PTC Therapeutics Inc (PTCT) 2023 Q4 法說會逐字稿

Good day, and thank you for standing by, and welcome to PTC fourth-quarter 2023 financial results. (Operator Instructions) Again, please note that today's conference is being recorded. I would now like to pass the call over to the Senior Director of Investor Relations, Ron Aldridge.

Good afternoon, and thank you for joining us today to discuss PTC Therapeutics Fourth Quarter and Full Year 2023 corporate update and financial results. I'm joined today by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; our Chief Commercial Officer, Kylie O'Keefe; and our Chief Financial Officer, Pierre Gravier.

Today's call will include forward-looking statements based on our current expectations. Please take a moment to review the slides 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 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, Matthew Klein. Matt?

Thank you, Ron. Good afternoon, and thank you all for joining today's call. I'm pleased to share our fourth quarter and full year 2023 results, and to provide an update on the progress of our pipeline programs as we move into what will be an exciting 2024 with a number of potential significant milestones.

As we closed out 2023, we had another solid quarter commercial performance, with total fourth quarter revenue of $307 million and full-year 2023 revenue of $938 million, representing 34% growth over 2022. Our DMD franchise revenue totaled $143 million in the quarter and $611 million for the full year. Eric and Kylie will provide additional detail on our commercial performance shortly.

Our revenue performance reflects the continued outstanding work of our global customer facing teams and our successful efforts in geographic expansion. With this infrastructure and track record of execution, I remain confident in our team's ability to succeed with our next product launches, including sepiapterin for the treatment of PKU.

Most of you are aware, in January, we received a negative opinion from the CHMP on the continued conditional marketing authorization for Translarna in the EU. This opinion is expected to be ratified by [EC] in late March or early April. Importantly, Translarna remains on the market until ratification occurs. In addition, we continue to commercialize Translarna in several regions outside of the EU where independent authorizations exist. While we are, of course, disappointed in the CHMP opinion and the potential impact it has on patients in Europe, PTC is well positioned to withstand us up.

As I have previously emphasized through our efforts to focus our R&D portfolio, rightsize the organization, and strengthen our balance sheet, we have a solid foundation for building the company forward and continuing to deliver on our goal of discovering, developing, and commercializing transformative therapies for patients.

As we look forward to 2024, we have a number of important potential regulatory and clinical milestones for a number of our programs. I will begin with our sepiapterin program for the treatment of children and adults with PKU. We remain on schedule to submit [MAA] per se deterrent to the EMA in the first quarter of this year, and to submit the NDA in the United States no later than the third quarter of this year.

As we continue to collect data from the open-label extension study following the Phase 3 APHENITY trial, we continue to see durability of sepiapterin treatment effect, and the ability of patients on sepiapterin to tolerate increases in dietary protein intake beyond the recommended daily allowance. This liberalization of diet is incredibly meaningful to patients and further supports the potential of sepiapterin to fill the persistent unmet medical need of the majority of the 58,000 PKU patients worldwide.

Moving to our particular program for Friedreich ataxia, we had a Type C meeting with the FDA earlier this quarter. Based on discussions with FDA, we now have a path to potential NDA filing based on the placebo-controlled results from the MOVE-FA study in combination with long-term open label extension data currently being collected. The open-label data will be compared to a natural history population from the robust Friedreich ataxia patient registry using analyses similar to those provided to FDA by Reata as part of this quite high-risk NDA.

Based on the time needed to collect sufficient long term open label data, we expect to be able to submit an NDA in late 2024. We are very excited about the potential of particular note to fill the significant remaining unmet need for pediatric and adolescent FA patients.

In other regulatory updates, we remain on track to submit the BLA for Upstaza to the FDA in March, and are also scheduled to meet with FDA in March to discuss the contents of a potential NDA resubmission for Translarna.

Turning to our ongoing clinical trials. We expect to share interim 12-month results from the pivotal Phase 3 trial of PTC518 in HD patients in the second quarter of this year from the initial cohort of subjects on whom we reported data last summer. The 12-month results will include additional safety and tolerability data as well as biomarker data, including CSF Huntingtin protein levels, NfL levels in the blood and in the CSF, and volumetric changes on MRI. We will also be sharing data from the clinical outcome measures collected as part of this study.

Finally, we expect to share top-line results from the CardinALS registration directed trial of utreloxastat in ALS patients in the fourth quarter of this year.

In closing, we are well positioned for an exciting 2024. We have the team, the capital, and the strategy that position us to execute on the many impactful opportunities that lie ahead.

I will now turn the call over to Eric and Kylie to discuss our commercial performance. Eric?

Thanks, Matt. Our global customer facing team has delivered yet another strong quarter. Continuing the significant momentum we have built, we see ongoing growth from our portfolio products in more mature markets such as the US and EU, and also new markets where we have invested in geographic expansion in Latin America, the Middle East, North Africa, and the Commonwealth of Independent States, where there has been robust year-over-year growth.

