PTC Therapeutics Inc

NASDAQ:PTCT

Earnings Call Transcript 2022-Q2

[Operator]

Good day and thank you for standing by. Welcome to the PTC Second Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Kylie O'Keefe, Senior Vice President, Head of Global Commercial and Corporate Strategy. Please go ahead.

[Kylie O'Keefe]

Good afternoon and thank you for joining us today to discuss the PTC Therapeutics second quarter 2022 corporate update and financial results. I'm joined today by our Chief Executive Officer, Stuart Peltz; our Chief Operating Officer, Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Emily Hill.

Today's call will include forward-looking statements based on our current expectations. Please take a moment to review the slide posted on our Investor Relations website in conjunction with the call which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements, as such statements are subject to risks that can materially and adversely affect our business and results of operation. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission, as well as the company's other SEC filings.

We will disclose certain non-GAAP information during this call. Information regarding our use of GAAP to non-GAAP financial measures and a reconciliation of GAAP to non-GAAP is available in today's earnings release.

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

[Stuart Peltz, Chief Executive Officer]

Thanks, Kylie and good afternoon, everyone and thanks for joining us today. I'm excited to share PTC's second quarter results for what I expect to be a transformational year for the company. Our mission at PTC is to discover and develop innovative therapies and bring them to patients with rare disorders and, in doing so, to create significant value for all of our stakeholders.

We've been very successful in pursuit of this mission. Today, PTC has five marketed products, seven development programs and several scientific platforms which to generate future products. We continue to build a robust pipeline of potential new therapies that at steady-state will deliver a new product every two to three years. We made important progress in the second quarter towards achieving our ambitious goals for 2022. We continue to achieve strong revenue growth and to advance towards multiple clinical milestones. I'd like to highlight several particularly significant achievements in the quarter.

Let me begin with our strong revenue growth in the quarter, in which we achieved $166 million in total revenue with a 42% increase over the second quarter in 2021. This is quite remarkable and puts us in good position to achieve our full-year revenue target of between $700 million and $750 million. The DMD franchise is expected to continue a strong growth trajectory throughout the remainder of 2022.

We also reported top line results with Study 041 which was an important step forward for Translarna. In Study 041, we demonstrated a statistically significant benefit for Translarna and nonsense-mutation DMD patients across a number of relevant functional outcomes in the broad intent-to-treat study population. Based on these results, we plan to request conversion of the EU conditional authorization to a standard marketing authorization. In addition to the EU, we look forward to discussing these results and a potential path forward for approval with the FDA and other international markets. In addition, these results will reinforce our strong value proposition with payers in the EU and international markets. Matt will go into these results in more detail shortly.

We recently announced the marketing authorization for Upstaza by the European Commission. This approval expands our product portfolio to five commercialized products. Upstaza is the third gene therapy ever marketed and the first marketed gene therapy directly administered into the brain. Our goal at PTC is to bring Upstaza to AADC-deficient patients and their families as quickly as possible.

We are well-poised for commercial launch and our planned commercial price is between $3 million and $3.5 million. This reflects the exceptional value of Upstaza and takes into account the ultra-orphan AADC patient population with a small-budget impact to payers from this one-time durable treatment.

Pricing of Upstaza is based on multiple factors, including that the disease is highly morbid and fatal and the high unmet medical needs of AADC deficient patients with no standard of care. Lastly, Upstaza brings substantial value to patients with transformative clinical results and durable effect with up to 10 years of follow-up. We have already treated our first patient on commercial drug through the early access program in France and Eric will go into this in more detail shortly.

Let me switch gears to Evrysdi and we continue to achieve strong updates across all regions. The FDA recently approved the supplemental NDA of Evrysdi for pre-symptomatic infants with SMA under two months of age. Their approval is based on interim efficacy and safety data from the RAINBOWFISH study in newborns. We showed that pre-symptomatic babies treated with Evrysdi achieved key milestones such as sitting, standing and walking after 12 months of treatment, similar to that seen in normal babies.

Turning now to our oncology program with unesbulin, previously known as PTC596, we recently announced the current gene preliminary safety and efficacy results from our Phase Ib study in unesbulin, our tubulin binding agent, in advanced leiomyosarcoma patients and a podium presentation at ASCO. Based on these preliminary results, PTC initiated the SUNRISE LMS study, a placebo-controlled registration-directed study of the efficacy and safety of unesbulin and dacarbazine in patients with advanced LMS.

PTC has a broad and deep pipeline across a range of diseases and we eagerly anticipate important results with several registration-directed studies during the next 6 to 12 months. We believe the positive results from these trials could be transformational for PTC. PTC is clearly having an exciting year and has executed on all of what we set out to achieve in the first half of 2022 which is truly remarkable.

With that, let me hand it over to Matt for a development update. Matt?

[Matthew Klein, Chief Operating Officer]

Thanks, Stu. I'm proud to share that our teams continue to execute on our many 2022 goals. We are working tirelessly to deliver on our mission to bring innovative therapies to patients around the world.

Beginning with Translarna, as Stu mentioned, we recently announced the positive results from Study 04 one in patients with nonsense mutation DMD. As a reminder, Study 04 one was designed as a global trial with a 72-week placebo-controlled phase followed by a 72-week open-label extension phase which is still ongoing. Top line results from Study 04 one demonstrated a statistically significant effect of Translarna on 6-minute walk distance in the overall ITT population of 359 boys. This is the first disease-modifying DMD therapy to demonstrate a statistically significant functional benefit in a placebo-controlled trial.

In addition, a statistically significant benefit of Translarna was also demonstrated in the North Star Ambulatory Assessment and the 10-meter run/walk and 4-stair ascend timed function tests in the ITT population. These results are not only statistically significant but provide evidence of clinically meaningful benefit as they represent a 20% to 25% slowing of disease progression in a known unilaterally progressive and fatal disease.

