Q2 2023 PTC Therapeutics Inc Earnings Call

Okay.

Good day, and thank you for standing by and welcome to the P. T C second quarter 2023 financial results conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

You didn't hear an automated message advising your hand is raised to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today Senior director of Investor Relations, Ron Aldridge you.

May begin.

Good afternoon, and thank you for joining us today to discuss PTC therapeutics second quarter 2023 corporate update.

Actual results I'm joined today by our Chief Executive Officer, Dr. Matthew Quine.

Our Chief Business Officer, Eric Powell, our chief commercial.

<unk> officer high legal Keith and Doug.

Chief Financial Officer P. Eric Robbie.

Today's call will include what we're looking statements based on our current expectations. Please take a moment to review slide.

Also on our Investor Relations website in conjunction with the call which contains our forward looking statements our actual.

Actual results could materially differ from these forward looking statements such statements are subject to risks that can be.

Materially and adversely affect our business and results of operations.

For a detailed description of applicable risks and uncertainties. We encourage you to review the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission as well as the company's other SEC filings, we will disclose certain non-GAAP information during this call.

Information regarding our use of GAAP to non-GAAP financial measures and a reconciliation of GAAP to non-GAAP are available in today's earnings release with that let me pass the call over to our CEO Matthew clients.

Yeah.

Thank you Ron good afternoon, and thank you for joining the call I'm pleased to share Ptc's second quarter results and our expectations for continued strong performance in 2023.

I would like to extend a warm welcome to our new CFO , Peter grabbed yet I've had the pleasure of working with Pierre over several years and I am confident his extensive experience in finance strategy and health care advisory will be incredibly helpful. As we continue to build the PTC them tomorrow.

Now, let me begin with our second quarter revenue.

We achieved another quarter of strong revenue growth with total revenue of $214 million, it's represents 29% growth over the second quarter of 2022.

DMD franchise revenue in the quarter totaled 162 million, a 21% increase over the second quarter of 2022.

It's robust second quarter performance puts us in a strong position to achieve our 2023 total revenue guidance of $940 million to $1 billion, which would represent 34% to 43% year over year growth.

In addition to our team's continued strong commercial performance. Ricky is now approved in 100 countries with more than 8500 patients treated globally.

<unk> continued growth is expected as access is achieved in countries, where everything is approved.

In addition, based on the recent positive opinion from the sea HMT.

The EU marketing authorization now include pre symptomatic infants, providing another important source of potential revenue growth.

As we shared in May we initiated a strategic portfolio review associated Opex reduction with our previously announced decision to discontinue our preclinical gene therapy programs and other prioritization decisions.

We now anticipate non-GAAP R&D and SG&A expense for the full year 2023 of between $810 million and $860 million.

Versus our previous guidance of between $890 million and $940 million.

In addition to the expected impact of our EMEA portfolio decisions on 2023, Opex, we anticipate annualized savings of approximately $150 million in 2024.

Moving to our pipeline Q2 was very busy as we reported results from several clinical studies, including strong datasets from our affinity and pivot to HD studies.

Let me start with our affinity trial of CPA tariff PKU patients.

In May we announced that we met the study's primary endpoint of blood phenylalanine reduction with highly statistically significant and clinically meaningful results.

Tpa Taryn demonstrated substantial fee reduction from baseline of 63% and the overall primary analysis population and 69% in the subset of classical PKU patients. In addition, the vast majority of patients were able to reach target fee levels in line with U S guidelines of less than 350.

Micro <unk> per liter.

With these strong data in hand, we requested a pre NDA meeting with FDA, which has been granted and is scheduled for the third quarter.

Pending FDA feedback, we expect to submit an NDA in the fourth quarter of this year.

Given the strength of the affinity that we remain incredibly enthusiastic about the potential billion dollar plus global commercial opportunity because CPA Ter.

In addition, as professor arguments out emphasize in our recent PKU commercial deep dive presentation. The physician community is excited about the potential for <unk> to fill the persistent large unmet medical need for PKU patients worldwide.

Moving to PTC five Atms for Huntington's disease patient in June we reported interim 12 week data from the pivot HD trial.

To summarize all key objectives interim data analysis for PTC.

PTC 508 treatment resulted in dose dependent lowering of blood cell Huntington protein with mean lowering huntington protein levels of 30% in the 10 milligram dose cohort.

Treatment resulted in the targeted levels of CNS exposure with a ratio of CSF plasma exposure of one five to one at the 10 milligram dose.

This suggests that greater borrowing of HGT protein, possibly up to 45% could be occurring in brain cells.

Importantly, PTP five onex, well tolerated with no treatment related Aes, no reports of peripheral neuropathy and no treatment related CSF NFL spikes with an overall trend towards lower NFL levels, and PTC 508 treatment groups.

With these encouraging interim data, we will continue to enroll stage two in early stage III patients into the pivotal <unk> study.

And of course, we look forward to the 12 month results of the initial treated subjects at which time, we can learn more about the longer term effects of PTC 518 treatment on key disease Biomarkers.

These HD data along with the continued global success of of risky further support the power of our splicing platform.

Moving to particularly now we reported results in our move up a trial in pediatric and adult <unk> patients.

While the trial did not meet its primary endpoint the results of the Mugabe trial did demonstrate evidence of meaningful clinical benefit on key aspects of <unk> ataxia, including in pediatric patients for whom there remains a large unmet medical need.

In particular, the data demonstrating particular notes treatment benefit on the upright stability section of the <unk> bar scale support a potential long term benefit in slowing time to loss of ambulation.

Given these results the well established safety profile, particularly on pediatric patients and the remaining unmet medical need for pediatric FH patients. We plan to share. These results with the FDA to determine if there is a potential path to approval.

We requested and were granted a type C meeting with the FDA, which is scheduled for the fourth quarter of 2023.

We expect a number of additional regulatory activities in the second half of 2023.

Beginning with Translarna, we expect the HMP opinion for the type two variation to convert the European conditional marketing authorization to standard authorization in the third quarter in the U S. We plan estimate a type C meeting request this month to the FDA to discuss the totality of data collected to date that could support an NDA resubmission for <unk>.

