Good day. And thank you for standing by. Welcome to the PTC Therapeutics Third Quarter 2021 Corporate Update and Financial Results 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 would now like to hand the conference over to your speaker today, Kylie O'Keefe, Head of Investor Relations. Please go ahead.

Good afternoon. And thank you for joining us today to discuss the PTC Therapeutics third quarter 2021 corporate update and financial results. Joining me on today's call is our Chief Executive Officer, Stuart Peltz; our Chief Development Officer, Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Emily Hill. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Please take a moment to review this 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 operations. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report on Form 10-Q and our annual report on Form 10-K filed with the Securities and Exchange Commission, as well as the company's other SEC filings. We would 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. Stuart?

Thanks, Kylie. And thank you all for dialing in. I'm excited to tell you about our progress this quarter. As we have continued to demonstrate remarkable commercial revenue and have been making good progress across a robust pipeline. At PTC, we are committed to creating both short and long-term value for all our stakeholders. To accomplish this, we have built a company that discovers, develops, and commercializes therapies to treat patients with high unmet medical needs. We are building a sustainable pipeline, and its steady state will develop new therapies that reach commercialization on a continuous basis. This will allow us to substantially grow our revenue base so that it will continue to increase in the years to come. The results of all these efforts are bearing fruit. We seek continuous and impressive commercial revenue growth of our products, and we now have five ongoing registration-directed studies with an increasing number of preclinical and clinical studies in progress. We are building a sustainable enduring biopharmaceutical company. Turning to this quarter’s DMD franchise commercial revenue, we continue to deliver impressive year-over-year growth. The franchise has grown by 39% compared to the third quarter of 2020, with $114 million in total revenue. This was primarily driven by new patient starts for both Emflaza and Translarna and geographic expansion for Translarna. I'm pleased to announce that we are raising our 2021 revenue guidance for the DMD franchise to $400 million to $420 million from the $370 million to $390 million. Eric and Emily will go into more detail shortly. Now I'd like to highlight the significant milestones achieved in Brazil with both Tegsedi and Waylivra this quarter. In August, we were pleased to announce the approval of Waylivra in Brazil. This is the first approved treatment for familial chylomicronemia syndrome or FCS. And we're excited to be able to bring this therapy to patients in need. This was not the only milestone for Brazil this quarter. I'm also happy to report that Tegsedi, which is for the treatment of HATTR amyloidosis, received Category 1 pricing. Category 1 pricing is given to innovative treatments that show benefit over current standards of care. Due to the Portuguese descent, there was a higher prevalence of HATTR patients in the Brazilian population. Eric will go into more detail on the remarkable progress of the commercial team later in this call. Now let me turn to Evrysdi, which is the first commercial product from our innovative splicing platform. Evrysdi continues to show strong revenue in this quarter with approximately 20% total market share in just over a year after launch. Evrysdi is the most prescribed SMA treatment in the United States, and Roche expects further growth in 2021 with approval in 63 countries and its continued focus on the pricing and reimbursement efforts outside of the U.S. The success of our commercial portfolio demonstrates our ability to utilize our commercial agents to grow revenues to further invest in the pipeline, which I'll now discuss in more detail. In particular, I'd like to start with our near-term value drivers. I'm excited to announce that we have initiated the registration-directed trial called APHENITY or PTC923 in PKU. We view this as a significant opportunity as there is a well-defined patient population through newborn screening, known centers of excellence, and a clear pathway to approval with blood-based biomarkers as an endpoint, as well as having an enriched population through a run-in responder analysis that increases our chance of success. Let me talk about our next two registration-directed trials from our bio-e platform. The bio-e platform targets excess electrons and the oxidative stress that contributes to multiple disease states. The first compound from this platform, vatiquinone, inhibits 15-Lipoxygenase, a key regulator that controls the oxidative stress response. The first of the registration-directed trials with vatiquinone is the MIT-E study in patients with mitochondrial disease associated with seizures. We expect results in the third quarter of 2022 and, if positive, would be the basis of our NDA. Our second registration-directed vatiquinone trial, MOVE-FA, is in patients with Friedreich ataxia, a mitochondrial disease that affects neuromuscular function. We're grateful for the collaboration and support from the FA community in helping us to drive enrollment. We anticipate results in 2023. We're also moving ahead with the next-generation compounds from the bio-e platform, PTC857. We have selected ALS as the first indication and are aiming to initiate the Phase 2 trial for PTC857 in the first quarter of next year. I’ll now discuss our innovative splicing platform with a focus on PTC518 for the treatment of Huntington's disease. We recently reported results from the PTC518 healthy volunteer trial. We were able to show dose-dependent lowering of both HTT mRNA and protein, and achieve the targeted 30% to 50% reduction. We also demonstrated that the PTC518 passes the blood-brain barrier and has minimal influx. These are key attributes to treat Huntington's disease. We remain very excited about this program and are moving as rapidly as possible into Phase 2. Moving into the Phase 2 trial, we will replicate safety, tolerability, and pharmacology of PTC518, as well as decreases in Huntington mRNA and protein levels in Huntington’s disease patients. Now we’ll go into more detail on our Phase 2 program shortly. Now, moving on to AADC. In Europe, we still expect the CHMP opinion by the end of this year, and look forward to bringing this transformational therapy to AADC deficiency patients. I’m also pleased that we recently held the ribbon-cutting ceremony for our gene therapy manufacturing center of excellence in Hopewell, New Jersey. Our new state-of-the-art facility is equipped and staffed to produce high-quality plasmid and AAV vectors for gene therapy applications. I’m very proud of the progress we’ve made over the past quarter with exciting commercial achievements and steady-state progress across our pipeline. This speaks to the dedication of our people who have worked incredibly hard in the face of the ongoing challenges of the pandemic. The past 18 months have required perseverance, and I’m proud to say that we’ve continued to execute across all fronts. We have all the ingredients, research, development, and commercialization in place that positions us to be a growing revenue-generating enduring biopharmaceutical company. I’ll now turn the call over to Matt for an update on the development program. Matt?