In addition, in a pooled analysis of the over 700 boys enrolled in our three placebo-controlled Translarna trials, Study 007, Study 020 and Study 41. There is a highly statistically significant benefit across a range of functional assessments. While the study 04 one ITT population results did not achieve significance, we believe the significant results in the ITT population which was the pre-specified population along with evidence of real-world, long-term benefit generated from the STRIDE registry, position us to request conversion from the EU conditional marketing authorization of Translarna to standard marketing authorization. In addition, we plan to meet with the FDA to discuss the potential for an NDA in the U.S.

Turning now to our gene therapy platform, following on the approval of Upstaza in the EU, we are now focusing efforts on submission of a BLA to the FDA which is planned for the fourth quarter of this year.

I would like to now share encouraging results for our FITE19 study of Emvododstat for the treatment of COVID-19. The FITE19 study was designed as a double-blind, placebo-controlled, 28-day study of hospitalized COVID-19 patients. As a reminder, Emvododstat is an oral small molecule that targets the cellular enzyme dihydroorotate dehydrogenase, or DHODH, by targeting a cellular enzyme rather than a viable protein. Emvododstat is less likely to elicit drug resistance which is particularly important as the COVID-19 virus continues to mutate.

Given the changing nature of the pandemic to the outpatient setting, we concluded enrollment of the FITE19 study early, with 189 subjects enrolled in order to review the data collected to date and make an informed decision on next steps. Across all randomized subjects, there was a trend towards Emvododstat benefit across several disease-relevant endpoints, including duration of hospitalization and time to reduction of fever. Notably, when examining the cohort of patients enrolled within five days of infection, there was a clear benefit of Emvododstat treatment on time to respiratory improvement, duration of hospitalization, dyspnea resolution and cough relief.

As an example, median time to respiratory improvement, the study primary endpoint, was 28 days in the placebo group and only 10 days in the Emvododstat group with a p-value of less than 0.05. These findings are particularly important, as they suggest a clear potential for Emvododstat in the early treatment of COVID in the inpatient or outpatient setting, where the majority of cases are now managed. We plan to complete the remaining data analyses and will then formulate a strategy for next steps in advancing Emvododstat for the treatment of COVID-19.

Over the course of the second quarter, we continue to make progress across our other platforms and expect results from several of our ongoing registration-directed trials in the next 6 to 12 months. Starting with our ongoing registration-directed AFFINITY Phase III trial of PTC923 in patients with PKU, we remain on target to share results by year-end 2022. The AFFINITY trial is a 6-week placebo-controlled study with a primary endpoint of reduction in blood phenylalanine levels. To enrich the randomized study population for likely responders, the study includes a run-in phase during which potential subjects are treated with 923 for two weeks and only those demonstrating response to PTC923 treatment are randomized. Following completion of the 6-week placebo-controlled study, all subjects will be eligible to enroll in a long-term extension study.

Turning to the Bio-e platform, we have three ongoing registration-directed trials, two with vatiquinone in mitochondrial disease-associated seizures of Friedreich's ataxia and one with PTC857 in patients with ALS. Due to COVID-19-related delays in enrollment, we now expect to have results from the MIT-E trial of vatiquinone in patients with mitochondrial disease-associated seizures in the first quarter of 2023.

As we have previously shared, the MOVE-FA global trial of vatiquinone in Friedreich's ataxia patients is fully enrolled and we continue to expect results in the second quarter of 2023. Enrollment is ongoing in the CardinALS global placebo-controlled trial of PTC857 in ALS patients. The CardinALS trial is a 6-month placebo-controlled study with a target enrollment of approximately 258 subjects. Subjects will be randomized two to one to receive PTC857 or placebo. The primary endpoint of the study is change in the ALSFRS score from baseline to six months with secondary endpoints capturing other aspects of disease morbidity and mortality risk.

Finally, I want to provide an update on our PTC518 Huntington's disease program from our splicing platform. Enrollment is ongoing in our Phase II PIVOT-HD study, a global placebo-controlled study of PTC518 in HD patients. This study will consist of two parts, an initial 12-week placebo-controlled phase focused on PTC518 pharmacology and pharmacodynamic effect followed by a 9-month placebo-controlled portion, during which we will collect blood, CSF and radiographic biomarker data. The study will initially include two dose levels, five milligrams and 10 milligrams, with the potential to study a third base. We anticipate data from the 12-week portion of the study by the end of this year.

We are very excited about our continued progress across our development programs and look forward to sharing results from several of our studies in the near future. I will now hand the call over to Eric to discuss our commercial portfolio. Eric?

[Eric Pauwels, Chief Business Officer]

Thanks, Matt. This is a very exciting time for BTC and in particular for our global customer-facing teams commercializing a diversified portfolio of products that address high unmet needs for patients with rare diseases. We have achieved another very strong quarter and we are thrilled to add a fifth commercial product to our portfolio with the recent approval of Upstaza and to bring much needed treatment to AADC-deficiency patients. Our DMD franchise continues to be a key revenue driver as we continue to expand our global footprint that will also support the future growth from the pipeline.

Let me begin with Upstaza and our ongoing launch preparations. We are very excited about the recent approval in Europe and our team is actively executing on all strategic initiatives supporting the launch. We are off to a good start and have treated our first commercial patient this quarter under the French Early Access Program.

Treatment center readiness is well on track as well as further preparation for surgeries carried out at key European centers. Patient identification is continuing to accelerate and we anticipate treating additional commercial patients with the upcoming launch in Germany. We are also focused globally on markets that have early access programs, such as France, Italy and other via cross-border healthcare. The Upstaza price is expected to be in the range of $3 million to $3.5 million which factors in our projections of future pricing negotiations in key European markets. We are confident that the durable efficacy and safety data we have obtained from over 10 years of patient experience with Upstaza will support HTA [indiscernible] submissions for reimbursement as the first and only treatment approved for AADC-deficiency patients 18 months and older. We have guided to $20 million to $40 million in revenue from Upstaza.

