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

Good morning, everyone. My name is Gena Wang. I'm Biotech Analyst at the Barclays. Welcome to our Second Virtual Global Healthcare Conference. First, I wish everyone stay healthy, and I would like to thank all the participants, investors, companies and especially our event team, our corporate access team, who made this Virtual Healthcare Conference possible. With that, I would like to introduce our next presenting company PTC Therapeutics. With us today, we have Matthew Klein, Chief Development Officer; and also Kylie O'Keefe, Head of Global Strategic Marketing and Business Intelligence. With that, I hand over to you, Matt.

Great. Thank you very much, Gena. It's a pleasure to be here today and being able to share a lot of exciting updates from us here at PTC. Let me just get into slide show mode. Great. Today, I will be making forward-looking statements. I refer everyone to our SEC filings. For those of you who don't know PTC, we are a global diversified rare disorders company, focused on discovering, developing and commercializing best-in-class treatments for patients with rare disorders. Over the past 22 years, we have built a set of innovative discovery platforms that has allowed us to have a strong and diverse pipeline across all stages of development. We are proud that our research engine drives the development of innovative products for patients with high unmet medical need, including 2 innovative approved therapies, Translarna and Evrysdi. This morning, I'll walk you through several of our platforms and programs to highlight a few of our key upcoming events in 2021. First, I'll start with our Bio-e platform from which we have 2 ongoing registrational trials. One in mitochondrial epilepsy and one in Friedreich ataxia. Mitochondrial epilepsy is the highly warning condition of refractory seizures in patients with inherited mitochondrial disease. The Phase II/III registrational trial was built on a foundation of solid science in previous clinical studies, in which we have demonstrated a market impact on seizure activity and seizure-related morbidity in a number of mitochondrial disease subtypes. These results include reduction in seizure frequency, disruption of refractory status epilepticus, decrease in seizure-related hospitalizations and decrease in disease-related mortality risk. These results give us confidence that vatiquinone has the potential to show clinically differentiated improvement for mitochondrial epilepsy patients. We initiated a global randomized, placebo-controlled study, the MIT-E trial, for children with mitochondrial epilepsy in late 2020. The trial will enroll approximately 60 patients between the ages of 1 of 18 years. Subjects will be randomized to receive either with vatiquinone or placebo for 24 weeks. The primary endpoint for the trial is the change in frequency of observable motor seizures from baseline with secondary endpoints capturing other aspects of seizure morbidity. We expect results from this trial in the third quarter of 2022. Our second vatiquinone on registrational trial is being conducted in patients with Friedreich ataxia. As with vatiquinone in mitochondrial epilepsy, we have data in FA patients that support the clinical rationale for moving into a Phase III trial. Vatiquinone has previously been evaluated in our Phase II study in FA patients. In this study, vatiquinone treatment resulted in a significant improvement in disease severity over 24 months when compared to an age and stage matched natural history cohort. These results support that longer-term treatment with vatiquinone can deliver a meaningful effect in Friedreich ataxia patients. The registrational study, MOVE-FA, is a randomized, placebo-controlled trial that will enroll approximately 120 subjects worldwide. Patients will be treated for 72 weeks with either for vatiquinone or placebo. The primary endpoint is the change from baseline in the modified Friedreich ataxia rating scale, or mFARS. And a key secondary endpoint is effect on activities of daily living as assessed by the FA-ADL scale. Importantly, we developed this endpoint strategy with regulatory authorities in both the U.S. and EU. The trial has begun enrolling, and we expect data readout in 2023. Moving to our metabolic platform. I'd like to provide some details on our PTC923 PKU program. In mid-2021, we will start a registrational study evaluating PTC923 for the treatment of PKU. This Phase III study is built on the efficacy results from the Phase II PTC923 trial summarized on this slide. In this Phase II crossover study, PTC923 was compared with to Kuvan. And we found that 50% more patients responded to PTC923 as compared to Kuvan, and this included patients with classical PKU. In addition, in the subjects that responded to both Kuvan and PTC923, PTC923 demonstrated a twofold greater reduction in blood phenylalanine levels when compared to Kuvan. I want to emphasize that despite there being approved therapies for PKU, the majority of PKU patients are not well addressed by current therapies. And there remains a high unmet need, and thus, a large opportunity for PTC923 to address a large population of PKU patients. The PTC923 registrational trial, the AFFINITY trial, is a