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

Ladies and gentlemen, thank you for standing by, and welcome to the PTC Therapeutics Translarna Deep Dive. [Operator Instructions] I would now like to hand the conference over to your speaker today, PTC, CEO, Stu Peltz. Please go ahead, sir.

Thank you for joining our Deep Dive series. Today, we're going to focus on Translarna ahead of the dystrophin data readout in the first quarter 2021. We're going to be talking about the totality of evidence to support treatment with a disease-modifying therapy and the regulatory cap and its commercialization. We're planning to hold -- continue to hold a series of Deep Dives in 2021, including one on Huntington's disease ahead of the healthy volunteers data in the first half of 2021 to help you understand what to expect. So I will not be making forward-looking statements. So please look at the SEC documents. Let's go to Slide 3. PTC has been the pioneer in discovering, developing and commercializing DMD therapies throughout the world. When we started, most of the key elements of Duchenne muscular dystrophy drug development were not in place. There was limited to no natural history or lack of validated regulatory endpoint and unclear regulatory path for approval. Working with patients, patient advocates, regulators, and investigators, we're able to validate endpoints to find the natural history of the disease, to find a regulatory path for approval of the drugs for DMD. Through all of these efforts, we've had the largest database on natural history of the disease. We're proud that Translarna was the first ever therapy approved for Duchenne muscular dystrophy, the first and only marketed therapy with clinical data addressing the underlying cause of this disorder. Translarna is distributed in over 50 countries, bringing a life-changing therapy to thousands of patients. Multiple regulatory bodies have approved Translarna recognizing the positive risk benefit. Most recently, Translarna was also approved in Russia. We have been commercializing Translarna outside of the United States since 2014, and we've been commercializing Emflaza in the United States since 2017. So we have a strong global commercial infrastructure. On Slide 4, we talk about Duchenne muscular dystrophy and the fact is that it's a relentlessly progressive fatal genetic disorder. GMV is a X-linked muscle disease that affects 1 out of every to 3,500 to 5,000 live birth and approximately 20,000 children are diagnosed with Duchenne globally each year. DMD arises from the absence of the dystrophin protein caused by mutation in the dystrophin gene that prevent this production. Knowing the genotype is very important to ensure the right patient receives the right therapy. Let's go to Slide 5. DMD is a neuromuscular disorder that leads to continuous loss of muscle function that causes decline of motor, pulmonary and cardiac function, resulting in premature mortality. While the disease is manifested at birth, the average age of diagnosis for Duchenne's boys is approximately 5 years of age. This is because there is a gap between symptom onset and the DMD diagnosis. One of our pioneering efforts is to close the diagnosis gap, so that the DMD boys can have early intervention to potentially delay disease progression. Well, the precise timing of event is not the same for each DMD patient, this disease follows the same course. This includes progressive muscular weakness that is seen initially in the lower extremity of muscles. This prevents DMD boys from getting up off the floor to loss of ambulation, to then loss of upper extremity function, including upper arm strength. Eventually, the DMD patient shows respiratory and cardiac issues. Deterioration of ambulation occurs in the first decade of life, wheelchair dependency in the second decade and eventual respiratory and cardiac failure with mortality seen in the third or fourth decade. Slide 6 looks at the role of dystrophin. Dystrophin is an important structural protein in muscle cells that protects muscle, especially during muscle contractions. During an eccentric contraction, the dystrophin protein acts as a shock absorber, ensuring that the energy from the contraction is appropriately utilized and that the cell membrane is not damaged. In the absence of dystrophin, the contraction causes an excessive force on the muscle membrane leading to breaks in the muscle membrane. The continuous membrane damage leads ultimately to muscle loss. The reason why early treatment is important is because in the absence of treatment once the muscle is lost it's hard to regain. It is replaced by fatty and connective tissue. Restoring dystrophin early delays the progression of muscle deterioration. In the next slide, we show you how Translarna functions. It does so by reading through nonsense mutation. So what normally happens is that for a normal messenger RNA, it's translated by the cellular machinery to make a full-length dystrophin protein. However, a mutation called the nonsense mutation is a single point alteration that's in the middle of the protein coding region that leads to premature termination of the protein, which leads to an incomplete dystrophin protein that's rapidly degraded and the RNA has also rapidly lost. However, Translarna works by interacting with the translation machinery to trick the cellular machinery to add an amino acid at the premature termination codon, so it goes on to make a full-length protein, enabling the production of the full-length dystrophin. On the next slide, shows you that we have dystrophin production occurring. We and others have had numerous publications demonstrating dystrophin production in [indiscernible] and in the multiple animal models. In around 2004, we performed the proof of concept clinical study to monitor dystrophin production in DMD patients. Pre and post-treatment biopsies were collected and used to determine dystrophin expression. 61% of patients responded after 28 days of treatment. This was highly significant. We thought that this was a useful proof-of-concept demonstration, but at the time, the FDA feedback was that we needed to have clinical endpoints for approval. As I described earlier, we pioneered the clinical pathway for Duchenne muscular dystrophy trials. We performed an initial natural history trial to characterize the 6-minute walk test and time function test in DMD and then performed numerous clinical studies. And as you've seen previously, the evidence for Translarna's benefit comes from multiple studies. In Study 4, we assessed dystrophin production in patients. Study 7 to find the dose of ataluren and provided us an understanding of the need to enrich the patient population and demonstrated Translarna's effectiveness. This study also showed the consistent effect of ataluren in selected dose across key endpoints. Study 20 reinforced the consistent effect across key endpoints and further highlighted the need to interpret results in light of our understanding of this disorder through natural -- through new natural history studies. Lastly, our long-term open-label study, Study 19, provides additional data in preservation of pulmonary function in nonambulatory patients. As a whole, these studies showed evidence of meaningful clinical benefit of Translarna. We're at Slide 12. And as I just described, the Translarna clinical benefit has been investigated in multiple clinical studies and has also been investigated in post marketing settings. There has been over 2,500 DMD patients treated with Translarna. The benefit of Translarna has been demonstrated across multiple clinical trials of post-marketing registry and meta analysis. And as we'll discuss in the next few moments, results obtained from the long-term data from the post-marketing STRIDE study registry trial demonstrate Translarna's effectiveness in DMD patients in a real world study. On the next slide, the results shown here for the primary and secondary trial endpoints demonstrate that the totality of the data shows a consistent treatment effect for Translarna across multiple end points in multiple studies. The study shows the outcome of 2 randomized clinical trials with Translarna demonstrated benefit over placebo in the 6-minute walk test and in multiple time points in test. This benefit was confirmed by meta-analysis. On the