PTC Therapeutics Inc (PTCT) 2021 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the PTC Second Quarter 2021 Financial Results. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker for today, Kylie O'Keefe, Senior Vice President of Global Commercial and Corporate Strategy. You may begin.

Good afternoon, and thank you for joining us today to discuss the PTC Therapeutics second quarter 2021 corporate update and financial results. Joining me on today's call is our Chief Executive Officer, Stuart Peltz; our Chief Development Officer, Matthew Klein; our Chief Business Officer, Eric Pauwels and our Chief Financial Officer, Emily Hill.

Before we start, let me remind you that today's call will include forward-looking statements based on 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 quarterly report on Form 10-Q and 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 is available in today's earnings release.

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

Yes, thanks Kylie, and thanks for joining us today. As we close out the first half of 2021, I'm proud to say that a lot of progress has been made in all facets of our business, and I'll go into this in more detail shortly. However, before I do, I'd like to take a moment to reflect on our strategic plan at PTC and measure how we're doing.

At PTC, our mission is to provide innovative treatments to patients with debilitating diseases that have few or no treatment options. The foundation of our strategy is to have a sustained pipeline so that we may continue to produce commercial treatments that will drive revenue and create value for all stakeholders over both the short-term and long term. We all know the importance of having a deep pipeline to balancing innate challenges of the drug discovery and development process. We are all working towards building a steady-state number of therapeutic programs so that the successful programs move forward. This approach will allow us to have a sustained pipeline of potential new therapies that reach commercialization and substantially grow our revenue base. Though many of us have been fortunate to have access to COVID vaccine, we recognize that the pandemic is still very much a reality in many parts of the world. This brings additional challenges with potential impact across multiple aspects of our business. However, we're continuing to manage through these challenges as they arise.

I want to emphasize the impressive revenue growth that we have seen this quarter, which is driven by the strength in our DMD franchise and the incredible uptake of Evrysdi. Based on this impressive growth, we will be raising our 2021 DMD franchise revenue guidance to $370 million to $390 million, and Emily will go into this in more detail later in the call.

So let me start with the DMD franchise. Our commercial team has been working hard to make our therapies accessible to DMD patients around the globe. As a result, Translarna saw an impressive 36% year-over-year growth. I'm very proud that the growth continues almost 7 years post launch, both in existing geographies and with continued geographic expansion. Emflaza is also continuing to deliver strong revenue, with an increase of 36% over the same period of last year. Eric will discuss the success of the commercial franchise in more detail shortly.

Now let me turn to the splicing platform, starting with Evrysdi. Evrysdi continues to see a strong uptake in the U.S. with 1,800 SMA patients now on treatment, representing almost 20% market share in less than a year post launch. Evrysdi is also now approved in 53 markets outside of the U.S., and we are starting to see an early adoption in these markets and expect this growth to continue as we conclude on additional pricing and reimbursement discussions. As anticipated, Evrysdi was approved in Japan this quarter, and we will receive a $10 million milestone payment from Roche upon the first commercial sale.

I also wanted to touch on the recent positive results from the SMA studies, which I find to be quite remarkable. The RAINBOWFISH study using Evrysdi in pre-symptomatic infants diagnosed with SMA, demonstrated that Evrysdi-treated infants achieved the same developmental milestone as healthy children. Interim data from the JEWELFISH study, which is assessing Evrysdi in SMA patients previously treated with other therapies, including Zolgensma and SPINRAZA demonstrated overall stabilization in motor function after switching to Evrysdi. This shows the benefit of Evrysdi in the broad and heterogeneous real-world SMA population.

Turning to PTC518 and our Huntington's disease program. In the second quarter of this year, we were excited to release the preliminary results from our Phase I healthy volunteers study. As a reminder, the results from this study demonstrated a dose-dependent lowering of Huntington mRNA even after only a single dose of PTC518. The results also demonstrated a target mRNA lowering of 40% to 50% even in the lowest multiple ascending dose cohort. We are in the process of completing the Phase I trial. This includes additional protein sampling, a food effect cohort and a CSF pharmacology cohort. We plan to release the results of these additional cohorts in the third quarter of this year as well as share details on our next clinical study, which we are planning to initiate before year-end.

I'll now turn to our Bio-e platform. This is an exciting and novel science platform to identify new therapies that result as a consequence of excess electrons, usually produced from the mitochondria during electron transport. This triggers oxidative stress and causes havoc within the cell that results in and exacerbates multiple disease states. Drugs that can modulate this process would be valuable therapy to treat a wide variety of diseases. We have 2 important ongoing trials with vatiquinone. Our first compound from our Bio-e platform that is a 15-lipoxygenase inhibitor, which is the key regulator of this pathway. The first is in mitochondrial epilepsy. And the second is in Friedreich ataxia. These 2 trials are registration-directed and therefore, a potential near-term value drivers. We also have a second-generation 15-lipoxygenase inhibitor, PTC857 with pharmacokinetic properties, well-suited for a range of adult neurodegenerative diseases. We are pleased to have completed the Phase I healthy volunteers study for PTC857, and Matt will share the results later in the call.

