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

Thank you for standing by, and welcome to the PTC Therapeutics' PKU Deep Dive. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Kylie O'Keefe, Chief Commercial Officer. Please go ahead.

Hello, everyone, and thank you for joining today's call. We are excited to share with you this presentation on PKU and our product, sepiapterin. Before I begin, I refer you to our forward-looking statements on this slide, which are also posted on our website as well as our Risk Factors section in our most recent 10-K. Let me now begin by introducing our presenters. First, I am joined by Dr. Matthew Klein, our Chief Executive Officer; second, I'm joined by Professor Ania Muntau, a German pediatrician. Ania was awarded her MD degree from Ludwig-Maximilians University in Munich, Germany in 1992, where she also received her postgraduate training in pediatrics. Since 2014, she has headed the clinic for pediatric and adolescent medicine at the University of Medical Center Hamburg-Eppendorf. Her main area of work is research into genetic diseases in children, particularly inborn errors of metabolism. Professor Muntau is a recognized global expert on PKU and has an active clinical practice treating PKU patients. And lastly, myself, Kylie O'Keefe, the Chief Commercial Officer. We will cover 3 key topics today. Matt will begin by providing an overview of PTC and our product for PKU, sepiapterin. Ania will discuss the current clinical practice in PKU, including the significant unmet needs that remain despite current therapies and the opportunity of sepiapterin to address many of those needs. And I will discuss the commercial landscape to sepiapterin in PKU. With that, let me hand the call over to our CEO, Dr. Matthew Klein. Matt?

Thanks, Kylie. Let me start with a brief introduction to PTC. PTC is a science-driven global biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies for patients with rare disorders. We have built a robust commercial portfolio with 6 marketed products, 5 of which we commercialized globally and the sixth, Evrysdi, from which we collect collaboration and royalty revenue. We are very proud of our commercial team's performance in generating substantial year-over-year revenue growth. And in the first quarter of 2023, each product achieved double-digit year-over-year revenue growth. This strong first quarter performance puts us in a position to achieve our 2023 total revenue guidance of $940 million to $1 billion. This revenue guidance includes $545 million to $565 million in DMD revenue. To sustain our product portfolio, we have also built a robust pipeline of compounds in research and development in 3 therapeutic areas: neurology, metabolic disorders and oncology. With the readouts from several clinical trials completed in the first half of the year, we look forward to an active second half of 2023, including continued progress on our PIVOT-HD trial of PTC518 in Huntington's disease patients, our SUNRISE LMS study of unesbulin in leiomyosarcoma patients and the CardinALS trial of utreloxastat in ALS patients. In addition, we have a number of planned regulatory activities in the second half of the year. In the third quarter, we are planning to submit the BLA for Upstaza and we expect to receive an opinion from the CHMP on the Type 2 variation to convert the Translarna conditional marketing authorization to full authorization in Europe. We also expect to have a pre-NDA meeting with the FDA for the sepiapterin PKU program in the third quarter and expect to submit the NDA for sepiapterin in the fourth quarter of this year. In addition, we are also preparing to request Type C meetings with the FDA to discuss the potential NDA resubmission for Translarna in the U.S. as well as to discuss the potential for an NDA submission for vatiquinone based on the recently released MOVE-FA results. The focus of today's presentation is our sepiapterin program for PKU. Let me begin the main part of our program with a brief recap of the results from our Phase III APHENITY trial. We are thrilled that we met the primary endpoint of blood phenylalanine reduction in the APHENITY study with highly statistically significant and clinically meaningful results. Sepiapterin demonstrated substantial phenylalanine reduction from baseline of 63% in the overall primary analysis population and 69% in a subset of classical PKU patients. The vast majority of patients were able to reach target phenylalanine levels in line with U.S. guidelines of less than 360 micromoles per liter. Importantly, sepiapterin was also well tolerated with no serious adverse events. As I mentioned for the overall primary analysis population, the mean blood phenylalanine reduction in a sepiapterin-treated group was 63% with little change in the placebo group as expected. This result was highly statistically significant with a p-value of less than 0.0001. In the subset of classical PKU patients, the sepiapterin-treated group demonstrated a 69% mean blood phenylalanine reduction again with minimal change in the placebo group. These are outstanding results that clearly differentiates sepiapterin for the treatment of PKU patients of all ages and disease severity. As part of the secondary endpoints of the trial, we looked at the important question of how many patients achieved the recommended target phenylalanine level. For the U.S. guidelines for all ages and European guidelines for children under 12 years of age, 84% of the patients achieved a phe level of below 360 micromoles per liter. For the European guidelines for adolescents and adults, 93% of subjects achieved the target level of below 600 micromoles per liter. Of note, the proportion of patients achieving target blood phenylalanine levels in the Kuvan placebo-controlled trial was 32%, achieving below 360 micromoles per liter, and 54%, achieving below 600 micromoles per liter. One of the questions that we have gotten often in recent months is the treatment effect of sepiapterin in patients previously treated with Kuvan. In the APHENITY study, 27 patients entered reportedly on active or generic Kuvan. These subjects had an average phenylalanine level on study entry of 581 micromoles per liter. These subjects then underwent a 7-day washout, after which their average level was 691 micromoles per liter. Next, we were able to determine the relative effect of sepiapterin treatment on these patients in the run-in phase of APHENITY. After 2 weeks of sepiapterin treatment, the mean phenylalanine level in this group was 304 micromoles per liter, which is below the U.S. guidelines target phe level of 360 and represents 48% lower phenylalanine levels following sepiapterin treatment in patients receiving Kuvan at study entry. Following the placebo-controlled study, patients were eligible to enroll in a long-term open-label study, which is ongoing. This study has several objectives to assess long-term safety and durability of sepiapterin treatment effect as well as to assess phenylalanine tolerance. The phenylalanine tolerance assessment looks at the ability of sepiapterin to control phenylalanine levels following the regimented increase of phenylalanine intake. In the open-label extension study, patients who had a phenylalanine level of below 360, were eligible to enroll in the phenylalanine tolerance protocol. Essentially, a dietitian prescribes a biweekly percent increase in phenylalanine intake based on measured phenylalanine levels. We then are able to measure changes in phenylalanine levels with increased dietary phenylalanine intake. The graph on the left side of the slide demonstrates the average biweekly prescribed phenylalanine intake for the first group of 12 subjects who are participating in the phenylalanine tolerance protocol. Of note, the recommended phenylalanine intake for adult women is about 55 to 60 milligrams per kilogram per day, and for men, 60 to 65 milligrams per kilogram per day. So you can see patients in this protocol are taking greater than the recommended daily allowance of phenylalanine. On the right side, we see the corresponding phenylalanine levels at each time point. As you can see, in the face of increased phenylalanine intake, phenylalanine levels have remained relatively stable and below the 360 micromoles per liter threshold target level. Of course, these are preliminary data but they are very encouraging, given the importance of phe tolerance and patient quality of life, physician uptake and payer engagement. We look forward to sharing more of these data once available. Now I'd like to invite Professor Ania Muntau to give her perspective as a clinician treating PKU patients. Ania?