In the fourth quarter, we delivered $155 million of revenue for PTC-marketed products, which represents 22% growth year over year. For the DMD franchise, we closed out the year with a strong fourth quarter for both Translarna and Emflaza, delivering an impressive $143 million in net revenue, which is 25% growth compared to the fourth quarter of 2022, with a strong full-year performance of $611 million.

For Translarna, we achieved $75 million in revenue this quarter with annual sales of $356 million, which is a robust 23% growth over the same annual period last year. I'm very proud of the team's efforts and determination these last few months, as they have worked tirelessly to ensure that every single Translarna patient in Europe continues to receive treatment until the ratification of the CHMP opinion. And we are actively evaluating local country options for ongoing access to treatment.

Additionally, we continue to diversify our Translarna franchise globally, as we brought this treatment to patients in seven new countries last year as part of our ongoing expansion geographically around the world.

Now, turning to Emflaza. Quarterly net revenue was $67 million with $255 million of net revenue in 2023, which is a 17% growth over 2022. The team has implemented a multi-prong strategy to ensure that we protect our Emflaza business in anticipation of a loss of exclusivity in Q1 this year. Our US team continues to engage with healthcare professionals by providing meaningful clinical differentiation compared to prednisone, and have implemented other strategies to ensure Emflaza brand loyalty for new and existing patients.

We continue to support DMD patients and their caregivers with outstanding service from our PTC cares teams by enhancing customer experience, providing easier access to treatment, facilitating co-pay assistance, and improving adherence for patients in the US. PTC is also partnering with our specialty pharmacies and contracting with targeted payers to dispense the Emflaza brand. We continue to communicate and support our exclusivity for two to five-year old DMD patients, which continues into 2026. And we are also leveraging patient advocacy in support of the benefits and value of Emflaza.

Now, I will ask Kylie to update the progress of our current and future new product launches. Kylie?

Thanks, Eric. Let me begin with Upstaza, the first and only approved gene therapy infused directly into the brain, where we continued to see transformative results. In October, we presented Upstaza data at the CNS conference showing cognitive improvement and continued increase in long-term motor milestones. Our rollout across Europe continues to progress with new patients treated in the quarter.

Furthermore, we are continuing the global expansion of the franchise with additional regulatory filings in Asia Pacific countries and have recently received regulatory approval in Israel where the team is working actively to treat our first patients. Globally, patient identification, treatment center readiness, and access and reimbursement discussions continue to advance.

Moving to Tegsedi and Waylivra in Latin America. We closed out the year with robust growth for both Tegsedi and Waylivra, more than doubling our revenue in the region. Patient identification is robust and the number of patients on treatment continues to grow across the region, including first time revenue in new countries.

In Brazil, we received a new group purchase order for Waylivra, which is in recognition of the increased number of patients that rely on these life-changing treatments. We anticipate fulfilling this grew purchase order in the first quarter.

As previously discussed, we are updating our total revenue guidance following the CHMP opinion for Translarna. With growth continuing across the portfolio for Evrysdi, Upstaza, Tegsedi, and Waylivra, our efforts to protect the Emflaza business, and expected Translarna revenue in geographies outside of Europe, we are updating our annual total revenue guidance to $600 million, $680 million.

We continue to plan for our global launch of sepiapterin. Feedback from the PKU community is extremely positive and there's a widespread recognition amongst metabolic specialists, geneticists, and dietitians of the potential of sepiapterin to meet the significant unmet needs for many of their PKU patients, not just patients who have been unresponsive to Kuvan, but also those who are poorly controlled on this drug and could potentially do significantly better on sepiapterin as we saw for numerous patients in the APHENITY trial, as well as classical PKU patients.

More importantly, we continue to see durability of treatment effect and the ability for patients on sepiapterin to increase their dietary protein intake beyond the recommended daily allowance, while still maintaining control of Phe levels in the long-term extension study.

In addition, we have heard from patient advocacy groups around the world that PKU patients are excited as they've been waiting for a therapy that combines efficacy through both Phe reduction and improved Phe tolerance with tolerability. Both the physician and patient excitement continues to give us the confidence that we can reach over $1 billion opportunity. And we look forward to taking a step closer to realizing this upon our first global approval.

In conclusion, a strong fourth quarter rounds out what was a strong 2023 for our commercial team. Our team is well positioned to continue to execute across all our commercial products and across all geographies, together with building out the foundation for sepiapterin for success in 2024 and beyond.

I will now turn the call over to Pierre for a financial update.

Thank you, Kylie. I'll now share the financial highlights of our fourth quarter of our full-year 2023. Please refer to the earnings press release issued this afternoon for additional details.

