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

Okay. Great. My name is Gena Wang. I'm SMID Cap biotech analyst at the Barclays. I'm so glad to see everyone here. This is the second, I think, a Global Healthcare Conference that in person, I remember last year. So this is the second year. I wanted to welcome to our 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 and corporate access team, who made this healthcare conference possible. With that, I would like to introduce today's first presenting company, PTC Therapeutics. With us today, we have Matt Klein, Chief Operating Officer. We have Emily Hill, Chief Financial Officer. We also have Kylie O'Keefe, Senior VP of Commercial and Corporate Strategy. So maybe before I start with the questions, Emily, if you want to give a overview of the company.

Yes. Sure, Gena. Thank you for having us. Happy to be here. PTC is entering its 25th year. We are a biopharma company developing, researching and commercializing therapies for rare genetic disorders. Importantly, we've given financial debt in this year of $940 million to $1 billion. We have 4 dataset's reading out upcoming in Q2, 3 of them are from registrational trials for PKU, Friedreich ataxia and mitochondrial-associated seizures, which I'm sure you'll get into a lot of detail about. So we're looking forward to those milestones and our continued commercial success this year.

Great. So maybe I will start with PKU. You had a very impressive data report at the JPMorgan time beginning of this year. So we are waiting for the second -- the Part 2 data. So maybe if we take one step back, Matt, like the clinical trial design, why -- what is the rationale when you're using Part 1 is a screening of 60 milligram per [indiscernible], but the Part 2, you have a dose escalation 20 milligram 40 [ NS ] 60?

Yes. So thank you for the question, Gena. We're incredibly excited about the APHENITY trial, which is our Phase III trial of sepiapterin for the treatment of kids and adults with PKU. While PTC has done a lot of pioneering in a number of different therapeutic areas as well as approaches to drug delivery, this is an example where we were able to leverage a well-established clinical trial design that has been used by others and is accepted globally by regulatory authorities. So this includes a running phase, which after screening all subjects get treated with our drug sepiapterin for 2 weeks and we're able to identify responders to the drug, which we're defining as any individuals over 15% reduction from baseline phenylalanine levels. And only those that respond get randomized to receive drug or placebo for 6 weeks with the primary endpoint being reduction in phenylalanine levels in the group that had a greater than 30% reduction during that run-in phase. This is really the ultimate enrichment strategies and that we're able to include in the randomized population only subjects who responded to the drug. And as you mentioned, Gena, that run-in phases out at what we're targeting as the ultimate dose, which is 60 milligrams per kilogram. However, during that 6-week placebo-controlled phase, we have a dose escalation. And the simple idea is just we want to collect important new exposure fee-change data. So as a standard part of any drug development program and so PK/PD response is an important element, so we can understand what would the reduction of phenylalanine be as a function of dose. But we again, anticipate that the commercial dose will be 60 milligrams per kilogram, which will be the dosing in the last 2 weeks. And again, what's really important here is that the half-life of phenylalanine is such that we are very confident we will get to a steady state within the 2 weeks at each dose level, so we can really clearly understand what the optimal reduction will be as a function of dose.

So just wondering why not switch? Why not do Part 1 and then you identify PK/PD because Part 2 is more the pivotal study part? And then will you be concerned because now starting to lower dose and then gradually go to the higher dose, would there be any concern about the magnitude of benefit you saw in the Part 1, how that will translate to Part 2?

Yes. We have no concern at all. So after the Phase I is over that 2-week final phase of what we believe will be the ultimate dose, all subjects get washed out for a minimum of 2 weeks. Again, based on the half-life of the drug and then allow any levels should -- will return to baseline. So we basically re-baseline all subjects. And then obviously, in the placebo group, as has historically been demonstrated, we don't anticipate there to be any or any very little change in phenylalanine levels over the 6 weeks, not concerned about a placebo effect. And in the treatment group, we fully expect to realize the full potential reduction at each dose level, again, just given the pharmacokinetics and pharmacodynamics effects.

So how frequent do you collect the fee reduction data?

So they'll be collected, obviously, before each dose starts and then add 3 time points with each of the 2 weeks.

Okay. Good. So for the Part 1, how many patients are Kuvan-naive patients versus your responders -- now responder?

