wealth of knowledge on the Bio-e platform. And so the only thing we sort of have a knock on him is his choice of sports teams, but -- which he's for, but beyond that, he's quite a good guy. So let me pass the mic over to Matt. Matt?

Thank you very much, Stu. It's a pleasure to take all of you on this deep dive into the Bio-e platform. The Bio-e platform is really a story. A story of how we leverage our expertise in the specialized area of electron transfer or redox chemistry to drug a unique family of electron trafficking enzymes that regulate disease-causing pathways. We began by treating children dying of genetic brain diseases of electron transferred chemistry and used that experience to build a portfolio of programs and a pipeline targeting diseases of significant unmet medical need. So let's begin with the platform. The Bio-e platform has 3 essential components: novel targets, oxidoreductase enzymes, novel small molecules; redox active compounds; and a novel approach. The novel targets, oxidoreductase enzymes are a family of enzymes that regulate energy metabolism and are unique in the requirement for an electron transfer reaction to activate or inactivate their biological activity. The novel small molecules come from our proprietary redox chemical library that has over 20,000 scaffolds capable of performing the electron transfer chemical reactions needed to affect the biological activity of the oxidoreductase enzymes. Third is our novel approach. To develop redox active drugs requires specialized screening tools, enzyme assays and specialized medicinal chemistry capabilities to optimize biodistribution, safety and potency, all of which we, of course, have. The novel targets are oxidoreductase enzymes. This is a family of enzymes, many of which have well-described roles in the generation of energy and the regulation of inflammation and oxidative stress. These enzymes are unique in that their activity is achieved through electron transfer reactions; that is, from the transfer of an electron from one molecule to another. A number of these enzymes have known biological significance that we at PTC are the first company able to systematically drug these enzymes, given our understanding of their unique chemistry and our library of small molecules that are capable of carrying out the necessary electron transfer reactions needed to affect their biological activity. These small molecules come from our proprietary library of over 20,000 redox active scaffolds. The library was purchased from Polaroid many years ago following its bankruptcy, as developing film is really a series of redox chemical reactions. This library not only has the structural diversity one typically expects in a drug library, but also has redox diversity. That is, these series of compounds differ in their ability to transfer electrons to different oxidoreductase targets, which provides a level of selectivity and specificity. Similar to traditional medicinal chemistry efforts, when we do drug development from this platform, these compounds are optimized in the development process for structure activity relationship. However, in addition to optimizing SAR, we also optimize compounds for redox activity, which can affect target selectivity and potency. The compounds we develop from our Bio-e platform share a number of important characteristics. They are all small molecules. They are orally bioavailable, though it is possible to develop IV formulations. They are highly selective for their oxidoreductase targets. They have a defined redox activity, that is, a defined capacity to transfer electrons. They are catalytically recycled, which means once one of these compounds donates electron to an oxidoreductase target, they're able to pick up another electron and therefore, continue to affect their specific target, which provides for low nanomolar potency. In addition, our compounds are all amenable to scalable manufacturing. Our initial enzyme target is the enzyme 15-lipoxygenase, which is a well-known regulator of a number of processes key to CNS and other disease pathologies, including inflammation, glutathione depletion and oxidative stress-mediated membrane damage. This diagram shows the 15-lipoxygenase enzyme response pathway. 15-lipoxygenase is activated by free radicals. It is essentially a sensor that detects these oxygen radicals. When activated, 15-lipoxygenase oxidizes polyunsaturated fatty acids to form highly reactive oxidized lipids. Under normal cellular conditions, these toxic lipids are neutralized by reduced glutathione, which is generated by the enzyme glutathione peroxidase 4 that sits adjacent to the 15-lipoxygenase enzyme. However, under disease conditions of high levels of oxidative stress, the production of oxidized lipids outstrips the available glutathione and these oxidized lipids formed by 15-lipoxygenase propagate a series of pathological disease-causing processes as shown on the left hand of the slide. Oxidative stress is an important part of the story. Oxidative stress refers to the situation in which levels of free radicals, usually oxygen or nitrogen free radicals, outstrip the body's ability to detoxify them. These free radicals can arise from a number of different sources. In the case of mitochondrial disease, they result from defects in the electron transport chain. In the case of Parkinson's disease, they can also result from mutations affecting the mitochondria or other cell membranes. In other diseases, like Duchenne, there are high levels of oxidative stress that results from the lack of dystrophin-associated membrane damage. But importantly, in all cases, regardless of the source of the free radicals, their abundance results in the activation of 15-lipoxygenase and the propagation of a potent oxidative stress and inflammation response pathway. These cartoons help to further illustrate the activity of 15-lipoxygenase and how we target the enzyme to affect disease processes. Once activated by free radicals, which again can form from a number of different sources, as I mentioned, the 15-lipoxygenase enzyme produces oxidized fatty acids that further heighten oxidative stress and cellular information, damage cell membranes and ultimately lead to cell death and decreased neurological function. So to review, oxidative stress, which can arrive from free radicals generated from a number of different sources, activate 15-lipoxygenase, which amplifies that initial oxidative stress insult and initiates a feed-forward pathway of lipid information, membrane damage and cell death. So how do we affect 15-lipoxygenase activity? Our PTC compounds donate an electron to the iron core of 15-lipoxygenase and turn the enzyme off, decreasing inflammation and decreasing oxidative stress, increasing cell viability and preserving neurological function. These -- it's critical to realize that these compounds are not simply antioxidants. While they target oxidative stress, they act through a specific enzyme target to catalytically affect the high flux oxidative stress pathway regulated by 15-lipoxygenase that causes disease pathology. Our first 15-lipoxygenase-directed compound is PTC743. PTC743 is an orally bioavailable small molecule that readily