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

Good morning, everybody. It's a pleasure this morning to have with us our next presenting company at the Bank of America Health Care Conference, PTC Therapeutics. I've got with me several members from the PTC team that we'll be talking for the next 30 minutes or so. I'll start off by introducing CEO, Stu Peltz. Hi, Stu, how are you?

Good. Good, Tazeen. Good to be here. Thanks for having us. And I have a team with me as well. I have Emily, why don't you introduce yourself?

Hi, Emily Hill, CFO. Nice to see you.

And then Kylie O'Keefe.

Hi, lovely to see you. It's Kylie O'Keefe here, Senior Vice President of Global Commercial and Corporate Strategy.

Okay. Guys, thanks so much for making time. And let's go straight into what's going on with the company. There's been a lot of updates recently. Maybe Stu, for those who might not be as familiar, just maybe spend 2 minutes telling us about PTC. Your differentiation versus competitors on the market, and then we can go into some specifics about your pipeline opportunities?

Yes, that would be great. Thanks for having us and we're pretty excited on the progress that we've made in all fronts from discovery to development and including commercialization. Even though this year, obviously, has been challenging for all of us for the pandemic, I think we -- as the company has been able to adapt pretty quickly, progress the pipeline, find new patients in existing countries where we're commercial, and we've also added new geographies. And there's been a lot of execution. We've been able to achieve many of the key value creating milestones. And I think there's a bunch of highlights. Last year, we initiated 5 clinical studies, 3 of which are registration-directed. 2 of them are from our Bio-e platform. Vatiquinone is in registration trials for mitochondrial epilepsy and Friedreich ataxia. This will be completed in 2022 and 2023, respectively. We're also quite excited about the recent results demonstrating proof of on-target engagement from the Huntington’s program for PTC518. This was done in a healthy volunteer trial. We had shared the preliminary results in our recent Huntington deep dive. We also have [indiscernible], which is previously 299. It's in the registrational trial for COVID-19. We're going to be completing that enrollment by the second quarter. This drug functions by targeting of the cellular enzyme of dihydroorotate dehydrogenase. So that -- because it's a cellular enzyme, there should be less drug resistance. So we think this could be -- clearly, there's been work done in vaccines, but there's clearly a need for therapy. So we're excited about this one as well. The DMD franchise, as you've seen, had very strong commercial growth in 2020, and that has continued in 2021, both Emflaza and Translarna generated significant revenue and showing one of our strongest quarters to date. Also, you've seen that Evrysdi is doing great. We expect that to see continued growth this year, not only in the U.S. but in Europe as well with the recent European approval, and we expect a Japanese approval later this year as well. So we're also excited about getting the EU CHMP opinion for the AADC deficiency gene therapy as well as we'll be submitting a BLA to the FDA. And then finally, we have additional data coming from our healthy volunteer study for PTC518 and the readout on healthy volunteer study for 857 as well, as well as there'll be some readouts in our oncology program that we're looking forward to as well. So you can see it's truck full of milestones as we move forward.

Yes, excellent. So maybe let's talk about a few of those things. Maybe let's start with a product that's near and dear to my heart. I've been covering you guys for a long time. So I've witnessed a journey that Translarna has had from pipeline to approval in Europe? And maybe, Stu, you could tell us a little bit about where you guys are in the process of trying to get approval here in the U.S. and just to remind everybody, what the benefits of Translarna are for nonsense mutation DMD patients?

Sure. So yes, thanks for that. So we're -- we've had -- we're in the process of getting ready to talk to the FDA for -- with our dystrophin study as well as the other Translarna study that we have done with a real-world data. So it's the combination of those two. We're completing some of the analysis we need to do, and then we'll have a conversation with them. We also have a trial that will complete, Study 041 that will complete in 2022. That's a backup for that. You could see both -- so we're excited about that. And clearly, the data from the registry study, which is looking at the real-world data with 5 years of the patients have really shown efficacy in terms of preventing ambulation, protecting pulmonary and allowing kids to get off the ground. So -- and we're seeing years of difference over a 5-year period. So we're excited about that data, and we look forward to bringing it to patients in the U.S. as well. We've already had substantial -- had patients in the U.S. for some time now with patients staying on drug in the U.S. for well over a decade. And so we believe that there's the totality of the evidence that really shows the benefit of Translarna for these patients across multiple placebo-controlled trials as well as the real-world STRIDE study. So we're moving forward on that, and there'll be more as we -- more information as we progress this.

Okay. So just given the bit of history that Translarna has had with U.S. regulators, what specifically are you trying to show them now that you did not show them before as it relates to dystrophin production? And can you just tell us what's the bar for what they would want to see in order to get this drug finally approved?