Beginning with top-line results, total revenue for the fourth quarter was $307 million. This consisted of DMD franchise revenue of $143 million and other revenue of $164 million.

Starting with the DMD franchise. Translarna net product revenue in the quarter was $75 million, while Emflaza net product revenue of $67 million.

Moving to Evrysdi. Fourth-quarter global revenue of SEK354 million, which equates to about USD400 million, was achieved by work, earning royalty revenue of $51 million for PTC. We also earned $100 million milestone for achieving more than $1.5 billion in 2023.

Our total revenue for full year 2023 was $938 million for year-over-year growth of 34%. This included DMD revenue of $611 million, which represented 21% year-over-year growth. Evrysdi royalties for the year grew 49% to $169 million year over year.

Non-GAAP R&D expense was $113 million for the fourth quarter of 2023, excluding $8 million in non-cash stock-based compensation expense compared to $175 million for the fourth quarter of 2022, excluding $14 million in non-cash stock-based compensation expense. The year-over-year reduction in R&D expenses reflects the strategic portfolio prioritization as the company continues to focus its resources on its differentiated high-potential R&D programs.

Non-GAAP SG&A expense was $68 million for the fourth quarter of 2023, excluding $8 million in non-cash stock-based compensation expense; compared to $79 million for the fourth quarter of 2022, excluding $13 million in non-cash stock-based compensation. This expense reduction reflects lower operating cost as a result of the reduction in the workforce.

We're maintaining our guidance we provided in January for GAAP R&D and SG&A expense of between $740 million and $835 million. We are also maintaining our guidance for non-GAAP R&D and SG&A expense of between $660 million and $755 million, including expected R&D expense milestone payments of up to $65 million and excluding estimated non-cash stock-based compensation expense of $80 million.

Cash, cash equivalents, and marketable securities totaled approximately $877 million as of December 31, 2023, compared to $411 million as of December 31, 2022. The strong balance sheet provides PTC with the resources to execute on our strategy, and to achieve our milestones over the next several years, including the anticipated sepiapterin in August.

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

(Operator Instructions) Sami Corwin, William Blair.

Hi, this is Brooke Shuster on for Sami, and thanks for taking our question. We were wondering if you could provide more details on the transition of the sales of forces of resources for Translarna with the removal of the EU market? And if there will be any effect on the SG&A outlook for 2024?

Okay. Thank you very much Brooke for the question. As we talked about previously, obviously we still are marketing Translarna in the first quarter in Europe until the ratification. And if sepiapterin occurs and then it will be a very rapid transition of that infrastructure to get ready for the sepiapterin launch. As we've discussed, we'll be submitting MAA for sepiapterin in the first quarter and that infrastructure that we've built will be well positioned for a successful what we plan to be a successful launch of sepiapterin in Europe.

So the OpEx guidance that we've given for the year incorporates what we plan to have today, and also already accounts for what we're going to need tomorrow for the sepiapterin launch and any other product launches that we have.

Thank you.

Kristen Kluska, Cantor Fitzgerald.

Hi, this is Rick Miller on for Kristen. Thanks for taking our questions. Maybe on FA, vatiquinone, can you speak to anything on the ongoing regulatory strategy in the US versus Europe? With two guided regulatory interactions, do you plan on making similar arguments around the data in MOVE-FA to the different regulatory bodies? Or could there be different strategies when it comes to the FDA and EMA based on what they're looking for? Any color here could be helpful. Thank you.

Yeah. Sure, Rick. As we shared on the call, we were very pleased to announce that we had a very productive discussion with the FDA regarding the Friedreich ataxia program earlier in within the first quarter. Based on those discussions, we now have a path to NDA submission, we believe, late in the year. It was an extensive discussion regarding the clear evidence of benefit in the MOVE-FA placebo-controlled study, particularly its upright stability scale, which is now clearly recognized as the most applicable part of the entire end far score for assessing ambulatory pediatric adolescent young-adult patients that made up the majority of the population of the MOVE-FA study.

So after that discussion, it was agreed that we have the ability to potentially submit an NDA based on MOVE-FA along with confirmatory evidence from the long-term open label extension portion of MOVE-FA, comparing those data to natural history data, very much like [periodic, it's just by sepiapterin so if I'm combining solid, reliable, strong evidence of clinical benefit] in the MOVE-FA study along with confirmatory evidence from the open label portion of that study. So we're very excited to improve that data.

Okay. Thank you.

Kelly Shi, Jefferies.

Hi, this is Hugh for Kelly. Thanks very much for taking the question. First question on Emflaza. Have you seen any patient switching from Emflaza to generic? And I know that you cannot speak for patient, but if a patient were to speak -- sorry, were to switch or were not to switch, do you know what could be the reason driving patient the decision, please? And I have a follow-up question, please.