penetrates the CNS. PTC743 targets 15-lipoxygenase to decrease oxidative stress, inflammation and restore the endogenous antioxidant system as well as decrease cell death. The lead indications for PTC743 are refractory mitochondrial epilepsy and Friedreich's ataxia, for which we plan to initiate pivotal trials this year. PTC743 has already been in over 500 patients ranging in age from 1 month of life to 69 years, with the longest exposure of over 10 years in a boy with a severe mitochondrial disease known as SURF1 Leigh syndrome that is typically fatal in the early childhood. Our team has done extensive preclinical work on PTC743 to validate its 15-lipoxygenase target interaction and verify its mechanism of action in preclinical disease models. On this slide, we demonstrate the ability of PTC743 to inhibit both 15-lipoxygenase activity and the activation of the deleterious 15-lipoxygenase response pathway. For these studies, we generated cell lines from biopsies of mitochondrial disease patients and activated the 15-lipoxygenase activity with a compound known as RSL3, resulting in production of high levels of lipid based inflammation. In this system, 743 demonstrated a potent decrease in cellular lipid oxidation as measured by a nonspecific fluorescent marker of oxidized lipids known as [ODP]. In the experiment shown on the right side of the slide, we quantify the production of one of the direct products of 15-lipoxygenase known as 15-HETE using our proprietary bioanalytical platform. In the presence of RSL3, the inducer of the 15-lipoxygenase pathway, there is a significant increase in 15-HETE, the product of 15-lipoxygenase. Importantly, with the administration of PTC743, 15-HETE is significantly decreased down to baseline levels confirming PTC743 has 15-lipoxygenase inhibitory activity. Moving from patient-derived fibroblasts to an arguably more physiologic relevant cell type. We evaluated PTC743 in rat cortical primary neurons using live cell imaging. As on the previous slide, 15-lipoxygenase pathway activity was induced by a, in this case, BSO, resulting in the expected accumulation of oxidized lipids as measured by a green fluorescent marker. As you can see on the figure on the right, administration of PTC743 prevented lipid oxidation in these primary neurons. We've also quantified this change in oxidized lipids using our mass spec bioanalytical panel and similar to the previous slides demonstrated a return to baseline levels. Taken together, these in vitro studies, along with the many others we have performed, provides strong preclinical PTC743 target validation and mechanism of action data. As we moved PTC743 from the laboratory and into the clinic, the initial clinical indications for PTC743 was a family of diseases known as mitochondrial disease. Mitochondrial disease is a family of inherited disorders characterized by genetic defects in the structure or the function of the mitochondria, the cell's energy-making apparatus. The reason for developing PTC743 for mitochondrial disease is simple. Mitochondrial disorders are genetic diseases of oxidative stress. The job of the mitochondria is to regulate electron flow to make energy, and defects in the mitochondria leads to free radicals that form high levels of oxidative stress. In other words, if you're interested in developing drugs for oxidative stress diseases, targeting a family of genetic diseases of high levels of oxidative stress would be a logical place to start. These inherited mitochondrial diseases arise from over 100 different mutations. However, importantly, they share this common biochemistry of oxidative stress, inflammation and decreased glutathione. These diseases are typically diagnosed in the first 1 to 2 years of life. They are rapidly progressive, highly morbid and usually fatal in childhood. While mitochondrial diseases can affect every organ in a body, they most severely affect the brain, which is not surprising, because when you have a defect in the energy-making apparatus of the cell, you'll see its effects most clearly in the most high energy demand organ, the brain. Our initial experience with PTC743 came through an expanded access protocol conducted between 2009 to 2012. Patients in this study met 2 key criteria: one, a confirmed diagnosis of mitochondrial disease; and two, patients had to be within 90 days of end-of-life care, essentially at terminal stage of disease. The study duration was 13 weeks, given that these patients were deemed to be within 13 weeks of death, with a long-term extension for those that survived the initial period. Given that this was an end-of-life study, the endpoints were mainly survival, drug safety and pharmacokinetics. In this study, we had the remarkable finding of a significant survival effect. Of the 94 patients enrolled between 2009 to 2012, 42 remain alive and still on study drug today. That's 42 patients who were deemed to be at end-stage disease and within 90 days of end-of-life care are alive today 8 to 11 years following initiation of PTC743. In addition to this important survival effect, we observed a number of additional clinical effects, including reduced seizure frequency, improved neuromuscular and neurological function, decreased transfusion requirements in patients with anemia as a component of their disease, and improved liver function in patients with mitochondrial-associated liver dysfunction. In addition, we collected CNS and blood-based biomarker data that were consistent with the PTC743 mechanism of action and with the disease pathology. And importantly, PTC743 was observed to be safe and well tolerated even in the most highly infirmed pediatric patients. As this was an end-of-life study, there were no defined efficacy measurements beyond survival. However, a number of physician reports were available and provided details on observed patient responses. Here are a few examples: no seizures, gaining weight, appetite increase, walking better with minimum support, energy is way up, seizures are under much better control, Myoclonus is much better as well, fewer illnesses, more alert, stability in a severe disease not typical of the understood natural history of that disease. In addition to these subjective physician reports, we also collected objectively measured CNS biomarkers. HMPAO is a SPECT imaging agent that was traditionally used to assess cerebral blood flow. Given that the HMPAO agent binds to intracellular-reduced glutathione, it has been used as a surrogate measurement of reduced glutathione and cellular oxidative stress. Not surprisingly, in mitochondrial disease patients, HMP uptake levels are markedly decreased relative to healthy controls. Therefore, we thought to use these scans to determine whether PTC743 treatment could decrease oxidative stress and improve endogenous glutathione levels. We obtained pretreatment and 13-week posttreatment scans on the first series of patients treated with PTC743 and looked at increased uptake of HMPAO in several brain regions. On this graph, we show on the y-axis average percent increase across the patient population and HMPAO uptake over baseline for each brain region shown on the x-axis. As you can see, in each brain region, there was