Ptc Therapeutics, Inc. Q4 FY2023 Earnings Call

Good day and thank you for standing by. Welcome to the PTC Fourth Quarter 2023 Financial Results. 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 call is being recorded. I would now like to pass the call over to the Senior Director of Investor Relations, Ron Aldridge.

Good afternoon and thank you for joining us today to discuss PTC Therapeutics' fourth quarter and full year 2023 corporate update and financial results. I'm joined today by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; Chief Commercial Officer, Kylie O'Keefe; and our Chief Financial Officer, Pierre Gravier. Today's call will include forward-looking statements based on our current expectations. Please take a moment to review the slide posted on our Investor Relations website in conjunction with the call, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements, as such statements are subject to risks that can materially and adversely affect our business and results of operations. For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as the company's other SEC filings. We will disclose certain non-GAAP information during this call. Information regarding our use of GAAP to non-GAAP financial measures and a reconciliation of GAAP to non-GAAP are available in today's earnings release. With that, let me pass the call over to our CEO, Matthew Klein. Matt?

Thank you, Ron. Good afternoon and thank you for joining today's call. I'm pleased to share our fourth quarter and full year 2023 results and to provide an update on the progress of our pipeline programs as we move into what will be an exciting 2024 with a number of potential significant milestones. As we closed out 2023, we had another solid quarter of commercial performance with total fourth quarter revenue of $307 million and full year 2023 revenue of $938 million, representing 34% growth over 2022. Our DMD franchise revenue totaled $143 million in the quarter and $611 million for the full year. Eric and Kylie will provide additional detail on our commercial performance shortly. Our revenue performance reflects the continued outstanding work of our global customer-facing teams and our successful efforts in geographic expansion. With this infrastructure and track record of execution, I remain confident in our team's ability to succeed with our next product launches, including sepiapterin for the treatment of PKU. Most of you are aware, in January, we received a negative opinion from the CHMP on the continued conditional marketing authorization for Translarna in the EU. This opinion is expected to be ratified by the EC in late March or early April. Importantly, Translarna remains on the market until ratification occurs. In addition, we continue to commercialize Translarna in several regions outside of the EU, where independent authorizations exist. While we are, of course, disappointed in the CHMP opinion and the potential impact it has on patients in Europe, PTC is well-positioned to withstand this outcome. As I have previously emphasized, through our efforts to focus our R&D portfolio, right-size the organization, and strengthen our balance sheet, we have a solid foundation for building the company forward and continuing to deliver on our goal of discovering, developing, and commercializing transformative therapies for patients. As we look forward to 2024, we have a number of important potential regulatory and clinical milestones for a number of our programs. I will begin with our sepiapterin program for the treatment of children and adults with PKU. We remain on schedule to submit MAA for sepiapterin to the EMA in the first quarter of this year and to submit the NDA in the United States no later than the third quarter of this year. As we continue to collect data from the open-label extension study following the Phase 3 APHENITY trial, we continue to see durability of sepiapterin treatment effect and the ability of patients on sepiapterin to tolerate increases in dietary protein intake beyond the recommended daily allowance. This liberalization of diet is incredibly meaningful to patients and further supports the potential of sepiapterin to fill the persistent unmet medical need of the majority of the 58,000 PKU patients worldwide. Moving to our vatiquinone program for Friedreich ataxia, we had a Type C meeting with the FDA earlier this quarter. Based on discussions with FDA, we now have a path to potential NDA filing based on the placebo-controlled results of the MOVE-FA study in combination with long-term open-label extension data currently being collected. The open-label data will be compared to a natural history population from the robust Friedreich ataxia patient registry using analysis similar to those provided to FDA by Reata as part of the SKYCLARYS NDA. Based on the time needed to collect sufficient long-term open-label data, we expect to be able to submit an NDA in late 2024. We are very excited about the potential of vatiquinone to fill the significant remaining unmet need for pediatric and adolescent FA patients. In other regulatory updates, we remain on track to submit the BLA for Upstaza to the FDA in March and are also scheduled to meet with FDA in March to discuss the content of the potential NDA resubmission for Translarna. Turning to our ongoing clinical trials. We expect to share interim 12-month results from the PIVOT-HD trial of PTC518 in HD patients in the second quarter of this year from the initial cohort of subjects on whom we reported data last summer. The 12-month results will include additional safety and tolerability data as well as biomarker data, including CSF Huntington protein levels, NFL levels in the blood and in the CSF, and volumetric changes on MRI. We will also be sharing data from the clinical outcome measures collected as part of the study. Finally, we expect to share top line results from the CARDINAL's registration-directed trial of utreloxastat in ALS patients in the fourth quarter of this year. In closing, we are well-positioned for an exciting 2024. We have the team, the capital, and the strategy that position us to execute on the many impactful opportunities that lie ahead. I will now turn the call over to Eric and Kylie to discuss our commercial performance. Eric?

