PTC Therapeutics Inc

NASDAQ:PTCT

Earnings Call Transcript 2020-Q2

[Operator]

Ladies and gentlemen, thank you for standing by and welcome to the PTC Therapeutics Second Quarter 2020 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. I would now like to turn the conference over to your host, Mr. Alex Kane, Head of Investor Relations of PTC. Sir, please go ahead.

[Alex Kane, Head, Investor Relations]

Thank you. Good afternoon and thank you for joining us to discuss the PTC Therapeutics second quarter 2020 corporate updates and financial results. Joining me on today’s call is our Chief Executive Officer, Stuart Peltz; our Chief Financial Officer, Emily Hill; our Chief Development Officer, Matt Klein; and our Chief Business Officer, Eric Pauwels.

Before we start, let me remind you that today’s call will include forward-looking statements based on current expectations. Please take a moment to review the slides posted on our Investor Relations website in conjunction with the call, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements, as any and such risks can materially and adversely affect our business and results of operation. For a detailed description of applicable risks and uncertainties, we encourage you to review the company’s most recent quarterly report Form 10-Q and Annual Report 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 in today’s earnings release.

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

[Stuart Peltz, Chief Executive Officer]

Thanks, Alex. Looking back at the second quarter, I am proud of the continued strong commercial performance in our Duchenne franchise, with nearly 20% growth year-over-year, excluding Brazil. Emflaza had an outstanding quarter, with greater than 30% year-over-year growth. As you will hear throughout the remainder of the call, despite the challenging environment due to the global pandemic, PTC has continued execute in our commercial business and advanced key platforms and programs in our pipeline. One of these key platforms is our validated small molecule splicing platform.

As many of you know, the most advanced splicing program is risdiplam for the treatment of spinal muscular atrophy, or SMA with a PDUFA date on August 24, which is rapidly approaching. We believe that risdiplam which will be the first and only old treatment for SMA has the potential to be the most competitive commercial product for this devastating rare disorder. Risdiplam validates our splicing platform and represents how innovation can generate substantial value for all our stakeholders. When we started the SMA splicing program over a decade ago, it was considered a loon shot. The dominant belief at the time was that was splicing is a great target in principle. It is a mechanism that occurs with most all RNAs and cannot be selectively modulated with small molecules.

Because of our deep understanding and expertise in RNA biology, we knew that RNAs were actually the first enzyme that can form unique structures with catalytic function that can be targeted. We also knew that the successful targeting RNA would lead to a new platform to discover compounds that could lead to multiple new treatment options for patients living with rare disorders. It represents a new paradigm for drug discovery. Over the years, we have built the splicing technology that led to the discovery of risdiplam into a novel platform. As we highlighted recently in our splicing platform deep dive, PTC has unique expertise in RNA biology. We have constructed an isle in the centric compound library, proprietary screening tools, a proven process optimized compounds to bring them to the clinic, and a fully integrated global commercial infrastructure to bring rare disorder therapies to patients.

As you may have heard on our recent deep dive, this is a platform that has a number of additional targets moving forward. We anticipate 3 to 5 splicing development candidates over the next 3 to 5 years. The next slicing compound to enter the clinic is PTC518, our development candidate for Huntington’s disease, which is expected to be a first in human trial later this year. In addition to Huntington’s disease, there are exciting new splicing programs emerging from our deep pipeline, including [indiscernible]. We are also making progress in other platforms and programs in the second quarter. We have strengthened our pipeline with the acquisition of PTC923 for PKU. PTC923 expands our platform capabilities through the addition of a late-stage program for inborn errors of metabolism. We believe it has the potential to be the best-in-class treatment for PKU patients.

We also recently initiated a Phase 2/3 trial for PTC299 for COVID-19. We recognized that PTC299 has the unique dual mechanism that is potentially effective against both stages of the viral infection. We worked with leading academic collaborators and quickly confirm PTC299 antiviral activity against SARS-CoV-2 in vitro moving rapidly into the clinic for COVID-19. The clinical trial is being conducted in two stages. We expect Phase 1 to be completed in the second half of 2020 and anticipate reporting top line results for both stages in the first half of 2021. We have multiple sites in the United States, Brazil, Spain and Australia, with additional countries expected to initiate in the coming months. Ultimately, it’s a combination of the mechanism, the preclinical data, the well-established safety profile, and the compound’s oral bioavailability that gives us great confidence in PTC299 potentially as a treatment for COVID-19.

One of the reasons that we took PTC299 forward is because COVID-19 global pandemic requires our industry to work towards our solution. In addition to its obvious effect on the health of our individuals, COVID-19 has impacted many industries, including our own. At PTC, we took early and aggressive steps to mitigate potential risks to our operations. Importantly, despite the challenges presented by COVID-19, we have been able to execute on certain key programs and lessen the impact on others. As I mentioned earlier, we expect to initiate a first-in-human Phase 1 trial for PTC518 for Huntington’s disease later this year. In our Bio-e platform, the two potential registrational trials for vatiquinone, formerly known as PTC743 remain on track to initiate late this year. We are particularly excited about these upcoming trials as they provide us for near-term opportunities to address two rare disorders with the significant unmet medical need. In addition, as we recently announced, we initiated the Phase 1 study for PTC857, a second compound from our Bio-e platform ahead of schedule.