Thanks, Stu. I’m happy to provide an update on the continued progress of our pipeline programs. I will begin with our PTC923 PKU program. As planned, we initiated enrollment in the APHENITY trial, our global Phase 3 registration-directed trial of PTC923 in pediatric and adult PKU patients. This double-blind placebo-controlled trial will include a run-in phase to identify responders to PTC923, who will then be randomized to receive either PTC923 or placebo for six weeks. As a previous approved therapy for PKU, the primary endpoint of the APHENITY trial is the reduction of phenylalanine. Following completion of the placebo-controlled trial, subjects will then be enrolled in a long-term open-label extension study. We expect to have results from the placebo-controlled trial by the end of 2022. Turning now to our PTC518 Huntington’s disease program. Following the announcement of the successful Phase 1 study results in healthy volunteers, we are moving forward with our Phase 2 study in Huntington’s disease patients. This study, pivot HD, will include a 12-week double-blind placebo-controlled phase followed by a one-year open-label extension phase. This study will enroll approximately 100 to 150 subjects who will be randomized to receive placebo for one of two dose levels of PTC518. The primary objective of the placebo-controlled phase is to demonstrate safety, pharmacology, and evidence of HTT mRNA and protein lowering in HD patients. In addition, we will collect CSF, plasma, and CNS radiographic biomarker data in both the placebo-controlled and long-term extensions phases of the study that could provide evidence of a meaningful PTC518 treatment effect. As we discussed in our program update last month, the inclusion criteria for the pivot HD trial were carefully constructed to ensure enrollment of the study population in whom we can demonstrate treatment effect over the course of the study. The criteria for this Goldilocks population was developed based on extensive analysis of the HD clinical and biomarker natural history databases. We look forward to initiating the Phase 2 study by the end of this year. Next, I’ll provide updates on our bio-e platform. As Stu mentioned, we are continuing enrollment in the two registration-directed trials, vatiquinone in mitochondrial disease-associated seizures, the MIT-E trial, and in Friedreich ataxia, the MOVE-FA trial. I am proud of the progress our teams have made in activating our global study sites to allow for enrollment in these trials during the pandemic. We expect results from the MIT-E trial in Q3 2022 and from the MOVE-FA trial in 2023. As we reported last quarter, we completed the Phase 1 healthy volunteer trial of PTC857 and are now moving forward with a Phase 2 trial in patients with ALS. As a reminder, PTC857 inhibits the enzyme 15-lipoxygenase, a key regulator of the inflammation and oxidative stress pathway known as ferroptosis. Ferroptosis is a recently described cell death pathway that has been demonstrated to be key to neurodegenerative disease pathology, including ALS and Parkinson’s disease. In a series of preclinical studies, we have demonstrated that PTC857 is a potent protector of neuronal cell death and neuropathology in a number of in-vitro and in-vivo neurodegenerative disease test systems. We plan to initiate the Phase 2 study in the first quarter of 2022 and we’ll provide additional details on the study design once it is finalized. We are excited about the progress we have been making in our ongoing registration-directed trials and look forward to initiating the Phase 2 trials for PTC518 and PTC857 in the near future. I’ll now turn the call over to Eric for an update on our commercial business. Eric?