Turning now to DMD. Our global DMD franchise continues to deliver robust revenue across all regions. Our second quarter revenue for the DMD franchise was $134 million. Our Emflaza net product revenue for the second quarter was $57 million which represents 16% growth over the second quarter last year. Ongoing execution by our Emflaza team to have new patient starts, continued favorable access, high compliance and appropriate weight-based dosing for DMD patients in the United States.

For Translarna, we achieved $77 million in net product revenue for the second quarter which represents a 46% increase over the second quarter of 2021, driven by growth in all regions. As a reminder, we can have large group purchase orders which can create lumpiness due to uneven government buying patterns. Overall, Translarna revenue continues to be globally diversified and robust in all key markets. We continue to make good progress with regulatory approval and pricing and reimbursement in our newer markets in Eastern Europe, the Middle East and Latin America.

We are also continuing to expand our presence in additional markets in Asia-Pacific as this region continues to be of strategic importance for potential future revenue growth for PTC. We are in a strong position to achieve the 2022 DMD revenue guidance of $475 million to $495 million.

In Latin America, our team continues to strengthen the Tegsedi and [indiscernible] franchise. In Brazil, following the innovative drug classification for Tegsedi and we received the first purchase order from the Ministry of Health which was delivered in the second quarter. This was an important milestone for our hATTR patients awaiting treatment. Furthermore, patient identification continues to be strong and we anticipate additional IP purchase orders over the course of the year.

Finally, discussions progressed with CONITEC, the National Commission for the Incorporation of Technology for inclusion of Tegsedi in the essential drug list which simplifies access. For Waylivra, we now have patients on treatment for FCS in Latin America and patient identification continues to progress well. As a reminder, last December, we submitted an application to ANVISA Brazil for approval of Waylivra for the treatment of FPL. If approved, Waylivra will be the first approved treatment for FPL in Brazil and this will mark the first approval globally for this indication. We anticipate a decision in the second half of 2022.

In conclusion, our customer-facing teams globally have had an extremely successful first half of the year and we will be focused on capitalizing on the momentum built and our launch of Upstaza for the remainder of the year.

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

[Emily Hill, Chief Financial Officer]

Thanks, Eric. In the first half of 2022, we saw continued strong revenue growth and progress in advancing our pipeline across multiple platforms. Given current market conditions in the biotech space, we are particularly pleased that the royalty monetization for Evrysdi, combined with our strong continued revenue growth, allows a strong capital structure to fund the further advancement of our pipeline. The press release issued earlier this afternoon summarizes the details of our second quarter 2022 financial results. I will take a few minutes now to review these financial results. Please refer to the press release for additional detail.

Beginning with top line results, total revenues were $166 million for the second quarter of 2022, a 42% increase over the second quarter of 2021. This was driven primarily by net product revenue from DMD franchise of $134 million and Evrysdi royalty revenue of $22 million. Our total revenue from the first half of 2022 was an impressive $314 million. And as Stu said, we are on track to achieve our 2022 total revenue guidance of $700 million to $750 million. Apart from our continued net product revenue, we also anticipate a $50 million milestone payment from Roche when annual Evrysdi sales reach $750 million. In addition, we have guided to $20 million to $40 million in revenue from Upstaza.

Turning now to our DMD franchise, Translarna net product revenues were $77 million, representing year-over-year growth of 46% compared to the second quarter of 2021. Emflaza had net product revenues of $57 million, or 16% growth year-over-year. Moving now to Evrysdi. Our partner, Roche reported 2022 year-to-date sales of approximately CHF500 million which translated into second quarter royalty revenue for PTC of $22 million. As a reminder, PTC retains approximately 57% of Evrysdi royalties, with Royalty Pharma receiving the remaining 43% up to a cumulative total of $1.3 billion, after which PTC received 100% of Evrysdi royalties.

Non-GAAP R&D expenses were $144 million for the second quarter of 2022, excluding $14 million in noncash stock-based compensation expense compared to $112 million for the second quarter of 2021, excluding $13 million in noncash stock-based compensation expense. The year-over-year increase in R&D expenses reflect additional investment in research programs and advancement of the clinical pipeline. Non-GAAP SG&A expenses were $66 million for the second quarter of 2022, excluding $14 million in noncash stock-based compensation expense compared to $57 million for the second quarter of 2021, excluding $12 million in noncash stock-based compensation expense. Cash, cash equivalents and marketable securities totaled approximately $506 million as of June 30, 2022 compared to $773 million as of December 31, 2021.

I'd now like to turn the call over to the operator for question and answers. Operator?

[Operator]

[Operator Instructions] And our first question will come from Eric Joseph from JPMorgan.

[Eric Joseph, JPMorgan]

A couple from us on Translarna. First, wondering if you could sort of unpack a little bit the geographic mix in demand this quarter and the extent to which you saw large group purchase orders that may have driven the performance and perhaps that we should be backing out and thinking about the sales trajectory in the second half. Belatedly, is there any material FX impact that we should also be considering? And then, secondly, as it relates to requesting the transition to standard marketing authorization in the EU, can you just provide a little more granularity on the timelines, both requesting that change and sort of what that recycle might look like?

[Stuart Peltz, Chief Executive Officer]

Yes, I think this was a great quarter where we saw growth of both Translarna and Emflaza, quite good and there was growth throughout all geographies. But maybe, Eric, you want to talk a little bit about where there could be differences in where we saw growth?

[Eric Pauwels, Chief Business Officer]

We have certainly seen robust growth across all geographies. And as you know, Translarna is a product that has international markets and we have large group purchase orders that can be sometimes a little untimely. But in this quarter, we actually saw large orders across all geographies and in particular, it was very robust in Europe. And what we see with revenue this year is we never really guide to quarters. And right now, what we're doing is we're really focusing on growth in all key markets and our guidance continues to be $475 million to $495 million. So the growth is actually continuing across different markets and that's really because of new patients. We continue to see a really high compliance. We've added programs that would also include dose adjustments for patients.