Before I pass the call over to the team, I want to touch on recent developments with Translarna for nonsense mutation Duchenne muscular dystrophy, the first product we discovered, developed and commercialized by PTC. Importantly, the EMA took further risk benefit profile of Translarna with the six annual renewals of the conditional approval, which is the basis of our sales outside the United States. The CHMP recently recommended revision to the Translarna label removing the statement, efficacy has not been demonstrated in non-ambulatory patients. This change enables healthcare professionals to use their clinical judgment to make treatment decisions for their patients on Translarna who have lost ambulation. It also supports our discussions with reimbursement authorities on continuing Translarna treatments for patients who become non-ambulatory. We have pioneered therapies for Duchenne muscular dystrophy and remain highly committed to the community.

I will now turn the call over to Matt for key updates on our clinical programs. Matt?

[Matt Klein, Chief Development Officer]

Thanks, Stu. To start, I want to build on Stu’s comments regarding our team’s response to the COVID-19 pandemic. Despite the many challenges, we have worked hard to mitigate the impact on ongoing Emflaza studies.

Let me begin with Study 045, the U.S. Translarna dystrophin study. In developing the protocol for this study, we carefully considered every element of the design to minimize variability that could confound study results. This included the decision to use a single site to the study at UCLA, the method of muscle biopsy collection and the method of biopsy sample analysis. I want to highlight that the protocol specifies that sample analyses will not occur until the end of the study. PTC and study investigators will be blinded to the results until all analyses are complete. At this time, final study muscle biopsies have not yet been collected from 8 remaining boys in the 045 study. Given the evolving COVID-19 landscape in Los Angeles and in other affected regions where study patients reside, we are continuously monitoring the situation to determine when it will be possible to safely obtain the final biopsies. We are also exploring all potential options in order to have a data-readout by year end. Of course, we have ensured that all subjects remain on Translarna until they are able to complete the final study visit.

Turning to our Bio-e platforms, we remain on schedule to initiate potential registrational trials of particular note in refractory mitochondrial epilepsy in the third quarter and increase their capacity in the fourth quarter. As we detailed in our Bio-e platform deep dive, the Phase 2/3 mitochrondrial epilepsy trial will enroll approximately 60 children with the most common mitochondrial disease subtypes that have refractory seizures as a key component of this pathology. This trial will include a 1-month running period to ensure our eligible subjects have the minimum frequency of observed motor seizures, followed by a 6-month parallel arm phase in which subjects will receive either particular known or placebo.

We estimate that the refractory mitochondrial epilepsy market is approximately 11,000 to 13,000 patients in the U.S., EU, Latin America and Japan. The Phase 2/3 [indiscernible] trial will be a 48-week double-blind placebo-controlled trial and will enroll patients from the U.S., EU, Australia and Latin America, where we estimate the assay market size to be approximately 25,000 patients in aggregate. We will be working closely with splice investigator teams and advocacy organizations to ensure that subjects are both of particular known potential registrational trials will be able to safely travel to and from study sites. In addition, we have adjusted certain elements of the study protocols to minimize any potential disruption that could occur in the event of the COVID-19 week. As Stu mentioned, we recently announced that the first patient has been dosed in the Phase 1 trial for PTC857, the second compound from our Bio-e platform. This study is progressing well and we look forward to having data from the single ascending dose and multiple ascending dose studies prior to the end of the year.

Turning now to the splicing platform our Huntington’s disease program remains on track to initiate first-in-human studies this year. These Phase 1 studies will include both single and multiple attending dose regimens in order to inform safety and pharmacokinetic parameters and informed dose selection to achieve target Huntington mRNA level reduction in the range of 40% to 50%. As you may recall, this strategy of validating target engagement and supply chain activity in first-in-human studies was the key component of risdiplam’s development program.

Moving on to our gene therapy platform due to COVID-19 related delays, we now expect to receive the final CHMP opinion for our AADC deficiency MAA in the first quarter of 2021. Analytical testing by our contract labs, which is needed to respond to standard review process inquiries has been delayed, but contract lab personnel and resources have devoted to support their COVID-19 related efforts. Turning to the BLA submission for AADC deficiency, the key gating factor remains the study of the surgical use of the intended commercial cannula to deliver gene therapy product to young patients. These treatment procedures have been delayed by hospital cancellations of elective surgeries due to COVID-19. These procedures are now scheduled to occur in Q3 and we still expect to be able to initiate the BLA submission for AADC deficiency to the FDA in the second half of 2020 in the absence of additional delinquencies.

Finally, I want to share that we have completed the integration of programs from the CNSA acquisition. We are in the process of completing the necessary non-clinical studies of PTC923 to support the long-term dosing plan for the Phase 2 trial in PKU patients. Despite there being two marketed products, there remains a large unmet medical need globally for PKU patients. We look forward to providing additional insights into PTC923 PKU program in our deep dive later this year. As you have heard despite the impact of COVID-19 on certain clinical programs and regulatory timelines, we have been able to advance a number of key programs and in some cases accelerate timelines.

I will now pass the call to Eric to provide an update on the commercial business.

