PTC Therapeutics - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 revenue of $178.9M and diluted EPS of -$0.83; both exceeded Wall Street consensus estimates of $173.6M revenue and -$1.03 EPS, respectively. Bold beat on both top and bottom line. [ir.ptcbio.com/news-releases/news-release-details/ptc-therapeutics-provides-corporate-update-and-reports-second-3] [ir.ptcbio.com/node/17926/pdf] Revenue Consensus Mean: $173.6M*, Primary EPS Consensus Mean: -$1.03* (Values retrieved from S&P Global).
• Sephience (sepiapterin) achieved EU marketing authorization (broad label, all ages) on June 23 and FDA approval on July 28 (broad label ≥1 month); global launch underway in the U.S. and Europe, positioning a new growth pillar.
• DMD franchise revenue was $96M, with Translarna $59.5M and Emflaza $36.4M; Evrysdi royalties were $57.6M.
• FY2025 guidance maintained: total revenue $650–$800M; GAAP R&D+SG&A $805–$835M; non-GAAP R&D+SG&A $730–$760M.
• Subsequent event: FDA issued a CRL for vatiquinone in FA (Aug 19), citing lack of substantial evidence of efficacy and request for an additional adequate study—an overhang for the pipeline near-term.

What Went Well and What Went Wrong

• What Went Well

  • Beat estimates: revenue $178.9M vs $173.6M* and EPS -$0.83 vs -$1.03*; better royalty contribution from Evrysdi. Revenue/EPS consensus values*, S&P Global.
  • Major regulatory wins: Sephience broad-label approvals in EU and U.S.; management: “expect Sephience to be the foundational product for PTC’s future growth and path to profitability.”
  • Balance sheet remains strong: cash, cash equivalents and marketable securities $1,989.2M at June 30, 2025.

• What Went Wrong

  • Core franchise decline: Translarna ($59.5M) and Emflaza ($36.4M) were down YoY vs Q2 2024 ($70.4M and $47.3M).
  • Elevated operating spend vs prior year in SG&A (GAAP $85.3M vs $69.5M) reflecting launch and portfolio support.
  • Post-quarter regulatory setback: FDA CRL for vatiquinone requires another adequate, well-controlled study, delaying potential revenue contribution.

Transcript

Speaker 4

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics' second quarter 2025 earnings conference call. All participants are in listen-only mode. After the presentation, there will be the question and answer session. 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.

Speaker 0

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 the 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.

Speaker 2

Thank you all for joining today. I'm pleased to share results from another strong quarter highlighted by the first approvals for Saphiance for the treatment of children and adults with PKU. We expect Saphiance 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 non-renewal of the Translarna conditional marketing authorization, we have reached agreements with about half of European countries based on the unprecedented use of Article 117 mechanisms to provide paid Translarna profit. For the remainder of 2025, we expect to be able to maintain approximately 25% of European revenue from prior to authorization non-renewal.

The highlight of the quarter was the EU approval of Saphiance in late June with a broad label inclusive of all disease subtypes and age groups. Last week, we announced FDA approval of Saphiance with similar broad labeling for patients aged one month and above. Based on the strong Saphiance data package and the significant unmet need for PKU patients, Saphiance is positioned to become the new standard of care for children and adults living with PKU. As we have discussed, we believe the Saphiance 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 two weeks and look forward to a robust early launch. Eric will provide further details on the Saphiance launches shortly. Given the potential significant revenue opportunity for Saphiance, 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 Sensa Pharmaceuticals in 2020. PTC will pay the participating Sensa 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 Saphiance, we have two NDAs that remain under FDA review for vatiquinone and Translarna.

For the vatiquinone NDA for Friedreich 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 for Huntington’s disease, following the positive Phase II PIVOT-HD study results, we continue to collaborate with Novartis on next steps for PTC518 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 Saphiance global launch. Eric?

Speaker 3

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 Saphiance following approvals in both Europe and the U.S. We will review details of our Saphiance launch efforts shortly. We generated $96 million in revenue in the second quarter from our global DMD franchise. As Matt mentioned, despite the non-renewal of the EU conditional marketing authorization, we have continued supplying paid Translarna to several European countries, leveraging mechanisms specific to each country in accordance with Article 117 mechanisms. 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 Inflizumab.