Yes. So we had shared that we had 156 children and adults who passed the screening criteria and those are the 156 subjects who were entered Phase I. And we had 102 of the 156 or 65% who had a greater than 30% reduction. And then just to benchmark that in the Kuvan run-in all-comers study, that was 20%. So we're seeing multiple fold increase in responders. We had an additional 13 subjects who had between 15% to 30% reduction. So all told 74% of the patients treated had a greater than 15% reduction with 2/3 of them having a greater than 30% reduction. And that included 10 classical PKU patients who had an average of 61% in phenylalanine reduction, again truly remarkable changes in that 2-week period.

Okay. So for the patients that are screened, have any of these like 156 patients, have they had exposure to Kuvan? Are these Kuvan-naive patients or experienced patients?

So this is really a mix of patients who've been on Kuvan in the past. We even have subjects who were on Kuvan and washed out of Kuvan before entering this study. And so we'll look forward to being able to provide those data in more detail after the placebo-controlled phase is completed in May.

Okay. Will you be able to share like a percentage of patient like on Kuvan versus naive patients?

Yes. We'll share that information.

Okay. Okay. Okay. So that's good. And also patient baseline characteristics, how do you compare this versus say Kuvan Phase III data?

We haven't broken out all the details of the demographics. We fully expect though that this population will look similar to the population that was in the Kuvan studies, which, again, we're really excited about, right? This is going to give us an opportunity to demonstrate how sepiapterin can meet that large unmet medical need despite the value of Kuvan and generic BH4 agents, even Palynziq and really start to fill a significant gap in the large Kuvan marketplace. And large channel PKU market place.

Okay. So what do you -- what would you consider a success study? So what criteria you would define -- so given -- we know that Kuvan is on the market and the biosimilar, we're coming -- it actually is already now? And then how do you see the clinical profile has to be in order to be in order to be competitive? And what patient population do you think will be the sweet spot for you?

Emily, do you want to take that?

Yes, absolutely. So I think so if we sort of step back and look at the marketplace as it stands today, Gena, I think it's an estimated around 58,000 patients globally for PKU. And if you look at the treatment algorithm today, there's still 30% of patients that are therapy-naive. So despite there being 2 therapies available, the needs are not being met. And that includes the classical PKU patients, which are obviously quite severe, have baseline fee levels of 1,200 micro milli per liter or greater and they're therapy-naive. So they've never tried a therapy. Now as Matt just talked about, we've shown pretty substantial data in the Part 1 and hope to see similar data in Part 2 that would show a benefit in these classical PKU patients and not just a benefit, but up to 60% reduction. So that's an opportunity to meet the needs of those patients. The remaining 70% that have tried Kuvan, the vast majority of those patients initially fail, so they don't show a response. So that's an opportunity as well in the sense that they've tried Kuvan and failed. And so even in the genericized market, there's an ability to demonstrate that they've tried the standard of care and need an additional therapy to meet their needs. Of the patients that respond, that 30% over time, 60% of those are fully controlled. And so from that perspective, they come off the drug, again, creating documentation to step-throughs and payer needs in a genericized market for why they need additional therapy. So when you look across the broad market, less than 10% of the patient population is having their needs met. And so while we think obviously, Part 1 is really significant data, the 6% and the 30% or greater responders and 61% in the classical PKU, we think if it's within that range, there's a number of different patient segments that would be an opportunity for sepiapterin. Things when you look at it from a financial perspective, obviously, there's this large unmet need that Kylie is describing. And then if we look back to Kuvan at its peak revenue, that was about $0.5 billion product, clearly addressing 10% or less of the market. So I think we have an opportunity to be a multiple of that.

Okay. Good. And I have one last question regarding this program regarding safety. What is your view? I think high dose 60 milligram was slightly worse than Kuvan, if we look at the -- I mean, of course, it's a small number of patients. So how do you see the safety profile comparison?

I think what we've seen in the past and what we fully expect to see this trial is that, overall, the drug is safe and well-tolerated amongst patients of all age groups. This is a trial that includes patients under 2 years of age obviously, where there's an important need given newborn screening for PKU in many parts of the world. And we are confident that in addition to the strong efficacy signal, we expect will also have a very favorable safety profile.

Maybe going back to Emily's comment, given the generics in the market, where do you think that the price could be as a competitive?

Yes. I think we haven't got to that point yet because, obviously, from a pricing point of view, we look pretty closely at value proposition and the big part of that is the data package that we'll have in hand post the readout of Part 2. But I think a reasonable benchmark is the Kuvan branded price to Palynziq, somewhere within that range.

