PTC Therapeutics Inc (PTCT) 2022 Q4 法說會逐字稿

Good day, and welcome to the PTC Therapeutics Fourth Quarter 2022 Corporate Update and Financial Results Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the call over to Kylie O'Keefe, Chief Commercial Officer. You may begin.

Good afternoon, and thank you for joining us today to discuss PTC Therapeutics' Fourth Quarter 2022 Corporate Update and Financial Results. I'm joined today by our Chief Executive Officer, Stuart Peltz; our Chief Operating Officer, Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Emily Hill.

Today's call will include forward-looking statements based on our current expectations. Please take a moment to review the slide posted on our Investor Relations website in conjunction with the call, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements. As such, statements are subject to risks that can materially and adversely affect our business and results of operations. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission as well as the company's other SEC filings.

We will disclose certain non-GAAP information during this call. Information regarding our use of GAAP to non-GAAP financial measures and a reconciliation of GAAP to non-GAAP are available in today's earnings release.

With that, let me pass the call over to our CEO, Stuart Peltz. Stu?

Thanks, Kylie. Good afternoon, and thank you for joining the call. I'm proud to share PTC's fourth quarter and full year results and our expectation for continued strong performance in 2023. PTC treats rare diseases by modulating gene and protein expression. Our strategy is to discover, develop and commercialize products to build a robust pipeline of potential new therapy. Our goal is to deliver one new therapy every 2 to 3 years.

I'm honored to report that PTC has been named the winner of the 2023 EURORDIS Black Pearl Company Award for Innovation. This award recognizes and celebrates companies, who have undertaken groundbreaking science to advance rare disease research and development and is a testament to the mission and strategy of PTC. We are planning a very exciting year in 2023, including the celebration of our 25th anniversary, and we're proud of what we've achieved to date. Our commercial portfolio has 5 marketed products plus 6 products for which we collect collaboration and royalty revenue.

In 2022, we achieved $699 million in total revenue, which is a remarkable 30% growth over total revenue in 2021. This revenue achievement was despite substantial FX headwinds to when calculated at constant exchange rate, it was $740 million, representing a 37% year-over-year growth. In the fourth quarter of 2022, we achieved $167 million in total revenue.

We expect our growth to continue to accelerate in 2023. As announced in January, we expect our total revenue guidance in 2023 to be between $940 million to $1 billion, which would represent more than a 30% year-over-year growth. We are continuing to advance a broad and deep pipeline of new therapies that we expect to provide substantial growth to our commercial portfolio in the coming years.

I'm proud that these efforts have led to 7 promising development programs focused on treating rare disease as a primary medical need, from which we'll have 4 important readouts in the first half of 2023, 3 of which are registration-directed studies. We expect results from the AFFINITY study, sepiapterin for PKU, for vatiquinone in both mitochondrial disease associated seizures of Friedreich ataxia and the 12-week data for PTC518 in Huntington's disease. Matt will go into this in more detail shortly.

We're very excited about Part 1 data for AFFINITY study with sepiapterin and look forward to the results from Part 2 shortly. In addition to these studies, we continue to progress enrollment in our Sunrise LMS trial via Unesbulin and in leiomyosarcoma patients in our CardinALS trial for (inaudible) for ALS patients. With solid growth across our commercial portfolio and many new therapies advancing in our pipeline, we continue to generate strong momentum for many years to come.

I'll now hand over to Matt for an update on our development programs. Matt?

Thanks, Stu. Our teams continue to make progress in advancing important new therapies from our pipeline to patients in need. As Stu noted, in the first half of 2023, we will have results from 4 of our ongoing clinical trials, 3 of which are registration-directed study.

Let me begin with an update on AFFINITY, our global Phase III trial of sepiapterin in patients with PKU. As a reminder, AFFINITY is a double-blind, placebo-controlled study in which subjects are randomized to receive sepiapterin or placebo for 6 weeks with the primary endpoint being reduction in blood phenylalanine levels. To enrich the randomized population for sepiapterin responders, there is a running phase during which all screen subjects received sepiapterin for 2 weeks. Only those subjects to demonstrate a reduction in phenylalanine levels of 15% or more from baseline will be randomized with the primary analysis population consisting of those who have greater than 30% reduction. Importantly, all subjects entering the placebo-controlled phase will undergo a washout period of at least 14 days.

In January, we shared data from the Part 1 run-in phase for the initial cohort of subjects with greater than 30% reduction in phenylalanine levels. I will now provide an update on Part 1 preliminary data for all subjects. Overall, 156 subjects pass can completed the Part 1 run-in phase. Of these 156 subjects, 102 or 65% had greater than 30% reduction in phenylalanine levels from baseline. This is a very high responder rate over 3x the responder rate recorded in the Kuvan responder study. When looking at the magnitude of phe reduction in the 30% sepiapterin responder group, there was a mean reduction of 66%, which is more than twice that recorded in the Kuvan placebo-controlled phase.

Also, I want to point out that the 30% responder group includes 15 classical PKU patients, who had a mean phenylalanine reduction of 61.5%, which is a very impressive result. I'll add that there are an additional 5 classical PKU subjects, who had a 15% to 30% reduction in Phe levels during the run-in phase. These Part 1 results, including the high responder rate and the mean phenylalanine reduction in nonclassical and classic patients continue to support the premise that sepiapterin can potentially meet the persistent unmet medical need of PKU patients. With the high proportion of subjects achieving an over 30% phenylalanine reduction in Part 1, the primary analysis population for Part 2 will be over-enrolled by approximately 25% beyond the initial target of 80 subjects. Given the time required for these additional subjects to undergo wash out and complete the placebo-controlled portion of the study, last patient, last visit is planned to occur in March, and we expect results of Part 2 in May.

