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

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics Sephience FDA Approval Conference Call. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Ellen Cavaleri, Head of Investor Relations. Please go ahead.

Thank you for joining to discuss the FDA approval of Sephience. I'm joined by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Pierre Gravier. Before we begin, I refer you to our forward-looking statements, which are posted on our website, as well as the risk factors in our most recent 10-K. I will now pass the call over to our CEO, Dr. Matthew Klein.

Thank you all for joining us today at this pivotal moment for PTC and the PKU community. I'm very excited to announce the FDA approval of sepiapterin, a once-daily oral therapy for children and adults with PKU that will be commercialized under the trade name Sephience. Sephience was approved with a broad label inclusive of all disease subtypes and all ages from 1 month of age upwards. I want to begin by thanking all the patients and families who have participated in the Sephience clinical studies as well as the physicians, dietitians and care teams at our clinical trial sites. And a very big thank you to the patient organizations, including the National PKU Alliance and flok for their continued partnership. As we have discussed, we expect Sephience will be the foundational product for PTC's sustainable growth and path to profitability, and I'm incredibly proud of our team's efforts to help reach this important milestone. With FDA approval, Sephience is positioned to become the new standard of care for children and adults living with PKU. The data from the Sephience clinical program demonstrated the therapy's ability to provide robust phenylalanine level reductions and the potential for PKU patients to liberalize their highly restrictive diets. Efficacy has been demonstrated across all key disease subgroups, including BH4 nonresponsive patients with classical PKU. In addition, Sephience has been demonstrated to be safe and well tolerated. There is a significant Sephience commercial opportunity. There are an estimated 17,000 PKU patients in the U.S. with over 300 additional individuals diagnosed annually through newborn screening. Despite there being 2 approved therapies, there remains a significant unmet need as the vast majority of patients are not on any therapy and would benefit from a safe, well-tolerated and highly effective treatment. We believe the Sephience revenue opportunity in the U.S. exceeds $1 billion, given the strength of the clinical data and the ability for Sephience to address all key patient segments. In addition, we have experienced customer-facing teams to maximize the revenue opportunity. Our teams have demonstrated the ability to successfully commercialize rare disease therapies, including starting and maintaining patients in genericized and competitive markets. Furthermore, we have guided to having IP protection at least until 2039. We are all incredibly excited to have reached this approval milestone and to begin making Sephience available to all those who may benefit. I will now turn the call over to Eric, who will provide details on our U.S. commercial launch. Eric?

Thank you, Matt. I want to begin by expressing our immense excitement at reaching this significant milestone. For the past decade, our customer-facing teams have successfully launched multiple products globally. None hold greater importance for the future growth of PTC than the launch of Sephience in the U.S. today. Our goal is to swiftly deliver this highly differentiated therapy to the thousands of PKU patients living with the burden of this lifelong debilitating disease. We have a world-class commercial team ready to successfully launch Sephience. Our teams consist of experienced in-house employees with rare disease experience across all functions, including marketing, sales, medical, market access, patient engagement and patient support services. We are well positioned to leverage our core launch capabilities and more than 8 years of experience in commercializing Emflaza to drive early and rapid Sephience adoption. We are ready to launch and expect first shipments to the U.S. patients in August. I would like to share some details on the key aspects of our Sephience launch plan, including the PKU landscape, our customer engagement strategy, our access and pricing strategy and finally, our launch metrics. It will be clear that we have the knowledge, experience, passion and plan to realize the full potential of the Sephience commercial opportunity. I will begin with a review of the PKU landscape and our customer engagement strategy. Our team has profiled over 1,200 potential prescribers at 104 PKU centers of excellence. These prescribers and centers will be our immediate focus as they account for more than 80% of the PKU claims data and treat the highest concentration of U.S. patients. As Matt mentioned, our data support the ability to address all key segments and the full spectrum of the approximate 17,000 patients in the U.S. In terms of sequencing, our initial focus is on the patients who recently failed or are not well controlled on existing therapy and those who could be switched from existing oral therapies. These patients account for approximately 40% of the PKU population in the U.S. Our focus will then progress to treatment-naive patients who could benefit from a new effective treatment. To date, our customer-facing teams have focused on providing disease state education, but will now pivot to educate and promote the benefits of Sephience to health care providers. To complement our face-to-face promotional efforts, we have developed digital tools, social media channels, online disease awareness campaigns and advanced customer analytics to drive brand awareness of Sephience. In addition, we continue to engage with the PKU community to empower patients and caregivers to have informed discussions with their health care providers about the potential benefits of Sephience. Our key initiatives with organizations such as the National PKU Alliance and flok include patient education programs and PTC Reimagines PKU, where patients and caregivers opt in and share personal experiences with the community. We look forward to continuing to build on these already strong relationships with these key stakeholders. Now I will detail the work our teams have done on market access to ensure immediate uptake at the time of launch. Effective market access involves the work of our regional account managers, medical science liaisons, market access experts, patient engagement specialists and case managers. These teams are dedicated to educating health care professionals on the benefits and differentiated profile of Sephience and ensuring PKU patients have access to care. I want to specifically emphasize the crucial role of our PTC Cares team in the launch. This group of case managers provides white-glove service to each patient, offering insurance verification, co-pay assistance and coordinating specialty pharmacy shipments to help patients quickly start and stay on Sephience therapy. The PTC Cares team is ready today to process patient start forms and address Sephience inquiries from patients and health care providers. Our market access teams also bring years of real-world experience with Emflaza in efficiently managing prior authorizations and step edits and are ready to proactively manage insurance requirements. I also want to highlight PTC's long-standing and unwavering commitment to ensure that all eligible patients receive access to our treatments. All commercially insured PKU patients can expect a $0 co-pay per month upon enrolling in our PTC care program, and we anticipate that most individuals with Medicaid and Medicare coverage will have nominal out-of-pocket costs. I will now detail our payer discussions and pricing strategy. A key aspect to the success of the Sephience launch is its compelling value proposition for payers. Throughout the year, our team has engaged with national and regional payers in preparation for launch. Based on the robust Sephience data from our clinical trials and insights from our extensive market research, payers recognize the unmet need, the disease burden and the clearly differentiated profile and strong value proposition of Sephience. Both commercial and government payers indicate they expect very low barriers for access to Sephience with typical prior authorization requirements linked to the indication on the label and only a small number of payers potentially requiring step edits. In setting the price for Sephience, our primary objectives were to leverage brand differentiation and minimize payer restrictions while maintaining a narrow global pricing corridor as we introduce Sephience in the U.S. and other key markets worldwide. The U.S. wholesale acquisition cost of Sephience is $41,000 per month based on an average patient weight of 45 kilograms. This average weight is estimated from our clinical studies and long-term claims data of sapropterin in the U.S. Health care providers will determine the prescription dosage for each individual patient and adjust dosage accordingly over time. Sephience will be available in 250-milligram and 1,000-milligram sachets that is easily diluted in a convenient, once-daily oral formulation. The final net price to payers will be determined by compliance, adherence and our payer mix, which we expect to be approximately 65% commercial and 35% Medicaid, Medicare. Finally, we would like to share the launch metrics that we intend to provide externally. We expect to share the number of patients on commercial therapy, patient start forms received, the payer mix and health care provider prescribing and payer dynamics. We plan to initially share these metrics along with the progress from our international launches starting at our third quarter earnings call. In summary, we are incredibly proud to make Sephience available to the PKU community in the U.S. and worldwide. We believe the clinical profile and our expertise in launching rare disease therapies position Sephience to become the future standard of care. We stand ready to support all children and adults with PKU to access this new, highly effective treatment. I will conclude by extending my heartfelt gratitude to the PKU community for its unwavering support of PTC over the years, helping us reach this important milestone of FDA approval. Our team is excited to continue our partnership with the PKU community long into the future. I will now turn the call over to the operator for Q&A.

