Ptc Therapeutics, Inc. Q1 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the PTC Therapeutics First Quarter 2020 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I'd now like to hand the conference over to your speaker today, Alex Kane, Head of Investor Relations of PTC Therapeutics. Thank you. Please go ahead, sir.

Good afternoon and thank you for joining us to discuss the PTC Therapeutics first quarter 2020 corporate updates and financial results. I hope that everyone is doing well and staying safe. Joining me on today's call is our Chief Executive Officer, Stuart Peltz; our Chief Financial Officer, Emily Hill; as well as Matt Klein and Eric Pauwels, who are recently appointed Chief Development Officer and Chief Business Officer, respectively. 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 contain our forward-looking statements. Our actual results could materially differ from these forward-looking statements, as any 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.

Thanks, Alex, and thank you for joining us today, as we provide an update on the first quarter. I hope that everybody is staying safe and healthy amid this challenging time. I’m incredibly proud of how the PTC team has responded to the COVID-19 crisis, recognizing the seriousness of COVID-19 and acting early. In late February, we understood the threat and set up a COVID-19 task force that included individuals from all areas of expertise of PTC, including physicians, public health experts, and epidemiologists that understood the implications of the viral pandemic. This team immediately implemented a plan to safeguard the health and safety of our employees and ensure that they have the necessary equipment to work effectively from home. This task force continues to meet and refine processes that allow us to remain productive and safe. We have a second task force that focuses on critical aspects of our business to ensure access to our therapies. This task force is continually assessing issues that could arise with our clinical programs, manufacturing, supply chain, research, as well as the commercial business. We have revised strategies to mitigate potential issues in our businesses and continuously assessing how well they are functioning. Patient services and engagement teams are now working together to ensure that patients have the necessary access to treatment. We have also created a third COVID-19 task force whose mission is to look at what is next and think through the strategies we should employ as the world begins to open from being locked down. Their job is to strategize multiple scenarios of what will be needed to be successful in different places around the globe. As a result of these efforts, our teams have adapted and have continued to execute. Field teams are engaging with the physicians, identifying patients, and driving awareness of our commercial products. Given the limited ability for personal interaction, they are doing so remotely using a number of digital approaches. Our scientists have also continued to work in the laboratory to drive critical research programs forward. We have put safeguards in place, including staggered shifts to allow reduced interaction so that they can work in a safe environment. As all companies in the industry have experienced, ongoing and planned clinical trials have been impacted as hospitals and health care providers focus on treating COVID-19 patients and have slowed or closed sites. The effects of COVID have also impacted regulatory filings in our gene therapy program. Matt will talk more about these programs. Overall, I'm proud of the organization's response to the COVID-19 crisis. We have a strong capital position with more than $595 million on our balance sheet as of the end of the first quarter. We are being both strategic and prudent about capital allocation. As an example, because of COVID's potential impact, we have deferred certain capital expenses at our Hopewell facility and now anticipate that GMP manufacturing of clinical material at this facility will begin in early 2021. I also want to highlight other aspects of PTC business that keep us well-positioned, both in the crisis and beyond. These include the strong team that we have in place, our global commercial infrastructure, and commercial products that can be delivered and administered to the patients at home. For the first time, SMA patients will have the potential opportunity for an at-home therapy. In addition, we have a diverse rare disorder pipeline with multiple upcoming catalysts. Let me now focus on the progress we made during the first quarter, starting with SMA. We recently disclosed the meaningful and positive results for risdiplam in both the SUNFISH pivotal study for type 2 and 3 SMA patients and the FIREFLASH pivotal study in type 1 SMA patients. We anticipate an approval with a broad label later this year. Earlier this week, along with our partners Roche and the SMA Foundation, we shared the positive 12-month results of the FIREFLASH Part 2 pivotal study. The FIREFISH Part 2 study results are quite exciting, and so the importance of increasing SMN protein systemically demonstrates the achievement of motor functions and developmental milestones, such as the ability to roll over, sit, and stand. The study met its primary endpoint of patients sitting without support at 12 months and was highly statistically significant. Twelve of 41 patients, or 29%, met the milestone with a P value of less than 0.0001. Considering the median age at enrollment was 5.3 months and that these infants already had progressed disease, these results are particularly exciting. The safety data were consistent with the known safety profile of risdiplam. Importantly, this study also met all its key secondary endpoints. This included the CHOP-INTEND, HINE-2, and event-free survival. Ninety percent of all infants in this study showed a CHOP-INTEND improvement from baseline, with a median change from baseline of 20 points. Part 2 showed even greater improvements in patients' ability to stand and walk as assessed by HINE-2 than were observed in Part 1 at 12 months. One patient in FIREFISH Part 2 reached the bouncing milestone, a key component of developing the ability to walk. After 12 months of treatment with risdiplam, 93% of infants were alive, 85% were without permanent ventilation, and 95% of patients maintained the ability to swallow. As Dr. Servais pointed out on the Roche call, this is particularly impressive when compared to other therapies, as well as the bulbar function benefits may reflect a small molecule's ability to reach the brain stem. In contrast, in the natural history of the SMA type 1, the median age of death or permanent ventilation is 13.5 months, and all infants with type 1 SMA older than 12 months require feeding support. Overall, it's clear that these results are highly compelling. As we communicated recently, the FDA extended the PDUFA date of risdiplam to August 24 due to the submission of additional data from SUNFISH Part 2. The inclusion of these data in the submission is anticipated to support broad access and reimbursement for risdiplam for the widest range of SMA patients. Importantly, the FDA has identified no substantive issues to date during the review. Roche's careful preparation has assured ample risdiplam drug supply. Roche is working proactively with its partners in the SMA community and its logistic providers to ensure drug supply upon launch in the current COVID-19 environment. As part of Roche's pre-launch commercial efforts, several early access programs have been initiated. Earlier this year, early access programs were opened to the United States and European countries for type 1 SMA patients. Recently, it was announced that the program has been expanded to include type 2 SMA patients. Importantly, in response to requests received from type 1 and type 2 patients whose current treatment has been interrupted due to the COVID-19 pandemic, Roche has decided to amend the program to allow these patients to receive risdiplam. These requests for risdiplam demonstrate that a significant unmet need exists within the SMA population. The need for an oral therapy that can be taken at home is shown to be even more critical for patients as they try to navigate through the COVID-19 pandemic. In fact, risdiplam would be the only available SMA therapy that does not require clinic visits for administration, an important concern for patients with respiratory complications. We expect that risdiplam will be the most competitive global product for a broad range of SMA patients and anticipate a robust launch following approval. Risdiplam was the first compound arising from our splicing platform. One advantage of this compound is that it's systemic, meaning that it is in the blood and can reach all affected tissue. The second advantage is the ability to measure risdiplam's pharmacodynamic effect on SMN2, mRNA, and SMN protein in blood or other easily accessible tissues. As you may recall, we successfully utilized this approach in risdiplam Phase 1 studies, where we demonstrated proof-of-concept of its activity in healthy volunteers. We plan to use the same approach in other splicing programs. The same approach will be used in PTC-518 in Huntington's disease; PTC-518 is a development candidate from a Huntington program, and IND toxicology studies are ongoing. Let me now turn to our commercial efforts in the first quarter. We had a strong year-over-year first-quarter growth in our DMD franchise, with revenues of $68 million. We are reporting $40.5 million in worldwide Translarna sales and $27.5 million in U.S Emflaza sales. In addition, we continue to see positive trends in the weeks following the first quarter. Nevertheless, we cannot predict the duration and severity of the COVID impact on our commercial business over the coming months. Therefore, until we have further understanding of the effects of COVID on revenues, we are withdrawing our 2020 financial guidance at this time. I also want to talk about Analyst Day. It's becoming increasingly clear that hosting an Analyst Day in mid-June in New York City would not be in the best interests of the health and safety of either our employees or guests. We will postpone the meeting and switch to hosting multiple webinars in which we do deep dives into our programs and platforms. We believe this will be a productive way to update you on all our programs and platforms. I'll now turn the call over to Matt and Eric and Emily. For Matt and Eric, we welcome them to the executive team and their first debut on the quarterly calls. Matt will now update you on the status of the clinical program. Eric will cover more on the commercial business update, and Emily will give a financial update. So let me now turn it over to Matt.