Thanks, Matt. Our PTC customer-facing team has delivered another outstanding quarter in our global DMD franchise. We have built a strong foundation for our potential launch of the PTC AADC gene therapy, which will follow the anticipated EMA approval and will continue to drive our geographic expansion across the globe to strengthen our commercial engine. Our strong revenue growth continues in our DMD franchise with a 39% increase year-over-year. This brings our year-to-date sales for the DMD franchise to $306 million. Our 2021 revenue guidance was originally at $355 million to $375 million at the beginning of 2021, which in Q2 was raised to $370 million to $390 million. Based on the continued strong year-to-date performance, we are pleased to announce that we are raising our 2021 revenue guidance for the DMD franchise to $400 million to $420 million, a substantial increase over the original guidance. New patient starts, continued high compliance, and a focus on operational excellence has fueled sustained growth of Emflaza. This quarter, we achieved $47 million in revenue, which is a 22% increase over the third quarter of 2020. Turning to Translarna, we achieved $67 million in revenue this quarter, a 55% growth over the third quarter of 2020. As a reminder, especially in rare diseases, significant international markets like Brazil can produce large orders and create lumpiness due to the uneven government-driven orders that vary over the course of the year. This drives large quarter-over-quarter growth in comparison to others. In this quarter, the successful launch in Russia was a key driver of our growth, as we received centralized reimbursement in Russia and obtained a significant order for a large group of nonsense mutation DMD patients. Additionally, we are seeing continued growth in main European markets and driving geographical expansion in Central and Eastern Europe, Latin America, the Middle East, and Asia Pacific, which remain important to our future growth. We are also excited to recently share the real-world results from the STRIDE patient registry, demonstrating that treatment with Translarna delays the loss of ambulation by more than five years in boys with nonsense mutation Duchenne muscular dystrophy compared to standards of care alone. This further adds to the totality of evidence for the benefit of Translarna. We are making continued progress for access to Translarna with reimbursement agreements now established for patients in Finland and the Netherlands and broader coverage for two to five-year-olds for patients in Italy. Despite significant COVID-19 challenges in Brazil, we are pleased with the additions of approval of expansion of the Translarna label to include patients in the two to five-year-old range. Across Latin America, we continue to see increases in newly diagnosed DMD patients and expect to fulfill an order for Translarna in Brazil in the fourth quarter of this year to treat both new and existing DMD patients in the country. Now turning to Tegsedi and Waylivra, we are excited to announce that we have successfully received Category 1 innovation classification from CMED, the Drug Market Regulation Chamber in Brazil. CMED price categorization is the first critical step in getting pricing and reimbursement in Brazil. Category 1 classification is given to innovative treatments that provide greater efficacy than current standards of care and allows for pricing in line with international markets. Tegsedi categorization as an innovative treatment is a key milestone toward optimizing the value in Latin America. We will continue to provide name, patient access, and now commence reimbursement negotiations with CONITEC, Brazil's Health Technology Assessment Body for inclusion affects study in the Brazilian public health system or SUS. As a reminder, there are an estimated 5,000 patients with HATTR amyloidosis in Brazil. Tegsedi is the first antisense medicine available for patients in Brazil to address the underlying cause of the disease. We were thrilled to announce that Waylivra was approved by ANVISA in Brazil as of August 2021. Following the approval, we have commenced discussions with CMED, the Brazilian pricing authorities. Waylivra is the first treatment for FCS in Brazil. FCS is a rare metabolic genetic disease, which results in a significant disease burden to patients, including potentially fatal pancreatitis and other chronic complications. We have been engaging in patient finding in Latin America with ongoing success, and now have patients on treatment in LATAM through early access programs. I will now touch on the preparations for PTC’s first gene therapy launch for PTC-AADC. We have built the foundation to support a strong launch, which we anticipate to incur in Europe shortly after final approval. PTC continues to accelerate patient screening activities in enriched high-risk populations. Significant progress has also been made with the identification and preparation of expert pediatric neurological centers of excellence throughout the United States and the EU to ensure treatment center readiness at the time of launch. And we remain focused on identified patients globally where gene therapy access is available. We are proud to have commemorated October 23 as AADC Deficiency Awareness Day together with the AADC family network and look forward to bringing this much-needed treatment to patients very soon. The third quarter has been yet another strong quarter with sustained growth in the DMD franchise. I am looking forward to a strong Q4 as our global customer-facing teams continue to execute flawlessly against their strategic initiatives. I will now turn the call over to Emily for a financial update. Emily?

Thanks, Eric. We have continued to see substantial revenue growth from our commercial portfolio this quarter. And we remain in a strong position to continue to support strategic advancement across our diverse pipeline. We look forward to continuing to deliver on important milestones across all of our programs. The press release issued earlier this afternoon summarizes the details of our third quarter 2021 financial results. I will take a few minutes now to review these financial results. Please refer to the press release for further details. Beginning with top-line results, total revenues were $138.7 million for the third quarter of 2021, a 17% increase over the third quarter of 2020. This revenue includes $115.6 million in net product sales and $23.1 million in royalty and collaboration revenue. The strong growth of the DMD franchise continues this quarter with Translarna net product sales of $67.2 million, compared to $43.4 million in the third quarter of 2020. Continued geographic expansion, particularly in Russia, has been driving this growth. Year-over-year, Emflaza revenue is also up this quarter, with net products revenue of $47.1 million over $38.5 million in the third quarter of 2020. This has primarily been driven by better compliance and new prescription starts. Due to this strong performance, we have raised revenue guidance for the DMD franchise to $400 million to $420 million from $370 million to $390 million. Turning now to Evrysdi, where our partner Roche has reported year-to-date revenue of 396 million Swiss franc, resulting in $33.3 million in year-to-date royalties to PTC. Royalties to PTC for the third quarter were $13.1 million in royalty revenue. As a reminder, PTC also retained sales-based cash milestones, and the $10 million milestone payment for the first commercial sale in Japan was received by PTC this quarter. In addition to this, PTC has an additional $325 million in sales-based milestones remaining, with the $25 million payment expected when this threshold of $500 million in revenue is reached. Non-GAAP R&D expenses were $117.8 million for the third quarter of 2021, excluding $13 million in non-cash stock-based compensation expense, compared to $83.8 million for the third quarter of 2020, excluding $9.2 million in non-cash stock-based compensation expense. Non-GAAP SG&A expenses were $56.4 million for the third quarter of 2021, excluding $12.8 million in non-cash stock-based compensation expense, compared to $50.3 million for the third quarter of 2020, excluding $7.6 million in non-cash stock-based compensation expense. We have lowered and narrowed the range of our non-GAAP R&D and SG&A expenses for the full year 2021 to $715 million to $735 million from $725 million to $755 million. Cash, cash equivalents, and marketable securities totaled $867.9 million as of September 30, 2021, compared to $1.1 billion as of December 31, 2020. I will now turn the call over to the operator for Q&A. Operator?