[Operator Instructions] Our first question coming from the line of Kristen Kluska with Cantor Fitzgerald.

Huge congratulations to the team on this approval and great day for the PKU community. First question I had for you is you made a comment that you're targeting about 80% of the focus from the claims data. But how large is the claims data relative to the actual prevalence since in this indication, we know it because of newborn screening?

Kristen, thank you for the question and the congratulations. It is indeed an exciting day for the community. Just want to emphasize first that we intend to target the entire population of 17,000 patients given the label and given the data supporting that we can reach all of those segments. I think -- I don't know if, Eric, you want to break down a little bit of what those data you talked about referred to. But really, this is just -- Kristen, these are just sort of overall guides and directional in terms of early efforts and are all estimates, but I'll let Eric provide a little more detail.

Yes. Kristen, thanks for the question. We're really targeting these centers of excellence. There's 104 of them, and approximately 1,200 health care providers really sit in these, what we call Tier 1 or upper decile. These are physicians that have a significant amount of PKU patients. And what we're doing right now is targeting the entire population, but there is really a two-pronged approach in terms of our targeting strategy. The first one really is obviously to make Sephience available to all patients in the U.S. However, we're focusing really on those centers that are engaged with treatment already as well as differentiating Sephience with those patients who have failed on existing therapies. So if we look at our overall deciles and the prevalency, 80% really accounts for approximately 104 of those centers of excellence.

Okay. And then I know you said that the naive patient group is a big focus in addition to the ones that previously failed or couldn't tolerate other medicines. But do we have a sense of the breakdown of naive patients that are naive just because the subtypes of PKU they had weren't appropriate for other medications such as classical? Or is it other reasons just that there's no impact to diet liberalization, so they didn't really have any interest to get on any drugs in the first place? I guess I'm really just trying to understand why there are so many patients with PKU that remain treatment-naive despite 2 therapies on the market before today.

I think, Kristen, it's a little -- it's what you said. It's hard to pinpoint the exact breakdown, but there are a number of factors that account for that sort of therapy naive. Part of it is an understanding from past experience that there are certain patients, i.e., classical patients who tend not to have benefited from sapropterin, either generic or branded, right? That's one. And then there's others that are -- were tried but didn't fail -- or didn't succeed or weren't able to get enough of a benefit that it made it worth taking a therapy in addition to the highly restrictive diets. I don't know that we have an exact breakdown of which falls into both camp, but they're all grouped in an area. And as Eric alluded to, a lot of these patients have had recent contact with specialty centers, with these centers of excellence, and that's really going to be part of that first wave that we're hearing about that are on some of the waiting lists that we've all heard about in addition to those who are already on Kuvan or sapropterin, either branded or generic. And our data consistently show that patients who have any benefit in Phe reduction with sapropterin have had a much greater reduction on Sephience. So that's why we're seeing that first wave consisting of both of those groups of patients.