next slide, the results from additional clinical studies, including supine to stand, the NSAA and quality of life measures in both studies also favors Translarna treated patients. These results reflect the use of new endpoints and the emerging understanding of meaningful assessments in DMD. Now let me talk about the STRIDE registry, which is a post-marketing trial to obtain real-world data on the long-term impact of Translarna on DMD patients. The STRIDE registry is the first and largest real-world study of nonsense mutation Duchenne patients. This registry follows over 250 patients over 5 years in a real world study. The importance of the long-term registry is that it lets us look at Translarna's long-term impacts on these patients on an important endpoint that cannot be practically measured in a clinical trial. In DMD, this would include following a patient until they lose ambulation or monitoring loss of pulmonary function. As you will see, the data continues to support the clinical benefit of Translarna in a real-world setting and adds to our understanding of the progression of the disease. Slide 16. The results demonstrate Translarna treatments translate to meaningful delay in loss of ambulation, loss of physical function and loss of pulmonary function. All factors that lead to early mortality in these patients. These data have been key to the annual renewal of marketing authorization for EMA as they capture the true long-term benefit of Translarna on the devastating and progressive nature of DMD. The next few slides will provide detail on some of the key data collected over the past 5 years. As you can see on Slide 17, Translarna delays loss of ambulation by 3.5 years when compared to a matched natural cohort. In the STRIDE registry, a statistically significant improvement in loss of ambulation was somewhat observed. On the next slide, following loss of ambulation, there is a decline in loss of upper body strength followed by poor pulmonary and cardiac function, which are directly linked to patient mortality. In later stages of DMD, patients begin to have pulmonary and cardiac issues. When the forced vital capacity is at around 60%, DMD patients need pulmonary assistant, leading to a need for nocturnal ventilation. Most patients lose pulmonary function forced capacity less than 1 liter, they are in real trouble and is predictive of mortality within 3 years. The registry also followed pulmonary function over 5 years. The results in this slide are quite remarkable. We're on Slide 19. The results demonstrated that Translarna therapy significantly delayed the loss of pulmonary function when compared to matched natural history cohort. The results on Slide 20 shows Translarna's benefit on another key measure of pulmonary function, forced vital capacity less than 1 liter. Again, we see substantial and significant effect of Translarna compared to a natural history cohort. In addition to these data on previous clinical trials and real-world registry, we're also conducting Study 041, which is a confirmatory trial that I'll now describe. As you can see on Slide 21, the design of Study 041, the confirmatory trial, incorporated all of our learnings of DMD drug development, particularly study population, including criteria, endpoints and duration. The criteria for primary analysis population is the combination of the patient's baseline 6-minute walk test and rise from supine score. This is based on learnings from our previous experience. A number of clinical trials to identify patients for the primary analysis that are likely to decline within the 18-month clinical trial, but who are not likely to become nonambulatory. The design was reviewed with regulatory authorities. 041 is a placebo-controlled trial and with -- and we have completed enrollment. The primary outcome is a 6-minute walk test with additional key secondary endpoints, measuring mobility, upper extremity and pulmonary function. We have received market authorization for Translarna in 2014 which is when it became commercially available. The marketing authorization for Translana has been renewed for 6 straight years by the EMA. The results from clinical trial and the STRIDE registry that provide real-world evidence of the long-term clinical trial benefit has been included in the assessment. In June 2018, the EMA expanded the label to include children aged 2 to 5 with nonsense mutation Duchenne muscular dystrophy. The CHMP concluded that additional clinical data supported the benefit-to-risk ratio in this population. In July 2020, the EMA removed the wording from the indication statement in the label, efficacy has not been demonstrated in nonambulatory patients. This change enabled physicians to use their clinical judgment to make treatment decisions to continue treatment for their patients on Translarna who have lost ambulation. We are expecting the readout in Study 041 in the third quarter of 2022. On Slide 23, we talk about Study 045. As a reminder, Study 045 was designed to demonstrate statistically significant increase in dystrophin expression. The study enrolled 20 boys aged 2 to 7. Patients were treated with Translarna for 40 weeks or greater. Muscle biopsies were taken prior to and following treatment period. All biopsies have been collected and biopsy analysis is ongoing by our contract CRO, and the results are expected in the first quarter of 2021. One key aspect of the study was the design of a sensitive assay to capture dystrophin expression, and this is shown on Slide 24. In collaboration with the FDA, we developed and validated the ELISA assay for the detection of lower levels of dystrophin in samples. Another important feature is this assay is that it detects full length dystrophin protein. The assays and the ELISA are using electrochemiluminescence SULFO-TAG label. Dystrophin protein from muscle extract is captured by a dystrophin antibody that's bound to the plate. After additional detector dystrophin antibodies hovering the SULFO-TAG interacts with dystrophin, an electrical current is run through the plate and light is generated when both the capture and detection antibodies are in close proximity. This unique assay has low background, is very sensitive and highly quantitative. The results will be available in the first quarter next year to support a potential NDA submission for accelerated approval. On Slide 25, we show 2 regulatory pathways that can bring Translarna to the United States patient. First, a placebo-controlled data from the Study 041 could provide the basis of an NDA with data readout in the third quarter of 2022. However, Study 045 provides the option of an accelerated approval path. The FDA has told us that statistically significant increase in dystrophin level is sufficient for accelerated approval with Study 045 and upon positive data readout in the first quarter of 2021, we can move forward to submit the NDA. So let me switch gears to talk about Translarna's commercialization. Since launch in 2014, PTC has been working to expand access to Translarna to more patients globally. Positive label changes have allowed physicians to treat more DMD patients. Translarna is an oral product, allowing ease of administration which is demonstrated by a compliance rate of over 90%. Translarna is currently distributed in over 50 countries, and we continue to expand geographically. So on Slide 27, you can see that we've had year-over-year commercial growth in revenue, which we expect to continue with additional geographical expansion, including in the United States. So in summary, PTC is well positioned for rapid U.S. launch of Translarna. We estimate that there's between 1,000 and 2,250 nonsense mutation Duchenne patients in the U.S. who are eligible for Translarna. With Emflaza, we've already built a strong commercial infrastructure in the United States with leadership position in Duchenne muscular dystrophy. We have over 150 patients in the U.S. that are already on Translarna through clinical trials and with our large database of patients who are treated with Emflaza, it should allow us to geneotype these patients to determine if they are appropriate for Translarna treatment. Again, we are excited, and with positive results, are well positioned to rapidly launch Translarna in the U.S. next year. Thanks for your time, and let's open it up for questions.