Thank you, Matt. It's a pleasure to be here and to share my views about the treatment challenges in PKU and the potential benefit that sepiapterin may offer. Before I begin, I'd like to say that the APHENITY data that Matt just highlighted is exciting news for the PKU community, and I am amazed. The data is much more than we all expected and is really surprising in a positive way. I'm excited about the opportunity to offer sepiapterin to my patients. I'd like to begin by giving an overview of phenylketonuria of PKU, which is sometimes called PAH deficiency. PKU is an inherited, autosomal recessive condition caused by variants in the PAH gene that encodes the PAH protein leading to impaired PAH function and PKU. Today, we know of more than 1,000 variants in the human PAH gene. Both the environment, which is the dietary intake of phe and the genotype, are causal components of PKU. Unfortunately, PAH genotypes may not predict the clinical phenotype or be used to evaluate or treat the disease. There are some very severe mutations. The most frequent being [indiscernible] in the homozygous state, where we know there will be severe PKU without residual function. But in many compound heterozygous genotypes, we cannot predict the phenotype. This slide shows the role of the PAH protein in the phenylalanine metabolic pathway, specifically the phenylalanine hydroxylating system. The enzyme PAH catalyzes the first and rate-limiting step in the metabolic pathway of phe and converts phe to tyrosine. Interestingly, the natural co-factor of the PAH enzyme, BH4, has been shown to correct misfolding and early degradation of PAH and in this way, improves in-vivo PAH enzyme activity if taken in pharmacological doses. Impaired PAH enzyme function leads to systemic accumulation of phe, and this has a number of neurological consequences. Elevated blood phe concentrations interfere with the normal production of neurotransmitters and leads to PKU. Blood phe accumulation and in particular, accumulation in the brain is toxic to the central nervous system and impairs several neurological functions. To give you some examples, we know very well that patients who have been off treatment for some time, show white matter lesions and reduced myelin production. We see, in particular, deficiency of large neutral amino acids due to the phe-mediated competition for the transporter LAT1. We also see neurotransmitter deficiency that can be well translated to symptoms. In addition, the excessive phe in the brain causes oxidative stress. And there are other examples shown here. PKU severity is associated with higher blood phe levels and decreasing phe tolerance. Historically, we have observed different clinical phenotypes of PAH deficiency. The severity of PKU is related to PAH variants and is categorized by blood phe levels and phe tolerance. So you see increasing blood phe concentrations with more severe phenotypes and decreasing phe tolerance with the increasing severity of the disease. Here, you see the historical classification of PKU into 3 classes: mild, mild to moderate and severe. Although I want to make the point that PAH deficiency covers a continuum of severities. There are American and European treatment guidelines for PKU. And here, I want to focus on the main differences. In the U.S., the treatment of PKU should be initiated as early as possible. Treatment is lifelong with the goal of maintaining blood phe levels in the range of 120 to 360 micromoles per liter in patients of all ages. The European guidelines recommend treating all patients with levels above 360 micromoles per liter. The target levels for patients less than 12 years and for maternal PKU is 120 to 360 micromoles per liter. The target level for patients older than 12 years is 120 to 600 micromoles per liter. It is worth noting that the phe levels that are recommended in these guidelines are 10x normal physiological levels. These guidelines represent a compromise and are not the ideal treatment goal, which would be normalization to phe levels below 120 micromoles per liter. Lifelong diet restrictions remain a key requirement for PKU patients. A PKU diet is a very low-protein diet, accompanied by phe-free medicinal foods because the allowed intake of natural protein is too low for normal functioning of the patient. The patients must eat modified low-protein products such as pasta or bread. Some patients take glycomacropeptide as a low phe protein substitute. In some countries, patients are treated with large neutral amino acids. There are several barriers to long-term continuation of this diet. It is very burdensome due to poor palatability and the lack of variety in the PKU diet. Many patients have low-protein pasta with tomato and salad day after day. Adding to this challenge, the cost of the medicinal food is very high. In many countries, the cost must be covered by the families due to a lack of insurance coverage. This very strict diet, even if very well done, is still associated with considerable risk of malnutrition. Patients have increased GI issues from changes in their microbiome. And there are significant social barriers as having meals with others in public is really difficult. We have made considerable progress with the implementation of diets suited to PKU patients. Nonetheless, we still experience suboptimal outcomes. Even with early and continuous management of diet alone, many PKU patients experienced cognitive symptoms as well as emotional and behavioral problems. In children and adolescents, we see poor academic performance due to PKU-related suboptimal learning capability. In particular, we observed abnormalities in executive function. We see reduced processing speeds and impaired bone formation. And many adults, particularly those who are off treatment, come to the clinic because they are not doing well. They present with depressed mood, a very high incidence of generalized anxiety, phobias, decreased positive emotions