Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics Second Quarter 2025 Earnings Conference Call. Today's call is being recorded. I would now like to turn the call over to Ellen Cavaleri, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us to discuss PTC Therapeutics' Second Quarter 2025 Corporate Update and Financial Results. I'm joined today by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Pierre Gravier. Today's call will include forward-looking statements based on our current expectations. These statements are subject to certain risks and uncertainties, and actual results may differ materially. Please review the slide posted on our Investor Relations website in conjunction with the call, which contains information about our forward-looking statements and our most recent quarterly report on Form 10-Q and annual report on Form 10-K filed with the SEC, as well as our other SEC filings for a detailed description of applicable risks and uncertainties that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. Additionally, 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. I will now pass the call over to our CEO, Dr. Matthew Klein.

Thank you all for joining today. I'm pleased to share results from another strong quarter, highlighted by the first approvals for Sephience for the treatment of children and adults with PKU. We expect Sephience to be the foundational product for PTC's sustainable growth and path to profitability. In the second quarter, we again had solid revenue performance with total revenue of $179 million, with continued contributions from our DMD franchise, including in Europe. Following the nonrenewal of the Translarna conditional marketing authorization, we have reached agreements with about half of European countries based on the unprecedented use of Article 117 to provide paid Translarna product. For the remainder of 2025, we expect to maintain approximately 25% of European revenue from prior to authorization nonrenewal. The highlight of the quarter was the EU approval of Sephience in late June with a broad label inclusive of all disease subtypes and age groups. And last week, we announced FDA approval of Sephience with similar broad labeling for patients aged 1 month and above. Based on the strong Sephience data package and the significant unmet need for PKU patients, Sephience is positioned to become the new standard of care for children and adults living with PKU. As we have discussed, we believe the Sephience revenue opportunity in the U.S. exceeds $1 billion, and our global customer-facing teams are excited to bring this therapy to all those that could benefit. We initiated the European launch in Germany in mid-July and are leveraging early access mechanisms in other European countries while formal pricing and reimbursement discussions proceed. In the U.S., we plan to ship the first commercial drug to patients within the next 2 weeks and look forward to a robust early launch. Eric will provide further details on the Sephience launches shortly. Given the potential significant revenue opportunity for Sephience, PTC has reached an agreement to purchase the annual global net sales payment obligation of 8% to 12% that was part of the acquisition of Censa Pharmaceuticals in 2020. PTC will pay the participating Censa rights holders approximately $225 million upfront and additional future sales milestones for approximately 90% of our net sales payment obligation. We view this transaction as a constructive use of our cash reserves given the expected value creation based on the transaction terms. Now with the FDA approval of Sephience, we have 2 NDAs that remain under FDA review for vatiquinone and Translarna. For the vatiquinone NDA for Friedreich's ataxia, a late cycle meeting was held in July. At that meeting, FDA shared that the application is still under active review and confirmed they do not plan to hold an advisory committee meeting. Turning to the PTC518 or votoplam Huntington's disease program, following the positive Phase II PIVOT-HD study results, we continue to collaborate with Novartis on next steps for votoplam and aim to meet with FDA in the fourth quarter to discuss the Phase III trial study design and potential accelerated approval pathway. Finally, we remain in a very strong financial position, closing the quarter with approximately $1.99 billion in cash, allowing us to fully support all planned commercial and R&D initiatives, engage in strategic business development activities, and achieve cash flow breakeven without the need for additional capital. I will now turn the call over to Eric to discuss our commercial performance and our Sephience global launch.