Okay. And one last question for me. In the instances where there will be step edits, is a blood test to determine Phe levels good enough here? Or what about if the patient has said that they've had prior exposure with the branded drug?

Eric, do you want to cover that [indiscernible]?

Yes. I think -- in our payer meetings, what we know is that step edits are really easily managed. These patients here, especially that target group, which is very substantial that have either failed or on current therapies right now that are looking for a more effective therapy, there's already prior documentation. So what we've seen with most of our payer research as well as the meetings that we've had is that there will be very minimal step edits. And it will be a very simple test that we can do in a matter of days or weeks if required. The vast majority of payers are -- would actually require prior authorization just to the label. And our face-to-face meetings have really documented that. And keep in mind that these health care providers and these centers are experts because they've had current therapies and they've been able to get Phe reductions very quickly and been able to get those information back to us so that we can get patients on Sephience.

Our next question coming from the line of Judah Frommer with Morgan Stanley.

Congrats on the approval from FDA, very exciting. Just a couple of follow-ups. I guess, first, just in terms of patients that have failed prior therapy, how engaged are they with their physician or with their care team? Is there -- we've been hearing that there's a risk of patients being kind of lost to follow-up the older they get and the further away they've gotten from effective therapy. And then second, just -- you mentioned kind of $1 billion peak sales opportunity, which is probably a bit higher than consensus. Is there anything you'd highlight specifically that makes up for the delta between that $1 billion and where consensus peak sales are currently? Is it market share? Did you notice anything in pricing or anything like that?

Thanks for the questions, Judah. Let me tackle the second one first and say it's -- I think consensus is where it is, and there's a broad range of estimates. And I think it's not just one. I think now that we have the price, I think everyone can now appropriately put what we think in terms -- what pricing looks like. As we've said, we intended to price at a premium to Palynziq given the highly differentiated features of Sephience and the discussions we've had with payers based on the value of the therapy that the therapy brings both in terms of efficacy as well as safety, which, of course, is very important. So we've always said, if you look at the population of 17,000 patients and looked at the fact that the vast majority of patients are not currently on a therapy and take estimates of market penetration for a highly differentiated orphan therapy, plug in the price, what we said, what the average price is based on 45 kilos and the math gets you, I think, pretty -- to our $1 billion estimate and maybe in some cases, more. But we've been very clear that we believe this is at least $1 billion opportunity in the U.S. And of course, there's also the contributions ex U.S. We're incredibly excited about the European approval. The German launch is underway. The European launch is underway. And we expect there to be contributions outside the U.S. from Europe, from Japan, from Brazil and from other countries around the world as we said this is a global launch. Regarding your first question, there are -- as Eric mentioned in his presentation, there's these patients who may have failed in that first wave who are still pretty attached to the centers, right? Just because they're not on the therapy, there's still a need to interact with the centers, the dietitians because diet modification, diet nutrition supplements are then the mainstay of therapy for those who are not on pharmacologic treatment. And then there are those who may be a little more distant from the centers just in terms of time. But I think this is a misnomer. They've been called by some lost to follow-up and what we hear from the patients is, we're not lost. We're actually right here. And we've heard that there's a great deal of interest for many to get on a therapy that could be effective in reducing phenylalanine, could be effective in allowing for diet liberalization and be safe and well tolerated. So that group may not be the first wave we're targeting in the launch, but we already have plans and already have work underway to begin to make sure that we access those patients because, as Eric said, we're very much committed to making sure that any individual who may benefit from this therapy can receive it.

And our next question coming from the line of Tazeen Ahmad from Bank of America.

I apologize for the background noise. I have a couple of questions. Can you clarify if you're going to be doing a free drug program, at least initially as part of the launch? Secondly, I know it's a little bit of a range, but curious how you're thinking about the time it's going to take at least initially from the time a doctor writes the script until the patient receives drug. And then I have one more follow-up after that.

Tazeen, thank you very much for the questions. Eric, do you want to take those?

Yes, sure. Thanks for the questions, Tazeen. I mean, right now, we have no -- we are not planning on offering free drugs simply because we know that Sephience is a very convenient and oral therapy that can -- where we can measure Phe within a matter of days or weeks. And payers like that. They like to see a very rapid response. Payers right now will look more for Phe reduction than anything else, and we can measure that very quickly. When we presented the profile, payers have said that there's no need for free drug here. So there -- we won't be rolling out a program on that. With regards to time from patient start form to actual fill, we anticipate that to be very dependent on whether or not there's a step edit or prior authorization. However, I would say that the centers of excellence are really quite experienced at this. Again, they've had treatments, high-cost treatments for PKU and rare disease, and they've been able to get products through in matters of days or weeks. Now this is going to depend, of course, depending on whether it's private commercial insurance or Medicaid or Medicare. But we would anticipate shipping products sometime in the next few weeks to patients here in the United States. And the time frame could be days and probably no longer than a few weeks other -- outside of a step edit.

Okay. And the last question is, how should we be thinking about gross to net maybe for the rest of this year? We know it will improve over time, but if you can give us some guidance for modeling.

Yes, sure. I think that's going to vary a little bit because it's going to depend on the payer mix. Right now, we're estimating approximately 65% of the patients that will be on commercial plans and then about 35% will be on Medicare, Medicaid or some kind of government plan. Now in the initial phase of the launch, we could have probably more private plans initially. And then over time, that would recalibrate. So it's going to be kind of hard to give you that specific number right now. But I can tell you that, that will be one of the metrics that we'll be providing in our upcoming calls.