Turning now to our PKU program, which is another important near-term value driver. We're excited as we plan to initiate the Phase III registration-directed study affinity in September of this year. PKU is a large orphan indication within an estimated 58,000 patients globally. The vast majority of patients are not well controlled with existing therapies, highlighting the substantial unmet medical need. Study start-up activities are well underway, and we are utilizing our global infrastructure to focus on sites, both in the U.S. and globally. PKU is a unique development and commercial opportunity in the rare disease world as it has well-defined patient population, well-known centers of excellence and an expedited path for commercialization. We look forward to the potential of bringing PTC923 as a clinically differentiated therapy to the PKU community.

Moving to our gene therapy platform and our AADC program. As a reminder, the CHMP imposed a clock stop to allow for the pre-approval inspection. This process is still ongoing, and we expect to see CHMP in the fourth quarter. Turning to the U.S., as we have previously shared, we were conducting additional surgeries in advance of the BLA submission. We're happy to announce that the third surgery has recently been completed and will now align with the FDA prior to the BLA submission, which we plan to submit by the end of this year.

I want to take this moment to discuss our gene therapy manufacturing facility in Hopewell, New Jersey. We have a 220,000-square foot, fully functional, well equipped and validated facility for the development and manufacture of the gene therapy products in our pipeline, thereby minimizing our reliance on external CRO. As we have excess capacity and retain the relevant manufacturing expertise, we have unique opportunity to potentially create a revenue stream by entering into development and manufacturing service agreements with other companies, utilizing this facility and our expertise to produce high-quality plasmid DNA and AAV vectors.

Lastly, I wanted to highlight the potential upcoming milestones from our oncology platform. Unesbulin, previously PTC596, is in clinical trials for 2 niche solid tumors, DIPG and LMS. DIPG is a rare pediatric brain tumor and LMS is a rare adult solid tumor in muscle. Both have high unmet medical need with few beneficial to no treatment options. Results are anticipated in the second half of 2021 for the 2 clinical trials, and with positive results, we have the potential to initiate registration-directed trials. We look forward to sharing the results shortly.

As you can see, we are continuing to make progress across our commercial and clinical efforts. I'm proud of our progress, driven by our people and their strong commitment to our mission to deliver therapies to patients in need. With that, I'll turn the call over to Matt for an update on development. Matt?

Thanks, Stu. I want to start by emphasizing the continued progress our development teams have made across all our programs. First, I'll start with our splicing platform and our PTC518 Huntington disease program.

As Stu mentioned, we shared the initial results from our PTC518 Phase I healthy volunteers study to the second quarter of this year. As we reported, PTC518 treatment resulted in the desired of dose-dependent lowering of HTT mRNA levels in both the SAD and NAD cohorts. We are in the process of completing additional cohorts to provide data on HTT protein levels and CSF biodistribution. Results from these cohorts will be released in the third quarter of this year. Given that we have achieved our key objectives for the PTC518 Phase I study, planning for the Phase II trial is underway, and we expect to initiate the trial by the end of this year. The Phase II study will be conducted in HD patients and will focus on demonstrating dose-dependent reductions in HTT mRNA and protein levels. We will provide more details on the study design once it is final.

Next, I would like to highlight the progress we have made in programs for our Bio-e platform. We have 2 ongoing registration-directed trials of vatiquinone, our lead compound in the Bio-e platform, and we recently completed the Phase I healthy volunteer study of PTC857, the second compound to the platform. With the MIT-E trial, our Phase II/III trial in children with inherited mitochondrial disease and epilepsy and MOVE-FA, our Phase III trial in Friedreich ataxia are global studies that are actively enrolled. As Stu noted, these programs are near-term value drivers, and we remain on schedule to have data readouts with the MIT-E study in Q3 2022 and the MOVE-FA study in 2023.

Turning now to PTC857, a 15-lipoxygenase inhibitor being developed for adult neurodegenerative diseases. I am pleased to share that we have completed the Phase I healthy volunteer study, and that PTC857 was found to be well-tolerated with no reported serious adverse events. PTC857 also demonstrated predictable pharmacology, and we were able to achieve the desired plasma exposure levels, consistent with the levels at which we observe efficacy in our preclinical studies. We are now positioned to move PTC857 forward to Phase II. Through its activity at 15-lipoxygenase, PTC857 targets the pathway of oxidative stress and inflammation known as steatosis, a pathway key to CNS disease pathogenesis in ALS, Parkinson's disease and other neurodegenerative disorders. Our preclinical program has demonstrated that PTC857 provides potent protection against oxidative stress and inflammation based cell injury and death in a series of CNS disease in vitro and in vivo test systems.

Turning now to our PKU program. We are on schedule to initiate our Phase III registration-directed trial, the APHENITY study with PTC923 this quarter. As a reminder, APHENITY is a double-blind, placebo-controlled study with a run-in phase to identify subjects who respond to PTC923 treatment. These responders will then be randomized to receive either PTC923 or placebo for 6 weeks. This approach of enriching the study population with responders increases the probability of success of the trial. Following the efficacy study, all subjects will be eligible to enroll in a long-term open-label extension study. We plan to have data from the efficacy trial in the fourth quarter of 2022.