Thanks, Matt. Our global customer-facing teams performed well again this quarter, achieving $118 million in second quarter revenue from our marketed products, and we are excited to have initiated the global launch of Sephience following approvals in both Europe and the U.S. We will review details of our Sephience launch efforts shortly. We generated $96 million revenue in the second quarter from our global DMD franchise. As Matt mentioned, despite the nonrenewal of the EU conditional license, we have continued supplying paid Translarna to several European countries, leveraging mechanisms specific to each country in accordance with Article 117. Outside of Europe, we continue to generate Translarna revenue, including in Latin America, the Commonwealth of Independent States, the Middle East and North Africa. Our experienced U.S. neurology team is ready to bring Translarna to nonsense mutation DMD patients following potential FDA approval. Now turning to Emflaza, as expected, with additional generic entrants, we have seen continued market erosion. However, we continue to see meaningful revenue, and our PTC Cares team has done an outstanding job ensuring new patient starts and maintaining high levels of brand loyalty for Emflaza with the DMD community. Shifting to Tegsedi and Waylivra in Latin America, we continue to identify and treat new patients in the region and have received group purchase orders in Brazil. For Upstaza and KEBILIDI, we are pleased that new AADC patients have been treated across multiple regions and our commercial efforts remain focused on where patients are identified, including those countries with AADC deficiency founder effects. We expect a steady cadence of AADC patients to be treated in the U.S., Europe, Asia Pacific, and Latin America throughout 2025. Turning now to Sephience for PKU, our world-class commercial team is in place to successfully launch Sephience following the U.S. and European approvals. We are well positioned to leverage our core launch capabilities in rare disease with more than a decade of commercial experience to drive early and rapid Sephience adoption. We initiated the first launch in Germany in mid-July and engaged key PKU centers in the country. We are very pleased with the initial feedback from health care providers, and the first patients have already received commercial therapy. Our teams in Europe have identified other key markets where paid early access programs are available for Sephience, and we'll leverage them as soon as possible. We are thrilled with the recent FDA approval of Sephience, which we believe is well positioned to redefine the standard of care for PKU. In the U.S., our dedicated team is already calling on health care providers in 104 PKU centers of excellence who account for more than 80% of PKU claims and treat the highest concentration of U.S. patients, including those diagnosed at birth, children, adolescents, and adults. The clinical data support the ability of Sephience to address the full spectrum of the approximately 17,000 patients in the U.S. In terms of sequencing, our initial focus is on the patients who recently failed or are not well controlled on existing therapies and those who could be switched from existing oral therapies who are seeking greater Phe reduction. We will then progress to treatment-naive patients who could benefit from a new effective treatment. Our payer meetings continue to be productive following presentations of the clinical data and the value proposition of Sephience from our market access and medical affairs teams. We have actively engaged with key commercial, Medicaid, and Medicare payers covering over 220 million lives and have received positive feedback on access and coverage of Sephience with minimal restrictions. We are equally excited about the anticipated regulatory approvals of Sephience in Japan and Brazil before the end of the year, building on the launch momentum that has already begun in the U.S. and Europe. Initial feedback from health care providers worldwide is highly positive, and we look forward to continuing to provide updates on the Sephience global trajectory in the next several quarters. In addition to our team's focus on the Sephience launch, we have also been preparing for the potential launch of vatiquinone in the U.S. Our experienced teams in neurology are ready to launch the product and address the significant unmet need for both children under 16 who currently have no approved therapy, as well as adults with FA who may benefit from a well-tolerated and effective therapy. With that, I will now turn the call over to Pierre for a financial update.

Thanks, Eric. I will begin by reiterating our excitement for the approval of Sephience, a pivotal milestone both for patients and for PTC. As we discussed, Sephience has the potential to become the standard of care for PKU and will serve as the cornerstone product driving our path to profitability. Today, we announced the purchase of Sephience' annual global net sales payment obligation owed to Censa. This strategic transaction is accretive based on the terms we negotiated and underscores our confidence in the market opportunity. I'll now share the financial highlights of our second quarter of 2025. Beginning with top line results, total product, collaboration, and royalty revenue for the second quarter was $179 million, including DMD franchise revenue of $96 million. Starting with the DMD franchise, Translarna net product revenue in the quarter was $59 million, and Emflaza net product revenue was $36 million. For Evrysdi, Roche achieved second quarter global revenue of approximately USD 559 million, resulting in royalty revenue of $58 million for PTC. For the second quarter of 2025, non-GAAP R&D expense was $104 million, excluding $9 million in non-cash stock-based compensation expense compared to $123 million for the second quarter of 2024, excluding $9 million in non-cash stock-based compensation expense. Non-GAAP SG&A expense was $76 million for the second quarter of 2025, excluding $10 million in non-cash stock-based compensation expense compared to $60 million for the second quarter of 2024, excluding $10 million in non-cash stock-based compensation expense. Cash, cash equivalents, and marketable securities totaled $1,989 million as of June 30, 2025, compared to $1,140 million as of December 31, 2024. Our strong financial position provides us with the necessary resources to seamlessly execute on our strategy, successfully launch all our new commercial products globally, achieve all our anticipated milestones, as well as advance our novel R&D efforts and accelerate our trajectory towards cash flow breakeven and profitability. Furthermore, this strong foundation provides us with the ability to explore business development opportunities to enhance our commercial portfolio and pipeline for long-term growth. I will now turn the call over to the operator for Q&A.