[Eric Pauwels, Chief Business Officer]

Thanks, Matt. As Stu highlighted, the DMD franchise had strong growth this quarter, with both Emflaza and Translarna generating significant revenue in Q2. Outside of Brazil, our DMD franchise had an outstanding quarter with revenue growth of nearly 20% year-over-year.

Let me start with Translarna. In our 6th year post launch, we are exceeding expectations in key markets with the exception of Brazil, which is one of the country’s most severely affected by COVID-19. Importantly, we continue to find new patients in Europe, Latin America and other key markets despite the challenges of COVID-19. As Stu noted, we believe that the revision of the language on the Translarna label will be a positive for patients. We see the update as an opportunity to further educate physicians, caregivers, and patients on the impressive real world results from Stride Registry and Cinergy DMD Natural History Study, highlighting Translarna’s long-term efficacy.

Now, let me provide an update on the group purchase order for Translarna in Brazil. As a reminder, in Brazil, the government is essential payer, by which only a few large group purchase orders are placed annually for the number of patients approved through the judicialization process. Due to the impact of COVID-19, there was an administrative delay with payers for this centralized order. We remain highly engaged with the Ministry of Health and are working to ensure that Translarna patients will continue to achieve this important treatment. In addition to our ongoing meetings with the Brazilian government, DMD advocacy groups and KOLs are also making their voices heard to advocate for Translarna access in Brazil. These stakeholders are critical to ensure that payers have the most recent information on new and existing patients. Notably, we have seen a substantial increase in newly diagnosed patients in the second quarter. We anticipate an order later this year for both existing and new patients.

Now, turning to Emflaza, we are hitting our stride in the U.S. by bringing awareness to the community on the critical importance of Emflaza treatment for all DMD patients. We continue to see ongoing improvements and greater efficiency supporting the business, resulting in more than a 30% year-over-year increase in second quarter sales. Based on early observations, we anticipate that strong performance will continue into the second half of the year. Our U.S. commercial team comprises original accounts, patient engagement, case and market access managers identify new patients at a high rate this quarter and it helps accelerate time to commercial therapy. Patients previously have bridged therapy at patient assistance programs transitioned to commercial therapy even more rapidly in the second quarter. These new Emflaza patients included both naive and former prednisone patients. Among our existing base of patients, compliance and adherence remains very high as discontinuation rates remained low on Emflaza.

Now, turning to Tegsedi, launch activities in Latin America continue to progress well and we continue to find new patients in Q2. We remain engaged in pricing discussions in Brazil and expect the process to be completed by the end of the year. Also in Brazil, during the second quarter, we filed with ANVISA for approval for WAYLIVRA. Patient finding in early access programs for WAYLIVRA are ongoing and we continue to anticipate revenue from this product in 2020. To echo both Stu and Matt comments, while COVID-19 has impacted certain aspects of the commercial business, we continue to drive key areas of the business forward.

I will now hand the call over to our Chief Financial Officer, Emily Hill, to review our financial progress.

[Emily Hill, Chief Financial Officer]

Thanks, Eric. The PTC is in an excellent position to invest in our growing business and accelerate growth while maintaining fiscal discipline and a strong balance sheet. We recently completed a transaction with Royalty Pharma that bought forward $650 million in non-dilutive capital. As a reminder, we were seeing nearly 60% of the risdiplam loyalty stream, up until a $1.3 billion threshold is reached. After the threshold is reached, PTC became the entirety of the risdiplam loyalty stream. This data structure allows us to risdiplam’s meaningful sales potential. We believe risdiplam has the potential to be the most competitive commercial product in the SMA market and believe that its market potential exceeds current analyst consensus.

Importantly, we also retained all economics associated with the approximately $400 million in remaining risdiplam milestone payments from Roche. As a reminder, we expect a $15 million milestone payment imminently associated with the firing of the MAA with the EMA. And following the first commercial sale in the U.S., we would receive an additional $20 million milestone payment.

I’d now want to take a few minutes to highlight the second quarter 2020 financial results which are summarized in the press release issued earlier today. Starting with our top line results, we reported $75.2 million in total revenues in the second quarter of 2020 compared to total revenues of $85.5 million for the second quarter of 2019. As Eric mentioned, Emflaza had an outstanding quarter and Translarna saw continued growth with the exception of the delay in the group purchase order in Brazil.

Translarna net product revenues were $38.6 million for the quarter. This compares to $57.8 million for the second quarter of 2019. As I said, sales for the quarter were impacted by delay of the Brazil purchase order, which accounts for the year-over-year decrease in second quarter revenue. For Emflaza, we reported net product revenues of $36.2 million for the second quarter of 2020 compared to $27.6 million reported for the second quarter of 2019. Growth in net product sales, were driven by new patient prescriptions and continued operational improvements and efficiencies in our commercial business.

Non-GAAP R&D expenses were $168 million for the second quarter of 2020, excluding $8.6 million in non-cash stock-based compensation expense compared to $54.5 million for the second quarter of 2019 excluding $5.5 million in non-cash stock-based compensation expense. The increase in R&D expense includes one-time charges associated with a recent acquisition and a manufacturing agreement. Specifically, it includes $53.6 million related to the acquisition of Censa Pharmaceuticals and $41.2 million related to the MassBio commercial manufacturing agreement for our lead gene therapy program in AADC deficiency. The majority of these one-time expenses are non-cash charges for the current fiscal year.