a marked increase in HMPAO uptake as high as 90% over baseline levels in the cerebellum, signifying significant increases in glutathione levels and decreases in CNS cellular oxidative stress. In addition, these improvements were found to correlate with improvements in disease severity scores in these patients. So overall, we learned a number of important lessons from the expanded access protocol. First, and critically important, PTC743 was observed to be safe and well tolerated. There was meaningful clinical effect recorded across a number of disease subtypes, independent of genetic mutation. There was a marked mortality effect and objective evidence of favorable CNS biomarker activity. And overall, we had now data sets that were able to inform subsequent drug development. Based on these expanded access data and other clinical studies, we selected our 2 lead PTC743 programs in refractory mitochondrial epilepsy and Friedreich's ataxia, both of which, as you've heard already, will be entering potential registrational trials this year. Mitochondrial epilepsy refers to the symptom of refractory seizures, which occur in 40% to 50% of all patients with inherited mitochondrial disease from a variety of genetic mutations. These seizures are highly morbid and do not typically respond to traditional antiepileptic medications since the traditional antiepileptic medications don't target the energetic and oxidative stress pathways that underpin seizures in these patients. In fact, many traditional antiepileptics actually heighten oxidative stress. So any potential benefit they will provide is offset by their exacerbation of the underlying seizure-causing process. There's a strong rationale supporting PTC743 development for refractory mitochondrial epilepsy, including in vitro data and in vivo data as well as clinical data collected through previous 743 studies in which we have recorded beneficial effects on seizure frequency, refractory status epilepticus and seizure-related morbidity. These data are from an in vitro study of PTC743 in mitochondrial epilepsy patient cells. In this study, we included cells from 3 patients with different genetic feedbacks and subjected the cell lines to a stimulus that activates the 15-lipoxygenase pathway to induce oxidative stress and cell death. We then demonstrate that PTC743 potently protects these cells from this oxidative stress-mediated cell death at low nanomolar concentrations, confirming efficacy in an in vitro test system of disease. We have done a number of similar studies in which we confirm the cell death and 743 protective effects are dependent on 15-lipoxygenase activity, all of which have been published in peer-reviewed journals. Next, I want to share some of the clinical data supporting the advancement of PTC743 for refractory mitochondrial epilepsy. These data presented here are from a compassionate use study of PTC743 in the severe mitochondrial epilepsy subtype, a pontocerebellar hypoplasia type 6, or PCH6. PCH6 is an ultra-rare mitochondrial epileptic encephalopathy in which seizures typically begin in the first days of -- days or weeks of life and continue without improvement until death in early childhood, typically from seizure complications, such as refractory status epilepticus, pneumonia [Audio Gap] In this study, we treated 5 patients as part of a compassionate use protocol at a single site in Italy. We conducted a retrospective review of the data from all 5 patients since they each completed 3 years of treatment. Of note, the first 2 patients enrolled in this study were enrolled while in a hospital experiencing refractory status epilepticus; that is, continued seizures that was untreatable by any medication. In addition, 1 of these 2 patients also had refractory status dystonicus. Both the status epilepticus and status dystonicus are potentially fatal. Following the initiation of PTC743, both patients had resolution of status epilepticus within 6 and 17 days, respectively, without recurrence for the duration of the study. All patients had an overall reduction in motor seizures, including 2 patients with decreases in seizure frequency from a frequency of 120 to 150 motor seizures per day down to 3. In addition, since all patients were treated under a single health care system, we were able to study the effects of PTC743 on disease-related hospitalizations by quantifying the number of disease-related hospital days in the 12 months prior to and 36 months following initiation of PTC743 therapy. In the year prior to starting drug, the children spent an average of 52 days in the hospital for disease-related issues, such as seizure control or infection. By year 2 and 3, they spent 0 days in the hospital, a marked decrease. We also examined PTC743 impact on mortality risk by generating a literature and physician report-based natural history cohort, matched for age of disease onset and mutation severity. As you can see in the figure on the bottom part of the slide, this Kaplan-Meier curve demonstrates a clear reduction in mortality risk for the PTC743 patients, all of whom, in fact, remain alive today and on therapy for -- with the longest patient being on PTC743 for 8 years. We are now moving forward with the potential registrational trial in children with refractory mitochondrial epilepsies we've discussed. This will be a randomized, placebo-controlled trial of 60 subjects enrolled in study sites in the U.S. and Europe. There will be a 1-month run-in phase to establish baseline seizure frequency and then a 6-month parallel arm study, a design similar to other pediatric epilepsy syndromes. The primary endpoint will be observed motor seizure frequency with secondary endpoints assessing occurrence of status epilepticus, hospitalizations and caregiver burden. We are scheduled to start this trial in Q3 2020. Our other lead PTC743 indication is Friedreich’s ataxia, a highly morbid genetic disease resulting in severe neurological and neuromuscular function as well as cardiomyopathy. Friedreich ataxia results from mutations in the frataxin gene, whose product is responsible for mitochondrial iron-sulfur clustering, a key component of mitochondrial structure. Therefore, defects in frataxin result in severe mitochondrial damage and as we have mentioned several times already, this mitochondrial damage results in the generation of high levels of oxygen radicals and oxidative stress, which activate 15-lipoxygenase. This link between activation of the 15-lipoxygenase pathway and Friedreich ataxia pathology has been supported by a growing body of laboratory as well as biomarker studies. In addition, in our own preclinical work, we have been able to demonstrate that 743 is a potent protector of oxidative stress-mediated cell death in patient fibroblasts as well as IPS cells. In addition to the scientific rationale supporting PTC743's development for Friedreich ataxia, we have conducted a Phase II study in which PTC743 treatment was associated with a significant improvement in long-term disease progression. The design and results of that study are summarized on this slide. We conducted a double-blind, placebo-controlled trial in 63 patients in the United States. In the primary analysis conducted