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 Inflizumab with the DMD community. Shifting to Tecsettia and Wayleva in Latin America, we continue to identify and treat new patients in the region and have received group purchase orders in Brazil. For Osphasa and Covilie, 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 Saphiance for PKU.

Our world-class commercial team is in place to successfully launch Saphiance 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 Saphiance 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 healthcare 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 Saphiance and will leverage them as soon as possible. We are thrilled with the recent FDA approval of Saphiance, 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 healthcare 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 Saphiance 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 fee reduction. We will then progress to treatment-naive patients who could benefit from a new effective treatment. Our peer meetings continue to be productive, following presentations of the clinical data and the value proposition of Saphiance 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 Saphiance with minimal restrictions. We are equally excited about the anticipated regulatory approvals of Saphiance 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 healthcare providers worldwide is highly positive, and we look forward to continuing to provide updates on the Saphiance global trajectory in the next several quarters. In addition to our team's focus on the Saphiance 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 Friedreich ataxia 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. Pierre.

Speaker 1

Thanks, Eric. I will begin by reiterating our excitement for the approval of Saphiance, a pivotal milestone both for patients and for PTC. As we discussed, Saphiance 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 Saphiance's annual global net sales payment obligation owed to Sensa Pharmaceuticals. The 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 $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 $16 million for the second quarter of 2024, excluding $10 million in non-cash stock-based compensation expense. 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. Operator?

Speaker 4

Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one one again. Kristen Bell will compile the Q&A queue. This will take a few moments. We are going to take our first question. It comes to the line of Kristen Kuska from Cantor Fitzgerald. Your line is open. Please ask your question.

Hi, everyone. Congrats on a great quarter and thanks for taking my questions. I have two. 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 will talk with the FDA, and will you have any additional data to share with them at that time? 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 so much.

Speaker 2

Thank you very much for the questions, Kristen. Kristen, on the first question, I think this is exactly as we had said we hope to be doing with our partner Novartis, which is once we complete the readout of Pivot HD, engage with the FDA to discuss two things. One, the design of the efficacy trial based on some of the key learnings that we talked about from Pivot HD, as well as discuss pathways to accelerated approval, whether that's on the existing data we've shared thus far with Pivot HD or the additional data that we could continue to collect as the open label extension is ongoing. As we talked about, we would fully expect the efficacy trial to be a large trial, as has been done previously with Huntington’s disease. As you know, there's a fairly finite universe of endpoints and certain factors that could go into discussion.

I would say our wish list is to come away with alignment for what the key elements of that efficacy trial will be. Obviously, we have confidence that that should happen, as well as clarity on the data that we'll need, whether it's the data we have at hand now showing long-term CUHDRS changes, NFL, some of the other biomarker changes to support accelerated approval, or whether there's going to be additional data that we could use once we get further into the open label extension. On your second question, Article 117 is something that was referenced in the European Commission's adoption of the CHMP opinion. Actually, there's two articles. There's Article 117 and Article 5, which together reference specific things in the European Commission doctrines.

What they allowed together is individual countries to allow Translarna to still be commercially available despite the fact that the license has not been renewed. It's basically an umbrella or a directive that each individual country can elect to leverage or not based on individual country-by-country mechanisms that they have. As we said, we've seen about half the countries leverage that availability. That's, again, based on a lot of the feedback they've gotten from patients and physicians who have clearly communicated the benefits they've observed with Translarna, as well as the lack of alternative therapies. In countries where possible, we've been able to provide paid drugs. Other countries have elected not to do it. We're about half now. We've said that we expect to be able to maintain about 25% revenue through the rest of 2025.

I think we're going to see how different countries, different contracts, and things play out over time. Article 117 mechanisms don't need to be renewed. It'll be at the discretion of individual countries about renewing. In some countries, for example, Italy has publicized they're allowing for six months, and then it'll be revisited. Other countries have not given it a timeline. It's going to be very variable, which is why we've said we expect the 25% for the remainder of the year. This is all an incredible upside given the context of this situation when you consider that the license wasn't renewed. This is really based on a lot of the feedback from the patients and the physicians about the clear perceived benefits of Translarna.