Thank you. Our first question comes from Eric Joseph with JPMorgan. Your line is open.

Hi, good afternoon. This is Hannah on for Eric. Thanks for taking the questions. Just a few from us. So first with respect to your oral splicing platform, just wondering if there are any other trinucleotide repeat disorders that you might be looking to expand into over the near term, such as myotonic dystrophy or Friedreich's ataxia? And then next with regard to PTC299, the 519, COVID-19 study, just wondering if you're able to talk about powering assumptions for your primary endpoint of time through a spiritual improvement, and just maybe what some of the entry criteria are as it relates to prior vaccine exposure or COVID-19 seropositivity? Thank you.

Sure. Okay. I'll start with the oral splicing. I think that the splicing one and the platform and as what we have been talking about in terms of the splicing, the – it's really quite interesting that we've been able to build the informatics program that allows us to identify which sort of U1 sites that we can monitor. We've been particularly interested in the nucleotide repeats as well. So I'll speak more generally and just say we built a platform that's capable of looking at those, and we have a high interest in multiple other repeats like myotonic dystrophy that you said, as well as others. And we think that we can use the platform in interesting ways to be able to tackle other ones. We've talked previously about what we've disclosed. So we have a bunch of other and then we probably have five or six more programs that we haven't disclosed yet. But we've always been interested in the ability to be able to produce the expression of these using our technology so that we can. So I think that's being used quite well in the case of 299 and 519, I'll pass that over to either Matt or Kylie on that one.

I mean, question on the 519 trial. So as you mentioned, our primary endpoint in that trial is time to sustain respiratory improvement, which is defined as an oxygen saturation of 94% on room air, which is sustained until discharge from the hospital or the end of the study, which is day 28. Basically, the powering assumptions here were based on the estimation of median time to respiratory improvement in the placebo group, which means taking people to baseline existing data, which was roughly 11 days. And then we had a hypothesized treatment effect and then basically looked at a hazard ratio of about 1.3 to two sides of type one error, which brought us to our sample size of 380 subjects, which we believe gives us a more than 80% power to detect that difference. In terms of your question regarding the vaccination, we don't have any criteria that include or exclude that previous vaccination or that's when that relates to seropositivity.

That'd be great. Thanks for taking the question.

Thank you. Our next question comes from Danielle Brill with Raymond James. Your line is open.

Hi guys. Good afternoon. Thanks so much for the questions, I guess, first on the doses for Phase 2, the 518 study. I am presuming 30 mg would be one of the two doses you're thinking of using. Are you contemplating going higher or lower for the second dose? And then do you think it's reasonable to assume we may have data. It’s probably data next year. Thanks.

Yes. Maybe I'll start out, I'll pass it on to Matt. You might remember that we did the Phase 1 study where we did a 15 mg and 30 mg and we saw in the 30 mg up to 65% of the RNA that was reduced and we would anticipate that at steady states, the protein levels would go down and help the number. I think what we would be initially targeting is what we've said is the 30% to 50% of that to be able to get to that. And the way we're thinking about this as well as probably also thinking about taking advantage of some of the effect that we see at a bit higher levels in the CSF. So that gives us an opportunity to actually look at a range of doses. Matt, maybe I'll pass on to you to give the thinking on that.

Yes, absolutely. So the 30 mg dose was the dose that we use for the protein cohort, as Stuart said, which really got us to the 65% mRNA and protein reduction and as Stuart said, all long we’ve been using the inputs from Phase 1, which was the blood mRNA and protein reduction, as well as plasma exposure and CSF exposure to come up with a range of dose levels that would put us in the 30% to 50% range, which we believe will be somewhere target doses, somewhere between five and 20. We generally don't give out all the details of the design until the protocol is up and running and we're ready to start. So we'll have more specific information on that as we get closer, but needless to say, we'll be leveraging the translatability of the molecule. And as we learned from that first placebo-controlled phase about the relationship between dose, PK, PD in terms of Huntington mRNA protein reduction in patients, we'll have the opportunity to titrate that dose. If in fact, there's any differences between what we observed in Phase 1 and what we observed in HD patients. In terms of the design and data, the 12-week placebo-controlled phase, we said that we are looking to plan to start that study with the end of the year. Those subjects will then roll over into a long-term extension where we'll be focusing on measurable changes in important biomarkers of disease, including the reduction in Huntington mRNA and protein in blood as well as in the CSF and looking at other important biomarkers of disease, including NFL, as well as volumetric changes on MRI. In terms targeting data, I think we'll have more detailed information on time to results once we get the trial started. So we can give you more information on that in the future.

So, sorry, just to clarify, Matt. Would you intend to provide data after the placebo-controlled portion or would you wait until the one-year crossover is complete?

Danielle, I expect we'll share the data after the placebo-controlled phase because that first part of this study is very important in terms of establishing the PK, PD relationship in Huntington disease patients and will be very important in informing the dose level for the efficacy trial, whether that's time is a Phase 3 or we're able to take advantage of the accelerated approval pathway as post-marketing. So we do believe that dataset is very important, and we would share that.