Thanks, Stu. I'm thrilled to join the executive management team at PTC, and I look forward to the continued progress at our clinical programs. It's an exciting time to step into this role with our multiple upcoming clinical catalysts, even in light of the current environment. In terms of timing updates for our clinical programs, I will start with Study 045, the U.S. Translarna dystrophin study. Due to COVID-19, the 045 study site is closed to elective procedures, which has delayed the study completion as a few patients still require final study muscle biopsy. Based on the site's current timelines, we now anticipate reporting top-line data in the third quarter. We expect that in combination with our existing clinical data, statistically significant results in 045 would be sufficient for accelerated approval in the U.S. As a reminder, this is a single site, 40-week study that enrolled 20 boys aged two to seven years with nonsense mutation. The primary endpoint is percentage dystrophin change from baseline as measured by electrochemiluminescence or ECL. In close collaboration with the FDA, we developed and validated an ECL liquid-based assay that is highly sensitive, highly linear, and particularly well suited to identify large proteins, such as dystrophin. Turning now to our splicing platform, Stu detailed the exciting results for risdiplam, our first small molecule from this platform. Our next splicing program in Huntington's disease remains on track with the initiation of clinical studies in healthy volunteers to start prior to the end of the year. These Phase 1 studies will include both single and multiple ascending dose regimens to inform safety and pharmacokinetic parameters. We expect these studies will be relatively straightforward and support those selection to achieve target Huntington RNA reduction levels in the range of 50%. Shifting to our bio e-platform due to COVID-19, we now expect to initiate potential PTC743 registrational trials in refractory mitochondrial epilepsy in the third quarter and in Friedreich ataxia in the fourth quarter. We will initiate these studies once the planned study sites reopen and are available for clinical trials, and, of course, once we can ensure patients can safely travel to and from study sites. The Phase 1 trial of PTC857, which is being developed for GBA Parkinson's disease as its first indication, remains on track to start in the third quarter. As we have discussed previously, the Bio-e platform is complementary and synergistic with our other platforms. PTC743 and PTC857 target 15-lipoxygenase, a key enzymatic hub that regulates the inflammation and oxidative stress that underpin mitochondrial and CNS disease pathology. PTC743 has been tested in over 400 patients, primarily in children with inherited mitochondrial disease, and has demonstrated promising efficacy as well as favorable safety signals, and expanded access and compassionate-use studies in patients with mitochondrial disease. PTC743 has had a clear impact on refractory seizures, reducing the number of patients' seizures as well as seizure-related morbidity, including hospitalizations. In addition, in a Phase 2 trial in Friedreich ataxia, the PTC743 demonstrated statistically significant impact on disease severity at 24 months, relative age and stage-matched natural history controls as assessed by the validated bar score. For PTC857, the compelling preclinical data and its target mechanism of action strongly support its development for Parkinson's disease. The target of 15-lipoxygenase is a very important upstream modulator of multiple pathways known to be key to Parkinson's disease pathogenesis, including alpha-synuclein oxidation and aggregation and microglial activation, a driving factor in neuroinflammation. Therefore, targeting 15-lipoxygenase allows us to simultaneously affect multiple pathways while many current therapies in development target only one of these pathways. Moving onto our gene therapy platform and associated updates, as you noted, COVID-19 has impacted our gene therapy program timelines. With respect to the Friedreich ataxia and Angelman Syndrome gene therapy programs, COVID-19 has impacted multiple IND labeling activities. We currently anticipate the IND filings will be delayed at least one quarter. Now we plan to provide an update in filing timing as we better understand the ultimate impact of COVID-19 on these programs. Moving to our AADC deficiency program, manufacturing activities are continuing and remain on track. The gating factor for the BLA submission remains the study of the use of the commercial canula in patients. These treatment procedures have been delayed by hospital cancellations of elective procedures due to COVID-19. Therefore, we now expect the BLA submission for AADC deficiency to the FDA to be in the second half of 2020. As a reminder, the MAA for the AADC deficiency program was submitted to the EMA in January, and timelines remain in place for the CHMP final opinion by the end of the year. Overall, despite COVID-19 related delays, we still expect a number of exciting and impactful clinical catalysts in the coming months. I'll now pass the call to Eric Pauwels to provide an update on the commercial business.

