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

Hi, everyone, and thank you for joining us at the 41st Annual Cowen Healthcare Conference. I am Joe Thome, one of the senior biotech analyst on the team. And it is my pleasure to have with me today, PTC Therapeutics. We have CEO, Stu Peltz; CFO, Emily Hill; and Kylie O'Keefe, Vice President and Head of Global Strategic Marketing and Business Intelligence. Thank you all for joining us today.

Thanks for having us.

Of course, Stu. Maybe you've been super productive over the past 12 months. Maybe if you did want to just give us a few highlights of the past 6 to 12 months and kind of the big things that we should be looking for in 2021 in terms of milestones?

Yes. No, no, thanks. And again, we're obviously really excited with all the progress that we've seen through all fronts in 2020. And the -- even despite the challenges of the pandemic, I think the company really was able to adapt quickly and progress the pipeline and move forward on lots of different milestones. I think when you think of 2020, we initiated 5 clinical trials, 3 of which were registrational. Of the 3, trials we initiated in 2020, 2 were from our Bio-e platform, and the Bio-e trials were with vatiquinone and therefore mitochondrial epilepsy and for Friedreich ataxia. And then the healthy volunteer trial with our Huntington's program, which I know lots of people are interested in, and we'll have results to be able to share with you this half by coming up within the next quarter that's coming up. And then we've also recently initiated the final stage of our PTC299 trial for COVID-19, which is -- which we're really excited about, which has a dual mechanism of action that inhibits the SARS-CoV-2 viral replication and actually then also comes down the cytokine storm. It does so by targeting a cellular enzyme instead of a bioprotein. So I think this will be less likely to exhibit any drug resistance. And then I think you could see from the commercial business, the DMD franchise had a strong growth in 2020 with both Emflaza and Translarna. And so that generated significant revenue for us. And even despite the pandemic, we continue to see year-over-year growth with the franchise. And then with Evrysdi, we've seen continued significant growth this year, both in the U.S. and now with the approval in the U.S. -- ex -- in Europe with ex U.S., with the positive opinion that we got from the CHMP. And then we're looking for that -- for the Japanese approval later in 2021. So I think in '21, '21 continues to be quite an exciting year. We're going to create, I think, substantial value for all the stakeholders. And that, obviously, with the Evrysdi approval in Europe, the BLA submission and EMA CHMP opinion for the AADC deficiency, the healthy volunteer data for 518, the PTC518 healthy volunteer results and the Bio-e moving forward. It's really evolving and very productive time for the company.

Definitely a lot going on. Maybe we'll start with the existing franchise and then dive into the pipeline, but it does seem that Emflaza and Translarna did do really well even throughout the COVID pandemic. If you could just talk a little bit about the existing franchise. What should we expect over the next 12 years? What do you expect over the next 12 months, that year? And we recently did see some Translarna data. Can you tell us kind of next steps with the FDA for Translarna in the U.S.?

Sure. I'll start with a little bit of that, and then we'll -- I'll turn -- I'll pass it out to Kylie to talk through some of the commercial aspects of it. So -- but we're -- obviously, we're very pleased with the DMD growth over the last year. And I think as you'll hear, it's really a combination of expanding the patient base, high compliance and then label updates. So that's been going quite well and just continued geographic expansion that we could talk about. And then also with the dystrophin obviously, we're -- as I said before, that we're working through all the results to talk to the FDA. And that, in combination, we want to talk to them with the STRIDE registry, which everyone's seeing, the power of that data. And we think the combination of both the results that we saw with the dystrophin reduction, along with the really strong data in terms of preservation of ambulation and pulmonary function, really, is, ultimately, you think that's what you would want is, endpoints as opposed to able to predict the things that patients care about, like maintaining waking as well as pulmonary function. So we're excited to move forward on that. And then maybe, Kylie, you want to talk a little bit about the global growth and expectations for the franchise. Oops, did I lose you, Kylie? She must be frozen a little bit.

Yes. She seems to have got frozen.