Thank you, Hugh, very much for the call there. Kylie, do you want to comment on what leads the Emflaza, our revenue projections, and potential impact of generics?

Yeah, absolutely. So thank you very much for the question. As we've said in the past, we've obviously had -- the fact that loss of exclusivity has been on the horizon, and we've been preparing for this. The team has a number of strategies in place to do everything they can to protect the business. And obviously, Eric outlined a number of days in the prepared remarks.

So I think from that perspective, we've talked about contracting with specialty pharmacies. We've talked about contracting with payers, number of initiatives, highlighting clinical differentiation to prednisone, ensuring brand loyalty through outpatient PTC cares team. And a number of these programs are in place to ensure that we can protect the business upon the loss of exclusivity.

From that perspective, I think it's too early to say, flipping switches. There's nothing that we've seen so far. And I think what we have seen and understand through speaking to both physicians and patients in the community is that there is a strong brand loyalty to Emflaza. There's a number of programs in place to ensure that brand loyalty.

And so from our perspective, we've done everything we can to maintain that business, and our revenue guidance is projecting that as well.

Okay, great. And then on the Huntington's disease program. Has the FDA given you specific guidance in terms of firm criteria and timeline to lift the clinical hold, please? Thank you very much.

Yes. As we previously shared, we had a very productive discussion with the agency in the fall of last year, where they shared that this data we've collected so far in the PIVOT-HD study since 12 weeks should be sufficient to allow conducted that study for 12 weeks duration. And if we wanted to be able to give a full protocol at 12 months, that they would like to see six months worth of safety data.

So that's obviously very encouraging, because as we've shared last June there's very strong evidence of safety and tolerability, thus far with no evidence of NfL spikes seen and also no treatment-related serious adverse events. The profile continues to be safe as we continue to collect more data. So we look forward to being able to share it out with the FDA, the six-month data they'd like to see to lift the partial clinical hold, [which we expect to do is basically to take those data].

Thank you.

Eric Joseph, JP Morgan.

Thank you. Just wanted to touch on -- particularly in FA, if you'd like to see that opportunity back on the table. Can you just talk a bit more about what has got the FDA a little more constructive? Was any new data from the open-label extensions discussed? Or is it more about just getting them on board with upright stability or the key functional endpoint?

And just looking back on your commentary where they previously seemed to want a confirmatory study. If you proceed with an NDA submission here, that would be for full approval or accelerated approval next year? Thanks.

Thanks for the question, Eric. So the discussion with the agency really focused on the upright stability scale. I think as we've talked about when we started the MOVE-FA study, what wasn't quite appreciated was that the population you were looking at ambulatory patients, the only sensitive portion of that scale is in the upright stability scale. And over the past couple of years, there's been several publications and there's also been an FDA-funded study looking at pediatric Friedreich ataxia patients.

All of these studies have shown clearly that if you want to assess the treatment effect in a young adolescent ambulant patient population, that the upright stability is the only way to do it. In fact, to even look at the placebo data in our trial, you see that the placebo group barely changed on any of the other parts of the Emflaza. It was really only on upfront stability that you see disease progression in that population over 72 weeks.

And so we are able to show those data, Emflaza data, and provide evidence to the agency, including evidence from the study they've funded. It becomes very clear that while the primary endpoint itself didn't hit, we demonstrated significant benefit on the only thing you possibly could show significant benefit on disease progression, and that's the upright stability scale.

So I think those data and that understanding, along with the supportive evidence on the fatigue scale, which has also statistical significance is well recognized as the most burdensome system for application; some correlation with a walk test. All of that together, I think was very helpful in having a constructive discussion with the agency and being able to talk about a path forward to NDA based on the new MOVE-FA data.

We have not done the analysis yet of the open label data. Those weren't shared. But we will obviously prepare an analysis plan for those data to share with the agency ahead of doing those analyses. In terms of it being accelerated or full approval, we're still having those discussions at this point.

But what we're most excited about obviously is being able to have the potential to submit an NDA based on the move that a study, and still what is still a significant unmet need for pediatric and adolescent Friedreich ataxia patients. And also to be able to have a therapy that would provide benefit to you ambulatory patients who are young adults that are at an adult age as well.

Okay. I appreciate the commentary there. Maybe just on the sequencing of a shift -- the open-label extension analysis and showing those data with FDA. I guess, well, will you updating the [Street] with those data ahead of further interactions with the agency?

Yes. We expect those open label data to be collected over the next several months and we would expect then to complete the analyses once they collect all the data. Well, we'll also be doing an analysis of the original study. As you know, we've previously shown that in the long-term follow-up from the initial, particularly on study, we had a highly significant benefit when looking -- when comparing those patients treated for 24 months, [versus a stage in that history match].

We'll be updating that analysis as well, and including that as a source of confirmatory evidence to the exact sequencing of having the data shared with the FDA and updating the [Street]. We'll certainly keep you posted as we move towards towards the NDA, including FDA meeting.