Okay. Good. And are you still on track to report data in May?

Yes. Yes, we are -- we very much look forward to that.

Okay. And then would that be a top line release and then company hosting call? Would that be...

Yes, we haven't given the exact details, but typically, obviously, with data of this importance and this kind of program, we'll have top line release and obviously, have an opportunity to walk people through what we found in the trial.

Okay. Good. Okay. And then the audience, if you have any questions, feel free to raise hand. So maybe I was switching gears to your Huntington program. So maybe any update on the U.S. part, clinical whole part?

Yes. So this is our PTC518 program for Huntington disease patients from our splicing platform. And as we've talked a lot about, this program follows on the successful path established by [ VISD ] which was discovered by PTC and we did a lot of the early development of the drug. And that taught us a great deal about how to successfully develop all small molecule splicing agent for the treatment of a CNS disorder. And much of what we did in developing 518 a lot of its attributes, assuring that it's highly specific, highly selective, crosses the blood-brain barrier as [ ePlus ] was to ensure that we can deliver meaningful reductions in Huntington protein levels throughout the brain of Huntington's disease patients given that it's a whole brain disease. We are now in the midst of our PIVOT-HD study, which is our global Phase II 12-month placebo-controlled study of PTC518 in Huntington's disease patients. And that study is up and running and enrolling at study sites around the world. As we've shared, when we presented the [ tox ] data that we presented to all the regulatory agencies and that supported dosing for all of our planned dose level 5, 10 and up to 20 milligrams for 12 months at study sites worldwide, the FDA had asked us for some additional data to support the dosing at those levels and for that duration. We had some back and forth in conversations with the agency. The suggestion was to provide some additional data. We are planning to provide data that we're collecting as part of the Phase II PIVOT trial given that we're able to get this study enrolled outside of the U.S. We're obviously moving full steam ahead because there's a great deal of excitement about the potential for this molecule. And as we conduct the study, we'll plan to collect that safety data and then bring that to the FDA to have ongoing discussions. So there's no update at this time other than to say we're collecting the data that we believe will unstick this in the U.S. and allow us, if needed, to enroll patients in the U.S. if the enrollment hasn't closed around the world.

So I think what data led to FDA hold since there is no AE were reported?

Yes. So -- sorry?

Yes, like what data led to FDA clinical?

So very importantly, this is a partial hold by the agency based on nonclinical data. So this had nothing to do with anything in the clinic. We're dosing in the clinic and moving forward exactly as planned. It was simply a matter of them saying they would like to see some additional data to support the dose levels and duration that we were proposing in the study.

So can you provide a status regarding the nonclinical data? And have you submitted to FDA -- what data package have you submit? Like how long would that be anticipated to be resolved?

Yes. So we have completed the nonclinical program and the complete nonclinical data package, including 9 months nonhuman-primate data were provided not only to FDA, but to regulatory authorities throughout Europe, Australia, Canada. And again, that same package has been able to support the dosing of 5, 10 and up to 20 milligrams for up to 12 months in all of those other places. It was the FDA who said, with this tox package, we would like you to provide additional data, can be additional nonclinical data, could be clinical data. And as I shared previously, our plan is to use the clinical data that we're collecting in the PIVOT-HD trial because probably the best representation of what can happen to humans is going to come from humans. And so we're fortunate to be in a position we're able to enroll the study, move this study forward and collect in patients, the data that we believe will unstick this with that deal.

Okay.

Yes. The sentence the best prediction of what happens in the humans is really important because as you'll recall from our approved therapy for SMA Evrysdi, we actually saw in nonhuman primates, ophthalmological AE that was then -- looks for in humans in subsequent studies and never observed. So it is important to distinguish some of the events that happened in nonhuman primates from humans.

Okay. Yes. And I remember that event. And then on the other hand, the nonhuman -- I mean the Huntington program, you're already in clinical development and then FDA come back. So I'm just wondering what kind of like that one was the retinal issue right here, like what was the things finding that make FDA a bit concerned that they wanted to see more data?

Yes. So we've not gone into the details of the nonclinical program. We typically don't share that. We're still talking about eye exams that never mattered in patients. So…

You learned from that.