randomized, placebo-controlled study with a design similar to previous PKU clinical trials. Treatment duration will be 42 days, and the primary endpoint is the reduction of phenylalanine levels in blood. The trial is expected to begin in mid-2021, with data expected, the year-end 2022. Let me switch gears and now discuss our splicing platform. Over the last 2 decades, PTC has pioneered the development of selective small molecules to modulate splicing. The success of the recently approved drug, Evrysdi, for SMA, validates the significant potential for selective and specific small splicing molecules to meaningfully impact disease. Our next most advanced splicing molecule is PTC518, which is being developed for the treatment of Huntington's disease. A key focus of our preclinical work has been to demonstrate that PTC518 has broad CNS distribution and can effectively reduce HTT mRNA and protein levels, which we have been able to do. The results on the top part of this slide show that PTC518 demonstrates a dose-dependent reduction in HTT protein in the brain of the back HT mouse. The HTT reduction is clearly titratable based on drug levels. So that the level of HTT lowering can be tightly controlled. Furthermore, as shown on the lower part of the slide, PTC518 reaches deep brain structures uniformly, including the striatum, cortex and cerebellum and reduces HTT, mRNA and protein levels in all of these tissues. This is critically important as Huntington's disease is a whole brain disease, and we believe that a successful drug for Huntington disease needs to achieve this broad tissue distribution. In addition, PTC518 achieves broad tissue distribution throughout the body. As shown on the bottom right graph, there is a near 1:1 ratio between blood and CNS concentrations and intracellular HTT lowering. This is important because that means that HTT lowering in blood cells can be used as an accurate indicator of HTT lowering in the brain cells, and this will be very useful for us in the clinical development program. PTC518 entered the clinic at the end of 2020 with the initiation of the Phase I SAD and MAD studies. In these healthy volunteer studies, we'll be not only assessing the safety and pharmacology work, typically examines in our Phase I study, but we will also be measuring a reduction in HTT levels to validate splicing mechanism just as we did in the Evrysdi Phase I healthy volunteer program. We plan to share data from the SAD and MAD studies in the first half of this year. Next, I want to briefly highlight our gene therapy programs. PTC is currently preparing for our first gene therapy launch for patients with AADC deficiency. AADC deficiency is a rare, highly morbid fatal childhood disease resulting from genetic defects in a dopamine decarboxylase gene, which is necessary for dopamine production in the brain. Our gene therapy product provides a functional copy of this gene directly into the putamen of the brain. Over the course of the past decade, we have built a strong data package that demonstrates the significant and durable results in improving neurological and neuromuscular function. With the CHMP opinion expected in Q2, we are now focusing efforts on the commercial launch. As part of these efforts, identification and preparation of expert pediatric neurosurgical centers of excellence is underway throughout the U.S., EU and Latin America. Patient finding activities are also accelerating with over 60 screening programs in over 20 countries. We're very excited to be bringing this pioneering and transformative gene therapy page to AADC patients. Finally, I'd like to share some of the accomplishments in our commercial teams. PTC has built a strong global commercial infrastructure with a footprint in over 50 countries that has enabled continued growth of our business year-over-year. We are particularly proud of our continued growing global DMD commercial franchise. As a reminder, Translarna is a treatment for nonsense mutation DMD patients ages 2 and older. And Translarna is currently distributed in over 50 countries worldwide. In 2020, we had revenues of $192 million, revenue growth that was driven by high compliance, geographic expansion, new patients and label modifications. Moving to Emflaza, which is the first and only corticosteroid approved for all DMD patients aged 2 and older, we achieved revenues of $139 million in 2020, which is a 38% year-over-year growth, driven primarily from new patient starts, a reduction in bridge and PAP, free of charge programs, an increase in compliance and a lower treatment discontinuations. As you can see, we are expecting a number of key development and regulatory milestones in 2021 from across all of our platforms. Some of the key milestones include a positive CHMP opinion for Evrysdi, which occurred a couple of weeks ago. Results from our PTC518 HD and PTC857 Phase I programs and a CHMP opinion on our PTC AADC gene therapy program. Later in the year, we expect to initiate our Phase III PKU trial and to have data readouts from our Phase II/III COVID-19 trial and early-stage oncology studies. We look forward to sharing updates with you as we continue to deliver on our mission of bringing innovative, differentiated therapies to patients with unmet medical needs. Thank you.