Okay, great, Thanks for taking the question.

Jeff Hung, Morgan Stanley.

Thanks for taking my questions. For Translarna, are you aware of any communication between the EMA and the Brazilian Health Regulatory Agency after the recent EMA decision, given their data sharing agreement, roughly how much you got from Brazil? And then I have a follow-up.

Yeah, Jeff. We're not aware of any correspondence. I think, Brazil has traditionally been quite independent, and we expect that to continue to be the case, as indications we have is that they will continue to act independently and making their assessment therapy have the benefit of that.

Okay. Thanks. And then for the sepiapterin NDA submission, what other data might be needed beyond the talk data? Could the FDA look for clinical data versus Kuvan and classical PKU patients? Or have they ever asked you a sense about running a head-to-head study against Kuvan? Thanks.

Yeah. So as we've previously talked about, the only outstanding or the only gating item for the NDA submission was the completion of the study. We started that as expected in December. And now that we have visibility to those timelines, we look forward to discussing being able to possibly submit the NDA news sooner than the third quarter. So obviously we look forward to those discussions.

In terms of comparison to Kuvan, I think that's something we've never been asked for. In fact, what we've been able to show FDA and other regulatory authorities as well that we had to do Phase 3 study, which was a head-to-head comparison of Kuvan, and it showed statistically significant benefit of [PTC's] handover Kuvan.

And then, of course, the APHENITY study where we had that number of patients, 27 patients, who came in the study on Kuvan. We had washed out a bit and nearly had a 50%, roughly 50% greater lowering effect phenylalanine once those patients pushed over to sepiapterin, again clearly demonstrating that we're able to provide significant greater benefit to these patients.

And then, of course, the evidence in the classical PKU patients. And then within the APHENITY study with a mean reduction of 69% of the placebo-controlled portion, I think is, again, very supportive of the potential for sepiapterin to provide benefits to the full spectrum of PKU patients of that being of all ages and all degrees of severity. And also reinforcing that patients have demonstrated responsiveness to BH4 in the past, so we can certainly expect that much greater response once this there's put on sepiapterin.

Great. Thanks so much.

Brian Abrahams, RBC Capital Markets.

Hey, good afternoon. Thank you for taking my questions. On this 518 Huntington's program, I guess two questions. First, I'm curious how your views have evolved, on whether this could be a potential path for accelerated approval for that drug based on NFL and/or brain volume?

And then secondly, I know there's an additional cohort of patients that you guys were enrolling, the ones that weren't presented last year and included early stage three patients. Just wondering where you're at with that cohort? If we might see interim results from less than 12 month's timeframe and the second quarter as well? And your latest thoughts on moving to a 20-milligram dose? Thanks.

Well, thank you very much, Brian, for the questions. So on your first question, okay. Look. I think, it's very clear that FDA as a whole in the neurology division in particular, has been looking at the accelerated approval path as one that is rational for neurodegenerative diseases where it's typically many years of very, very large study needed to register clinically meaningful effect. So to be able to have a biomarker that is likely to predict clinical effect makes perfect sense, that you can have an accelerated approval in patients with either drug access to therapy, while you collect that longer-term data.

Obviously, if it makes sense for neurodegenerative disease in general, it certainly makes sense for a disease like Huntington's disease, which, of course is an indolent disease. The efficacy study will necessarily need to be large and long.

In terms of potential biomarkers for HD, we think there's several, as we mentioned, both NFL and brain volume. Certainly in a disease of inflammation, oxidative stress to be able to show a benefit on a marker of inflammation. Oxidative stress, like NFL, certainly should be likely to predict clinical benefit.

And similarly for something like brain volume, whether it's a pathogenesis of disease is selling to restart that loss of brain volume, and then symptoms that present itself and ultimate clinical or degeneration as you could sell that process, brain atrophies that certainly suggests you should be able to influence the progression of disease. So we see those both as potential biomarkers.

Of course, it's going to be a matter of having the data, having the discussions with the agency, because we will be the first ones through that portal. But I definitely think that the agency has shown an openness to leveraging the accelerated approval pathway in the case of diseases like HD. And we certainly would look to avail ourselves of that opportunity.

In terms of your second question, that the Phase 3 enrollment has gone quite well. In fact, overall enrollment really ticked up after we shared the June data. And we're able to reassure both the patient community and physician community that you can develop a drug for Huntington, while all that is safe and well tolerated and have the necessary bio distribution and pharmacodynamic effect necessary for therapeutic benefit.

So we've seen an excellent enrollment and we will be sharing in addition to the 12 month data in the second quarter, interim data from 12 weeks on the other stage two patients, as well as some of the stage two patients. So we look forward to sharing all of those data with you all in the second quarter.