Turning now to our gene therapy platform. As Stu noted, the third cannula surgery in support of the AADC BLA submission has been completed. We plan to align with the FDA on the data package and then to submit the BLA by the end of the year. As a reminder, the surgeries were conducted to gain experience with the intended commercial cannula in delivering our gene therapy product. One of the innovative aspects of our AADC gene therapy program is that the gene therapy product is delivered directly to the putamen, the area of the brain key to disease pathology. In order to achieve this direct delivery into the brain tissue, neurosurgeons use a stereo tech surgical procedure that relies on an MRI-based Google map that provides a direct path for the surgeon to safely reach the putamen to deliver the gene therapy.

Let me now provide a quick update on Emvododstat previously PTC299, currently in a Phase II/III trial for COVID-19, the FITE19 study. Enrollment is ongoing in this trial, and we expect this study to be completed by the end of this year. As a reminder, Emvododstat is also being studied in ongoing trial in patients with acute myeloid leukemia.

Finally, I would like to remind you of our ongoing placebo-controlled trial with Translarna for Duchenne muscular dystrophy, Study 041. This global study is a 72-week randomized placebo-controlled trial that incorporates many of the key learnings we have made from our previous DMD trials. This study is fully enrolled, and we expect to have results in Q3 2022. In summary, we are continuing to move our development programs forward with many important milestones in the near future.

I will now turn the call over to Eric, for an update on our commercial business. Eric?

Thanks, Matt. Once again, I'm extremely proud of the strong execution from our global customer-facing team and the continued remarkable growth of our global DMD franchise. With our key focus on patients, our team was instrumental in delivering another highly successful quarter for commercial revenue. We have seen incredible progress in our DMD franchise with year-over-year growth in both Emflaza and Translarna, resulting in a 36% growth for the franchise.

New patient starts continued high adherence and fewer discontinuations has sustained the growth of Emflaza. In this quarter, we achieved $49 million in revenue, which is a 36% increase over the second quarter of 2020. Strong execution, supported by new data recently presented by Dr. Craig McDonald at the PPMD, continues to support clinical differentiation over prednisone and is helping drive new prescriptions from patient switches.

Turning to Translarna. We achieved $53 million in revenue this quarter, a 36% growth over the second quarter of 2020. This sustained performance was driven by growth due to expansion of the patient base, continued high compliance and broader access in existing geographies as well as continued geographic expansion. As an example of geographic expansion, following the approval of Translarna in Russia, we are pleased to announce that we have successfully launched and patients are now receiving treatment. The launch in Russia and continued growth in other key markets have been one of the major drivers for revenue growth in the second quarter of 2021.

Ongoing geographical expansion in Central and Eastern Europe, Latin America, the Middle East and Asia Pacific continues to be a focus for us, including expanding our footprint and infrastructure in additional markets such as Japan and Mexico. We are making continued progress with reimbursement for Translarna, and we are pleased in extending the managed access agreement in England. In Latin America, we continue to see increases in newly diagnosed DMD patients and are making good progress towards securing a group purchase order for Translarna in Brazil in the second half of 2021 to treat both new and existing DMD patients.

Now turning to Tegsedi and Waylivra. Disease awareness and patient identification continues to be the focus in Latin America, and our teams have made substantial progress despite the ongoing COVID-19 challenges in the region. In Brazil, our discussion on pricing for Tegsedi continues. During this process, we continue to provide medical innovation, genetic testing and patient program support to make Tegsedi available in multiple countries within Latin America through early-access programs to bring this important treatment for hATTR amyloidosis patients. We are pleased that we now have some of the first patients benefiting from the treatment with Waylivra in Latin America through early-access pathways. We are preparing for a launch in Brazil. However, due to COVID delays at ANVISA, Waylivra registration is now anticipated in Q4. ANVISA has announced the establishment of a task force to address the backlog of pending applications with a priority for rare disease applications.

I will now touch on the preparation for PTC's first gene therapy launch. As a reminder, PTC AADC new transformative gene therapy that has the potential to produce meaningful changes in AADC deficiency patients. Preparations are progressing well, and we anticipate launch to occur in Europe shortly after final EMA approval. PTC continues to accelerate patient screening activities with over 100 at-home and saliva based genetic testing programs in over 20 countries, initiated in enriched high-risk populations. Significant progress has been made with the identification and preparation of expert pediatric neurological centers of excellence throughout the U.S., the EU and Latin America to ensure treatment center readiness at the time of launch, and we remain confident to achieve our goal of 300 patients identified globally by launch.

We generated another strong and sustained performance in Q2, and I continue to take great pride in our accomplishments from global customer-facing teams and their ability to flawlessly execute against their strategic priorities. With that, I am pleased to announce that PTC is raising our 2021 revenue guidance to $370 million to $390 million.

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

Thanks, Eric. In the second quarter of 2021, we continued to see strong commercial performance and demonstrated progress across our pipeline. We remain in a healthy financial position with a robust cash balance and another year-over-year increase in revenue from the DMD franchise. We have been working strategically to advance key platforms and look forward to a number of upcoming milestones from our pipeline. In light of the consistent strong performance of Translarna and Emflaza to-date, we are pleased to raise revenue guidance for the DMD franchise for 2021 to $370 million to $390 million from the original 2021 revenue guidance of $355 million to $375 million.