<unk>.

Perhaps Dave that as we've previously shared we are awaiting feedback from the FDA on additional bioanalytical data, we submitted in support of comparability analyses between the clinical and commercial drug product.

Based on the timing of the feedback we expect to submit the IDE.

<unk> BLA in the third quarter.

Overall I am incredibly proud of our continued successful execution across both our commercial and R&D teams.

Commercial performance in the first half of 2023 positions us well to meet our revenue guidance of $940 million to $1 billion.

And the strong datasets from affinity and pivot each team position us well for continued future growth.

I will now hand, the call over to Eric and Kylie to provide an update on our commercial accomplishments.

Eric.

Thanks, Matt.

It is exciting to see the progress of our pipeline and the future opportunities of new product launches and our customer facing team is eager to bring these much needed treatments to patients around the world.

We are extremely proud of the accomplishments of our global customer facing team, which has delivered another strong quarter of revenue.

<unk> continues to accelerate the significant momentum built in the first quarter and is focused on executing on the growth strategy of our commercial portfolio of products.

Our global DMD franchise continues to be robust and our strategy of geographic expansion continues to progress in Latin America, Middle East and Northern Africa, Ncis regions, while we continue to build out the future foundation and growth of markets in Asia Pacific.

Now, let me turn to the DMD franchise.

Trent, Florida and in Florida continue to be an important growth drivers delivering an impressive $162 million in net revenue for the second quarter, which is up 21% compared to the second quarter of 2022.

With a strong first half for our DMD franchise, we are updating our 2023 DMD franchise revenue guidance from $545 million and 565 million to 545 million to $575 million.

For Translarna, we achieved 96 million.

Revenue this quarter, which is a remarkable 25% growth over the same quarter in 2022.

Growth occurred across all major regions and we continue to see growth from new patient starts being added in new growth markets.

As mentioned previously due to the unpredictability of large government orders and some of the of our regional markets, particularly in Latin America, Central and Eastern Europe , The Middle East Ncis regions, we expect to see ongoing lumpiness in quarterly revenue throughout the year.

Now turning to implant the fundamentals of the Plaza business continue to be solid quarterly.

Quarterly net revenue was $66 million, which is 16% growth over the same quarter in 2022.

We continue to see strong trends in a number of new patient start forms in the second quarter, which will provide important momentum as we progress through the year, along with continued high compliance appropriate weight based dosing and a continued focus on broad access.

Now I'll ask highly to update the progress on our current and future new product launches Kiley.

Thanks, Eric Let me begin with update on the first and only approved gene therapy and peak directly into the brain.

We continue our steady rollout across Europe , including treating our first patient in Italy in the second quarter.

We continue to see transformative results to the patients that we have traded desktop, which we shared at the recent European pediatric Neurology Society EPS conference in Prague.

New treatment centers of excellence.

Internationally to support the treatment of patients as we continue the European rollout.

We also continue to leverage early access program from cross border treatment opportunity and expect to treat more patients both in Europe and other international markets throughout the second half of 2023.

Leaving <unk> in Latin America, we continued to establish <unk> as the treatment of choice based on its strong clinical profile and improved quality of life.

Regulatory atti polyneuropathy patients.

In Brazil, we completed delivery of the remainder about secondary patchy fill out from the Ministry of health.

We continue to see robust growth in patient identification as well as positive patient responses on treatment.

Across the Latin American region.

Lastly, we're extremely excited about the Serbia taryn opportunity as discussed recently at the PKU data presentation with.

With a substantial unmet need and strong differentiation from both the mechanism of action and the affinity results.

Customer facing teams are looking forward to bringing this differentiated therapy.

<unk> and PKU patients upon approval.

As we discussed at the call we were able to leverage our strong global commercial infrastructure and we have now established our internal global launch date.

This team is actively working to prioritize the global Laurent speaking.

Key prelaunch activities with the first step of bringing <unk> to the U S market.

Followed closely by Europe , Japan, and other key international markets.

With physician excitement as outlined by Dr. Mendell, and PTC is proven track record in commercializing rare diseases. The team is poised to achieve the market opportunity.

Alright.

In conclusion, our second quarter rounds out an excellent first half of 2023 for the commercial team with.

With significant progress across all our commercial products and across all geographies, we are well set to achieve our ambitious 2023 revenue guidance.

Now, let me turn the call over to Pierre for a financial update.

Sure.

Thanks Scotty.

I want to begin by saying how truly.

To join the <unk> team as CFO .

I have known the PTC team as an advisor for several years and it's a privilege to be working with such a patient focused company and bring my skills to continue to build the PTC up tomorrow.

It is my pleasure to provide you with the financial highlights of our second quarter 2023.

Please refer to the second quarter earnings press release issued this afternoon for additional details.

Beginning with top line results total revenue for the second quarter was $214 million.

This consisted of DMD franchise revenue of $162 million in other revenue of $52 million.

Starting with the DMD franchise.

<unk> net product revenue in the quarter was $96 million, reflecting growth of 25% over the second quarter of 2022.

Given by strong performance across all geographies.

And floods are net product revenue of $66 million.

Representing 16% growth in the quarter compared to the second quarter of 2022.

Moving to everybody.

Second quarter global revenue of 342 million Swiss francs.

Which equates to about 380 million U S dollars with achieved.

Earning royalty revenue of $37 million for PTC.

As Matt mentioned.

The second quarter performance puts us in a strong position to achieve 2023 total revenue guidance of $940 million to $1 billion.

<unk>, an expected 100 million there are milestone when everybody surpasses one $5 billion in annual revenue.

non-GAAP R&D expenses were $117 million for the second quarter of 2023.

Excluding <unk> 16 million in noncash stock based compensation expense.

Compared to 143 million for the second quarter of 2022.

Excluding $14 million noncash stock based comp expense.

The year over year increase in R&D expenses reflects additional investments in advancement of the clinical pipeline.

non-GAAP SG&A expense these were $75 million for the second quarter of 2023, excluding 14 million there are in noncash stock based compensation expense.

