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

Good morning, everyone. Welcome to Barclays Global Healthcare Conference. It is my great pleasure to introduce our first presenting company, PTC Therapeutics. With us today, we have Matthew Klein, Chief Operating Officer; and also Kylie O'Keefe, SVP, Commercial and a Corporate Strategy. So before I start, Matthew and Kylie, do you want to give a quick overview of the company? And then we can dive into the questions.

Sure. Thanks, Gena. Thank you so much for this opportunity to present today. For those of you who don't know PTC, we're a global biopharmaceutical company that discovers, develops and commercializes innovative therapies for rare disorders. We have a broad platform built on a number of different pioneering scientific platforms. And also with multiple different scientific approaches, including targeting gene -- [ Bio-e ] gene therapy, RNA technology and others. We had a very successful 2021 from a commercial standpoint with net commercial revenues of $539 million, including $423 million from our DMD franchise. We're looking forward to a very successful 2022. We have 5 ongoing registration-directed trials, including our Study 041 for Translarna as well as registration-directed studies from a number of our different platforms. In addition, we made significant progress in our pipeline, and we'll be initiating our Phase II trial for PTC518 for Huntington's disease, which comes from our splicing platform and follows on the successful development of the Evrysdi, which was the first product discovery from our splicing platform. So we have a lot of exciting activities in 2022, and we look forward to a number of important catalysts.

Thank you very much. So you mentioned also your DMD franchise. As you remember early days, Translarna got approval in Europe, and I know it was a great success. And however, we are waiting for the confirmatory trial now. When I do my calculation, the enrollment completed in early November 2020, 72-week endpoint. So the year, especially about early April 2022. So should we expect -- assuming 2, 3 months cleaning up the data, should we expect late second quarter or early third quarter?

Yes. So back on your -- correct, Study 041 was the confirmatory trial for the conditional marketing authorization in Europe. But given that it's a well-controlled, placebo-controlled trial, it can also provide the data necessary to support an NDA in the United States as well as in other geographic areas, including Japan. This study really leverages years of experience in developing therapies for Duchenne muscular dystrophy, and we've been able to apply a number of important learnings, including the right study population, the right endpoint, the right duration, all of which are critical factors in setting the trial up for success. As you pointed out, we are completing last patient last visit, and we will expect to have data before the end of Q2 2022.

Okay. Good. And so like how would you communicate with the investors?

So I think we will -- as usually occurs when we have data, we usually do a combination of either a press release and/or a broadcast, and obviously, down the line, we'll present the data at scientific meetings as well.

Okay. Sounds good. How much data we will see when you -- because since you also want to preserve some data for the medical conference, how much we will see when you share the base?

Yes. I think we'll make that decision at the time. Obviously, the primary endpoint of the study is the 6-minute walk test, and this is -- we really pioneer drug development for Duchenne muscular dystrophy. And over the course of our clinical trials, one of the most important learnings we made is that if you're going to have a successful trial based on the 6-minute walk test, it's incredibly important to identify the right population. We talked a lot about this in our other development programs, this Goldilocks population, one that's not too advanced, one that's not too early, one that has the right amount of decline over the course of placebo-controlled trial that allows us to demonstrate clinical benefit in the context of a defined period of the trial. And so in this case, we were able to do that based on our previous 2 studies. When we look at the population that we've included in this trial, we see a statistically significant improvement in 6-minute walk distance in a treatment group with Translarna relative to placebo from both studies. And so what we were able to do is ensure that in this trial, we are enrolling that Goldilocks population. We're conducting a study over 72 weeks, which we believe is a more than adequate duration to capture that treatment effect. And so obviously, the first thing we're going to be looking at when we look at data, the 6-minute walk test, but we will also be looking very closely, of course, as some of our key secondary endpoints, including North Star and time function.

