PTC Therapeutics Inc
NASDAQ:PTCT

Watchlist Manager
PTC Therapeutics Inc Logo
PTC Therapeutics Inc
NASDAQ:PTCT
Watchlist
Price: 43.23 USD 0.79% Market Closed
Market Cap: 3.3B USD
Have any thoughts about
PTC Therapeutics Inc?
Write Note

Earnings Call Transcript

Earnings Call Transcript
2019-Q2

from 0
Operator

Good day, ladies and gentlemen, and thank you for your patience. You've joined the PTC Therapeutics Second Quarter Corporate Updates and Financial Results Conference Call. At this time, all participants need listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference may be recorded.

I would not like to turn the call over to your host, Chief of Staff to the CEO, Timothy Dyer. Sir you may begin

T
Timothy Dyer
Chief of Staff to the Chief Executive Officer

Hello. Good afternoon and thank you for joining us to discuss our 2019 second quarter corporate updates and financial results. Joining me on today's call is our CEO, Stuart Peltz; our Chief Operating Officer, Marshall Sousa; 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 our slide on our simultaneous presentation, which contains our forward-looking statements.

Our actual results could materially differ from these forward-looking statements as any and such risks 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 reports 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 and non-GAAP financial measures and a reconciliation of GAAP to non-GAAP is available for today's earnings release.

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

S
Stuart Peltz
Chief Executive Officer

Thanks, Tim, and thank you all for joining the call this afternoon. Over the second quarter, we've made important progress growing the DMD franchise around the globe. In addition we have increased the franchise value this quarter by expanding the Emflaza label to include two to five-year old patients.

Furthermore, following approval of Translarna in Brazil, we completed an annual contract with the Ministry of Health to provide Translarna to patients. We continue advancing the therapies in our pipeline with two programs on track to be submitted to regulatory authorities by the end of the year including an NDA for Risdiplam, a small molecule identified from our splicing platform and a BLA for our first gene therapy product for the treatment of AADC deficiency.

Moving these clinical programs to commercial stage products reflect our continued execution of the five-year strategic plan that we described last year. This vision elucidated PTC's mission of bringing differentiated therapies to patients suffering from rare disorders with limited or no treatment options. By fulfilling this mission, we will be creating value for all of our stakeholders.

One key pillar of our strategic plan is to continue to build a robust diversified orphan drug franchise. We believe that one of PTC's key differentiators is our ability to work across multiple scientific platforms to bring orphan products to patients in need of new treatments.

Our products and innovative programs currently span across five core platforms including nonsense mutation read through, alternative splicing, gene therapy, anti-sense DNA technology, and oncology.

We intentionally sought to develop products against targets with differentiated mechanisms of action that allow us to diversify our pipeline ensuring that we bring innovative products to patients with high unmet medical needs.

I'm very proud of the team's execution of the strategic plan. Because of these efforts, we are now in the position, to have four product launches over the next year, Risdiplam for SMA, Tegsedi for Hattr, Waylivra for FCS, and our gene therapy product for AADC deficiency.

In addition, there is potential for U.S. approval of Translarna for DMD in 2020, based on the outcome of the dystrophin study. The combined potential revenue and royalty streams of these products all of which are either already approved, or will be submitted for approval this year is anticipated to grow in excess of $1.5 billion, in potential revenues by 2023.

Our growing commercial infrastructure was strengthened over the second quarter. Importantly, we have started to see early access sales of Tegsedi in Latin America bringing patients the benefit of in-home injections to treat polyneuropathic hATTR, because this rare disorder has a Portuguese ancestry. Brazil is one of the largest markets, with an estimated 5000 patients.

We know from market research these patients have a high degree of unmet medical need. And Tegsedi offers important therapeutic benefit, to bring therapy to patients as quickly as possible. We have submitted the application for Tegsedi registration in Brazil. And expect to receive this, by the end of the year.

We also made significant progress in Brazil for Translarna. As I mentioned, on the last call, Translarna received regulatory approval in Brazil, in the second quarter for nonsense mutation DMD patients over five years of age.

Having received the approval, we have now completed our negotiations for an annual contract to sell directly to Brazilian Ministry of Health. This contract and the Anvisa approval will allow for broader patient access in Brazil.

As I mentioned earlier, we also expanded Emflaza access to patients in the second quarter. The FDA granted our Emflaza label expansion for patients two to five years old. This is critical. As treating patients earlier, can preserve muscle mass. And delay loss of ambulation.

Multiple publications from clinical studies as well as long-term natural history data show that Emflaza is the superior product, compared to Prednisone. Our DMD franchise continues to produce robust revenues. And provides a strong base, in which we are continuing to grow the business.

We are reporting that the DMD franchise revenue was approximately $85 million, in the second quarter. We remain confident in our DMD revenue guidance of $285 million to $305 million, for full year 2019.

The teams have also been working hard to advance our clinical programs. We have been preparing the BLA for our gene therapy product, to treat AADC deficiency and are on track to submit the BLA this year with a potential approval next year.