Sure. So what we are trying -- when we recently did a study looking at dystrophin levels in patients where we -- and we showed this previously as well, many, many years ago, demonstrating the dystrophin production that's being made. And then so that -- so we have that, that we're going to be presenting. And then we'll have, along with that, a STRIDE registry results, where we were we've demonstrated protection from loss of ambulation by multiple years, improvement of pulmonary function, where you see a really substantial improvement of pulmonary function versus natural history and elongation of ability to get off the floor by years as well as we've been up by treatment by Translarna. So we'll be showing them that data. And then -- if -- so that's what we'll be talking to them. And then subsequently, as a backstop, if this doesn't go, we have Study 041, which is a placebo-controlled trial that we've been running, and that will be -- that data -- that trial will be completed in 2022.

Okay. And where -- for Study 041, where are those patients enrolled from, like, geography wise?

It's a global trial, the U.S., certain areas in Europe and then in the Asia Pacific.

Okay. And what is the endpoint that's being measured there?

That's the 6-minute walk, as the primary endpoint, followed by -- but -- so what we did there is we defined -- we used all of the natural history that we had as well as what's within the community from the BioMarin results, the Eli Lilly results, the 2 clinical trials that we had. And so one of the -- I think one of the most important things that you can do is understanding the natural history, and what's the patient population that will respond, especially in like a neuromuscular disease. That's probably one of the things that's the hardest to do, and you need to -- we've been working on that. And we've now had -- we've had a set of data where we're able to identify those patients that are likely to actually have loss in walkability, but not go nonambulatory. So we've been able to hone in on those patients and be able to look at those over a period of time. And we're doing it over an 18-month period versus what we did previously in 12 months. So I think we've been the pioneer within this area. And I think we've defined the -- best way to define those patients as well as elongating the time. So I think we're in a very good position there as well.

And so I guess just because other companies now struggle to show efficacy on 6-minute walk even recently, what were your learnings from your previous studies? And how have you changed what your view of the right, let's say, age of the trials might be to measure, to 6-minute walk for your particular therapy?

Right. So I think that is most key, right, is sort of defining what is the patient population. Because difference, let's say, from SMA versus neuromuscular neurodegenerative diseases, they don't get better, right? So you have to have a comparator that lets you see the difference of them and what -- and so there's always a set of patients, if they're too early within the disease that they won't change enough. If they're too far -- if there -- if it's a small enough -- if they're in a low enough 6-minute walk, they're probably nonambulatory. So you need to find the right patient population to be able to do that. And so we've been able to use criteria to define that, of that population, and then be able to follow them in that way. So we've used the learnings from the natural history from this to define the appropriate patient population to be able to show a different...

Are they younger than what you studied before?

It's not really age, that's the critical aspect of it. It's really where they are -- it's like it's -- you can use like -- we used to use the 300 to 400 range, but can you use greater than 5 seconds to get off the ground supplying to stand and greater than 300 meters will give you a population similar to the 300 to 400 population. So that's what we were using.

Okay. And so when should we expect to see the first round of data from the studies that you just described again?

So the 041 is, I think, third quarter, we should complete in the third quarter of 2022. So, say it takes a quarter to figure it out either by the end of the year or early the following year, we'll be presenting the data.

Okay. So maybe let's talk about some of your other pipeline assets. Most recently, you had an update for Huntington's. It's important because I think there might be some confusion about what you presented, the importance of that. And I think people are also trying to compare that to what other companies have recently presented. I know it's a hard thing to do. It was not an apples-to-apples comparison per se. But given what's been perceived as data that's been underwhelming to some folks from companies in general. Can we talk about -- can you summarize for us what you think is important about your particular approach, the Huntington's and the data you presented so far?