Thanks, Matt. Our global customer-facing team has delivered yet another strong quarter, continuing the significant momentum we have built. We see ongoing growth from our portfolio of products in more mature markets such as the U.S. and EU and also new markets where we have invested in geographic expansion in Latin America, the Middle East, North Africa, and the Commonwealth of Independent States, where there has been robust year-over-year growth. In the fourth quarter, we delivered $155 million of revenue for PTC-marketed products, which represents 22% growth year-over-year. For the DMD franchise, we closed out the year with a strong fourth quarter for both Translarna and Emflaza, delivering an impressive $143 million in net revenue, which is a 25% growth compared to the fourth quarter of 2022, with a strong full year performance of $611 million. For Translarna, we achieved $75 million in revenue this quarter, with annual sales of $356 million, which is a robust 23% growth over the same annual period last year. I'm very proud of the team's efforts and determination in these last few months as they have worked tirelessly to ensure that every single Translarna patient in Europe continues to receive treatment until the ratification of the CHMP opinion. And we are actively evaluating local country options for ongoing access to treatment. Additionally, we continue to diversify our Translarna franchise globally as we brought this treatment to patients in seven new countries last year as part of our ongoing geographic expansion around the world. Now, turning to Emflaza. Quarterly net revenue was $67 million, with $255 million of net revenue in 2023, which is a 17% growth over 2022. The team has implemented a multipronged strategy to ensure that we protect our Emflaza business in anticipation of a loss of exclusivity in Q1 this year. Our U.S. team continues to engage with healthcare professionals by providing meaningful clinical differentiation compared to prednisone and has implemented other strategies to ensure Emflaza brand loyalty for new and existing patients. We continue to support DMD patients and their caregivers with outstanding service from our PTC Cares team by enhancing customer experience, providing easier access to treatment, facilitating co-pay assistance, and improving adherence for patients in the U.S. PTC is also partnering with our specialty pharmacies and contracting with targeted payers to dispense the Emflaza brand. We continue to communicate and support our exclusivity for two to five-year-old DMD patients, which continues into 2026. And we are also leveraging patient advocacy in support of the benefits and value of Emflaza. Now, I will ask Kylie to update the progress of our current and future new product launches. Kylie?

