PTC Therapeutics, Inc. ($PTCT)

Great. Well, good morning, everyone. Thank you for joining us on day 2 of the Barclays 28th Annual Global Healthcare Conference here in Miami. Very happy to have PTC Therapeutics here with us today. And I'm Ellie Merle, one of the biotech analysts here at Barclays. And joining us from PTC is CEO, Matt Klein; and CFO, Pierre Gravier. Thank you both so much for joining us.

Maybe to kick it off, let's start with Sephience, which is a launch that I think a lot of investors are closely following. Can you give us a high-level overview of PKU as a disease and why this could be such a meaningful opportunity for Sephience?

Absolutely. Thank you so much, Ellie, for having us. So PKU is a rare disease where individuals are born without the ability to break down the amino acid phenylalanine. This results in accumulation of phenylalanine in the body and has devastating consequences for brain development, neurological function and a whole host of other symptoms. That's why there's newborn screening for PKU so that once diagnosed, individuals can start on a highly restrictive diet that keeps them from ingesting protein. So you can imagine a very challenging life where you either have very little protein or you suffer severe neurological and other consequences if you have protein in your diet. There's about 17,000 individuals in the United States with PKU. [indiscernible] to say about 58,000 in countries around the world that we intend to market Sephience, our therapy for kids and adults with PKU. And we see this as really a significantly large opportunity because there's 17,000 individuals with this disease. They're diagnosed at birth. And while there, prior to Sephience were 2 approved therapies, the vast majority of patients weren't served by these therapies, and there remained a significant unmet medical need for folks who desperately want a therapy that's safe, well tolerated, can help them feel better and have more freedom with their diet.

Yes. And I mean, I think that investors still very much underappreciate the market size, I think, in part, given some of the experiences seen with Kuvan and Palynziq in terms of the total -- like from a sales perspective, opportunity that was seen with those drugs. Maybe can you walk us through in more detail some of the differences between Sephience, Kuvan and Palynziq and why you think Sephience can unlock this broader population, whereas we haven't seen this, frankly, from Kuvan and Palynziq.

Yes, absolutely. And that's such an important point. When we started the launch, there was really this misconception that since the vast majority of patients weren't on a therapy, perhaps kids and adults with PKU didn't want to be on the therapy. That's just wrong. What really was the situation was that they want to be on a therapy that's safe, well tolerated and effective. PKU is a little bit different than other disease areas in which we work because if you think about diseases like Duchenne muscular dystrophy or spinal muscular atrophy, without a therapy, there's nothing these individuals can do except suffer the consequences of the disease. So there's a high willingness to try a therapy and even stay on it if it may not be that effective or there's no perception of effectiveness. That's not the case in PKU. You're diagnosed at birth and you start on a lifelong highly restrictive burdensome diet. So your standard approach to dealing with this is already very restrictive and something you're already taking. So if you're going to take a drug on top of that, it's got to change something. You've either got to feel better or you can not -- you can ease off on that highly restricted diet. That's why if someone goes on an oral therapy like Kuvan branded or generic and doesn't perceive a benefit, phenylalanine is not getting lower, diet can't be loosened. There's no motivation to stay on it. Similarly with Palynziq, which has been demonstrated to be effective, but has very significant tolerability -- a very challenging tolerability and safety profile, it's hard to stay on it and have an impact on your already very restrictive life. So all that is to say, this is a different disease state. And if a drug is not working for you where you can't tolerate it or has a safety profile that's difficult for you, you're not going to stay on the therapy. And that's why people took this idea that not staying on that therapy meant patients didn't want a therapy. No, no, no. They want a therapy. They want a therapy that can change their current management and that they can tolerate and have diet freedom, feel better and have a better quality of life. And so that's why we're so enthusiastic about the opportunity of Sephience. It's an oral therapy once daily. The clinical studies have shown that patients have significant reductions in phenylalanine. The long-term extension studies are showing that patients are able to liberalize their diet and the Phe tolerance substudy of our Phase III study, 97% of patients were able to increase protein intake. 70% of patients were able to reach the recommended daily allowance of protein intake for someone without PKU and still control -- maintain control of phenylalanine levels. The safety and tolerability profile is very strong. And what we're seeing in the real world are these benefits come to life for patients. We're hearing stories of individuals being able to have foods that they never had before, kids able to sit at the lunch table and have the meals that other kids are having, adults who talk about being able to eat with others at work that they were never able to do before, being able to drive home in the car without brain fog because your mental clarity is better because your phenylalanine is lower. And these benefits are being delivered in the context of a very favorable safety and tolerability profile. And that's why we say that we really view the potential addressable market here as the full population of PKU patients because our data demonstrate that we're having significant benefit in folks with the full spectrum of disease, including those with more severe PKU known as classical PKU. So I think we're I hope people are slowly appreciating that this is a disease where those affected desperately, desperately want to be on the therapy. They just have to perceive that there's benefit and that it's safe and well tolerated in order to stay on it.