and social maturity deficits. They are very often socially isolated and show even lower bone density. We have 2 main goals with therapy for PKU patients. First, to decrease blood phe concentrations to bring them as much as possible to physiological concentrations and at the same time, to increase the dietary protein tolerance. This is the amount of phenylalanine protein that a patient can consume without experiencing an increase in blood phe concentration, it has increased phe tolerance. This second aspect, of course, is the main determinant of the quality of life for PKU patients. We currently have 2 approved treatments for PKU patients, Kuvan and Palynziq. Kuvan is sapropterin dihydrochloride, which is the synthetic form of the natural co-factor of the PAH enzyme tetrahydrobiopterin or BH4. It is indicated for adults and pediatric patients older than 1 month. There are several clinician-reported challenges with this drug. It has a limited response rate. A maximum of 30% of patients respond to it, both initially and over time. So most of the patient population does not receive adequate control from Kuvan. Importantly, the classical PKU patient population receives little to no phe reduction from Kuvan. In patients that do respond to Kuvan, the decrease in phe concentration is usually around 30%, but not more than 50%. This is not a drug that allows for reaching physiological phe concentrations. The other approved drug is Palynziq, which is pegvaliase. This is an injectable drug of a phenylalanine degrading enzyme derived from plants and genetically produced. It converts phenylalanine not to tyrosine but to trans-cinnamic acid and ammonia. This drug is indicated for patients who are older than 16 years and have uncontrolled blood phe of greater than 600 micromole on existing management. However, Palynziq has several challenges. Of particular importance are the known safety issues seen in clinical trials and clinical experience. In the first 3 months, it is associated with a high number of adverse events, including anaphylaxis that requires patients to carry an Epipen. It also has inconvenient injectable administration and lengthy titration. All of these factors mean clinicians often relegate Palynziq to being a treatment of last resort. Also, it can take up to 2 years for a patient to see a response. However, those patients who do respond do reach physiological phe concentrations. With Kuvan and Palynziq, we have 2 drugs that have incrementally helped PKU patients but present several challenges. As a result, there is a need for a new approach. Sepiapterin has several mechanistic advantages over sapropterin. First, sepiapterin is a precursor of tetrahydrobiopterin. After being taken by mouth, sapropterin is rapidly oxidized and converted to BH2, much of which is then quickly excreted from the body. The BH2 that does get absorbed and arrives at the cell doesn't enter the cell very easily. So essentially, very little of the BH4 actually gets to where it needs to get to the cell. And when it gets there, it doesn't get inside the cell very well to exert any beneficial effect. Sepiapterin, on the other hand, is rapidly absorbed, intact from the intestines, transported to the cell and actively transported into the cell where it's rapidly converted to BH4. The co-factor for the defective enzyme, so it can exert its effect with high bioavailability. And this partly explains a substantial and clinically meaningful phe reduction that we saw in the APHENITY study. Second, we believe that sepiapterin provides additive effects as a molecular chaperone as shown here. As we covered on the previous slide, sepiapterin is actively transported to misfolded variant PAH tetramers inside a cell and converted to BH4 in pharmacological concentrations. Sepiapterin and BH4 act as independent pharmacological chaperones by binding to different variants of PAH. Sepiapterin corrects the confirmational structure of the tetramer and promotes metabolism of phe to tyrosine. This has been shown in preclinical experiments where sepiapterin has increased the activity of various PAH variants. The community of metabolic physicians is hopeful that sepiapterin will treat the majority of PKU patients, including untreated patients, therapy-naive patients, including classical PKU subjects; patients who have failed on other therapies and are desperately looking for new alternatives; and patients who are currently not well controlled on 1 of the 2 existing therapies. The APHENITY study has shown that one of the big differentiators between sepiapterin and Kuvan is that sepiapterin can treat classical PKU patients, which means patients with the severe phenotype of PKU may have a new treatment option. There is a huge unmet need for PKU patients that can potentially be addressed by sepiapterin. We know that PKU leads to a toxic accumulation in the brain and must be treated from this. Current PKU therapies are not suitable for all patient subgroups. Sepiapterin has advantages over both Kuvan and Palynziq and can potentially treat a much broader patient population. Sepiapterin is easy to take, is well tolerated, and the APHENITY results show that it has very convincing efficacy for a broader range of PKU patients. This can help close the gap in care with the goal of having some patients not be required to have the restrictive PKU diet for life. It is clear to me that sepiapterin could lead to a better quality of life for many PKU patients. As for my own clinical practice, I am excited to offer this new therapy to classical patients. I would also retry all of my patients who have been unsuccessful on Kuvan, on sepiapterin and also a significant group of patients who are partially responsive to Kuvan but not completely satisfied with the goal of achieving lower blood phe concentrations and higher protein intake. The results of the APHENITY study are really convincing. And now I'd like to hand things over to Kylie, Kylie?