So I think we are -- so I think what we could say is that, for instance, with the geographic expansion, we recently got the approval in Russia. We'll continue growing in the Central and Eastern Europe and Middle East and North Africa. Still continuing to find patients even in Europe as well as in Latin America. So we -- for both -- for Translarna, we see substantial growth. And then for Emflaza, that growth is really -- as you saw, was really quite strong. And I think that is somewhat of a consequence of the -- really the data that's come out on the improvements of Emflaza in terms of how much better it is -- it's really incontrovertible that it's better now, the prednisone that patients should be [Technical Difficulty]. And so we continue with it over time.

Yes. We were pleased to see strong growth across the DMD franchise, even despite the pandemic. As Stu mentioned, Emflaza was up 38% year-over-year based on continued new prescriptions and uptake. And then Translarna, despite the pandemic's impact in Latin America saw continued new patient growth. We saw 2 sides of an expected contract for Brazil delivered in 2020. And so we look forward to continuing that expansion into 2021.

Perfect. And last question on, pardon me, Translarna. Stu, if you could just touch on Study 041. We're expecting data from that maybe later in 2022. Maybe just what are the expectations there? Maybe how can that help to round out Translarna's profile? I know you mentioned the STRIDE database, which is really impressive. But what will for one kind of add here?

Yes, yes. I think we're in good position there. We think it will be done by the third quarter of 2020 -- 2022. And that trial has really been based on the compilation of all the districts -- all of the DMD data out there. I think we used our data as well as data from the previous BioMarin data, the results then was a composite, and we really used the natural history that we had to really understand a bit about the [Technical Difficulty]. In particular, this is very much really making sure that you have the right patient population, and we were able to look through that to define the best natural -- from the natural history data, and we now have a lot of the -- how to bring -- which is the patient population. So when we have a relatively large trial, the primary endpoint are going to be on those patients, which change -- which will change over a year but aren't likely to go non-inventory within that year. And so that's the primary endpoint. So we feel pretty good about that in terms of having a broad population of patients, having the right patient population to look at for the primary endpoint. So I think we're in a very good position to get that results. And we think that we now -- we've understood the natural history, and there's enough of it for us to make the predictions there.

And then maybe jumping over to Evrysdi. Any sort of comments that you can make on the launch so far in the U.S.? It definitely seems like it's going on our panel yesterday on orphan neuromuscular disorders, definitely looking out 5 years, seems that this is really going to control a lot of the non-gene therapy aspect of the market. Any adoption trends that you can discuss so far? Any switches over from SPINRAZA? And how are you thinking about growth here over the next couple of years?

Yes. We think just because of the nature -- the launch that -- we're obviously really pleased with the enthusiasm of the -- just how patients and physicians are taking it. In that, the -- and Roche, I think, has shared with you that they said that they anticipate that, in the U.S., the Evrysdi is going to be the treatment of choice for SMA. So that gives you a pretty good indication of how they feel about it. And they did say that about 2/3 of the patients have been switches from Zolgensma and SPINRAZA, 1/3 are naive patients. So we're getting the full range of patient populations from severe type 1 to the less of the type 3 patients. So we're getting a very good distribution of that. And that they're -- about 25% are type 1 patients, 50% are type 2, and then 25% are type 3, which they reported. So if you think about it already, they've had more than 1,000 patients treated, which is, in a sense, like 10% of the total share after just 5 months of the launch. So I think that sort of bodes well. It makes sense to me from the activity and efficacy of the drug, the ease of use and delivery of that, that I think it's going to continue to grow and do quite well. That's -- I think helps. So we're really pleased with how it's been going thus far. You just recently saw the approval with the CHMP -- not the approval, the opinion from CHMP that's going to lead to the approval. So we feel, again, that's just going to continue to expand and grow. So again, exciting. I mean this is really -- I think really a transformative drug to me, and we're very proud of it, not only from -- how well it can do for patients, but that it really was the demonstration that you can go into a new area of science and come up with a whole new way of identifying new therapies for patients. And so we're excited about the dysplasia platform.

And the next candidate from the splicing platform is PTC518. As you mentioned in the earlier remarks, we should see some healthy volunteer data in the first half of this year. Can you just discuss the progress of the Phase I healthy volunteer study? Maybe the overall design. I know it has both a SAD and a MAD portion. If you could just walk us through that a little bit. And maybe which of those cohorts can we expect to see in the first half?