We are also excited to report that, Roche expects the risdiplam NDA, to be submitted by the end of the year. Roche oversees the risdiplam NDA. And we are supporting this effort.

Risdiplam results were showcased at two medical meetings this quarter, the American Academy of Neurology meeting and the Cure SMA Meeting. KOL feedback was overwhelmingly positive, with increasing support for the need of an oral therapy, with ease of administration and broad tissue distribution.

We believe risdiplam will be the most competitive therapy in the SMA space. The SMA program was the first project demonstrating that small molecules targeting the splicing apparatus to modulate gene expression can selectively or specifically change the course of disease progression. We are the leaders of the small molecules splicing modulator field.

Discovering the first small molecule drug to affect SMA splicing that will be submitted to the FDA for approval is something that we are all proud of accomplishing. It is an important achievement. We have also investigated risdiplam's mechanism of action, which has been productive and incredibly valuable. We have synthesized these efforts to create a splicing platform that we have utilized to discover other potential small molecule splicing modulators to treat diseases.

Moving forward, we intend to substantially increase our focus on the splicing platform with the objective to generate several new transformational therapies for patients. Our unique understanding of the splicing mechanism and how it can be modulated by small molecules is a key competitive advantage that we are working hard to continuously improve.

We have already produced another candidate within the platform for Familial dysautonomia or FD for short, which is expected to enter the clinic soon and we anticipate entering the clinic next year for Huntington's disease. But the work does not end there and we intend to generate a significant number of drug candidates using the splicing platform in the coming years.

Splicing modulation is expected to be a key source of innovation and value for all our stakeholders. Like risdiplam, both the FD and HD molecules have the potential to demonstrate rapid changes in RNA and protein levels in the blood and other tissue allowing the ability to show an early proof of concept next year. You may recall that for the SMA molecules, we showed that increases of protein levels were observed in the blood and reflected its clinical activity in the CNS.

Let me turn now to another strategic priority for PTC, our gene therapy platform. Aligned with our strategic imperative to advance the gene therapy portfolio and infrastructure, we are proud to report that PTC has signed a long-term lease agreement with Bristol-Myers Squibb Company, under which we gain access to approximately 185,000 square feet of space. This includes an existing state-of-the-art biologics production facility and supporting research and operations buildings on the BMS campus in Hopewell, New Jersey.

We plan to further develop the biologics facility to support gene therapy production and also plan to move our research operations to a newly renovated building on the same campus. The buildings we are leasing are located on an existing BMS property of over one million square feet, which has been transitioned to a multi-tenant research and development campus. The existing GMP suites on this site were recently renovated and will be used to produce material to serve multiple preclinical and clinical gene therapy programs. This adds to our current preclinical production capacity in Bridgewater, New Jersey. These efforts underscore our commitment to our internal gene therapy program.

I'll now turn the call over to our COO, Marcio Souza, to discuss the details of our commercial and clinical progress. Marcio?

M
Marcio Souza
Chief Operating Officer

Hey, thanks Stuart. We're very excited with the results in the first half of the year and remain confident about the full year performance. I'd like to start by reviewing some of the key business dynamics for our commercial portfolio. So far, 2019 has been the strongest commercial performance in the history of PTC. It's especially humbling to be in the position of delivering four distinct therapy for rare disorders all with high medical unmet needs. We are proud to be delivering differentiated therapies for thousands of patients globally.

Let me start by reviewing Emflaza, the only treatment approved in the United States for all DMD patients older than two years of age. Demand for Emflaza continues to grow and we have seen compliance of patients on the drug of around 90%. To-date more than 400 physicians prescribed Emflaza and our focus remain on the continued growth for the brand, including leveraging new data on differentiation.

We expect the continued growth to come mainly from patients that might have decreased dose to manage safety while sacrificing efficacy with prednisone as well as expanding into segments that might not be as engaged or have equal access to a standard of care in the past.

Another area of growth is a recently approved label expansion for Emflaza. The promotional launch is going well with the focus on updating payer policies and educating healthcare professionals on the benefit of early intervention. As noted last quarter, we have switched to a new specialty pharmacy in the U.S. and expect temporary operational inefficiencies to be resolved by the end of the third quarter.

Now focusing on Translarna. Our ex-U.S. business remains very healthy with organic growth of patients in all regions. We have entered the fifth year of Translarna after the initial approval in Europe. At the time of that approval, we had established a steady STRIDE aiming to collect long-term effectiveness of Translarna in nonsense mutation commercial patients treated in a real setting. We are delighted with the results coming out of STRIDE, including benefits in ambulatory and non-ambulatory patients.

This data for more than 200 patients have now been presented at several congresses demonstrating significant delays in loss of ambulation and improved ventilator function, when compared to match natural history controls. Additionally, we have received a significant order in the second quarter from the Brazilian government following the approval of Translarna by ANVISA. The number of patients identified in Latin America continue to grow and we continue to work with the payers worldwide to provide Translarna broadly to patients in need.