Let me now move to the 2 registration-directed trials of vatiquinone, MIT-E and MOVE-FA. The MIT-E and MOVE-FA studies are based on both the strong scientific rationale as well as data from several previous studies in which we have recorded evidence of treatment benefit across key disease endpoints. The MIT-E study is a global registration-directed trial of vatiquinone in patients with mitochondrial disease associated with seizures. The study includes a 24-week placebo-controlled phase with a primary endpoint of change in observable motor seizures from baseline. The placebo-controlled phase will be completed in March, and we now expect results in the second quarter to allow for data cleaning and database lock.

The MOVE-FA trial is a global registration-directed study of vatiquinone in patients with Friedreich's ataxia. The study includes a 72-week placebo-controlled phase and the primary endpoint is the change in the validated mFARS rating scale from baseline. Last patient, last visit for the placebo-controlled phase will also be in March, and we continue to expect results of the MOVE-FA study in the second quarter.

Moving to our PTC518 Huntington disease program. Enrollment is ongoing at our global sites for the Phase II PIVOT-HD trial. As a reminder, PIVOT-HD is a 12-month placebo-controlled trial in two parts. Part 1 is 12 weeks in duration and focuses on PTC518 pharmacology and pharmacodynamic effects as well as biodistribution. Part 2 is 9 months in duration and focuses on blood-based CSF-based and radiographic biomarkers of disease. The study initially includes 2 dose levels, 5 milligrams and 10 milligrams, with the ability to include a third dose level of up to 20 milligrams leveraging the titratability of the molecule.

As we shared at the JPMorgan conference in January, we have initiated additional 5-milligram and 10-milligram dosing cohorts in early stage III patients. We expect results from the 12-week portion of the trial in the second quarter of 2023.

Turning now to Translarna. We recently had an informal meeting with the FDA during which we discussed the potential path to an NDA resubmission. Based on the meeting discussion, we plan to request another Type C meeting to review the totality of data collected to date, including dystrophin and other mechanistic data as well as additional analyses that could support the benefit of Translarna. We plan to prepare a request for this meeting in the near future.

Lastly, for Upstaza. As we previously shared, the FDA requested additional bioanalytical data in support of comparability analyses between the drug product using the clinical studies and the commercial drug product. We have completed these analyses and have provided the results to the FDA for review ahead of a BLA submission, which we continue to expect to occur in the first half of 2023.

I will now hand the call over to Eric to provide an update on our commercial portfolio. Eric?

Thanks, Matt. It is exciting to see the great progress of our late-stage clinical pipeline and the global commercial team is certainly ready to leverage our expertise and broad geographic footprint to bring these important treatments to patients. Our global customer-facing team has delivered yet another strong quarter continuing the significant momentum built throughout the year and closing out what has been a very remarkable year for PTC.

Our launch of Upstaza in Europe is building momentum. The global DMD franchise continues to strengthen, and we see our global commercial expansion delivering significant growth. With the fifth product added to our commercial portfolio, we delivered $128 million of revenue in the fourth quarter and an impressive $535 million for 2022, which represents 25% year-over-year growth for our marketed products.

Let me start with Upstaza. We are pleased with the initial launch of Upstaza following the approval in the EU. Last year, we treated commercial patients in Germany and patients in France through the early access program. Importantly, we are pleased with the initial interactions with health technology bodies in France and Germany, which will further support pricing and reimbursement in the future. We anticipate continued growth in 2023 by treating patients in other European countries, also enabling cross-border treatment options.

Lastly, to continue the growth, we will further focus on geographies outside of Europe with additional registration submissions and named patient programs in Latin America, the Middle East and Asia Pacific.

Our DMD franchise continues to deliver robust results with $114 million in revenue in the fourth quarter, which brings our 2022 DMD franchise to $507 million, an impressive 20% year-over-year growth over 2021. This remarkable achievement is despite strong FX headwinds and when calculated in constant exchange rate, it is $539 million and 27% growth.

The fundamentals of the Emflaza business continued to be solid. Revenue in the fourth quarter of 2022 for Emflaza was $58 million. This brings total annual Emflaza revenue to $218 million, which is a remarkable 17% growth over 2021. Operational excellence drove continued new patient starts, broad access and continued focus on high compliance and lower treatment discontinuations.

Turning to Translarna. We achieved $56 million in revenue this quarter, which brings our 2022 revenue to $289 million, which is an outstanding 22% growth over the previous year. Again, despite significant foreign exchange headwinds, we continue to see growth in our main markets now that Translarna is in its eighth year of commercialization. Additionally, we continue to push forward with our geographic expansion into new markets in Latin America, Middle East, Northern Africa and Asia Pacific.

Now turning to Tegsedi and Waylivra in Latin America. The focus we have had on building the foundation of these therapies is delivering results. We have strengthened our position in Latin America as the pioneers in rare diseases with our recent approval in Brazil for the second indication for Waylivra in familial partial lipodystrophy, or FPL. This is the first treatment for FPL in Brazil and the first approval globally for Waylivra for the FPL indication. As a reminder, Waylivra was previously approved for familial chylomicronemia syndrome and received Category 1 innovative drug pricing in Brazil.

For Tegsedi, we have received our second group purchase order from the Brazilian Ministry of Health, which we expect to fulfill in the first half of this year. And our discussions with ContiTech continues to progress. Across the region, we also continue with our geographical expansion with MAA filings for both Tegsedi and Waylivra, and we continue to support and grow our patient base through early access programs.

2022 was a fantastic year for our global customer-facing team and has set us on a solid trajectory for 2023. This has been a transformational year as we continue our launch efforts for Upstaza, launch FPL in Brazil and continue to grow our DMD franchise ahead of our near-term pipeline readouts.

Now let me turn the call over to Emily for a financial update. Emily?

Thank you, Eric. I will take a few minutes to review our fourth quarter and full year financial results. Please refer to the earnings press release issued this afternoon for additional detail.

Beginning with top line results. Total revenues for the fourth quarter were $167 million. This consisted of net product revenue across the commercial portfolio, of $128 million and Evrysdi royalty revenue of $40 million.