Thank you, Matt. So several questions here. Firstly, you try to identify the, say, the perfect -- the patient population to assess the 6-minute walk test to benefit. On the other hand, do you think that will limit your label in the U.S.? Of course, Europe already has a broad label approval. So for U.S. or Japan, do you think that will -- if the trial positive, will that turn into certain limitation of your patient population?

It's a good question, Gena, and the short answer is, no. The FDA has guidance on this, and they continually advise companies to really look for enriched populations in whom you can practically demonstrate treatment benefit. And in this particular case, we're obviously enrolling boys with nonsense mutation Duchenne muscular dystrophy, but it's not like we're setting one specific genotype or subset that's different than the population, rather we're capturing a point in time that every boy with DMD progresses group and the fact that we're looking at something like 6-minute walk testings as well as time function test is infinitely applicable to all page -- all boys with DMD with nonsense mutations. So we're adopting a very well-described and advised strategy from the agency, which is find a population in whom you can practically demonstrate significant benefit over the course of the clinical trial with the understanding that this would be broadly applicable to the larger population.

So if you have [indiscernible] the baseline 6-minutes walk test because you have a very defined range. So if possible, do you think you will feel very comfortable and expand it lower end and upper end, right?

Absolutely.

Okay. Okay. So maybe also ask about 6-minutes walk test. We saw like different disease. The 6-minutes walk test has some variability. So how do you -- what kind of effort you have to standardize 6-minute walk test across different sites and since this also global trial?

Yes. Great question. As I mentioned, we've made many learnings over the years and one of them is the importance of trying to minimize interrater and also interest subject variability. They're both very, very important. So in initiating this trial, we went through extensive training with each study site, the study site staff. This included practice sessions, doing the walk test videotaping, corrective sessions, follow-up video sessions to check in and reinforcing learning. So let's just say, there was an extensive amount of training and standardization that went into this trial. In addition, we also, at key time points, are having two 6-minute walk test assessments. And we do that with specifying that we'll take the better of the two. Again, a standard approach, but something that's very important in trying to minimize interest subject variability to make sure that we are getting an accurate assessment of the 6-minute walk test, a key different assessment points in the trial.

So Matt, so I heard a different opinion on how many times you should do the 6-minute walk test. Some, when they do study, they think only once is good, so less coaching involved and others would do like twice or 3 times. So what is your thought? And you did say you pick the better one. So like did you see -- when you do twice, like what is the, say, time interval? Like how long the difference is between the first test and the second test? How much coaching? Or another one is also, if you did first one very quickly followed by second one, the fatigue, everything. So how do you control all these to make sure it's more standardized?

Yes. So the first point you run up is coaching. That's part of the training, right? So the sites have scripts, how they follow the administration to avoid coaching because that obviously can confound the results. Also, there are different assessors that coaches differently. So that goes into that very important standardization and operationalizing how the test is administered. We do it on different days, so we don't have the fatigue problem. And then by designating ahead of time that you take the better Huntington's scores that allows score consistency across the trial. We tend to see very little variability, but it's just -- when you conduct a clinical trial and you have a primary endpoint like a 6-minute walk test, you want to say, let's control as many of the variables as possible. May make a difference, may not, but you want to make every effort to control any aspect of variability in the trial.

Matt, I don't know if you can share like how do you avoid -- like what kind of protocols can avoid coaching? Just trying to [indiscernible].

Well, and this goes into the training, so you get a script and you have basically a protocol for how the test is administered. Obviously, we're not present for every single one of these assessments and can't say no coaching happens, but I think it's really important that you want to have a script for how this test is administered. And then we have these practice sessions and video sessions where we assess the assessors to get them comfortable with the administration of the test in a standardized matter.

Okay. Very helpful. And so another question is, what is the level of confidence that, say, in the worst-case scenario that trial was not positive, the EMA will still keep the current approval intact or how likely that will be overturn?