at 6 months, we were unable to demonstrate a statistically significant effect on the validated Friedreich's ataxia rating scale due to a marked placebo response in 2 patients. After 6 months, we transitioned all subjects to 743 and continued treatment for a total of 24 months in order to ascertain long-term impact of the 743 treatment on disease progression. We then conducted an analysis of PTC743 treatment by comparing the treated patients with an age, stage and sex-matched natural history cohort. Those results are shown on the chart on the right-hand side of this slide. The natural history cohort had an overall worsening of almost 5 points over 24 months consistent with other literature reports of the rate of disease progression in Friedreich ataxia. The PTC743 treatment group had an overall improvement in disease severity with a lowering on the FARS score which translates to lower disease severity of 1.8 points. This was a statistically significant improvement with a p-value of 0.001. These data provide the support that PTC743 can deliver a meaningful effect in Friedreich ataxia patients and that a longer study period is necessary to demonstrate this effect, particularly in a placebo-controlled study design. With these learnings as well as several others made by our teams and other companies, we are moving forward now with our potential registrational Phase III trial in Friedreich ataxia. This trial, which is scheduled to initiate in Q4 this year, will be a randomized, placebo-controlled trial with a target enrollment of approximately 100 patients, with study sites in the U.S., EU and Australia. We will be enrolling patients aged 7 to 21 years, as these patients tend to have a more consistent rate of progression, and we as a company can uniquely target younger patients with Friedreich ataxia given the strong safety dossier of 743 in children. The trial duration will be 12 months and the primary endpoint will be the modified FARS scale with secondary endpoints assessing various aspects of function relative to Friedreich ataxia. And again, we'll be beginning this study in Q4 of 2020. I'll now move to our second-generation 15-lipoxygenase compound, PTC857. PTC857 is being developed for adult neurodegenerative diseases with a first indication of GBA Parkinson's disease, where the same pattern of membrane damage and mitochondrial dysfunction leading to free radical formation, activation of 15-lipoxygenase, inflammation and oxidative stress and cell death have all been well established. Importantly, as mentioned earlier, 15-lipoxygenase activity has been linked with 4 distinct pathways, all known to be central to Parkinson's disease pathology, including glial cell activation, alpha-synuclein oxidation and aggregation, glutathione depletion and oxidative stress-mediated membrane damage. Through its target-based activity of 15-lipoxygenase, PTC857 can affect all 4 of these pathways. So while other drug development efforts may focus on one specific aspect of disease pathology, we are able to simultaneously affect all 4 of them with one orally bioavailable compound. We have done an extensive amount of preclinical work validating the effect of PTC857 on these different Parkinson's disease-related pathways. In this set of studies, we demonstrated the effect of PTC857 on microglial activation and inflammation. 15-lipoxygenase pathway activation was again induced by RSL3 in striatal cells. We then took the media from the striatal cell cultures and applied it to microglial cell cocultures, which resulted in production of pro-inflammatory cytokines. In other words, we activated 15-lipoxygenase with RSL3 in striatal cells and then showed that the products of 15-lipoxygenase activated the glial cells to secrete pro-inflammatory cytokines. Treatment with PTC857 resulted in a dose-dependent decrease in inflammatory cytokines, including IL-1 beta as shown here, at low nanomolar potencies. This is just one of the several studies we have conducted demonstrating PTC857's ability to decrease glial cell inflammatory cytokine production following 15-lipoxygenase activation. We have also studied the effects of PTC857 on alpha-synuclein oxidation and aggregation. Alpha-synuclein oxidation leads to alpha-synuclein aggregation, which ultimately results in the formation of Lewy bodies, a well-known aspect of Parkinson's disease and a key aspect of GBA Parkinson's. In this study, we examined the effects of PTC857 specifically on alpha-synuclein aggregation. We induced the 15-lipoxygenase pathway activation in N27 rat dopaminergic neuron cell line, an in vitro model widely employed to evaluate alpha-synuclein production, accumulation and aggregation. On the left part of this slide, we first show the effects of 15-lipoxygenase pathway on cell viability as shown in terms of nuclear -- nuclei staining, and that's the column furthest on the left. What you can see is that there was minimal effect on cell viability. However, when we look at the effect of 15LO pathway activation on alpha-synuclein, you see that there's a marked accumulation in the RSL3-treated cells, and then with the addition of PTC857, there's a prevention of alpha-synuclein accumulation. This is then quantified on the right side of the slide, where we look -- where we used an alpha-synuclein aggregation intensity detector to demonstrate again that there's a marked increase in alpha-synuclein aggregation with the addition of RSL3, and this alpha-synuclein aggregation is prevented with the addition of PTC857. We have done a number of other studies looking at alpha-synuclein oxidation as well in both N27 cells and GBA Parkinson's IPS cells with similar significant effects on alpha-synuclein. We have also evaluated PTC857 in the MPTP mouse model, a gold standard model of Parkinson's disease. MPTP induces the Parkinson's disease phenotype through inhibition of mitochondrial Complex I activity and subsequent oxidative stress-mediated injury to dopaminergic neurons. In this study, we demonstrated a statistically significant improvement in both parameters of dopamine-related locomotor function with administration of PTC857. We are now ready to move PTC857 into the clinic. The Phase I human volunteer PTC857 study is scheduled to begin in early Q3. These will be single and multiple ascending dose studies that will inform safety and pharmacology as well as dosing for the Phase II program. We look forward to sharing these results with you in the near future. In conclusion, as we come back to the surface from our deep dive, you can see the Bio-e platform is a true platform, made up of a family of enzymes with known biological significance. Small redox active molecules from our proprietary library, which allow us to drug key biological targets that are beyond the reach of current approaches. We plan to initiate 2 potential registrational studies with our lead compound PTC743 and Phase I studies for our compound PTC857 in the coming months. In addition, we have a rich pipeline of drug candidates that we look forward to sharing with you as they move through preclinical development and into the clinic. Thank you for listening, and we'll shift to the operator for the Q&A portion of the deep dive.