And our next question coming from the line of Ellie Merle with UBS.

Congratulations on the approval. Just in terms of the patient segmentation, you mentioned that about 40% of the U.S. population have either failed or are not well controlled on therapies. I guess what's the mix in that 40% of those who have failed versus those that are not well controlled? And I guess of those that have failed, how often do these patients still see their physician or are actively under care? And I guess of those that have failed, what's the mix between pediatric and adults? And then lastly, in terms of the initial uptake, what's your expectation in terms of the mix between pediatrics and adults?

Yes. Thanks for the questions, Ellie. Just to clarify, I think the 40% that Eric gave was just of those who have been closely or had contact with the centers within the past year. I think in terms of thinking of the overall population, the number we've shared previously that have tried -- we've said about 70% of patients have tried therapies, and maybe about 70% of them have tried and failed. So again, these are all estimates. It's very hard to have exact numbers. But the number Eric referred specifically to is what our research indicates of those patients who've been in close contact within, say, the past year or so in terms of trying or failing with the centers, which is why there are folks who have recently expressed an interest in being on a drug or recently tried or failed and sort of a prevalent at the centers and would be a logical part of a first wave of patients who might get on drug in addition to anyone who's currently on a therapy that would switch. I don't know we have an exact breakdown of kids versus adults. But Eric, do you want to talk a little bit how we're thinking about just pediatric versus adult in that initial wave of patients that we treat in the early launch?

Yes. And to Matt's point -- thanks for the question because to Matt's point, really, we're targeting those who have actually seen their physicians very recently, and that's a very substantial number. Over 40% of these 17,000 patients have been in their physicians' office at least once or twice during the course of the year and have either failed or poorly controlled on treatment. So you know that they're actually very engaged in their treatment. And there's another percentage of them, obviously, that are on existing treatments that may benefit from a new therapy. This is a cohort of patients that are very, very engaged in therapy. And if you want to call it the low-hanging fruit, those are the ones we'll be going after in those 104 centers because we know that they visit their physicians pretty regularly. Your question about how often do they visit, the ones who are actively engaged will visit their offices at least once or twice a year, sometimes more frequently and of course, have different ways of communicating to their physicians. In terms of split between pediatric and adults, we anticipate to have probably a little bit more of the pediatric or, I would say, adolescent population given that there is approximately 45 kilograms in the average weight. We know that there's a very high unmet need, particularly in classical patients and others with high Phe levels. Physicians have indicated that those patients who are younger and adolescents are going to be the areas they'll want to treat first because of the high unmet need. And of course, Phe control, diet control and the long-term cognitive consequences are one of the priorities. So we anticipate probably in the initial stages more adolescent and pediatric. But over time, we're looking at everyone in that 17,000 population.

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

This is [ Jenna ] on the line for Kelly, and we wanted to offer our congratulations on the approval as well. We wanted to -- we noticed on the label -- seems to mention a restrictive diet. So we're wondering how do you plan to highlight your diet liberalization data in your marketing efforts? And to what extent do you expect that to help engage and convert patients? And we have a second question, which is that we noticed you mentioned you're looking to switch patients from current orals. Could you comment on potential switch dynamics with Palynziq as well?

So [ Jenna ], thank you very much for the questions and for the congratulations. The -- just -- your first question was about it saying that -- in the label saying that Sephience should be used in conjunction with a Phe-restricted diet. And that's just a fairly standard view from the FDA to remind that a lot of patients start on the diet, they would then get a therapy and that the diet should be monitored along with the therapy so that when diet liberalization or if diet liberalization occurs, it should be done under proper guidance. And that's something that we've heard a lot about from patients in the study that the nutritionists work very closely with the patients to ensure a gradual liberalization of the diet. I think one thing is for sure true from the feedback we've heard that our presentations and publications have gotten the word out that in the long-term extension study, the interim data we've reported already to date show that patients have been able to liberalize their diet, those in the Phe tolerance portion of the protocol. We've previously presented that 97% of the patients in that protocol have been able to liberalize their diet and that 2/3 are reaching above the recommended daily allowance of protein, which again is very important and impressive results for patients. So those data are known. We will leave it to the physicians and the health -- the nutritionists and the health care teams to work with the patients to ensure that when appropriate, the diet is being liberalized in a thoughtful manner. In terms of the -- your second question was regarding switch patients and the current oral therapy and switch dynamic from Palynziq. I don't know, Eric, do you want to comment on what we've heard in terms of our physician work on that?

Yes. We had a lot of work with current therapies. And obviously, if a patient is doing well on Palynziq, that's not going to be our initial focus. We're looking for all patients who are on therapy who potentially are looking for a more effective oral therapy, a convenient oral therapy. And we know that Palynziq has its limitations. It's for adults only. It has a lengthy titration period. There are safety and anaphylaxis issues. And of course, it's an injection that has a certain degree of burden for patients. We believe that Sephience is really going to be the potential standard of care because it should be the first-line oral therapy that provides a broad spectrum of efficacy to all patients, including those who have been on Palynziq. But anecdotally, while we have heard patients who have failed on Palynziq, of course, we will provide Sephience therapy. But patients who are stable is not our initial focus.

Our next question coming from the line of Brian Abrahams with RBC Capital Markets.