Your third question regarding the 20-milligram dose, our view remains as it was when we talked about in June. I think what we're seeing with the 10-milligram dose and the preferential distribution to the CNS, was a 1 to 1.5 ratio of plasma and CSF exposure that we very much believe that 10 milligrams is probably a dose that we need.

So right now, we're committed to moving forward with 5 milligrams and 10 milligrams and learning more about it. Of course, we do have that opportunity to titrate it up to 20 milligrams if need be. But right now, we believe that we may very well be sitting at dose levels that are the right ones to safely achieve the desirable Huntington protein that can provide clinical benefit to patients.

Thanks so much, Matt.

Peyton Bohnsack, TD Cowen.

Hi, guys. I guess for us, could you possibly elaborate on the reauthorization process for Translarna in Brazil and Russia? And maybe the process for ational assessment in the United Kingdom?

It looks like in Brazil specifically the renewal is up in April. Is that the case? And do you expect -- I know you mentioned earlier that there was a crossover between the two agencies, but do you expect the recent EU decision would have an implication here? Thanks.

Thank you for the questions. So as you mentioned, for reauthorization of Brazil, that process is ongoing. Every indication we have is that this will continue to be an independent assessment and remain very interested in following their own assessment; the view of KOLs and others in Brazil and are not influenced by the CHMP's decision.

I'd say that we're seeing similar things in the UK where they also have said that they want to do their own independent national review and a national authorization. So, the signals that we're getting very clearly is that the strong desire of countries to do their own assessment and not follow the lead of the CHMP.

Great. Thank you. And then I guess, maybe just a quick follow-up question. When you're looking at the open label data, have you guys reached sublime with exactly what the national history like external cohort group will look like with the FDA? Or is that still ongoing?

So, Peyton, I think you're talking about for Friedreich ataxia?

Yes. Sorry for Friedreich ataxia.

Yes. I think we're -- it's really a luxury. The Friedreich ataxia community has really been a model community in doing the necessary hard work of creating a robust patient registry. The FA, [back home]'s natural history registry is a robust repository of patient data that has several years' worth of data on things like the mFARS, including upright stability scale. And this is something that Reata was able to leverage as part of the NDA, and we would look forward to doing the same.

I think the FDA acknowledges that. I think the FDA has publicly acknowledged that the Friedreich ataxia community they've done in building this registry and obviously, it's something that's incredibly useful to develop -- drug developers like us, like Reata and others, who can now leverage that natural history database to contextualize the long-term beneficial effects of therapies.

So I think there's no question that this is the registry. We will, as -- needed to develop a statistical analysis plan and precisely details how we'll do what will be a propensity score match with -- to ensure that we have an apples-to-apples comparison between the patients in MOVE-FA and vatiquinone and the natural history patients, and that should provide us the necessary natural history data -- or the long-term treatment data needed to provide that confirmatory evidence of the NDA.

Great. Thank you so much for taking our questions.

David Lebowitz, Citi.

Thank you very much for taking my questions. Could you compare the regulatory process for 505(b)(2) and 505(b)(1)? And talk about how the data to this point for sepiapterin fits into the submission? And what additional components, or different ways of looking at the data might be required by the FDA?

Yes. Thanks David. I think, just for context, as we've talked about, the initial sepiapterin development path was 505(b)(2), which was a decision made by Sensa when they were developed in the compound, I think it was likely thought to be a path that would be maybe faster or less resource intensive. But when we license the therapy and it's very clear, it is not the appropriate path. That's more -- it's really for a molecule like sepiapterin.

Sepiapterin has novel composition, novel mechanism of action, novel biodistribution, novel pharmacology, and clearly differentiated therapeutic benefit. So it doesn't fit into the need to 2505(b)(2) paradigm. It's a novel therapy that is and should be part of the 505(b)(1) development pathway.

As such, it's a necessary then to provide a full slate of nonclinical studies, including things like pharmacology studies, toxicology studies, internal fetal studies, all those types of -- juvenile toxicity, all of those studies then become necessary to be part of our program all of which we'll have.

And in terms of being ready to submit the NDA and the 505(b)(1), as we said, the only outstanding item is the study, which I mentioned earlier in the call. So it's really a matte -- I think, it was probably not appropriately started in 505(b)(2) pathway, and it was really not a clinically prolongs for a novel differentiated therapy like sepiapterin 505(b)(1).

Does the FDA require any type of head-to-head comparisons in this particular process?

Not at all. I think the one thing we could say is -- I think we're in a situation that is precedented. There have been approved therapies for PKU. There's a well-established clinical trial endpoint and what the FDA likes to see and that's exactly what we follow. Including the sepiapterin registration program, looks a lot like the Kuvan program, in terms of having a responder analysis to identify those that responded, then having a placebo-controlled study, and then having the necessary data to demonstrate durability and long-term safety, all of which we have. I say the only different a program is a significantly greater responder rate, significantly greater magnitude of treatment benefit.