And now we're going to take our first question from Kristen Kluska from Cantor Fitzgerald.

Congrats on a great quarter. I have 2. The first is just on Huntington's. What is going to be on your wish list related to the trial design you and your partners talk with the FDA? And will you have any additional data to share with them at that time? And then for Translarna in Europe, under this Article 117, which I'm less familiar with, do you have to renew this every year? Should we be expecting this 25% revenues on a go-forward basis?

Thank you for the questions, Kristen. Regarding the first question, we plan to engage with the FDA after completing the PIVOT-HD readout, focusing on the design of the efficacy trial using insights from PIVOT-HD and discussing potential pathways to accelerated approval. This may involve existing data from PIVOT-HD or additional data we continue to gather during the open-label extension. We expect the efficacy trial to be extensive, similar to past Huntington's disease studies, and we aim to align on the key elements of that trial. We believe we will gain insight into the necessary data, whether from our current long-term cUHDRS changes and NfL metrics or any further data as we advance in the open-label extension. On your second question, Article 117 was mentioned in the European Commission's acceptance of the CHMP opinion, along with Article 5. These articles enable individual countries to keep Translarna available commercially, despite the license not being renewed. Each country can decide whether to use this directive based on their own processes. We’ve seen about half of the countries taking advantage of this provision, influenced by patient and physician feedback regarding the benefits of Translarna and the absence of alternative therapies. In regions where feasible, we have been able to provide the drug for payment. Some countries have opted out entirely. We expect to maintain approximately 25% revenue through the end of 2025, although it will depend on how contracts and country-specific situations develop. Article 117 does not need renewal, but it is up to each country to decide about continuation, with varying timelines—Italy is allowing six months before reassessment, while others haven't specified. Given the context of our situation with the license not being renewed, we see this as a significant opportunity, especially based on the positive feedback from patients and physicians about Translarna. We're pleased to continue generating revenue in Europe and to keep providing an essential therapy to those who need it.

And the question comes from the line of Tazeen Ahmad from Bank of America Securities.

For Sephience, Matt, can you give us clarity on the metrics that we should expect to see in the early innings of the launch, presumably on the 3Q call? And then can you clarify if you've already started receiving scripts? And if so, do you have any kind of sense on what types of patients are receiving scripts first?

Thank you for the question, Tazeen. I think it's early days, as you say, and I think we're happy with how things have gone, and in particular, what we've seen in the public, a lot of social media and a lot of patients talking about how happy they are. This is data that they wished for and hoped for. And just a lot of positive feedback, which, one, is incredibly gratifying and two, is really consistent with our understanding of the significant unmet need that Sephience can fill. Eric, do you want to go into a little more detail on Tazeen's two questions on the early metrics?

Yes, thank you for the question, Tazeen. As mentioned earlier, we will consistently share key metrics on a quarterly basis, including prescriptions, patient start forms, and the number of commercial patients currently receiving treatment. We will also provide information about healthcare providers and payer prescribing and coverage dynamics. Additionally, we will offer insights into the rollout and international aspects of Sephience, specifying which countries we plan to include. There are several important metrics to track, but most importantly, you will notice a focus on the number of prescriptions and the count of healthcare providers who have prescribed the treatment.

On the scripts received so far, if any?

Yes. We're excited that we've already received prescriptions in the U.S. Patient start forms came in on the very first day, and the feedback from health care providers has been excellent so far. Additionally, we already have our first patients on commercial therapy in Europe, and the feedback from physicians has been very positive. Our teams have immediately promoted the benefits of Sephience. The observations we've made, although it's still early, closely align with our expectations. Physicians are interested in bringing in patients who are poorly controlled or have not responded to other treatments. Many are looking to switch patients to improve their control, and we've also seen prescriptions for new patients.

And it comes from the line of Brian Cheng from JPMorgan.

Two from us. It's probably still in the early days to understand how contracting and the eventual net pricing for Sephience is. But I know that you already have been in touch with a sizable portion of commercial payers out there. So just curious if you had some feedback that can help us to think through the level of contracting. And then I have a quick follow-up.

Yes, thanks, Brian, for the question. We've had positive discussions with payers so far, including a good mix of commercial, Medicaid, and Medicare. These meetings are ongoing after our launch and are progressing as expected. The clinical profile of Sephience is being well received, and payers recognize its differentiation, showing a strong willingness to cover the product. There are minimal restrictions and prior authorizations required, with only a few indicating potential step edits. Regarding contracting, it's still early, and we haven't pursued that yet. At this point, we don't see the need to contract with payers. We will provide metrics on gross to net as we understand the payer mix, which we estimate to be about 65% commercial and roughly 35% Medicaid or Medicare. Overall, everything is going as expected.