The press release issued earlier this afternoon summarizes the details of our second quarter 2021 financial results. I will take a few minutes now to review these financial results. Please refer to the press release for additional details. Beginning with the top line results. Revenues were $117 million for the second quarter of 2021, a 55% increase over the second quarter of 2020. This revenue includes $103 million in net product sales and $14 million in royalty revenue from our partnered Evrysdi program.

Turning now to more detail on the success of the DMD franchise. Translarna net product sales were $53 million compared to $39 million in the second quarter of 2020. A key driver of this growth has been through geographic expansion, particularly in Russia and the Central and Eastern Europe, Middle East and North Africa region. Emflaza net product revenue for this quarter was $49 million as compared to $36 million in the second quarter of 2020.

Moving on to an update on Evrysdi. Our partner Roche has reported year-to-date sales of approximately CHF243 million, which is approximately USD265 million. As a reminder, in exchange for $650 million upfront cash added to our balance sheet, PTC also retains approximately 57% of Evrysdi royalties until Royalty Pharma receives a return of $1.3 billion, after which 100% of the royalties revert back to PTC. As part of this royalty monetization transaction, PTC also retained sales and regulatory based cash milestones. Following the approval of Evrysdi in Japan this quarter, we anticipate a near-term $10 million milestone payment upon the first commercial Japanese sale.

Non-GAAP R&D expenses were $112 million for the second quarter of 2021, excluding $13.4 million in non-cash stock-based compensation expense compared to $168 million over the second quarter of 2020, excluding $8.6 million in non-cash stock-based compensation expense. The relative decrease in research and development expense is primarily related to onetime charges in the second quarter of 2020 of $53.6 million for our Censa merger as well as $41.2 million for a commercial manufacturing service agreement with MassBiologics.

Non-GAAP SG&A expenses were $56.6 million for the second quarter of 2021, excluding $12.3 million in non-cash stock-based compensation expense compared to $45.3 million for the second quarter of 2020, excluding $8.3 million in non-cash stock-based compensation expense. Cash, cash equivalents and marketable securities totaled $947.1 million as of June 30, 2021, compared to $1.1 billion as of December 31, 2020.

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

Thank you. (Operator Instructions) Our first question comes from the line of Eric Joseph with JPMorgan.

Nice quarter. Just on the DMD franchise performance. With guidance now raised here. If we're looking at the midpoint, that actually seems to imply a flat to down trajectory for the second half. So I'm just wondering if you could kind of talk us through any risks that you're anticipating with respect to ongoing performance with either Translarna or in Emflaza? And wondering whether this second quarter results reflect any advanced purchasing or stocking? And then I have a follow-up.

Yes. Thanks, Eric. Eric, why don't you take this?

Sure, Eric. First of all, I mean, we had a terrific Q2. We had $53 million in sales for Translarna, that's a 36% increase over last year. And with Emflaza, organically 36% growth. We had $49 million of revenue in the quarter. I think when you look at our revised guidance, I think our guidance right now reflects that we're growing in all major markets. We're very proud of the work that the European team has done after 7 years, especially Northern and Southern Europe, where they have the largest base of patients, and we've been able to maintain that high base, large base of patients with high compliance rates minimizing dropouts. But where we're seeing growth right now is really a lot of this the new patients are coming in from Russia, from Central and Eastern Europe, Middle East. And our business in Latin America continues to be solid despite some of the COVID challenges that we have. And we expect right now orders in Latin America, and particularly Brazil, significant orders, which you already know, can be somewhat lumpy, we anticipate those to happen in the second half of the year. So I mean, overall, I think we're very confident. We have a strong continued growth of Translarna. On the Emflaza front, we had one of our best quarters ever, and we continue to see new patient growth. We also see that the compliance with Emflaza is extremely high. And more importantly, that the data that's being generated now new data, real-world data and switching data, we're seeing not only new patients, but we're seeing an increased amount of patients that are actually switching from prednisone to Emflaza. And that's really a very important sign. So overall, I think our guidance, where we're looking at right now is a very strong continued performance. It would be right now on the upper end, it would be at least about 17% increase year-over-year. And that's pretty in line with what we think we could achieve, and the business right now has a good tailwind.

Okay. Great. And just second question on Emvododstat. The FITE19 is focused on hospitalized patients, but I'm just trying to get a sense of how you're thinking about the market opportunity and use here assuming success. Do you see potential for its use in the outpatient setting? Do you have the regulatory flexibility to do that? Or do you need to conduct a separate trial for patient use?