We're, you know, one, happy to be able to still harvest revenue from Europe, but two, really happy to be able to still provide this therapy to patients who really need it.

Speaker 4

Thank you. Thank you. Now we're going to take our next question. The question comes from the line of Tazin Ahmad from Bank of America Securities. Your line is open. Please ask your question.

Hi, guys. Good afternoon. Thanks for taking my question. For Saphiance, Matt, can you give us clarity on the metrics that we should expect to see at the early innings of the launch, presumably on the 3Q call? Can you clarify if you've already started receiving scripts? If so, do you have any kind of sense on what types of patients are receiving scripts first? Thanks.

Speaker 2

Thank you for the question, Ms. Tazin. I think it's early days, as you say, and I think we're happy with how things have gone. 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 the thing that they've wished for and hoped for. There is just a lot of positive feedback, which, you know, one, is incredibly gratifying and, two, is really consistent with our understanding of the significant unmet need that Saphiance can fill. Eric, do you want to go into a little more detail on Tazin's two questions on the early metrics we plan to share in early dynamic?

Speaker 3

Yeah, thanks for the question, Tazin. As we said earlier, the metrics we're going to continually provide on a quarterly basis will be prescriptions, patient start forms, the number of commercial patients that are currently available on treatment. We'll also provide information regarding healthcare provider as well as payer sort of prescribing dynamics and coverage dynamics. We'll also provide you some color on the rollout and the international flavor of Saphiance, which countries will actually be bringing on board. There are a number of key metrics here. More importantly, I think you're going to see this as it's still early days, but you're going to see the metrics really centered around the number of prescriptions and the number of healthcare providers who have prescribed.

Thank you. On the scripts received so far, if any?

Yeah. To provide you some, we're thrilled that we've already gotten prescriptions in the U.S. We have patient start forms that came in on the very first day, and the feedback from healthcare providers has been excellent so far. As I mentioned, we also have our first patients on commercial therapy in Europe already. The feedback from physicians has been very positive. Our teams have been promoting the benefits of Saphiance immediately. The characteristics that we've seen, and again, it's very early days, kind of match up very closely to what we've seen. Physicians are looking to bring in patients who are poorly controlled or have failed. Many of them have interest in switching patients to get better fee control, and we've also seen prescriptions for naive patients.

Okay. Thanks, guys.

Sure.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Brian Chen from JPMorgan. Your line is open. Please ask your question.

Hey, guys. Thanks for taking our questions this afternoon. Two from us. It's probably still in the early days to understand how contracting and the eventual net pricing for Saphiance is, but I know that you already have been in touch with a sizable portion of commercial payers out there. Just curious if you had some feedback that can help us to think through the level of contracting and then have a quick follow-up. Thank you.

Speaker 3

Yeah, sure. I think.

Speaker 2

Thanks, Brian. Go ahead.

Speaker 3

Thanks for the question. Eric, go ahead.

Speaker 2

Take it away. I remember calling you from security.

Speaker 3

Yeah, thanks, Brian, for the question. We've been having really good meetings with payers so far. As I mentioned, it's been really dozens of payers and quite a good mix between both commercial, Medicaid, and Medicare. We continue to have these meetings now post-launch. I think really, more than anything else, it's going as well as what we expected. We see right now that the clinical profile of Saphiance is being very well received. Payers already see that it's highly differentiated, and there's a high willingness to cover the product. Importantly, very minimal restrictions, prior authorizations to the label, and only a few have said that we implement step edits. Overall, minimal restrictions. Regarding your question around contracting, we haven't gotten—it's still early days. We haven't gotten into that at this point in time. We don't necessarily see the need at this point in time either to contract with payers.

As I said, we will be providing metrics around gross to net further down the line as we get the payer mix, which we anticipate at this point in time to be 65% commercial and approximately 35% to be Medicaid or Medicare. At this point in time, it's a bit early, but overall, I think it's going as well as we expect it to go.

Great. Maybe one for Pierre Gravier. Is there any meaningful inventory build that we should think through? Also, how should we think about any changes in terms of the SG&A line that we should expect for the Saphiance launch? Thanks for taking our questions.