Compared to $66 million for the second quarter of 2022, excluding $14 million in noncash stock based compensation expense.

As Matt noted earlier.

We now anticipate non-GAAP R&D and SG&A expense for the full year 2023 of between $810 million and $860 million.

Cash cash equivalents in marketable securities stood at approximately $238 million as of June 32023.

<unk> to <unk> $11 million as of December 31, 2022.

Cash increased by $52 million from end of the first quarter, mainly due to the addition of $50 million from restricted cash as a result of the positive sits up there in data readout based on the Blackstone agreements.

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

Operator.

And thank you.

And one moment please.

As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

One moment, Bob first question.

And our first question comes from Kelly <unk> from Jefferies. Your line is now open.

Thank you for taking my questions and congrats on a great quarter.

Ask the question is.

So regarding the trust line of sales in Q1, you mentioned the sales benefited from large government order in Europe can you comment and how data government auto impact of Q2, and how should we anticipate for the future to stretch your wholesale thank you.

Kelly. Thank you very much for the question. Obviously it was another strong quarter of Translarna revenue I'll, let Eric provide me some more details on the differences between Q1 and Q2.

Hey, Thanks for the question Kelly.

First of all we're really pleased with the quarter, we generated $162 million of DMD franchise, that's 21% growth year over year compared to last year.

And I think as <unk> seen in the past years.

Actually invested in geographic expansion, it's been very consistent that we know that lumpiness will occur quarter to quarter and it's really nothing new at this point in time.

But since we've expanded in many of these regions large government orders, particularly in Latin America, Central and Eastern Europe , and the Middle East in our CIS regions as we've seen consistently those orders and the size of the orders and the timing is relatively unpredictable however, unlike western.

Europe .

And the U S, which tend to be more predictable from week to week and month to month I would say that the fundamentals are still the same.

We've received large orders and the timing of those orders will continue.

<unk> business and even those markets continue to grow new patient starts high levels of compliance.

Adjustments in very low discontinuation rate that occurred.

So the fundamentals for both the new markets as well as our mature markets.

Really solid and in place.

We anticipate orders in the second half of the year.

And we've raised if you will the upper end of the guidance at this point in time to reflect that.

The timing and the size of those orders will likely be more defined in the in the third quarter.

And as we get closer and closer to the third quarter, we'll be able to if you will adjust and confidently achieve that level of guidance. So just stay tuned Kelly for an update around the Q3 as we provide a little bit more color and we'll have more visibility on the timing of group purchase orders in the second half.

But right now we feel very confident and we have very good tailwind in the DMD franchise, we're making throughout the year.

Thank you very much and I also have two quick follow ups.

First can you guide out any trigger for PTC to start reporting.

Claudia.

Revenue.

Thanks for kind of just wanted to talk about.

Okay.

Absolutely. Thanks Kelly.

As we've spoken about while we did provide guidance last year I think the intent with providing that guidance was to ensure that we clearly indicated that we expected to treat patients very rapidly into the launch and we weren't expecting a delay from launch to treatment of those patients as we've said previously it's very.

To understand the true full costs in the first 12 months of launch and so as we move through that period, and we garner a much clearer understanding on how we're seeing patient treat put pricing and reimbursement, particularly in Europe , Spain, a country by country process getting more clarity into that in a number of registration ex U.

<unk> will be able to provide more granularity and more clarity.

So hopefully that answers the question.

Yes. Thank you and then one last one if I may.

Regarding the type C meeting with FDA and attack shelf filing.

Just curious what kind of.

Strategy, you could share whether you have Dallas from Grupo analysis.

And also for <unk>.

Focused on like improved efficacy, maybe some genetic marker and also start to a group of patients. Thank you.

Yes.

Okay. Thanks for the question to clarify the type C meeting for which indications.

Okay, yes so.

So as we said we've requested that type C meeting from the FDA and it was granted and that will take place in the fourth quarter and as we talked about while we didn't hit the primary endpoint. We had very strong data on a number of important aspects of the disease in particular, the upright stability subscale.

Just thinking about.

Friedrich ataxia, as a disease and drug development and the tragic attacks here one of the main goals of any therapy would be slow the times locations. So these ambulation that is.

One of the key.

Key mortgage transition point of the disease and every drug that targets alternative progressing seeks to try to slow that time to loss of ambulation. The upright stability subscale Oems forest has been shown to be a key predictor of time philosophy emulation. So the fact that one we had pre.

That particular sub scale and <unk>.

And to the fact that it is a component of the primary endpoint and we showed.

Strong signal of effects with.

A difference of about one three points between treatment and placebo.

And we've done some work to show that that should translate to a delay in loss of ambulation of at least eight months.

And perhaps more with some other analyses that we've been able to do so we're able to come to SBA and be able to talk about the potential path to an accelerated approval, what we've been able to demonstrate an intermediate clinical endpoint upright stability that we're able to delay likely.

Likely delay or longer term significant more of a transition point it seems loss of ambulation and the fact that we showed statistical significance and a strong magnitude of effect.

We can demonstrate that we are able to likely provide a long term clinical benefit with regards to the key.

A key goal or that based therapy, which is delaying loss of ambulation. So we look forward to having that discussion with the agency obviously with the Sky class approval Thats directed towards adult patients we have a.

The study that was included primarily pediatric patients. So a very strong safety record of particularly on the pediatric patients getting now a data set that has many positive aspects, but in particular very strong data with regard to ability to slow the loss of ambulation, which is really the key goal of that take that.

Very helpful. Thank you.

And thank you.

And one moment our next question.

And our next question comes from Sami Corwin from William and Blair. Your line is now open.

Hi, guys. Thanks for taking my questions I guess first do you have any clarity as to why these see HMP opinion for Translarna got question I thought that was originally supposed to happen in May and is there any contingency plan. There if it doesn't get approved and then I have a follow up question.

Hi, Tammy Thanks for the question actually the initial timing was.

And in each one.