Yes, sure. So right. So when you think of it, it's a Phase I program, where we're doing both single ascending dose and multiple ascending dose. And so -- and we're really quite excited about this because, again, it's an orally bioavailable molecule that we previously -- that previously shown in BACHD models that it passes the blood-brain barrier, that it reduces HTT -- the mutant HTT protein in that as well as reduce the RNA level. So it's really a quite exciting model. And very -- the approach is really quite analogous to what we've been doing and what we did with SMAs to pick the molecule, so that it's not -- it does pass the barrier that is not efflux because that's also one of the important points that it doesn't get just pushed out or pumped out of the brain as well. And so that -- and we've been able to accomplish that with PTC518. And then we're obviously on track with the SAD and MAD to be releasing that as we said in the second quarter of this year. We're going to be doing a deep dive on that in advance of that, so that everyone will be ready and familiar with it. And the results will include both the single ascending dose as well as the multi-ascending dose. And just to remind everyone that this single ascending dose study includes 5 cohorts, each with 6 subjects with 2 placebo. And then the multiple ascending dose is also -- could have up to 5 cohorts against 6 patient -- 6 subjects untreated versus -- and with 2 placebo. And so the multiple ascending dose cohorts will receive 14 days of exposure followed by 28 days of follow-up, right? So what do we expect from this is demonstration of proof of splicing mechanism. We'll be able to establish the pharmacokinetics and the safety, so that we're able to define the dose that gives us a drug exposure that will provide the desired level of Huntington protein reduction, unless there's, again, really analogist, what we've tried to accomplish in the risdiplam of Phase 1, right? We are -- and I think what maybe -- people maybe missed it. And that one is that it's really telling you the alteration and the levels. Here, we're -- you're going to know that. So I think that's really good. So at the end of the day, in the Phase I study, we'll know the drug concentration in the blood, the levels of HTT, RNA protein that are reduced from the blood. One cohort in the multiple ascending dose will have measured not only in the blood, but also measure the level of compound in the CSF. And that would just also connect -- we've already done this in like non-human primates, where we know the level in blood is similar to the level that you -- probably a free drug in blood is similar to a level that we saw in CSF. And we'll be showing that at the deep dive. And so we'll be really there. Now just also to remind everybody that the -- these are healthy volunteer studies. And so we're not necessarily looking for Huntington's protein in the CSF. These are healthy volunteers. And so we don't know. So what we -- we're really doing this as a PK study. And not to mention also I think it's relatively controversial, what does actually reduction mean there anyways. So again, we'll have that within the first half of this year.

And there is kind of various thoughts on the level of Huntington protein reduction that you do need to drive benefit. Where does PTC stand on this? What level of reduction would you like to see? Is there too much? Is there too little? Kind of where do you fall on that spectrum?

Yes. That's actually -- obviously, that's a key question, right? In a way, when I think about what we're able to do because it's very analogous again to what we did in SMAs that we're actually able to give the drug and measure the level of reduction, right? So that -- and the fact is because it's already bioavailable, it goes throughout the periphery as well as within the brain. We're pretty confident that, that level of reduction we see in blood is the level of reduction that we see in brain. And then when we think about what's the right level, there is no -- we're probably going to try and shoot for 50%. Because I think there's at least some natural history clinical data that demonstrates that, that certainly can help. And so that's I think what we'll be shooting for. Again, it's an orally bioavailable molecule that can be titrated. But I think probably at the beginning of the clinical program, the types of levels, we don't know whether -- if you look at what people have been reporting using the competitors that have been reporting. Now they're not looking at blood or brain directly. They're looking at what's happening in the CSF. So if you just -- you've got to take that with a grain of salt because we don't know precisely what that really means, but they're anywhere between 12% and 30%, 40% at the most. So I think we're -- we might be in a pretty good position to be able to not only treat to get to a level that we're interested, but also be able to have it throughout the whole branding, which I think is getting the advantage of the U.S. or available in small molecule.

Yes. I think 2 advantages that you've highlighted definitely in the past, not only the convenience of an oral molecule, but also this ability to have sort of a systemic effect and that Huntington's disease is more of a systemic disease instead of just the brain. If you could dive into that a little bit. Do you think patients will be able to see sort of a larger benefit with a systemic therapy than something that is targeted?