Yes. So maybe that's -- I think that's an important thing to talk about because I think people are bit confused over what -- why, in a sense, there are issues. And so what we're excited about in our data is that, what are some of the key characteristics of PTC518, right? So it was designed to be an orally bioavailable small molecule that crosses the blood-brain barrier. It reaches to all regions within the brain, and it's not effluxed out of the brain. Those are really key points because if the brain that's -- right, so if you think about Huntington's, it's really a whole brain disease. And so you need to get it to every portion of the brain, right? And when I say it's not effluxed, that's critically important because the brain protects itself by pumping things out. And so you can get things into the brain, so something to pass the blood-brain barrier, but they can't be -- but they're pushed out. So we made sure that our product was not effluxed and remained in the -- within the brain. Now the other important thing is that -- so it's an oral pill, we can measure the level of PTC518 within the blood. And what's most important is that we've seen -- the level that we see in the blood is the level that we see in the brain. And when you could take different parts of the brain or any aspect of the brain and see that same level. So it distributes well, it gets into the brain -- and gets into all brain. And that's exactly why it's a major advantage. So then we can actually show, and we show this initially in animal models that you can look at the Huntington reduction is clearly titratable depending on the PTC518 exposure. So we can control that. So what I think -- and so that's a key point. And what really distinguishes PTC518 is that it has the uniform HTT lowering exposure and shows a 1:1 ratio between what you see in the blood, and what you see in the brain. And this -- so we've already shown, obviously. We've already shown this in animal models, but we most recently showed in humans as well, where we did both single ascending dose as well as the multiple ascending dose and showed that we can titrate the level of Huntington's mRNA reduction as a consequence of the dose. And so the key point is, we know the dose, we know the dose that gives an exposure. We know that, that drug passes the blood-brain barrier, gets into the brain. And so -- and then it distributes well. So we've shown that we can actually get a HTT mRNA lowering that's beyond the target of 30% to 50%, even with a single dose. So the next steps will show -- it will allow us to look at both the MRA protein in Huntington's patients. So we're pretty excited about this.

Okay. I think some questions people had were the [indiscernible] of what you've observed thus far into clinical benefit or clinical meaningfulness in actual Huntington's patients. And so based on what you've seen so far, what are some of the reasons why we should be optimistic that you will see clinical benefit in patients?

Sure. Well, the nice thing about going after Huntington's disease is that it's a monogenetic disorder. It's due to the mutant Huntington's protein, right? There's plenty of data that demonstrates that if you lower the mutant Hunting level -- natural -- reduced by natural mutations of lower transcription, you see the patient does better before they get Huntington's disease. So -- and there's animal data that shows that as well. So there's a clear demonstration that the level of the mutant Huntington level defines how the degree of the disease that you get. So reducing it is key for that. And again, having an orally bioavailable molecule that we've shown, both, that gets passes the blood-brain barrier, is -- can get to every part of the tissue, and we've shown this as well in nonhuman primates, where you could see the level in the CSF is similar to the level that you have in blood. Again, so -- and the beauty here is you're seeing the reduction of HTT in cells, right? It's not due to -- what people have been measuring before is in the CSF, that has to be predominantly due to broken cells that spew out Huntington's RNA or protein. And that's not necessarily -- and it's not proportional within the whole brain. So the measurement that you're getting may not define an exposure that's given the appropriate lowering. It's certainly not throughout the whole brain.

Okay. What is your thought, based on what you just said about what we should be looking for an HTT levels, et cetera. What is your thought about the recent data that Roche presented for tominersen? I think the view was underwhelming. What's your sense on why it didn't seem to have an impact on the UHDRS scale that seems to be what people really want to see an impact on?

Right. So I think it really differentiates between an orally bioavailable molecule that distributes well, which is giving oligonucleotide that is interstitially given that doesn't distribute well. It's already -- they've already defined that there's disproportionate levels of lowering in animal models between what goes on in the cortex versus the stride. So you already know you're not getting it to every part of the brain, and you're not getting this within the deep resets, so that's problem number one. And then you're measuring the lowering that occurs within the CSF, which you don't know if necessarily accurately will reflect in human that. So that's issue #1. Issue #2 is that I think that the oligos have a specific problem due to, I think, an induction of inflammatory response, at least the taxis, that causes a real problem. So it's our view that this is similar to what was seen with Spinraza. When you think about tominersen, you were giving about 10x more of the oligonucleotide and about 4x more of the volume. So it's not surprising that you're getting a greater immune response of that. So we think it's a combination of that and the hydrocephalus can actually interfere with the penetration on CSF distribution. So we think really -- the issues really show you the issues with oligonucleotide in the problem of distribution within the brain. And that's -- we've always felt that, that's the major advantage of a small molecule that it distributes well, it gets every part of the brain, the blood bring transmitted to, so you have a better shot at reducing HTT throughout the whole brain. Does that help?

Yes. And I guess one debate that seems to be ongoing is, does HTT lock down really indicate with the level of certainty, future efficacy?