[Operator Instructions] Our first question comes from Brian Abrahams with RBC Capital Markets.

I have 2, and thanks for the very helpful deep dive on the program. So it's -- for 743, it sounds like you've seen pretty broad effects in that expanded access program. But I'm actually curious if there were any particular subtypes or patient profiles that -- in whom you saw optimal effects that might guide your next steps. And then bigger picture, how are you guys looking at the totality of efficacy and safety data that you're seeing for the drug across all the different indications for which it's been explored, as you think about next steps? And then I have a quick follow-up.

Sure. Thank you, Brian, very much for the questions. When we look at the expanded access experience, one of the most impressive findings to us is that we were able to record favorable clinical effects across all the different subtypes studied, which, in those early days, gave us an important demonstration of the fact that we were targeting a common response pathway and that the potential for PTC743 really was agnostic to the underlying genetic defect, given the fact that it's targeting this common response pathway mediated through 15-lipoxygenase. In terms of making decisions about advancing compounds -- I'm sorry, advancing programs and indication-specific development, a lot of it comes down to some practical considerations and strategic considerations: where are there enough patients to actually do a clinical trial, where are populations where you actually have objective or validated endpoints that would satisfy regulatory requirements. And again, a lot of the decision of -- that underpin the mitochondrial epilepsy program is that we had, in refractory seizures, an easily objectively measured primary endpoint, motor seizures, that we don't have to worry about subjective variability, inter-reader variability, and also importantly, there's a clear precedent with the regulatory authorities for approving drugs for seizures, and that's no small item. It's very important that there be regulatory precedent for endpoints in order to have a highly successful drug development program. In terms of the totality of evidence, obviously, with having patients on drug for 8, 9, 10 years continually without drug-related serious adverse events or any drug-related toxicities provides us with an incredibly strong safety package that will, of course, be used in support of approval applications for 743 regardless of the specific indication.

Got it. That's very helpful. And then my other question was just on dosing. I recall you guys had explored different dosing, I think, BID, TID, a fixed dose, weight-based. How are you thinking about dosing for the upcoming studies?

Yes. So from the beginning, we really had a TID dosing strategy. For the first patients ever treated with 743, we, of course, did sort of a step-wise once a day, twice a day, 3 times a day, until we had a larger clinical experience demonstrating its consistent safety. So the drug is administered 3 times daily to all patients. In pediatric patients, it's dosed on a weight-based basis in common with other pediatric drugs, and for adults, it has a fixed dose.

Our next question comes from Robyn Karnauskas with SunTrust Robinson Humphrey.

So I have a couple or a bunch, but I'll just do 2. So [ straight ] up for the science side, so there's a lot of -- there's different types of these enzymes, and talk about how you picked -- how specific your inhibitor is? And why you would want to inhibit -- why you chose that? Do you inhibit multiple versions of 15-LO or do you actually inhibit one? The second question is a broader question, which is more -- do you see this as something that you could use to treat more types, less common subtypes of [ MEDS ] patients? Or even when I look -- think about what you discussed today, just a broad inhibitor for stroke. I don't know how fast the onset is. Maybe you can talk about that. And then just lastly -- I guess I have 3 questions. For Friedreich's ataxia, help us understand better the first Phase II that was done by Edison Pharmaceuticals and compare that to the 3 patients from the second Phase II trial. Just give us more color about what you learned from these studies and how we think about that program going forward.

Sure. Let me see if I got all 3 of those. So the first question is the 743 and 857 have affinity and activity at both subtypes of 15-lipoxygenase. So it's not specific to one specific subtype of 15-lipoxygenase, it has activity at both. Obviously, when we do drug development from the redox platform, we have the ability to identify compounds that may have specificity for one -- or selectivity for one specific anti-oxidoreductase enzyme, ones that may have activity to other oxidoreductase enzymes and that decision of dialing in selectivity is important in terms -- is an important consideration when we identify a target set of indications, where maybe one or maybe more than one oxidoreductase enzyme may play an important role. In terms of the seizure populations and subtypes of the mitochondrial epilepsy, in our discussions with regulatory authorities when we developed the current trial protocol, it was advised that we focus on some of the main mitochondrial epilepsy subtypes to demonstrate efficacy. We'll certainly then have the ability to extend to the smaller populations, which may not necessarily be amenable to their own placebo-controlled trial, but we have many different ways of being able to approach that in the future. Finally, in terms of Friedreich ataxia, the Phase II trial done by Edison, Edison and BioElectron are the same company. BioElectron -- Edison changed its name to BioElectron in 2017. So the Phase II trials shown there, with the 3 sites and the 63 patients with the long-term effect on disease progression, all came from the same trial. That was the same Phase II trial. And again, the real important take-home points for us from that study were something that I think that most in the disease community have now realized, that a 6-month trial for Friedreich ataxia, given the heterogeneous rate of disease progression, and more importantly, evidence of a persistent placebo effect at 3 and sometimes even at the 6 months, makes that really too short a duration to establish a significant therapeutic effect. And I think even if we look at the Reata data and Reata itself will acknowledge that at 6 months, they would not have had a significant study due to the placebo effect. So as we walk -- as we move forward from that trial, we have confidence in the ability to deliver a long-term benefit to patients, and now we have confidence that we're able to do so -- we're able to set a study design that will allow us to capture that significant benefit in advanced PTC743 for approval in Friedreich ataxia.