Timeline was put together based on how we thought that the typical back and forth at <unk> during the <unk> process.

<unk>, obviously, there was one more turn the questions back and forth push C. H one into the third quarter. So we remain highly confident of our ability to achieve the conversion from conditional marketing authorization to standard market our authorization knowing that really the bar here is being able to.

European statute confirmed the benefit that existed at the time of registration which of course was in 2014 based on our first placebo control study study seven and now we have a data set in over 700 blades.

Confirms that benefit, but actually expands our ability at showing 741, a statistically significant benefit all comer ITT population, which is the indicated population as well as showing significance on a number of different endpoints, including Northstar ambulatory assessment at its heart function test and this is really a body of data that not only can.

Firms, yes, which is the charge builds on.

Great. Thanks, and then given you have about $330 million cash how are you guys kind of thinking about capital deployment in terms of either focusing on your commercial franchises and products.

And that will be going through regulatory submissions in the near term burst as your earlier stage research pipeline.

Yes, I think as we've talked about that we are well capitalized.

Can you take us to the next.

Hey, guys through this year and get us to the PKU box, we've talked a lot about having the infrastructure in place to launch <unk>.

<unk> and other products, we also have.

Robust discovery and development infrastructure. So all the pieces are there so we're well positioned and well capitalized to move forward the programs and prepare for the launches that we expect to occur in the next one to two years.

Great. Thank you.

And thank you.

And one moment our next question.

And our next question comes from Kristen <unk> from Cantor Fitzgerald. Your line is now open.

Hi, everyone. Thanks for taking my questions and welcome here.

Just wanted to ask what the main questions will be at PKU pre NDA meeting and essentially what feedback you are looking for here.

Sure Christine Thanks for the question. So obviously pre NDA meeting as often and focus around the structure of the NDA. How the components are put together, how we do integrated safety and efficacy.

The analyses and then going through the check list.

In line with in terms of what's needed from a clinical standpoint efficacy standpoint safety database non tox package CMC package. So it's a fairly standard.

Approach the pre NDA meeting, obviously, we are quite gratified to have the meeting granted and our expectation is that we'll be able to align with the agency and move forward with a submission in the fourth quarter.

Okay. Thanks for that and we've often talked to you about the synergies with displacing platform, especially now that.

You are progressing along with Huntington's disease, but maybe just kind of wanted to ask a question from the sense of how much overlap you think there is within neurologist community and in particular, the adult community with the experience with <unk> given the launch has been pretty substantial here and then if you have any initial feedback that you've heard.

From some leaders in the space based off of your early data.

Yes.

Can you give a little bit of color and then I'll turn it over to Kelly for a bit more detail on this.

Obviously SMA just in general in both pediatric and adult.

Huntington is obviously going to be mostly adult so we were able to.

To complete our work and Judy Ross, but I would say there is broad recognition in the scientific position as well as the patient communities importantly, about the power of the splicing platform and obviously, we've talked a lot about it as the.

Being able to provide us with a blueprint of how to successfully discovered.

Developed an oral compound for all licensed compound for a whole brain disease, such as SMA Huntington disease, and I would think in many ways to enrich the experience is also.

Set a path for us as well as we think about getting this out and doing clinical trials in both the patient and physician communities because of the recognition of the power of spicing platform the ability to deliver an effective oral small molecule that not only state, but being able to deliver meaningful results.

Providing more color on how we're thinking about and working with them.

Yes, absolutely I think what I would add Chris and in addition to what Matt said I think one of the things that we do as a commercial team, which we take very seriously is making sure we take learnings across all aspects of our business as well as making store, where they overlap between physician specialties and physician target KOL points.

That was sharing that amongst the different claims. So if we look at Huntington's disease, specifically as Matt said, obviously, it's more adults, but one of the things that is consistent is.

The movement disorder sub specialty within neurology has overlaps between ups data and other parts of our business and so we're making sure it's not entirely overlap, but there are some components of overlap and so in that case, we're making sure that we're we're having consistent touch points that we're sharing that across the different teams.

Great. Thanks again.

And thank you.

And one moment for our next question.

And our next question comes from David Leibowitz from Citi. Your line is now open.

Thank you very much for taking my question.

When you think of the guidance.

For dish.

<unk>.

For full year.

The implication is that at the high end of the guidance the revenues would actually declined by 27% in the second half.

Are we to assume that guidance is just making the most conservative possible assumptions here.

And that's the thing.

Things could very well work out differently as the year progresses or should we expect a decline in the second half.

Yes. Thank you David very much for the question, obviously, our I talked a bit about how.

How much growth, we've been able to achieve and the reasons for that growth and the trade block franchise.

Talk a little bit about the dynamics in the second half of what we're thinking about total year guidance.

Yes.

First of all I think we continue to see growth So David I think.

What we're trying to do is is to really modulate a lot of these group purchase orders in countries, where we have established ordering patterns that are relatively inconsistent.

So while we're being a bit conservative in certain areas the unpredictability of the timing and the size of the orders.

Can certainly play, but what we've seen fundamentally in all of these markets, particularly in the Latin American markets, where we continue to see orders and orders from new countries.

Well as essential in this eastern European markets, and middle Eastern markets, which in the last few years have started to sort of.

Stabilized much in terms of their ordering patterns. There are still some unpredictability and because the number of patients that we have a large amount of patients in certain markets.

Such as Brazil, Russia, and a number of other key areas.

The timing and the size of these orders can have fluctuations between one quarter or the next but.

Sunday rentals are still very strong and I think we're very positive given the fact that we have seen quarter on quarter growth.

So I think.

As I mentioned I think we have some very nice tailwind.

I think we're going to continue to see good growth and we're very confident that we're going to be able to achieve the guidance that we've set out or at least exceed it.

Got it. Thank you very much for that and just jumping over to <unk>.

PKU given the trial.

The pivotal portion of the trial utilized a diet.

Is that part of the protocol.

And I know the OLED.

You are adding fee into the diet.

From a labeling perspective.

Can be OLED.

<unk> is a component to allow.

Could not be a requirement.

For patient.