My congratulations as well. Two questions for me. First off, just on the price point, I think you've talked about a premium to existing therapy. It is substantially higher than what's out there. So I guess I'm curious if we could talk a little bit more about what shaped your pricing decision and the degree to which that particular price point was tested with payers? And then secondly, I was hoping if you could expand a little bit more on the wait list out there at the centers of excellence, just the scope of those wait lists and maybe the time lines for center readiness to prescribe and for formulary placement that would enable prescription.

Brian, thanks very much for the questions. I'll just make a quick comment on the wait list and then let Eric tackle your question about price and then a little more color on the center dynamics. So as we've talked about, the feedback we've gotten is that as we did our work in mapping the centers of excellence, the care teams at the centers of excellence, it's our understanding that a number of them have generated lists of patients who either expressed interest to get on Sephience as soon as possible or individuals that the centers know would be very good initial candidates to get on drug, whether that means switching someone who's on once-a-day oral therapy for one that has been shown to be highly effective and safe and well tolerated or maybe someone who's tried and failed, for example. We've also had our opt-in program, which Eric mentioned on the call, PTC Reimagines PKU. And that's an opportunity not only for patients and families, but caregivers and others to opt into us then to provide them information and start the process of helping them get on the therapy. So we think both of these approaches will be very helpful in that initial wave of the launch. Again, let me let Eric talk about the thinking that went into our pricing decisions and then if there's any additional color he wants to give on the wait list dynamics.

Thanks, Brian. We've had a lot of engagement with payers, not only through market research, but also we've had our teams, our field-based teams that have been engaged with many payers. In fact, right now, I think the total count is over 220 million lives that have been covered, and it represents a very good mix between both commercial and government. What we learned from those payers in talking about not only Sephience and then in market research and presenting different pricing is that there is -- they realize that PKU has a burden of disease. It's very high and that there's unmet need still and that they clearly see the product differentiation based on the clinical profile. What we also learned is that they don't spend a lot of money. There's a very low budget impact for PKU treatment and care overall, especially since there are multiple plans and there are a few patients distributed through these plans. When we presented the price as well as the clinical profile, payers have said that there's a high willingness to pay for an effective therapy that works across a broad range of patients. And importantly, it's something that they can measure very quickly in a matter of days or weeks so that they don't waste time, months, whatever, trying to get through and understand the therapy is quick. HCPs and health care providers and caregivers know it's a lifelong disease, but they also want to measure the results of Phe reduction. When we presented price points in research, it's been well received. It's been very consistent with many analogues that have been launched in the last 12 months in the rare disease space. And when we've again looked at the profile, they've said they don't expect minimal restrictions, very, very minimal restrictions, and that would be prior authorizations to the label. There might be a small number of payers that would implement a step edit. But I'd remind you that our PTC Cares team have done this for the last 8.5 years with Emflaza and doing this against prednisone, which is a very low-cost alternative. And we'll be able to measure Phe reductions with existing therapies and move them quickly through to Sephience. So overall, I would say payer response has been very positive, and we continue to plan further meetings with our payers here over the next few weeks.

Our next question coming from the line of Sami Corwin with William Blair.

Congrats on the approval. I was curious if there is a stipulation in the label that patients need to be sepiapterin responsive. I was wondering how exactly that's being determined. And then is there any way that you will be able to track or share compliance data as well?

Yes. Sure, Sami. On the first part, sepiapterin responsive, I think this is really something that the agency has included now in all PKU therapies that basically patients who are on the drug should respond to the drug. In the label, they talk about trying -- that patients should be started out at the -- if you were over 2 years old, at the 60 mg per kg dose, and there'd be an expectation that there'd be some lowering of Phe over the first few weeks on therapy. So that's really what they were referring to that there should be some demonstrated lowering of Phe if someone initiates the therapy. We did not highlight compliance data in the initial information that we're going to give. That could be something that we'll look to do later on in the launch as we better understand those dynamics.

Our next question coming from the line of Geoff Meacham with Citigroup.

Congrats on approval. Just have a couple. It sounds like you expect initial access to be pretty good, but I want to get your perspective on the use or whether you'll deploy patient assistance programs and how that could help initially. And then the second question is, how would you characterize the level of physician engagement pre-approval? I guess I'm trying to get a sense for whether you'll see a bolus dynamic at the onset or more maybe the steady add as patients come in for regular scheduled visits.

Geoff, thanks for the questions. Let me take the second one, and I'll give the first -- I'll have Eric talk about the -- thinking about PAP programs and the like. So we've had a high level of engagement with both the physician and the patient community. This is -- for us, once we start work in a rare disease that we understand that doing -- working with the rare disease community includes the whole community, including physicians, the care teams, including nurse practitioners and dietitians who often make prescribing decisions at these centers and then, of course, with the patient groups and work very closely with them. So we know that there is a great deal of enthusiasm across the board. It's been shared with us from a number of physicians, from a number of patients to get on therapy as soon as possible. As we've talked about, this is a high morbidity with PKU and the potential of having an oral, safe, well-tolerated and effective therapy that can lower phenylalanine and potentially enable liberalization of diet is a very compelling profile for patients and for physicians. We're also in this unique situation where the fact that there have been other therapies on the market, there's an understanding in the community of the dynamics of prescribing a drug, what that looks like and those types of dynamics that in other rare diseases, when we're the first one, there's a little bit of a learning curve everyone goes on. That's not the case here. And then, of course, there's newborn screening as well. So there really is a prevalent population that's ready, willing and desiring to get on a therapy and an engaged physician and health care team community ready to also engage and get patients on therapy. Eric, do you want to talk a little bit about PTC Cares, PAP and the way we think about patient support?