Non-GAAP SG&A expenses were $45.3 million for the second quarter of 2020, excluding $8.3 million in non-cash stock-based compensation expense compared to $43.8 million for the second quarter of 2019, excluding $5.4 million in non-cash stock-based compensation expense. The relatively flat year-over-year change in SG&A expense reflects our ability to leverage our existing global infrastructure. Net loss was $181.4 million for the second quarter of 2020 compared to net loss of $41.8 million for the second quarter of 2019. Cash, cash equivalents and marketable securities totaled $498.9 million as of June 30, 2020 compared to $686.6 million as of December 31 2019. Now including $650 million in cash received in July upon the closing of deals for Royalty Pharma unaudited pro forma cash cash equivalents and marketable securities as of the second quarter would be greater than $1.1 billion.

I will 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 Robyn Karnauskas of Truist Securities. Your line is open.

[Robyn Karnauskas, Truist Securities]

Hi, everyone. Thanks for taking my question. So I am going to ask you a question that I get all the time, upfront. So can you clarify for us? given the last deal, you did How important is business develop for you versus say, the development of your splicing platform, which I think a lot of people are really excited about help us understand how you prioritize your businesses? I think that’s the most common question I get so I am asking it on the call?

[Stuart Peltz, Chief Executive Officer]

Sure. So thanks for the thanks for the call. I, obviously, our overall team’s goal is always to bring innovative therapies to patients with high unmet medical need. And I think we, as you can see, we have, built the company over the last 22 years, and sitting here for [indiscernible] to have a strong pipeline over the over the next 20 years. And the strategy has really been to use the internal discovery capabilities that we have built, as well as business opportunities that continue to grow and the splicing platform, as you see I think has created a subset substantial value with the plan. And I think from the deep dive You could see how the opportunities out there are unavailable so the plan is part of what we have done is to expand all expand into that. So the way I look at this is really, in a sense short time goal and that, you need a relatively broad pipeline in order to bring a number of products they are critical for growth. But that’s also true for business development right you never know for sure when things are going to be ready for getting to commercialization. So we look to fill the pipeline as needed through business development. And it helped us to evolve and development additional new core expertise, such as gene therapy, so these are important to us as well. And we think there’s some near term value creators like in the inborn errors of metabolism we will be starting to registration studies. By our e programs we will be studying the two that also pivotal studies that could be the study now that could be part of, the 2023 timeframe. So there is a lot of value that we think we can do in terms of creating value. So the way we are looking at that is we are highly excited about our innovation capabilities and we are going to be pursuing them with [indiscernible] moving forward and we look for business development opportunities in very strategically. And in this case, now that we have built the pipeline and platforms that vertically strengthened if we see something that’s interesting and then the other point is obviously, the current platform is, is important. So the therapeutic area, is the platform in the commercial footprint, I think that is how we are going to continue to grow both the innovation but also the revenues for the company. Does that help you?

[Robyn Karnauskas, Truist Securities]

Yes I mean, I think the big question is, is focusing on business development in any way a distraction from developing your current drugs, in particular that from the splicing platform which is a near term catalyst? That’s a more direct question.

[Stuart Peltz, Chief Executive Officer]

Yes, I think that’s fair and the answer is No, it doesn’t. It isn’t like our pipeline is not yet big enough to say that we are prioritizing A versus B and then we have the resources to be quite focused to make sure especially now to really go whole hog through the splicing platform, and so I don’t think it’s a diversion. Because they are obviously different people that are moving forward on this the way we actually constructed the team now, or the company in terms of organizational structure is in sort of pulling from one group to another, it’s building our teams to be able to handle that and then have the infrastructure for them to be autonomous enough with in the oversight. So I think, we are pretty focused on that we are strengthening our current platform. So I don't think, that's a very important point. It's not like we are deprioritizing one for the other right now. We are not big enough yet to be able to say that we are going to be doing that.

[Robyn Karnauskas, Truist Securities]

Thank you so much. Got it. Thank you so much.

[Operator]

Thank you. Our next question companies Joel Beatty of Citi. Your line is open.

[Joel Beatty, Citi]

Hi. Thanks of taking my questions. The first one is to follow-up on the last question from Robin. From the standpoint, what types of programs or what would he be looking for that would have a PTC at list in the high level?

[Matthew Klein]

I guess from my high level – Thanks, Joel, for that, I mean, when we tend to think of a high level, it's really to look at within the vertical. If you think about it, we now has in the gene therapy method – by the splicing platform, right. So it's within the platform that we have built, that will be moving, that will probably – we are not looking to trade additional metabolism, we are not looking to go outside of that area. So, we are looking carefully for start-up, selective and strategic big opportunities, that the focus efforts on the current and platforms that we are, we have in place. And so, therefore, and that could also has helped and enhanced our commercial footprint.

[Joel Beatty, Citi]

Okay, good. That’s helpful. And then a question on risdiplam, have there been discussions with FDA and potential indication that anything you can give there helped us confidence and FDA meeting the PDUFA dates and then how do you anticipate the label could compare with the approved estimate?