We're incredibly encouraged that every other regulatory authority who's seen the package has allowed the dosing up to 20 milligrams for 12 months. So we're very comfortable by that and we'll continue to work with the agency in a collaborative fashion to move the program forward in the U.S. as well.

Okay. And then have you -- like do you think FDA will be okay with sufficient -- like what kind of human data would that be feel okay about safety? I assume nonhuman primate usually try to dose higher and so that you have -- you understand the safety margin when to translate to human, right now with the human dose and you dose 5, 10 milligram, so like what kind of data do you think FDA will think will be sufficient from humans? And do you think that they still wanted to see the nonhuman primate data, just to see what kind of safety margin that you have?

So just to be clear, obviously, we've provided the nonhuman primate data to FDA and all regulatory authorities. And I think quite clearly, we have multiple margins to the doses proposed. That is why the study has been able to go and all around the world. I think this is a case that we sometimes see where one regulatory authority may have a question that others don't. Is it possible that the FDA is thinking about [indiscernible] all splicing agents with a broad brush stroke and our concern maybe some of the findings that were in branaplam, some of the tominersen issues are reading through to 518, which of course is somewhat understandable, but not really justified given the significant differences between 518 being oral, small molecule, titratable, broadly by distributed, you wouldn't expect to have the ASO complications observed and report in tominersen or, quite frankly, the off-target problems of branaplam given the challenges that are well-known in terms of CNS exposure and efflux of the molecule and the fact that it's a repurposed agent from SMA, which definitionally tells you it violates one of the primary victims of small molecule splicing development specificity. So we look forward to continuing the discussion with them, bringing them the clinical data, which we believe is the most meaningful in establishing and supporting that the drug can be safely dosed to patients.

Okay. Sorry, I keep asking the same question. So Matt, like what is the highest dose you use in the nonhuman primates data? And then was FDA concerned about you didn't test high enough or are they concerned about you did not test long enough that you have a 9 months and they wanted to see say, 12 months or 24 months?

So I may give the same answer to the same question.

Okay. So maybe first question, what is the highest dose you tested in the nonhuman primate?

So Gena, we certainly appreciate people wanting to understand every possible detail in nonhuman primate. We're just not going to go into it. We're very comfortable that we have done a very appropriate nonhuman primate study at multiples to the intended clinical doses. Those data have been reviewed by several regulatory authorities around the world, have been allowed for the safe dosing of patients at 5, 10 and up to 20 milligrams for 12 months. And this is a simple matter of the FDA just wanting to get a little bit more data and that's what we're going to provide.

Okay. That's fair. Going back to human data ex-U.S. cohort like 12-week data1. So first, maybe like the total data package that you will be reporting?

Yes. So importantly, PIVOT-HD in total is a 12-month placebo-controlled study. We're initially starting with 5 milligrams and 10 milligrams and then going to leverage the titratability of the molecule to go up to a third dose, which we said could be as high as 20 milligrams. The study is divided into 2 parts. The first part is a 12-week study where we're going to focus on pharmacokinetics and pharmacodynamics in Huntington's disease patients, understanding the relationship between exposure and blood, Huntington, mRNA and protein reduction. We'll also be providing data on CNS exposure because we really want to understand the relationship between plasma exposure and CNS exposure, particularly given the important observation from Phase I, where we had greater exposure in the CNS than in the periphery, which again, the effort was to design a molecule that gets into the brain and broadly by distribution doesn't get effluxed and we saw that we've actually done that and really optimized that aspect of distribution. Those data points are really important because they're going to help us understand what is likely to be the optimal dose in patients to achieve what we're targeting, which is a 30% to 50% reduction of Huntington protein levels in the brain. In the second 9 months of the study, we're going to be finding biomarker data, including CSF protein level changes, volumetric MRI changes as well as NFL in the CNS and the plasma, so we can begin to understand the impact of the Huntington reduction in the brain on important biomarkers of disease, which we believe can again help us understand what the ultimate benefit can be at different dose levels.

So the 12-week data, like what kind of data do you think you should dose higher?