Translarna net product revenues in the quarter were $56 million, reflecting strong growth in most geographies and despite significant foreign exchange headwinds. Emflaza had net product revenues of $58 million, representing 22% growth year-over-year.

Non-GAAP R&D expenses were $175 million for the fourth quarter of 2022, excluding $14 million in noncash stock-based compensation expense compared to $136 million for the fourth quarter of 2021, excluding $13 million in noncash stock-based compensation expense. This year-over-year increase in R&D expenses reflects additional investment in research programs and advancement of the clinical pipeline.

Non-GAAP SG&A expenses were $79 million for the fourth quarter of 2022, excluding $13 million in noncash stock-based compensation expense compared to $74 million for the fourth quarter of 2021, excluding $13 million in noncash stock-based compensation expense.

Our total revenue for the full year 2022 was $699 million for year-over-year growth of 30%. This was impacted by significant FX headwinds, which were calculated at CER was $740 million and 37% year-over-year growth. This included DMD revenue of $507 million, which represented 20% year-over-year growth or 27% growth at CER. Evrysdi royalties for the year grew 108% to $114 million year-over-year.

Cash, cash equivalents and marketable securities totaled approximately $411 million as of December 31, 2022 compared to $773 million as of December 31, 2021.

I will now turn the call over to the operator for Q&A. Operator?

(Operator Instructions) Our first question comes from Eric Joseph with JPMorgan.

This is Hannah on for Eric. Just a few from us. So first, can you break down some of the revenue components in your full year '23 revenue guidance outside of your DMD franchise? Just wondering how you're thinking about the balance between over Evrysdi and Upstaza? And then I have a follow-up after that.

Thanks Hannah for the questions. Emily, do you want to take that?

Yes, sure, I'm happy to take the question. We're looking forward to our guidance for 2023 of $940 million to $1 billion. That obviously reflects continued growth expected in the DMD franchise. As you alluded to also growth in Upstaza, and Evrysdi both royalty and milestone. There's a $100 million milestone expected for crossing a sales threshold for Evrysdi and then continued contribution of Tegsedi and Waylivra. We haven't broken out specifically the contributions of Upstaza and Evrysdi, but obviously, you can see now that Roche's Evrysdi approved in over 90 countries, quickly becoming the standard of care in SMA, and we expect significant growth going into next year.

Okay. That's helpful. And then just moving on to AFFINITY. Thanks for providing updated data from the run-in portion. Just wondering if you're able to speak to the variance of phenylalanine lowering that you're seeing in that running study? And then should we expect any stratification mechanisms or criteria in place based on magnitude of phe reduction as part of the Phase II patient randomization?

Yes. Yes. I think that's a good point. And I mean, one of the things that we always say is that the nice thing about the endpoint is the biochemical marker, so we measure the phenylalanine and it's a relatively stable measurement. Matt, do you want to talk a little bit about the stratification in the measurement?

Yes, absolutely, Hannah, thanks for the question. So first, just obviously, we're really excited about the updated Part 1 data. I think from what we reported in January, and we are seeing the overall response rate up from 61% to 65% and the magnitude of pre reduction for both nonclassical and classical PKU patients is also higher, which continues to give us a lot of confidence going into Part 2.

In terms of your question about genetic variance, I believe that was your question. The enrollment includes really the full spectrum of genetic variance, nonclassical and classical. We did do any specific stratification or exclusion based on any specific genetic subtypes.

In terms of the stratification for Part 2, we did stratify the randomization for above and below 600 micromolar per liters, so that was the 1 strata as well as stratifying for greater than 30% response from the run-in phase and 15% to 30% response from run-in phase was, of course, the greater than 30% population being the primary analysis population for the study.

And within the greater than 30% patients, who are moving on to the primary analysis population, should we assume that there's no further stratification based on what was seen in the run-in portion?

Correct. We predefined the strata was greater than 600 at baseline from below 600 at baseline as they enter the placebo-controlled phase.

And maybe just one more, if I could. Just wondering about the need or the interest in over-enrolling the study relative to your initial study design. I wanted to know if that was born out of feedback from any regulatory agencies?

Yes. No, we were -- Go ahead. Go ahead, Matt.

Yes. That had nothing to do with regulatory interaction that was agreed upon -- the protocol was agreed upon with the FDA ADMA prior to the start of the study. This really reflected significant interest on the part of the patients and the physicians. I think as you've talked about this clear unmet medical need and desire for safe and effective therapies. And what we saw was just really significant interest from centers throughout the world. And as the over-enrollment and the delays in getting to data really comes to the fact that there is still a large number of investigators, key KOLs, who have patients, they really wanted to get into the study. And of course, we believe that the greater number of patients only strengthens or heightens that probability of success in the trial.

Our next question comes from Kristen Kluska with Cantor Fitzgerald.

Congrats on the 25-year milestone. First question I had was for PKU, can you give us your sense or preliminary thoughts on what the payers' response might be whether there might be a generic Kuvan step at it or perhaps how it could differ across different populations such as those with classical?

Yes. So yes, this -- I think this is -- Yes, a good point. And I think it's unique to remember that while Kuvan was the first drug, it had a large patient population that it was ineffective to. And what we see is that approximately, if you look at maybe Palynziq and Kuvan together, it's still probably close, but not exactly 10% of the overall population. So you have a huge patient population of patients that are not satisfied with the current treatments, right? So there's 58,000 PKU patients globally. So that makes it a really pretty significant opportunity to be able to bring the -- to bring the new therapy that we believe is much -- is highly effective. You could see that getting 60 -- over 65% in the overall patient population and 61.5% of the classical, they're nearly the same, just showing you how effective it is when you consider what PKU -- what Kuvan was before, it didn't even function on classical patients.