[Operator Instructions] Our first question comes from Alethia Young with Cantor.

I wanted to just ask about kind of in the real-world in Europe. What's kind of been the most compelling of these data? Is it kind of the ambulation loss kind of curves? Or are the pulmonary kind of curves that you're seeing there? I just wanted to kind of get some color now that's in the market for quite a while. What's been the most relevant thing.

Yes. I think that -- thanks for the question. And obviously, during clinical trials, you measure something that you can see in the 12 months or so area, 18 months at the most. And so this is looking at 5 years and seeing real benefit across patients over 5 years. And so -- and that's what really allows you to actually see -- watch what happens to them over that. So I think it allows us really to show that the registry shown in terms of Translarna on top of standard of care alone, that you saw 3.5 -- on average, a 3.5-year delay in loss of ambulation, which we think is quite considerable. And then actually, when you look also, that's also true of the -- you see the same sort of delay in decline as measured by the time function test. So that's a really important point. In a way, it's hard to watch people lose ambulation in the 1-year period. But I think what's really quite remarkable is the loss of pulmonary function over that time. And when you look at the -- either the force vital capacity at less than 60% or even with the less than 1 liter, you could see just that both of them, the patients that are not losing pulmonary function in the Translarna treated case versus the really matched cohort. And that's ultimately really critical because it's linked to mortality and morbidity. So that's the -- that's actually showing a major difference as a consequence of that. And I'd just remind you that as we talked, it's always about first, you don't get off the ground, and you can lose ambulation and upper arm strength and then cardiac and pulmonary function. And delay in each of those -- each of those points -- delay in one helps everything else downstream. But you are really are helping quite a bit in these patients in terms of better quality of life, better pulmonary function. So I think we also know, obviously, that the impact on ambulation, excuse me, is key. So that's really important, but the pulmonary benefits are so significant.

And just as a follow-up. I mean I know you have this confirmatory data readout 2022, but I mean, it's been on the market for like almost 8 years or something, I mean, what like impact does this data really have? I mean it seems very, very well entrenched in the market, and it serves as certainly a relevant clinical need for the physicians.

Yes, I think this was a regulatory requirement, but we believe that the durability and the -- we've seen the strong year-over-year growth in terms of everything. So the physicians who have seen the -- all the other data, the registry, the nonambulatory data, I think they've seen it in their treatments, which is when you think about it, while we are still greater than 90% compliance. And so I think the totality of the data from both the STRIDE as well as the other clinical data is really I think, really showing that the positive risk-benefit profile of Translarna. And the fact that it's effective. And I think this is -- along with all the -- I think the other thing is when you look at the data from the 2 clinical trials, all of them are on the favorable side. Translarna is the only drug in Duchenne muscular dystrophy, where we -- when you look at all those endpoints, you see not only positive in the 6-minute walk test, but also in all the time function test, NSAA, quality of life, they all show favorability. So if you look in a sense at all of them together, there's no example where it's not benefiting the patients.