Speaker 1

Yeah, thanks for the question, Brian. As we mentioned, we are leveraging our existing infrastructure, so there will be no additional OpEx. In terms of inventory, everything is ready, right? Just to be clear, all the patients have what they need.

Speaker 3

Yeah. I'll just add, I can add a little more color to that, Pierre. In the context of inventory, we plan to ship to patients sometime around mid-August. Clearly, we were working with two specialty pharmacies that will carry just-in-time inventory levels. It's not really something that we're looking at in terms of building. What we are doing right now is anticipating that demand based on the number of start forms that we've already started to accumulate. As we've mentioned, there has been incredible excitement around the launch of Saphiance, and the community now is really poised to begin that. We'll be monitoring that very closely. Again, Brian, we're not really going to be building inventory at all. We're just going to be managing accordingly with our specialty pharmacies.

Great. Thanks, guys.

Speaker 4

Thank you. Now we're going to take our next question. This comes from the line of Judah Frometh from Morgenstern. Your line is open. Please ask your question.

Speaker 2

Hi, guys. Thanks for taking the questions and congrats on the update. Can you provide a little more color on the decision to allocate capital to these prior Sensa shareholders? Is there anything you can share in terms of hurdles for your decisions to do that on 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.

Hey, thanks for the question, Judah. As we talked about, we have accumulated and built significant cash reserves. We closed the second quarter with almost $2 billion still in cash on the balance sheet. What we said we're going to use that for, we're going to deploy it strategically. We're going to support our commercial programs, our R&D program, pipeline programs, as well as be thoughtful about business development and corporate development. I would put this under the heading of a strategic deployment of our capital. Pierre, do you want to give a little bit more detail on the thinking around this and why it was a strategic deployment of capital?

Speaker 1

Yeah, absolutely. Look, given the revenue total share of Saphiance and, you know, our ability to achieve a billion-dollar 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. This is a very high return on capital. That's how we thought about it. Furthermore, as Matt mentioned, we have a very strong financial position that will not preclude us from additional opportunity for BD or pipeline investments or own R&D efforts. We have a lot of firepower remaining.

Speaker 2

Okay, great. 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 PTC518 being an oral small molecule splicing agent. I think what we've done over the past few weeks is really take two 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.

Thanks.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Teleshi from Jefferies. Your line is open. Please ask your question.

Congrats on the progress and thanks for taking my questions. 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 Saphiance? Will there be some wait time for logistical reasons? Also, on the sales guidance for full year 2025, does it remain the same from Q1, from $650 million to $800 million? Curious if this number includes any revenues from PKU launch and also have a follow-up. Thanks.

Speaker 2

Thank you for the questions, Kelly. I'll start and then pass to Eric and Pierre. First, we've talked about the ability to provide benefit to the full spectrum of PKU patients. In terms of sequencing, there are a relatively large number of patients who are at these specialty centers, 104 specialty centers that we talked about, who are either on existing therapy, oral therapies, and can certainly benefit from one that could provide greater lowering and see greater diet liberalization. Others who've recently tried and failed, and others who may be in recent contact with the centers and therapy naive. It's that group of patients that we've talked about that we see as the first and that we would be targeting in terms of sequence. Of course, those who may be in less contact with the center as time goes on.

There's a large number, as we shared on the call last week, somewhere around 7,000 patients fitting for that first wave of the sequence. Eric, do you want to talk a little bit about wait times and how quickly patients can get therapy?

Speaker 3

Yeah, 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 Saphiance, it may take a little bit longer. However, most of these patients that Matt described are either poorly controlled or they've failed. Some of them are looking for better fee control. If there's documentation, usually that will go much quicker through the payer. For us, we anticipate that the first wave will already have previous documentation and 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 eight and a half years.

Our teams have been dealing with that with Prednisone and Influenza. The good news here is Saphiance and the activity of Saphiance and fee can be measured very quickly. 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.

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

Speaker 2

Yeah. Thanks, Kelly. I can answer that, and I can pass it to Pierre to answer your question about guidance because I don't think we got to that one. On FA, we held 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. 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 Feduca. Pierre, did you just want to comment on guidance and the inputs?