So we think it's pretty clear that this is a superior product. And so I think -- and there's so many patients where the drug were ineffective that we think we're in a really good spot for this. And so we don't think -- we don't expect any step at it for classical PKU, because it was so well known that it's -- Kuvan didn't hit and even if there is step edits for patients to walk through Kuvan. There's already a fair number of those patients, who've already tried and failed Kuvan, and it has been well documented and even if they haven't, it's a very short period of time to show that it is or isn't functional.

So I think that you have a real -- I don't think there's going to be cumbersome or difficult to be able to handle. So Kylie, do you have anything to say also? You've done a fair bit of work on payers.

Yes. Thanks, Kristen, for the question. I think it's a really important one. And as Stu said, we really do believe in the substantial unmet need that exists in the PKU marketplace. And as Stu was talking to, we've started to begin a number of different payer engagements to ensure we understand sort of how they're looking at a data package. And from that perspective, as Stu was saying, if you look at the classical PKU patients, Kristen, there has been no effective therapies in that space. And so from that perspective, we don't see any type of step edits or requirements to be able to put these patients on treatment.

And as Stu was also saying in the space where they've previously tried Kuvan, even if they were step-edit to generic first plans in the case of Kuvan being generic, again, we don't see this as a major hurdle because in many cases, they've tried and failed Kuvan and therefore, the documentation has been established. And even if it needed to be reestablished, it is a quick and efficient step in the sense that it's a blood-based biomarker. So you're able to put the patients on treatment, establish the treatment isn't working and move them on to a more effective therapy. And so from that perspective, we're very confident going into the commercial landscape that we have the right data set and the last data package, assuming success with AFFINITY to hit the ground winning.

And we don't look at this like as we're competing with the generic. We're competing with a drug that had a very small window of patients to treat most of which the patients were successful. And so we plan on bringing in the sense of new therapy that these patients, we anticipate will have -- we'll be more successful on this therapy. But it's very different than fighting with it. You just have a generic and you're trying to fight to get a piece of that pie. We're actually -- we actually believe that we'll be able to treat patients that weren't able to be treated before.

Okay. Thank you, Stu and Kylie. I think of your late-stage candidates MDAS perhaps gets less attention compared to especially like PKU and Huntington's disease. So maybe can you reiterate for us why you remain excited about the program potential here? And how you think about the commercial opportunity and ease of finding some of these patients should it be successful and ultimately approved?

Yes. We think vatiquinone are very important new therapy in part because it really does tackle a new area in terms of treating medicine. And that is really sort of mitochondrial dysfunction on the consequences of that. When you think about mitochondrial dysfunction. When you think about the amount of ATP that's produced in order to be functional, it's almost like 15 (inaudible) ATP molecules to (inaudible) and if things go arrive during that, you have dysregulation and enhance free electrons that obviously can cause all sorts of stress on the cell that causes both -- that can cause havoc and obviously, (inaudible) neuroinflammation and things like that.

And the consequence of that is big when you think about especially like in the brain, where it's only a 3-pound organ, but it uses about 20% of the overall ATP within the body, it could be dramatic effects, and you could see that with mitochondrial disease with associated seizures. So I think having a drug that can modulate this and soon novel new mechanism is quite important. And we're excited about that because it can be used really quite broadly. Matt, do you want to talk a little bit about MIT-E and why we're so excited about this?

Yes, Kristen, thank you again for the question. Look, while maybe it's not getting as much attention, this is a population that's known. There's over 20,000 patients worldwide with mitochondrial disease associated seizures. And as Stu mentioned, this is just the beginning of populations that could benefit from a drug that targets these fundamental (inaudible) inflammation pathways and it causes a disease. Now we have confidence in the study. It's built on a number of previous studies showing that we can have an important effect on seizure activity, both in terms of seizure frequency and other seizure-related morbidity. And we believe that this can be a very important therapy not only from mitochondrial disease patients, patients with Friedreich's ataxia, but many others.

And our next question comes from Brian Abrahams with RBC.

Stu, my congratulations as well on 25 years. I was wondering if you guys could expand a little bit more on the nature of your discussion with the agency on Translarna. I'm curious to learn a little bit more about, I guess, what their initial reactions were to the full 041 data plus the STRIDE registry? What seems to be the sticking point? And I guess what gives you confidence that dystrophin and some of the other analyses would support approval? And is this something that would be a potential accelerated approval perhaps?

Yes. So we recently had an informal discuss and that will allow us to lead to having -- setting up a meeting with them. And it really was the notion of us talking about the overall package in the mechanism of action as well as why we think we have clinical benefit as a consequence of that. Matt, do you want to go through this a little bit?

Yes, sure. Brian, thanks for the question. So just to take a step backwards, as I think most of most of you recall, after we had the 041 data, we had requested a Type C meeting with the FDA to discuss 041 as well as STRIDE as a pooled analysis from -- including Study 7 and Study 20 and the agency informed us that we would have a meeting of written response only. We had asked to be able to have a live meeting given the volume of data, and they said that they would provide written response-only comments, but we would have the ability to talk to them afterwards if we still have questions. And obviously, we did have questions at initial feedback, which seem to focus mostly on Study 041 itself not meeting the bar of substantial evidence of effectiveness.

But clearly, there's evidence of benefit in that study. And when combined with Study 7 and Study 20, we see highly statistically significant and consistent improvement on the key functional endpoints of disease. And then as you mentioned, also the STRIDE industry. This meeting was a live meeting offering as a clarification of the comments that were made in the Type C written comments. And again, a lot of that discussion was about why Study 41 wasn't believed to have substantial amounts of effectiveness. We talked about totality of data, and it was suggested that we could request a separate Type C leading to discuss total and the data, including the mechanistic dystrophin data, because the comment in our meeting was made that we had shared those data, which as you all know, we had those data, but actually focused on the functional benefit that was in 041 came afterwards.