Thanks, Eric. Let me begin with Upstaza, the first and only approved gene therapy infused directly into the brain, where we continue to see transformative results. In October, we presented Upstaza data at the CNS Conference, showing cognitive improvement and continued increase in long-term motor milestones. Our rollout across Europe continues to progress with new patients treated in the quarter. Furthermore, we are continuing the global expansion of the franchise with additional regulatory filings in Asia-Pacific countries and have recently received regulatory approval in Israel, where the team is actively working to treat our first patient. Globally, patient identification, treatment center readiness, and access and reimbursement discussions continue to advance. Moving to Tegsedi and Waylivra in Latin America. We closed out the year with robust growth for both Tegsedi and Waylivra, more than doubling our revenue in the region. Patient identification is strong and the number of patients on treatment continues to grow across the region, including first-time revenue in new countries. In Brazil, we received a new group purchase order for Waylivra, which is in recognition of the increased number of patients that rely on these life-changing treatments. We anticipate fulfilling this group purchase order in the first quarter. As previously discussed, we are updating our total revenue guidance following the CHMP opinion for Translarna, with growth continuing across the portfolio for Evrysdi, Upstaza, Tegsedi, and Waylivra. Our efforts to protect the Emflaza business and expected Translarna revenue in geographies outside of Europe, we are updating our annual total revenue guidance to $600 million to $680 million. We continue to plan for our global launch of sepiapterin. Feedback from the PKU community is extremely positive, and there is a widespread recognition among metabolic specialists, geneticists, and dieticians of the potential of sepiapterin to meet the significant unmet needs for many of their PKU patients, not just patients who have been unresponsive to Kuvan, but also those who are fully controlled on this drug and could potentially do significantly better on sepiapterin as we saw for numerous patients in the APHENITY trial as well as classical PKU patients. More importantly, we continue to see durability of treatment effect and the ability for patients on sepiapterin to increase their dietary protein intake beyond the recommended daily allowance, while still maintaining control of Phe levels in the long-term EXTENSION study. In addition, we have heard from patient advocacy groups around the world that PKU patients are excited as they've been waiting for a therapy that combines efficacy through both Phe reduction and improved fee tolerance with tolerability. Both the physician and patient excitement continues to give us the confidence that we can reach over $1 billion opportunity, and we look forward to taking a step closer to realizing this upon our first global approval. In conclusion, the strong fourth quarter rounds out what was a strong 2023 for our commercial team. Our team is well-positioned to continue to execute across all our commercial products and across all geographies, together with building out the foundation for sepiapterin for success in 2024 and beyond. I will now turn the call over to Pierre for a financial update. Pierre?

Thank you, Kylie. I'll now share the financial highlights of our fourth quarter of our full year 2023. Please refer to the earnings press release issued this afternoon for additional details. Beginning with top line results. Total revenue for the fourth quarter was $307 million. This consisted of DMD franchise revenue of $143 million and other revenue of $164 million. Starting with the DMD franchise. Translarna net product revenue in the quarter was $75 million, while Emflaza net product revenue of $67 million. Moving to Evrysdi. Fourth quarter global revenue of CHF354 million, which equates to about $400 million was achieved by Roche, earning royalty revenue of $51 million for PTC. We also earned $100 million milestone for Evrysdi achieving more than $1.5 billion in 2023. Our total revenue for full year 2023 was $938 million or year-over-year growth of 34%. This included DMD revenue of $611 million, which represented 21% year-over-year growth. Evrysdi royalties for the year grew 49% to $169 million year-over-year. Non-GAAP R&D expense was $130 million for the fourth quarter of 2023, excluding $8 million in non-cash stock-based compensation expense compared to $175 million for the fourth quarter of 2022, excluding $14 million in non-cash stock-based compensation expense. The year-over-year reduction in R&D expenses reflects the strategic portfolio prioritization as the company continues to focus its resources on its differentiated high potential R&D programs. Non-GAAP SG&A expense was $68 million for the fourth quarter of 2023, excluding $8 million in non-cash stock-based compensation expense compared to $79 million for the fourth quarter of 2022, excluding $13 million in non-cash stock-based compensation expense. This expense reduction reflects lower operating costs as a result of the reduction in the workforce. We're maintaining our guidance we provided in January for GAAP R&D and SG&A expense of between $740 million and $835 million. We are also maintaining our guidance for non-GAAP R&D and SG&A expense of between $660 million and $755 million, including expected R&D expense milestone payments of up to $65 million and excluding estimated non-cash stock-based compensation expense of $80 million. Cash, cash equivalents, and marketable securities totaled approximately $877 million as of December 31st, 2023 compared to $411 million as of December 31st, 2022. The strong balance sheet provides PTC with the resources to execute on our strategy and to achieve our milestones over the next several years, including the anticipated sepiapterin launch. I will now turn the call over to the operator for Q&A. Operator?

Thank you so much. Our first question is from Sami Corwin with William Blair. Please proceed.