Great. And then maybe one for Pierre. Is there any meaningful inventory build that we should think through? And also, how should we think about any changes in terms of the SG&A line that we should expect for the Sephience launch?

Yes. Thanks for the question, Brian. As we mentioned, we are leveraging our existing infrastructure. So there will be no additional OpEx. And then in terms of inventory, everything is ready, right, just to be clear. So all the patients have what they need.

Yes, I can provide more details on that, Pierre. Regarding inventory, we plan to ship to patients around mid-August. We are collaborating with two specialty pharmacies that will maintain just-in-time inventory levels. So, we are not focusing on building inventory. Instead, we are anticipating demand based on the number of start forms we have already received. There has been significant excitement around the launch of Sephience, and the community is eager to begin. We will monitor this closely. However, we will not be building inventory; we will just manage it with our specialty pharmacies.

And it comes from the line of Judah Frommer from Morgan Stanley.

Congrats on the update. I guess, can you provide a little more color on the decision to allocate capital to these prior Censa shareholders? Is there anything you can share in terms of kind of hurdles for your decisions to do that on kind of a returns basis relative to maybe allocating that capital somewhere else, business development on potentially earlier-stage assets or just investing further in your pipeline?

Thank you for the question, Judah. As we mentioned, we have built up significant cash reserves, closing the second quarter with nearly $2 billion in cash on the balance sheet. Our plan is to use these funds strategically to support our commercial programs and R&D initiatives, while also being mindful of business and corporate development opportunities. This falls under the strategic deployment of our capital. Pierre, would you like to provide more detail on our rationale for this approach?

Yes, absolutely. Look, given the revenue potential of Sephience and our ability to achieve $1 billion plus of revenues in the U.S. alone, this is a thoughtful use of our cash. We said that we will be disciplined. We will focus on creative value transactions, and that's exactly how we thought about it. And this is a very high return on capital. So that's how we thought about it. Furthermore, as Matt mentioned, we have a very strong financial position that will not preclude us for additional opportunities for BD or pipeline investments or R&D efforts. We have a lot of firepower remaining.

Okay. Great. And then just on Huntington's, is there anything you can share on interactions you've had with Novartis since providing the update?

Judah, I would say that the teams have worked very well together. There's a clear shared sense of urgency in getting this program forward and getting a therapy to patients that could be beneficial. There's a shared enthusiasm for the mechanism of Huntington lowering and the positive attributes of votoplam or PTC518 being an oral small molecule splicing agent. And I think what we've done in the past few weeks is really take 2 very aligned teams, work together and make sure that we take the next necessary important step, which is meeting with the FDA to align on the efficacy trial design as well as understanding with the data we have at hand and what additional data we could have, what the potential pathway for accelerated approval looks like.

And it comes from the line of Kelly Shi from Jefferies.

Congrats on the progress. Maybe first on PKU launch, specifically on how to timely capture those who are under care and recently failed other therapies, how soon could they get Sephience? And will there be some wait time for logistical reasons? Also, on the sales guidance for full year '25 remain the same from Q1 from $650 million to $800 million. Curious if this number includes any revenues from PKU launch? And also, I have a follow-up.

Thank you for the questions, Kelly. I'll start and then pass it over to Eric and Pierre. First, we've discussed our capacity to benefit the full range of PKU patients. Regarding the sequence, there are a significant number of patients at the specialty centers we mentioned—104 in total—who are either using existing oral therapies that could be enhanced with a treatment offering greater reduction in Phe and more dietary flexibility, or who have recently tried and failed other options, and others who may have had recent contact with these centers and are new to therapy. This group of patients is who we plan to target first in our sequencing efforts, progressively reaching out to those who may have less frequent contact with the centers later on. As we indicated on our call last week, there are approximately 7,000 patients that fit into this initial group. Eric, would you like to discuss wait times and how quickly patients can receive therapy?