So we see this as an opportunity to again highlight not only 41, but 41 alongside the other placebo-controlled studies, STRIDE registry, how the benefits we demonstrated in the course of the clinical trial are translating into long-term meaningful benefit as far as delaying the key morbid transition states of the disease, loss of ablation, loss of pulmonary function and then bring in all the mechanistic data, we have to study 45 in the laboratory game as well, which really confirm that we have a novel method of action in terms of (inaudible) and that's yielding dystrophin production, which is also associated with the clinical benefits recorded in all of these studies.

That's really helpful. And if I could just squeeze in a quick follow-up on the PKU program. I think the ways to measure phenylalanine levels in modern studies are more reliable, but I was wondering if you could maybe just clarify the way phe is being measured in the Phase III relative to the Kuvan studies and your confidence that the assessment of phe's repeated or robust enough such that you wouldn't have pseudo-responders, whose reductions might drop off between the open-label run in the randomized portion as has happened with some of the old Kuvan studies?

Go ahead, Matt.

Yes. Brian, we're using a blood spot analysis that's done at home. This has been very well validated as a robust measure I think that we have confidence that, obviously, we're using the same methodology in both the run-in phase and the placebo-controlled phase. And also, it's important to note the way that we measure these phe responses, which in the run-in phase, they're treated for 14 days, but we're averaging 3 different time points, 5, 10 and 14 days, which gives us the value of reduction. So it's averaged over 3 points, which is another effort to ensure we're getting an accurate and precise assessment of the phe reduction.

So this is a method that's been well designed, well validated. We have a GLP laboratory, consistent measurement in both the run-in and the placebo-controlled phase. I can't comment on specific differences to the methodology that was used with Kuvan that I provide the confidence that we have a very well validated method that can provide both accurate and precise assessment of the phe changes over time.

Our next question comes from Joseph Thome with Cowen.

Maybe just one, we're going to see some registrational data set here in the first half, which is great. Hopefully, some of these are -- or all of them are successful. But as you did bring these in, is there anything else that you would need outside of the registrational data before a regulatory submission? So essentially could you just comment on your comfort with the CMC as it stands right now and the size of the safety database for sort of the next 3? That are coming up here, that would be great.

Yes. Matt, do you want to take that.

Yes, sure. Thanks for the questions, Joe. So obviously, all -- both compounds, sepiapterin for PKU as well vatiquinone have been in development for a number of years, which has really given the opportunity for the other components of the package when you think about P&C and you think about nonclinical (inaudible) for those portions of the package to get filled out. We obviously are conducting a fairly large study in PKU now with sepiapterin to that. And we believe, based on this trial and the other data that have been collected in other sepiapterin studies that will have the sufficient database to support commission with a positive trial and with vatiquinone, I think one of the really foundations of that therapy is the extensive safety record that's been recorded in kids over the past decade, including patients who've been on drug continuously for over a decade with a very strong safety profile.

So taken together for both therapies, we believe we have all the components of the package. Obviously, with positive data, we'll meet with the agency to rely on the details of the (inaudible) submission and then move forward as quickly as possible.

Great. And then maybe just a quick follow-up maybe on the financial side. In terms of the financial spend guidance for 2023, is there any additional build in the U.S. marketing force anticipated this year? Or would that be more of a 2024 spend item?

Yes, Emily?

Not sure, I'll take that one on the spend side and then commercial on anything on the infrastructure. We're pretty well sized on the commercial force. So there's no significant change in the spend on the U.S. sales force.

Our next question comes from David Lebowitz with Citi.

I guess question number one, on the 923 data. How should we benchmark response rate compared to Kuvan given that patients were on a phe restricted diet, which would be expected to deepen the overall response?

Yes. So I think what we're asking for is for people, whatever diets on, but to keep a consistent diet of what they're on. And I think what -- I think overall, what you're seeing within the results are pretty dramatic results of greater than 60%, both in the classical as well as the other forms of PKU. So I think you've seen consistent activity of the molecule. So I feel we're in -- and if it's deeper in the other way here, I think you're still seeing pretty high response rate. Matt, you have ...?

Thanks for the question. In general, these patients all tend to be on phe restricted diet and the key in both studies, obviously, to have them on consistent diets, so that's not a confounding variable. But I think what we're seeing in terms of differences in magnitude of effect is quite impressive. If you look at the Phase I, which was the Kuvan responder study, they recorded a greater than 30% change in 20% of the patients. And obviously, now we're looking at 65% in this study. So I think this is clearly a much higher response rate. And again, what we've talked about is really what you'd expect for a more bioavailable and potent cofactor. And obviously, in the phases you said, of a continuous diet.

And would you be -- do you expect to specifically report a response rate for classical PKU patients?

Yes, I mean, overall, we'll be -- at the end of the day, we'll break that out as well.

Our next question comes from Kelly Shi with Jefferies.

So for MIT-E data now in Q2, could you help to set an expectation on what kind of reduction of stage of frequency would be considered clinically meaningful? And what other merits we should also focus on to evaluate the clinical benefit of vatiquinone? And then lastly, given that the mitochondrial disease is a very heterogeneous disease, would you expect some groups of patients with certain like genotypes a greater benefit based on the mechanism of action of vatiquinone?

Matt, do you want to take that?

Sure. Thank you again for the question. So when we talk about benefit in these patients, First, we have to think about the disease itself. So obviously, mitochondrial disease associated seizures are highly morbid and common aspect of the disease. So about half the patients with mitochondria have seizures and these seizures don't tend to respond to typical antiepileptics, because the typical antiepileptics don't target the energetic pathways that cause futures in these patients. In fact, many of the traditional antiepileptics are mitochondrial toxins, so they actually make the disease worse. These kids have seizures that are refractory to typical meds, they can have 10 hundreds, even up to 1,000 a month.