And just a follow-up. So when you talk about the specificity, I mean I've read tons of science papers, I feel like it may be toxic if you get rid of it in mice, but I'm not sure if they're inhibiting other types of -- other enzymes as well. What are the risks for long-term safety? We know that these enzymes do other things besides what it's really doing in these patients. What are the risks for the real long-term side effects that we might be observing about? And then the question around stroke, like it just seems like an obvious drug that might be used to, again, onset of action, it could really eliminate some of the damage early on in stroke theoretically. Just curious about those 2 things.

Yes. So PTC743 has been dosed in small children starting at age 2 for 10 years without any evidence of toxicity or serious adverse event. I think that would be incredibly strong dossier of safety we've established, confirms the safety of this molecule even in the sickest of children. And so we're very comfortable that we have the ability to develop both safe and effective compounds out of this platform. And so obviously, we take safety very seriously, and in vitro safety screening is a key component of the early stages of our platform. But again, having the safety experience we have in very sick children with long-term treatment without drug-related adverse or serious adverse event, I think, is a testimony to the safety of this molecule, and we have the same confidence in the other molecules that we bring into the clinic. In terms of the potential of targeting 15-lipoxygenase for the treatment of stroke, I think it's very rational, if you think about what happens on a physiologic basis in terms of stroke. Stroke really is first an ischemic injury and then, of course, there's the issue of ischemia reperfusion injury, which is all about oxygen-free radicals and activation of inflammatory and oxidative stress pathways. I think that it's an indication that we could certainly think about treating, in fact, some of the mitochondrial diseases such as MELAS have strokes as a component of their disease pathology. So I think it's certainly within consideration of where targeting these enzymes can have a potential.

Our next question comes from Raju Prasad with William Blair.

Very helpful deep dive today. Can you just talk a little bit about some of the things that we think about when moving from a single-arm trial to placebo-controlled trial with epilepsy studies, on potential for placebo creep and such. I mean, is that something that you've taken into account with the sizing of the trial? And then on 743 for Friedreich's ataxia, can you just maybe put this drug in the context of PTC's gene therapy program? How do you kind of see both programs playing out from the -- a patient demographic perspective?

Thank you for the questions. First, obviously, when you design any study, you have to be wary of the potential for a placebo effect, and we certainly looked at the placebo effect that was recorded in some of the [ travail NFX ] dose studies where we made our power estimates and selected our sample size. We also -- you'll notice that our parallel arm design is for 6 months rather than the traditional 3 months used in some of the other pediatric epilepsy syndromes. That was done in part to ensure that we would wash out any placebo effect, which could [ daunt ] our results. It also provides us with the benefit to demonstrate meaningful impact on other aspects of disease beyond just seizures, such as hospitalizations, occurrence of status epilepticus and caregiver burden. With regard to Friedreich ataxia, let me just take a step back and talk about the strategy of our gene therapy program. In our gene therapy program, we're focused on targeted micro dosing to affect diseases. And what we mean by that is we develop our gene therapy products and plan to deliver them to specific anatomical locations that are really ground 0, if you will, for disease pathology. So in the case of Friedreich ataxia, we're planning to deliver our gene therapy product to the dentate nucleus of the cerebellum, which is a key, really, anatomic hub of disease pathology in the ataxia that's observed in the disease. However, it's important to note that Friedreich ataxia also affects other areas of the brain as well as other organ systems, most notably the heart. Friedreich ataxia is life-shortening due to the cardiomyopathy associated with the disease. And so what we have with 743 and our gene therapy program is the very powerful potential to treat the entire Friedreich ataxia patient, a gene therapy that will go to a targeted location that's a significant component of the disease, and then a small molecule that has biodistribution throughout the brain and the entire body to address the other symptoms, including potentially the life-shortening symptom of cardiomyopathy. And so we're very proud to be able to offer both of these programs and drugs together to treat the whole FA patient. I'll also point out that it's no secret that the key to treating these degenerative disorders is to start as early in life as possible. And of course, the aim of gene therapy will be to get into younger patients, and this is another really benefit of the -- of 743, which is, given all of our safety data in children, we can uniquely deliver that drug to children. And so we can not only address the entire FA population, adult and child, but we can do so at earlier ages, and hopefully stave off any degeneration and minimize any disease pathology.

Our next question comes from Joseph Thome with Cowen.

Just a couple. First on 743, the clinical study. I know these patients are refractory, and you said that some AEDs can actually make disease worse. But I just wanted to make sure that the placebo arm, no one's getting any sort of background to AED, it's a true placebo. And then I know that you're enrolling 4 different subtypes of epilepsy. Is there any reason why 743 would perform better or worse in each subtype? And then I have one more follow-up.