So we're really doing very well in terms of preserving the base and growing the base but also to geographic expansion. We have new markets that are also significantly contributing. So essentially, we're seeing that robust growth across the global and diversified markets that we have right now.

[Stuart Peltz, Chief Executive Officer]

I think what's important is, I think you could see we continued to grow our business quite well and I think we're going to continue to do that. We're reiterating that $700 million to $750 million. So I think we're very comfortable with that. You want to talk a little bit about that [indiscernible] Kylie?

[Kylie O'Keefe]

Yes, absolutely. So Eric, with your question around FX, I think, obviously, in the perspective that Stu said, we are reiterating our guidance. And so while we do see an impact across the U.S. dollar to the euro, we continue to see a robust and globally diversified portfolio across a number of different geographies. So while we are seeing an impact, we remain confident in our business and this geographic diversity allows us to remain confident and reiterate guidance.

[Stuart Peltz, Chief Executive Officer]

And then your question [indiscernible] timeline, Matt, do you want to take that one?

[Matthew Klein, Chief Operating Officer]

So just as a reminder, Study 04 one was part of our commitment following the conditional marketing authorization from the EMA. And really, the idea here was to conduct Study 04 one to provide comprehensive evidence in support of the benefit risk of Translarna. And it's that generation of comprehensive evidence which really triggers our ability to convert the conditional to the standard marketing authorization. So obviously, we're very excited about the results which were collected in the ITT population of 359 boys. And when you think about comprehensive evidence and you think about 359 boys is the largest data package in a single trial for DMD and the statistically significant results on functional endpoints, including walk distance in North Star, we clearly believe that we have that comprehensive evidence which is more at the benefit of Translarna, then, of course, the safety collected in this study and a long-term safety package collected not only through our clinical trials but also in a long-term registry, again, informs the favorable safety aspect of the drug.

And then, finally, we also have generated over the past several years to STRIVE data which provides long-term real-world evidence of benefit in Translarna in delay loss of ambulation of roughly 5.4 years, delay in loss of pulmonary function of 1.8 years which are really important given that those are the two key morbid transition in the disease. So when you put the Study 04 one data together with the STRIVE data, we believe we have the comprehensive data that warrants conversion from the conditional marketing authorization to standard. The way that's happening mechanically is, as we said before, we are due to provide the data by the end of Q3, that we will submit a type two variation for the CHMP or EMA which basically requests that conversion. This will initiate a profit in Europe that will unfold over the course of several months where they'll be back and forth. They may have questions about the data.

So it's hard to say exactly what the time will be from initiation of that process in September till the end. We think it will be several months but clearly be much shorter than when we're anticipating as typical MAA submission.

[Operator]

And we'll take our next question from Raju Prasad from William Blair.

[Raju Prasad, William Blair]

Can you give us a sense, just now having a couple more months of looking at the Upstaza commercial markets under your belt on the potential cadence of kind of revenue recognition that you anticipate maybe this year? And even if you could give a little more color into how you anticipate the launch going into next year, that would be helpful.

[Stuart Peltz, Chief Executive Officer]

Obviously, our goal is to bring up data to all the AADC-deficient patients. And maybe just a little bit of color, while we recently just got the approval, you then have to do a bit of work to be able to go then into other places. So that being is being worked on right now and then we're going to be working on, or have been working on also market access in different places as well. So we're pretty well positioned for the commercial launch. We'll be using both the commercial launch in terms of bringing drug to patient as well as expanded access program to patients as well. And so we feel like we're in a good position but like we said, we already have one expanded access paid expanded access patients that have had the surgery in a commercial patient. The preparation for launch, a lot of work has gone into it and there a number of key success factors which is accelerating disease education, patient identification and then preparation of the surgical center and then making sure that the key positions are engaged and then working with the patient advocacy groups and payer engagement.

We've been working hard on that. The first country, obviously, that we'll be going into in Europe is going to be Germany, followed by other international markets, in particular, where we can do expanded access program. And so, if you think about a patient identification instance [ph], a key focus of us for the launch preparation and this just goes on really forever and even post-approval. So I think, at the end of the day, I think we've shown a strong track record in launching rare drugs. Team is quite experienced, a broad global commercial footprint to get into over 50 countries. So we're pretty confident that this is a significant opportunity for the Upstaza launch.

[Raju Prasad, William Blair]

And then, just a question on clinical trial enrollment. Can you give us a sense of where you are with the AFFINITY trial on enrollment, as well as it looked like the MIT-E trial first quarter '23 readout as well as obviously, the Phase two Huntington study.

[Stuart Peltz, Chief Executive Officer]

Did you say for the PKU trial, right?

[Raju Prasad, William Blair]

The PKU trial and then I just saw in the press release that I think the MIT-E trial is now a 1Q '23 readout.

[Stuart Peltz, Chief Executive Officer]

Yes. So we're pretty excited, obviously, about the PKU trial. We think that our drug has substantial benefit over Kuvan and so we're pretty excited about that. Matt, do you want to just talk a little bit about where we are on that?

[Matthew Klein, Chief Operating Officer]

Sure, Raj. All three of these trials are global trials, leveraging our global development infrastructure. And for PKU, the sites are up, running and rolling and we are on track for results by the end of 2022. Similarly, as we updated on the PIVOT-HD study, we're standing sites up around the world and enrolling that trial with the data by the end of 2022 and results by the end of 2022. Similarly, as we updated on the PIVOT-HD study, we're standing sites up around the world and enrolling that trial with data by the end of 2022 on the 12-week portion. And then on MIT-E, we moved the data from one quarter to first quarter 2023. That's mainly due to COVID-related delays. These children with mitochondrial disease and seizures are quite ill. These children with mitochondrial disease and seizures are quite ill. In fact, when there's not a pandemic going on, seasonal colds and flus can easily put them in the hospital and even can be fatal events.