Our next question comes from Eric Joseph with JPMorgan.

I just had a quick one related to Study 041. And just curious to know with all of the peripheral development going on in the gene therapy space for DMD, to what extent that may have had an impact on, I guess, compliance or follow-up in Study 041. If you've lost any patients to the follow-up because of competing -- competition for clinical trials and how that's accounted for in the statistical analysis plan?

Yes. No. Thanks for the question, Eric. I think the health care professionals have been keeping the patients on drug. And then I think that -- you got to remember also that we have a broad range of ages and that you probably -- many of the patients are above 7 and heavier. And so they have been in -- and so there's really been no impact as a consequence of that in Study 041. So I mean I think we feel that this trial is now fully enrolled, and we have high confidence of it moving forward.

And just -- thanks for the question there. Sorry, I was on mute earlier. And just to sort of level set expectations with the Study 045 data approaching soon, just what does FDA want to see in terms of the level of expression, the consistency of expression in the dystrophin data expected near-term in order to facilitate accelerated approval?

Yes. Thanks for that. I mean we've talked a bit about this in the past as well. And you could see from what previously has been reported in what they said when they first approved the drug based on the dystrophin level that any dystrophin must be good. And what they asked us to do is to demonstrate a statistically significant mean increase over baseline. So we expect, obviously, the levels to be low in untreated and therefore that -- it's anything above as long as it's statistically significant.

Our next question comes from Robyn Karnauskas with Truist Securities.

Thanks, Stu, for the Deep Dive, it was very helpful. This is Minh on for Robyn. Just 2 questions, I guess. The first one on whether having one super responder from the 045 study will be enough to [indiscernible] . And then the second question on, can you just remind us how much time has lapsed since collection? And when measurement would be expected to be taking place? And then whether after collection, whether you guys do a quick quality checks of sample to just measure [indiscernible] in this sample to determine whether better samples should be collected? And then also, whether there's any, I guess, talk about any, I guess, concerns over a deterioration of the collected sample between now and measurements?

Yes. Matt, you want to take that?

Yes. Sure. Thank you for the question. So clearly, given the importance of Study 045 in designing the study and particularly around questions of biopsy quality. All of the -- we incorporated all the learnings we've had and others have made into this trial, right. And so there are many important elements of the study design, including having age criteria of boys, age 2 to 7. So younger patients who have more muscle, less fatty infiltration, less fibrosis is obviously very important in being able to detect an increase in dystrophin expression with creation of an assay. The ECL assay that's highly sensitive and could detect full length dystrophin and importantly be able to detect the very low levels of dystrophin that we expect to be at baseline, so that it increases our ability to capture a treatment effect on those patients. And then specific things we did around the acquisition of the biopsies themselves and process. So obviously, we wanted to make sure that the biopsies are obtained and processed as quickly as possible, so that there's no risk for any impact on room temperature or any risk for denaturing of any of the critical protein that we're going to be measuring. So that was put in place. In addition, we took 3 biopsies from each of the 2 muscle sites the tibialis anterior and the gastrocnemius, again, to ensure that we have a muscle sample of high quality. Each of those biopsies will be analyzed in terms of dystrophin expression. And then we have into the protocol incorporated the ability to use the highest quality biopsy at baseline and at post-treatment to form the basis of the primary analysis. To answer your question regarding interval, as you know, 12 to 20 subjects had their final study biopsy done at most -- in accordance with the protocol Week 40. The remaining 8 subjects were unable to have their final biopsies taken right away due to COVID delays. However, we were able to get all 20 biopsies completed and there aren't -- the last set of 8 patients will have had their final biopsies between 14 and 16 months of following initiation of therapy. However, we have no reason to believe that additional time on Translarna should have any impact on dystrophin expression, given that the drug is clearly at steady state at that time. But of course, we have incorporated into our analysis plan, a sensitivity analysis to account for any potential impact that duration of treatment could have on dystrophin expression.

Great. And then, I guess, do you think having 1 super responder of the 20, would that be enough to do testing? Do you think or how much would that like impact the mean, I guess. And if that would be enough to do testing?

Yes. So sure. So obviously, statistical significance is a factor of 2 key factors, right, magnitude of effect and variability. And in fact, when we powered the study, we performed a number of scenarios, looking at different levels of coefficient variance and different levels of magnitude of effect knowing that we have a coefficient variance of 25% based on our validation work and then looked at different levels of just increasing dystrophin expression. So with 20 subjects, for example, if we had even a moderate or a modest increase of 40% dystrophin expression with the 20 subjects and the coefficient variance as we expect it to be, we would have over 95% power to detect statistically significant treatment effect. Now your question is about, could 1 individual really drive that? I mean certainly, it's possible. But again, that's going to depend on the magnitude of response, and we set this study up in order to capture that increase in dystrophin across majority of the population. So we really expect to see the Translarna benefit not just in 1 subject, but across the population.