Sure. So patients will enter the study if they're on antiepileptic therapies. They were -- they have -- they can be on them in the trial, but they'll have to be on a stable regimen of antiepileptic therapies for at least 30 days prior to entering the trial. And then their baseline 1-month run-in observation period will be in the context of those -- that antiepileptic therapy regimen. So they're going to have to have a minimum number of observed motor seizures on the current regimen in order to get randomized to receive a placebo or 743. In terms of the subtypes and a reason to believe one group may be more responsive than another. We really have no reason to believe that, given the fact -- at least from a biology or biochemistry basis, given the fact that the seizure pathology being mediated through the 15-lipoxygenase pathway is similar regardless of underlying genotype. Of course, there's always factors that may make one individual patient more responsive than others. But as a whole, there's no reason to believe that there would be any differential effect in the different subtypes.

Okay. That's great. And then maybe just a broader business question. Just because you highlighted how many opportunities you have with this platform versus what we have -- what we know with the splicing platform and the gene therapy platform and PKU. And maybe -- is it possible to bring all of these together at one time? Or how are you kind of prioritizing this platform to make sure that you can get the most bang for your buck from each different area of the business?

Go ahead, Matt.

Yes. Certainly -- Stu, do you want to take that or... yes, I think -- I'm sorry.

No, go ahead.

Yes. I think we're pretty proud of the team we have. And obviously, portfolio management is an important aspect of what we do. We're able to advance our programs across the entire platform quite efficiently and quite effectively. Obviously, it's our responsibility to make sure that we're doing so without making any trade-offs, but I think we are fully committed to advancing therapies as quickly and effectively as we can from all of our platforms.

Our next question comes from Martin Auster with Crédit Suisse.

This is Mark, on for Marty. My first question is, I saw that there was a 35-patient placebo-controlled study in patients with Leigh syndrome. I guess I'm curious, did you see improvement in seizure burden or other benefits in that study? And can you speak to the magnitude of benefit observed? And then second question is, can you speak to the powering of your upcoming epilepsy study and the specific assumptions that went into your calculation?

Absolutely. So you're referring to the Phase II Leigh syndrome study that was done several years ago. In that study, we did not explicitly look at seizures. It was actually at a time before we had collected a lot of data confirming the antiepileptic effects. So seizures were not set out as a specific endpoint. However, one of the items on the disease rating scale that was used in that trial looked at seizures, and we were able to see across several of the patients in that study a reduction of seizure frequency as recorded by the disease severity scale. And that's consistent as well with the antiepileptic effects in Leigh syndrome patients recorded in our Leigh syndrome study that was performed in Italy, which occurred before the one in the United States. In terms of powering, we looked at basically a differential in the treatment or -- and placebo group of roughly 50% in seizure frequency and basically used a estimate of a frequency of -- or I'm sorry, percent reduction in seizures in the placebo group and then looked at a delta between that and what we hypothesized in the treatment group. And we're confident in being able to deliver a delta or a difference in seizure frequency reduction of 50%, and that's what -- with which we have greater than 80% power to demonstrate a significant difference in the study with 60 subjects.

The next question comes from Alethia Young with Cantor.

This is Li, on for Alethia. So I'm just curious what other companies have pursued sort of this approach targeting oxidative stress pathway in the past, if any? And is there any learning from there? And then second for mitochondrial epilepsy, is it a well-diagnosed population? Maybe can you talk about how is it currently screened and diagnosed?

Absolutely. Thank you very much for the questions. First, in terms of oxidative stress, many companies and there have been many approaches in the past attempted to conquer oxidative stress. This is just such a fundamental component of the disease. And I think traditionally, or previously, no one has been able to systematically drug 15-lipoxygenase in the way that we're doing it. We're basically inhibiting the enzyme by interacting directly with the core of that enzyme and turning it off. So we're basically able to affect the engine that drives the oxidative stress response in these cells. And so -- and again, that comes from our unique ability to drug that enzyme based on our expertise in electron transfer chemistry as well as having small molecules that can perform the electron transfer reactions necessary to effectively inhibit these oxidative stress pathways. And so while others may try to look at generic quenching of oxygen-free radicals or more traditional "antioxidant approaches," that's not what we're thinking. We're taking basically a directed approach, catalytic approach to shut off the motor that's driving this oxidative stress response, which is unique. In terms of the mito -- I'm sorry, your question on mito epilepsy...

Mitochondrial epilepsy, yes, the diagnosis.

Oh, the diagnosis, so the diagnostic journey. So typically, mitochondrial disease patients can get diagnosed in one of many ways. In fact, many of them who have seizures, it's actually the seizures' occurrence that leads to the diagnosis. So this will be kids who will have seizures in childhood. They'll get treated initially with traditional antiepileptic medications. And then when they don't respond, they undergo a much more in-depth workup, which now these days includes genetic screening or certain metabolic screens that will reveal the underlying mitochondrial disease. So there's the -- there's a prevalent population we estimate 5,000 to 6,000 patients in the U.S. and in Europe with refractory mitochondrial epilepsy. And these patients are treated at specialized mitochondrial disease centers, and obviously, having been in -- having worked in this field for so long with 743, we have a very well-established network throughout the world of physicians who care for these patients and, obviously, also have very close ties with the patient foundations in the U.S., Europe and elsewhere, given the long-standing commitment that we've had to develop drugs for mitochondrial disease.

Our next question comes from Joel Beatty with Citi.