We have a high degree of confidence, Gena, because we've now gone through 7 annual renewals of the conditional marketing authorization. And the agency to get with past few years has looked very closely at the real-world evidence we've accumulated in our STRIDE registry. When you think about what we do in clinical trials, we try to get an idea during a finite period of time of how the drug will benefit patients over the long run of the disease in the real world. And through our STRIDE registry, we've been able to provide real-world evidence that we can delay loss of ambulation, delay loss of pulmonary function, which really are in the 2 key aspects of morbidity of Duchenne muscular dystrophy in the real world. And so the fact that they've looked at that evidence, they've embraced that evidence, granted us annual renewal on that accumulating evidence of real world benefit gives us a great deal of confidence that the -- if Study 041 doesn't turn out as we wish that it won't jeopardize the European authorization.

And when you -- every year when you renew, what kind of data you need to submit to the EMA?

Yes. So typically, what we've done in the core of that submission over the past few years has been the annual updates from our STRIDE registry, showing the long-term benefit as well as safety updates. Obviously, EMA is always wanting to understand the risk-benefit balance, and that includes safety and evidence of treatment benefit. And so obviously, with the annual renewal, we've been able to continually show a strong favorable respective balance of Translarna therapy for boys with DMD.

Very helpful. And the -- maybe another thing -- a little bit timely in the current, well, unfortunate in Europe, in Russia and the Ukraine. So maybe if you can -- like how much -- any negative impact for the Translarna or the revenue from the recent situation?

And maybe I can talk about the trial and Kylie can talk about the impact on -- how we think about potential impact from a commercial perspective. In terms of the trial, we had a study -- two study sites in Russia for 041. By the time the conflict occurred, the subjects enrolled in the trial had already completed the placebo-controlled portion. We have collected all the data. So we see no impact on 041 as a result of the current conflict.

Yes. And so from a revenue perspective, obviously, as we know, the situation in Russia at the moment is extremely volatile, and we are watching closely and still keeping a focus on our patients because that's most important, obviously. So from a revenue perspective, obviously, we provided guidance for 2022. So as you remember, the guidance for DMD was $475 million to $495 million and then the total revenue was $700 million to $750 million. I think one of the things that we do when we look at this guidance is trying to understand the different puts and takes. And while Russia is obviously a part of the revenue for both DMD in total, we do feel like there's other opportunities to make up that, should we have a situation where we're not able to have receivables in Russia.

Okay.

So we're not concerned about the impact on the total revenue guidance.

Okay. Now switching gear on your pipeline assets, Huntington program, one of the still very exciting assets. And we also saw some initial encouraging data. So maybe I wanted to go back to some science questions when we talked before. I wanted to understand better if you have any updated thoughts. So when we look at the exposure, the CSF and compared to the animal -- in human and animal was quite different, like 2.7 CSF versus [ human ] and versus animal is almost 1:1. So any update for us there, what could cause a difference here?

Yes. So maybe just to share. We -- the PTC518, which comes from our Splicing Platform that we're developing for Huntington's disease follows right behind Evrysdi, which was discovered from our platform, was the first oral splicing molecule ever approved. We've developed it along with Roche for patients with SMA. We made a number of really important learnings, how to develop an oral splicing agent that broadly biodistributes and that can be an effective therapy for serious diseases. One of the most critical aspects is ensuring that you have a drug that gets into the brain, crosses the blood-brain barrier, and that's not efflux. That's incredibly important for a disease like Huntington's disease, which is a total brain disease. So the success of that molecule being able to deliver on its function, which is, decrease the amount of the toxic huntingtin protein requires that, that drug gets across the blood-brain barrier and is not efflux. So by design, they wanted to ensure that. In the Phase I study, one important element of the study was ensuring that we had, at blood-brain barrier penetration, and now efflux. So when we saw a relative difference in the biodistribution with, as you said, the ratio of 2.7:1 CSF to plasma, we saw that as a great sign. That confirmed that we succeeded in designing a molecule that gets across the blood-brain barrier and is not efflux. It also suggests that at lower doses, we may be able to achieve higher concentrations in the brain and achieve our desired targeted 30% to 50% reduction in huntingtin mRNA and protein. Of course, we also have, as we've talked about, one of the advantages of having an oral molecule is that it's titratable. So as we move into Phase II, our PIVOT-HD study, which will be starting this quarter. One of the things we want to look at now in Huntington's disease patients is the relative exposure in the plasma and the CSF of patients and that will allow us to start understanding whether we are achieving -- or what dose levels we're achieving that desire a 30% to 50% reduction in huntingtin mRNA and protein in the brain.