Thank you, Matt. Okay. So thank you. I think that's a very comprehensive overview, and it seems a lot of the programs and quite a lot for the catalyst this year. So I will start with Huntington's. I think that this will be a very exciting new pipeline asset. And so maybe wanted to start, you did mention that you will collect the blood sample to do the testing? Can you talk a little bit about the pros and cons? Like, will you be also using CSF versus the blood? Any thoughts regarding the way you collect the samples?

Yes. Thank you, Gena. And obviously, we're very excited about this program as well. I think Evrysdi clearly demonstrated the potential for a small molecule splicing therapy that can deliver transformative therapies. And of course, we learned many important lessons in the development of Evrysdi that we, of course, have incorporated into both the preclinical, translational and clinical programs for PTC518. And so a lot of what we're doing in the 518 Phase I program is following exactly what we had done for the SMA therapy. And so the Phase I study is going to capture the typical things, what looks for in a Phase I study, including safety and pharmacology. But we're also, importantly, going to look for evidence of splicing mechanism in healthy volunteers. Now one thing to understand about the way PTC518 works is that it targets an intron, that introduces, basically, a stop sign into the translation of the Huntington mRNA into protein, thereby preventing the production of a mutant protein. Huntington, of course, is an intracellular protein, and therefore, we're able to demonstrate by looking -- let me first say that it uniformly reduces HTT mRNA and protein in all cells of the body, both brain cells and blood cells. And what we've seen preclinically is a one-to-one correlation between the reduction in blood cells and the reduction in brain cells. Therefore, that allows us to regularly sample blood and get a lead on what's going on in the CNS, which is incredibly useful because we can't practically biopsy areas of the brain as we did in the preclinical studies to verify the HTT reduction. We can get that read from over the blood cells. So that being said, we -- while we look at blood cells for proof of splicing mechanism, we will be looking at both plasma and CSF to verify pharmacology because what we can reliably use the CSF for is validation that we are getting the blood-brain barrier crossing and lack of efflux, which were just the molecule specifically designed for. And make sure that, that mirrors what we saw preclinically. Because we know that if the compound is getting into the CSF, it won't be efflux, and we know it's broadly distributing throughout the brain to all the regions, reducing HTT levels just as we'll be able to see in the blood cells. So this will be a combination of blood cells for proof of splicing and CSF and plasma for proof of pharmacology.

Okay. I think that, that makes sense. So basically, the knocking down -- the Huntington knocking down, we will be also collecting from CSF as well to validate it. Yes?

Well, no, no, let me be clear. The CSF, the key knockdown -- Huntington is an intracellular protein, right? So -- and the goal of the therapy is to decrease the production of the -- ultimately, of the mutant HTT mRNA protein in cells of the brain. You shouldn't necessarily find that in the CSF. The CSF is a self-frequent part. So in order to -- the splicing mechanism proof will come from what we see in the blood cells. We'll certainly look in the CSF, but really the CSF is for pharmacology. We want to see in the CSF that the compound is getting across the blood-brain barrier and not getting efflux. So the CSF is to check the pharmacology box, the blood cells are going to be really where we're going to look for that dose-dependent proof of splicing mechanism.

So then the other part is -- I think the reason I'm quoting this because we saw the Roche Ionis. They look at the Huntington, the CSF reduction, the level of the protein reduction, right? So that's kind of everyone is looking for, like how -- and then they needing similar standard to apply maybe PTCT's program, I see like how that will be -- they report a 50% reduction. So will you be also sharing that level -- similar level of the data regarding...