And so there's been a lot of caution on the part of parents and physicians to get the kids into the study sites. So that's caused a little bit of delay in getting the trial to the enrollment target but we're now on target to have results, as we said, in the first quarter of 2020.

[Operator]

And we'll take our next question from Kristen Kluska from Cantor Fitzgerald.

[Kristen Kluska, Cantor Fitzgerald]

So given that you have three registrational trials where we're expecting data through the second quarter of next year and the Upstaza BLA guided for the fourth quarter, could you talk about some of the commercial readiness steps you're taking towards juggling these potential filings and beyond should they be successful?

[Stuart Peltz, Chief Executive Officer]

Yes, sure. Let me start a little bit where, obviously just the way the structure of the team is, is such that each team is moving forward on that. So in terms of juggling, we don't really juggle if there is -- each team has in each of the registration directed program, each team is doing their work to get ready for both launch and regulatory, correct. So it isn't like we have to wait for one versus the other. Every team, every one of those has their own team that is moving forward. And I think we have a pretty strong track record in moving those forward. And the team is pretty experienced in this, so I think we'll be able to move all of them as things move forward.

And I think, with the global footprint that we have, gives us really the capabilities to be able to knock on wood, all goes well, that we'll be able to launch all of them at each one as it progresses and gets approved, both in Europe as well as in the U.S. Does that help you?

[Kristen Kluska, Cantor Fitzgerald]

And I know in the past you've made a lot of synergies with your splicing platform as it relates to Evrysdi and then, of course, the work you're doing in Huntington's disease. But now that there's been a lot of commercial experience here, wondering if your views have at all changed, confidence increase or anything that you could really take away from the commercial experience relative to this platform?

[Stuart Peltz, Chief Executive Officer]

Yes. I think, from our point of view, we're really pleased with the splicing platform and the commercial prospects of it. Obviously, the nice aspect of these molecules is that they're orally bioavailable, especially for neurodegenerative diseases. The fact is that they get to every part of the brain and, therefore, they could treat every aspect of the disease. We think, in these cases, oral is probably the best way to go. You could titrate it. You can utilize PD markers in the blood to have a sense of where you are in terms of what dose you give and what's the effect of either increasing or decreasing the amount of the protein, like we've done with Evrysdi or PTC 518. So you're not driving the bus blindly. You have a pretty good look into saying what is based on this exposure level, you're getting this effect on splicing. And we think that's really important. And then you can measure the level of the drug and therefore know that, in the CSF as well, to know the exposure level that you're getting within the brain, as well. So you get a lot of information that lets you make good decisions at the same time.

And then obviously, from a commercial perspective, when the fact that this is the case is the standard sort of commercial program where you know that you could show everyone that what the dose is, what the right level is, therefore, with the clinical data on hand. I think this is a really nice commercial product to move forward with. We spent a lot of time now perfecting the splicing platform where it's really honed and efficient. So, we think this is going to be a platform that's going to add multiple programs that ultimately will get to commercial for multiple drugs. We're thinking it's going to be exciting. I mean, I think it's really an exciting platform.

[Operator]

Our next question will come from Joe Thome from Cowen.

[Joe Thome, Cowen & Company]

Maybe one on the mitochondrial epilepsy patients. What's kind of your update is thinking in terms of how many patients are out there? And is it relatively straightforward to identify them? And then, as you're looking at sort of the presentation, are there any variabilities in the type of seizures that these patients experience?

[Stuart Peltz, Chief Executive Officer]

Matt, you want to take that?

[Matthew Klein, Chief Operating Officer]

Yes, absolutely. So when you talk about seizures in mitochondrial disease, it's a highly morbid and common component of these disorders. So roughly 30% to 50% of kids with mitochondrial disease have seizures as part of their disease and the vast majority of these seizures tend to be refractory to typical antiepileptic therapies. The simple reason that most traditional antiepileptic therapies increase, as part of their benefit, they increase oxidative stress which is actually the pathology underlying seizures in children with mitochondrial disease. So in many ways, traditional therapies make them worse.

Obviously, the benefit of vatiquinone is to target the underlying antigenic pathways that underpin the oxidative stress [indiscernible] in these children. We estimate there are about 20,000 patients worldwide with mitochondrial disease-associated seizures. And as you pointed out, within this group, there is some variability. They have variability in number of seizures and, obviously -- as well, Joe, there's [indiscernible] variability in the types of seizures. They could be motor. They could be myoclonic. They could be tonic. They could be clonic.

And then, most of these children actually have a composite picture with many different features subtypes. Obviously, for the purposes of the clinical trial, we're focusing on observable motor seizures as the primary endpoint because those are obviously, one, observable and then, two, quantifiable which is obviously an important aspect of being able to measure treatment effect. And in fact, this study design of focusing on the observable motor seizures, having the observation run-in phase and the overall structure mimics the previous trials done in things like [indiscernible]. We're just using a very well-established study design for pediatric epilepsy [ph].

[Joe Thome, Cowen & Company]

And then maybe just to follow up on that, is there a separation from placebo in terms of reduction in number of major motor seizures that you're looking for in order to go forward with the submission or conversation with the FDA?

[Matthew Klein, Chief Operating Officer]

Yes. So we powered the study for a Delta of about 40%. We're estimating placebo to have a decrease of about 10% and that's just based on what's been observed in previous pediatric epilepsy syndromes. And then we are targeting a approximately 50% reduction in seizures in the treatment group as a median reduction. And the way that the change is calculated is, as I mentioned, there's a 20-day run-in period where we establish a baseline seizure frequency and then we measure the monthly frequency over the course of the 6-month placebo-controlled phase.

I think while we're targeting a delta of 40% in terms of difference between treatment and placebo, I would point out that in these children, given how severe their seizures are, how highly morbid these seizures are and how they're related to other morbid aspects of disease, like aspiration and pneumonia and in some cases, [indiscernible] and death, even an observed decrease of 20% to 25% will be clinically meaningful for these patients.