Okay. So another question. I think you tested 15 milligram, 30 milligram. Any additional doses you want to explore? I think the underlying question is, how do you know that -- because you're only testing the blood. And first, like whatever level you tested, how do you know this is reflective in the CSF? And then also whatever level you see, how that -- how would that translate to the brain that would translate to clinical benefit? Like we use that 40% to 50% knocking down, like how much evidence we have to support the clinical benefit?

Yes. So a few questions in there. We try to get each of them. First, going back in the development of the molecule preclinically, again, there was this -- we knew it was incredibly important if we're going to make an important impact on Huntington's disease that we have a small molecule that gets us in the brain and gets to every region of the brain. And one of the things we've been able to show from clinically is that we had broad distribution and a 1:1 ratio across all regions of the brain in terms of huntingtin mRNA and protein lower. As we move into Phase I, we came with -- again, this 30% to 50% target, which is based on the literature, which has shown the ability to have a better clinical course if you have reductions in the neighborhood of 30% to 50% of huntingtin protein. So what we did in Phase I is, of course, studied a range of doses from 15 milligrams all the way up to 135 milligrams daily. We then learned -- we saw the desired safety and importantly, the dose-dependent lowering of huntingtin mRNA. We then moved into the MAD and started with the initial dose groups of 15 and 30 milligrams. And again, importantly, saw the dose-dependent lowering of huntingtin mRNA and that we were able to achieve with 15- and 30-milligrams reductions of roughly 30% and 60%, respectively. So we had -- with 15 and 30 milligrams and the exposures associated with those dose levels, we saw the targeted reduction in huntingtin protein. At that point, along with the important CSF data showing that we were successfully able to get across blood-brain barrier, not have efflux. We check all the key boxes in Phase I. We said, okay, now let's move to Phase II in Huntington's disease patients and move the work forward.

Okay. Then another -- because your molecule also targeting both wild-type and the mutant one, right? So like how -- I think I'm not sure how much we know that when you target both, how much like the -- the over knocking down the wild-type, the good protein and then -- but you do need a certain level of knocking down the bad mutant protein. So how much do you really talk about? What is the right percentage and especially, giving the lowest data [ volition ].

Yes. So good question. So the literature clearly shows that wild-type huntingtin protein is very important in neonatal development. Similarly, the literature very clearly shows that at even levels up to 80% of wild-type huntingtin knockdown, there's been no adverse effect. The other piece of data that's emerging now is and understanding that balance is also important. So the fact that you are lowering both wild-type and mutant may actually be more protective than lowering one without the other. And again, we, therefore, come forward with this target reduction of 30% to 50%, knowing that that's a range where we can be comfortable in safety and comfortable in the ability to make an important impact on disease. Regarding the Roche data, I think it's very hard to drive any conclusions about the potential benefits of huntingtin lowering and the potential risks of huntingtin lowering based on a number of factors. First of all, it's intrathecally administered. It doesn't have blood-brain distribution. So it's not really an adequate trial of the potential benefits of global huntingtin lowering in the brain. Second and probably more important is, it's now been well acknowledged even in some cases by Roche itself that the toxicity observed in their Phase III study was really due to ASO-related toxicity, and that's by giving a large protein load in the CSF. So I think, again, there's very little read-through in terms of both safety and efficacy in terms of HTT lowering from that trial.