Thanks, Matt. I'm delighted to join the executive management team at PTC. With a strong first quarter behind us and important upcoming milestones this year, we will continue to build on our existing portfolio of revenue-generating products, prepare for future launches, and remain selective with business development opportunities. Currently, on the commercial side of the business, our top priority is ensuring that patients on treatments have the necessary drug supply, and we have not seen significant disruptions to date. With personal promotion from our sales team worldwide limited by COVID-19, we continue to engage with health care providers, patient advocacy groups, and payers by driving DMD disease awareness activities through virtual calls, DMD masterclass webinars, educational podcasts, and leveraging virtual platforms to host local advisory boards. Additionally, social media is playing an even more important role in the current environment, especially for DMD patients seeking information about our products. We had a solid first quarter with Translarna and Emflaza, both in terms of maintaining our existing patients and in new patient growth. New patient growth was driven in part by diagnostic and educational efforts over the last several months, and we continue to see these efforts positively impacting the business into the second quarter. For Translarna, we saw continued growth in Q1 and positive trends both in diagnosis and prescriptions globally. In the EMEA region, we have successfully maintained adherence in compliance for patients on Translarna and have seen minimal disruption. In the LatAm region, we continue to have ongoing discussions with the Ministry of Health in Brazil to secure future purchase orders, and we have seen the number of positive injunctions that will allow patient access to increase. Importantly, we continue to highlight comparisons of the impressive real-world results from the Stride Registry and Cinergy DMD Natural History Study, highlighting the long-term efficacy of Translarna. For Emflaza, our U.S. commercial and PTC Care's case management team has been fully engaged and made significant impacts in the first quarter of 2020, driving enhanced customer service and improving efficiencies with new patient starts, reauthorization, as well as patient adherence and compliance. We expect these ongoing improvements will continue through the next quarter. In the first quarter of this year, patients moved faster from the time of new prescription to commercial therapy, and patients previously on bridge therapy and patient assistance programs transitioned to commercial therapy more rapidly. In addition, physicians continue to see the differentiated benefits of Emflaza, confirmed by multiple publications, including the recent data from Cincinnati Children's Hospital Real World Outcomes, demonstrating comparative benefits such as the delaying loss of ambulation better compared to prednisone. Now, let's turn to TEGSEDI. Our launch activities are still progressing despite the current environment, with our focus now on pricing discussions in Brazil, which we expect to be completed in the second quarter. TEGSEDI is well differentiated as the first and only approved at-home therapy in Brazil with slowing disease progression and quality of life indicated in the label. In the first quarter, we saw continued growth in new patient identification and prescriptions in LatAm. As a reminder, Brazil has the largest prevalence of hATTR amyloidosis polyneuropathy patients worldwide. Building on our core capabilities in LatAm, we anticipate a Waylivra filing with ANVISA in the second half of this year and continue to identify new SGS patients for Waylivra therapy. Turning to AADC deficiency, prelaunch activities continue to progress. We have adapted to the current environment by implementing virtual education and patient finding initiatives, including conducting multiple masterclasses with over 200 health care providers in attendance from over 20 countries. We also rolled out a program called, 'The Road Less Traveled' for finding a path towards early patient diagnosis. We've also held multiple European Steering Committee meetings, and we recently launched social media campaigns utilizing expert videos, focusing on symptoms and directing viewers to disease state websites. Finally, patients continue to be identified as our teams push forward with virtual healthcare provider meetings to diagnose new patients in cerebral palsy and epilepsy clinics. Looking back at the quarter, the home-based administration of our commercial products allowed us to maintain our current base of patients and add new patients, even as the COVID-19 pandemic started to take hold. As a result, in the near-term, we anticipate continuity of supply to the existing base of patients, some continued growth with new patients for both Translarna and Emflaza, and continued operational improvements. I will now hand the call over to our Chief Financial Officer, Emily Hill to review our financial progress.