Yes, Kelly, thanks for the question. I think really, that's going to depend. Again, it's very early days, and part of that is going to be based on the patient's profile. If they've already been controlled on current therapies and would like to switch to Sephience, then it may take a little bit longer. However, most of these patients that Matt described are either poorly controlled or they failed. And some of them are looking for better Phe control. If there's documentation, usually, that will go much quicker through the payer. So for us, we anticipate that that first wave will already have previous documentation, and we will be able to, if you will, address many of the prior authorizations and if required, some of the step edits very quickly. We have a lot of experience with that over the last 8.5 years. Our teams have been dealing with that with prednisone and Emflaza. And the good news here is Sephience and the activity of Sephience and Phe can be measured very quickly. So we can get to the point of prescription and dispense relatively quickly, particularly in that group that Matt mentioned, that initial wave of close to 7,000 patients.

Maybe just quickly on FA, could you share any comments on your latest engagements with the regulatory agency and also, your confidence level for the PDUFA given it's only 12 days away?

Yes. Thanks, Kelly. I can answer that and then I can pass it to Pierre to answer your question about guidance because I don't think we got to that one. So on assay, we had a late cycle meeting a few weeks ago. It was a very constructive meeting. We were told by the agency that they're still actively reviewing the application. And so, we're just waiting for any additional information and questions that we can address as they continue their review despite it being so close to PDUFA. Pierre, did you just want to comment on guidance and the inputs?

Yes. Guidance, $650 million to $800 million, as we discussed, the bulk of it is our existing product portfolio and obviously includes new product launch as well. There are still some uncertainties, as you can imagine, on Emflaza, for instance, that's probably how you derive the $650 million at the bottom end and the $800 million will be dependent on how fast we ramp up and the upside potential there as well.

And it comes from the line of Brian Abrahams from RBC Capital Markets.

This is Kevin speaking on behalf of Brian. I have a couple of questions regarding Sephience in the EU. Could you discuss the expected uptake in the early access markets you've identified in other EU countries? More broadly, how should we consider the opportunities in the EU? Additionally, you mentioned that there would be no G&A impact from these launches. Does this also apply to the EU?

Kevin, thanks for the questions. I'll just tackle the second one first and let Eric talk about European dynamics. No, we don't expect any OpEx changes for Sephience. It's all currently covered. As Pierre said, we're leveraging our existing infrastructure. Similarly, for vatiquinone, if approved and launch there, the OpEx is already baked in as we'll be leveraging our existing neurology commercial infrastructure in the U.S. Eric, do you want to talk a little bit about what we're seeing or expecting in Europe beyond the Germany early access program?

Yes. Thanks for the question, Kevin. The European opportunity will be very significant. And of course, Germany is the second largest market in the world. So for us, it's incredibly important to get off to a really good start and establish, if you will, the pricing corridor. We're going to be leveraging a number of key markets in Europe that have early access programs and patient programs. Those are typically the Southern European markets as well as Central and Eastern European markets, and there are some in the North. We would anticipate somewhere between 5 to about up to 10 markets that could potentially contribute during the course of this year and through the first half of next year. And the European opportunity will be incredibly important if we can maintain and we will maintain a very narrow pricing corridor. But in addition to that, we also expect approval in Japan and Brazil and coming on board there, we will also add some of the momentum that we've built from the U.S. and Europe. So these are also incredibly important markets to our growth in the future.

And the question comes from the line of Ellie Merle from UBS.

This is Tejas on for Ellie. I know you mentioned you had some scripts coming in. Have you guys seen any approvals yet for coverage? I know it's ahead of any drug getting shipped, but just anything anecdotal? And then a little bit on the ex U.S. opportunity. How does the distribution of patients work in some of these countries? Are they concentrated at major centers? Or are they a bit more spread out through these countries?

Thanks for the questions, Tejas. On the first one, it's still early days to answer that question. So there's nothing more to add on that. But Eric, do you want to talk a little bit about distribution of patients in Europe?

Yes. And just going back on the insurance, we're in the process. We're just in a few days. So, as you can understand, we're going through the process of insurance verification in the U.S. That process price was lifted, insurance verification and then co-pay assistance, that takes a few days for all that to happen. But as we progress, we'll be providing a little bit more color there. In terms of major centers of excellence, in fact, I think Germany is a great example where we were able through our compassionate use program to target more than half of the centers in Germany that actually oversee close to 8,000 patients. And with that, our compassionate use program was actually rolled out and has been incredibly important in converting some of those patients immediately. Most of these patients are seen in centers of excellence, very much like the U.S. where you have a patient that's diagnosed at birth. So they're actually moved immediately into that center and followed throughout adolescents and then their adulthood. So we see in Europe a very high concentration in the major cities, and it's really not as diffuse. It's actually far more centralized.