Supporting the DMD community globally has been our very fabric for many years. We have initiatives for both prescribers and patient groups to advance the needs of DMD patients. Our STRIVE Award for patients and patient advocacy is in its fifth year and we have received more than 30 qualified applications, which will support better standard-of-care for patients globally.

Moving on to Tegsedi and Waylivra. We have seen the first patient in Latin America for Tegsedi and first prescriptions for Waylivra. We're excited with the potential of both products and our ability to leverage PTC's infrastructure and knowledge base.

Tegsedi is expected to be approved by ANVISA in the following months, which would trigger pricing and access negotiations with the government. The patient care programs including our nurse network support is in place in all key countries to support this launch.

We are working closely with Akcea to review the recent clinical results for Waylivra in Familial Partial Lipodystrophy or FPL to determine the potential commercial strategy in Latin America.

Now switching gears to gene therapy. As we approach the AADC deficiency BLA submission later this year, the teams are busy finding patients and preparing the ground for a successful launch.

In terms of patient identification, our global large scale screening programs continue to rollout to all targeted regions and countries. For instance, we have recently agreed to partner with a key hospital in Germany to initiate a pilot newborn screening project in more than 90,000 newborn screens using the 3-OMG ph method. It's an important initiative to realize our long-term vision to include AADC deficiency in newborn screening panels globally.

In the U.S., the protocol driven AADC deficiency screening in cryptogenic cerebral palsy will start screening patients this quarter and the non-protocol screening systems are in place globally.

On the educational front, we are busy providing resources to physicians and caregivers to identify and provide best care for AADC patients including a series of webinar specifically targeting increasing diagnosis in AADC. We have also requested a specific ICD-10 code for AADC deficiency, which we expect to be accepted. This will allow for better follow-up of patients in the future.

Moving to some key clinical development updates, first Ataluren. We have finished enrolling study 045, our dystrophin assessment study, which if positive would support the resubmission of the Translarna NDA in the United States for nonsense mutation DMD. With the enrolment now complete, we expect the results in the first half of next year.

As previously reported, we have requested a re-examination for the non-ambulatory label expansion in Europe and our tentative date for an opinion is in October. And we are working diligently on the resubmission to start the documentation for the European Medicines Agency.

For our AADC gene therapy, on top of the preparations for the BLA submission later this year, we have received approval for our paediatric investigation plan in Europe, which is a critical step towards the market authorization application submission.

Our FA program readiness is evolving well and we have selected Emory as the first site for the initial trial. Since this is the first time a gene therapy will be delivered to FA patients into the cerebellum, it's key that we assess in this trial proper dosing and safety. But at the same time, we intend to assess both imaging and functional endpoints. Because this is an open label study, we would expect to report on progress for the first few patients in late 2020. These are exciting times for PTC as we continue to deliver on our therapies to support the rare disease patients.

I'll now hand the call over to our Chief Financial Officer, Emily Hill. Emily?

E
Emily Hill
Chief Financial Officer

Thanks, Marcio. I'm happy to be joining the call today for the first time in the CFO capacity. It's been a great experience to be part of PTC's growth in the last five years as we've developed from an R&D stage company to a global commercial company still driving innovative R&D. I am eager to continue to be an integral part of our next growth phase as we anticipate submissions approvals and subsequent launch of our first gene therapy product and the advancement of several R&D programs.

As you know our second quarter press release was issued a short while ago which summarizes the details of our financial results for the second quarter of 2019. Please see that release for further details. I'll start with a few comments on our financial performance in the quarter and then reiterate our guidance for the full year 2019.

Starting with our top line results. We reported $85.4 million in combined net revenue across our commercial portfolio in the second quarter of 2019 compared to combined revenue of $68.1 million for the second quarter of 2018. Translarna net product revenues were $57.8 million for the quarter. This compares to $47.8 million in the second quarter of 2018. This growth includes the expansion of Translarna ex-US including regulatory approval and an annual contract with Brazil.

For Emflaza, we reported net product revenues of approximately $27.6 million for the second quarter of 2019, which compares to $20.3 million reported in the second quarter of 2018. We are working towards establishing Emflaza as the standard of care for all patients in the US and are happy to be able to bring Emflaza now to patients as young as two years of age.

Continued growth of the DMD franchise and the contract with Brazil for Translarna gives us confidence to reiterate our 2019 DMD franchise revenue guidance of $285 million to $305 million. We have also outlined the opportunity for our pipeline to generate potential combined revenue in excess of $1.5 billion by 2023.

Non-GAAP R&D expenses were $54.5 million for the second quarter of 2019 excluding $5.5 million in non-cash stock-based compensation expense compared to $28.7 million for the second quarter of 2018 excluding $3.9 million in non-cash stock-based compensation expense. The increase in R&D expense reflects our strategic investment in advancing the gene therapy platforms, splicing programs and other research programs as well as the advancement of the clinical pipeline.