[Stuart Peltz, Chief Executive Officer]

Yes. So, obviously, we are waiting to talk, waiting for the PDUFA date. We strongly believe that it’s certainly going to be approved by that time. And we strongly believe it’s is the best-in-class product and we think it’s the most commercially competitive product out there. We think that obviously from our point of view it’s going to be a broad efficacy will be the standard of care, we expect that the label is going to be very broad for all SMA types, including 1, 2 and 3. Obviously, we have the data for a placebo-controlled trial both for SMA Type 1 for those younger patients and even in – I think even there when you compare the datasets in terms of, even in the Type 1, the older patients and seeing benefit there that wasn’t seen by others. So, we think it’s really quite strong. And then there is Type 2/3 in the older patients we saw in the SUNFISH, even strong data as well and then it’s also supported by the other programs with [indiscernible] and RAINBOWFISH. So, at the end of the day, we think it’s going to be a very strong label for both the Type 1s as well as adolescents and adults, obviously the first and only treatment that’s an orally bioavailable product. So, it’s home administration and in particular, in this environment, now that’s a huge benefit, you don’t have to go to the hospital to see a physician. There is a strong safety profile and we think that has done some quite well. So, we are very excited about that.

[Joel Beatty, Citi]

Great. Thank you.

[Operator]

Thank you. Our next question comes from Alethia Young of Cantor. Your line is open.

[Unidentified Analyst]

Hi, this is Lee on for Alethia. Thanks for taking our call. Maybe just one on AADC, can you just give us more color on the remaining steps to file BLA and then how confident that you can file by year end? And then another one on the U.S. [indiscernible] study, just wondering if you think the COVID challenges might make it harder to integrate [indiscernible] the delay? And then is there any steps FDA guidance on it? Thanks.

[Stuart Peltz, Chief Executive Officer]

Sure. So let me remind you that we will talk about the BLA, the BLA has been submitted. So, we are moving through Europe. The key gating item, as you know, is the surgeries with the commercial cannula. And I will let Matt you want to talk a little bit about that Matt?

[Matt Klein, Chief Development Officer]

Yes, absolutely. So as Stu said, we keep hearing of the surgical procedures with the intending commercial cannula because the smart cannula and this is AADC marked for gene therapy delivery new in the U.S. it’s an approved device, just not explicitly for the delivery of gene therapy into the [indiscernible]. It has been used in clinical trials with a good safety record for gene therapy deliveries, into the [indiscernible] of adults. And so really that last piece is getting some experience in the surgical administration on the gene therapy products with the device. So it’s really an assessment that we have been asked to provide of the device and the surgical procedure for the delivery of gene therapy products which we pertain hence we have those procedures completed and will push them forward for final PBLA discussions with the agency and then move forward with declaration for the submission. With regard to the discrepant study, obviously, we are all frustrated by the delays from the COVID trial and PTC has an incredible, long standing our long standing history of being dedicated to developing therapies, specifically trends lot at the DMB patients we are obviously incredibly excited to receive the sixth time n Europe, the evidence that we will continue to collect on a number of functional long term benefits for our strong registry. And now we are at the point that we are just waiting for patients to come in and get their final biopsies so we can analyze all the results. Clearly, we want to get this study read out by years end obviously there is some unpredictability during the pandemic, which is obviously affecting not only the study site in California but also in the space where some of the patients Such as Texas, Arizona. And of course, foremost, we want to make sure the safety of the procedures. We are still in the process of sorting out the exact timing of biopsies at UCLA. Fortunately, it looks like pandemic numbers may be slowing. And so we are in constant communication with the site to see when we can get a better idea of that specific timing for those final biopsies. And of course, most importantly, we are ensuring that these patients don’t have any disruption in the supplier trends, so that when we are able to get their biopsies we’ll be able to do so in the context of ongoing Translarna

[Operator]

Thank you. Our next question comes from Joseph Thome of Cowen and Company your line is open.

[Joseph Thome, Cowen & Company]

Hi, guys thank you for taking my questions. The first one on the MAA for AADC I think you indicated that the EMA has some feedback on some additional information that they need from I think if you could qualify kind of what sort of information do they need? And do they put you on a stop clock? So you have that extra time to respond, or is there a time limit? And second, if you could just update us on the progress for IMDS, for PTC, for [indiscernible]?

[Stuart Peltz, Chief Executive Officer]

Sure, So Matt, do you want to talk a little about the MAA?

[Matt Klein, Chief Development Officer]

Yes, absolutely. Thank you for the question. So as we mentioned, we submitted MAA in January. And based on the standard MAA timelines, we expected the final CHMP opinion in late December of this year, that’s just based on the pre specified timeline from the MAA. During the during the review process ADC asked us some pretty standard questions wanting additional manufacturing related analyses done on the drug product. These are all done by our external commercial manufacturing organizations they have been impacted by COVID in a few ways, one is obviously decreasing the number of available personnel but also our lead CMO’s are involved with other companies and developing solutions for the COVID pandemic. So obviously they redirected their resources toward personnel other resources towards the COVID related activities is up. In order to be able to satisfactorily respond to the MAA’s questions asked we were granted a stop clock so that we can then obviously come back and address the questions which are easily addressable once we have the available resources to do so. And panel on the final opinion in Q1 of 2021.