So high seizure volume. It's a highly morbid aspect of disease, which frequently leads to aspiration, pneumonia and other infections and often to be the cause of death for these patients. So when we think about meaningful reduction, most of the physicians we speak to think that even a 20% to 25% reduction in seizure frequency, those patients can be important. We've powered the study for a 40% differential reduction between the treatment group and placebo group with a hypothesized reduction is seizure frequency in the active population and 10% in the placebo population.

In terms of differences between genotype and response, given the fact that vatiquinone is targeting 15-lipoxygenase which is a common response pathway outside of the mitochondria, the treatment effect should be agnostic to underlying genotype. And (inaudible) there the other patient characteristics such as a stage of disease that could contribute to differential therapeutic response. That's possible. But one of the things we've observed in previous studies is there's no specific relationship between genotype or disease subtype and response, again, because we're targeting element common or response net common to all different causative genotype defect.

Our next question comes from Tazeen Ahmad with Bank of America.

Maybe 1 point of clarification for Translarna. I think Stu and Matt, you've talked about the totality of data as being the premise for a lot of your discussions recently with the agency. But I guess as it relates specifically to dystrophin, if the agency looks for dystrophin as part of the package, can you just remind us when the last time dystrophin was measured in any of your trials to date? And how many patients' worth of data you might have on that?

Yes, sure. So the way -- obviously, the way the -- you got to remember also the dystrophin was when we measured it, we measured it in study 04 which was the first study that we did, to take a look to see its proof-of-concept studies where we showed -- and that's a published paper, where we showed that you saw increased levels of dystrophin. And it was a small study, I think, I don't know, 15, 16 patients somewhere around there. And then we redid Study 45. We did it again in Study 45. That was how many patients was that, Matt, do you remember?

So we had 20 overall, and there were 18 in analysis population.

So we have those sets of patients. And then we have, obviously, from a clinical point of view, studies from 007, 020 and Study 41 with a large number of patients where in the ITT population, and especially in 41, we saw a clinically significant results. And then not only was it as Matt had said before, that not only was the -- not only was it positive there, but it was also positive in the North Star, the time function that -- and that was true also in Study 020 as well as multiple endpoints in 007. So there's a large body of data that demonstrates Translarna's activity in terms of treating patients.

And that's then consistent with the STRIDE registry that we've done where we've looked at hard endpoints such as loss of ambulation, loss of getting off of -- being able to get off the -- stand from the ground and loss of pulmonary activity. And then all those results demonstrating that you preserve both the ability to walk, to preserve the ability to get off from the ground and by year and preserve the ability to preserve pulmonary function.

So you put all that together, frankly, I have not seen a better clinical package than the one we have. And we believe it's pretty clear that patients benefit from it. And you can see that patients have been on it for now quite a long time. So we believe -- and we have patients from -- obviously from around the globe, getting Translarna. And we always think it's appropriate and fear that we should work towards getting patients in the United States this drug. And what we're really asking for is, look, we'd like to -- we think that we have a strong package. Let's review it, let's have an advisory committee and at least give us and not just us the patients and their families a fair hearing so that the folks, who have been -- and in fact, many of them have been on it for over a decade now, that to give them their do on what we think is a highly active drug.

Okay. I mean, at this point, what do you think needs to happen to get the agency over the finish line for them to say that you should apply for approval? Have they looked at all this data already as part of your written interaction?

Yes. So we're -- look, what we think is we've had years now of working with the agency and not talking to them. And it's not just us. It's been the whole community has only had written discussions and uncomplicated results with a large body of data and they have plenty of new people there who may not understand the whole picture and have all the discussions. And not to actually -- I simply don't understand that, not to have interaction where you have communication and you talk through it. And just like everything else that we do in life, you need to be able to go back and forth to give points of view and that is how you change people's minds or at least have a shot at it. One doesn't have an easy shot at it if it's every 3 months, you get the right response back to questions. So we think that at least what we need to do is to have a conversation to see where that goes.

Okay. And do you think that, that will be sooner rather than later? Or do you have to wait that extra 3 months just to schedule it?

It takes time. This is the nature of regulatory discussions, you put it in, and there's time for them to get -- fit you in.

Our next question comes from Gena Wang with Barclays.

I have 2 questions regarding AFFINITY study. First is just clarification. Regarding the 156 patients, these patients actually pass 50% phe reduction screening test? Or was that 156 patients as a total patient that you screen? If it's a large 156 patients is a passed 15% phe reduction, what is the total patient number you've screened?

Matt, do you want to take that one?

Yes, Gena. So the 156 refers to all those, who went through screening and then completed the run-in phase. So that's 156 subjects, who were -- received 2 weeks of sepiapterin. Of those 156, 102 or 65% had a greater than 30% reduction.

So out of 156, how many of these achieved 15% phe reduction?

So of the 156 -- so we said 102 had over 30% and 13 had between 15% and 30%. So in total, that would be 115 or about 75% -- 74%, 75% had 15% reduction and above. But obviously, far and away, the majority of those, 102 of those were greater than 30% reduction.

Okay. Very good. Very helpful. And then my second question is, can you remind us the rationale of dose escalation with 2 weeks each of the 20-milligram, 40-milligram 60 milligram for the Part II study?

Yes, sure. So one of the things we're studying obviously, at the agency always likes to understand is exposure response relationships so by doing the 2 weeks of 20 milligrams per kilo, 2 weeks of 40-milligram per kilo, 2 weeks at 60 milligrams per kilo, we can have a very nice curve and understand the relationship between exposure and response, which is important for regulatory purposes. We believe the dose will be 60 milligrams per kilogram, and we're also very confident that 2 weeks is sufficient to understand what the effect at each dose level will be.

Our next question comes from Jeff Hung with Morgan Stanley.

This is Mike Riad on for Jeff Hung. First one, once the upcoming AFFINITY data readout in May, can you remind us how you're thinking about the cadence and timing of regulatory events? And we have a follow-up after that.