Absolutely. And you've seen some encouraging launch metrics out the gate. Walk us through what's been seen with the launch so far, both from a start form perspective as well as revenue.

Absolutely. So in the first 5.5 months, we had over 1,100 starts. And in the first 5.5 months, we had over $110 million in revenue, and that's mainly U.S. with some small contributions in Germany. We started the global launch towards the end of Q3 last year with approvals in the U.S. and Europe. We've recently got an approval in Japan in December. We'll be launching there in early Q2 in Brazil. And I think this early success is really a testament to both the significant unmet need and the strong desire of patients to get on this therapy. And of course, also a credit to our teams. I mean, we did a lot of work for a year, 1.5 years prior to launch, mapping out the 104 centers of excellence, getting to understand who are the decision makers and what are the dynamics at each center. For example, many of the PKU centers, the prescription decisions are driven not necessarily by the physicians, but by the nurse practitioners and the physician associates and also dietitians. They're a really important part of the care team because, of course, in the absence of a therapy and sometimes even in the presence of a therapy, diet is still a really important part of management of PKU.

Absolutely. And in terms of who's getting the drug, Sephience, I mean, we're seeing a lot of Kuvan failures are out there, and then there's patients that aren't treated. How are -- what are you seeing in terms of who's starting on Sephience and where you're seeing the most uptake initially?

Yes, absolutely. One of the clear themes of the launch thus far is breadth. We've had two month old prescribe the drug and 80-year-olds prescribe the drug, full spectrum of disease severity. And then across all key patient segments. We've described the segments as being those who are currently on therapy, whether that be Kuvan branded generic or Palynziq, those who've tried and failed, which is probably the vast majority of individuals with PKU and those that are therapy naive. And that's often individuals who have what are known as non-BH4 responsive or classical PKU who are never tried on Kuvan because there was a belief that since their mutations don't respond to BH4, they were unlikely to have benefit. And what we've seen early in the launch is the majority of patients getting prescribed the drug are those who've tried and failed other therapies, whether it's Kuvan or Palynziq and we've seen a number of the therapy-naive patients also get the drug, including adults who I think, again, this is one of those prelaunch misconceptions that there was this group of patients who were never tried on drugs, who are remote from the centers who are never going to come back in and they're coming back in. We're seeing adults who are therapy naive come back in. And then we're seeing a smaller number of switches thus far. It seems that the dynamic that's been playing out in these early days of the launch is that the centers are looking to put those who currently aren't on a therapy first rather than switching someone who is on the therapy. And our data have been very consistent in showing that if you have a response to sepiapterin and Kuvan, you're going to have a much more significant benefit from sepiapterin. And I think 100% of the patients who've been in our studies have shown that. And in our AMPLIPHY head-to-head study, we were able to quantify that relative benefit. And we had, on average, 70% percent greater reduction of phenylalanine with Sephience relative to sepiapterin, which again just speaks to the fact that when patients are switched, they're going to stay on the drug and enjoy greater benefit. But again, I think the priority has been to first get those who don't have a therapy right now tried on Sephience.