Thanks for that question. In particular, we're excited about this. Just to remind everybody that PTC299 is an oral, small molecule. And that so it certainly can't be used in the outpatient setting, right? So we think right now we're doing a hospital trial, but it certainly could be used. And I think it has an advantage and that it's a dual mechanism, and that is that because of its mechanism, first of all it's a cellular mechanism, so it won't have the issue. So we don't anticipate as much of an issue with the SARS-CoV-2 mutating and it targets the DHODH cellular enzyme. And second of all, I think by targeting this, it's less likely to elicit-drug are resistant as a consequence of that. So on the whole, we think that this will certainly have a possibility in the outpatient setting, and we'll have to discuss with the FDA based on the results from the current trial. If successful, if and when successful, how can we use it in both the in-hospital as well as patient setting. So we certainly think that it has the capability to use in both. And it's simple to take. You can get -- obviously, you get a prescription, you can take it as soon as you get COVID.

Our next question comes from the line of Alethia Young with Cantor Fitzgerald.

Congratulations on all the progress. This is Nina on for Alethia. We were wondering for the Huntington's update end of the year, if you could just share how much and what information we should get or expect around CSS?

Sure. Matt, do you want to take that?

Yes, sure. So as we've said before, the Phase I study, the key objective of that study was to demonstrate dose-dependent lowering of Huntington mRNA in protein and peripheral blood cells. We're in a unique opportunity with an oral molecule that broadly biodistributes through the body and through the brain, where we have a ratio of lowering in peripheral blood cells of 1:1 with cells inside the brain. So what we're able to do is able to look at blood cells peripherally and get a read on what's going on in the brain. And that's really a function of, one, the biodistribution molecule too, that it is an oral molecule that's been designed that influx from the CNS and really penetrate all regions of the brain equally, which obviously is incredibly important in Huntington's, which is a total brain disease. And so that's what we were able to show so far with the data we've readout in the dose will be the lowering of mRNA in the peripheral blood cells in both the SAD and NAD cohorts and the CSF cohort we referred to is a pharmacology program. When we're going to look at in the CSF in healthy volunteers is making sure we get the biodistribution to the CNS that we anticipate based on all the work we've done before. One key element of the design of this molecule was to ensure not only this across the blood-brain barrier, that it doesn't get declogged. So that means once it gets across the blood-brain barrier, it stays in. And that's incredibly important for its biodistribution throughout all regions of the brain. Well, the way we can tell whether or not what's happening is by measuring drug levels in the CNS, in the CSS specifically, and comparing those levels to the peripheral plasma levels. So that's exactly the readout that we'll be getting from the CSF cohort, lining up the levels of drug in the plasma with the levels of drug in CSF and being able to check that box that we're getting the desired and designed CNS penetration. So specifically, we're beginning a readout of drug levels in the CSF and being able to check that key box that we're getting the biodistribution and a lot of these we've seen in the preclinical studies in the animal models and we're a key design feature of the molecule.

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

I just have a couple. One on AADC. This is a program where I think you guys have been engaged in patient finding efforts for a while. It's been a few quarters since we've gotten an update on how many patients you found. I think the last count was somewhere in the 200. I was curious if you have any updated numbers on the addressable patient population that you could identify today? And then I have a follow-up.

Okay. Yes, thanks for the question. Eric, do you want to take it?

Yes. Tazeen, right now we're still doing a lot of work, as I mentioned earlier, our plans are really continuing to aggressively look at and pursuing patient finding. We're not -- at this point in time, we're not going to be compared with providing numbers of patients, but we're well on track right now to achieving our goal, which is to have 300 addressable patients between now and the time we have our first launch. So we're anticipating our launch, the first country launch to be in Germany, and that would be following EMEA approval. And at that time, we'll be providing the number of patients. But you have to be really, really -- you have to understand that this is an ultra-rare disease. And what we've done is we've really casted the net pretty widely now. So we have 100 programs right now where we have been screening patients in very high-risk population, particularly like in the cerebral palsy and epilepsy centers and we casted our nets geographically to over 20 countries. And those 20 countries really represent areas where we can get access and reimbursement. But keep in mind, when we announced the number of patients at the time of launch, that would be the number of patients globally. And then, of course, that will be sequence according to market access and reimbursement amongst various countries in Europe and in early access programs across the globe. So really focusing on that. We're focusing on not only just patient finding, but making sure that our centers are ready, and we have centers right now that have, as Matt said, who have treated patients in the U.S., in Europe and Asia. And we're really expanding, if you will, the pediatric neurological centers of excellence to make sure that when we have these patients, they'll be able to be treated as quickly as possible.

Okay. And in terms of your total addressable population that you think exists, I think your last guidance was somewhere between 5,000 and 6,000 patients. Is that still your view?

Yes. Eric?

We currently -- yes, our current -- what we've seen not only in the published literature of the work that we've done in terms of screening programs, particularly in the this population, suggest that, that is a sort of global number. Now remember, this treatment is not sort of a simple product that you're going to use like a tablet and oral or even an infusion. So this is the required stereo-tactic approach, surgery and follow-up. So the intervention and the treatment of the patient is going to be slightly more complicated than sort of your average treatment that we would do. So in terms of how and what we believe the number of patients that exists, I think it's incredibly important to know that we have made important strides in finding these patients through these genetic testing programs. The PINPOINT program in the U.S. is for the patients saliva programs that we're using are simple and easy to use. And we're finding these patients in many of the countries where we know that gene therapies are currently being reimbursed, and that's really important.

And the beauty is we're finding them everywhere as well in many different countries. So I think we're in pretty good shape that still gives us the confidence that there's about 5,000 patients there.