Okay. And another very important question, the regulatory path. I think in the past, you talked about possibly using the biomarker as surrogate endpoint. So any updated feedback from FDA regarding the regulatory path forward?

Yes. So we've designed the Phase II trial in 2 parts. The first part of PIVOT-HD is a 12-week placebo-controlled trial in Huntington's disease patients in which we seek to collect very, very important pharmacology, pharmacokinetic and pharmacodynamic effect, again, understanding the plasma-CSF exposure and huntingtin mRNA and protein levels in our dosing. We believe that's very, very important data, not only in showing up our assumptions and identifying the proper dose to get the desired lowering of huntingtin, but it's also just critical information we need to keep the development program moving forward. Then the trial will continue for an additional 9 months of placebo-controlled study, wherein we're going to collect important biomarker data, including reduction in CSF protein levels, NFL levels, brain volume levels and will also collect a number of clinical endpoints. We will, of course, need all of this data to put us in a strong position for the Phase III trial, whether that's done following Phase II pre-approval or if we are able to achieve an accelerated approval, we'll then obviously then need to conduct the post-marketing confirmatory trial. We have not yet talked to the agency specifically about the pathway. It's been our experience that it's best to talk to the agency about our program once you have some data, so that we can have a data-driven discussion. Obviously, we all know that the accelerated approval pathway exists. It exists to allow for approval of therapies for significant unmet medical needs like Huntington's disease. It's pretty clearly spelled out what you need to show in terms of surrogate biomarker effect, a biomarker that is likely to suggest you will have clinical benefit. So the framework is laid out. What we believe we need at this point is, let's get some data so we can then have an informed discussion with the agency about the potential regulatory path.

Matt, did I hear correctly that for all the biomarker data, will you collect the CSF protein data or it will be the exposure data?

See, we will be collecting CSF exposure and huntingtin protein levels, which we think that when you think about the CSF, there's no cells in the CSF. So when there is huntingtin protein in the CSF, that's typically a reflection of cell death and cell injury. So by studying changes in CSF protein, that's able to give us an understanding of the benefit of 518 on cell viability and overall neurodegenerative progression.

Okay. That's very -- glad to hear that because I do think this is a very important data point and since other trials all collect that data.

Yes. Absolutely.

That will be also you can do -- I mean, not really apple-to-apple, but at least some level of cross trial comparison.

Absolutely. And of course, we couldn't do that in Phase I because of healthy volunteers. So you don't expect to see huntingtin protein in CSF, but now that we move into patients, obviously, that's going to be an important part of the set of biomarkers we collect to demonstrate PTC518 benefit.

Okay. Good, very [indiscernible]. We don't have too much time left, and I wanted to -- I know you have tons of other pipelines, maybe like if you wanted to highlight what are the most important, the upcoming data catalysts that investors should be focusing on?

Yes. As I mentioned, we have a number of exciting upcoming events this year. So as we've talked about, we have a Study 041 reading out with data, with results expected before the end of Q2. We expect to have a CHMP opinion for our AADC gene therapy program in April. This would be the -- if approved, this would be the first ever direct administered gene therapy to the brain. So it's an incredibly important therapy, very strong clinical data package showing the transformative benefits of the therapy. And so we look forward to that opinion, and then we'll follow on with BLA submission later in Q2. We have data results expected for the end of the year in our PTC923 AFFINITY Phase III trial, again, following along the well established, highly enriched population approach for PKU studies as well as results from our mighty potential registrational trial. We're initiating the PIVOT-HD trial this quarter, which is very exciting. We are also going to be initiating our registration-directed PTC857 ALS trial from our Bio-e platform as well as initiating potential registrational trials from two programs in our oncology platform. So a number of really exciting activities coming this year.

Thank you very much.

Thank you. Gena.

Thank you. Gena.

Thank you, everyone.