Hi. This is Brooke Schuster on for Sami. Thanks for taking our question. We were wondering if you could provide more details on the transition of sales forces and resources for Translarna with the removal of the EU market? And if there will be any effect on the SG&A outlook for 2024?

Thank you very much, Brooke, for the question. As we talked about previously, we still are marketing Translarna in the first quarter in Europe until the ratification of the CHMP occurs. And then it will be a very rapid transition of that infrastructure to get ready for the sepiapterin launch. As we discussed, we'll be submitting the MAA for sepiapterin in the first quarter, and that infrastructure that we've built will be well-positioned for a successful launch of sepiapterin in Europe. So, the OpEx guidance that we've given for the year incorporates what we plan to have today and also already accounts for what we're going to need tomorrow for the sepiapterin launch and any other product launches that we have.

Thank you. One moment for our next question, please and it comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed.

Hi, this is Rick Miller on for Kristen. Thanks for taking our questions. Maybe on FAA for vatiquinone, can you speak to anything on kind of the ongoing regulatory strategy in the U.S. versus Europe? With two guided regulatory interactions, do you plan on making similar arguments around the data and MOVE-FA to the different regulatory bodies? Or could there be sort of different strategies when it comes to the FDA and EMA based on what you're looking for? Any color here could be helpful. Thank you.

Sure, Rick. We are pleased to announce that we had a productive discussion with the FDA regarding the vatiquinone program earlier in the first quarter. Following those discussions, we now have a path to NDA submission that we believe will occur late in the year. The discussions focused on the clear evidence of benefit from the FA placebo-controlled study, particularly regarding the upright stability scale, which is recognized as the most relevant aspect of the entire mFARS score for evaluating ambulatory pediatric adolescent and young adult patients who constituted the majority of the MOVE-FA study population. After our discussion, it was agreed that we could potentially submit an NDA based on MOVE-FA alongside confirmatory evidence from the long-term open-label extension of MOVE-FA, comparing that data to natural history data similar to what Reata did for its SKYCLARYS NDA. We are combining strong, reliable evidence of clinical benefit from the MOVE-FA study with confirmatory evidence from the open-label portion. We are very excited.

Okay. Thank you.

Thank you so much. One moment for our next question, please, it's from the line of Kelly Shi with Jefferies. Please proceed.

Hi, this is Yun for Kelly. Thanks for taking the question. First question on Emflaza, have you seen any patient switching from Emflaza to generic? And I know that you cannot speak for patients, but if patients were to switch or were not to switch, do you know what could be the reason driving patient decision, please? And I have a follow-up question, please.

Yes, thank you, Yun, very much for the call. Kylie, do you want to comment on what Emflaza revenue projections and potential impact of generic?

Yes, absolutely. So, thank you very much for the question. As we've said in the past, we've obviously had the fact that loss of exclusivity has been on the horizon, and we've been preparing for this. The team has a number of strategies in place to do everything they can to protect the business. And obviously, Eric outlined a number of these in the prepared remarks. So, I think from that perspective, we've talked about contracting with specialty pharmacies. We've talked about contracting with payers, a number of initiatives, highlighting clinical differentiation to prednisone, ensuring brand loyalty through our patient PTC Cares team. And a number of these programs are in place to ensure that we can protect the business upon the loss of exclusivity. From that perspective, I think it's too early to say we think switches, there's nothing that we've seen so far. And I think what we have seen and understand through speaking to both physicians and patients in the community is that there is a strong brand loyalty to Emflaza. There's a number of programs in place to ensure that brand loyalty. And so from our perspective, we've done everything we can to maintain that business and our revenue guidance is projecting that as well.

Okay, great. And then on the Huntington's disease program, has the FDA given you specific guidance in terms of the criteria and timeline to lift the clinical hold, please? Thank you very much.

Yes. As we previously shared, we had a very productive discussion with the agency in the fall of last year, where they shared that this data we collected so far in the PIVOT-HD study for 12 weeks should be sufficient to allow conduct of that study for 12 weeks' duration. And if we wanted to be able to do the full protocol of 12 months that they would like to see 6 months' worth of safety data. So, that's obviously very encouraging because as we shared last June, there's very strong evidence of safety and tolerability thus far with no evidence of NFL spikes and also no treatment-related serious adverse events. The profile continues to be safe as we continue to collect more data. So, we look forward to being able to share now with the FDA the six-month data they'd like to see to lift the partial clinical hold, which we will expect to do as we take that data in the coming months.