Thanks, Eric, and congratulations to Eric and Matt for their promotions. We are happy to have reported such a strong first quarter with our DMD franchise growing 28% year-over-year, and with the positive tailwinds from the first quarter continuing into April. We feel well prepared to handle the current environment, as we have highlighted this afternoon. But due to lingering uncertainty regarding the duration and the degree of the impact of COVID, we are withdrawing financial guidance for 2020. As you have heard reflected throughout today's call, we have given a great deal of thought to cost, timelines, and prioritization throughout the COVID-19 pandemic. We're fortunate to have a portfolio of home-administered commercial products, diverse assets across multiple platforms, and the ability to shift resources as needed. Strategically, we've identified trade-offs where we can push forward certain programs and be more conservative with capital-intensive programs, such as deferring some capital expenditures for our Hopewell biologics manufacturing facility for future commercial products. It doesn't impact our production of near-term commercial and clinical programs such as AADC deficiency and Friedreich ataxia gene therapy that allows us to conserve some cash as we move through this uncertain time. Now I want to take a few minutes to highlight the first quarter 2020 financial results. The press release issued earlier this afternoon summarizes the details of our first quarter 2020 financial results, and I will review these details now. Starting with our top-line results, we reported $68.3 million in total revenues in the first quarter of 2020 compared to total revenues of $53.6 million for the first quarter of 2019. Translarna net product revenues were $40.5 million for the quarter. This compares to $35.3 million for the first quarter of 2019. Growth was driven by an increase in net product sales in existing markets, as well as continued geographic expansion into new territories. For Emflaza, we’ve reported net product revenues of $27.5 million for the first quarter of 2020, compared to $17.8 million for the first quarter of 2019. Growth was driven by an increase in net product sales due in part to the operational improvements and efficiencies noted by Eric earlier. Non-GAAP R&D expenses were $81.9 million for the first quarter of 2020, excluding $8.2 million in non-cash stock-based compensation expense, compared to $47.9 million for the first quarter of 2019, excluding $4.7 million in non-cash stock-based compensation expense. The increase in R&D expense reflects costs associated with advancing the gene therapy and Bio-e platforms and increased investment in research programs, as well as advancement of the clinical pipeline. Non-GAAP SG&A expenses were $51.2 million for the first quarter of 2020, excluding $7 million in non-cash stock-based compensation expense, compared to $36 million for the first quarter of 2019, excluding $4.6 million in non-cash stock-based compensation expense, reflecting continued investments to support our commercial activities including our expanding commercial portfolio. Net loss was $112.7 million for the first quarter of 2020, compared to net loss of $72.1 million for the first quarter of 2019. Cash, cash equivalents, and marketable securities totaled $595.9 million at March 31, 2020 compared to $686.6 million at December 31, 2019. Before I wrap up, I wanted to share the details of a transaction we completed this week with the former shareholders of Agilis that removed liabilities from our balance sheet. As you are probably aware, as part of our acquisition of the gene therapy platform, we owed Agilis future cash milestones. We are pleased to have exchanged a subset of those cash milestones for cash and PTC stock. The future milestones include $40 million of time-based milestones that were owed in August 2020, and $185 million of cash milestones expected to be paid in 2021 upon the approval of the AADC Deficiency BLA and the receipt of a Priority Review Voucher. Almost 95% of former Agilis shareholders elected to exchange those 2021 milestones for approximately 2.8 million shares of PTC stock and an early receipt of the 2020 cash. This alleviates PTC of a significant cash liability, especially in 2021 while we advance our gene therapy platform. I will now hand the call over to the operator to start our question-and-answer session.