Yes. So in healthy volunteers -- the Phase I studies in healthy volunteers, one does not really expect to see Huntington mRNA and protein in a normal person's CSF. In fact, in any person CSF, we rarely expect to see protein. Now we're well aware that Roche Ionis reported in patients seeing a lowering in Huntington protein in the CSF. I don't think anyone's clear exactly to what extent that reflects anything going on in the brain cells, which is really where you want to have activity. What we have with this molecule that's incredibly special is it's an orally administered therapy with broad body and broad CNS distribution. And we can, believe it or not, get a more accurate read on what's going inside the brain cells by looking at the blood cells because we know the activity in all cells of the body is correlated one-to-one. And so I know it's sometimes a little counterintuitive for people to think that you're going to get a better read of what's going on in neuron and the striatum or in the cortex or cerebellum by looking at a peripheral blood cell than the CSF, but that's the reality because what you really want to understand is your activity inside cells because the disease is caused by the toxic protein killing the cells. So what you really want to do is get a read on what's going on, and we can uniquely do that because of this molecule.

Okay. So then going back to the animal data, you seem like very confident, this reflective of the brain knocking down. So what kind of data have you shown? We did see the mouse data? Have you shown the non-human primate data? Was that very representative as well?

Yes. So that's a great question. So one -- again, one of the key things to realize is that this molecule is specific for the human intron. That intron, that sequence, that -- for which we modulate -- which we induce splicing through, is not present in all species. So the way that we were able to demonstrate this is by introducing the human gene into the mouse, the BACHD model. It's basically the humanized model, and that gave us the very clear read on that activity. This sequence is not present in non-human primates. So what we've been able to -- so what we've done is we've used the mouse data as the proof of splicing, the broad splicing activity across all regions of the brain, the one-to-one correlation between different brain regions as well as the brain regions and the peripheral blood cells. What we've been able to do with the non-human primates is use the pharmacology, penetration of the blood-brain barrier, concentration to CSF, to validate that, in fact, the molecule is getting to where it needs to go and not get an efflux, we can deliver that broad-brain Huntington lowering as we've seen in the mouse model.

I see. Okay. That makes sense. So basically, non-human primates, you're testing the brain penetration of this small molecule. Can you share with us the ratio, say, the film versus brain -- how much actually got into the brain? And is there any differences between different deeper brain areas like a putamen or cortex? Any differences there? Or can you give a little bit more color there?

Yes. So the distribution is broad and even, which is great. So one of the things that we did in the small and developing this molecule, we specifically designed it, not only to get across the blood-brain barrier, but to have minimal efflux because we know that in order for this molecule to broadly distribute to even the deep regions of the brain, it can't be kicked out of the CSF, right? It's got to remain across the blood-brain barrier. And so this concept of designing the molecule to optimize broad distribution by minimizing efflux was a key aspect of the design of the molecule.

Okay. That makes sense. And then regarding the healthy volunteers, you have a SAD and MAD thesis. Can you share like what doses you will be using? And then also how many -- when you provide the update of Phase I, how many patients should we see or will you reach your whatever final conclusion, I know you will share the data. So if you can give a little bit more color on the data expectation?

Yes, absolutely. So we designed -- we planned for initially a minimum of the 5 SAD cohorts. Each of those SAD cohorts have 6 active and 2 placebo subjects, very typical of a Phase I model. And then we have -- we're planning 3 to 5 MAD cohorts. And those MAD cohorts, again, in each one, we'll have 6 -- treatment -- PTC518 treatment and 2 placebo subjects for each cohort. There will also be a food effect study. Again, very common -- things are very commonly done in Phase I studies. We haven't yet given any specifics on what we'll be presenting in the data and when, but we will be sharing the SAD and MAD data. And I just say people have asked us, what should we be looking for? What should we be expecting? How should we think about what you're going to show us? And what we should be showing you, the check for us that is being able to show that we have predictable pharmacology, consistent pharmacology plus dose levels and that we're able to achieve that dose-dependent effect and Huntington mRNA in protein levels. That's really key, right? Because the advantage of having oral small molecule is that it's titratable. And what we want to be able to show is that we can modulate splicing by adjusting the dose. Now we've not given specifics yet on the exact dose levels that we've tested in Phase I. We've consistently said that we are targeting a 40% to 50% reduction in Huntington mRNA in protein levels. And obviously, we've used the informational data from our preclinical studies to make sure that we're including dose levels to achieve that, both more and less so we can get that full range of dose dependency that will allow for the dose selection as we move into patients in the next phase of development.