Sure.

Well the labeling of.

Ultimately include on top of a diet.

Hey, David It's a good question, obviously, we've talked a lot about the all the different aspects of your question, obviously the importance of having a stable diet in the trial. So that we don't confound. The trial results. It's incredibly important that we have an understanding of the effects of secrets here relative to placebo in a context of stable diet.

But we also know as you referred to that being able to liberalized diet is really the Holy Grail for PKU patients their diet is highly restrictive.

It takes an enormous impact.

Finally in many many ways.

Obviously, one of the key differentiating factors as well as the ability to keep your tariff to maintain phenylalanine levels within control and still allow for the amortization of the data. We saw in the early data feed tolerance data that I presented thus far both of this first study readout as well as in the <unk>.

<unk> commercial deep dive a few weeks back that we are seeing that.

No <unk>.

In the face of it.

Intake that exceeds RBA levels in many patients.

We're looking at the data that are continuing to come in from the open label expansion. We're seeing our team continued to be the case as more and more patients to go through the protocol and we look forward to sharing those data at <unk>.

Yes future forms in the future.

So what the label lets say were not short.

Slightly since the protocol talked about stable diet that that will be in that but nonetheless in all reality in everyday life patients will have possibly some component of diet control, but obviously, what they do in daily life and believe the liberalized their diet is going to be much more impactful or.

How it is that type of drug is necessarily prescribed adjusting what the perceived value was the increased physician uptake and broad patient interest and finally being able to have all powerful therapy.

Not only provides better controls as finally allows them to liberalized their diet, which is so very important to patients.

Got it. Thank you so much for taking my questions.

And thank you.

And one moment our next question.

And our next question comes from Eric Joseph from Jpmorgan. Your line is now open.

Hi, Good afternoon. This is Anna on for Eric Thanks for taking the questions. Just wondering when we might be able to see maybe a fuller update our presentation of data from the phase III study.

As you guys are considering and conducting additional analyses to take the FDA just wondering if there's a plan to present these to the street.

Yes, Hello, Thank you very much for the question so.

Honestly, we took.

Sure the key top line data from this study, including the positive results in a number of a number of secondary endpoints on the two important components of the employers to Bolivar subscale as well as the upright stability sub scale.

So we have done initial additional analyses, particularly around being able to quantify the likely long term benefit expecting with regards to loss of ambulation based on rates different we were able to achieve a slowing progression on the FY <unk> the ability to scale. So we're going to continue to do some more work in that area and we will look forward to.

Showing those sharing those analyses.

The charity there as part of our application or a presentation will be available.

Our investor community.

Okay, and then this may be a little bit more of a niche question, but so for the diet liberalization study for PKU just wondering from your conversations with physicians and patients is there a specific amount or the percentage of increase fee tolerance.

That patients might achieve that would be considered clinically meaningful to both physicians and patients.

I think I would say as we highlight.

President Buentello highlighted very nicely.

In our deep dive a few weeks back how burdens the restricted stock.

So even slight increases in intake is would be incredible benefit both.

It's gratifying for conditional, but obviously important for patients and their quality of life question. When looking at our data and were seeing that patients are able to get beyond the recommended daily allowance of protein.

Unaffected individual would be able to have as part of their standard diet and still maintain control I think that those are incredibly powerful data because that would far exceed what any loans that hope, Florida therapy, so for us to be able to observe that it's been very encouraging to us obviously, it's something that the patients have gotten very excited and as Dr. <unk> said theres.

She and other physicians are very excited about what they've seen so far in those days.

Okay, great. Thanks for taking the questions.

And thank you.

And one moment our next question.

And our next question comes from Jeffrey Hung from Morgan Stanley . Your line is now open.

Hi, This is Mike <unk> on for Jeff hung. Thank you for taking my questions and congrats on the quarter and the progress.

So if you have favorable U S regulatory outcomes in all your late stage programs.

Presumably we'd see them launch in a close timeframe. So how is the company thinking about preparations for multiple simultaneous launches, especially in the context of the annualized $150 million in Opex savings in 2024 and would you launch them immediately if that was an option. Thanks so much.

Yes, Michael Thanks, so much for the questions.

We would look forward to that opportunity.

<unk> been building for that we are well set up for that we're well funded for that I'll, let finally provide a little bit more color, but let me just say the short answer is we would welcome that activity and work as quickly as possible as we always do to get these important therapies to patients.

Probably a little more color on this infrastructure.

Yeah, absolutely thanks, Matt and thanks, Michael for the question as Matt said I think we definitely welcome that that problem to have but as we've talked a lot about we have a really strong commercial infrastructure in place globally and this includes both capabilities and capacity to focus on neurology and metabolic and obviously the.

Team is gearing up very quickly for a potential PKU launch. In addition to that obviously, we don't start on day one of launch the team has done a lot of work while trials the ongoing to build relationships with kols to build relationships with patient advocacy groups to ensure that we understand the need for the payers.

To ensure that we understand what's necessary to be successful launch and all of that takes place sometime.

Sometimes often up to two years prior to launch.

We're in a good position to be ready upon successful regulatory.

Discussions and positive movement towards NDA submission and it would require additional resources the infrastructure to be successful that the way, we have the footprint and more than 50 countries around the world and we are definitely ready to go and I know it takes many of the colleagues that we are excited for the opportunity to be able to bring.

A lot of these differentiated therapy to patients with high unmet medical need in neurology and metabolic spaces.

Alright Super.

That's really helpful. And then maybe a last one more of a housekeeping question could you comment a little bit on the royalty rate for this different merits. It seems like it's been trending a little bit down in the last few quarters any commentary on why we should expect and thanks. So much.

Sure Colin do you want to fill that.

Absolutely, yes, so the royalty rates from Roche for every kid between 8% to 16% sorry that is on an annualized basis every year. They start at the beginning which is the 8% and that he had up to 16% so from that perspective throughout the year they progressed through the.

Different tiers.

Up towards that as we've seen with 701 million Swiss francs of sales in the first half of the year with wet hearing up towards the second than almost any of the third.