Our next question comes from Raju Prasad with William Blair.

Just curious if you could provide a little more color on how the regulatory agencies have looked at the STRIDE data, particularly FVC and loss of ambulation as it relates to Study 041. Is it something where if the 6-minute walk test is tough to discern that those would be enough? Or just curious to hear kind of how they're doing this with long-term real world data set?

Yes. Thanks, Raju. Thanks for the question. We do believe like -- I think what you're alluding to, that the totality of the data is very much important. And you could see that we've obviously got renewals every year and that part of the renewals have been also from using the STRIDE real world registry as well as the other clinical trials that we have, and they always monitor risk and benefit. And so I think there -- I think they're very aware of the importance of the clinical data and that we've gathered with trial -- of the trial. And I think that's obviously to Europe and most others. The key point is the clinical results of that you've seen and that the long-term data is actually really quite important. And you can see we've had some changes within the label that allowed patients -- a greater number of patients to be able to get that. You saw the increase in the -- from EUR 2 to EUR 5 as well as the elimination of the data about patients who are on Translarna who go nonambulatory can stay on it. So I think if you look at that, that's been going on over the last several years. So all in all, I think we're confident that the totality of the data, considering the evidence for Translarna is pretty strong, and we're going to always take that all into consideration.

Great. And just a question on the ECL assay. Can you just give us a sense of what the lower limit detection is there? And how much -- how important that is with the collaboration with the FDA?

Yes, sure. That's an interesting point. The reason -- the whole reason we developed the assay is because in discussions with the FDA, they wanted a better assay and that they wanted something that could -- that certainly nicely detects full length dystrophin and at low levels. And so the ECL, and we'll probably be happy that at some point we're going to publish the -- or present the assays. And so we're going to be showing that because it's an ECL, and it's a very sensitive ECL, as I described in the talk as a consequence of -- really as a consequence of it being in a sense a liquid assay with a very low background. You could probably detect as low as probably 0.037% of normal. So it's a pretty sensitive assay that shows you that as many -- it's probably many, many folds better than western blotting. So we're very proud that this assay has been worked out and validated, and it was done in collaboration with the FDA. So I think they like this assay as well.

Our next question comes from Tazeen Ahmad with Bank of America.

Stu, as it relates to the European population that you've studied so far, do you have any metrics on what the longest time on therapy patients have been on Translarna in Europe is?

Yes. I think maybe since 2014 on commercial drug. But we've also had -- we have over 150 patients from the U.S. who are on drug also from and some of those goes from Phase IIA. So it's -- which was done in 2004, '05, and then there was a bit of an interruption but they got on. I don't remember what date they got on, but it's probably like 2007 or so. So they've been on -- we have patients both in Europe and U.S. that have been on well over 10 years.

Okay. So with that in mind, when you do get your dystrophin data and just given the variability of measuring dystrophin and what's considered to be meaningful dystrophin production. Do you think you will have the opportunity to share with FDA real-world clinical evidence of Translarna's efficacy, like, for example, for the patients that have been on either in the U.S. or Europe for now multiple years?

Oh, yes. This is -- actually the STRIDE registry was a European commitment. And so we had talked with them about doing this. So they're very interested in the results as well. And with the FDA, we certainly -- this is, I think, incredibly important data that really shows the long-term benefit of Translarna on these patients. So we anticipate that this will be a also a real part of the data set that we will be presenting. I remember a part of, they've written things on quite a bit about the importance of real world data because what they -- at the end of the day, what they're trying to figure out is what you -- what impact does your drug have, what you measure in the short-term in a short clinical trial, even if it's a year. So what happens over a longer term? And what impact does that drug have on the patient. And I think especially that in particularly important in Duchenne muscular dystrophy, where kids continue to decline, but it happens over a 25-year period. And so STRIDE registry like this is so important because when you look at this data, you're really showing the -- look what it does in terms of allowing a delay in loss of ambulation, the effects on pulmonary function. That's ultimately what the patients are going to care about. And so that's why I think this data is so valuable on top of all the other clinical data that we have.

Okay. And then longer term, Stu, how do you think of an environment where one or more gene therapies for DMD might be available. Do you think those gene therapies could be used in nonsense mutation patients? Do you have any color on whether or not there would still be ample opportunity for marketing Translarna if at a couple of years' time or less, there is at least one other option available for patients?

Yes. So I think there's certain issues that are needed, obviously, to be considered, and that, obviously, depending on the effect of gene therapy and how well you use. But I look at this, and we've been studying this now for a long time. The gene therapies are very much in early stage. Clearly, they also have the drawback of how much you can give. So older patients in a way, when we think about this, what -- if that were to come about, clearly, a number -- a lot of the older patients will not be able to get gene therapy. And we do think it's actually relevantly a young therapy where we don't know the durability of it. We don't know how long it will last and how effective a microdystrophin is and what are the limitations as a consequence of that. What it'll do to other tissues and organs in the long run, when you don't have a full length dystrophin and probably that need to be considered. So I think, from my view, we're relatively a longer way from seeing what it really does in terms of delaying the clinical benefits, not just whether you see microdystrophin. But -- and also in patients where they aren't naturally getting better anyways in terms of that age. But as they sort of stabilize, what to do with them? There's no data yet that shows that in any well controlled manner yet. And so we'll be waiting to see that. But I think there's always going to be a place for Translarna regardless of what the results are.