Thank you.

Thank you. One moment for our next question and is from the line of Eric Joseph with JPMorgan. Please proceed.

Thank you. I wanted to discuss vatiquinone and FA. It's encouraging to see that opportunity back on the table. Can you elaborate on what has led to a more positive stance from the FDA? Was there any new data from the open-label extension that was mentioned, or is it more about aligning them with the stability of a key functional endpoint? Also, reflecting on previous comments regarding their desire for a confirmatory study, if you move forward with an NDA submission, will that be for full approval or accelerated approval? Thank you.

Thank you for the question, Eric. The conversation with the agency primarily centered on the upright stability scale. When we initiated the MOVE-FA study, it was not fully recognized that for the ambulatory patient population, the upright stability scale is the only sensitive measure. In recent years, several publications and an FDA-funded study focused on Friedreich ataxia patients have clearly indicated that, to evaluate treatment effects in young adolescent ambulant patients, the upright stability scale is the sole effective measure. In our trial, the placebo group's scores remained mostly unchanged across other parts of the mFARS, with disease progression evident only on the upright stability scale over 72 weeks. Presenting this data, along with supporting evidence from the FDA-funded study, underscored that while the primary endpoint at mFARS was not met, we demonstrated a significant benefit in reducing disease progression, specifically on the upright stability scale. Additionally, the data on the fatigue scale, which also showed statistical significance and is noted as a major symptom for FA patients, correlated with the walk test. This comprehensive set of data fostered a constructive dialogue with the agency and paved the way for an NDA submission based on MOVE-FA findings. We have yet to analyze the open-label beta data, but we will prepare an analysis plan and share it with the agency. Discussions regarding whether this submission will lead to accelerated or full approval are ongoing. What excites us most is the possibility of submitting an NDA based on the MOVE-FA study, which addresses a significant unmet need for pediatric and adolescent Friedreich ataxia patients, as well as providing therapy for 50 ambulatory patients who are young adults or of adult age.

Okay. I appreciate the commentary there. Maybe just on the sequencing of the open-label incision analysis and showing those data with FDA. I guess, will you be updating the Street with those data ahead of further interactions with the agency?

Yes. So, we expect those open-label data to be collected over the next several months and would expect them to complete the analyses once they collect all the data. We'll also be doing an analysis of the original study. As you know, we've previously shown in the long-term follow-up from the initial vatiquinone study, we had a highly significant benefit when comparing those patients treated for 24 months versus an age-stage natural history match. We'll be updating that analysis as well, including that as a source of confirmatory evidence. To the exact sequencing of having the data shared in the FDA and updating the Street, we'll certainly keep the Street posted as we move towards the NDA, including a pre-NDA.

Thank you. One moment for our next question, please and it's from the line of Jeff Hung with Morgan Stanley. Please proceed.

Thanks for taking my questions. For Translarna, are you aware of any communication between the EMA and the Brazilian health regulatory agency after the recent EMA decision given their data sharing agreement? Roughly how much do you think you could come from Brazil? And then I have a follow-up.

Yes, Jeff, we're not aware of any correspondence. I think Brazil has traditionally been quite independent. We expect that to continue to be the case. And the indications we've had is that they will continue to act independently in making their assessment of the benefit of Translarna.

Okay. Thanks. And then for the sepiapterin NDA submission, what other data might be needed to be on the tox data? Could the FDA look for clinical data versus Kuvan in classical PKU patients? Or have they ever asked you or sense about running a head study against Kuvan? Thanks.