I have 2 questions. The first is on the mitochondrial epilepsy study in which you showed a large decrease in hospitalizations from over 50 a year to 0. Can you discuss how that could compare to standard of care? And how common it is to get that type of control with standard of care? And then the second question is, could you discuss the difference between the first-generation 743 and second-generation 857 agents?

Yes, absolutely. So it's -- your first question regarding the hospitalization analysis. This was one that we were able to do given the fact that these patients had been followed by the same doctors and the same hospital and the same health care system, the Bambino Gesù, the Vatican children's hospital in Rome, really since they were diagnosed in the first month of life, the diagnosis was made there. And so when we look back and see 52 days of hospitalization, that was under the optimal standard care at one of the world's leading centers for mitochondrial disease care. And the fact that we're seeing the decrease that persists in year 1, year 2 and year 3, to us, gives us a great deal of confidence that, that was drug-related. In fact, when we talked to the doctors and even looked back prior to those 12 months prior to starting drug, these patients had a history of being hospitalized. So this was not something that occurred at one isolated period of time. It was really part of their general -- the general natural history of that disease under optimal standard of care, and we recorded a decrease following the initiation of therapy. In terms of the differences between 743 and 857, 743 is a great drug for pediatric populations. We have already established, obviously, a large volume of safety data in pediatric populations. It has good biodistribution and it reaches the brain. 857 is a second-generation compound and like most second-generation compounds, you'd be able to improve on things like dosing frequency, bioavailability, and 857 is going to be able to be given less frequently, it's going to be easily manufactured for much larger populations. And so we feel it really is a good second-generation compound that's going to allow us to access different non-pediatric disease groups than we can -- than we are right now with 743.

Our next question comes from Gena Wang with Barclays.

I have 3 questions. I think the first 2 is more -- trying to understand a little bit more the redox platform. The first question is, wondering if you can give a little bit more color, what would be the impact of over-suppression of a 15-lipoxygenase? And the second question is regarding the specificity of the 743, and if you can give a little bit more color regarding the -- if any data you have done in terms of the selectivity of the 15-lipoxygenase versus other enzymes, if you have any like a fold selectivity, if you have those numbers. And I have a follow-up question.

3 Sure. So in terms of over-suppression of 15-lipoxygenase, we have not -- in a number of our studies, we have not observed any cell toxicity associated with the suppression that we do right now, with either 743 or 857. It's important to note the activity is not completely eliminated. The way to think about it is really this pathway is -- like all pathways represents as a homeostatic or balance between the production of the oxidized lipids and the neutralization of those lipids by the glutathione peroxidase [ core ] product with these glutathione, which, nature is very smart, they sit right next to each other. So you have your neutralizing enzymes sitting next to your pro-inflammatory enzyme. And it's only in the disease states where you get a over-activation of the 15-LO activity resulting in a high amount of these oxidized lipids that you then deplete your endogenous dioxygenase system and propagate this pathway forward. And so what 743 and 857 are doing through their inhibitory activity is actually returning things down to a baseline or homeostatic level. In terms of specificity of 743, 743 actually also has activity at another important enzyme known as NQO1. And that's very important because the way 743 works is it donates its electron to the 15-lipoxygenase core and then is able to interact with NQO1 to pick up another electron and continue to feed it into 15-lipoxygenase. So this is an instance where it has some activity for another oxidoreductase enzyme, but that's advantageous. That's what allows for its potency and its ability to continue to affect the 15-lipoxygenase enzyme. In terms of being able to give you specific numbers regarding fold selectivity between those 2 enzymes, I'm not able to do that right now. But I can tell you that one of the things that we do when we think about developing drugs off this platform is we obviously have a whole bunch of different oxidoreductase targets, and what we're able to do -- target screens. And what we're able to do is profile all the different activities at the different enzymes, which helps then inform, again, indication selection and also helps us understand what we may want to do in terms of modification of the molecule to try to dial out some of that activity when it's not advantageous and dial it in when it might be advantageous, such as in the case of 743 and being able to pick up electrons from NQO1 to continue to affect 15-lipoxygenase.

Okay. Very helpful. And then lastly, I think when I look at the old corporate deck, 743 was also planned for NDA filing for PCH6 in the U.S. and Leigh syndrome in Japan. So any updated thoughts on these 2 indications?

You must be referring to an old BioElectron deck. Is that correct?

Yes.

Yes. So in -- those were considerations we had with PCH6. Of course, and as we said, we have the experience of treating 5 children in Rome with obviously clear morbidity and mortality effect as well as seizure effects. And so I believe at the time the thought was we should look at trying to see if we could advance -- if we could gain an approval for that very, very limited indication. And we did have some discussions with regulatory authorities on that. And in fact, it was in those discussions that we were -- it was suggested that we should just go for that entire population of mitochondrial epilepsy and go forward and do the proposed trial we're planning now and really secure a label for the -- I think the direct quote was "the large population that desperately needs your drug." And so with that as a message from the regulatory authorities, we took that as the green light to go ahead and plan this trial and move it forward. In terms of the Leigh syndrome program in Japan, that was a program that was licensed to Sumitomo Dainippon Pharma and discussions with regulatory authorities over a path for approval in Japan are still ongoing.

And I'm not showing any further questions at this time.

Okay. So maybe what we could end it there, let me thank everyone for joining today. I think you could see why we thought this was such an exciting platform because of the unique both chemistry and biology, but also the advanced nature of the PTC743 and having 857 as the next generation, which we'll be starting with GBA Parkinson. So it's really quite exciting. So again, we'll be having more of these that we'll be posting about the webinars and deep dives. So again, thanks for joining. We appreciate your interest. Have a good day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.