Thank you, Ania, and thank you very much for joining us today. I'm excited to share some additional details on the unmet need for PKU patients and how sepiapterin will fit into the PKU landscape. As discussed by Professor Muntau, despite the availability of some treatment options, there clearly remains a significant unmet need in PKU. Of the diagnosed PKU population, less than 10% of PKU patients are well controlled on Kuvan or Kuvan generics, and the majority of patients are looking for a better therapy to achieve phe control. Around 70% of diagnosed patients have been trialed on Kuvan. Of these, approximately 70% of them do not respond and are considered to fail. Of the remaining patients trialed on Kuvan, approximately 30% will respond. But around 40% of those 30% are well controlled and around 60% see a reduction in blood phe but is still not well controlled with phe levels outside the target thresholds. This leaves an additional 30% of patients who have never been trialed on Kuvan, which also includes many classical PKU patients who are therapy-naive. In totality, this demonstrates a large unmet need in the PKU marketplace and market opportunity. The patient journey for PKU is well understood, and it all begins with a heel prick and a blood spot test soon after birth as newborn screening is widely available in most developed countries. These babies and their families are immediately connected with the health care team and that may either be a geneticist or a pediatric metabolic specialist, depending on the country you live in, and also a dietitian being their primary medical care and support network. These relationships are generally maintained right through childhood and well into a PKU patient's adult life. The urgency to reduce blood phe levels means that these babies immediately need to reduce their protein intake and be started on medical formulas to supplement the essential amino acids that will be lacking in their protein-restricted diet. These medical formulas and later in life, medical foods will likely be a lifelong companion to the PKU community and patients. The impact of diet for life, as it is commonly known, is quite dramatic for PKU patients. The need to restrict protein has multiple implications, ranging from social isolation, anxiety, depression to fatigue. The need to try and stick to the PKU diet has an enormous impact on the patient's quality of life. There are 3 key issues in PKU management. First, most patients on diet alone do not achieve effective phe control. As mentioned previously, the diet is extremely difficult to consistently adhere to, and the unpalatable and expensive medical foods and formulas only make this even more challenging. Second, the currently available pharmacological treatments are not addressing the needs of the majority of the PKU patients. And this is due to both efficacy limitations, side effects and convenience challenges. Third, as a result of this poor phe control, many patients are faced with neurocognitive challenges, impacting executive function and quality of life. And in the case of prolonged high phe levels, this can lead to hyperpigmentation, motor deficits, ataxia, seizures and irreversible intellectual disability. As Professor Muntau mentioned, the two main goals of therapy when treating PKU patients are decreasing blood phe levels and increasing dietary protein intake, well known as improved phe tolerance. I want to first focus on the importance of reducing blood phe levels. Uncontrolled blood Phe levels lead to reduced executive function, headaches, anxiety, depression, impairing daily function for these patients. Specifically, there is a significant correlation between blood phe levels and IQ. Across the review of 40 different studies, it was shown that each 100 micromolar per liter increase in blood phe predicted a 1.9 to 4.1 point reduction in IQ and this is meaningful. This just reinforced how important it is to provide PKU patients with a treatment that can control their blood phe levels to within the target phe range. The second goal of PKU therapy is to allow patients to liberalize their diet, allowing them to increase their protein intake through improved phe tolerance while maintaining target phe levels. It cannot be overstated how important this is to both PKU patients and physicians alike. Staying on the diet for life is an enormous burden on PKU patients and leads to them feeling frustrated, stressed, anxious and ultimately limited in their daily life. The implications are significant, not being able to eat the same foods as their friends, being excluded from many social interactions, for example, birthday parties, barbecues, restaurants, school cafeterias and many more. As a result, the ability to ease their diet restrictions is the primary driver for patients to seek new therapeutic options. To put this in context, many PKU patients are restricted to, on average, 5 to 10 grams of protein per day. Compare this to what could be considered a normal meal day for many people. As an example, a breakfast of eggs and bacon with some potatoes, maybe a wrap for launch with some chips and cookies as accompanying snacks for the afternoon, then a dinner of grilled chicken with some broccoli, salad and bread. This would give a total daily protein intake of about 115 grams. That's more than 10x what many PKU patients should consume in a day. Compare this meal on the left of the slide to the images on the right of the slide. PKU patients must vigilantly select low protein foods and weigh them carefully to ensure they strictly limit their phe intake. And the PKU foods required to replace things like bread, pasta, biscuits and other daily staples leave a limited selection for them to choose from. So I mentioned the 5 to 10 grams of protein that PKU patients are restricted to per day. What does that actually look like? The burden of achieving this is substantial. As you can see on the left of the slide, 1 banana, a bowl of rice and a single egg already hits this threshold. To the right of the slide, you can see the traffic light system that PKU patients must live with on a daily basis. They need to stay away from things like meat, tofu, dairy, nuts, pasta. They need to monitor and limit intake of low protein foods, including beans, potatoes and broccoli. They need to be cautious about more liberal consumption of certain foods like fruits and vegetables as well as medical low-protein food, which is allowed. And protein supplements to ensure intake of essential amino acids must be taken up to 3x per day. So what is diet adherence like for these PKU patients? Well, let's hear directly from them. [Presentation]