Non-GAAP SG&A expenses were $43.8 million for the second quarter of 2019 excluding $5.4 million in non-cash stock-based compensation expense compared to $29.4 million in the second quarter of 2018 excluding $4.1 million in non-cash stock-based compensation expense, reflecting continued investments to support our commercial activities including expanding our commercial portfolio.

I would also like to reiterate our non-GAAP R&D and SG&A expense guidance for full year 2019 of $360 million to $370 million, excluding non-cash stock based compensation expense of approximately $35 million. Net loss for the second quarter of 2019 was $41.8 million compared to a net loss of $9.5 million for the second quarter of 2018.

Cash, cash equivalents and marketable securities totaled approximately $363 million at June 30, 2019, compared to approximately $227 million at December 31, 2018. We are proud to have built a global biotech company that is in a financial position to continue to execute on our long-term strategy.

I'll now hand the call over to the operator to start our question-and-answer session. Operator?

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Raju Prasad of William Blair. Your line is open.

R
Raju Prasad
William Blair

Thanks for taking the question. Just a quick question on revenue guidance for 2019. I think you guys did $140 million this year. I'm trying to figure out with the label expansion and Brazil, what are you kind of expecting to get to the midpoint there from those new growth drivers. Thanks.

S
Stuart Peltz
Chief Executive Officer

Thanks for the call. Emily?

E
Emily Hill
Chief Financial Officer

Yeah. Thanks for the call, Raju. We are happy to be reiterating our revenue guidance for 2019 of $285 million to $305 million for our DMD franchise. That reflects the anticipated Brazil order for current patients underlying demand does not contemplate the expansion of two to five year olds in the Emflaza label as that is a slower process.

R
Raju Prasad
William Blair

Great. And just one on kind of your small molecule platform. Can you just talk a little bit about some of the learnings that you had with Risdiplam and the prior four molecules splicer that you're going to take forward?

S
Stuart Peltz
Chief Executive Officer

Sure. Yeah. So for the -- in the Risdiplam, obviously, we've been doing this for some time and I think we've learned in terms of thinking about mechanism of action and how to focus on that. And over the years we've built quite a proprietary library of small molecules that we think give us a unique advantage in being able to target splicing.

And then, also, we've learned a bit about in terms of the site the first site that we're hitting especially in like Risdiplam is a U1 binding site that has mismatches there. Now, as you probably remember, maybe from some of our calls, most of the time it's a perfect interaction between the U1 and the five prime splice site.

But in SMN it's not and that's why it's leakier and our molecule in the sense increases the interaction to allow the splicing efficiency to occur. And we've learned a lot about that interaction that allows us in the sense to do a high throughput screen that lets us then more to other targets as well.

And as a consequence of that, we've been able to move quite rapidly for familial dysautonomia, is a good example. So, a lot of times when you did it once, you ask yourself can you do it multiple times and this is again a clear example of getting FD to a second molecule that's specific for that particular mutation.

And then we've gone on to do it on a third time into a late stage chemical optimization for Huntington's disease. So from a big picture perspective, I think you could see that what you'd like to be able to do is use a platform to be able to get multiple compounds out of that. And you see that we are able to use our knowledge to understanding the mechanism of action to actually move into multiple other targets and move them quickly through the discovery process into the clinical development.

R
Raju Prasad
William Blair

Great. Thanks.

Operator

Thank you. Our next question comes from Alethia Young of Cantor Fitzgerald. Your question please?

A
Alethia Young
Cantor Fitzgerald

Hey guys, thanks for taking my question and congrats on the quarter. Two questions for you. Can you talk a little bit more about AADC deficiency and kind of what's going on with the manufacturing there and the progress toward getting an approval? And then I was just curious if you guys might give an update on how many patients you've found with AADC deficiency. I think the last time we got an update was on January. Thanks.

S
Stuart. Peltz

Yeah. Hi Alethia. Thanks for the questions. Yeah, we're actually really quite excited about moving AADC deficiency. As we've said all things are on track for submitting the BLA this year for a potential approval next year. And obviously as you know the key thing is on getting manufacturing completed and done. And Marcio do you want to talk a little bit about that?

M
Marcio Souza
Chief Operating Officer

Sure, sure. Absolutely yes. So a couple of steps here right towards the submission of the BLA and hopefully the approval next year subsequent to that. So the manufacturing group continue to work very hard on all these steps that we agree with the FDA towards the -- all the bets that have to be made before the submission obviously the comparables on those making sure all the analytical methods is validated in accordance to the discussions we had with the agency and then all the other parts of the BLA. We do expect to soon be meeting with the FDA in relation to the pre-submission for the NDA itself which is a procedural step. It's normally taken on things like that where it's more structurally and administratively how the submission is going to be going.

But from all the aspects in general, it's all finalization of documents right now other than on the manufacturing there. We're still working towards the release of the commercial batch based on the agreements we had with the agency. But since our last update, there has nothing really major or even minor to that extent that happened that is not in the plan like it's all sequential at this point in time. I wanted to make sure, we not only manufacture to the specs that we agreed with the agency, but also have enough inventory for the time of launch and the technical operations group is working really hard with that together with and under the supervision of our quality team because we know how important it is to make sure our process are not only efficient but compliant as well.