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

Hi, good afternoon. Thanks for taking my questions. A question for you, Stuart, how are you thinking about the Translarna franchise in Europe, specifically given that it's a relatively mature product now. Where do you see most of the new uptake coming from these days? And then I have a couple of follow-up. Thanks.

Yes, sure. So I think, you're seeing still growth which is predominantly new patient than geographic expansion, which we're continuing to do. And it's been quite – it's been going quite well. Eric, why don't you go through with your team has been…

Yes, sure. Hi, Tazeen. Sorry, can you hear me okay? Hi, Tazeen. How are you? Sorry, I'm having a little connection problem here. So Tazeen, yes. Right now a lot of our growth that we've seen in the quarter has continued to come from a lot of the main markets. We're seeing very high compliance. We're also implementing a lot of dose adjustments as patients are getting older and heavier. And we're seeing growth in many of the main markets where we have been quite mature and have launched the product for at least five, six, seven years, but we're also seeing growth in other parts of Europe and in the international markets. As I mentioned during the call, we have recently launched in Russia. And very quickly we were able to get centralized reimbursement in Russia and also very quickly a significant order came in for a group of patients. So that dynamic is quite interesting. Is it similar to Brazil? So it's – their large orders for a number of patients, which creates a little bit of lumpy revenues quarter-over-quarter. But what we see continued growth with Translarna is that patients are staying on drugs for long periods of time. They're adjusting with the dose. There are long – there are patients that we are seeing new patients that are coming in areas in Central, Eastern Europe and Latin America, and many others – of many other areas. So the collective around Europe and international is extremely important. And in some of the tough payers, even some payers that we've had to fight with for a number of years have opened up and signed new agreements. So even smaller countries like the Netherlands and Finland shown that they're willing now to pay which have been more restrictive in the past. And then there's obviously a lot of the label expansions that have occurred. We have label expansions for children as beginning of two years, and really broadening the number of eligible patients. And then the number of less restrictions that are going on right now in terms of patients who go non-ambulatory. So physicians are making if you will, it sort of risk benefit decision before taking patients who are not off drug before non-ambulatory. So if I had to actually look at it collectively, it is a combination of good patient compliance dose adjustments, geographic expansion, and particularly in key markets. And this quarter, clearly Russia and our main markets have really driven Translarna what is probably one of our strongest revenue quarters to date.

Okay. That was super detailed. And thank you for that. So, related to what you just said, the guidance and sales that you introduced today, would you say that's coming more from confidence in Translarna or from uptake for Emflaza? And then my last question probably for Emily here is, can you just talk to us about your expense estimates? It looks like they're going lower relative to last year and why is that? Thanks.

Sure. Okay. So yes, obviously there's a lot of confidence in both Translarna and Emflaza and Emflaza and they both have been growing. Eric, you want to talk a little bit about growth so both of those two.

Yes, absolutely. I mean, we saw 22% quarter-over-quarter growth with Emflaza. I mean, we've $47 million in the quarter. We see that as again, a combination of different things, but primarily again, very high compliance. We've been also working on dose adjustments. We've minimized dropouts, but we've also seen a lot of new patients who have gone to Emflaza, not only new patients who are naive but many patients who are switching based on a number of key publications and scientific data now. And of course the experience that we've generated that shows that Emflaza is superior to prednisone. So we see a lot of those tailwinds in Emflaza, continuing as the base of patients is growing within Emflaza. For Translarna, I think we are equally confident based on the things that I mentioned and we're looking forward to continued geographic expansion, keep in mind all the work that we did over the last probably year, year and a half to expand in many of these markets is paying off and we continue those investments in Asia Pacific, and also in other places in Latin America. And we expect those to continue to provide us growth. So overall, I think we're very confident.

And then this is Emily, Tazeen. When it comes to your OpEx question. I think it's really just a result of 2021 being a full year impact of COVID versus 2020. So obviously we greatly reduced our travel expense and then Eric's team has very successfully transitioned to holding most of their physician seminars and consortiums virtually.

Helpful. Thank you.

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

Hi, thanks for taking our questions and congrats on all the progress. This is Nina on for Alethia. We are wondering what gives you confidence in the mighty readout in the third quarter of 2022. And how do you think of risks for that trial? And also another one. We are curious how you were planning to update us on the FDA feedback for the Phase 2 PTC518 trial next year. Thanks.

Sure, the mighty – Matt, do you want to go through that?

Yes, absolutely. So the mighty trial is the registration-directed trial in children with mitochondrial disease associated seizures. And as we've talked a bit about before, this Phase 2/3 trial was really constructed based on a number of mechanistic data as well as previous clinical data we have in the treatment of mitochondrial disease, children with seizures who have a variety of different genotypes and phenotypes. And so the trial, this Phase 2/3 trial was really constructed based on a number of mechanistic data as well as previous clinical data we have in the treatment of mitochondrial disease, children with seizures who have a variety of different genotypes and phenotypes. And so what we've been able to demonstrate in our previous studies is that we are able to reduce seizure frequency, reduce the occurrence and arrest the occurrence of status epilepticus, which is the condition of continued seizures in one specific subtype of mitochondrial epilepsy. We've been able to demonstrate that we can reduce disease-related hospitalizations in that cohort. The children on average had 52 days in the hospital over the course of the year. That was reduced to zero days in the hospital following two and three years on therapy. And in that cohort, we were also able to demonstrate a mortality benefit. So when we looked across not only that one subtype but again, across all the different subtypes we've treated, we've been able to demonstrate that we're able to affect seizure frequency and seizure-related morbidity in these children. And again, the fact that vatiquinone targets the 15-Lipoxygenase enzyme and the oxidative stress response pathway that is common to the disease pathology, regardless of the underlying genotype or phenotype, is what gives us further confidence that we're able to demonstrate the treatment benefit across the whole family of mitochondrial disorders, again, independent of the specific mutation. So that trial is enrolling 60 children at centers around the world. We've been able to work closely with our global network and close relationships with patient foundations around the world that we've been able to develop over the course of many years and are moving forward with enrollment in that trial. And as we said, expecting the data and results in the third quarter of 2022. I missed the second part of your question, if you could just repeat it related to that trial.