Yes. And this is something that we've been doing for the last 8.5 years. And again, I think to Matt's point, PKU centers that we've been calling on, over 104 centers are experienced in this and have been experienced for years now and decades in not only prescribing oral but injectable therapies, self-administered therapies, but high-cost therapies. So they understand prior authorizations. They understand steps. They also understand that we have to be exceptional at servicing PKU patients, and that's what we are prepared to do. And to Matt's point, we've been staffed with experienced teams right now. They will be taking patient start forms as of tomorrow, and we will be beginning the process as we do, which is insurance verification. Patients, when they opt into the PTC Cares enrollment, they will have a 0 co-pay for any monthly prescription that they have. Through that process, if there are step edits, our field-based teams coordinate with case managers to ensure that those are done quickly and effectively and brought forward so that patients can be put on Sephience therapy. So we have had a really, really good experience with the DMD community, and we want that to be translated with that white-glove service that our PTC Cares team will now provide for the PKU community.

Our next question coming from the line of Joon Lee with Truist Securities.

Congrats on the approval. Is there a standard accepted definition of not well controlled on existing therapies who may be candidates for Sephience? Is it a certain plasma levels of Phe or inability to liberalize diet or something else? And also, our protein needs differ by age. And would that guide you in targeting a specific age group?

Thanks for the questions, Joon. On your first one, look, I don't know that there's a scientific or an exact numeric definition of not well controlled. We know that in clinical trials, we have looked at thresholds of a 15% reduction of phenylalanine. Our primary analysis was based on those who had a 30% reduction. But I think the name of the game for PKU patients, and as Eric said, it's the name of the game for payers, too, they tie value to phenylalanine lowering. And so the idea for a patient, they like to have some lowering ideally. It might be lowering enough that you feel different, lowering enough that you can come back off your highly restricted diet. So I think it may mean different things to different people, and physicians may each have their different definition. But I think one of the things that -- one of the most impressive pieces of data from the Sephience trials was that in the run-in portion, we had 2/3 of patients having a greater than 30% reduction. That's all-comers from the full spectrum of disease, including the more severe classical patients. We had 75% of patients having an over 15% reduction, and 84% of the patients in the trial got to beneath 360 micromolar per liter, which is important for 2 reasons: one, that's the target threshold of phenylalanine lowering; and two, that's the point at which patients should start being able to liberalize their diet. So the data -- our data really support -- the Sephience data show that we're getting significant reductions across a broad spectrum and a large population of PKU patients. And then your second question was about protein lowering being different at different ages and will that go into our maybe targeting of patients. Not at all.

Right. Protein needs, are they -- are there certain age groups that may need to have greater protein intake for growth or development that might particularly benefit from Sephience?

Yes. I think the -- look, we would argue that the full spectrum could -- age spectrum and severity spectrum could benefit from Sephience. I would say that was well understood, and it's the reason why there's newborn screening for PKU is that neurodevelopment, neurocognition are intimately linked to phenylalanine levels. And that's -- again, that's why there's newborn screening so that individuals with PKU can get on low-protein diets as soon as possible to minimize phenylalanine levels and optimize neurodevelopment and neurocognition. And so this idea that lower is important and that's important across the full age spectrum. But again, I think that we do expect there to be adoption of the therapy at the very early ages. That's why having a label down to 1 month in the U.S. and no lower limit in Europe are so important. And as Eric said, we expect early on that, that probably 2/3 of the patients will be pediatric and adolescent. But again, over time, we expect to be able to capture the full age range.

Our next question coming from the line of Luke Herrmann with Baird.

Congrats on the approval. So are there any insights thus far into your European launch experience that have informed your strategy in the U.S.? And then while not the initial focus, can you provide some insight on how strategy for the treatment-naive group might differ functionally from the initial launch?

Yes. Thanks for the question. So it's early days in Europe. And I would say that, look, one of the advantages here is that we've got global commercial teams that have been doing rare disease commercialization for years. And so we have a European team that is very understanding of this particular dynamics in Europe. We have an outstanding team overseeing the launch in Germany that certainly understands the dynamics within Germany. We have highlighted that we had an early access program in Germany for 2 reasons -- prior to launch for 2 reasons. One was to get a number of patients on therapy who could be rapidly converted to commercial therapy upon launch, which occurred on July 15 with the listing of the price and [ allowed tax ]. And then also to get into and get experience at the top -- get the physicians in the top centers in Germany experienced with the drug so that while they may not have all of their patients in early access, they certainly get familiar with the drug. And so far, we're seeing that strategy is paying off. Obviously, in the U.S., we have an incredibly experienced and accomplished set of customer-facing teams, incredibly enthusiastic for this launch. And as Eric highlighted, this is a team that's very experienced in understanding every step of the patient journey, all the complexities of market access and having done this from Emflaza where I would say there's elements that are much more complex than they'll be for PKU. They stand at the ready to really deliver on the launch.

Our next question coming from the line of Joseph Thome with TD Cowen.