Tier of royalty rate, so I wouldn't say that they're going down if anything they go up.

But that's on an annualized basis.

Thank you thanks for that clarification. Thanks, so much.

And thank you.

And one moment our next question.

And for our next question, we have Brian Abrahams from RBC capital markets. Your line is now open.

Hi, This is Joe on for Brian Thanks for taking my question.

Just going back to <unk> can.

Can you can you talk about some of the potential outcomes of the sea see HMP opinion is correct.

Possibility that translarna can remain on the market with conditional authorization with the annual renewal.

A follow up.

Hey, Joe Thanks for the question. So obviously the types of variation that we're submitting is is to convert the conditional authorization to standard authorization and as we've talked about we're confident in the ability to do that given the strength of the data and our ability to meet the requirement of <unk>.

<unk>.

And said earlier building.

The data that already existed at the time of registration obviously, if <unk> were to decide that they want us to continue to collect data whether that's as part of the longer term open label section.

741, which.

Included the 72 week placebo control portion of the 72 week open label portion obviously the analysis, we presented an analysis that formed the basis of the <unk>.

Conversion requests are on placebo control.

That's a possibility could simply say strides really great for the first time provides direct measurements of the long term benefits of a therapy for DMD. It also is able to capture the fact that we are having an impact on the two key mortgage transition points of the disease, while sort of emulation lots of quality function and they say we want more.

All data to convert that's totally possible. So there absolutely is that possibility that they as they continue with the conditional authorization for Ciena for now which of course has been business as usual for train one.

Got it. Thank you that was very helpful.

So to tell.

In the U S pathway.

I guess, if I'm not mistaken type C meeting has been requested this mindset is their typical response time from the FTA.

To get back to you once the meeting is being requested or and also how much additional back and forth.

Can you expect to have before the meeting is scheduled.

Yes, Thanks, Jeff.

So that meeting request came based on a recent discussion with the division within our division.

You talked about the potential pathways.

Two NDA resubmission in the U S, particularly now given the volume of data we have not only from the three placebo controlled studies that are set to start in 2741, but importantly, those sorry, David that I recently mentioned, which provide very strong evidence that the benefits that we're recording over the course of the time of the clinical trials are translating to long term meaning.

Paul benefit and the most significantly as possible as long time to loss of ambulation loss of pulmonary function.

The agency said well why don't we get all of our data together, including some of the mechanistic data that we generated over the years any analysis, we want request a type C meeting and we will have a discussion about how we can put together an NDA package.

That would be suitable for Resubmission as mentioned you have not yet submitted that request, we will be submitting that request in August .

They typically respond within a couple of weeks to let US know if the meeting was granted or not and typically the timeline for type C. Meeting following meeting request a meeting date is roughly 75 days.

Got it thanks for the clarity.

And thank you.

Okay.

And one moment for our next question.

And our next question comes from Colin Bristow from UBS. Your line is now open.

Okay.

Hi, This is <unk>, calling congrats on the quarter. Thanks, Paul to camera question. So I guess our question is on the.

PTC 518, HD program. So in terms of the euro as partial clinical hold just wondering if you have already submitted the <unk> data as well as the additional safety data to FDA, yet and if there's any feedback of whether requirement from FDA to potentially at least.

And also the second part.

On the same program so far the dose.

Escalation so based on your data it seems like the 10 milligram.

We'll be very likely to reach targeted HPT reduction go.

<unk>, 13% to 15% range and you previously noted you need some more data at low doses to put two further.

Determining.

The dosing escalation. So just wondering could you. Please let us know what kind of update us out of your mind need to see to make this decision and this potential dosing escalation be included in your conversation conversation with FDA for the clinical hold the king.

And when we await expects with CBO data. The next data update thank you so much.

Thank you very much for the questions.

I'll start with the first question regarding FCA and the partial clinical hold in the U S. Obviously, we work.

Very pleased to see that the data that we presented.

In June the first cohort of patients coming through the first parts activity HD.

Demonstrated the drug was safe and very well tolerated no serious adverse events no evidence for peripheral neuropathy.

NFL spikes, but have been observed in other therapies. So overall, a strong safety record as we could have hoped for.

Obviously, we are continuing to monitor safety. We also mention that we have an independent SMB that continues to meet and continues to support continuation of the study as it is and also indicated based on looking at the five milligram data as part of our employee cuts. They would support it we will decide DSO escalating to a 20 milligram dose we have.

<unk> submitted to the agency the safety data.

And our argumentation and support.

We are opening the study in the U S that process is still ongoing and obviously, we'll provide an update.

At the appropriate time regarding your second question.

The doses.

You are correct.

Sure.

As we shared we believe the 10 milligram dose both based on what we observed in terms of blood reduction in Huntington protein of approximately 30% as well as again being higher exposures with CNS to the blood with that ratio.

CSS the Plaza one five to one gives us every reason to believe that we're within that targeted range of 30% to 50% lower rate within gross sales.

What we said and reduced since we believe we are in the range is continue to collect data on the five milligram and 10 milligram dose cohort and importantly, some of those biomarker data over the second part of pivotal HD that some brokers that with the 12 month data.

Later.

<unk> is available.

That will confirm if we are at the dose level we want.

And then we will probably use that time to inform any additional decisions regarding.

Going to that higher dose level 20 milligrams.

Of course, it's important to note that we are an incredibly favorable position with an oral molecule that we can titrate and to.

To be able to have peripheral biomarkers, such as blood Huntington protein Africa provide important information regarding target engagement in Pharmacodynamic effect is an incredibly important factor in being able to steer this clinical development program forward and taking us to a REIT dose level, that's not only state bucket.

Provide important benefit potentially for patients so as for now we're continuing with the pilot.

We will expect to have that next data update the biomarker 12 months eight update approximately nine months from when we had the for the three months data update.

And again.

In terms of that decision it will be based on what the data looked like and as I mentioned, the DSV has already provided us there, okay and support to go to higher dose if and when we decide we need.

That's very helpful.

So just sorry, just one quick clarification.

Are you.