In discussions with patients, we have learned they have high hopes for a new therapy that can help to ease this burden. The most important driver for patients is a reduction in blood phe to levels that can then be maintained, along with the ability to increase their protein intake, without being impacted by cognitive fog. This is why the phe tolerance data that we have shown is so important to both patients and physicians alike. Of course, they also want a drug that has a good safety profile without concerning persistent side effects. And the therapy should be easy to use, preferably oral, once a day and with easy storage. Now let's hear from some additional physicians about their perspective on PKU. Firstly, Dr. Drago Bratkovic and secondly, Professor Nicola Longo. [Presentation]

Similar to PKU patients, as you just heard, it is important from a physician point of view to see reduction of blood phe and improved phe tolerance as the most important drivers for health care professionals caring for these patients. They want to be able to control blood phe levels, ease their patients' restrictive diets and improve their overall quality of life. We asked 20 blinded health care professionals caring for PKU patients, what they were looking for in a potential new therapy for PKU. They told us that in order to prescribe a new therapy first line, they would need to see a phe reduction of at least 30%, but ideally closer to 50%. They also told us that they would like to see a response rate across their PKU patients of at least 35%, but again, that 60% would be ideal. This market research was conducted before we completed the APHENITY study. We now have the APHENITY results in hand, and it is clear that sepiapterin has emphatically exceeded these expectations. Sepiapterin has reduced blood phe across a broad range of patients, including classical PKU patients, and has reduced that blood phe by 63% from baseline. In addition, we have seen a response rate of equal to or greater than 30% and in 66% of patients. It is clear from the APHENITY results that sepiapterin has exceeded the expectations of the PKU community to ensure first-line usage. We are now preparing to bring this innovative therapy for PKU patients to the market and are extremely excited about the commercial opportunity. As outlined earlier, the remaining unmet need in this space, despite 2 therapies existing, creates a large market opportunity. There are a number of key segments that present low-hanging fruit that we will target. First, patients who have not been trialed on Kuvan or are considered therapy-naive. And this includes, as we have noted in the past, many of the classical PKU patients, where we have demonstrated benefit in both the Phase II and the APHENITY study. Secondly, patients who have not responded to Kuvan. In terms of these Kuvan failures, many experts who have treated patients with PKU across the world have indicated that based on the data they have seen from our APHENITY study, and from their understanding of the mechanistic benefits of sepiapterin, all patients who have failed on Kuvan, should be trialed on sepiapterin. And Ania noted this earlier. Thirdly, patients who have achieved some level of blood phe reduction from Kuvan, but are not well controlled and for whom sepiapterin may deliver a better reduction in blood phe levels. A reduction in blood phe that is clinically meaningful for these patients may significantly enhance their quality of life, potentially allowing them to substantially increase their protein intake and also decrease the use of formula and expensive medical foods. In summary, the potential market opportunity for sepiapterin is composed of a number of key PKU patient segments comprising up to 15% to 30% of the overall global PKU population that are targeted for treatment. As we have noted in the past, we are expecting a price range between Kuvan branded price and Palynziq. And with this in mind, this would put us above $1 billion market opportunity. Turning now to the commercial pillars for success. PKU represents a unique commercial opportunity within the rare-disease space. First, as noted earlier, newborn screening is widely utilized across major markets. This means that babies born with PKU are identified immediately and hence become candidates for effective treatments to control their blood phe levels. Second, once diagnosed, patients follow a well-understood patient journey through metabolic centers where care is carefully managed by the pediatric metabolic specialists and/or geneticists and dietitians. PTC has a good understanding of these centers and the key opinion leaders who work within them. And we have already begun to build a solid foundation of relationships with them through our clinical trials, advisory boards and other key activities. Third, the disease pathology of PKU is well understood with control of elevated blood phe levels, representing the primary goal of therapeutic treatments. And finally, the patient advocacy community is extremely active and well coordinated in the PKU space. PTC is not pioneering the pathway here. We're not trying to understand or decipher complex endpoints or build a natural history program from scratch. For PKU, it's a well-trodden path to success with the blood-based biomarker of phe reduction being recognized by physicians, regulatory agencies and payers alike. PTC is well positioned for a successful commercial launch of sepiapterin. PTC is an expert in developing and delivering life-changing therapies to people living with rare diseases, and we have a proven track record in commercializing these therapies globally. We work closely with our stakeholders to understand the needs of the patients we provide therapies for. And we have a comprehensive working knowledge of the different complexities of the rare disease regulatory and payer landscape in each of the different regions and countries. We have developed a global commercial infrastructure with an established footprint in over 50 countries around the world. And this footprint has an in-depth understanding of the specific needs of each of these countries, including the different access pathways and in particular, early access pathways. Hence, we are well placed to ensure that the launch of sepiapterin is a success and that we can reach the maximum number of PKU patients who can benefit from this new therapeutic treatment. Let me now turn to the cross-functional team at PKU clinics globally that will be called upon by our customer-facing teams. After newborn screening, as noted, geneticists or pediatric metabolic specialists, depending on the country, are the first PKU specialists that see patients. These physicians confirm the diagnosis and begin initial treatment. After a patient's diagnosis has been confirmed, they are referred also to a dietitian, who will work hand-in-hand with the parent and the geneticist or metabolic specialist. The dietician's primary roles are providing a set diet and plan, along with recipes and information regarding medical formulas. The dietitian remains one of the primary health care professionals throughout a patient's lifetime, and generally is the closest to their care, hence, they are also extremely important. Nurse practitioners are also important prescribers and endocrinologists may also assist with diet management and prescription of treatment for PKU patients. Neurologists, while they do support cognitive assessments, do not generally prescribe treatments. Importantly, PKU clinics are well defined and we are aware of the key treatment centers across the regions globally and the key opinion leaders within each treatment center. Over the last 3 years, we have built strong relationships with the PKU community. We not only know where the PKU treatment centers are but we also have a deep understanding of the PKU prescribers and how to reach them. Specifically in the U.S., we know who was writing Kuvan for patients, who is writing Palynziq for patients and the specifics of their prescribing patterns. This will allow a rapid and highly targeted focus on key customers at launch. In addition to the U.S., we know the health care professionals that have patients who have lapsed from treatment. We can precisely identify those lapsed on both Kuvan and Palynziq using this real-world evidence to target patients who have failed or who are unsatisfied with the current therapies. Insights from U.S. clinicians indicate clearly that many PKU patients are treading water and they deserve better. In addition to this, we have established important collaborations with key global PKU networks, including a number of different scientific associations that are seen here. The dietitian and nutritionist communities, as noted, are also critical in the PKU patient care, and we are collaborating with a number of these associations as well. And finally, of course, the PKU patient community is extremely active, and we are working closely with many of the global associations. Overall, we are now well integrated into the PKU community and have developed a comprehensive understanding of the networks required for rapid dissemination of information and advocacy. As we prepare for our commercial launch, we are setting the stage to bring sepiapterin to the majority of PKU patients. As Ania stated earlier, the APHENITY results are extremely convincing, and we will now focus on sharing this data broadly to build the confidence in the efficacy of sepiapterin beyond our clinical trial investigators. We will focus on the differentiated mechanism of action that has generated these results and the quality of life benefits that this will bring to patients, and we will engage with the PKU community to ensure they are informed and ready to initiate treatment with sepiapterin upon approval. We will also differentiate sepiapterin with our data package and mechanistic advantages. We will also differentiate our product through the support we provide the PKU community of patients and their caregivers. We have a road map for achieving this, initially starting in the U.S. with our PTC Cares team. PTC Cares is our support program designed specifically to help patients and their caregivers get started on different PTC medications and provide personalized support throughout their entire treatment journey. Market access is always critical, and we are currently heavily focused on our pricing and reimbursement strategy in early access programs, and this will continue throughout launch and beyond. Sepiapterin represents a potential game-changing therapy for PKU patients and a significant commercial opportunity for PTC, and the team is extremely excited to bring this therapy to PKU patients in need. With these strong data in hand, our next step is to request pre-submission meetings with regulatory authorities, which we will do so as soon as possible and as Matt noted earlier. And then based on agency feedback, we plan to move forward with the NDA and MAA submission to name a few. We are initiating our launch preparations as laid out today, to achieve the potential $1 billion market opportunity. With that, we will now turn back to the operator for Q&A. Operator?