Yes. Well, I personally think that's true because I think at the end of the day, when you think of the disease, it's a whole brain disease. It's not the striatum. Cortex is every tissue within the brain. And I think one thing we're pretty sure of is that the other approaches would make perfect scientific sense. It's often the issue of delivery, right? That's the -- and the -- and that's really what the -- really, I think, very much distinguishes us, right. In that, we're capable of actually being able to get to a level, get -- and every cell, every brain cell gets -- will get the drug as a consequence. And therefore, we'll be treating the whole brain. And then we can tightly control that. So I think we're in a good position to be able to be, in a sense, very similar to what we saw with SMA, that it will be treating the whole brain disease. And as well as -- we do know it's a systemic disease. So it could help every tissue as well. So I think that's why we're actually quite excited about this program.

And last question on this program before we move on to some of the others. Based on what you've seen maybe from other Huntington's trials or what you've been thinking in-house, how long do you think you'll have to follow patients in the clinical program to see a functional benefit, even if the therapy is able to drive these reductions that you're talking about?

Yes. That's the key question, right, is -- and you sort of -- I'd like to say not long. But we don't -- the truth is we just simply don't know yet. Because there is no drug really from them that causes the disease. And that's why we -- to me, as someone who's -- we were the pioneers in like Duchenne muscular dystrophy. You can -- I remember sort of taking arrows early on, but now everyone's probably have much more of an appreciation that understanding the natural history, understanding what outcome measures do, are there biomarkers that are reasonable just. So we're looking at all of this, like there's obviously the Huntington composite scale. But really, what we're -- what are the things that move there? Are there other -- so take you through that. What's the natural history of what patients are the best patients to look at? It's a little bit of -- my guess is, when you think about it, it's a little bit of the goldilocks. It can't be too early that you can't see changes. They're too late. That the patient is too far gone to be able to do something. So you have to have the right patient population with outcome measures that you could see different, what is some biomarkers or symptomatologies that you can measure earlier on to see the alterations? And that's sort of how we're thinking about our clinical program. So we're working on that now. And we'll disclose that after the next one.

Perfect. And maybe we'll jump to gene therapy. We've seen definitely some encouraging data in PTC AADC with really long-term follow-up, which I think differentiates this program from a lot of other gene therapy programs that are out there. Can you just remind us on next steps in the EU and the U.S. and an EU launch could potentially come this year? Maybe what's the team doing ahead of that to prepare?

Yes. So we're actually really excited about that. Because the medicine, the therapy itself is really quite transformative. And it's analogous to when you think about -- for the -- again, the most severe of the patients, it's very analogous to like the SMA type one patients. They never reach their developmental milestones. They don't pick their head up, roll over, sit or staying. And then the drug itself has shown that it can do that. And as you're right, that there's been a lot of data that showed we have patients, which have been able not only to sit, stand but also walk and they improve over time. We have long-term durability of the result. We saw biomarker data, dopamine production over 5 years and then 5-year follow-up. So it's really quite an exciting transformative medicine. And that we're -- we have -- the CHMP opinion will be in -- should be by the end of the first half of this year. And that we'll be putting the FDA BLA into that also by the first half of this year. The BLA -- so that's quite exciting. It could be the first approval in this -- with the CHMP and then the BLA, that was, as you might remember, depending on some work with the cannula. And so, obviously, the pandemic really made that difficult. But we've now been able to do this. And we've done a couple of patients, and there will be probably another 1 or 2, and then we'll be done with that and then go to the FDA and talk with them after that. So we're excited about that as well. And then we've been doing a lot in terms of getting -- you think about this, right? It's really getting ready for doing the -- getting the surgeries ready for treatment and then the identification of the patients. And those are 2 things. That's -- when you think about, that's the key commercialization aspect of the process. And Kylie, do you want to talk a little bit about that?