I guess just with those compassionate use programs, just around the world, how many patients are on them, including in the U.S.? And how fast do you think you could convert those?

Yes, Tejas, we launched a specific early access program in Germany for two reasons. First, with the pricing set for the German launch, patients quickly transitioned to commercial access. Second, it allowed us to provide the drug to physicians at key centers. We did not implement a global early access or compassionate use program; this decision was unique to Germany due to the launch dynamics, the pricing announcement, and the six months of free pricing following the launch.

And the question comes from the line of Geoff Meacham from Citigroup.

This is Jarwei on for Geoff. Two questions. Just to your earlier comment on the early scripts coming in, could you provide some color on the cadence and types of patients coming in? Have these patients lined up more with their scheduled visits? Or have these early patients been coming in voluntarily for a medication switch? And then second question, based on your latest conversations with FDA on vatiquinone, what has been your sense on the agency stance on a broad label for all age groups? And is there a possibility that the agency could perceive demonstration of benefit on certain mFAR subgroups to be more appropriate for certain portions of the patient population? And on that topic of labeling, have those discussions begun?

Thanks for the question, Jarwei. It's still early days, and we don't see any specific rules or patterns. What we do know is that many patients are eager to access the drug quickly. We’re observing a lot of interest on social media, with patients reaching out to their doctors immediately. The prescription decisions at these centers can come from MDs, doctors, or nurse practitioners, so there's a mix involved. We've also mentioned that many centers, especially in the U.S., have patient waitlists. Therefore, they may be working from that as well. While there aren't clear rules, as we anticipated, there's a wide range of patients interested in the drug, and physicians want to provide it for these different groups, as Eric noted. Regarding vatiquinone, we expect that the label will cover all age groups, although the MOVE-FA study specifically addressed pediatric and adolescent patients who currently lack approved therapies. We have data on adults from that study, which aligns with findings in younger patients, as well as information from our longer-term extension studies that confirm evidence, including data from an earlier study showing significant effects in both ambulatory and non-ambulatory adults in terms of slowing disease progression over the years. Overall, the data package supports the benefit and safety across all age groups and varying degrees of disease severity for FA. We have not officially started labeling negotiations at this time.

And it comes from the line of Joon Lee from Truist.

When you talk to the FDA for the Huntington's, my guess is that it will be with CDER, but CBER is also looking at AMT-130 for Huntington's and is expected to run their decision on accelerated approval path this quarter. So given the same disease indication with the decision by CBER, is that any sort of regulatory precedent that may impact CDER and your program? And also quickly, do you still owe royalties to Shiratori?

Thanks for the questions, Joon. Regarding your first question, we are closely monitoring the FDA's interactions that CBER is having concerning gene therapy. We have discussed the potential benefits of administering gene therapy to one part of the brain to reduce HTT. If these benefits are realized, we believe they could significantly contribute to lowering Huntington protein throughout the entire brain in a sustainable manner, while also allowing for dose adjustments and peripheral monitoring of HTT reduction. From a development perspective, we see good correlations. On the regulatory front, there seems to be an increasing interest from the agency in achieving alignment, especially regarding rare diseases, whether it involves CBER or CDER. There have been many changes at the FDA lately, but the desire for alignment still exists. With this in mind, we are very interested in understanding what the potential pathway may look like. As we shared during the PIVOT-HD readout in May, we were pleased to show a statistically significant benefit after two years when compared to a well-matched natural history cohort from the ENROLL-HD database, along with indications of dose-dependent longer NfL after 24 months. Thus, we are eager to see the FDA's position on using the natural history comparator. Additionally, we have the advantage of providing peripheral biomarker data that demonstrates we are positively impacting what is most important in the disease, which is the toxic Huntington protein. Pierre, would you like to comment on the remaining royalties for Shiratori?

Yes, we still owe low single-digit royalty to Shiratori.

And it comes from the line of Sami Corwin from William Blair.

Congrats on the progress. I was curious if you could provide an update on the Translarna review in the U.S. I think the last we heard there have been some clinical site inspections. And then given your strong balance sheet and revenue projections, what are your thoughts on additional BD opportunities or early pipeline investments?

Thanks for the question, Sami. On Translarna, that NDA remains under active review, as we mentioned that we had had the clinical site inspections completed in the spring. We have got IRs in the early part of the summer that we were able to easily address. And so, now obviously, without the PDUFA date, it's hard to know exactly when the agency will reach an action, but we have had back and forth in terms of IRs in addition to the inspections as we previously talked about. In terms of the balance sheet, clearly, we still remain with significant firepower and look to do strategic BDs. Pierre, do you want to just talk a little bit how we've been thinking about the potential BD opportunities and timing?