Yes. I mean, look, there's never yet been a drug for Huntington. So this is pioneering work from that, point of view. But on the other hand, it's a monogenetic disorder that's a consequence of having a mutant Huntington that causes aggregation and ultimately leads. So that there's no question that it's the mutant Huntington, right? We know that's the -- and there's enough data within -- looking at natural history that patients who have lower levels of mutant Huntington do better than those with higher levels. And that's been corroborated in animal model study. So it seems to me that your best target is the target that directly reduces the level of the protein that causes the disease state. And so it's -- and I've heard some discussions relative to like -- it's not really like Alzheimer's because this is due to a monogenetic disease, and it forms on aggregate, it doesn't form on plan. So you're going against the key factor that causes the disease that ultimately, if you reduce, you should do that.

I see. Okay. So can you give us an overview of what we should see in terms of data going forward over the next, I don't know, the rest of this year, for example, into next year from the Huntington's program?

Sure. So we're -- we'll be -- our goal is to finish up the healthy volunteer results. There's -- I think there's a lot -- so that's what's going on right now, where we're going to be completing that. For instance, we'll be completing a food effect. We've also showed in the Phase I data that the half-life of PTC518 is long enough that it's -- you can actually see reductions with -- even after 72 hours. So there's a possibility to do alternate dosing type. So we'll be looking at all of that to really begin to define the precise dose that will go into the Huntington's patients. And then what will go into the Huntington's patients and the first thing we'll do is obviously then to repeat what we did in healthy volunteers to demonstrate we see the same results in Huntington disease patient.

Okay. How important is it going to be for you to find the maximum tolerated dose? Is that part of the plan? And how important will it be to have multiple dosing options available as you think forward to commercial?

I think what we're trying to do is -- so again, the beauty of orally bioavailable molecules is, that is titratable. We give it a particular dose, and we see -- get a particular exposure that reduces it. And we've shown really nicely that it's very much a titratable and dose dependent. And so our goal is to reduce Huntington's protein by approximately 30% to 50%. And so we think that -- and you could see that even at the lowest dose of the multiple ascending dose, we saw even at one of our lowest dose, we were able to get within the range of 50%, reduction. And that was even true in the case of a single -- within the single ascending dose where you're able to get 50%. So we think we have a wide range to be able to dose. And so it gives us a lot of opportunities to move forward at a dose that we think is 50% reduction, gives us certainly flexibility.

Okay. And how do you balance that against safety? So I think a comment that people had about the Roche data was not really understanding the safety profile, how much of it is related to the particular molecule versus what's ASO specific, for example?

Yes. I mean that's always -- safety is always the key within this. I think it's a little bit of apples and oranges. I know people have said this. But I mean the oligos -- the difficulty, the key in any clinical program is to find a dose that gives you exposure that's effective, right? The difficulty in using ASOs intestinally is, there's no real measurement, right? You might -- people have been using the CSF. But if it already disproportionately lowers Huntington in different parts of the brain, you're not -- and also the ASO itself is, they're at the limits of detection. That causes a little bit of variability. And so you're not -- you find the -- you're sort of having a difficult time to finding a precise dose that gives you an exposure, that gives you a uniform lowering. We don't have that problem, right? We give a dose, we get an exposure. We're getting an exposure that's throughout the whole tissue with all of the brain. So we think we'll have a wide safety window that gives us dose-dependent lowering. And we've seen that already in the multiple ascending dose. What we saw is that over the 14 days of the multiple ascending dose, even the 50-milligram dose was greater than 50% in reduction. That gives us a lot of flexibility, the balance, efficacy and safety.

Okay. And so as we think about how you will differentiate yourself outside of the oral deliverability aspect of it, which we appreciate. How should we think about what the safety profile is going to look like for your product then?

Yes. So currently, right now, there's safety -- safety is obviously just safety toxicology. Obviously, we had a wide window in moving into these patients. So we don't have currently any safety concerns. PTC518 seems to be well tolerated. And we'll be monitoring over time. But I think we're in a good position to be able to move forward. I think, obviously, we balance safety and efficacy. But I think right now, we're feeling a good flexibility in the long-term time, we have -- we don't have anything, but we'll see as we complete it, what pops out and see what we have. But I think right now, we're in a pretty good position. This is very analogous to the SMA program. If you think about that. We -- what we did is healthy volunteers. We knew -- and again, the fact is we're able to measure SMN levels that allowed us to find a dose that give an exposure, that's quite effective.

Okay. Excellent. I think with that, we're going to have to stop. You have several more molecules that I would love to talk to you about, but then I would spend the whole day with you guys, and I have to move out.

[indiscernible] always.

We'll do another call to cover the rest of your pipeline soon. Kylie and Emily thanks so much for joining us this morning. It's great to see you, even if this is just virtually, and we look forward to the updates to come from PTC over the next several months.

Thank you.

Thanks, again.

Take care. Bye.