Okay. And then if I could squeeze one in on Huntington's. Just to clarify, are you planning on showing knockdown for wild-types by the end of this year?

So that we're looking at both. We don't discriminate between wild-type and mutant. So yes, you'll be seeing the overall, the levels reflect the overall levels of the RNA that we see since it's both of them, both wild-type and mutant are same. So you get that as well as the protein level reduction from both.

Okay. But will you be specifically think highlight what the wild-type knockdown is?

I think we'll be showing -- we'll be able to say what the wild-type knockdown is based on the global. There is no differentiation between the 2 in that sense. It is 49 and 50. So it's a 1:1 ratio.

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

This is [Steve] on for Brian. Another one on Huntington's. I'm curious what is known about how the neuron adapts to accumulation of mutant Huntington over time and give any data from animal models or preclinical models that might tell us whether a rapid depletion of the mutant protein could cause any inflammation or dis-regulated protein turnover?

We don't have any. I think there's been several studies that show in terms of clinical benefit right in animal models that show the lower end of hTT results in improvements in animals. So I don't think you have a rapid reduction in that sense is causing any sort of unusual consequence that I know of at least in the animal studies.

Our next question comes from the line of Peyton Bohnsack with Cowen.

This is Peyton on for Joe. And congrats on a strong quarter. I was wondering if you could provide a little more background on why ALS was chosen for PTC857 instead of some of these other CNS disorders or neurodegenerative disorders? And any time line on when you'll release more details on the trial design?

Sure. So maybe I'll start and then pass it on to Matt. I think if you think about 857 and the whole Bio-e platform and knowing that, really, in terms of excess electrons that leads oxidative stress and turns on inflammation causes aggregation. It's a key, so 15-lipoxygenase is a key mediator in this process. And then when you're -- in a sense when the system of stopping of electrons gets overwhelmed, this is sort of emergency response system that ultimately turns on the inflammatory response and fixing. So it's a real problem. So it gets turned down and it doesn't get turned up. But I guess the important point is that could be used in a way it happens in all of the neurodegenerative diseases as well as many other things. So you can go through a multiple of them. And our notion was to look at a number of them. And maybe Matt will go through the -- and that's the idea. We will be doing that. But Matt, why don't you go through as to why we're picking up ALS as the first example.

Yes, sure, Stu. As Stu mentioned, the entire preclinical program has been based on the understanding that targeting 15-lipoxygenase and its pathway of oxidative stress and inflammation Is critical in a number of different neurodegenerative disease pathology, so including ALS, including Parkinson's disease and others. So what we've done is looked at a number of different in vivo and in vitro models on a number of different diseases and have been able to show strong efficacy across all of these models, some that are generic and others that are disease specific. So we arrive now with the Phase I data in hand and the ability to move to Phase II and our selection of starting first with ALS is based on the fact that right now we have 3 months, we have tox studies to support 3 month dosing. And when we think about neurodegenerative disease development, one of the key -- 2 of the key considerations actually are one, having being able to dose for long enough to see change. So rate of progression of the disease and then also being able to, of course, identify the patients that are going to change over time in the trial. So that you're able to show benefit. One of the key advantages of ALS is that, unfortunately, it's a rapidly progressive disease. And despite there being 2 approved therapies, there's still a significant unmet need. The disease is still rapidly progressive and fatal, with the majority of patients dying between 18 and 36 months following diagnosis. But over the course prior to that ultimate demise of the patient with ALS is a rapid decline in neurological function or muscular function, respiratory function, all of which are readily measurable. We also have an ALS, a validated endpoint, the ALS FRS, which is known to change over a 3-month period of time and allows us, based on use of the placebo group as well as robust natural history data, able to show in a 3-month treatment study in PTC857 that we can have an impact on the disease. So what we have here is the disease in ALS where our preclinical work was understood about the pathogenesis disease and the importance of our target pathway of 15-lipoxygenase in that disease, we have an opportunity in a 3-month study to show a treatment effect that can then form a then definitive registration directed study. So just to summarize, basically, the selection of ALS as the first indication is based where we are in terms of the toxicology program being expanded in the 3 months data complete and being able to do 3 months of dosing; 2, be able to have an ALS disease where in that period of time, we can collect the necessary data to show PK/PD effect and then be able to move on to efficacy. So right now we're in the process of designing that trial. It's going to include probably elements of the run-in phase to establish a baseline rate of progression of disease and at least in the 3 months keeping window, but we're still starting out the exact details, there will be a placebo and dose groups as well. We use very standard in those endpoints. Obviously, I mentioned the validating on mFARS scale, which is a validated endpoint, which has been used for approval previously as well as other important biomarkers that give us key indications of pharmacodynamic effect, particularly and relevant to both the disease of ALS and ALS mechanism of action of PTC have started. And we plan to begin that trial in the first quarter of 2022, and we'll provide more details on the full study design once it's ready.

That's very helpful. Sorry, just one more quick kind of follow-on question on that. Will you plan on going into other indications? Or will you wait until this trial is done with the data?