In terms of the patient finding initiatives, as I mentioned on the prepared remarks, there is a number of things we are doing. One of them is what we call non-protocol screening and that's basically giving physicians the ability to screen the at-risk or other patients that they might have misdiagnosed before with the DDC gene or the 3OMG match within the blood. This is going very well and we've been identifying patients like pretty much every week and progressing and are going to give an update in the future on the exact numbers. The second process, which we believe to actually yield more patients on the identification is the protocol driven and that has to go through the IRB approvals, the contracting phase and up to a few weeks ago this being a little bit slow in a sense that you had to go for all that steps and make sure they're all accomplished. We're now at the process to start that and we expect to have the first patients screened in September. So our expectation is that later in the year we would be able to provide an update on the exact numbers.

S
Stuart Peltz
Chief Executive Officer

And I think the work has been exciting and gratifying in that – just to remind you we found there is over 80 different alleles that we've identified, which really gets by the notion when people thought there was the founders' effect. So we get more and more convinced every day on the number that we had told you previously about 5,000 patients commercially so – that are commercially viable. So we're excited to keep moving this forward. We're excited that the – our process thus far in the manufacturing is moving along and we anticipate the submission with the completion of the manufacturing this year.

A
Alethia Young
Cantor Fitzgerald

Great. Thank you.

S
Stuart Peltz
Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Brian Abrahams of RBC Capital Markets. Your line is open.

U
Unidentified Analyst

Hi. This is Bert on for Brian. Thank you guys for taking our question. I had a couple on the Friedreich's ataxia program. Can you talk about any preclinical maybe functional data that you have to complement the protection expression data you've shown in the porcine and non-human primate models that gives you confidence that the level of expression you're able to achieve with the gene therapy would translate to functional improvements? And then also related to that, we will be building – process of building out your own gene therapy manufacturing capabilities to produce material for a clinical study be very limiting for being able to start the clinical trial in FA patients?

S
Stuart Peltz
Chief Executive Officer

Sure. Maybe let me start and then I can pass it on. The FA program as you alluded to just to remind everyone else on the call, we're able to obviously inject into the cerebellum and be able to get a substantial production of frataxin there to the levels that we would think would be – obviously to levels that we think would obviously change the course of the disease. So we're happy with the levels. There aren't any great models in the sense that we have that we'd be able to do the functional comparisons, but we feel pretty confident that we'd be able to bring it to the right place and that – in our discussions with all of the key opinion leaders would anticipate that will have effects as a consequence of that.

In terms of the manufacturing, we're on target in terms of manufacturing getting ready to get manufactured for the IND that's ongoing now. We're not – we can obviously, as I think we mentioned we have our site that we will be leasing. But this has been done initially at a different facility that we may ultimately come back later, if the facility opens to produce it there.

U
Unidentified Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from the line of Gena Wang of Barclays. Your question please.

P
Peter Kim
Barclays

This is Peter for Gena Wang. Thanks for taking our question. So I guess maybe two quick couple of ones from me. For TEGSEDI how should we think about I guess reimbursement decision process post approval? And how would pricing look like relative to the U.S.? And I guess relatedly like how should we think about revenue contributions from distribution first few quarters?

M
Marcio Souza
Chief Operating Officer

Yeah. So, thank you so much Peter for the questions. So first on Tegsedi and what do we expect after the approval, which is upcoming from ANVISA. Obviously that is two process right as we've described before. One is the individual patient's requests that would be called the name patient sales and that should continue to be requested by the patients and approved individually. And you might have seen that we got the first patients in the region reimbursed, which we feel really proud off. And that's going to probably be anywhere between the U.S. price and the European price based on the negotiations with the government.

Now we have submitted for as is requested now by the regulation there a price to be commercialized in the country. We fully expect that there's going to be some negotiation once it's approved and then there is a cap what it's called. That is a discount that is applied on top of that of around 20%. So it's going to be a reduction on the overall price that is normally anchored to the United States FSS price.

So there is some reduction there. It's going to be accounted for. We fully accounted for that in our internal projections on the model in the guidance for 2023 that we gave of $150 million for the product. Identification of patients and the lining up has been quite positive. So, we see the launch late this year and next year to be while patient-by-patient in this first phase to be quite productive and positive for PTC.

In terms of the contribution of the region for the overall mix of the company, as Emily mentioned, we did receive a large order for Translarna, which we're extremely proud of, because it means that patients can have continuity of access and it's for the entire year. So we know that it becomes a little bit more irregular, although it’s still fairly lumpy in terms of the size of the orders slightly irregular in terms of patients receiving it. It's an important region for us, but it's not the biggest region in the world for Translarna. So again, trying to balance the general demand globally while giving the emphasis there of all patients being on drug.

P
Peter Kim
Barclays

Great. Thank you. Sorry, a quick follow-up if I may.