[Operator]

And we'll take our next question from Tazeen Ahmad from Bank of America.

[Tazeen Ahmad, Bank of America]

Stu, I just wanted to get your thoughts on how you're viewing the opportunity for Emvododstat in COVID. Number one, I guess it's a little bit outside of what we've all become used to expecting from PTC in terms of areas of focus. And then also, I think people kind of view COVID becoming more endemic now and there are a number of oral antivirals available. Would love to hear your thoughts on where you think the under-met need is. And then secondly, just going back to your study, can you clarify if you met the primary endpoint? And what additional analyses would you expect to conduct before you make a decision on what to do with the product next?

[Stuart Peltz, Chief Executive Officer]

Yes. So obviously, we started this early on as we were learning about COVID and what are the best ways to look at it. It became relatively clear that it was obviously an evolving scene while even in hospitals, in order to see effect of things that affected both the viral load, you had to look at it early versus having patients who come in much later. It's much harder to see an effect on something that's going to affect the viral load. So that's sort of something that was learned and actually it turns out to be a relatively difficult to be able to guess where is the best sites in order to move forward to it. Nonetheless, I think what we decided to do is look at the study early when 189 subjects were enrolled in order to review the data collected and to make informed decision, because it was taking a long time in in order to complete the trial. And we felt we'd be better off looking now and seeing what would be the best way to do it.

So across all subjects, there was a trend towards Emvododstat benefit across that in several disease relevant endpoints, including duration of hospitalization, a time to the deferred investment [ph]. But when examining the patients that were enrolled five days of infection, there was a statistically significant benefit of Emvododstat treatment on time to respiratory improvement, duration of hospitalization, dyspnea resolution and cough relief. For example, hospitalization length in the placebo group of 28 days, 10 days on the Emvododstat group. So I think it's pretty clear that it was particularly important, as they suggest a clear potential for Emvododstat to work in early treatment in COVID which is, I think, what people expect.

And clearly, I think one of the better ways to do this is in the outpatient setting where I think the majority of the cases are now managed. So we're considering what's the best way to do the outpatient and to think about what's the best strategy, whether we work with someone else to get with the DHODH compounds that inhibit COVID-19, what's the best way to get that to the patient.

Firstly, I think there still is a need for additional drugs, I mean, because clearly, I think what we've shown here for DHODH is clearly a proof of principle that this would be good in treating COVID-19. The next question, though, is then this and other viruses that come up with it because, let me remind you, it's a cellular target and therefore, we think it will be good in terms of low mutation rate. And you could see some of the other drugs, where they're -- they're resistant, they're [indiscernible]. So I think there's a need for additional drugs out there. So we'll just have to consider the best way to move this forward.

And to your point about it's something that we normally wouldn't do, I think you're right, this isn't normally a position, an area that we would go in a large indication but there was a real need for treatment for -- it was the pandemic. And we knew that, just because the way it works and the role of DHODH in controlling de novo Pyrimidine synthesis, where we learned that you need the de novo synthesis for viral replication and that the salvage pathway was what most [indiscernible] isn't enough and you need this for viral replication but this is a potentially good target.

And so we thought that this was important enough of a disease and causing enough problems around the world that we'd like to be part of the solution if possible. So that's why we did that.

[Operator]

And we'll take our next question from Nishant Gandhi from Truist Securities.

[Alex Xenakis, Truist Securities]

This is Alex on for Robin. What type of cadence we wanted to know for news flow should we expect to see around the Translarna filing and the launch press in the U.S.? And what kind of communication can we expect? And then also, can you remind us about your manufacturing capabilities and capacity to support launches in both the EU and the U.S.?

[Stuart Peltz, Chief Executive Officer]

Manufacturing, or what are you referring to? Just in general?

[Alex Xenakis, Truist Securities]

Do you anticipate any sort of supply chain issue and regarding supplying the gene therapy products for an ultra-orphan therapy in the global markets?

[Stuart Peltz, Chief Executive Officer]

Sure. So I think, obviously, we're excited about the Translarna. We'll be having an end of Phase II meeting and talking with the FDA. I think we'll have news flow as we talk and get more clarity -- I mean end of Phase III meeting that will then give clarity on that. Matt, do you want to talk a little bit about next steps?

[Matthew Klein, Chief Operating Officer]

Yes. So in terms of Europe, I think we've talked quite a bit about the timeline. We expect to submit a type two variation by the end of September to request the conversion from conditional to standard into the U.S. As you asked, the plan will be to meet with the FDA, lay out all of the data from 04 one as well as the totality of data which strongly supports the benefit of Translarna and being able to share the fact that we have statistically significant data in DMD on functional endpoints which for a therapy that's targeting the underlying mechanism of disease will be a first. So, we really look forward to being able to share that, along with the totality of data and we collected in the STRIDE registry, demonstrating long-term safety and benefit, as we've previously talked about. So once we have that meeting with the agency and they give a line on the path to an NDA, it will obviously move forward. And obviously, we will share updates as appropriate.

[Stuart Peltz, Chief Executive Officer]

And then for supply chain and manufacturing, there's two prongs. There's the small molecule path and then the gene therapy path. The small molecule path is something that we've been doing now for almost 20 years. We have a strong manufacture supply chain group that's been capable of making sure we can manufacture and supply to either clinical or commercial products, multiple ones at a same time. And I think they're very good at it and we've been able to move forward. It can handle multiple programs and they've shown to be capable of doing this. Obviously, in gene therapy, we have the Hopewell site which is close to 300,000 square foot facility for gene therapy manufacturing and plus we have a site in Massachusetts with NBL that we can manufacture as well another 15,000 or so square feet for commercial manufacturing as well.