Yes, it's a good question. And this can get a little bit complicated. So let me try to walk through it slowly. The ultimate goal of the program is to reduce the levels of Huntington protein in the brain. We're in a unique position with Huntington's disease as a neurodegenerative disease where we understand the primary etiology of the disease. The disease is caused by the production of a toxic protein, toxic mutant Huntington protein that aggregates inflamed red brain cells and ultimately leads to their death and neurodegeneration. So we're leveraging splicing to reduce the production of that causative protein. We believe that 30% to 50% is the optimal window to effectively and safely reduce Huntington protein levels in the brain. Now how do we know that we're achieving that level of reduction? For obvious reasons, we can't get biopsies of neurons and measure PK/PD, but we're fortunate to be in a situation where we have an oral therapy that's systemically by distributes and we can look at the relationship between exposure in the blood and the reduction of Huntington protein and blood cells and also understand the relationship between exposure in the brain and exposure in the blood. And since we know that Huntington lowering is a function of exposure, we can then calculate an estimated brain reduction based on the PK/PD in the blood and the relative exposure in the brain and the blood.

So in the past, I think that in the brain, you actually doubled the -- because of, I think, the pump, I forgot the exact mechanisms that the brain actually you have a higher exposure.

Right.

And then the blood -- so if we're using that -- if we're just using simple blood Huntington protein level reduction, what range do you think will be sufficient and you do not need to go to the next dose?

So perfect question. So we're starting at 5 and 10 because based on Phase I, we believe if the relationship between plasma and brain holds for Phase I, 5 and 10 milligrams can put us right there. So to answer your earlier question about what will guide the selection of the higher dose is going to be based on the findings in terms of PK/PD and relative exposure of the brain in the blood that we collect in that first 12 weeks. That's why those data are so important. Obviously, they'll give us important data around safety and tolerability, but it will also allow us to begin to understand what the optimal dose might be and guide the decision of the initiation of the 20-milligram or of the 20-milligram dosing cohorts.

So if we use 30% to 50%, say, assuming in the brain, could that translate to 15% to 25% in [ CS ] in the blood?

Yes. So what we saw in Phase I in the MAD portion of the study at 15 milligrams, we had approximately 40% reduction. At 30 milligrams, we had approximately 60% reduction. So absolutely, 5 to 10 could put us in that range. And that's what -- and that's why we started at 5 and 10. A lot of people ask us, well, if you had 15 to 30 in MAD, why are you at these lower doses in patients? And the answer is because of the exposure differential.

I know we don't have time maybe quickly on Translarna and the [ AEDC ] commercial part, you know the one is the Translarna EU full approval process there, if you can quickly comment?

Yes. So we're in the midst of that process. It's referred to as a Type 2 variation. As we talked about, our charge for the European regulatory statutes is to confirm the benefit that was recorded at the time of Translarna authorization back in 2014, obviously, given the strength of the dataset from Study 41, the totality of evidence from Study 720 and 41. And the STRIDE registry, we believe not only we can confirm that benefit, but expand it and we look forward to an opinion on the conversion in the first half of this year.

Okay. And then AEDC, like when should we expect meaningful revenue contribution for Europe?

Yes. I think -- look, we had an EMA approval in July of '22 and we've been able to treat a number of patients in the back half of last year. I think, obviously, one thing that's well-known is while regulatory process in Europe is centralized, pricing and reinvestment is country-by-country. And so we immediately began negotiations in a country-by-country basis. We're focusing on 3 main access pathways. So early access programs that are available to us, for example, through France and other countries. Italy is another example, commercial access in markets like Germany, the U.K., other markets and then also through cross-border health care. So where there isn't treatment and as of excellence in home countries, patients are able to cross the border and get care in other countries as part of Europe. So we're working through that as we speak. And I think we were able to, as I said, treat a number of patients in '22, but we expect substantial growth moving into '23 as we expand the number of countries that we have access and reimbursement to it in Europe, but also look at named patient programs that are available to us outside of Europe as well.

So is it fair to see the meaningful revenue contribution will be 2024?

Yes. I think, look, we're -- obviously as typically seen with the product launch, there's a ramp-up period. I think with gene therapy, it's obviously a little bit faster than you commonly see with small molecules. But I think the difference here is unlike the U.S. where it's a pretty fast uptake and it's all pretty uniform, we're going country-by-country in a number of different markets. And so I think we'll see a little bit slower ramp up than if it's one centralized market. And so yes, I think '24, '25 is reasonable period for hitting near peak revenues.

Great. I know we are running out of time. Well, thank you very much and look forward to a lots of updates…

Yes.

Later this year.

Thank you, Gena.

Thank you, Gena.

Thank you, everyone.