Yes, as Matt mentioned, we have a strong financial position and are actively exploring business development opportunities. We have a global infrastructure in place, and we are experienced in getting drugs approved and commercialized internationally. Therefore, we are considering assets that can fit into our existing infrastructure. Additionally, we are looking at pipeline assets that will enhance our R&D portfolio, which outlines our approach to business development opportunities. Today, we reaffirmed our commitment to being disciplined and pursuing transactions that will create value for our shareholders.

A kind of follow-up question on the BD. Is there a sweet spot in terms of the stage of clinical development that you're looking at?

Yes, I believe we are casting a wide net, especially on the commercial side. We'll need to see how the regulatory decisions unfold, as they will determine whether we can handle multiple launches or if our existing infrastructure will allow us to develop and increase top-line revenue. We have several projects moving from our research platforms into clinical settings. Therefore, it will be essential to find opportunities that fit well with what we already have. Clearly, our focus will be on rare diseases, which may include both CNS and non-CNS areas. It's crucial that we identify the right opportunities that align with our existing programs and expertise.

And it comes from the line of Joseph Thome from TD Cowen.

This is Peyton on for Joe. So kind of asking a little bit about the vatiquinone scenarios. Saying that it is approved around the PDUFA date, how quickly could you launch therapy? And is there a particular population that you would go after? And then kind of along with that, would you then move it to try and get a registration in Europe? And then in the case that you do not get it approved, would you be open to running another trial? If you can walk us through that as well, that would be great.

Our current focus is on achieving potential success. Our teams are prepared and the necessary infrastructure is established, allowing us to launch immediately. Given that there are no approved drugs for patients under 16, we intend to prioritize that group. We take pride in our long-standing collaboration with Friedreich's ataxia centers in the U.S. that serve both pediatric and adult patients. This presents an exciting opportunity for us, and we would be ready to begin on day one.

And then if there wasn't success, would you consider running another trial? Or would you shelter the program?

Yes. As I mentioned, we are currently focused on achieving success. We believe that vatiquinone offers an effective therapy, as demonstrated by the data, not just for children who require a safe and effective treatment, but also for adults who could benefit from a safe, well-tolerated, and effective option. This is what we believe the data indicates, which also supported our NDA submission. We are committed to patients and will consistently seek ways to provide support.

And it comes from the line of Luke Herrmann from Baird.

Just 2 quick regulatory ones for me. First, a follow-up on the vatiquinone review. Has FDA given you any sort of indication around when labeling discussions could potentially get underway? And then second, on Translarna, again, has FDA given you sort of runway or timeline for when an action date could be put in place?

Yes. So, Luke, on your first question, there was no formal timetable as we said, the late cycle meeting was just a few weeks ago, and there are still some questions about that we were talking to them about at the time and no specific timeframe for next steps was given. As you know, I think things are quite busy at FDA these days. And in terms of the Translarna, and there will not be a PDUFA date issued just given the particulars of that application that it was a resubmission of an NDA that was received the CRL following a submission following an RTF. Anyway, just the legacy of this going back many, many years, it is not going to be as part of the PDUFA program. So PDUFA date will not be given.

And it comes from the line of Paul Choi from Goldman Sachs.

This is Daniel on for Paul. We're curious about like what's the pricing assumption after the 6-month free drug program ends in Germany?

Thanks for the question, Daniel. Eric, do you want to talk about our global pricing strategy?

Yes. Thanks for the question, Daniel. Look, right now, we're working to provide a very narrow pricing corridor. We've already announced the price in the U.S. and in Germany. They're very close to each other. In fact, we anticipate with the launch of Japan and other European markets to maintain that very narrow pricing corridor. Regarding your specific question, it's a process in Germany. The AMNOG process provides you free pricing. And then after that 6 months later, we will be in negotiations following a medical benefit assessment, and we'll be supporting that with all of the clinical data to help differentiate for all the same reasons why patients in Germany should actually obtain Sephience, particularly those who are poorly controlled who have failed. And I think the real-world data over the next 6 months and the support from our key opinion leaders and centers are going to help us with that benefit assessment. So stay tuned. This is a process that will take at least 12 months during the whole process for us to work. And I think we're very optimistic about maintaining a very close and narrow pricing corridor.

And the question comes from the line of Gena Wang from Barclays.