So those are the components of the data needed to support the NDA submission. This is for the efficacy. It's the evidence of effectiveness that the evidence of effectiveness that we have, and we look forward to be able to submit that NDA as soon as possible.

Got it. And just jumping over to FA. Have you received the minutes from the meeting yet? And what are the next steps?

Yeah. So, I think at this point, where we are is -- we're still, as I mentioned, having some back and forth with FDA regarding whether this could be an accelerated approval or full approval. That's something that we look forward to getting to correspondence on in the near future. And I think for us, right now, it's also moving forward, collecting the open-label data and getting together physical analysis plans that can support the confirmatory evidence. And so that's what all our team is focused on right now.

Got it. Thank you for taking my questions.

Gena Wang, Barclays.

Thank you. I would just ask one more question regarding vatiquinone in FA. So, did FD suggest any specific statistical methodology to analyzing data since this will be comparing to the history data as well as open-label extension study?

Yeah. Thanks, Gina. They were not prescriptive. I think we've gone to them and that we would look to do a propensity analysis approach. Again, we're in a realm here of precedent. They recently approved an NDA for SKYCLARYS based on the placebo-controlled study along with open-label data compared to the FA natural history data and seasonal propensity score matching.

So we have a lot we can follow here. But to be sure, we'll submit the fiscal analysis plan that will fully detail our approach not only in the propensity model, but also into what likely to be a mix effect modeling to provide the appropriate longitudinal estimate of treatment benefit relative to natural history.

Okay. And then very quickly, if you give a guidance what type of data you need to hit in order to could be approvable?

From the open-label registry?

For FA.

Yes. for the open-label portion?

Yes.

No, there was no specifics there. There was nothing prescriptive. I think this is viewed as the -- in regulatory framework, we have persuasive evidence of effectiveness we would be putting together an NDA based on our ability to demonstrate persuasive evidence of effectiveness in the placebo-controlled portion of the MOVE-FA study along with confirmatory evidence that we said will consist of comparing the open-label data to natural history, showing that there's a benefit over a longer period of time from both MOVE-FA, as well as I mentioned earlier to Eric's question also with open-label data with the natural history compassion from the first FA study that was in a slightly different population that consisted mostly of adults, both ambulatory and non-ambulatory, where we've previously done these types of analyses to show significant long-term benefit relative to the natural history.

Okay. Thank you.

Paul Choi, Goldman Sachs.

Hi, good afternoon and thanks for taking our questions. I want to change gears for a moment and maybe ask about utreloxastat and ALS. And I was wondering if you could maybe had the CardinALS study readout later this year, sort of frame your thoughts on potential treatment effect and/or areas of differentiation versus the approved therapeutic relative from [amlac]?

And my second question is under a scenario where amlac has a positive phoenix confirmatory study for (inaudible), can you maybe just comment on what your regulatory strategy might be? Because they get our full approval there filling as part of the confirmatory study. Thanks for taking our question.

Yeah. Thanks very much, Paul. Thanks for the question on the utreloxastat ALS program. This is a program we're very excited about given what's become very clear now as a link between theraptosis and ALS. I think that theraptosis pathway is now seen as really an important pathway in disease progression. And of course, utreloxastat was developed to specifically target that pathway.

We did a lot of the preclinical development work with utreloxastat benchmarking to Edaravone, which is also another approved therapy for ALS that it has a much more generic non-specific effect on elements of utreloxastat pathway. And as we've talked about, we've been able to show 25 to 30 times the potency in the final ASH site model. We've also been able to show important protective effects from benchmark against a number of other disease-relevant preclinical test models.

In terms of the study design, I think, again, we're in an element, as I mentioned with David's question on PKU, where there's clearly precedent for the design of an ALS study. And our discussions with the FDA were very constructive in ensuring that this is a protocol that could support registration if positive. We designed the study with a two-to-one randomization with the treatment effect of roughly 2.5 treatment difference between the treatment groups and the placebo groups, which gives us roughly 85% power to detect that difference. And I think that positions us very well to capture significant treatment benefit.

I think the regulatory pathway doesn't change at all based on what happens with amlac compound. And obviously, the commercial opportunity and the differentiation will be based on the data, what we see on ALS mFARS score what potentially we could see in terms of pulmonary function, and also what we might see in terms of mortality. You'll recall that the FDA has always been very keen in understanding both changes in ALS FRS and mortality risk.

I think it's also become very well accepted in the ALS community that given the aggressiveness and the complexity of ALS, that this is probably not going to be a single therapy disease. I think it's probably going to require more than one. But again, I think the specifics of return in terms of head-to-head comparison, well with analysis compound is really going to be data-driven, and we look forward to seeing the results from the CardinALS study.