[Operator Instructions] And our first question comes from the line of Kristen Kluska from Cantor Fitzgerald.

Great presentation, and thanks for providing us with these details. First question I had is how you're thinking about the cadence of a potential launch? I guess perhaps it's really not your typical rare-disease launch as you already have a pretty detailed map here about identifying patients. And then the pillars of unmet need you flagged, wondering if you expect one of these target markets to initially gain more traction over others initially?

Yes. Thanks, Kristen. We appreciate the question. So starting with your first question around the cadence, I think, as you noted, it is a pretty untraditional launch for rare disease. As you highlighted, newborn screening allows us to ensure that we have the patients identified, the treatment centers of excellence identified, and we've already begun working with them. We have a clear understanding of disease pathology, which allows us a smooth and efficient discussions from the payer side, and we're already engaged with a well-connected and coordinated patient advocacy community. So from our perspective, we see it as really around differentiation about ensuring that upon approval, both physicians and patients have a clear understanding of the advantages, both from a mechanistic point of view and also how that pulls through with the APHENITY data in why this treatment will bring benefit to PKU patients, both on the aspect of phe reduction as well as increased protein intake from a phe-tolerance point of view. So overall, we expect this to see a lot more rapid uptake, particularly in the U.S. being our first market and concentrated market than you would traditionally see with rare disease. And then obviously, we're moving ahead with European markets and a number of other countries as we progress outside of the U.S. And then the second question you had around the market segments and whether or not we see that differentiating in different regions. I think one of the things that I would probably highlight is just the difference between the U.S. and ex U.S. As we've talked about in the past, I think ex U.S. is a little bit more untapped. There are more therapy-naive patients, more patients that haven't been able to access Kuvan. And so I think we might see a faster uptake in the therapy-naive space outside of the U.S. versus in the U.S. But other than that, I expect it to be fairly consistent across the board.

Okay. And last question for me is what your expectation on therapy, how much room there will be for diets to be liberalized? And then despite these patients, understanding the strictness of this diet, how often are there mistakes or bumps that a therapy like this gives them some comfort room and making these errors when they underestimate the protein intake?

Yes, absolutely. So on the first question around diet liberalization, I think one of the things that we're going to learn a lot from is exactly the phe-tolerance aspect of the long-term extension study. And obviously, as patients come within those target phe levels and then are able to increase their phe intake, making sure that we monitor that ability to maintain those phe levels over time is really important. In addition to that, and obviously, as we shared, our initial data looks really great, and we expect that to continue as we continue to have the patients enrolled throughout the 50 as we've highlighted and then release data in the coming months. The second question around will there be bumps in the road? I think that's exactly the job of the dietitian and the nutritionists at the clinic, very tightly managed alongside the patient. They have clear diet plans in place, clear recipes that the dietitians work with the patients on. Obviously, patients are humans like all of us. So there will be some bumps in the road, but I think that the close alignment between the dietitian and the patient is what makes this -- limited bumps in the road.

And our next question comes from the line of Kelly Shi from Jefferies.

So on one of the slides, you mentioned targeting 15% to 30% of overall patients. Could you help to understand what's the split of a mild to classic patients population?

Yes, I think from that perspective, Kelly, I think that was for modeling purposes to help you understand how we get to the $1 billion plus opportunity. I think what's important is that classical PKU versus mild and moderate PKU differs from geography to geography, region to region. So in some cases, classic PKU represents 15% and in other geographies up to 50%. And so with that split, it's very hard to provide an average across the full globe. So from that perspective, we haven't broken it out per the different segments. And obviously, I think we believe that we have an ability to achieve a lot higher than that 15% to 30%. We're just giving that as modeling purposes to achieve the $1 billion plus. But as we transition to launch, we'll be able to provide a lot more clarity on the patient segments that we're seeing through the treated patients.