Our goal will be, I think it's more of a timing issue than anything else because of having short versus long-term toxicology. And I think we said that the adult neurodegenerative indication was the GBA Parkinson's disease and ALS. This is more of a matter of timing to get into them.

Our next question comes from the line of Danielle Brill with Raymond James.

This is [Alex] on for Danielle. I was thinking if you could provide any color on your plans for the 508 Huntington's Phase II patient pool. We've been hearing from KOLs that the patient pool should be a early stage Huntington's disease if possible to capture benefit. Is this feasible to address in Phase II? And if not, could you share your thoughts on how you're approaching the enrollment criteria for the patient pool in Phase III trial?

Sure. I mean I'll make a general statement, I'll pass it to. So obviously, in any of these diseases that are either neuromuscular and neurodegenerative, where they -- where you see it, you always want to get in as early as possible. But still, but be in the range of well, you're in early, that there's some decline that you can measure, right, so that at the end of the day, it isn't come in too early, the decline takes too long for a clinical trial, so you have to hit the right patient population, choosing the right endpoint on the range that you think. It's very much like a Goldilocks, right? Too early is it doesn't help you, if too late, doesn't help you. So you have to find the right patient population. And that takes a fair amount of looking at the natural history and trying to define what's the right patient population and what's the right outcome for that particular population? And can you see it in a given amount of time that you're going to do the experiment because you have high confidence. And then define the patient is it includes an exclusion criteria that gets you the patient population that you have some confidence that it will be declining. So that's the philosophy of what we're taking and Matt and this team has been doing a lot of thinking about that. So I'll say, if there's anything else like you want to talk about.

I think the point that you raised Alex is assuming in-force, this concept of the Goldilocks population where we're sure that we have a population that's early enough in disease that you have one, the ability to affect the disease progression. And especially, if our overall approach is acting upstream with the disease biology, you want to make sure that you're early enough that you can actually affect the disease progression, but also make sure that you can still have a meaningful amount of change in an untreated, right, because the key here is to able to show benefit over placebo. And to do that, that's really a matter of and that during the duration of the trial, you'll have placebo group that in absence of therapy is going to decline enough that you can show clinical benefits. And so we've been spending a lot of time availing ourselves of the existing databases, single hTT database over 20,000 patients. We worked on in-house with our teams and external KOLs as well working with us are looking very carefully at the important factors like age, CAG repeat, and a number of different endpoints that are collected to really find one, that population has kind of moved by Goldilocks population as you said. And second, the appropriate endpoints to actually measure those changes over time. So what you're going to see from us, and as this workflows continues in our Phase II trial, is first and foremost, obviously, to go over Phase II trials to be able to demonstrate the effect of Huntington mRNA and protein lowering in Huntington's disease patients, we will obviously be enrolling patients that based on our work. We believe are reasonable to show that in, but who also have changes and other measures of disease. Importantly, things like the adaptive changes, is what we want to look at as biomarkers of disease, both what they see in graphic to be able to then tie into demonstrating the benefit of reduction in hTT mRNA and protein. So obviously, to do that, we want to make sure we are making the direct template, and again, have the right patients who are going to change overtime, so that we can show a benefit in those patients.

But on the other hand, maybe I'll make also a bit. I think there is some interesting things going on, and based on the experience with Alzheimer's experienced with the FDA, we do plan to discuss with them a pathway for accelerated approval focusing on a relevant biomarker. I mean if you think about the practice in -- the plaque in Alzheimer's that was used, here you have, I think even a better case for the mono-genetic disease. You know you're targeting the precise protein of mRNA that's involved in the process, you know, that is due to the new case, the natural history data shows that reduced levels of immune protein, extend the time before you see the onset of the disease. So there certainly is the possibility of being able to at least have a discussion with the FDA and you heard probably Novartis talked about it as well, that they've had a discussion with both the EMA and the FDA. So if that's the case, we're in a very good position to see if we could work with that endpoint for potentially accelerated approval. And then what we've been talking about because certainly that is for the second study.

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

This is [Sheldon] on for Gena. I have a couple of 518 for Huntington. I think in the past, you mentioned that beyond the 15 and 30 mg max doses, you have another 2 to 3 doses. Could you comment on in the 3Q data updates, how many dose levels would include? And if you can share what doses they are? And my second question is, from this healthy volunteer trial to the Phase II trial, how would you define the optimal therapeutic window?

Sure. So what we've talked about in the past was in the single test dose, we went up to 135 milligrams, and the results got down to around 50% of the RNA level, which in a way, probably in 90 to 135 equates to 100% reduction of the hTT. In the multiple ascending dose of 15 and 30 milligrams, we are even at the 15-milligram dose, we're able to get to somewhere between 40% and 50% reduction after 14 days of treatment. So we were -- so it shows you really quite nicely that 15 milligrams, which is the lowest dose that was in our trial, got to that and 30 milligrams got up between to 60% and 70% reduction. So clearly, we're be able to titrate the level of hTT mRNA, depending on the exposure of that. The other things, I think what we're doing is really as we said, looking at food effect, looking at CSF in order to really in a sense, we're already in the range of where we are thinking about the dose that launched, so somewhere between 15 and 30 milligrams because that gives us already the 50% reduction that we'll probably start with in terms of reducing. So I think we're in a pretty good position and the next steps there will be really to reproduce and begin to look at the biomarker as a consequence of -- look at the biomarker of hTT in the HD patient, just to make sure that the exposure and reduction that we see is is doing well. And then also, what we said is that we're looking at CSF, in the CSF is so that and that's just a PK study. So we know that will just define and ensure that what we see in the blood is equivalent to what we've seen in the CSF. So I think what we're trying to do is obviously achieve the desired lowering at the lowest dose that makes them comfortable that we're in the therapeutic range where efficacy is. And we already know that with the 15-milligram dose range. Does that help you?