Just how do you think about risks for that trial?

Yes, so I think obviously in constructing a trial, we leverage our many years of experience and doing trials in children with mitochondrial disease. And I think when you talk about mitochondrial disease, one of the biggest challenges in drug development is the heterogeneity of disease, not only heterogeneity in genotype but also heterogeneity in genotype/phenotype relationship. And so we took that into careful consideration in designing this trial. And to overcome that we again are pleased that we're focused on this symptom. That's common to all of these different subtypes. So we don't have to worry about different constellation of symptoms. We know that all the children in the trial have the symptoms of seizures and we're also employing a strategy that has been used in several successful approval trials for pediatric epilepsy syndromes that's utilizing a run-in phase to ensure a minimum frequency of seizures, and then having the subsequent parallel arm only enrolling those children who met that threshold. In addition to account for any heterogeneity that might still come into play, we're stratifying the randomization for the most common subtypes. So we ensure balance across both the placebo and the control group. And we think all those are very good measures at addressing what we know could be potential risks in the design of that trial.

Got it. Thank you. And I guess for the second question, just how do you plan on updating us on the FDA feedback for the Phase 2 trial for PTC518 next year?

So I think what we'll be doing is obviously once we initiate the trial, we'll be telling you, we'll let everyone know. And also after we get the results after the 12 weeks, we would actually talk about that as well.

Okay. Thank you. That was helpful.

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

Thanks for taking the question. I know you guys recently opened the gene therapy facility. Can you talk a little bit about your plans for scaling that up with obviously the DC program as well as some of the follow-on gene therapy program? Just kind of getting a sense of what type of scale you'll have and GMP compliance and things of that nature. Thanks.

Yes, sure. In terms of compliance and it's a fully operating facility we had – we have about 220,000 square feet of both suites where we can grow and prepare the viral vectors as well as the ability to do both GMP plasmids as well in that manner. And so we built – the team is now fully capable of not only a preparation of our own plasmids in-house, but also preparation of all the viral vector that's required to do that. And we have all of the manufacturing capabilities to do that in-house, as well as all the quality and analytical to be able to perform those as well. So that's all being done. And we've been doing this for our other programs that are going on that like what we talked about for FA as well as for Angelman syndrome and others as well. So the team's capable of doing that both in the GMP and can do it from 30 liters to a thousand liter facility and make the plasmids as well. We've also been as I said, and I think I talked about in the past, we'll be doing it for external – potential external customers. We don't anticipate yet. We'll be – it will take a little bit of time to be fully functional. And so we'll use some of the extra space we have to be able to bring in potential customers, especially with plasmid where in a sense we'll be able to bring in not only work through that but also be able to bring in revenue as well. So the system itself is now the site is all up and running, capable of making both plasmids and DNA. And we've been making both vectors as well as plasmids now. And we're confident we can do this. And so we're going to be doing, fulfill all the needs we have as we grow and do more and more. And then also be able to have some customers on the outside.

Great. And with regards to APHENITY, I may have missed this, but do you have a sense of the number of patients that you're going to try and enroll in the arms and just given kind of the penetration of generic into the market? Just wondering if you think the Delta that you've seen kind of Phase 2, if you recapitulate that – you think that'll be enough to convert most patients over or do you think that you'll need kind of a bigger effect or you kind of go into Kuvan failure, just kind of curious to know strategy based on what you may see in the registration trial? Thanks.

So I think that's an excellent point, and that while there's a large number of patients, there's both patients that have been on Kuvan and have failed, or have never shown any improvement on it. So there's a large number of patients where Kuvan doesn't do well for patients. So we don't think even with the generic, that it's going to be a problem to bring in to be able to bring in enough patients to do this, we're targeting about 80 patients for the primary analysis, a cohort, obviously just remind everyone we'll have a run-in for that. And then no people will be responsive to it. So it's already set up, I think, for a high chance of success. We've enriched the study population of patients who respond to that and just to remind everybody we had done a previous Phase 2 study showing directly comparing Kuvan to our drug. And so and I think what we've shown is that we see a higher number of patients about 50% more responded, and they had a greater effect than of reducing phenylalanine than we saw patients on Kuvan. So we think it's obviously better. We view this as really quite a significant opportunity. Really, if you think about it, it's a very well-defined patient population. There's newborn screening centers of excellence, the pathways approval is well known. It's a blood-based biomarker where you can measure phenylalanine and a large number of patients, many of whom need improvement from a better drug. So we're excited about this. And then we think that there's obviously we'll see increasing success because we have a run-in in the responder analysis in the APHENITY study. So in our view, there's a very high unmet medical need in PKU. As the majority of patients remain untreated and are not well controlled even though there are two commercial products that are available. So we think this is a significant opportunity.