Congratulations on the approval. Great to see, especially in a challenging FDA environment. Maybe the first one, just on the responsiveness, the biochemical response period. I noticed on the label, you do have to demonstrate that within the first 2 weeks. I know in part 1 of the study, about 2/3 of patients had a 30% or greater reduction in Phe and they were termed biochemical responders. I guess is that what we should be thinking about when we think about what payers and clinicians want to see when they think about biochemical responsiveness? Or is this more of like an arbitrary, let's just make sure the drug is showing some level of activity? And then perhaps related to that, is the initial script then, I guess, for a 2-week period? And are you sampling? Or kind of how should we think about that transition from demonstrating responsiveness to a commercial patient?

Thanks for the questions, Joe. I'll take the first one and then pass to Eric for the second one. So in terms -- while it says responsive, there should be a response within 2 weeks, I think -- and then it also says in the label then if you can adjust the dose and see what happens in the next 2 weeks, there is no magnitude of lowering that has been sort of designated in the label. So I think it leaves that open. Again, we've talked about how in our studies, we've looked at 15%. That was the qualification to get into the placebo-controlled portion of the study. We had 30% as the primary analysis population. And those are well within the framework of what's understood of being responsive. Eric, do you want to talk about how we're thinking about the initial prescriptions and reauths and the like?

Yes. And I think -- thanks for the questions again, Joe. We anticipate that patients will receive -- vast majority will receive 60 milligrams per kilogram, and the script will actually be for a month. So payers aren't going to pay for just a few days or a few weeks. We know this is a lifelong disease. And while we can see a Phe response within days and even weeks, there will be patients that will require different dose adjustments, but the vast majority of 60 milligrams per kilogram will respond to therapy within days or weeks. And the script itself is usually going to be dispensed. And once dispensed, usually reauthorization occurs likely within a 6- or 12-month period, depending on what the payer will require in terms of Phe reductions. Just one thing that's very important to know is that payers really look at Phe reduction as being the primary goal of treatment. Physicians look at Phe reduction, they look at diet liberalization, diet goals, and patients look at diet liberalization and goals as well.

Perfect. And maybe just one quick one. Will scripts be trackable by third-party resources, do you believe, or no?

No, not at this time. It's going -- because we have 2 specialty pharmacies that will be distributing the product directly to patients, it will not be providing -- we won't have IMS data. It will be difficult to track. On that front, what we -- what I mentioned earlier is that we will be providing metrics and data during our regular calls, including the number of patients who are on commercial therapy, those who have patient start forms that are in the queue. We'll be providing also physician as well as payer sort of dynamics along the road there as well as gross to net and some of the other metrics that you normally would expect.

Our next question coming from the line of Joe Schwartz with Leerink Partners.

Congratulations on the approval, and thanks for the insightful data you shared earlier in the call. My first question is just if you could clarify how many PKU patients are actively managed at the 104 centers of excellence, which have the 1,200 potential prescribers of Sephience. And then second, I heard you say that payers will require some lowering of Phe. What is your understanding of how much Phe lowering they'll require? Are there certain thresholds that are commonly cited?

Yes. Joe, thanks very much for the questions. Eric, do you want to tackle this?

Yes. I think to your second question about what payers would require from a Phe perspective, it's just really according to the label. And I think it's going to be based on their own clinical judgment. A lot of times, it might be just a matter of whether a patient is getting close to or at target goals. Phe reduction can vary, and it can take a little bit of time. So I think that's going to be a medical judgment, but most of the payers will probably look at what we've done in the clinical studies. With regards to the actual number of patients, when we described the two-pronged approach with 17,000 patients, again, I would like to make it clear that Sephience is approved for patients 1 month and older, and we're going to be targeting all of these patients. But in those 104 centers and those 1,200 health care providers, those are really what we would call the Tier 1 health care providers. And each one of those centers can see somewhere between 60 to 100 patients. Some of these centers have hundreds of patients. So it varies across the board. And what we're targeting in that initial group is somewhere around 6,000 to 7,000 patients who are either poorly controlled, they have failed on therapy or on treatment right now and they're seeking new potentially better therapies or more convenient therapies. So in that context, Joe, what we're really doing is that first wave is going after those patients who have been motivated to get -- to seek treatment or on treatment. And that first wave really is going to be a very large priority for us. But again, many of these other naive patients will be equally important for us over time.

Our next question coming from the line of Gena Wang with Barclays.

Also add my congrats on the drug approval. It is a challenging FDA environment. So this is a big win here. So I have a few questions. First is I wanted to ask again, I know several questions already asked regarding the denominator for this 104 centers of excellence. I think we all understand total patient population is 17,000 and the 40% is 6,000 to 8,000 patients. But out of these 40,000 you got the number from, what is the denominator? I think that was -- like I think several analysts asked it from a different way. Just try to understand what is your sample size to derive at this 40% of the failed or not well-controlled patient population. And then my second question is, what is your expected screening rate for this 40% of patients that will be responding to sepiapterin? And lastly, my question -- actually 2 quick questions. Do you expect the bar for Phe lowering level will be higher than Kuvan or generic Kuvan given a higher price and also understanding this drug is more efficacious than Kuvan? And then lastly -- the fourth question, sorry, lastly is regarding your label. You do have warnings and precautions that I saw there is a slightly different warnings from the other drugs that's increased bleeding events. So maybe if you can elaborate a little bit, would there be any concern there impacting the drug uptake?