Okay. So when you say 40% to 50%, the protein reduction, is that after -- I assume that will be the MAD data, right?

Well, I think we -- the protein reduction would be in the MAD data, right? The mRNA, we would see probably in SAD and MAD. But obviously, given the half-life of the protein, you're going to need to have multiple dosing and assessing overall.

Exactly. Yes. And then the other related question regarding the drug is what is the half-life of the drug? And what is the frequency of dosing?

Yes. So we haven't gone into too many details about the specifics around the half-life. And obviously, one of the things we're going to be doing is understanding exactly what the half-life is in humans and making sure that correlated with what we modeled based on preclinical studies. And we're going to use those data to inform, obviously, dosing frequency, right, understanding exactly the frequency we need to give. But when we share data, we'll obviously provide more details on the exact dosing regimens that we've studied so far and what those data are.

Okay. Okay. That's fair. So now switch to Translarna. Just wondering if you can give any a quick update on the next steps, a feedback and also any impact to the EU renewal regarding the biopsy data?

Yes. So let me -- I'll start with the easier EU part, which is the EU has always been interested in clinical data. Maybe conditional marketing authorization, the annual renewals, modification to the label, have always been based on clinical data. And in fact, not only the clinical data from initial trials, but the long-term real-world evidence we're continuing to gather as part of this thriving industry. And these data are critically important because they really do capture what we try to understand from every clinical study, which is, what is the long-term impact of Translarna therapy on the key aspects of disease like loss of ambulation and loss of pulmonary function. And we can now, over time, clearly demonstrate that favorable effect of Translarna on those key aspects of disease. So the EMA has been focused on clinical. We expect no issue or no concern or the interest really in those data. They want to see the readout of 041, which is the final obligation as part of the conditioning marketing authorization. And we look forward to having those data in the third quarter of 2022. On the FDA side, we're meeting with our internal and external regulatory advisers and planning the next steps to share these data from the 045 study as well as we said in the deep dive, we're obviously delighted to be able to show the increase in dystrophin expression over -- in over 80% of the treated subjects, the clear relationship between longer exposure to Translarna and increased dystrophin expression, and we really feel that's just one piece of this totality of data because we uniquely now have the dystrophin expression, but more importantly, the clinical evidence of effect, which obviously is what the key is in developing the therapy.

Okay. Okay. That's good. And then quickly on -- we actually don't have much time. Just 1 last question on the AADC program. So what are the -- some pending activities before BLA filing in the second quarter?

Yes. So as we've talked about, the -- one of the key gating factors has been the need to do surgeries, some -- a few surgeries with the commercial cannula. Just as a reminder, the cannula is the device that delivers the gene therapy directly into the cutaneous. And these are done through surgical procedures using some stereotactic guidance. Basically, a Google map is made that gets the surgeons from the outside world, and shows them exactly where they need to go safely into the cutaneous. And the cannula is just a device that provides the administration of the gene therapy. We're using the ClearPoint Smartflow cannula that CE marked for gene therapy administration in the EU. Its 510(k) clear in the U.S. for a number of neurosurgical procedures, just not the specific administration of our specific gene therapy. And so we've been doing the procedures to assess the safety of the device in delivering the gene therapy. So that's not the safety of the drug product, the gene therapy, it's the surgical administration. So we've completed 2 of the surgeries, both went well. There were no safety issues recorded. And we were planning on a third procedure. Once those data are available, we'll align with the agency and move forward with the BLA planning.

Okay. So basically waiting for 1 more surgical procedure and then you can file?

Yes. So obviously, we look at the data, make sure we're all aligned with the agency and...

Yes, of course. Yes. Yes. Yes, okay. Okay. Well, thank you very much. I think this is a very productive discussion, and we keep our fingers crossed, and I'm looking forward to lots of data this year. Thank you.

Thank you, Gena.

Okay. Okay. Bye-bye.