Yes. For the CSF cohorts, will that cover only one dose level? Or would you cover multiple dose level in that cohort?

We're only doing one dose level, right, Matt?

Yes. You really only need 1 dose, this is simple pharmacology. We basically need the single dose level. Obviously, based on the dose proportionality, we've seen throughout the, not only the SAD and NAD work done to-date, but all the preclinical pharmacology volumes, I think one thing you can say that one thing that translates very well in neurodegenerative disease is the pharmacology models from preclinical to clinical, right? So what we learned about the biodistribution and what we've learned about the predicted pharmacology, we're able to assess a single dose level of those at a single dose level in the human.

Our next question comes from the line of Raju Prasad with William Blair.

This is Sami on for Raj. Congrats on the quarter. There was recently a paper published in Nature Communications that came out of an academic center in which they used in AADC gene therapy that was administered to the substantia nigra and ventral tegmental area. And that ultimately led to some pretty compelling improvements in motor function. Just kind of wanted to get your guys' thoughts on targeting these mid brain regions as opposed to the putamen? And if you would consider conducting a post-approval study examining the administration of PTC AADC too then? And then I have a follow-up.

Yes. Yes, thanks for the question. So that was done in the clinical at a university setting where you said substantia nigra. And so I think if you look at the results that we've had, where it's underway in terms of what we've shown going into the putamen, the really profound results that we saw in a much larger number of patients that was talked about and were looked at for 5 years in a clinical setting as well as 5 years after. So we have up to 10 years of continued results. And I think you can -- I think what we can see is that we saw durable neurological and neuromuscular improvement, again, up for 10 years. And I think we are the only therapy for AADC. That's an active regulatory process with the EMA that we submitted in 2020. And we also plan to list the BLA by the end of the year. So I think that we're uniquely positioned to take the PTC AADC as available to all AADC patient around the world that need this, I think, transformative therapy. And I think when we thought -- the reason we like to retain them is that, obviously, all patients showed improvement that we have many patients to show that. And then the other thing that I think is an issue is that the mid-brain is a much deeper structure that we think is less safe to get to. So I mean, this selective will be changing. The choice of that was based on a number of factors. And I think results of that have really shown that it's really, I think, quite efficacious transformative. It's where the dopamine neurons are and is soon to be quite active in the putamen. So we feel pretty good where we're at, and then we're doing all the other necessary regulatory events requirements to bring a gene therapy to patients.

Got you. And just a separate thought. I felt like we haven't heard too much about your oncology pipeline before, and it's a little divergent from your other therapies, which mainly target reignite disorders. So could you remind us what those candidates are and your clinical development strategy for them?

Sure. Yes, thanks for that question. So the oncology program that we're working on is there's it is for 2 compounds. One is called Unesbulin, which was previously 596 million. And then Emvododstat, which is a PTC299, and you heard a little bit about that with the COVID-19, but it's in clinical trials for AML. And we are finding a deep dive update on the programs actually quite shortly and sharing the results of these programs as well. PTC, on your next point is in clinical trials for DIPG and LMS, DIPG is a rare pediatric brain tumor. It's estimated to have about 300 patients per year that are diagnosed in it in the U.S. LMS is a rare adult solid tumor in muscles with an estimated 4,000 patients per year in the United States. Both of these programs have high unmet medical needs with really few beneficial to no treatment options. And so these programs have been ongoing. So it's very much reminiscent of a rare disorder, a rare disease approach. We anticipate having the results of these in the second half of 2021 for the clinical trials. And so I think we're quite excited about that. And with positive results here, we have the potential to initiate registration-directed trial following these results. And so then with Emvododstat it's in AML, and we also expect results by the end of 2021. So these are 2 additional programs in molecules that we have not talked much about what we're going to be starting. We're now getting into a position to talk about them and have some data that I think would be quite exciting.

Great. I'll look forward to seeing that data.

I'm showing no further questions in the queue. I would now like to turn the call back over to management for closing remarks.

Thank you. So thanks for joining us today. As we shared our second quarter highlights, I believe the progress that we've made in this quarter is really a result of the dedication of our people. And while the pandemic is ongoing, I really am continually impressed by development team that has made substantial progress across the full pipeline, and we're excited to continue to share these updates with you as they become available. Also, in addition to that, I think the perseverance and execution of the global commercial team has resulted in PTC raising our 2021 revenue guidance for the DMD franchise, and we look forward to the continued execution of this in the second half of this year. So thanks for joining and look forward to talking to you all soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.