I have one regarding Sephience. Just want to confirm that there is no IP protection and it will be relying on the orphan designation market exclusivity in U.S., Europe, and Japan. And I missed the beginning part of the call, just apologize if already asked. So should we start to see revenue contribution in Q3 '25? And then second question is very quickly regarding the vatiquinone in FA. I know you mentioned that late cycle review was discussed a few weeks ago. And just wondering if you can provide a little bit more color on what was discussed during that late cycle review. And then any label discussion come up during the discussion or afterwards?

Thank you, Gena. Let me clarify the first question. We have guided the intellectual property to extend until 2039. We hold a polymorph patent that lasts until 2038, which we believe will provide protection through that year, and we're conservatively estimating at least a year of patent term extension to 2039. We are also working to expand our IP portfolio to potentially extend protection even further beyond 2039, which applies not only to the U.S. but also to key global markets. We expect to see revenue in Q3 from Sephience as we have started delivering commercial products in Germany, and we have received patient start forms in the U.S. We anticipate being able to ship Sephience to patients in the next couple of weeks. Additionally, there is some new product revenue included in our broad guidance, and the upper end of our guidance, which remains at $800 million, allows for potential upside from new products. Regarding vatiquinone and the late cycle meeting, it was a brief session focused on the evidence being reviewed and the assurances that the review is ongoing. A key question was whether the fact that upright stability wasn't predetermined as a primary endpoint would affect the persuasiveness of the evidence of effect, which, along with confirmatory evidence, could support approval. They acknowledged that upright stability can indeed serve as an efficacy endpoint and will be used as a primary endpoint, for instance, in the SKYCLARYS pediatric trial, highlighting the FDA's evolving view that upright stability is the most relevant measure of efficacy in ambulatory pediatric and adolescent patients. We have not had any labeling discussions beyond what was covered in the late cycle meeting at this time.

And it comes from the line of Joseph Schwartz from Leerink Partners.

This is Jenny on for Joe. I just have a few follow-ups on vatiquinone. First, has the FDA given any indication that the review has been delayed and/or may be delayed due to staffing issues? We know it's kind of crazy over there. And then if approved, should we be looking at the SKYCLARYS launch as a template? And if not, how should we be thinking about that? And do you see any potential for combinations of SKYCLARYS and vatiquinone in FA patients?

Thank you for your question, Jenny. There has been no discussion about not meeting timelines. Even if there was a possibility of delays, I'm not sure there would be a discussion around that. We all recognize that there have been numerous changes at the FDA and a lot of work to be done. Recently, we've seen instances from the neurology division where some programs may not have met certain timelines. However, we look forward to continuing our collaborative efforts with the division and aim for a positive outcome, whether it is on time or as soon as feasible. As we mentioned, we anticipate that the dynamics of the launch will differ for several reasons, and I can let Eric provide more details on that. Would you like to discuss further?

Yes. I think we have an experienced team already that have been calling for the last 8.5 years in pediatric neurology. So we've already profiled all the key centers specific to FA. And we know the prescribers. We know through claims data where they are and the high unmet needs, plus the clinical differentiation. So we're already very well poised to launch and begin the process like we have with Sephience to get patient start forms on day 1. Our teams, not only are experienced in this, but we're looking at a number of different things, including not only the pediatric but a number of those patients who are adults who have failed on SKYCLARYS and some of them are poorly controlled, and there's still quite a bit of naive patients. So all in all, I think the opportunity is very significant, and our team is experienced and ready to go on day 1.

Yes. Additionally, we do not anticipate any monitoring. Pediatric patients have a significantly different dynamic than adults, which will likely result in different launch dynamics. Regarding combination therapy, this is a topic of interest. Those close to the Friedreich's ataxia community have always believed that it can be best managed with a combination of therapies, similar to other complex disorders. Therefore, we expect interest in exploring the combination of both vatiquinone and SKYCLARYS.

Excuse me, Jenny, any further questions?

No, that's it.

Dear speakers, there are no further questions. I would now like to hand the conference over to your speaker, Chief Executive Officer, Dr. Matthew Klein. Please go ahead.

Thank you all again for joining the call today. We're excited to have had another strong quarter. We're still seeing continued contributions, meaningful contributions from our DMD franchise, which is great because we now can have that in hand as we now embark on the future, which is the launch of Sephience, and we're incredibly excited about how things are going in the early days and all indicators we're seeing from everywhere in the world that this will meet our expectations of being our foundational product for building PTC going forward. So thank you all again, and have a great evening.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.