[Joseph Thome, Cowen & Company]

Great, thank you and then just the update on when we could see the IND for therapy if there is any update?

[Stuart Peltz, Chief Executive Officer]

I think we said it was delayed in the quarter we announced last quarter that we are continuing to work to advance them both, but there has been a number of COVID related delays for at least a quarter. So, we really do remain enthusiastic about both of these programs and we are working to really get it all done. So we can get that done. So that’s where we are at now. So, similar to what we reported the last time.

[Joseph Thome, Cowen & Company]

Great. Thanks again.

[Operator]

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

[Unidentified Analyst]

Hi, this is [indiscernible] on for Brian. [Technical Difficulty] Hello?

[Stuart Peltz, Chief Executive Officer]

I think your line is not muted. Ma’am. Okay, go ahead, David. Sorry.

[Unidentified Analyst]

No worries. Just another one on AADC, from your ongoing pre-launch activities with engaging in the market, could you just update us on your evolving trends of the clinical pathway to identify AADC patients? And if there are perhaps differences in the EU, I am just trying to get a sense of what your current level of confidence is and that will be here? And then I have a follow-up after this.

[Stuart Peltz, Chief Executive Officer]

Sure. So, Eric, you want to talk a little bit about our patient finding efforts?

[Eric Pauwels, Chief Business Officer]

Yes, sure, Stu. I think we have – we are continuing to work very hard to identify AADC patients despite COVID-19. We have been actually been raising disease awareness and driving testing, particularly patients that are in high risk, so with all the [indiscernible] clinics. We have accelerated a lot of our master class symposium, engage in key opinion leaders programs, symposiums and actually published clinical data. So intuitively in this awareness, we really think our level of activity for awareness can identify patients. We have also explored in a lot of our activities to a number of different countries as well both in Europe and specific in Latin America [Technical Difficulty]. We have been having a lot of payer discussions and they really do like the clinical data to understand [indiscernible]. So, patient identification continues to progress well. And as we have said, our goal is to find 300 patients and by the time we are prepared to launch in our first few markets globally.

[Unidentified Analyst]

Thank you. And then there is a quick follow-up on [indiscernible] again, so going back to the opening remarks discussing the recent CHMP recommendation to open the label to in addition to become non-ambulatory. I was just wondering to provide maybe an update view on any other evolving dynamics among physicians in the EU and if you have any perspective on expanding Translarna’s label to initiation among non-ambulatory patients? Thank you.

[Stuart Peltz, Chief Executive Officer]

Yes, thanks for that question. We were really heartened by this and has substantial positive feedback from both physicians and payers on their revision. And this really does allow the patients that keep that type of path to remain upon Translarna even as they transition to the [indiscernible]. And so that’s actually really important and certain countries has already had the willingness to do this. In terms of non-ambulatory that really is sort of country by country as well right now. Certainly, when you think about it, it makes sense from this point of view that if you have done ambulatory from – going from ambulatory to non-ambulatory that you would like to, we have been working on that. Maybe a little bit you want to talk a little bit about this, Eric, in terms of whether Europe is doing?

[Eric Pauwels, Chief Business Officer]

Yes. First of all, we have got to actively look after the announcement. Physicians and payers had looked at this as a positive step. So, immediately after that announcement as number of patients that might have been actually considered to stop, because they went non-ambulatory continued treatment. So, this really list, if you will, to not implement a stopping criteria. It was critically important. So we have already actually – since we have already actually seen patients that have been on Translarna go non-ambulatory and stay, it gives a lot of the physicians’ positive feedback and continue to see all this dialogue that they could have right now, it couldn’t with certain payers in Northern Europe, in Southern Europe and even in places like Latin America, where payers read the label, the warning of the label as a sort of stopping barrier or stopping criteria. So now there is a much [indiscernible] now in the future, I think patients and physicians will have a benefit discussion with the payers. And by removing that label could provide, if you will, a constructive dialogue that can be handled by the physician and the payer.

[Stuart Peltz, Chief Executive Officer]

And then the other things we have done a fair amount of work both in our Stride Registry as well as the non-ambulatory patients following them. And what’s really nice is that the results that we saw in the clinical data, has been shown with patients. And actually, you can use now much harder endpoints – the publications on the Stride data is really quite clear in terms of the substantial improvement on not only the walking longer, but multiple other time function test measurements we can see substantial improvement. And also what we have seen is in non-ambulatory patients, clearly better pulmonary function, I mean, very clear demonstration when compared to natural history, so we are excited all about and we really – we do try and work to make sure that non-ambulatory patients have a way to get Translarna as well.

[Unidentified Analyst]

Great. Thank you.

[Operator]

Thank you. Our next question comes from Raju Prasad of William Blair. Your line is open.

[Unidentified Analyst]

Hi, there. This is Sammy on for Raju. I had a question regarding dystrophin studies. What would be the scenario in which you forego the biopsies or a portion of them in order to file that BLA, I am just trying to understand which is that you are prioritizing?