Speaker 1

Yeah. Guidance, $660 million to $800 million. As we discussed, the bulk of it is our existing rare disease portfolio, and obviously, it includes new product launch as well. There are still some uncertainties, as you can imagine, on influenza, 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 ends up type of a bunch of there as well.

Thanks very much.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Brian Abrahams from RBC Capital Markets. Your line is open. Please ask your question.

Speaker 2

Hi, this is Kevin on for Brian. Thanks for taking our questions. I just had a couple on Saphiance in the EU. Maybe can you talk about what uptake is expected in other EU countries with early access that you've identified and more generally how we should think about the EU opportunity? I believe you mentioned no G&A impact given these launches. I'm assuming that also applies to the EU as well. Thanks so much. Kevin, thanks for the questions. I'll just tackle the second one first and let everyone talk about European dynamics. No, we don't expect any OpEx changes for Saphiance. It's all currently covered, as Pierre said. We're leveraging our existing infrastructure. Similarly, for vatiquinone, if approved and launched 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 about what we're seeing or expecting in Europe beyond the Germany early access program?

Speaker 3

Yeah, thanks for the question, Kevin. The European opportunity will be very significant. Germany is the second largest market in the world. 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 then 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. The European opportunity will be incredibly important if we can maintain, and we will maintain, a very narrow pricing corridor.

In addition to that, we also expect approval in Japan and Brazil, and coming on board there will also add some of the momentum that we've built from the U.S. and Europe. These are two also incredibly important markets to our growth in the future.

Speaker 4

Excuse me, any further questions?

Speaker 2

No, thank you.

Speaker 4

Thank you. Now we're going to take our next question. The question comes from the line of Ellie Merrill from UBS. Your line is open. Please ask your question.

Speaker 2

Hi, this is Tate on for Ellie. Thanks for taking your question. 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. A little bit on the ex-U.S. opportunities. 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.

Thanks for the questions, Taz. On the first one, it's still early days to answer that question. There's nothing more to add on that. I just want to talk a little about distribution of patients in Europe.

Speaker 3

Yeah. Just going back on the insurance, we're in the process. We're just in a few days, and as you can understand, we're going through the process of insurance verification in the U.S. That process, price was listed, insurance verification, and then copay assistance. That takes a few days for all that to happen. As we progress, we'll be providing a little bit more color there. In terms of major centers of excellence, 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. 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. They're actually moved immediately into that center and followed throughout adolescence and then their adulthood. 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.

Speaker 2

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?

Yeah, this was a very specific early access program in Germany that we launched for two reasons. One, with the listing of the pricing layouts and issuing the German launch, those patients pretty quickly turned right over to commercial. It was also an opportunity for us to get the drug in the hands of those physicians at the concentrated centers. We did not institute a global early access program or a global Compassionate Use program. This was a specific decision made in Germany due to the dynamics of the launch, listing of the price, and the six months of free pricing you get as soon as you initiate launch.

Speaker 4

Thank you. Now we're going to take our next question. The question comes to the line of Geoff Meaton from Citigroup. Your line is open. Please ask your question.

Speaker 2

Hey, guys. Thanks. This is Jarwe on for Geoff. Two questions. Just to your earlier comment on 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? Second question, based on your latest conversations with FDA on vatiquinone, what has been your sense on the agency's stance on a broad label for all age groups? Is there a possibility the agency could perceive demonstration of benefit on certain NFR subgroups to be more appropriate for certain portions of the patient population? On that topic of labeling, have those discussions begun? Thanks.

Yep. Thanks for the questions, Jarwe. On the first question, look, it's still early days. What we can tell you is that there's no rules or patterns we see yet. I mean, we know there are a lot of patients who are really interested in getting on drug really quickly. We're seeing a lot in social media of patients saying, "We're writing our doctors right away. We're trying to, we're going to get in as quickly as possible." A lot of the prescription decisions and prescription writing at these centers can be MDs, could be the doctors, could be the nurse practitioners. It's really kind of a mix. We've also talked about a lot of centers, particularly in the United States, having waitlist patients. There could be working off that as well.