Our first question comes from the line of Brian Abraham from RBC Capital Markets. Your line is now open.

Hi. This is for Brian tonight. Congrats on all the progress you've made in managing the COVID situation. I wonder if you could share how much progress you've made on the additional study of the AADC gene therapy and the combination prior to the pandemic. Also, what types of data from that study do you need to move forward?

Yes, thanks for that question. We are making progress with the AADC clinical trial. Matt, could you explain what we have been doing and the next steps?

Yes. Thanks, Stu, and thank you for the question. As you mentioned, towards the end of 2019, we received feedback from the FDA on additional data around the use of the intended commercial cannula in young patients. As a reminder, the clinical efficacy in our AADC deficiency program is quite strong. We've demonstrated durable impact with five years of continued effect as well as evidence of continued benefit to 10 years, and we of course have a strong safety profile. Manufacturing also remains on track, and we were able to submit the MAA to the EMA in January. And so the key gating item for the BLA was the treatment of young children with the commercial cannula. We had identified two patients that we were prepared to treat before the end of the first quarter, and due to the hospital closure for elective surgeries, those procedures have been pushed back, likely to be done sometime towards the end of Q2, possibly early Q3. Once we have those surgeries and the data from that, we will be able to continue preparations for BLA submission.

So we faced some delays due to the pandemic, which has made it a bit challenging to progress.

Great. Thank you so much.

Our next question comes from the line of Alethia Young from Cantor. Your line is now open.

Hi there. This is Eileen for Alethia. Thanks for taking our questions. I guess the first one is on COVID-19. Just wondering, are you seeing any changes in buying patterns for Translarna? And then how do you manage to keep the access for patients? And then second, for the FIREFISH data, how do you think risdiplam matches up to SPINRAZA and Zolgensma in type 1 patients? And then for SUNFISH data, is there any plan to present subgroup analysis, particularly around age, from the data set? Thanks.

Thank you. Let's start with the first topic regarding Translarna. We had a strong first quarter reflected in the numbers. As both Eric and Emily mentioned, the trends continue to show positive results. The distribution process is ongoing, and we believe patients are receiving the treatment they need. Eric, could you share your insights on what we can expect in the next couple of quarters?

Yes, we're seeing continued growth in the number of patients using both Translarna and Emflaza for DMD, and we have not experienced any decline in orders. In fact, we've built even stronger relationships with healthcare providers, payers, and advocacy groups during the pandemic. Our primary focus right now is to ensure a consistent supply for our current patients on Emflaza and Translarna. While there have been some requests for 90-day supplies of Emflaza, most patients still prefer monthly supplies. It may increase slightly, but it's not significant. Importantly, we've successfully established our case management team in the U.S. and have built strong connections with many DMD patients to make sure they have the necessary resources. We also want to reassure everyone that we have an adequate supply of both Emflaza and Translarna.

Yes. The second question pertains to risdiplam and helps contextualize our expectations for its performance compared to other products on the market. We believe risdiplam is the leading molecule in terms of efficacy potential. Recent data from the FIREFISH study, particularly Parts 1 and 2, reveal compelling efficacy, even among older patients. We observed durable increases in SMN proteins and changes in RNA in both the central nervous system and peripheral areas, which is significant. We might be the only ones demonstrating this aspect. Moreover, it is important to recognize that SMA affects the entire body, not just the CNS. One of the key advantages of risdiplam is that it does not require an intrathecal injection or immunosuppression. This is a substantial benefit. So far, we have not encountered any drug-related safety issues, and we pride ourselves on having the broadest clinical trial program for SMA, involving patients aged 2 to 25, with placebo-controlled trials. We included a wide range of participants, from pre-symptomatic individuals to older adults, showcasing the program's efficacy in both the placebo-controlled SUNFISH trials and the risdiplam trial. When comparing this to gene therapy, we find limited data on durability beyond 3 years, compounded by potential confounding factors related to follow-on therapies. Safety concerns associated with gene therapy include liver injury warnings, the necessity of systemic corticosteroids, and immunosuppressants for over 2 months, along with various restrictions on approved populations. There’s also sparse data on patients over three years old. In comparison, treatments like nurinersen involve more complicated administration processes, especially for patients with scoliosis, along with risks of meningitis and hydrocephalus, and insufficient trial data in patients older than 9. Considering all these factors, risdiplam's performance across the entire patient population leads us to conclude that it is the leading molecule in its class.