That's interesting because I would think that the Kuvan patients would almost be the lowest hanging fruit of like you know they respond and then there's a drug where they'll respond better and have more dietary flexibility. And we've heard that from some of the doctors that we've spoken to. Yes, how do you think about that?

I think that's another example of how a lot of the preconceived notions about the marketplace, if you will, prior to launch may not be playing out exactly as people thought, right? Number one was, these folks don't want to be on drugs. That's why the peak revenue for the existing therapies was so low. No, no, they want to be a drug that's safe and well tolerated. Okay. Well, the low-hanging fruit is going to be -- in the early launch is going to be driven by switches. Why? Because there's 100% guarantee they're going to be better on this drug. And a lot of physicians interviewed prior to the launch said, well, my intent is to switch the 80-plus percent of my patients over to Sephience and I'll then try it in a more severe mutations. It hasn't played out that way. It actually has played out that there's been early experience with more severe mutations. There's one very prominent physician who a lot of people interviewed who, I think early on was a little bit skeptical about the effect in classical patients. And she said, I tried one of my classical patients on the drug. There was, I think, somewhere like a 90% very rapid reduction in phenylalanine and I'm sold. Now all my patients are going to get tried on it. And that's just not that at that center. That's a theme we're hearing consistently. And so once the prescribing pattern shifted to trying all patients on it, there was priority given to those who don't currently have a therapy prior to doing the switches, which I think bodes very well for the sustainability of the launch because if you're thinking about the 100% guaranteed responders and 100% definitionally adherent population that have stayed on oral therapy, and those -- we haven't really penetrated deeply into that segment yet, that's still to come. But that's really good news for the launch. I'll say the other thing that's been really impressive early on, we shared this on the call last month or earlier this month, we've gotten more than one start form from 80% of the centers of excellence. That's kind of odd at this stage of launch. As usually, it's the other way around where you are -- maybe it's 20%, maybe it was the investigators in your trial who are the first ones to try it. And now it's gone the other way. We're just seeing this such broad uptake and broad interest. And so now that as we move -- we're still early days in the launch. But as we continue to move through it, it's just -- the story is going to be about penetrating deeper and deeper into existing centers where they're prescribing and continuing to penetrate deeper into these segments where those aren't on therapies. And slowly, I think we'll start to see the switches come as we move through the year into next year.

Absolutely. And so patient start form, that's certainly something that people will be tracking. You had about 1,100 exiting December. So if we're doing our math correctly, that's about 200 a month from the last update that you had around 500 exiting September. How should we think about the cadence of new starts from here? It seems like you're seeing a sizable breadth in prescribing, certainly a large number of centers. How should we think about this?

Yes. I think where we are now somewhere around -- out of the gate, super duper strong. I mean those first months, there was such incredible enthusiasm. And I think demand has remained. The patients want to get on the drug. We -- as we headed into the fourth quarter and into the fourth quarter of last year, what we started to see is the centers were saying, okay, we got to get to a steady cadence here where we can continue to prescribe. We can't spent all day long putting patients on Sephience as much as they want to be on it. And so I think we hit that point late last year where we were seeing now this sort of steady state where as patients were coming into the clinic, they were being put on the drug. And now we're also moving into a part where we're adding countries outside the U.S. So patient numbers now won't -- there's not start forms in countries in Europe. And as we launch in Japan, there won't be start forms, same with Brazil. So I think the metric as we move further into the year is going to be patients on drug. That's going to tell the full story as we get more centers outside the U.S. So the story of '26, we believe, will be continued momentum in the U.S. and then the addition of ex-U.S. patients coming on board. And we've said by the end of 2026, we expect to have commercial patients in 20 to 30 countries. So we're really excited about this being truly a global launch and being able to get the drug to as many individuals as we can who might benefit.