[Stuart Peltz, Chief Executive Officer]

So, I think – so we have 12 out of the 20 that has been done and – that have been treated and they have not been – they are still blinded, so we don’t know the data within that. We are just – the study was performed with 20 patients pre-imposed and they are still being treated. So we just think that it’s a better – it’s better to have all the patients if possible if this continues and expands on, well, there is a possibility we could say maybe we should just look at the data now in an interim way and take a look at that. So we obviously need to align with the FDA on that before we were to do that. So, we don’t want to look at the data before we agree with that, but it’s really a question of if we think it’s going to take forever or not. So, that’s our thought on that.

[Unidentified Analyst]

That’s very helpful. And just a quick follow-up on how are patient identification efforts for the mitochondrial epilepsy trial, just to get an idea how quickly you will be able to enroll patients in that trial?

[Stuart Peltz, Chief Executive Officer]

Sure. Matt, you want to sort of talk a little bit about our patient identification for the trial?

[Matt Klein, Chief Development Officer]

Yes, absolutely. So just to say historical background, 743 was really the first drug to be brought into the clinic exclusively for pediatric mitochondrial disease patients and has an enormous amount of brand recognition in the mitochondrial communities globally. We also have very good working relationships with the patient foundation of both in the U.S., EU, Australia, Japan and so we have been relying on this network to help us get the word out that this trial is starting. There is already a great deal of enthusiasm in a number of countries in which the trial is going to be conducted. And we are really excited to be able to launch the trial and believe that we can rapidly enroll the trial again COVID for me.

[Unidentified Analyst]

Thanks for taking my question.

[Operator]

Thank you. Our next question comes from Gena Wang with Barclays. Your line is open.

[Unidentified Analyst]

Hi, thanks for taking my questions. This is Peter for Gena Wang. I guess two questions for me first on Translarna, how much of quarter-over-quarter decline is due to COVID-19 and any color on new and existing patients and for back half of the year? Do you expect some growth relative to the first two quarters or largely stable excluding the order and I have a quick follow-up? Thank you.

[Stuart Peltz, Chief Executive Officer]

Can you say the first part again?

[Unidentified Analyst]

Yes. For Translarna, how much of the quarter-over-quarter decline is due to [indiscernible]?

[Stuart Peltz, Chief Executive Officer]

Okay, okay, great. Yes. So, Eric, you want to talk a little bit about that?

[Eric Pauwels, Chief Business Officer]

Yes, sure. I think there's very little decline if we look at the major market. In fact, in credit loss, out key markets outside of Brazil, into the grow and we have been seeing new patient identification, and new patients come on to therapy even in some of the most affected countries like Southern Europe, like, Spain and Italy, we have had new patients go on to treatment. We have also seen very high experience with clients rate in very, very low dropout. So, essentially in the main area, the main reason we haven't actually seen much impact that all from COVID-19. The main issue in decline is primarily the administrative delay from Brazil in the group purchase order at this time.

[Stuart Peltz, Chief Executive Officer]

Yes, I think also, you might remember either in my first – in my comments initially, I said it outside of Brazil we saw 20% approximately 20% increase.

[Unidentified Analyst]

Great. Okay. Thank you. I guess my second question is to extent that you can to provide a color on was defined, would you give us a bit color on like enrollment rate has been impacted by COVID-19 relative to patients and any color on folks which in found simple? Thank you.

[Stuart Peltz, Chief Executive Officer]

Yes, sure, I guess. I don't think we have ever given numbers on how things have done but things actually it terms of EAP has gone, actually quite well. And I know that Roche is quite satisfied with how the EAP happen. We do expect on approval, that, we think that we are obviously, we are confident relative to launch this quickly. And we think in particular, there will be a lot of transition from risdiplam. So, we think that's going to be a very strong part of the growth of raise the time-over-time, as well as obviously the 90s that particular so there are so many patients that are not being treated as though I think that's only bioavailable aged is very well suited for these patients. So we are excited about this, a launch which we think, which we anticipate will occur quite quickly.

[Operator]

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

[Eric Joseph, JPMorgan]

Yes. Thanks for taking the question. I just on Translarna picking up on your prior comments about discussions with DMA and health authority, can you talk a little bit to the extent to which they are interested in results in study 45 as they look to potentially renew conditional approval again in ‘21? Let me get some help authorities like, is there any sensitivity on their end on 3045 outcomes versus how to look at the Strike Registry data?

[Stuart Peltz, Chief Executive Officer]

Oh, yes, sure. Thanks for that. Eric. I think one important point there is that, it was very clear that the European authorities didn't look at dystrophin is because biomarkers that really predict anything. So it really, everything was based on the clinical results. And so, we kept them apprised not only the clinical data, that will have but also clinical data from the strides and the non-ambulatory data. So, they know that data quite well. And so the if the results from Study 045, I don't think it will be of any service to in the EMA sales, whether good or bad, because I don't think that, it isn't a biomarker to really predict clinical benefit, and so they had no interest in it in the past. I think you can see from another company when they talked about the results, that they didn't make any headway either. So they are not using this as something that's an approvable biomarker, so, and that's, I think, true, most other countries outside of the United States.

[Eric Joseph, JPMorgan]

Got it. That's helpful. And maybe a follow-up on Emflaza, I was wondering if you could just help us unpack the dynamics of the strong quarter here, how much is sort of different by efficiencies in the fire off process versus growth in new patient ads among naive patients should be a similar benefit in the second half of the year? And I guess also, we also just noticed that the Phase 3 [indiscernible] study also completed enrollment recently, can you just remind us whether this is a potentially labeled expanding trial and what regulators might be looking forward to enable that? Thanks.