Our next question comes from Danielle Brill with Raymond James.

I guess just trying to understand the risk here given the length of the study and the short half-life of Translarna. Is there any kind of risk around noncompliance? And will you be doing like looking at a correlation between drug concentration and dystrophin levels?

So the compliance, as I think we've talked about in the past, it actually doesn't appear to be an issue. I mean we've seen greater than 90% compliance and we measure that all the time. So we don't think that's necessarily going to be an issue and nor can you actually -- nor does the sort of the levels versus drug are necessarily correlative in that. So we don't think that's going to be an issue. I mean, that's sort of one of the issues with dystrophin as a biomarker. So I think the real -- what the FDA has said and what they've talked about in the past is that it obviously doesn't correlate with clinical benefit. So they're not using it as that. It's really just a biomarker to say the presence of that. And so we're measuring within the trial on that. But I don't think that you're going to necessarily be able to do those correlations, which you'd like to see as much as you'd like to. Those are probably not doable.

Got it. Okay. And that's helpful. And I'm curious if there's variability in the phenotypes depending on where mutations are. And if you're expecting similar efficacy for increasing dystrophin regardless of the location of the mutation?

Yes. That's a good question, but that's the interesting thing about the nonsense mutation replacement is that it's really just -- it's really a mutation of a single point alteration. And you might have probably noticed in the past that there aren't a lot of point mutations that affect dystrophy. And that's -- so there's -- they're mainly deletions or like nonsense mutation is actually prevents the production of the protein. So the dystrophin molecule itself is relatively capable of functioning even with probably -- with mutations because they don't come up very often. So I don't think that -- and then the small number of patients that you ultimately have wouldn't make the correlation. You need more patients to really make such a correlation. So I don't -- because even when you see kids with the brothers with the same mutation, you see variability. So you'd need a relatively larger population to really deem it safe. We always look at these exploratory analyses, but the level is -- the number of patients that you have is -- it's difficult to really make any conclusion.

Our next question comes from Vincent Chen with Bernstein.

I wanted just to follow up on some of the earlier discussion of the ECL assay. Based on your understanding of the variability of the assay and everything else related to sample collection and processing, what's the spec size you think you need in terms of increased dystrophin in order to be 90% powered to detect a statistically significant increase? And I guess the corollary to that is, what's your best sense for the likely increase driven by Translarna and what data is this just based on?

Sure. Matt, maybe you want to take a little bit on this.

Yes, Vincent, thanks for the question. So as we mentioned, we expect, based on all the validation work we do on the assay that coefficient variation is in the neighborhood of 25%. We also -- I can tell you that it's for a treatment effect on the order of, say, 40% increase in dystrophin, which should be relatively modest, we would have over 95% power to detect that. I think it comes out to somewhere closer to 98%. So I can go back and calculate exactly what magnitude and effect we would need to have 90% power, but obviously, it's going to be less than 40% mean increase in dystrophin expression on the baseline, which again is a relatively modest effect and obviously, in setting up this trial with younger patients, more healthy muscle, we believe that, that 40% increase -- mean increase would be a modest effect.

And actually, the question of how much -- it's an interesting question, but we've not really done previously to the 7-year olds. So we were never in the trial had younger patients who can do the 6-minute walk test. And so we're in an interesting position that the patients will be younger, which I think actually is -- could be more helpful because they have less fibrosis and fatty tissue as a base. So I think it's an unknown to us, but it is definitely an advantage in our trial.

Our next question comes from Colin Bristow with UBS.

Just -- I think we've covered most of mine, but I -- just to piggyback on something that was asked earlier with regards to gene therapy, you sounded very cautious on neutral and we're on the cusp of, obviously, a competitor readout. I was just -- I'm curious as to -- as you think about your longer-term projections, do you include gene therapy in there as a competitive threat? And if you could just give us a little more color on your -- the driver of your caution, that would be helpful.

The drivers of our caution in terms of gene therapy.

Yes, correct.

Yes, I think -- we obviously think gene therapy is important. We're doing so ourselves. We did it -- we went though into thinking about it in different ways. Obviously, by giving large amounts of vector can have issues within and have some toxicities that are clearly something that one has to look at. The fact that cells can -- it's -- we also think about reproducing cells and cells that have low turnover we thought would be better than cells that turn over rapidly. So we that's why we initially at least went into the CNS where brain cells don't turnover as rapidly and also in the difficulty of making large quantities. So I think the -- those are the reasons why we were cautious in terms of gene therapy because, obviously, there is continued growth within the muscle that's required. And if you think about you need that in order for cells to be able to have robust protein synthesis and it can divide and make more muscle. And in the absence of that, that makes it harder for it to occur. So we think, again, that Translarna has a real place in treatment and that -- not that it won't be or not that gene therapy won't be used and might be used in combination of it or it might be -- or depending on how long and durable it is. Maybe, Eric, you want to talk about thinking in terms of commercial and your thought process on there?