Great. Thank you.

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

Hi, this is Steve on for Brian. Thanks for taking our question on 518 and building off an earlier question. I'm curious, can you speak a bit more on what you might have to show for safety there, how long you might have to follow patients for potential accelerated approval? And have you looked at differences in transcriptome or transcriptome or proteome caused by 518 in preclinical models or clinical tissue comparing healthy and Huntington samples? And does that hint at any possible differences in safety?

Yes. So I'll make a couple of points. One is obviously safety is usually dependent upon both how it does in patients as well as the safety toxicology. I will say that these molecules are highly selective molecules. And I think we spend a lot, and I think that's really a differentiating factor for us. It's an orally bioavailable, small molecule where we really worked on to have selectivity and specificity of 518, so that it's very highly specific for HTT and for that particular U1 site. And so obviously what we're going to do is we'll review the results, in terms of the safety we'll be following that. And what we're going to be doing this in the placebo-controlled study, we'll review the results on the Phase 2 study to see how patients do in terms of the levels of reduction, both the blood within the blood of HTT RNA protein and the levels that change within the CSF as well. And we'll be monitoring a number of other biomarkers as well. And then to your question of potential accelerated approval, that's why we are actually going beyond the 12 weeks following that they'll transition onto an open-label study for and we still be on for a total of 15 months, and they give the long-term safety as a consequence of that. So we think if there's a potential for an accelerated approval. What we're interested in that is that we'll have not only looking at the HTT RNA and protein levels but other biomarkers as well. And so what we shown in the transcriptome, yes, we've looked in a lot of cells and we've seen that at concentrations. We see really only very few changes in gene expression or in alternative splicing. So it's highly selective and specific.

Great. Thanks for that, really helpful. Appreciate it.

Thank you. Our next question comes from the line of Gina Lovering with Barclays. Your line is open.

Hi, this is someone filling in for Gina, thanks for taking our questions. We have a couple of questions. First, congratulations on the strong quarter. Could you provide details on the size of the Brazilian order and the contribution from the Russian launch in the Q3 numbers, and how should we expect this to affect the run rate moving forward? My next question is regarding the 518 Phase 2 trial. Have you received any feedback from the FDA on which biomarkers will be considered effective predictors of clinical benefits? Thanks.

Yes, sure. So obviously, in terms of the FDA for Huntington's disease, we have not yet talk to them on the biomarkers. Clearly, it's important. We think that we will be measuring the biomarkers of both RNA and protein and blood, as well as the changes in Huntington protein in the CSF, and then other biomarkers like neurofilament. And then we'll be looking at other MRI measurements and biometric measurements as well. Both NFL and the CSF and plasma as well so I think that along and obviously if you think about Huntington's disease versus say, Alzheimer's, it's a monogenetic disorder that we know as a gain of function, and we know that it's the consequence of the HTT with the CA gene repeat and that lowering levels. And there's both animal data as well as natural history and clinical, from patients that show that reducing, that improves the outcome for patients. So I think, if there’s ever a biomarker where you could show the reduction of HTT levels and you know that the consequence of the disease is due to the HTT RNA in protein and that lowering that levels actually helps patients in terms of lower levels gives delays the progression of the disease. You’re in a pretty good spot to be able to say that you’re hitting the – lowering the levels of the protein and RNA and the result of that should be better outcomes. So I think there’s pretty good arguments that would make. And that then coupled with looking at the CSF and other biomarkers perhaps preservation of brain volume and others, there’s a package of information that we think would be important. In terms of the growth, yes, I think Eric already gave a little bit saying that, we’re obviously – the beauty of continuing to grow in geographic expansion is that, while things may be lumpy, different groups are ordering at different times. That helps smooth it out a little bit more. And so while Brazil this year was hit relatively hard with COVID, the commercial team has been working tirelessly with the Minister of Health to secure group purchase. We do expect one in the fourth quarter of this year. And maybe Eric, you want to talk a little bit about Russia?

Yes. Yes, I do. I think we have to characterize Russia in this quarter, very similar to what perhaps four or five years ago was Brazil. So in these – some of these countries the government will order or will provide access and reimbursement and will provide a single order for a very large number of patients for a number of months. So that creates the lumpiness. And while we don’t necessarily provide a specific size of the orders and the revenue of the orders within that quarter, you can easily go back four or five years and start to look at where we’ve had some lumpy quarters, particularly when we started adding new patients in Brazil and getting multiple orders or at least one or two orders a year for a large group of patients. The dynamic in this quarter was that Russia was a key driver of that growth. And as Stu mentioned, we anticipate we’re working tirelessly right now, we have an agreement in Brazil and we anticipate filling that order for a large group of patients as well in the fourth quarter. So it’s very hard to predict. These governments tend to have erratic buying patterns and they do sometimes pick the number of patients in the number of months, which is not always predictable. So it’s kind of hard to say, what would that be in sort of long quarter forecast, but what I’d like to emphasize is that on an annualized basis, you see Translarna growing consistently.