S
Stuart Peltz
Chief Executive Officer

Of course.

P
Peter Kim
Barclays

When should we expect any updates from like Part one and Part two of FIREFISH and SUNFISH? Thank you very much.

S
Stuart Peltz
Chief Executive Officer

So the updates -- so we'll be doing that at subsequent meetings for Part one and -- Part one of each of FIREFISH and SUNFISH at the World Muscle -- WMS maybe that will be -- we'll be presenting the continuation of that for Part one. Part two will be next year sometime.

P
Peter Kim
Barclays

Great. Thank you very much for answering questions.

M
Marcio Souza
Chief Operating Officer

Thank you.

Operator

Thank you. Our next question comes from Martin Auster of Credit Suisse. Your line is open.

M
Martin Auster
Credit Suisse

Hey, thanks for taking the question. Most of them have been asked, maybe just to follow-up on the last theme there. Is there any plan to present or kind of publish any of the pre-clinical data from the Huntington's splicing program in the balance of this year or ahead of the IND next year? Thanks.

S
Stuart Peltz
Chief Executive Officer

Yeah. Thanks. So we've been moving forward on the Huntington's program. We anticipate a clinical candidate this year with it going into the clinic next year. We're always careful in terms of timing of when we publish the work on Huntington's because of the structure and we take our time in terms of putting out the structures.

So, the publications of those are undefined as of that. But we'll probably be talking either the Science Day or at our Analyst Day further on about Huntington's so that you get more information and more details about what we're doing.

M
Martin Auster
Credit Suisse

Are you contemplating an Analyst Day later in 2019 or sometime next year?

S
Stuart Peltz
Chief Executive Officer

Sometime next year.

M
Martin Auster
Credit Suisse

Okay, great. Thank you.

Operator

Thank you. Our next question comes from Vincent Chen of Bernstein. Your line is open.

V
Vincent Chen
Bernstein

Congrats on priorities and thanks for taking the question. Another follow-up on Huntington's. I was wondering if you could provide a little bit more detail and color on the status of the preclinical Huntington's program and what's left to be done before you can get into the clinic.

I guess a little bit more on where specifically are you in the lead optimization process, what are properties you're focused on and I guess up maybe pointedly are you have a point where you have compound clusters or compounds that appear adequately specific for the target with pseudo X on? Or is there more to be done on the specificity front and reducing risk-altering effects?

S
Stuart Peltz
Chief Executive Officer

Thanks Vincent for the question. There's a lot of chemistry that's been ongoing. We're in the relatively late stages and we anticipate picking of a clinical candidate. Now, a lot of it is moving it through the screening process, the safety/toxicology studies that we do and that just takes some time.

So, we have a set of small set of compounds from a scaffold that we've identified that we like, that we anticipate where the clinical candidate will come from. And it's just now going through the myriad of assays that are required when you think about sort of what I always call the underbelly of what you got to do for getting a small molecule through an IND process. There's just a lot of testing to make sure for having understanding of the chemical properties and then our own internal safety/toxicology that allow us to define what the threshold and window are. Marcio?

M
Marcio Souza
Chief Operating Officer

Yes, yes of course. And Vincent just to add a little bit to everything that Stuart just said, right. So, specific properties that we are looking at these compounds. Obviously, distribution in -- all these structures of the CNS is important for us. We see that as a shortcoming of the other approach to really having the reduction of the Huntington and specifically on the dip structures. So, that far is important.

But at the same time, there is a lot of residual disease peripherically. So, wants to make sure that is a distribution peripherically as well. So, being an oral molecule or molecules as I'm going to explain a minute, that's quite important.

Stuart mentioned that we have a number of viable scaffolds that we've been working on from then. At this point in time while still early since we're going to GLP tox hopefully soon. We have multiple viable candidates and we intend to continue with them all the way potentially to the clinic since safety margins and even the ability of them to penetrate different issues or to have different properties on the spectrum of the disease. Since we know the Huntington is not necessarily just one manifestation, but that is like different types of patients that might benefit from all different profiles.

So, very extensive approach. We have like really dedicated and large number of people working on this. Expect to declare one or more candidates this year and beyond to clinic next year.

V
Vincent Chen
Bernstein

All right. Thank you.

S
Stuart Peltz
Chief Executive Officer

Thank you.

M
Marcio Souza
Chief Operating Officer

Thank you.

Operator

Thank you. Our next question comes from Joel Beatty of Citi. Your question please.

S
Shawn Egan
Citi

Hi, guys. This is Shawn Egan, filling in for Joel. Thank you for taking my question. I have three today. The first one is on the heels of today's positive day for you, whether you put it at FPL. It’s trying to frame any early work you've done on [indiscernible] opportunity there and [indiscernible] figure maybe for a sales force anyway?

S
Stuart Peltz
Chief Executive Officer

Well, Marcio?