Well, I think in some ways Stu, we view Translarna, yes, obviously, as the only drug that's been studied in nonsense mutation and it really does address the underlying cause of the disease. So in reflecting on what gene therapy is, gene therapy clearly has a place if it's proven safe and effective. There are always going to be questions about durability. But what we know from the commercial environment is that payers will pay globally for outcomes for clinical measures. And we haven't seen a lot of robust data in the nonsense mutation patients to date. What we do believe is that Translarna being the only drug that actually has been studied, will continue to play a very, very important role in not only internationally, but of course, if we get a pathway to the -- the regulatory pathway in the U.S., it certainly will have an important, long-lasting, durable, sustainable position with poor patients with nonsense mutation in the U.S. So we're very confident that this will continue to play a very, very important role for that -- for that subgroup of patients within DMD.

Our next question comes from Joel Beatty with Citi.

First one is, is there any potential to use some of the learnings from the splicing platform to develop a more effective Translarna? And I ask because regardless of the dystrophin biopsy results, it seems that a more effective Translarna might have some value for life cycle management in DMD as well as the wide variety of other nonsense mutation diseases out there.

Yes. No, I think that's a really good question. And I think some of it is also based on the constraints of the mechanisms that you're working on. I think that the nonsense mutation is different and of the splicing reaction that one versus the other. It's sort of hard to utilize that. But we continue to try and improve Translarna either with additional other molecules that can be a combination that can improve its activity or to find other molecules that are better than that. And that's been an ongoing effort, and we're trying to -- we've worked on that quite a bit. And that -- it's not been easy yet to have done. But we're working hard on that and there's some possibilities that we could find improvements over the long run for life cycle management. But that's just -- it's taking this time to move those forward.

Got it. That's helpful. And maybe one follow-up question. Could you compare the biopsy trial about to readout next year with the Phase IIa biopsy trial. It seems that trial reading out will have 20 patients whereas the previous biopsy trial had 38 patients. So the older one is a little bit larger. What's different about these 2 biopsy trials for the one reading out could support approval, whereas the other one wasn't able to?

Yes. So you have to remember, this was -- we were talking to the regulators for quite some time. And it was pretty clear this study was for us to demonstrate dystrophin protein for us to be capable of moving forward. And when both of the regulators made it very clear that they don't think that necessarily that it was a biomarker that would predict clinical efficacy. And so that's what -- those were the basis of what we're working on, and we use an immunofluorescence assay to test that. And that was good enough for the time for us to move forward and as proof-of-concept that it was for that. And we did it -- in that case, we did it in 3 sites there as well. In this case, we're doing -- all the biopsies were taken from a single site, so that was actually important. And it's going to be analyzed at one center and so I think that's -- those are important because when you think what are the issues of just having a very good assay and having good biopsies, right? So I mean the design, and that's critical, probably the variability can often come into the muscle. So we tried to design it to minimize the freezing and thawing effects and the protein degradation that can occur and the variability that could result as a consequence of having multiple sites. And so that was actually really important to us. And then to have an assay and I think the ECL assay that we've described, obviously, it's a liquid assay. It's far more linear than, say, a western blot. And in the first case, it was quantitative -- semiquantitative immunofluorescence. This is a more quantitative assay. And I think those things, we try to limit the -- as much as possible is the variability of those. And we -- and the assay is one that we can do. And then I think the other important point is that at the time, we couldn't do much younger patients, but we're now using patients that are ages 2 to 7 of old. So with patients that go down as low as 2, 3, 4 years of age. So we like those because those patients will have, again, less fibrosis, less fatty infiltrates than even kids that are 7 or 8 years old, where you can see substantial loss of muscle even then with fibrosis and fatty infiltrates that occur in muscle. So we've done as much as we can to really reduce the variability, both on the muscle part as well as on the assay part. So that's why I think it gives us confident that I think we're in good shape as we could be.

Our next question comes from Peyton Bohnsack with Cowen.

This is Peyton on for Joe. I've got a question if Translarna is approved in the U.S., how do you see uptake based on what you've seen in the EU and then also kind of continuing on that. Do you see Translarna being used either in combination with any other DMD gene therapy products that are being developed?

Yes, sure. Yes, thanks for the question. So we think, as we talked about, there's already, I think, over 150 patients that are on Translarna now. So we'd like to move that over relatively rapidly. And then I think as we've been talking about, we have Emflaza within the U.S. And so that's been going well. And so maybe, Eric, do you want to talk a little bit about the commercial aspects of how rapidly we could?

Yes. I think there's going to be a very important difference between what we did internationally and what will happen in the U.S. We now have since for about 3.5 years now that we've had Emflaza and an infrastructure in the United States, not only finding patients in genotyping them, but also importantly, we have thousands of patients currently on Emflaza treatment, where we have specific information about height, weight, dosages of the Emflaza, insurance, et cetera. We'll be able to work very effectively to determine if they have a nonsense mutation and be able to, I think, much more rapidly find that uptake because we have already a very substantial base. And as Stu said, we have the largest base of patients anywhere in the world being treated with a single product. And with that, that gives us, if you will, a very, very large pool, prevalent pool of patients who are currently on treatment with Emflaza that we can unify very quickly and get them onto treatment. So I think the difference in the dynamics will be quite different in the U.S. It should be a much more rapid uptake.

Our next question comes from Martin Auster with Crédit Suisse.