Like will you provide function of addition.

<unk> steakhouse from thanks to our investors.

Speech straight patients in terms of the program. The next update will just be the nine months' data. Thank you.

So good question. So we have a few more data data updates to go right. So obviously those first patients that we presented the part a.

Data on that first the three month data on in June we will expect an approximately nine months from now to have the 12 month data right and then obviously, we'll be able to provide.

The three month data update on the additional stage two and the early stage III patients windows available, we havent given that target.

The timing for that once we have more clarity on the <unk>.

Precise date.

Very helpful. Thank you so much.

And thank you.

And one moment for our next question.

And our next question comes from Joseph Tom from TD Cowen. Your line is now open.

Hi, there good afternoon, and thank you for taking my question, maybe one on <unk>.

It seems like companies are having various ability to.

Three patients after the approval of a gene therapy in the U S and in various levels of success here. So I guess is there anything that you can do during the Hopewell FDA review process to kind of prime payers to be ready to reimburse <unk> upon per country U S approval.

Which I expect will come sometime in the back half of next year and then maybe second we are going to know what the pipeline.

It looks like by the end of this year based on regulatory feedback you get the next couple of months I believe in your previous deal with Blackstone, There is $500 million earmarked for BD I guess.

Are you ever contemplating using that at all depending on what comes over the next few months. Thank you.

Okay.

Yes sure John Thank you very much for the questions. The first question.

On a stage.

I'll, let Carter give some detail on our setting the U S market in terms of payers, but I will add that we're obviously incredibly gratified to see as we continue treatments in Europe as well as the cheapest that we did as part of the carrier of a study that included sites in the U S, where we're continuing to see.

Very strong data.

Again substantiated in the fact that this is a transformative therapy. It's one of those therapies, where we see the effects of lower sulfur with the gene therapy taken kids, who had virtually no dopamine production no motor function and then providing the ability to make dopamine in the team that would be able to six crore.

Crawl walk isn't.

He is incredibly gratifying and of course that getting a itself so much preset the marketed increase for patients.

<unk> desire desire to get that therapy.

George.

Our preparations for U S.

Yes, absolutely Joe we are engaging with U S payers and we do this well ahead of launch to understand what are the types of queries that they have and what are some of the road blocks that might be put in front of us and we obviously, especially with ABC need to do education around what is the disease, the high morbidity and mortality rates.

The lack of standard of care of any disease modifying therapies out there available and obviously budget impact and all of that work happens ahead of ahead of approval in the U S. Team has been actively engaged in that process to date as Matt said with a strong data package and transformative data not just in the short term, but also.

In durability, which is one of the questions that a lot of payers have put in front of other companies with gene therapy is how well does your treatment perform not only in the short term, but also in the long term.

We feel very very confident.

Around the data package that we have throughout stays here and the value proposition in totality.

Has been.

Were very well received by U S. Payers, then there has been a high willingness to pay.

Yeah.

And Joe on your second question regarding <unk>.

Yes.

We will learn a lot more about about the portfolio in the coming months and obviously you've done a lot of.

Work in our own strategic prioritization, obviously decisions to discontinue to preclinical gene therapy programs as they move more towards a coherent strategy and focus.

Obviously it can be.

Part of that Peter do you want to add some more color.

But there will be opportunities.

Absolutely.

That said the team and the company is well aligned about our capital and our strategy to leverage our expertise and being opportunistic.

BD.

And as it comes to Blackstone, we're very proud to partner with such a strong group with life science expertise.

We will always evaluate our funding options as it comes to.

To beat on our capital structure.

Great. Thank you very much.

And thank you.

And one moment our next question.

And for our next question, we have Gena Wang from Barclays. Your line is now open.

Hi, its Tony on for Ciena going back to the Huntington's program could you just add some more color potentially on what kind of thresholds you might be looking for in terms of CSR protein I know you talked about 30% to 50% range, but is there kind of a specific cutoff you would be specifically looking for.

Yes, Toni Thank you very much for the question, obviously theres been a lot of discussion about CSF Huntington protein what it means.

And how do we measure it.

And many things like that look.

We are in a position where there is many important biomarkers of disease that we're measuring in this study we are measuring CSF protein. We're also measuring NFL, which obviously has been shown in neurodegenerative disease to be a very important marker.

We have safety.

In terms of.

Potential nerve injury, which I mentioned, we have not seen any signs thus far the pivotal HD trial, but also efficacy we can look to first an accelerated approval.

Indicator that there's broad interest, including from the regulatory authorities to look at NFL as an important marker of efficacy.

<unk> and Neurodegenerative disorders that are characterized by an enrollment in June the wall to wall CSF Huntington protein has been a bit.

Well characterized what we do know is that in early stages of Parkinson's disease. There is no detectable mutant Huntington protein in the CSF. It's at levels that are so low that is not protected with IV assets than any one of us. However over the course of time as nerve degeneration progresses. There is a gradual increase in.

The level of <unk>.

Huntington protein in the CSF. So that tells us that it is in a way a marker of neuro degeneration. So if that is true and we believe it is.

And that that CSF proteins likely coming from spilling some nerve cells, where they come in Uganda. During the course of the process the ability to lower CSF Huntington protein is an important marker that we are having a favorable effect on the brain cell flex that.

Injured and our spilling less Huntington protein in the CSF.

So all of that is to say that's what we understand about at quantifying what change is meaningful is a bit challenging I don't think anyone has the exact number other than to say obviously, if you have a marker of disease that is increasing over time as the disease worsens, if you could stabilize and ultimately lower got marker that obviously very good.

But I think the way we think about it is not in terms of any specific threshold, but being able to look at our effects on the trajectory of CSF proteins with the goals for tomorrow, and we did share on it. It's why we call them are observing lowering in the dose cohorts at very early points in time before we know that we're reaching steady state in terms of what will ultimately be able to.

Thanks, CSF protein lowering but we're also going to look at that alongside other important markers such as NFL as well as the volumetric MRI and that together those'll painted a picture of the benefit that PTC five is going to be able to provide for huntington's disease patient.