M
Marcio Souza
Chief Operating Officer

Yeah. Thanks, Shawn. That's a great question and we're super proud of the work Ionis and Akcea has done here to help this community and with the results that they sharing today and we shared as well. The opportunity basically doubles for us in Latin America when we add both FCS and FPL together. It's a perfect overlap. It's the same physicians diagnosing this. Our screening and monitoring programs are already contemplating.

One of the reasons -- and we alluded to that before but maybe not so explicitly that we did not submit to ANVISA or other regulatory agents because we were waiting for the readout of this trial to submit a broader label with a bigger indication which we intend to do. We're going to be reviewing -- we'll review the results -- preliminary results with the Akcea team before today's disclosure. We share their view and enthusiasm in relation to that and going to review the full results as soon as that is available and then file for the submission in Latin America.

I think what you can say right now is that patient identification was always in our radar screen. We're going to continue to look into them. We have a number of cases already they're being reported to us and you're going to definitely try to get these patients the treatment they deserve.

S
Stuart Peltz
Chief Executive Officer

And actually maybe from a point of view -- just based on what we've talked about before in terms of the vision in the 2023 the numbers that we gave previously did include FPL as part of that. So that's something upside as well.

S
Shawn Egan
Citi

Great. It completely makes sense. For Marcio, you mentioned initial newborn screening efforts in Germany. Have you had any initial discussions with the Secretary of Advisory Committee around getting AADC deficiency add as measure thereof?

M
Marcio Souza
Chief Operating Officer

Yeah, so more generic discussions. To be honest Shawn a disappointing time because the methods that we are validating now internationally like using the blood sample and being widely available has not been tested for NBF, yet. So one of the key things we're trying to do with this large hospital in Germany is to not only screen these babies and provides a potentially like saving diagnosis and treatment for them but also to make sure that this test work at scale so we can bring to other places like the United States, so all these conversations are ongoing. And as I mentioned again on the remarks its part of a broader strategy to make sure at the time of launch or shortly thereafter we have an available platform for newborn screening that can be readily deployed.

S
Shawn Egan
Citi

Great. And my last question is that can you provide any update on the enrolment for the pre-symptomatic RAINBOWFISH study? And kind of when we're evaluating those dataset is it more important to kind of show comparability to Spinraza and Zolgensma? Or are there other points of differentiation that are important to consider?

S
Stuart Peltz
Chief Executive Officer

So I think we'll probably be giving an update on RAINBOWFISH next year. From the comparability, I think, obviously the asymptomatic patients one would anticipate maybe having improvements and that's been seen within the data. We'd expect results like that as well that the patients relatively improved. Obviously, we think that the advantage of being able to pass not only get to the blood-brain barrier, but get into all of the tissues is an advantage not only early, but also as the babies mature and the blood-brain barrier no longer is open that still get the benefits of a molecule that can both go to CNS as well as distribute into other tissues.

S
Shawn Egan
Citi

Great. Thank for your answers.

S
Stuart Peltz
Chief Executive Officer

Thank you.

M
Marcio Souza
Chief Operating Officer

Thanks.

Operator

Thank you. Our next question comes from Eric Joseph of JPMorgan. Your line is open.

E
Eric Joseph
JPMorgan

Hey, guys. Thanks for taking the questions. Maybe just a biology question for the Huntington neural process the splicing program. If I'm understanding the mechanism correctly you'd be promoting those the turnover of the mutant and the wild-type antigen protein. So I'm just wondering if you could speak a little bit of the native function of Huntington and sort of how -- from a biological perspective, how wide of a therapeutic window you'd anticipate with this approach. And in preclinical are you able to analyze the relative turnover of the mutant versus the wild-type version of the protein?

And I guess if there are any different safety considerations or meaningfully different safety considerations with this indication versus the approaches that are directly administered to the CNS? Thanks.

S
Stuart Peltz
Chief Executive Officer

Yeah. Thanks for the question. So as you know actually right we are through that unable to promote the reduction of the Huntington's protein. I think it's widely believed that one could see efficacy by reducing it approximately 50%. We're able – obviously, the goals are lower but -- it hits both wild-type and mutant forms of that.

And so -- but we think that one could certainly establish a knockdown of 50% without having any detrimental or toxicity. At least that's I think what we all believe is true and we'll be able to monitor that as well. So I think that's where we are within our thinking of what we'll be able to do in terms of the clinic to be able to get at least at a 50% reduction.

E
Eric Joseph
JPMorgan

Got it. That's helpful. And maybe just a follow-up here if I could on risdiplam. It sounds from Roche's commentary earlier and also on your PR tonight that an MAA filing would be contingent on at least some part of the Part 2 data from the ongoing studies. Can you clarify whether EMA is interested in Part 2 is different both SUNFISH and FIREFISH? Or are they prioritizing one? And I guess as it relates to SUNFISH, can you just talk a little bit about your expectations from the randomized portion of that study what magnitude benefit MFM32 the trial is powered to detect what would be viewed as regarded as clinically meaningful?