And another question we get from investors is around the adherence that we'll see for Sephience, just given if patients say are nonresponders, do they stay on? How are you thinking about that? And what are you seeing in the real world? And your expectation for will there be discontinuations if patients they don't respond?

Yes. It's early days. So it's hard to have a clear sense of what this is going to look like at steady state. We shared that through Q4, the discontinuation rate was really low. We said low single-digit discontinuations and very few of those were for nonresponsiveness or not having an effect. I think we'll see that reach slightly higher than low single-digit discontinuations as you'd see with any drug. But I think the fact that we've seen in the studies that we have response rates of 70% to 75%, depending on how you define response, bodes very well for what we'll see in practice because in reality, the stories -- the anecdotes we're hearing, the data we're seeing from prescribers is suggesting that we're seeing what happened in the trials play out in the real world, that there's responsiveness among the full spectrum of severity, that there's patients who are under very careful management able to begin to liberalize their diet and looking on social media and seeing individuals posting their Phe levels dropping. And these include those with severe disease, talking about having foods that they never had for the first time, as I mentioned earlier, that's really what we're hearing across the board. Those aren't one-offs. And that really is consistent with the experience in the clinical trials.

Absolutely. Pierre, I guess, in terms of the guidance, I mean, we've gotten questions around, is the guidance conservative? Can you walk us through sort of what is baked into the guidance for the Sephience launch versus some of your other products?

Yes, of course. Absolutely, I'll break it into the multiple products. So the guidance on revenues is $700 million to $800 million on product revenues, excluding Evrysdi. In terms of revenues, the vast majority is Sephience. As Matt mentioned, we believe, right, in the strong momentum that is continuing in 2026 and the global opportunity is really $2 billion -- at least $2 billion plus worldwide. In terms of the rest of the portfolio, right, the mature business, the DMD franchise, Translarna and Emflaza, look, Emflaza, we now have 10 generics. And so we will expect continued erosion there. And then Translarna is unique. If you think about last year, Q1 had full sales in Europe before the license was removed. Now in Europe, obviously, we said we could maintain about 25% of our sales. And this is very unique. We sell without a license. You don't know how long it's going to be. And then ex Europe in LatAm and Russia, CIS, those are government orders, and it's unclear for how long we could maintain that. So the way we see this is mature business with continued erosion and then obviously, Sephience being the vast majority contributor here. And that's how we guided at the start of the year. And obviously, if we see less erosion, we have opportunity to obviously update guidance.

All right. That's helpful. Turning to Huntington's disease, which certainly has been an area of a lot of focus. Remind us where you are with your program and the data update that we can expect this year?

Absolutely. The Votoplam Huntington's disease program is continuing to move forward. We had shared that along with Novartis, there was a meeting with FDA in the fourth quarter of last year that there were two main objectives. One was to get alignment on the efficacy trial, a Phase III trial of Votoplam and alignment was reached and that protocol has been finalized and Novartis is moving very quickly to get that study up and running. That's an efficacy-focused study that could serve as a confirmatory study in the context of potential accelerated approval. And otherwise, it could itself be a registration trial, and we've shared that there's a plan to have an interim analysis in that study that could also provide another opportunity and an early look at data for potential accelerated approval. So Novartis is working very quickly to get that up and running. We said over 700 subjects in over 30 countries, there'll be centers. So it's going to be a very big trial and really something Novartis can manage quite well. In terms of the PIVOT-HD Phase II open-label extension, that study is ongoing as well. And we expect a readout in the first half of this year once all participants cross the 24-month time point. And so that will be coming up this half. And we've been clear that if those data looked supportive, that could allow us to have a discussion with the FDA about potential accelerated approval.

And I'm not going to ask you to comment on sort of what's happened recently with the FDA and uniQure. But maybe commenting on your own program, sort of what are the reasons why you think your data set would be supportive potentially of accelerated approval?