Okay. Terrific. And also I have a follow-up. So you have shown pretty impressive phe reduction in both mild and classical PKU patient population. I'm curious, so based on the physician feedback, what kind of treatment will come over time on the increasing of patients' dietary tolerance for sepiapterin in each group? Would they feel like comfortable to adopt it as a mainstay drug for treating both patient subgroups? And are they like a different standard for each group in terms of improving dietary tolerance?

Yes, thanks, Kelly, for the question. It's Matt. So I think one of the encouraging things we're seeing in the data are the -- a very, very strong magnitude of effect in terms of phe lowering, regardless if you're mild, regardless if you're moderate and regardless if you're severe. And in the data we are seeing in the phe tolerance -- included in the phe tolerance data we've shared, there are classical PKU patients there. So again, we're seeing the ability to liberalize patients in the phe-tolerance protocol to beyond the RDA for phenylalanine and still maintaining control. So I think this very much gives us confidence that we can achieve liberalization regardless of the severity. And obviously, phe intake is managed in close collaboration, as Kylie said, with the nutritionist and it's tightly managed based on age, sex and also severity. But again, what's so encouraging here is we're seeing uniformity of strong response regardless of any of those individual patient or disease factors.

And our next question comes from the line of Eric Joseph from JPMorgan.

This is Billy on for Eric. Just wanted to ask a little bit about sort of proportion of classical PKU patients who would see a benefit from using a BH4 medic. And then kind of following on from that, like what proportion of classical patients do you think have the residual PAH enzyme activity to make use of a therapy such as this.

Yes. Thank you very much, Billy, for the call. I think, again, one of the things that were very impressive in these data were the proportion of classical PKU patients in whom we registered a greater than a 30% reduction in baseline phenylalanine levels. And again, while there are, of course, patients who are homozygous for the null mutation and have virtually no enzymatic function, there are actually very few of these patients. And clearly, a co-factor and also chaperone effect is likely to be less impactful on them, but that's not the case for the vast majority of patients who are categorized as classical.

And I would add in addition to that, the classical PKU prevalence, as I mentioned, varies across geography. I think one of the things that's well accepted and Ania mentioned this in her prepared remarks is there is a huge unmet medical need in these patients, they're frustrated and they're looking for additional therapies. And so while in some cases, this represents about 15% of patients, in other geographies, it can represent up to 50%.

And just following on a little bit from that. Do you think that there'd be any sort of labeling implications from this or no?

Billy, I think there's -- typically, the way the label for these therapies goes is for the treatment of hyperphenylalaninemia. There's not -- from a regulatory standpoint, a binning of patients as classical, as moderate and mild rather as the treatment of elevated hyperphenylalanine due to phenylketonuria. So there's no discerning -- based on severity. And obviously, we have the data to support the treatment of all PKU patients regardless of age, regardless of severity and therefore, would expect to have a broad label.

And our next question comes from the line of Sami Corwin from William Blair.

I guess I was curious, obviously, sepiapterin has a better therapeutic profile compared to Kuvan. But since Kuvan only achieved about $500 million in peak sales, what factors do you think are going to be most important in achieving that $1 billion-plus opportunity? And then I was wondering if you could provide any color on variability of responses in that phe tolerance study, given there's no earlier approach there?

Yes, absolutely. Thanks, Sami. Just starting with the opportunity, I think there's two main factors that we look at for Kuvan peaking at $0.5 billion as to why we think we can get to multiples of that. I think, first and foremost, is the ability for us to treat a broader patient population. As Ania talked about in her presentation today, not only are we targeting those that have tried and failed Kuvan, those that are not well controlled on Kuvan, but also therapy-naive patients. And so this is a broader patient population than Kuvan was able to treat. In addition to that, the second part of why we see PTC being able to achieve multiples of Kuvan revenue is also because we see a somewhat untapped ex U.S. opportunity. There are a number of markets that PTC has a proven track record in and has a strong global commercial infrastructure that Kuvan has even not reached or has struggled with pricing and reimbursement. And we see with the data that we have in hand, coupled with the phe tolerance data that we're collecting through the long-term extension and ability to secure favorable pricing and reimbursement in these ex U.S. markets. So it's twofold. It's the broader patient population and the ability to tap ex U.S. markets.

With regard to your second question, Sami, so obviously, these are early data, but we're seeing pretty consistently across these subjects that their phenylalanine levels are staying below that 360 micromole per liter threshold. In fact, that's how the entire phe tolerance protocol works. The patients only move forward in the protocol if they're maintaining control, which is defined as less than 360 micromolar per liter with the increasing phe intake. So we're seeing very consistently strong results across those patients.

And our next question comes from the line of Robyn Karnauskas from Truist Securities.

I have a few. Let me just start with just a general question. I guess in your market research that you've done since you've had this data, what is the latest thoughts on like how payers will view having to step-through Kuvan? Second question is you talk about efficacy in classical patients. A lot of these patients are at centers and some get lost to follow-ups. Like have you done some research to -- especially in the classical world, like how many patients are lost that you may not get back, BioMarin will often talk about that. And the third question is following up on just the last question. So you had 12 patients in the beginning and then 4 in the end for the OLE. Just how many patients are actually reaching that point where they can actually get to that low diet and does that -- and what does that mean for them? Can they have 2 eggs and a chicken, like put it in perspective for us as far as like what kind of diet they can actually have as they get off this drug?