Okay, great.

Then I think you had one other question, which is the SUNFISH?

Yes, the SUNFISH subgroup, yes.

Yes. That, you know, I'm sure we'll be having additional posters over time on the data as it accumulates.

Thank you. Our next question comes from the line of Tazeen Ahmad from Bank of America. Your line is now open.

Hi, good afternoon, guys. Thanks so much for taking my questions. Maybe one on AADC, and then I have a couple more on a couple of other programs. Stu, in the past, you had been starting to give us updates on a number of patients that you've been able to identify. Can you give us a refresh number on how many patients you have as of today? And also whether you're thinking still is that there around, let's say, 6,000 patients worldwide that you hope to find over the course of the next several years.

Yes, thank you for that. As we mentioned in January, we identified over 200 patients during the J.P. Morgan meeting. We are still searching, but we've faced some challenges due to COVID, and I'll let Eric elaborate on that. However, we remain confident in the numbers we believe are there. The current focus is on identifying patients, which has become more challenging in the COVID environment compared to before. We are continuing to put in significant effort on this. Eric, could you please provide some insight into how we're approaching this in the current circumstances?

Hello, Tazeen. It's evident that the COVID environment has directly affected our patient identification efforts, but we are actively adapting to these changes. As Stu mentioned, we have identified over 200 patients so far, and our aim is to reach 300 patients before the first country launch, whether in the U.S. or Europe. We've implemented various initiatives, especially in Q1. When progress began to slow, we enhanced our online presence significantly. We conducted a masterclass with around 200 healthcare provider physicians across 20 countries. We also launched a well-received program called 'The Road Less Traveled,' which has helped healthcare providers better understand how to identify AADC deficiency patients earlier and recognize various symptoms, particularly in clinics focused on cerebral palsy and epilepsy. Additionally, we've held several European AADC Steering Committee meetings, which were unexpectedly well-received, with key opinion leaders participating in virtual educational sessions to aid in patient identification. Despite the challenges presented by COVID-19, which has meant fewer patients are visiting physicians and getting tested, we are still engaged in numerous virtual activities to maintain educational outreach.

Okay, thanks for that. And then maybe, Stu, a question on Translarna. For the study that you're doing to measure dystrophin, can you give us an idea of what percent of patients have not yet received that biopsy? And does it make any meaningful difference if, let's say, a patient was scheduled to get a biopsy in March or April, but they don't end up getting it until May or June?

Yes, that's a good question. We are currently waiting for the last biopsy results from around 40% of the patients. They were all scheduled to come in, but that process has been interrupted. We don't anticipate any significant issues with obtaining the biopsies or the treatment timelines. Once the sites are operational again, we expect to complete this without major difficulties.

Okay. And is there something that you've discussed with FDA, this delay?

I think in general, they are aware that sites are experiencing issues. While I’m not certain if we’ve spoken to them directly, they have already acknowledged that some sites are closed, particularly in urban areas. In this specific case, you may remember from the Sarepta experience that they had timelines of nine months and eighteen months. Therefore, we do not view this as a significant problem.

Okay, thank you.

Thank you. Our next question comes from Joel Beatty from Citi. Your line is now open.

Hi. Thanks for the question. So, risdiplam launches, should we anticipate that payers will only cover it as a monotherapy, or could there also be situations that payers could be open to paying for it as combo therapy, like Zolgensma or SPINRAZA?

So maybe a couple of points to consider. Starting with Translarna, we don't quite understand why this happened with risdiplam and SPINRAZA since both promote alternative splicing into the SMA transcript. We've demonstrated that it's possible to produce the necessary RNA for making the protein. Risdiplam effectively generates the right RNA and thus proteins. Regarding Zolgensma, we anticipate competition for type 1 patients. It's likely that as patients seek additional treatments, some may shift from Zolgensma to risdiplam, especially since we have trial data showing Zolgensma patients are now participating in an open-label trial receiving risdiplam. We expect there will be patients interested in risdiplam, particularly given the uncertainty surrounding the durability and variability of outcomes from their existing treatment.

Makes sense. And then I have one more question on risdiplam. Are there certain regions that you anticipate have a little bit more favorable dynamics for more rapid launch than other regions? And what type of factors would help the region have a rapid launch of risdiplam?

I believe that Roche will definitely want to move quickly in the U.S. and eventually globally as they lead the commercialization efforts. The U.S. will be their primary focus. Additionally, regarding the previous question, it's worth noting that SPINRAZA was covered after Zolgensma, suggesting that risdiplam may be used in situations where it's deemed appropriate.

Great. Thank you.