Sure. Our goal is we'll get the result. And then based on that, we'll obviously report out the results also publicly and then as rapidly as possible. Have set of meetings and get ready to an NDA for the product and get ready for regulatory guys as fast as possible. Obviously, we'll do a pre-NDA media. And while we're doing that, we'll be getting all the documents ready to go.

And my second question for the vatiquinone Phase II/III MIT-E data, they were expected this quarter, but they're now in the second quarter. Can you talk about any factors that led to the adjustment in timing?

Yes, I think it's finishing up the last patient out. Matt, do you have any thoughts on this?

Yes. It's -- yes, Michael, it's really a question of having now know exactly when that last patient last visit is going to be, which is going to be in March and then having sufficient time to do all the database cleaning, the database lock and then getting to data. So it's really a refinement of the timeline now that we know the definitive last patient last visit date.

Our next question comes from Paul Choi with Goldman Sachs.

I have 2 pipeline questions. First is on AFFINITY. Can you just maybe elaborate on the updated timing from May of this year versus your prior guidance? And can you maybe speak to any geographical differences with regard to practice and clinical treatment of PKU patients in the U.S. versus OUS that we might look for as you top line your results later this year?

Sure. So I'll just take the first one. I think we've talked about this is the timing really had to do with the large -- the refinement of the timing of when we would complete the trial had a lot to do with just -- there were a lot of patients at the end of the -- when we were nearing ready to close the trial. And what we decided to do is -- and it was a number of people that we wanted to make sure that some of their patients got in some of the KOLs would be able to do that.

And that us, we actually brought in more than we thought we would, and that extended the timeline that led to us getting the results, which we think now by everyone's in the trial now, and so we were able to give a pretty refined time on when we would be able to complete the trial. So we feel pretty good about now that we know exactly where we're at when we complete the trial.

In terms of the geographical differences. Matt, do you want to -- any comments you want to make on that?

Yes. I would -- Paul, we really don't expect geographical differences while there may be different guidelines in terms of target phe reduction in the region to region. The practice is fairly consistent worldwide. And obviously, this is a disease where the cornerstone of management is for now diet modification that starts at birth. Newborn screening is in place in many places around the world. So we can certainly look at whether there's differential response based on geography, but it's not one that we would expect on priority.

Okay. And as a follow-up on 518 for Huntington's, can you maybe comment or update us on what feedback or data you've provided to the FDA and just what your current expectation is for getting the clinical hold lifted there?

Yes, sure. I think as we've discussed in the past, our goal is to share with them some data that we're getting with current patients and go back to them on that with that. which we will be doing. And we think that opposed to having enough clinical data on the set of patients that we can then go back and talk to them on. And so that's what we're doing in terms of that. But we've opened up obviously a fair number of sites around the globe. And so patients are coming in, we even expanded to take an additional cohort of patients. So we feel pretty good about bringing them in.

And then we'll bring in, at some point when we have a set of data that we'll go talk to the FDA about and show them that we're in a pretty good ship. Just to remind everyone, we're doing the 5- and 10-milligram data that then will be able to go to the 20-milligram data and we'll be able to bring our data to the FDA at some point so we opened it up in the U.S. That's our game plan.

Our next question comes from Danielle Brill with Raymond James.

Just a couple of clarifying ones for me. I think last month at JPMorgan, unaudited 4Q revenues for Upstaza over $13 million. Is that number still accurate? And should we be expecting the spillover from the $20 million to $40 million you previously guided for in 4Q to be reflected in 1Q?

And then just a clarification on Translarna as well, the Type C meeting that you plan to request will this one be in person? Or are you expecting just written meeting as well?

Yes, thanks for the question. And so let me take Translarna up. And we anticipate this to be means that it will have conversation, so it's not going to be -- it's not going to be written. And I believe it's going to be a Zoom call, isn't that right, Matt?

We request -- we'll request a live interaction obviously, and I know the agency have now started having in-person meetings again. So the exact details Danielle, whether this is Zoom, whether it's phone, whether it's live, whether they want to do it another way, obviously, it will be up to them and we'll know better once we submit the request and get their response. Obviously, we would be coped with in person, but we believe that's the most effective form of discussion, but obviously, this is going to be up to the agents and their (inaudible).

Yes. And then in terms of, obviously, the patient finding, in terms of Q1, obviously, we most of what we do is focused on identifying patients. And certainly, we remain confident that we want to move those in. In terms of the numbers, I don't think there were any changes in the 2022 numbers. And we'll probably provide more color about how we're doing. We're very early within the launch, right? So I think we'll be able to provide more color on each of the quarterly calls and certainly at the Q1 earnings call, we'll provide more color on that. Kylie, do you have anything else to add to that one?

Yes. As said, Danielle, there is no changes to the numbers for Upstaza from unaudited into audited. And as Stu said, we're continuing to focus on patient identification and continuing to focus on securing pricing and reimbursement in a number of different countries across Europe as well as we talked about in January, focusing on looking at new patient programs outside of Europe. And so that's continuing according to plan. As Eric mentioned earlier, we're seeing strong engagement with payers across a number of different HTA bodies, and we look forward to being able to continue that pricing and reinvestment step to treat more patients in this, and we plan to provide more updates at upcoming quarter earnings.

Our next question comes from Robyn Kay Karnauskas with Truist.

This is Alex on for Robyn. We had a question on if there had been any updates into the patient finding for patients identified for AADC for data? It sounds like we're going to wait until the first quarter to get some more results on that? Correct me if I'm wrong, we also wanted to now turn towards the U.S. Can you remind us of the prelaunch initiatives that are ongoing for Upstaza and what additional initiatives may still be needed as we approach BLA submission and anticipated future launch?

Yes, sure. Eric, do you want to take that one?

Yes, sure. Thanks, Alex, for the question. We currently are seeing the dynamics in Europe, but we're also preparing for the launch of Upstaza in the U.S. in a similar way, and we have a dedicated team that's actually doing that. We have focused on a number of key areas, including accelerated disease awareness. We have a number of key programs, including advisory board symposium and publications, key publications and peer review that have been in English, it's also U.S.-based journals.