Gena, thank you for the questions and congratulations. And I will say, indeed, given in this time of uncertainties and approval delays, we are certainly not surprised, but nonetheless, quite excited that this came a day early and we're basically on time. And I think it was consistent with what we had believed would be the case. But as always, it was really great for this to come through. I'll make a general comment on your first 3 questions and then have Eric provide as much additional color as we can, and then I'll tackle the fourth question. Obviously, these numbers are based on claims analysis. They're all estimates. There's no hard in fact, exactly 4,000 or exactly 40% or 60%. These are rough guidelines. We've heard a lot of different numbers at different times that we've referenced. And we basically use these to just have directional for us to understand this is the first wave of patients is estimated about this many who have been recently engaged with the centers and would be an appropriate first wave. That being said, we've also had direct conversations with a number of physicians that speak a little bit differently about this. We -- and there was a question earlier about how -- tackling the therapy-naive patients. We've gotten feedback from some individual physicians that say that, that's actually a priority for them. The patients who may not be in that tried and failed, but who are naive who could really -- who are classical patients who could really benefit at this time for having a therapy that could lower their phenylalanine levels. Regarding your question on the bleeding warning, this is not a significant concern for us, a safety concern. This is in reference to one specific patient, which, in fact, the FDA has us highlighting in the label who had, we believe, bleeding episodes related to concomitant medication known to cause bleeding. So as you can see from the adverse event table, bleeding is not listed there. We do not expect this to be a concern -- a significant concern. Eric, do you want to provide any more color on Gena's other questions on the...

Yes. Gena, good -- yes, good questions, Gena. I think there isn't going to be a bar that's going to be different for Sephience or Kuvan or anything else. I think what's going to happen is we have -- the payers that we've actually spoken to at great length here say that prior authorizations to the label will be really what drives prescriptions, not necessarily Phe reduction. Yes, they're going to be looking at Phe reduction. And a lot of them, if they decide to use that, would utilize what we've seen in our clinical studies. So we don't see anything very different. All we see is a prior authorization to label and potentially a small number of payers that say they will utilize step edits. But we know we can get through that very, very quickly in again, a matter of days or weeks, and then get to the point where we provide the sufficient information to a payer to get them switched. So we don't really see that change. And I think to Matt's point about the claims database, the 40% is a very significant number. That 7,000, 8,000 patients, these are patients that have actually been on therapy or currently on therapy. So they've been highly motivated recently to try a therapy and are interested in new and potentially more effective therapy. So for us, that is our first and most important target because it is the low-hanging fruit. And it's a very substantial number of patients that we can address very quickly and early with our therapy.

Our next question coming from the line of Paul Choi with Goldman Sachs.

Congratulations on the approval. Just sort of going to the -- back to the patient treatment paradigm. Separate from their blood monitoring, how frequently are -- is the typical patient coming in? Just to help us think about modeling the launch cadence here, is it semiannually, annually? Just some color there on just how often the patients are coming in versus their blood test would be helpful. And then I had a follow-up question.

Yes. Sure, Paul. Thank you very much for the questions and congratulations. I would say that when we think about engagement with the center, there's engagement with the physician and coming into the clinic, but then there's now, in the age we live in, frequent -- actually coming into the clinic, but frequent contact with the sites in terms of talking to nutritionists, dietitians, monitoring and those types of things. So I think what's good here is it's not only a matter of someone coming in for an annual check or twice a year check, but there's also frequent regular communications that occur that can also enable triggering a prescription.

Great. And then my second follow-up question is just in terms of guideline updates, just sort of what you expect the rough timing for that would be for sort of PKU societies and other medical societies. And then can you maybe just remind us what the time line is for potential regulatory decisions in the other remaining major markets such as Japan and other major markets?

Yes. Thanks, Paul. I'd say just on your last question, first, we expect Brazil approval in the second half of the year and Japan in December. Those are the 2 markets that we've called out. We expect approvals in a number of other countries in between and along the way, but we've identified those as the major additional markets beyond Europe and the United States. In terms of guidelines, the treatment guidelines have recently been updated, specifically importantly, talking about the importance of Phe lowering. The lower the Phe, the better. And I think one of the most important evolutions in the guidelines is the fact that even if you are controlled, i.e., have a phenylalanine level less than 360 micromolar per liter, which is the target, that even going lower than that is better so that there's a benefit to treating folks even who may be at the less severe end of the spectrum with the therapy. Obviously, this is not something we can go to the store and get a vitamin to lower Phe, but it really would take a therapy that is able to be efficacious in doing that. And the guidelines have certainly emphasized that lower is, in fact, better. There's a great awareness in the physician community about Sephience. I don't know exactly the next time guidelines will be updated, but we certainly think that the most recent updates are particularly relevant to Sephience and is also supportive of the therapy and will certainly help its uptake.

And I'm showing no further questions in the queue at this time. I will now turn the call back over to Dr. Matthew Klein for any closing remarks.

Thank you all again for joining the call tonight. We are obviously incredibly excited about being able to bring Sephience to the PKU community. The FDA approval is a significant milestone for the community and for the company. And of course, with our European approval and European launch underway, we've really taken the steps -- a number of steps forward now towards our global launch. We look forward to keeping you updated on our progress. And as we talked about, we remain incredibly enthusiastic about this opportunity. So thank you all again for joining the call, and have a good evening.

This concludes today's conference. Thank you for your participation, and you may now disconnect.