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

Hi there. Thank you for taking my questions. Just the first one on the GMP manufacturing in early 2021. Can you just articulate how this maybe slight delay would impact any sort of initiation of gene therapy studies as those are tied together? And then my second question is, it looks like there is a study on clinicaltrials.gov for Translarna in DMD patients aged 6 months to 2 years. Just wondering what you're hoping to show here and is this related to a potential U.S. submission or the ex-U.S. label? Thank you.

The GMP manufacturing at the Hopewell site is set to proceed without any anticipated delays due to COVID, as we have already begun producing toxicology-level material at the Bridgewater site. We believe that moving forward will not hinder our progress, and we are confident that opening the plant in 2021 will not result in any significant setbacks. This process has involved considerable financial investment, but we decided to proceed since we have already established the necessary facilities at Bridgewater. We have also completed the necessary work to obtain approval in Europe for expanding the label, allowing patients with mutations to receive treatment earlier, which has been reported.

Great. And then, if I could just do one more on AADC. I see you're having some data presentation at ASGCT, outline changes of the body scale and aims and kind of functional endpoint. In terms of the regulatory review and maybe what physicians are interested in, how are they each going to look at these different efficacy endpoints? Is the one that's most important, or will they look at them kind of holistically?

Sure. So, Matt, do you want to take that?

Thank you for the question, Joseph. When we consider the AADC data package, one important aspect is that we've shown a significant increase in dopamine production in all patients as observed through PET scans. This indicates that we are addressing the critical underlying biochemical defect, providing compelling evidence that we are targeting the fundamental pathology of the disease. Additionally, when we examine the entire data package, including the primary endpoint of head control, we see benefits in every patient treated. Our long-term data, as highlighted in some of the abstracts, shows that the effects are durable, lasting beyond 5 years and even close to 10 years in some cases. This is very strong and persuasive data. We believe that physicians will recognize the comprehensive nature of our findings: firstly, we are addressing the fundamental biochemical defect in all patients, and secondly, we are observing correction in the key motor function defects associated with the disease, with these beneficial effects being sustained.

Great. Thank you so much.

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

Congratulations on all your progress and thank you for answering the questions. I have a couple of inquiries. First, I’d like to revisit the impact of COVID-19. Could you provide more details on the effects you’ve observed or any slowdown linked to COVID? It seems that the franchises have shown resilience, but I assume any slowdown mainly occurred in April. The decision to withdraw guidance was likely due to potential COVID-related effects. I would like to understand if you are actually experiencing any decline in demand for return to market products over the past couple of months, particularly from the end of Q1 or so far in April. Or was the guidance pulled just as a precaution in case conditions worsened? I'll pause there.

That's a good question because the decision to withdraw guidance was primarily due to the uncertainty of future developments. In the long term, it's hard to predict what will happen. However, in the short term, we feel optimistic about the first quarter and are managing both existing patients and new prescriptions without any noticeable slowdown. Perhaps, Eric, you could elaborate a bit more on this?

Yes, sure, Vincent, thanks for the question. In terms of the top line, we've seen very encouraging trends in Europe with Emflaza. We haven't had any requests for increased product; most patients are being shipped their supply on a month-to-month basis. We continue to see positive trends in Q2, with both the existing patient base and new patient growth still present, although there has been a slight decrease in new patient diagnoses and prescriptions as patients are seeing physicians less often. However, we've managed to protect our existing base, which is promising. Additionally, we have ensured that there is an adequate supply available. While there have been some requests for extended supplies of Emflaza, this represents a small percentage of the total. Our main concern is the uncertainty going forward. As mentioned, if the pandemic continues, there could be shifts in unemployment and payer mix, or potential disruptions to our Translarna shipments in various markets. We serve patients in nearly 50 countries through both partnerships and direct business, and we are being cautious in light of possible disruptions due to the pandemic. Currently, there are no indications from our strong results in the first quarter, or from what we're observing now, that we're losing patients or that growth will decline. I'll pass it back to Stu.

Right. And maybe one quick follow-up on that point. If you consider the price for Emflaza in the U.S., how does the price differ between patients on commercial insurance and those on government insurance? To put it another way, if there were a significant change in the payer mix, how would that affect the average net price paid?

The simple answer is that it mainly relates to the statutory rebate from CMS, which is currently higher. Our payer mix is approximately 60-40, with most payments coming from commercial insurance. If this mix were to change, our gross to net figure would also change due to more patients transitioning to Medicaid. However, we haven't observed that yet. It seems that families affected by DMD generally have good insurance coverage. Additionally, if patients switch from private to Medicaid programs, many states have disability programs for children that can facilitate quick transitions. Thus, the primary impact would be the statutory rebates payable to CMS if the payer mix changes.

I see. Let me ask another question about Translarna and the ongoing study. Could you provide some insight into how the powering calculations were conducted regarding the number of patients in the ongoing U.S. dystrophin study? What data did you use to estimate the likely effect size? For example, did you collect data from other patients treated with Translarna to determine the increase in dystrophin, whether from your studies or from clinical experience in regions where Translarna is used?