Yes, as we've discussed before, the only major requirement for the NDA submission was completing the mouse study, which we began in December as planned. Now, we have a clearer understanding of the timelines and are optimistic about the possibility of submitting the NDA sooner than the third quarter. In terms of comparisons to Kuvan, we have not been asked for that. However, we demonstrated to the FDA and other regulatory bodies that our Phase 2 study included a head-to-head comparison with Kuvan, which showed a statistically significant advantage of sepiapterin over Kuvan. Additionally, in the APHENITY study, we had 27 patients who initially were on Kuvan, washed out, and then showed about a 50% reduction in phenylalanine levels once they switched to sepiapterin, clearly indicating that we offer a significantly greater benefit to these patients. Furthermore, with the classical PKU patients in the APHENITY study, we saw a 59% effect in the placebo-controlled section, strongly supporting the potential of sepiapterin to benefit the full spectrum of PKU patients across all ages and severity levels. This also reinforces that patients who have previously responded to BH4 can be expected to show an even greater response with sepiapterin.

Great. Thanks so much.

Thank you. One moment for our next question, please and it is from the line of Brian Abrahams with RBC Capital Markets. Please proceed.

Hey, good afternoon. Thank you for taking my questions. On the PTC518 Huntington's program, I guess two questions. First, I'm curious how your views have evolved and whether there could be a potential path for accelerated approval for that drug based on NFL and/or brain volume? And then secondly, I know there's an additional cohort of patients that you guys were enrolling, the ones that weren't presented last year and included early Stage 3 patients. Just wondering where you're at with that cohort if we might see interim results from less than 12 months' timeframe in the second quarter as well and your latest thoughts on moving to a 20-milligram dose? Thanks.

Thank you very much, Brian, for the questions. So, on your first question, look, it’s very clear that the FDA as a whole of the neurology division, in particular, has been looking at the accelerated approval path as one that is rational for neurodegenerative diseases where it's typically many years a very large study needed to register clinically meaningful effect, so they’ll be able to have a biomarker that is likely to predict clinical effect; it makes perfect sense. So, you could have an accelerated approval, get patients who need a drug access to a therapy when you collect that longer-term data. Obviously, if it makes sense for neurodegenerative disease in general, it certainly makes sense for a disease like Huntington's disease, which, of course, is an indolent disease and the efficacy study will necessarily need to be large and long. In terms of potential biomarkers for HD, we think there are several, as you mentioned, both NFL and brain volume, certainly in a disease of inflammation trying to be able to show a benefit on a marker of inflammation just like NFL certainly should be likely to predict clinical benefit. And similarly, for something like brain volume where the pathogenesis of the disease is cell death, loss of brain volume and then symptoms that present itself in ultimate clinical degeneration that you could sell that process, a brain atrophy certainly suggests you should be able to influence the progression of disease. So, we see those both as potential biomarkers. Of course, it's going to be a matter of having the data, having the discussions with the agencies as we'd be the first ones through that portal. But I definitely think that the agency is showing openness to leveraging accelerated approval pathway in the case of diseases like HD, and we certainly would look to avail ourselves of that opportunity. In terms of your second question, that Phase 3 enrollment has gone quite well. In fact, overall enrollment really picked up after we shared the June data. We're able to reassure both the patients and the physician that you can develop a drug for Huntington lowering that is safe and well-tolerated and has the necessary biodistribution and pharmacodynamic effect necessary for therapeutic benefit. So, we've seen excellent enrollment, and we will be sharing in addition to the 12-month data in the second quarter, interim data from 12 weeks on the other patients as well as some of the Stage 2 patients. So, we look forward to sharing all of those data with you all in the second quarter. Your third question regarding the 20-milligram dose, our view remains as it was when we talked about in June. I think what we're seeing with the 10-milligram dose and the preferential distribution to the CNS with a 1 to 1.5 ratio of plasma to CSF exposure that we very much believe that 10 milligrams is probably the dose that we need. So right now, we’re committed to moving forward with 5 milligrams and 10 milligrams and learning more about it. Of course, we do have that opportunity to titrate up to 20 milligrams if need be. But right now, we believe that may be very well sitting with dose levels that are the right ones to safely achieve the desired reduction of the Huntington protein that can provide clinical benefit to patient.