And we’re seeing like what Eric said before. So we opened up new areas in like Russia, but also Central and Eastern Europe, but also the Middle East and North Africa. We just got in Latin America, Asia Pacific, we’re working on. So on top of maintaining all the patients who’ve been on it, have incredible compliance and there’s just continuous amount of data that we’re adding too, like the STRIDE data that Eric talked about where kids are at 5.5 years longer in terms of ambulation, better capabilities in terms of lung function, if the data’s becoming just so strong that it’s patients are on for a long time, we keep those – we maintain them and then we’re getting more and more patients as we get geographic expansion.

Got it. Thank you very much.

Thank you. Our next question comes from Peyton with Cowen and Company. Your line is open.

Hi, there. Good afternoon. Thank you for taking my questions. The first one just on the AADC submission in the U.S. Can you just let us know sort of the cadence of interactions with the FDA, if there are any expected before the BLA submission? Have they signed off on the surgeries that have happened? And then second, just in the Friedrich ataxia study can you just remind us a little bit how you arrived at that the 72 endpoint. I know at six months we maybe saw a little bit of a high placebo response in the prior study. So maybe what were the changes that were made in this pivotal to potentially limit that placebo response? Thanks.

Yes, sure. So first to the question about the BLA, as we’ve talked about we were going to complete the surgeries, collect those data and then meet with the agency to align on the package, ensure everything’s in place to make the submission. We have not had that interaction yet. We expect that we’ll have the interaction be able to submit the BLA in the first quarter of 2022. In terms of the move of our phase studies, as you alluded to, we have based a lot of this study on our previous Phase 2 trial particularly on Friedrich ataxia, which had the six-week placebo control phase followed by the long-term treatment duration where patients were treated out to 24 months. Importantly, we recorded a placebo effect in that six months, which prevented us from achieving statistical significance. And by the way, that’s common. If you look across, for example, even the ataluren trial had that trial been stopped at six months, they would not have hit their primary endpoint again because of a known placebo effect on that outcome measure. But also importantly, when we looked at the patients in our Phase 2 study, we found that over a two-year period, we were able to demonstrate an overall improvement in disease. That is a reversal in disease progression, and that really reinforced the important concept that one we’re able to achieve a therapeutic benefit and two that over longer treatment times, you can actually see a meaningful impact. And so when we put that together, along with the concern or placebo effect, we believe that the 72-week study put us in a very strong position to not only have limited and perhaps no placebo effect that impact our results, but importantly, be able to reinforce the long-term potential benefit of the vatiquinone therapy in Friedreich ataxia with regards not only disease progression as measured by the amfAR scale, but other of the key secondary endpoints that we’re collecting in the study.

Perfect. Thank you and congrats on the progress.

Thank you. Our next question comes from Karnauskas with Truist Securities. Your line is open.

Hey guys, this is Kripa on for Robyn. Thank you so much for squeezing me in and congrats on the progress this quarter. I had a question about the Huntington’s program. So in deciding what you call the Goldilocks population for your study, you said that you’ve looked at natural history databases. Firstly, how comfortable are you that, or what sort of feedback did you get from the FDA, if you’ve already talked to them about that a natural history study that you do yourselves does not need to be a part of the package. And when we see data from the controlled part of the trial, what can we expect in terms of readouts? Will it be safety and the Huntington RNA and protein levels? Or do you think that is enough time to see a separation in some of the other biomarkers, for example, like NFL? Thank you.

Yes. Thanks for the question. In terms of the study in natural history, obviously there’s a – the HD community has a lot of natural history that helps us define where there’s a time where if they own change, you won’t see a change if that’s not useful. And then there’s a – what normally happens, if they’re so far down the line, it’s very hard to see any changes that are too far gone, very similar to how we see this in DMD. So we’re trying to make sure we pick the right population where there’s a decline, but the decline isn’t – is that you can actually change the course of that that you would see the – you would be able to measure that difference. So the Goldilocks population really helps to ensure that we’re enrolling those subjects that are not too early in the disease progression, but have a higher risk of declining over the course of the trial and therefore treatment versus that gives you the possibility to see that. And so we’re hopeful as we measure that, obviously we’ll be measuring the biomarkers and we’ll see the reduction CT RNA and protein, that will be important, but we would also then anticipate seeing changes in the CSF as well as neuromuscular changes. And we’ll look in both the CSF and plasma. And then of course monitor the preservation of brain volume as assessed by MRI imaging. So we think that package will be quite interesting. And so the short-term 12 weeks will allow us to get that in the longer-term safety and pharmacology and pharmacodynamic measurement of all the others that will go on for the a year will, we think we’ll be able to see something there in terms of the biomarkers.

Great. Thank you so much.

Thank you.

Thank you. And I’m showing no questions at this time. I’d like to turn the call back over to Stuart Peltz for closing remarks.

Well, great. So thanks for joining us today. And I think as you can see, we’re continuing to build PTC into a revenue-generating company. And I’m proud that the PTC has made – what we’ve done this quarter, I think you can see we’ve delivered substantial continued year-over-year revenue growth. And once again, raising our DMD franchise 2021 revenue guidelines, the revenue growth, in addition to the continued advancement of our pipeline with the initiation of our fifth registration-directed trial in BKU. The progress – this progress really allows us to continue the mission that we have in delivering life-changing therapies to patients around the globe. So thanks for taking the time to listen and thanks for your questions.

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