Great. Thanks for that, and thank you for question.

Danielle Brill, Raymond James.

Hey guys. This is Alex on for Danielle. Just looking to Huntington's, just curious about what assay you're using for CSF-mutant Huntington detection. Wondering if you expect to have similar issues that a recent competitor had and how reliable the results are in an early HD population? Thanks.

Yeah, Alex, great question. I think there's two separate issues. There's assay reliability and then assay sensitivity based on the population. Let me take that to you in turns.

We've worked very hard ensuring that we have robust assays that are accurate and precise. And I think one of the things we know very well about assays in clinical studies is it's not just the assay itself is making sure that you have care and sample acquisition, sample processing, sample storage, sample transport, and then ultimately, sample analysis. And those are things that will pay very close attention on as we minimize any confounding elements that could influence the assay results.

We know the other part is important as well, as these assays tend to work much better when you have a larger number of samples. So something that we've been very thoughtful about is ensuring that we have batch channel. So each time we run these analyses, we're doing in as many samples as makes sense at that time. So again, all things that we can do to try to reduce the variability and increase the stability of those assay results.

You bring up another point that's very, very important, which is assay sensitivity based on disease stage. Now, it's well known that a very early stage or pre-symptomatic HD patients, mutant Huntington's protein is not detectable in CSF because it's incredibly -- the concentration is incredibly low.

We talked about picomolar concentrations at HD even lower. As we move into the Phase 2 patients we have in the Huntington trial, of course, these are patients we believe there is detectable Huntington protein in the CSF. We've seen that so far. But of course, obviously, something we'll watch very carefully in those patients is where we are in terms of the limit of detection for the assay, but that's something we're very thoughtful about.

Of course, we don’t know if that happen in Stage3 patients as those are patients that, of course, are going to be a bit further in their progression and we'll be -- will likely have much higher baseline in Huntington protein levels that will make that sensitivity issue really not an issue.

Thanks so much.

Joseph Schwartz, Leerink Partners.

Thanks so much for fitting me in. So I wanted to ask, since it's been a while since Kuvan and pegvaliase were approved. I was wondering whether, for sepiapterin, you've been able to establish with the FDA that data focused on Phe lowering will be sufficient and that clinical outcome assessments won't be required for approval in PKU? And then I have a follow-up.

Yeah. Joe, obviously, one of the most important things we did prior to commencing the Phase 2 study is to make sure we have full alignment on the study design, including the primary endpoint of Phe reduction.

I think, traditionally, if you look at the FDA when they have made a decision on approval based on something that doesn't change with time, it actually gives them confidence that they can interpret your study results in a meaningful way. So we, of course, make sure that there was alignment on Phe as the endpoint; Phe was the endpoint.

And of course, we're very happy to have seen not only that we had a significant effect. But as I've talked about earlier on the call, results are highly statistically significant and much greater magnitude than we've seen with previous oral therapies. So I think that becomes very easy for them to see the -- not only statistically significant, highly clinically meaningful benefit that we've been able to demonstrate in the APHENITY trial.

And of course, one of the elements of the pre-NDA meeting was ensuring that we had the safety and efficacy data that's necessary to support that NDA submission and the answer was yes. Yes, we do.

Okay. And then since strong patient advocacy seemed to be key for SKYCLARYS to get traction with the FDA, who wasn't on board with Reata being able to file, at first, I was wondering if you could give us any insight into how much the FA patient or physician community has been lending support behind your effort to pursue a filing to take one out?

As I mentioned earlier, Joe, I think the Friedreich ataxia community led by the Friedreich Ataxia Research Alliance is really a model disease community in terms of aggregating the patients, the physicians, as well as industry, and being able to really lead the charge in ensuring that this therapy developed, and develop successfully for the treatment of Friedreich ataxia patients.

I'm proud to say that we have partnered with -- since the beginning of the clinical development, in particular and ongoing many years back, and we've been incredibly grateful for their partnership, not only in helping us understand how to best design trials, their work in establishing a patient registry that will obviously be very important in us putting together a data package for NDA, and quite frankly, the work that they've helped lead with the physician community and research community on demonstrating the importance of upright stability for pediatric and adolescent ambulatory patients.

So I can proudly say that they've been a partner of ours. And we think that's been an incredibly important part of the vatiquinone journey. And we think it will continue to be -- that partnership will continue to be an important part as we move forward and look to submit an NDA.

Great. Thank you.

And thank you. I would like to conclude the Q&A session now. And thank you, all, who participated and turn it back to the CEO, Dr. Matthew Klein, for additional comments.

Well, I just want to thank everyone again for joining the call today. As we discussed, we look forward to an exciting 2024 with a number of important and valuable potential milestones ahead, and we look forward to sharing the journey with you all as we move forward. Thank you again.

And thank you all for participating. And you may now disconnect.