Yes, thanks for that. That's a good question. We reviewed other studies as well and based our assumptions on data from Sarepta and the assays we obtained. Matt, do you want to add anything to that?

We believe that with the 20 subjects in the trial, we would have 90% power, which we consider sufficient to demonstrate the Translarna effect. Additionally, we anticipate that the baseline will have very low levels of dystrophin expression.

When you mention 90% power, may I ask what the effect size and variability were?

Correct. As Stuart said, based we'd be looking at other trial data and running simulations.

Okay. Thanks for taking all the questions.

Thank you. Our next question comes from the line of Gena Wang from Barclays. Your line is now open.

Hi, this is Peter for Gena Wang. Thank you for taking my questions. My first question is about risdiplam. Do you expect it to generate significant revenue this year, or do you foresee some impact on patient initiation due to COVID? Additionally, could you remind us when the EAP was opened and how many patients have been enrolled both in the U.S. and internationally? Also, has the enrollment rate for the EAP changed before and after COVID? Thank you.

Sure. In terms of the overall impact of COVID on revenues, I believe people will focus on ensuring that patients have access to the drug supply, which could be beneficial for the commercial launch. As for revenues related to royalties, Emily, could you provide more insight on that?

Sure. I mean, we have the potential for up to $42 million in milestone this year on our collaboration with Roche on the risdiplam programs. Obviously, we have tiered royalties up to the mid-teens. With the MAA having them submitted earlier this year and PDUFA in the U.S. now in August 24, I'd expect this to ramp up more significantly next year. I think as far as COVID impacts the rate and ramp of those revenues, there's really some advantages and potentially being the only SMA therapy that can be delivered at home.

Regarding patient numbers, Roche hasn't provided specific details. However, they previously mentioned significant interest, and they are actively enrolling patients who are already part of the Expanded Access Program, both in the U.S. and in Europe. This indicates that the EAP program will be implemented globally, with a strong presence in the U.S. and in European countries that permit such programs.

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

Thank you for your questions. Regarding risdiplam, when do you plan to present more data from the JEWELFISH and RAINBOWFISH studies? Additionally, do you have any insights on the number of patients Roche is enrolling in the expansion of the Early Access Program, or any specifics about the types of situations that are leading to this expansion? For example, are patients who are off spin applying, or are there more stringent criteria? I also have a question about Translarna.

Sure. Yes, so that’s an important point too, is that they’re now planning presentations for that, probably be an update on the SMA. And then, yes, they have changed the EAP program to allow patients who are in other therapies to get into the EAP program as well. And they’ve also added type 2 as well to the program. So, yes, so patients who can't get, say, intrathecal injections or naive patients that they certainly can. It's really based on the physician's discretion based on what they think the need is. So COVID is obviously making limited access. So this is really a nice way for which they can get it at home and take it. So that's also adding to the number of patients who are hopefully transitioning to risdiplam. Very strong interest in this though.

Yes. Do you have any idea of how many in the U.S. versus EU are getting on the early access program, just kind of a general percentage-wise?

No. Yes, that hasn't been disclosed yet.

Okay. And then one on Translarna. I know obviously, you pulled guidance and you've commented on it enough on this call. But just wondering, usually, you have a Q2, Q4 bolus from Latin American orders, is the general pattern of revenue recognition going to be similar?

Yes. I think Eric could comment on that.

Yes, sure. Regarding Latin America and Translarna, we received approval from ANVISA last year and have been building a solid patient base. We saw new patients in the first quarter, including new diagnoses and prescriptions. The number of patients receiving positive injunctions for therapy is also increasing, indicating growth in all areas. We are currently negotiating with the Minister of Health and ANVISA to secure group purchase orders, aiming for a new purchase order in the second quarter. Due to COVID-19, we've moved many of our communications with the Minister of Health to virtual meetings, but we maintain a strong relationship with payers in Brazil. Our goal is to secure an order for Q2, as long as there are no significant disruptions from the pandemic or resource reallocations by the government. It's important to note that the funding for rare diseases at the Minister of Health is relatively small compared to the overall healthcare budget. We believe we can navigate these challenges and secure an order in Q2 to ensure patient continuity. We are very encouraged by the continued growth, which should pressure the Minister of Health to secure those orders.

At this time, I'm showing no further questions. I would like to turn the call back over to Stu for closing remarks.

Okay. Well, look, I want to thank all of you for joining the call today. I want to remind you that at the end of March was our 22nd anniversary at PTC. And so I look back upon now our long history, I'm very proud of how the company has evolved. It's gratifying to see the progress that we've all made and continue to make in discovering, developing, and commercializing treatments for patients living with rare disorders. I think really it's a consequence of the hard work and dedication of the team. We're well positioned to be able to push forward and even thrive, even under this uncertain environment. So again, thank you for joining the call. I look forward to seeing you all soon.

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