We're talking to payers as well in the U.S. and prepare for this launch. We're talking to a number of key payers about the design, because we know that there are gene therapies currently approved in the U.S. but many of them are replacing standard of care, now Upstaza will be the standard of care. So we're taking an approach to really understand how the payer view will be on this. We have accelerated a number of patient finding activities, particularly in the high enriched population. And looking at -- and also ethnic type groups. We have already where our target is to compare somewhere between 7 and 10 surgical centers to be ready at the time of launch.

And importantly, this will be timed and these centers will be timed with the time of launch, we'll be able to work very closely to bring these patients in. So overall, I think we're very pleased with the progress we're making outside of Europe, but we're also sharing a lot of the knowledge from the launch itself in Europe, and we're sharing that continuous learning and execution that we have with the U.S. market following the BLA approval, we'll be ready to launch the product in the U.S.

That sounds great. And also on the same note, now that there have been patients treated in the real-world setting, do you find that the clinical results -- this early, still early clinical results that you're seeing and details along with the procedure, match that of the -- what you saw in the clinical trials? Or are there any key differences to note?

Yes. No, we're -- look, it's a nice aspect of AADC deficiency and the gene therapy that we have as we see it is truly a transformational therapy where -- and as you've seen that all of the patients perform better in their patients that obviously, while they were growth arrested and weren't able to hold their head up, turn over, sit up, stand or talk have changed. And clearly, you can see some patients where we have 1 patient that speaks three languages. So that's been exciting, and we continue to see substantial improvement in these patients. So there's -- as we always say, there's nothing more ratifying than being part of a drug therapy and bringing it to patients and having such transformational facts on it. I think that's -- it's great for the family to see what it does for the family, the patients and for our own community for just being part of bringing it to them. So we're excited about it, and it continues to be a transformational product.

Our next question comes from Colin Bristow with UBS.

This is (inaudible) for Colin. We have 2 clarification questions. So the first one is on the PKU data. Congrats on the Part 1 data and could you please give us some more detailed colors on the primary reason for the top line delay to May, when like you have already like get a lot of stuff. It's just like for the Part 1, the enrollment was as planned and it has a fixed timing end point. So I'm just wondering what the rationale behind it?

And the second question is on PTC518 Huntington's disease program. We are just wondering, have you heard any updates on more specific requirements from FDA yet -- and how long will it take to get the data? And also in terms of the like ex U.S. enrollment, have the high dose portion already started the enrollment? Could you please clarify on that?

I think if I -- it was a little muffled. I think you're asking why is it in May? Was that the question? So I think the -- so I think maybe -- so just so we're clear, the reason is it was -- the end of the study really occurs when it's the last patient last visit you've completed that aspect of the study, and that's when all the patients are completed, you can then go and clean the data and ultimately get it analyzed. And really what happened is at the end of there was a large number of patients at the end of the study that we're going in. And that's always in a way, a little bit of an air traffic control nightmare to be able to get -- bring in as many patients as you can and close it as rapidly as possible.

And so that makes it -- and we're balancing, wanting to close the trial, but also wanting to make sure that patients got in and that patients from multiple physicians get into the trial. And so that we don't hanger anybody, because they weren't part of it -- of the trial. And so that's always -- it's always a little difficult sometimes to precisely land the plane at the time you think you're going to do it. And this one was in particular, much more at the end had lots of patients. And that's why the timeline moved from where we thought it would be to May. It's a little bit longer, but we've gotten a lot of -- we have a lot of the patients from people from all the key opinion leaders and investigators.

So at the end of the day, it was the small chains, so well worth it because we have everybody in the study, and we feel good about it. So I think that's -- at the end of the day, that's what we're comfortable with. I don't think -- and well worth the small amount of time chain to get everyone need.

So that -- and in terms of 518, we're now collecting data. We haven't said yet when we're going to clean the data and go back to the FDA. But we plan to do this and when we do, we'll let everyone know what our plans are, but we haven't done that yet. And we -- I don't think we've set it up to say when we're going to complete that. Matt, anything else I have to say on that.

Yes, I would just add a couple of things on the -- just as a reminder, right, this was feedback that came from the nonclinical data that we had committed to the agency that was reviewed at the other agencies. And as we said, all the other countries have allowed us to start the study at 5 and 10 milligrams for a year and even start at 20 milligrams up to a year and the FDA simply asked for some additional data to support the dosing and duration that we watch it. And as Stu said, we're in the process of collecting what we think will be the pure to do that, which is clinical data. So real data from patients that can comment comfort for the dosing in duration at the U.S.

In terms of your question regarding the initiation of the higher dose, the 20-milligram cohort, that hasn't started yet. As we said, we want to look at the data from 5 milligrams to 10 milligrams to really make a data-driven decision based on what we're seeing in terms of pharmacodynamic effect, that is reduction in peripheral mRNA Huntington and protein Huntington protein reductions were fully in the biodistribution in terms of CSF exposure. Once we have an understanding of what that looks like at 5 and 10 milligrams, we'll then be in a position to make a decision regarding initiation of the 20-milligram cohort. And so we look forward to having those initial 5 and 10 milligram data to help inform that decision in the near future.

There are no further questions. I'd like to turn the call back over to Stuart Peltz for any closing remarks.

Okay. Thank you, operator. And in closing, I'd like to thank all of you for joining the call today and your well wish for our 25 years. We're always excited about that, especially excited about where we stand today at PTC, where we have as you can see, strong and accelerating revenues from our product portfolio. We have 4 data readouts in the first half of 2023, including 3 registrational studies. So clearly, it, we're firing on all cylinders, and we look forward to more updates for you over the coming months.

And with that, thank you for staying on and good evening.

Thank you for your participation. You may now disconnect. Everyone, enjoy the rest of your day.