[Stuart Peltz, Chief Executive Officer]

Sure. So, in terms of the Emflaza, obviously, we have been spending the last couple of years in terms of gathering data and the publication. I just think that’s so clear in terms of demonstrating why Emflaza is the superior – the data just shows it’s a superior product relative to prednisone. And I think that there has been a lot of hard work done on that to get to this point. And so I think this growth – maybe Eric, you want to talk a little bit about the growth of Emflaza in terms of patients themselves.

[Eric Pauwels, Chief Business Officer]

Yes, sure, it’s Eric. Because we are really pleased with the growth right now that we have seen for Emflaza, this is – the majority of the growth right now is that we have been able to convert patients that have been on birth and have better patient assistance. We have been able to convert them much, much faster to commercial therapy, which is extremely important, because that’s the drug. In addition to that, we have continually increased the number of new prescription start forms during the quarter. We saw a nice increase there, an influx of both, a nice combination of naive and formal prednisone. [indiscernible] driving is at the base of patient again, like Translarna, we see very high adherence, very good compliance rates and very low dropouts. We also come into a period of reauthorizations and our team is staying away ahead of the reauthorization process and with the insurance companies, so that patients spend less time in that bridge environment of the drug and more commercial therapy. So, it’s a combination of a lot of these different efficiencies that have really driven this growth. And we are seeing that again, it’s looking real strong as we are moving into the second half of the year.

[Eric Joseph, JPMorgan]

Yes, got it. And on [indiscernible]?

[Eric Pauwels, Chief Business Officer]

[indiscernible], yes, my recollection, I can’t remember that was [indiscernible], but I do think – but that’s one where I don’t think we actually completed the enrollment and I think it’s been especially where COVID has been at substantial recruiting challenges.

[Eric Joseph, JPMorgan]

Understood. Thanks for the clarification. Thanks for taking the question guys. Appreciate it.

[Operator]

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

[Unidentified Analyst]

Hi, this is Matt [indiscernible] on for Marty. Thanks for taking my questions. Regarding that Huntington’s program, you mentioned that Phase 1 healthy volunteer data will include information on Huntington lowering of plasma and I believe you presented some data on mice on the relationship between Huntington lowering and plasma versus the brain? Does your therapy lower Huntington protein in non-human primates? And if so, can you describe the relationship you saw in HP in terms of Huntington lowering and plasma relative to various regions of the brain? Thanks a lot.

[Stuart Peltz, Chief Executive Officer]

Sure. Yes, so you are absolutely right, we are the – no, it’s really – to remind everyone, it’s the Huntington’s program what you might have seen on the deep dive was that you take what we call the [indiscernible] and they have articulated to be able to go – to be partner with that RNA, which actually makes the RNA unstable because of the premature stop and you don’t make either the protein or the RNA. So, that’s really actually quite important. And that’s the human form of this. My recollection is that the non-human primate, because it’s within the [indiscernible] have that sequence and so you wouldn’t necessarily see that. That’s my recollection of that. It’s not in the sense of model where you can do the subset – where you can actually look at the substrate, the human substrate in that case.

[Unidentified Analyst]

Great. Thanks so much for the question.

[Stuart Peltz, Chief Executive Officer]

Right. But it is very true that in the – in patients will very much be able to measure in blood the reduction of the RNA and potentially protein, especially in the multiple ascending dose, so that you have time to see the protein go down. And we do know from measurements that the blood brain levels are pretty much 50:50. So, what you are seeing in blood we anticipate will be similar to what we see in brain. And that was indeed the case in the animal model. So, it’s really quite exciting. It’s actually very similar to analogous to what we saw in the SMA program or what we anticipate to see. So, you have really an idea from the very early stages of the program that you are on mechanism, on target, you see the effects and then you go on to measure clinical benefit.

[Unidentified Analyst]

Perfect. Thanks again.

[Operator]

Thank you. I am showing no further questions at this time. I will be turning the call back over to management for any closing remarks.

[Stuart Peltz, Chief Executive Officer]

Okay. Well, thank you folks for staying on the call and asking these questions. We are obviously very pleased with the strong performance this quarter across both the commercial and clinical programs. And I am very proud on how the teams have continued to execute in the environment that we are in. As you know, we have been trying to do our part to reduce the consequences of it, but that makes you saw that we are – and that we are very excited about 299 and its potential to be part of the solution for COVID-19. We have also as I as I talked about before recently launched our internship program providing opportunities for graduates, which we call the talent pipeline program, or TPP. It offers a 1-year internship to provide real world experience for graduates during the challenging economic times. All graduates, although all graduates are eligible, we use this program to reach out to institutions, but minority communities. And I am gratified to say we approximately have about 3,000 applications. So, it’s been quite successful. So we are excited to be able to work alongside and mentor what we hope will be future leaders in the biopharmaceutical community. So thanks again for listening and we hope that everyone stay safe.

[Operator]

Ladies and gentlemen, this does conclude today’s conference. Thank you for participating. You may all disconnect. Have a great day.