Got it very helpful. Thank you.

And thank you Greg.

And one moment our next question.

And our next question comes from <unk> Ahmed from Bank of America. Your line is now open.

Hi.

This shift to a standard approval from.

From the datasets you are at now for EU practically unchanged in terms of either commercial opportunity reimbursement or does that kind of not really matter in the grand scheme of things and then as far as the cost savings that you mentioned about an annualized number of about $115 million or so.

To clarify upon what you might have said before could there be room for additional cost savings beyond what you've just described.

As we get closer to 2024 and you take a closer look at your portfolio. Thanks.

Great. Thank you very much for the questions Devine on the first question regarding the conversion from a regulatory standpoint, I think the impact is perhaps you don't have to go through a process that you are getting the renewal, but but more importantly answer the question of your question.

Commercial impact all at highly I talked about that.

Yes, So devine and then an answer to your question around the benefit I think what the team has done a remarkable job of securing very favorable pricing and market exits with conditional approval and not only being able to secure but maintain a really favorable crossing Colorado.

The maturation of the product.

It is not easy to do I think from a benefit perspective, we don't see a huge upside when it comes to the countries that we're already launched in with pricing and market access there are some smaller countries that we that would open the door to a discussion post conversion, but I think where the true outside this is the countries that we don't have registration that yet.

Okay and then regarding your second question in terms of potential further cost savings.

As we talked about at the time of the CEO transition one of the things that we really wanted to focus on particularly.

We have studied that with deposits and PK data that we ultimately had we were in a position to start really focusing down and looking at opportunities to reducing.

Our opex and reducing our costs. So the team has spent a lot of time in the spring looking into this we obviously shared the reductions.

That we plan associated with the discontinuation of the preclinical gene therapy programs, obviously that involves reduction in head count and we made these decisions in late May, which obviously gave a bit of a limited time in 2023 to realize the impacting cost savings, which is why we shared.

Sure that we expect those changes in 2023.

Greater impact said, an impact of approximately $150 million in cost savings in 2024.

Of course, we.

Also our volume will be in a position, where we're going to continually looking at the portfolio looking at opportunities to ensure that we advance our programs that have a reasonable return on investment as well as saving opportunities stay when that's not the case, but let's look at cost savings, we're looking at $940 million to $1 billion of revs.

This year, we're incredibly excited about that.

To expect as we.

Our other programs forward and looking forward to.

The potential launch of the PKU program, which we believe can be an over $1 billion market opportunity. We're really in a position where we should be thinking about moving towards that breakeven point and ultimately one day in the future being profitable to do that we have to continue to be very thoughtful and strategic about our utilization of capital and how we.

Think about Opex, so we think about programs.

Correct. This is David.

And that we continue to do over time as we built the company forward.

Okay. Thank you.

And thank you.

Okay.

And one moment for our next question.

And our next question comes from Paul Choi from Goldman Sachs. Your line is now open.

Thank you good afternoon, congratulations on the quarter.

My first question is on the commercial side with regard to F. Risky your partner Roche reported the first sequential decline.

Basically since the early days of the launch I'm just wondering if you could maybe comment on market trends there.

That your guidance.

Beds, a milestone for 2023.

My second question is also on Huntington's just with regard to enrollment.

Progress.

Pending the <unk>.

<unk> with the FDA and just how.

How youre factoring in the pace of enrollment contingent upon.

Clarifying the clinical hold there. Thank you.

Thank you very much for your question Paul Let me, let me take the second one first so in terms of enrollment look we have said all along that we were in a position to enroll this study outside the U S, but thats the bet.

It is having a global development organization that can broaden that trial started and conduct trials in countries around the world.

The study up and running in a number of countries.

In Europe , as well as in Australia, as well looking at as you saw in Canada.

And there is a great deal of enthusiasm.

All of these countries amongst the physician and the patient groups to participate in this trial.

Obviously, the interim data readout showing that the drug to date has shown to be safe well tolerated and is having the desired pharmacodynamic effect is only heightened the interest in the well.

We're obviously very aware of the desire of patients in the U S to participate in the study and physicians.

In the U S to participate in the study.

<unk>.

But I will say that we're going to continue to enroll that study without doing anything to slow it down knowing that if we are in the position to reopen the sites in the U S. There will be opportunities for patients to participate.

Regarding your second question.

On Wednesday.

Christi.

Current edgewater for you guys.

Yeah, absolutely. Thanks, I think one of the things pull that we're seeing with that breakdown. So continuing to see the growth in total patients treated and this is being driven by a number of different factors across the board.

It's being driven by continued switches coming from both.

<unk> been rozzer as well as continued therapy naive patient being treated in the U S. You've also heard Russ talk about the infant starting to be an increasing patient segment that <unk> treated patients and with the recency HMP opinion. We also expect this trend to continue ex U S.

I've also talked about the fact that they are global market leaders with market leaders in most major markets around the world and the global market leader by the end of 2023, I think one of the things that you do see with <unk>, which is consistent to what we see with transplant or more Eric touched on throughout this call is lumpiness.

The business and that's directly related to the international business.

They have large government based purchase or what is that fluctuate throughout the different quarters and so it is expected that you will see that quarter is a quarter Lumpiness I think we've seen growth from 2022 into 'twenty into Q1 of 'twenty three with a little bit of Lumpiness in Q2, but we expect the growth to continue through.

The rest of <unk> I think we're in a good position for the $100 million milestone that you touched on if you.

Look at sales through the first half of the year with Pos top flight, that's a really positive sign and so from that perspective, that's why we remain confident with the full revenue guidance for 2023, including that $100 million milestone. So just lumpiness that we see of course that trends on our business as well.

Okay, great. Thank you for the color.

Yes.

Thank you.

I am showing no further questions I would now like to turn the call back over to Dr. Matthew Klein for closing remarks.

Thank you again for joining us on the call today.

Im extremely proud of our many achievements in the second quarter and we look forward to a busy and productive second half of 2020. So thank you all again for joining the call and have a good day.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

[music].

Okay.