S
Stuart Peltz
Chief Executive Officer

Sure. Well, yeah so -- I think as Roche has recently discussed and actually in recent interactions with the EMA that there was a change of heart in that they wanted to see Part 2 of both FIREFISH and SUNFISH. So as we've said, previously, the SUNFISH data will be completed by the end of this year. That study as well as the FIREFISH early next year all that data then will be compiled.

There was no change just to be clear from any discussions from the FDA in terms of putting in based on Part 1 for both FIREFISH and SUNFISH. And Marcio want to take the…

M
Marcio Souza
Chief Operating Officer

Sure. Sure. And just to clarify right direct to your question, so we expect both submissions to include -- the submissions to include both Part 2 for SUNFISH and FIREFISH. The main reason on the discussions with the EMA is just how close to the completion of the trials it is, so they just want to make sure that they see -- that there is nothing really unusual here I would say.

In terms of the power of that trial to your question -- so just to remind you the two to one randomization originally planned to 186 patients. The expected point estimate change between placebo and the active arm was three points with a six so the deviations of a half standardized measure there. This is less than what is seen in the Part one if you were to look into the change compared to natural history.

So if you're really good since this group is expected to be less heterogeneous than the original group was in the Part one of the trial and we've seen such impressive results so far so we feel like quite positive about the results.

E
Eric Joseph
JPMorgan

Very clear. Thanks for taking the questions guy.

M
Marcio Souza
Chief Operating Officer

Thank you.

Operator

Thank you. Our last question comes from the line of Joseph Thome of Cowen & Company. Your line is open.

J
Joseph Thome
Cowen & Company

Hi, there. Thank you for taking my questions and congratulations on the quarter. First on Translarna in Brazil. I was curious, if you can give us a little bit more information maybe on ordering patterns there and the size of those orders. There was a posting online suggesting the size was around $45 million. Can you give us any indication of how this is going to be booked and maybe the frequency there? And then second on risdiplam for the initial data from the RAINBOWFISH study, are the FDA -- will the FDA receive some of these data and do you anticipate pre-symptomatic infants may be able to be on the initial labels either in the U.S. or the EU? Thanks.

S
Stuart Peltz
Chief Executive Officer

Great. Marcio want to take the first?

M
Marcio Souza
Chief Operating Officer

Yeah. So I'll start a little bit on the pattern then the use in Brazil and maybe Emily can talk a little bit about the revenues, right? So the dispense is based on the patient consumptions and the amount of patients that are being accrued. As Emily mentioned and I mentioned on my remarks as well, this is for the current patients. It's being practiced in Brazil that the Ministry of Health does dispense to patients that are accrued throughout the year. So we expect that potentially some of those patients are going to receive and a new request is going to be made periodically.

I think what it does to us is like that is -- there is one shipment that was made this quarter. We expect they're going to have new shipments. It is very hard to some extent for us to anticipate if this is going to be during Q3 or the beginning of Q4. But we know for sure that it is required to be done during this year since the patients use which has been pretty good in terms of compliance, they're going to require all the orders to be. In terms of the amounts of the shipments and the revenue recognition, I'm going to hand over to Emily to answer.

E
Emily Hill
Chief Financial Officer

Thanks Marcio. Yes, we're grateful to be in a position of having now a formal approval from the regulatory authorities in Brazil and now an annual contract. It really demonstrates the Brazilian government recognizes the benefit for nonsense mutation DMD patients. There is an annual contract that we have now entered and if you remember historically, we've received a large order for Translarna in Q4 of 2018 which reflected the need for a number of months of patients and subsequently did not receive an order in Q1. So a large segment of the annual contract was booked in Q2 and the remainder will be booked in the second half of 2019. And this gives us confidence as I mentioned before to reiterate our DMD franchise guidance.

M
Marcio Souza
Chief Operating Officer

And then to your second question on the label for Risdiplam, so the availability of data in terms of pre-symptomatic and whether not that's going to be included, it's going to depend obviously on the amount of babies that are enrolled in the trial between now and the submission on the availability of data and the discussions with the agents during the review. So it would be premature probably irresponsible for us as well to comment on this right now until we have that.

What we know in the discussions that did happen with the FDA is that, the label would be based on review of the current data for Type one, two and three which are considered quite important since the Type two and three are vastly under-treated globally and we see the differentiated profile operates the plan on those patients. And in overall, I believe and we all hear and concur and so does the community so there is still remaining and maybe growing unmet needs on Type 1s considering the market dynamics that are happening every day.

J
Joseph Thome
Cowen & Company

Great. Thank you.

Operator

Thank you. At this time, I'd like to turn the call back over to CEO, Stuart Peltz for closing remarks. Sir?

S
Stuart Peltz
Chief Executive Officer

Okay. Well thank you all for joining the call today. As you could see, the team has been executing quite well. I'm very proud of what they've been able to get accomplished in this half year. I think, it's really important for all our stakeholders to continue to build out the company that we talked about and it's gratifying to see the execution and the vision we’re building of a rare disorders company. So thank you for joining the call.

Operator

Thank you, sir. Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.