So, I think we're well suited and capable and we have a team of experienced people who've now have under their belt an approval in gene therapy, right, really only the third one that's been commercially [indiscernible]. So I think we're in a pretty good position there. And so we clearly have a state-of-the-art facility to be able to do gene therapy manufacturing. And in fact, we've also built out in the sense of small CRO in working with other companies that we have excess capacity that we can make a business out of making plasmids and manufacturing. So I think we're in pretty good shape, both in the manufacturing of gene therapy as well as small molecules.

[Operator]

And we'll take our next question from Brian Abrams from RBC Capital Markets.

[Stephen Mallon, RBC Capital]

This is Steve on for Brian. On Translarna, I'm curious whether you see any impact of the recent news that FDA may consider accelerated approval for a DMD gene therapy on the path forward for Translarna. Maybe as a related question, can you share whether any additional subgroup analyses you have performed from Study 101 but maybe didn't present yet, might help that application? And maybe how many such subgroup analyses you performed?

[Stuart Peltz, Chief Executive Officer]

Sure. So I think in terms of a couple of points. In terms of the gene therapy, I think, first of all, it's limited to the patient population possibly that there has. And I think that Translarna and Emflaza for that matter, are probably key foundational treatments on a standard of care for Duchenne Muscular Dystrophy that I think you have shown the wide age range and benefit demonstrated in a broad range of patients. And I think they're always going to be used for that. I have a little bit different view in terms of the gene therapy with the high dose, small patient numbers with benefit yet not demonstrated with a drug that you can't withdraw versus the therapy, once treated, these patients aren't capable of getting other treatment. It'd be interesting at the FDA in terms of thinking that and I think there's a number of key questions and issues that are yet to be addressed.

So, I'm very curious to see how viable the accelerated approval pathway is in the gene therapy where there isn't clinical data and the notion of using a dystrophin biomarker that in this case doesn't necessarily predict functional benefit, how you can bring that to patients when they can't get other gene therapies as a consequence of that. So, I personally am skeptical of that pathway right now in gene therapy. In terms of the Study 041, I think the fact that in the ITT population as well as we took it in the 300 to 400 analysis. So you see improvement and statistically significance in the ITT population, in the 300 or 400 that you saw statistically significant with the North Star as well as the time functions test and also in terms of time to 10% worsening. So we have a broad range of analysis, not to mention also the pooled analysis and the statistical significant overall when you pull all of that together with a 0.0002 P value both with the minute walk test, North Star and time function test.

So, I think there's strong data demonstrating that, in Study 04 one in a combination with the other trial, the 007 and [indiscernible] strong results of that. And really when you think about, we can show that there's a 20% improvement as a consequence of treating with Translarna and that when you think about translating that to what does it really mean, the patient from a functional perspective, when you look at the STRIDE registry and when you see the STRIDE and you see a greater than five years preservation of ambulation almost two years in terms of preservation of being able to get off the ground and actually a strong presentation of pulmonary function, we're in this very interesting position where we have so much data that shows you the results you get in the clinical trial, what does that mean from real clinical perspective with a long-term five years of data showing those preservations of ambulation, getting off the floor and pulmonary function.

You now know what those results mean to a patient. So we're pretty excited about that. And then, the other interesting analysis we did is, like with the North Stars, we know it's a number of different functions that you measure to get a North Star score. So what we also do on top of looking at that data, we say not only what does it do but how well did it preserve of those functions, right? Because over time, they lose function. And so we saw, when looking at this, that you reduce the risk by more than 30% to 40% on several [indiscernible]. So that's equivalent to perhaps saving one or two functions in these kids as a consequence of that. So that's, again, another great example of preservation of function. So I think that's really, really sort of important.

So at the end of the day, the most important thing I think we have out of this is that we got a positive result in the ITT population. That's the whole population of patients. So really, every group -- and it was a large enough study to be able to see this here. So I think, all in all, all of those results really, I think, makes this a very strong study demonstrating Translarna's effectiveness.

Did that help?

[Operator]

And we'll take our next question from Colin Bristow from UBS.

[Unidentified Analyst]

This is [indiscernible] on for Colin. So we have one question on the PTC AADC BLA filing in U.S. So as you said in the call, the filing will be expected in the fourth quarter. So could you please give us some more color on the details? For example, if there's anything to be done beforehand? And how would you incorporate the new launch experiences for the FDA filing? And have you have any further discussions with the FDA?

[Stuart Peltz, Chief Executive Officer]

Matt, you want to take that?

[Matthew Klein, Chief Operating Officer]

Yes, absolutely. Thank you for the question. So as we said all along, we would work hard to get the MAA across the line. And obviously, we're incredibly excited about the approval in the EU. As Stu said, this is really trailblazing in a number of ways. And now we're focusing the efforts on the BLA submission. As we said, our plan is to meet with the agency, we have not done that yet, to align on the package and make sure that we have all that is needed for the submission to BLA and then based on the timing of that, we believe we'll be in a position to submit the BLA in the fourth quarter of this year.

We believe that obviously having gone through the experience in Europe and being able to achieve an approval puts us in a very strong position. Obviously, we have the clinical data, the manufacturing data, nonclinical data, all those key components for approval, obviously we've been able to provide in Europe and look forward to being able to provide those to the FDA as part of our BLA submission.

[Operator]

And we'll take our next question from Gena Wang from Barclays.

[Unidentified Analyst]

This is Shan [ph] for Gina. I have two questions. I want to start with Upstaza for AADC. How you mentioned before you have identified 300 patients globally. So how many of them are [indiscernible] or can be treated based on the EU label? Secondly, can you break down the patient numbers by country or regions? And how many of them have early access?

[Stuart Peltz, Chief Executive Officer]

Yes. Thanks for your question. Obviously, maybe talk a little bit about AADC deficiency is obviously a very severe disease or patient lacking the motor milestones and of that dopamine production. So the vast majority of these patients that we've identified really do fall under the -- their missing major milestones. And so our label is really we have the breadth of the label that very broad. So we were pleasantly surprised by that. And so this was an important point that we're able to get that. So that's going to probably translate to a higher number of additional patients that will get treated.