Hi, good afternoon and thanks for taking our questions. I want to change gears for a moment and maybe ask about utreloxastat and ALS. And I was wondering if you could maybe add the CARDINAL study readout later this year, sort of frame your thoughts on potential treatment effect and/or areas of differentiation versus the approved therapeutic relative from amlac? And my second question is under a scenario where amlac has a positive phoenix confirmatory study, can you maybe just comment on what your regulatory strategy might be because they get their full approval there filling as part of the confirmatory study? Thanks for taking our question.

Yes. Thanks very much, Paul. Thanks for the question on the utreloxastat ALS program. This is a program we're very excited about given what's become very clear now as a link between theraptosis and ALS. I think that theraptosis pathway is now seen as really an important pathway in disease progression. And of course, utreloxastat was developed to specifically target that pathway. We did a lot of the preclinical development work with utreloxastat benchmarking to another approved therapy for ALS that it has a much more sort of generic and non-specific effect on elements of the utreloxastat pathway. And as we've talked about, we've been able to show 25 to 30 times the potency in the final ASH site model. We've also been able to show important protective effects from benchmark against a number of other disease-relevant preclinical test models. In terms of the study design, I think, again, we're in an element, as I mentioned with David's question on PKU, where there's clearly precedent for the design of an ALS study and our discussions with the FDA were very constructive and ensure that this is a protocol that could support registration if positive. We designed the study with a 2:1 randomization with the treatment effect of roughly a 2.5 treatment difference between the treatment groups and the placebo groups, which gives us roughly 85% power to detect that difference. And I think that positions us very well to capture significant treatment benefit. I think the regulatory pathway doesn't change at all based on what happens with the other compound. And obviously, the commercial opportunity and the differentiation will be based on the data, what we see on ALS mFARS score what potentially we could see in terms of pulmonary function and also what we might see in terms of mortality. You'll recall that the FDA has always been very keen on understanding both changes in the ALS AFS and mortality risk. I think it's also become very well accepted in the ALS community that, given the aggressiveness and complexity of ALS, this is probably not going to be a single therapy disease. I think it's probably going to require more than one. But again, I think the specifics of return in terms of any head-to-head comparison, well with the other compound is really going to be data-driven, and we look forward to seeing the results from the CARDINAL study.

Hey guys. This is Alex on for Danielle. I’m curious about what assay Huntington is using for detecting mutant Huntington in CSF. Do you anticipate facing similar difficulties as a recent competitor, and how dependable are the results in an early HD population? Thanks.

Yes, that's a great question. There are two distinct issues to consider: reliability and assay sensitivity based on the population. I'll address each of them. We've put significant effort into developing robust assays that are both accurate and precise. It's important to note that in clinical studies, the success of an assay relies not only on the assay itself but also on careful management of sample acquisition, processing, storage, transport, and analysis. We closely monitor all these aspects to minimize any factors that could affect the assay results. Additionally, these assays generally perform better with a larger number of samples, so we ensure that we are running analyses with as many samples as is practical. This approach aims to reduce variability and enhance the stability of the assay results. You've also highlighted a crucial point regarding assay sensitivity related to disease stage. It's well understood that in very early or pre-symptomatic HD patients, the mutant Huntington's protein is undetectable in cerebrospinal fluid (CSF) due to its extremely low concentration, sometimes at picomolar levels or even lower. As we progress to the Phase 2 patients in our Huntington trial, we anticipate that detectable levels of Huntington protein will be present in the CSF, as we have already observed. We will closely monitor the limit of detection for the assay in these patients. However, there's uncertainty about whether this scenario applies to Stage 2 patients, who are typically further along in their progression and likely to have substantially higher baseline levels of Huntington protein, which should mitigate concerns regarding sensitivity.

And thank you. I would like to conclude the Q&A session now. And thank you all who participated and turn it back to the CEO, Dr. Matthew Klein, for additional comments.

Well, I just want to thank everyone again for joining the call today. As we discussed, we look forward to an exciting 2024 with a number of important and valuable potential milestones ahead, and we look forward to sharing the journey with you all as we move forward. Thank you again.

And thank you all for participating. And you may now disconnect.