Yes. And I appreciate that. We're in a very different context, right? It's an oral therapy. We had a placebo-controlled initial study. We have an open-label study prespecifying that we were going to use an external comparator group. We also have the evidence in the blood of target engagement in dose-dependent lowering of Huntington protein. So we're in a much different framework and in CDER, which is also a different center in the agency. So what we believed all along is that Huntington protein itself has the potential to be a surrogate endpoint, likely to predict clinical benefit. The mutant Huntington protein is the causative disease protein and being able to lower it should have benefit. And by the way, there's a number of studies supporting that. So we have already a prespecified primary endpoint successfully achieved in PIVOT-HD of statistically significant lowering of Huntington protein that was dose dependent. So the idea is, okay, can we have data from the longer-term study that can support the notion that those changes observed early on in Huntington protein are likely to [indiscernible] to long-term clinical benefit. Now at 12 months in the Stage 2 patients, which is going to be the patients who make up -- more or less make up the Phase III study, we showed dose-dependent benefits relative to placebo at 12 months. And in the initial 1/3 of patients who reached 24 months, we saw dose-dependent benefits on cUHDRS, TFC, single-digit modalities test relative to natural history as well as a dose-dependent change in NfL. So again, we'll see what the data look like in the first half. But if we can have clinical data that maintains dose dependency, which suggests that there is a relationship between the amount of Huntingtin lowering and clinical effect and could have biological support from something like NfL, that's a marker of neuronal injury. That could be a package that -- well, we believe it's a package we could -- we would certainly feel comfortable talking to the FDA about and could be one that could allow us to leverage the surrogate accelerated approval path that's been used in the neurology division before.

Interesting. And what's your expectation for how the data at 24 months would compare to the data at 12 months? Do you expect continued stability, continued separation versus the natural history comparator? How do we think about that?

Yes, absolutely. So at 12 months, we benchmarked to placebo. And when we looked at the first group at 12 months and then that initial group out at 24 months, we saw continued trends of benefit both on the cUHDRS scale and some of the subscales. Those are small numbers, about 12 patients -- 10 to 12 patients in each group. We'll have a much larger, about twice that number now. And I think what we'd really be looking for is that continued trend of benefit that's dose dependent. And we have ways of also thinking about leveraging that placebo data to get a sort of a better match in the natural history group that more represents what a true comparator population should look like for the treated patients.

Okay. And so then after the data, sort of a fair assumption you'll speak with the FDA again?

Yes. I think depending on what the data look like, if the data look good, we'll work with Novartis and make and make a plan for regulatory discussions.

Great. Just quickly, I know you have a lot of other programs in the pipeline, including some interesting early-stage programs that you had an R&D Day on last year. Maybe if you could give us kind of the high-level overview of those programs.

Yes, absolutely. So we do have a lot of exciting programs. We also had the update with -- discussing with FDA about the potential of the next study for vatiquinone for Friedreich's ataxia, which they wrote to us that they believe that could be an open-label study with a natural history comparator. So we'll discuss and finalize those plans. And then we worked very hard to evolve the splicing platform. It delivered Evrysdi, which was incredibly valuable Votoplam program. And now we have a number of preclinical splicing programs. We highlighted our MSH3 program, where we plan to have a development candidate this year, another way of approaching Huntington's disease that can be complementary to HTT lowering. And our inflammation, ferroptosis platform also has a number of promising therapies. We expect to start our Phase I study for our NLRP3 inhibitor, PTC612, which is a highly differentiated potent molecule in the second quarter, we'll be starting that. And then also look forward to advancing our Nrf2 activator program and ferroptosis, Parkinson's disease program. So a lot of excitement early on of molecules that we think can be really meaningful coming closer to the clinic.

Great. Well, Matt, Pierre, thank you so much for the time, and thanks, everyone, for joining us.

Thank you, Ellie.

Thank you.