And as I said, we have 300 patients that we have identified and we'll continue to identify patients and continue to do that. We haven't broken that out from place to place. But what we're going to certainly what we do is, while we have 300 patients, we certainly have -- and we haven't broken them out by specific countries as well. We found in our patients that I think we're going to be pretty busy toting them throughout 2022 and beyond. We already have patients that have been reaching out into German centers to get treated. We also have scheduled paid expanded access patients as well. So things from a move as we do this, I think that's doing really quite well.

We look at this opportunity as a greater than $ one billion opportunity overall. And what we've said is that the revenues will be this year, we've guided the between $20 million and $40 million and we think that will continue to grow as a we line up all the patients, continue to train and get all of the of the surgical center side. So I think we're pretty excited over the next couple of years in getting all the patients we have to continue to find need to find more and more patients to treat.

[Unidentified Analyst]

May I ask a second question? I do want to switch gear a little bit to Huntington, your PIVOT-HD trial. I just wondering what kind of data we should expect by year-end. Will you share like neurofilament data also beside biomarkers, what type of other endpoints you will show by year-end, such as any imaging data, like Kitimat or ventricle volume?

[Stuart Peltz, Chief Executive Officer]

Yes. So you might remember that the trial is really in two parts. One is the 12-week trial where we're looking -- the first part of this is really to say what we saw in health volunteers do we see in Huntington's basis, right? So the AC is a placebo-controlled trial where the first 12 weeks is focused on the pharma of pharmacology and cover dynamic effects. And then the second is more on biomarkers and clinical endpoints, right? So the first 12 weeks will provide the important results between relationship of dose exposes your HDT and protein reduction in the blood at steady state, right? Then that -- we think that's important to set the same or different what the PK looks like in the CSF and exposure to the ratio between them, you might remember that we saw somewhere between two and three in CSS to blood.

So, we want to see what it looks like in HPT patients. And then as patients go on, we also want to look at [indiscernible] as well. But the first part of it is going to be the pharmacology and blood PK.

[Unidentified Analyst]

Just want to confirm, so by year-end, we would see owning PK/PD data at 12 weeks. But are you going to collect data for some internal reviewing?

[Stuart Peltz, Chief Executive Officer]

I'm sorry, I missed the last part.

[Unidentified Analyst]

Last part is, for the first part, like 12 weeks, even though you focused on PK/PD data, are you going to collect any of the biomarker data for like internal being?

[Stuart Peltz, Chief Executive Officer]

Yes, probably, as we have everything, we'll be looking and being able to monitor. This is all relatively new. There's never been an orally bioavailable drug. So right now, we're trying to get all the parameters correct in terms of knowing what the PK/PD, what it looks like in terms of inpatients in terms of what it's doing in the solo approaching in RM.

[Operator]

And we'll take our next question from Danielle Brill from Raymond James.

[Alexander Nackenoff, Raymond James]

This is Alex on for Danielle. I just wanted to touch back on Translarna in the U.S. and the Sarepta read-through and kind of how you're looking at the agency considering their apparent tolerance for some, let's say, dataset flexibility in Duchenne. Are you reading through to this that the Translarna future, it bodes better? Or do you think it stands on its own? Or are you not considering that there are different FDA divisions at play here?

[Stuart Peltz, Chief Executive Officer]

I don't know if you heard what I said before. But I think that I think we're hopeful that, look, we did Study 04 one was a well-done study that demonstrate a functional benefit in a broad population of Duchenne muscular dystrophy patients were the broad population in the ITT population demonstrates statistically significant in the 6-minute walk set but also in the North Star in-time function test. So, I think that is up that -- if you think about it, that I think the first example with a drug that actually show for the treating the underlying cause of the disease, where we're seeing it in an ITT population, a statistically significant results in multiple inputs and everything favored Translarna versus pop. And so I think that data along with the results from Study 007 and 014 that really shows that you're seeing clinical benefit. You don't have to rely on a biomarker that hasn't grown in our view, haven't yet shown is predictive of clinical benefit.

So, I think we're in a pretty good position from a clinical perspective. and then the data that goes along with it was 007 and DMD. And then the STRIDE registry that translates for people, what is -- in a way, when you do clinical endpoints the goal of critical endpoint is to predict outcomes for patients, right? And in this case, we also have that data to show the regulatory bodies where you see that in the STRIDE registry, we saw greater than five years in preservation of regulation, two years or so of presentation of being able to get off the ground and really strong preservation of pulmonary function.

When you're a patient, what do you care about? Can you still ambulate? Can you still get off the ground? And what do DMD patients die of which is pulmonary and cardiac function. And if you're showing improvement in those, I mean, the drug is showing clinical benefit. So we think we have a strong case there.

[Operator]

And I am showing no further questions at this time. I'd now like to turn the conference back over to Stuart Peltz for any closing remarks.

[Stuart Peltz, Chief Executive Officer]

Great. Well, look, I want to thank you all for joining us today. I think what you could see from -- we've been having really a great year, have made significant progress this year and have been delivering on a number of the key milestones. And we're proud of the approval of Upstaza which I think is really groundbreaking science and a milestone not only for PTC but for the entire field of gene therapy and for the AADC community.

And I think that the positive results from Study 04 one demonstrating the benefits to nonsense mutation DMD patients really adds and demonstrate that Translarna's benefit to the patient and adds to the totality of evidence of Translarna.

And so the other important point is that and what we've talked about particularly in the question that you've asked, is that we have a number of registration-directed studies that are ongoing that we look forward to sharing those results with you in the near future. So we're excited and happy, as you can see, to continue on the mission of discovering and developing these innovative therapies for rare [indiscernible].

So thanks for joining today and we look forward to our next conversation with an update.

[Operator]

Thank you. This concludes today's conference call. Thank you for your participation and you may now disconnect. Everyone, have a wonderful day.