This is Mark on for Marty. So I recall that in addition to the 20-patient Translarna dystrophin Study 045, you're also running a separate Translarna study called Study 046 that was ongoing, and I believe you are taking biopsies from that study. So I'm curious if you conducted needle biopsies in Study 046? And what were the learnings that you had? And specifically, were you able to get adequate samples through needle biopsy to run the necessary assays?

Yes, sure. Thanks for that question. Yes, Study 046, again, was utilized and we did do biopsies in them as well. And it was -- but it was only -- it was patients who've been on that times were older patients, and we weren't able to get a presample. So it's only been on that, and we were able to use that in our assay. And we're able to use it to show that use the ECL assay and to help validate it. So that's what we used it for, and I think that worked out actually quite well.

Okay. And just to confirm, was it a needle biopsy in that particular study?

Yes. Matt, you remember, I believe it was a needle biopsy, yes?

Yes

Yes.

Our next question comes from Gena Wang with Barclays.

The first one is regarding the Study 045. So for the 8 patients that had 14 to 16 months follow-up, what is the FDA feedback regarding the sensitivity analysis for the statistics purpose?

So actually, Matt, do you want to take that?

Yes, sure. Gena, thank you for the question. So obviously, it was very important that we modified the statistical analysis plan for the trial and include what additional sensitivity assays we were going to have to account for the different duration of Translarna had. So we modified the steps submitted to the agency, and there have been no issues raised on that point. Obviously, the challenge of dealing with the impact of COVID on clinical studies is one that has been shared, I think, by everyone in the industry. And I think we're in this particular instance, where there's no real reason to believe that there would be any impact on the key outcome measure, which is a measure of dystrophin expression based on that in this case, the delay in the muscle biopsy with the prolonged exposure to Translarna. So really, it was just a matter of making clear to the agency that we were prespecifying the sensitivity analysis and exploring any potential impact that might exist even though we believe it's a quite small chance that they would be wanting.

Okay. My second question is regarding the STRIDE study. What is the definition of a loss of ambulation?

Matt, why don't you want to take that?

Yes, sure, thanks. So the -- so part of -- in the registry, we obviously went first and the creation -- one of the key components of 041 was to have the -- use the natural history data from Synergy that we would go ahead and create a -- use the propensity score analysis, that would be important. And then identify from that entire patient, a number of the key factors that would be important in order to match. So things like age of first steroid use, other things such as duration of steroid use, age of symptom onset.

Sure. Yes. So my question is the definition of a loss of ambulation. How does that compare like in your STRIDE study? What is your definition consider loss of ambulation like that the time rise in certain seconds, like 21 seconds, 45 seconds versus Synergy trial, what is defined as loss of ambulation. And the later question is the Synergy, when you bought here 181, were these all the patients with the nonsense mutation? Or will that include all the other mutation type?

Matt?

So in terms of the mutation types that the Synergy database includes many different -- includes many different mutation types. So we -- it doesn't -- it's not specific to the nonsense mutation, which is why we took all of the important efforts to make sure that we matched on all of the other -- all of the other critical elements. In terms of the precise definition we used for loss of ambulation, we can go ahead. I'll come back to you with that answer, Gena.

Okay. And -- sorry.

Yes. So the STRIDE rates of nonsense mutation from the -- not from the -- all the patients in STRIDE had nonsense mutations.

Right. Synergy is not.

Okay. So I mean trying to understand how comparable these 2 population will be just from that history perspective. So my last question. Third question is regarding the Study 041. I know when you started the Study 041, I think the primary endpoint was do 6-minutes walk test and now has been evolving the whole view regarding the DMD. So the North Star score became much more important. So since this is a secondary endpoint, was the study designed to power to detect also NSAA score.

Matt?

Yes. So the study -- so 041 was powered based on -- 041 was powered based on the 6-minute walk test. But we have over 85% power to detect that difference in the target population. Just going back quickly to your -- the question on loss of ambulation. Clearly, the definition in Synergy for loss of ambulation was fully wheelchair bound. So it was the same definition we have in the STRIDE registry as in the Synergy data set.

Okay. So wheelchair bound, is that considered like, say, half of the day you're sitting on a wheelchair or like a certain definition, the time that bounded to the wheelchair?

Yes. I think it was the inability to be able to actually walk more than 10 meters or the transfer over. I believe that's what the [ laws ] expect that.

Our last question comes from Brian Abrahams with RBC Capital Markets.

This is Steve on for Brian. Any reason to expect that the ELISA might have different sensitivities to different mutant forms of dystrophin? And did you look at any either dystrophin expression or correlative cardiac function in the STRIDE registry data?

Yes. Thanks for that. The mutant form -- so what we're using in terms of the detection, the assay that's on the plate, the bound plate will be the carboxy terminal. And that's not -- so that one -- so it has to have a carboxy terminal that gets read through. So that shouldn't be an issue as well. And I think the cardiac -- remind me if I'm right, Matt, though was -- it actually -- that takes a bit more time. Is that right?

Yes. Correct.

Matt?

Yes, correct.

Yes. So that -- we don't have the data to be able to say anything about that now.

Thank you. And there are no other questions in the queue. I'd like to turn the call back to Stu for any closing remarks.

Okay. Well, thank you all for joining. We're excited about next steps, and we wish everyone to have happy holidays, and I'm sure we'll be talking to you after the holidays. Thanks for joining today.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.