Yes. Robyn, I'll take the third question, and I'll let Kylie take the first two. So I think the important thing to focus on here -- well, two points. One is the 12 to the 4 is more representative of just the point in time the subjects were at when we did the data cut, which was obviously back a few months ago. So they are able to stick through this protocol. The important thing to point out here in terms of understanding what that liberalization can mean is the fact that they're surpassing the RDA for protein in the diet. So that tells you that if you're getting a -- RDA, you're coming closer in line with a less restricted diet and more what would be a typical diet that would meet the RDA thresholds for men and women.

And Robyn, I'll pick up on your first two questions. And I think just in addition to what Matt said, the dietitians will obviously help guide what that means from a phe-intake point of view. If you remember the traffic light I touched on earlier, it allows them to move a little bit into the more yellow phases, but that's managed very closely with the dietitians. So on your first question around the opportunity and then -- sorry, your first question around step-throughs. From a step-through perspective, I think if we look at the U.S., we've had a number of different conversations with U.S. payers. And then we've also had a number of conversations with ex U.S. payers as well around what the data means and what the treatment algorithm will look like. I think, first and foremost, with the U.S., if we look at a market where there is a number of patients that have already been trialed on Kuvan and have failed or have been trialed on Kuvan and are not well controlled over time. So either come off the drug, considering that there's medical documentation that has been established for that step-through. So even in the worst-case scenario, if a payer did expect them to have reinitiated medical documentation, in that case, again, it's a blood test. The patient will need to go on treatment for, say, a week, a blood test would be completed and then they would assess therapy effect. So it's not a complex process. Even if, Robyn, you compare that to all of the work that the PTC Cares team has been doing for step-throughs from prednisone to Emflaza, this is a lot less complex, a lot more streamlined, and we don't see a hurdle around that. On the therapy-naive side, especially with classical PKU patients, where there's been no benefit demonstrated previously, we don't expect step-throughs because there is no benefit there. Ex U.S., I think what differs there a little bit is the importance of phe tolerance data. Ex U.S., as you know, medical foods and formulas are reimbursed. And so being able to liberalize that diet is so important from a payer point of view to help limit the cost that comes to managing that diet. And so again, in that case, being able to demonstrate to payers ex U.S., the importance of phe reduction alongside increase of phe tolerance is the data -- package that we expect that will allow us favorable pricing and reimbursement. In regards to...

That's super helpful. Let me ask one follow-up because it's relevant to what you just mentioned. So when you're talking to -- when you're dealing with patients and the thought about trying something new, what are your thoughts on how -- I guess let me just take a step back. The key questions I get from investors are, I guess, when will we actually get the next OLE data set? When will we get the genotype of the patients that are classical because I think there are some people that are just skeptical that they may be the more -- they may have the genotype that may be more willing to be responsive to this drug? So this is really more of a catalyst question. And any insights that you can give into what the patient reception is and how -- where they are with these new products are like I'm sure Karens are like all over this. And then I will be quiet.

No worries. Okay. So I think starting with the OLE question and the genotyping, I think what's -- what we're seeing consistently across all the different data sets is treatment benefit in all patients' severity types and ages. And I think that's really reassuring to us. There's obviously more to come, as you alluded to. We don't have a clear cadence on exactly how we will communicate that. But obviously, we'll continue to communicate through investor forums and then also medical conferences. In regards to patient awareness, I think this is a very well connected and coordinated patient community, and our teams are engaged with patient advocacy groups. As other physicians engaged with, obviously, the parents and the patients, as you alluded to, and they're extremely excited for a new treatment option. There's not been anything available for a number of years, and they're very excited on the precipice of potentially having another therapy available to them, particularly one that is not only able to lower phe but also have the ability to potentially liberalize the diet.

And our next question comes from the line of Debanjana [ Chatterjee ] from Citi.

I'm Debanjana on behalf of David Lebowitz from Citi. So we were curious specifically on labeling like how sepiapterin label might compare with Kuvan? And specifically, if the label could show the breakdown of sepiapterin benefit in classical subgroup?

Yes. Thank you for the question, Debanjana. It's probably too early to talk about label specifics. Obviously, we're moving towards the FDA interactions and the submission of the NDA. However, based on the strength of these data, certainly relative to the Kuvan label, we have a high degree of confidence that this would be a label for the full spectrum of patients with PKU of all age groups, given the fact that all age groups were enrolled and all levels of severity. As we mentioned earlier, there's not really a differentiation on a regulatory standpoint of different severities here. It's really the treatment of hyperphenylalaninemia, which is what the Kuvan label is. And obviously, given the strength of the data and our data set on the classical patients, we have every expectation that we would have a label that would cover the full spectrum of severity in addition to age.

And maybe I have a follow-up. So do you think the payers would want to see diet liberalization data on sepiapterin prior to coverage decision?

Yes. I think, particularly as we've talked about, particularly ex U.S. payers, are very interested in phe tolerance data specifically for the importance of the fact that medical foods and formulas are reimbursed ex U.S. And so it's quite important that they see how the diet is impacted by a phe reduction with therapy. So yes, we do expect that the phe tolerance data will be a key component of the payer package outside of the U.S. In the U.S., however, it is a much more streamlined focus on phe reduction and the importance of reducing phe reduction.

And our next question comes from the line of Brian Abrahams from RBC Capital Markets.

This is Joe on for Brian. Just curious about whether if there's going to be any additional screening beyond what is integrated in the newborn screening that may be required before patients can be put on sepiapterin to really test your responsiveness given that the drug can potentially should be lowering across a broader range of patients? And I know we already talked about reimbursement dynamics and step-throughs. But also just wondering if the reimbursement dynamics can be potentially different between pediatric versus adult patients since Palynziq is available for that population there?