Yes, absolutely. Thanks, Stu. And as you said, 2 of the key areas that we're looking at launch preparation is both patient identification as well as identification and preparation of the expert pediatric neurological centers of excellence. And both of these aspects are underway throughout U.S., EU, LatAm and additional geographies. From a patient identification point of view, we continue to aggressively pursue patient finding activities, and we have initiated more than 60 screening programs in over 20 countries. These screening programs are focusing on high-risk populations in cerebral palsy also epilepsy centers where there's common misdiagnosis. We're also looking at a number of different disease education programs targeted to educating physicians on the signs and symptoms of AADC deficiency, including global and country-specific webinars and also virtual Congress symposia. We've really started to see acceleration in patients identified through these additional programs and expanded geographic focus, and we anticipate identifying 300 AADC patients at the time of launch, which, as you noted, is in the second half of this year. And we expect these patients to be in countries where access and reimbursement to gene therapy products is available. We remain confident we will achieve this target.

So things are moving quite well. So we're pretty excited about the finding that's been reflected in the performance getting the -- because the surgical centers are really critical here as well to get them used to that. And so it's -- actually it turns out to be actually very important that we really got it all well aligned and gave us time to get moved. So we're -- it's actually in a good position right now.

Great. We look forward to a potential launch there. And then maybe moving on to the redox platform. In terms of 15-LO as a target, maybe what are some of the initial data that got you excited about this program? And if you can sort of pick between your favorite children here in terms of Friedreich ataxia, epilepsy? And maybe going into GBA, Parkinson's, is there one indication that the team is most excited about?

Yes. So the Bio-e is an exciting program for a couple of reasons. One is -- it's activated. When you think about it, it's really a consequence of excess electrons, right? And hence, why the mitochondrial is so involved in this. And while -- and when you think about it, while we all need oxygen, the oxidative stress is due to excess electrons that ultimately lead to damage within both DNA, RNA protein. And so that's why when you think about it, why is it so tightly controlled, right? It's because while you need oxygen, you also don't need molecules with extra electrons that can do damage. And so that's why -- it's like inflammation. You need enough when that -- you have to control this because there's always going to be some electrons where everything is not 100% efficient, and, therefore, glutathione and other things that sort of mock this up. And the 15-LO is the key mediator there, right? It's sort of the signal. So it turns on just to make the right amount and you keep everything in homeostasis. And what happens is, during situations like -- you get excess electrons that occur that ultimately lead to epilepsies or ferroptosis or other things that lead to issues. And so the 15-LO is at the key of that point. And so once it gets turned on, there's this fast forward loop that is like extra inflammation, that turns on inflammation, all these other systems, and that's where the damage occurs. So what we're excited about is the types of molecules we have not only combined and affect 15-LO, but they move electron to room. So they inhibit that from a query, dampened down the overflow and therefore, could change the disease. And we've seen that in results in mitochondrial epilepsies as well as in Friedreich ataxia. So it's an exciting -- and then it could be used quite in a number of diseases. So we're excited about that because we're studying along with the mitochondrial epilepsies and the Friedreich ataxia. And these would be good proof of mechanism that there will be new drug for this disease. And then oxidative stress has always been known to have this, but they have molecules that not only target 15-LO, but can be -- can alter the electron, change of it is, I think, going to be -- and that's a new area that we can then expand upon if things go well.

And maybe just in the last minute that we do have here, the company has been pretty active in terms of BD with Censa, BioElectron, Agilis, and obviously, the partnership with Roche. How is the company thinking about BD either bringing in new programs or partnering assets? What's the strategy here?

Yes. I think that -- look, so the vision is really -- when I think about building a company and what we've done over the -- what now over 2 decades, it's shots on goal, right? When you think about building a pipeline, look, we all know that not everything wins, right? And as I always say, we're fighting evolution. So you're going to -- you need the number -- you need to be a pipeline of products that give you opportunities to win. And so what we use business development for and internal is to build that pipeline. So we use that -- in really precise ways to do that, we look at our pipeline and say, what do we need? Where is the need for that? And then -- so it gives you extra shots on goal,to be able to do that. And that's really our purpose, right? We want to be humble enough that we know we can't do everything, but we have a lot of innovative ideas, but we then supplant them also with additional things that we could look out. So we're always looking, and we trying to bring in things that we think will be fruitful in the near term, and they could be platforms to do other things with it as well. So that's the way we've been thinking about it. So we don't do it randomly. We try to keep them within the verticals that we have within our pipeline.

Perfect. And with that, we are out of time. But congratulations on all the progress, and I think it's going to be a very exciting remainder of 2021. Thank you all for joining us today.

Thanks for having us.

Thank you.