There's no clear rules, but exactly as we expected, you're seeing a broad swath of patients wanting to get access to the drug and physicians wanting to provide the drug for all those different segments, as Eric has talked about. On vatiquinone, we would expect, based on our conversations, that the label to be inclusive of all age groups. While the Move F&E study was focused in pediatric and adolescent patients for whom there's an unmet need without approved therapy now, we have data in adults in that study as well that are consistent with what we've seen in the younger patients as well as data from our longer-term extension studies that were provided in terms of confirmatory evidence, including data from an earlier study where we're seeing in adults, both ambulatory and non-ambulatory, significant effect in terms of slowing of disease progression over years.

Taken together, the data package clearly supports benefit and certainly safety in the full age spectrum and full spectrum of disease severity for Friedreich ataxia. We have not gone formally into labeling negotiations yet at this point.

Awesome. Thanks, Matt.

Speaker 4

Thank you. Now we are going to take our next question. The question comes to the line of June Lee from TWIST. Your line is open. Please ask your question.

Speaker 1

Hi, thanks for the updates and for taking our questions. When you talk to the FDA for the Huntington's, my guess is that it'll be with CBER, but CBER is also looking at AMG 130 for Huntington's and is expected to render a decision on accelerated approval path this quarter. Given the same disease indication with the decision by CBER, is that any sort of regulatory precedent that may impact CBER and your program? Also, do you still owe royalties to Sensa? Thank you.

Speaker 2

Thanks for the question, June. On the first question, we're obviously watching with great interest the FDA interactions that CBER is having around the gene therapy. Look, we've talked a lot about, you know, if there's potential benefits of the gene therapy administered to one part of the brain through direct administration to lower HCT. If there's benefits there, we think that leads through incredibly well to lowering Huntington's protein throughout the whole brain and to be able to do that in a durable way and also allowing for dose titration and monitoring peripherally of HCT lowering. We've always thought from a development standpoint, there are very good read-throughs. Certainly on the regulatory side, I think there's been an increasing desire by the agencies to have alignment, particularly when it comes to their views on rare disease, whether it's in CBER or CBER.

Obviously, there have been a lot of changes in FDA recently, but I think that that concept and that desire to have alignment remains. With that in mind, we're clearly very interested in understanding what the pathway could look like. As we shared at the Pivot HD readout in May, we were very happy to demonstrate the statistically significant benefit after two years relative to a well-matched natural history cohort from the enrolled HD database, as well as the signals of dose-dependent longer MFL out of 24 months. We're going to be very keen to see the FDA's position with regard to using the natural history comparator with CBER to address.

Obviously, we have the additional benefit of being able to find the peripheral Huntington lowering biomarker data as well, which is clearly an important piece of evidence that we're having favorable effects on what matters most, so the disease, not toxic Huntington protein. Pierre, do you want to comment on the remaining royalties for Suratori?

Speaker 1

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

Speaker 2

Thank you.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Sammy Corbin from William Blair. Your line is open. Please ask your question.

Hey, thanks for taking my questions and 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. Given your strong balance sheet and revenue projections, what are your thoughts on additional BD opportunities or early pipeline investments? Thank you.

Speaker 2

Thanks for the question, Sammy. On Translarna, that NDA remains under active review. As we mentioned, we had had the clinical site inspections completed in the spring. We got IRs in the early part of the summer that we were able to easily address. Obviously, without the FDA, 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 and the BD, clearly, as you know, we still remain with significant firepower and look to do strategic BD. Pierre, do you want to just talk a little bit about how we've been thinking about the potential BD opportunities and timings?

Speaker 1

Yes. As I mentioned, we have a significant financial position and we're actually looking at BD opportunities. We have a global infrastructure. We know how to get drug approved globally, and we know how to, obviously, commercialize this drug worldwide. These are, you know, so we're looking at assets that we could cast in our existing infrastructure. Furthermore, we're also looking at pipeline assets that will complement our R&D portfolio. That's how we're thinking about BD opportunities. We demonstrated today that we will be disciplined and that we will do transactions that create value for our shareholders.

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?

Speaker 2

Yeah, I think we're looking pretty broadly, Sammy. I think a lot certainly on the commercial side, we'll see what we have in terms of all the regulatory decisions. That'll dictate whether we're busy doing multiple launches or whether we'll have capacity, commercial capacity with our existing infrastructure to bring something in to continue to develop to drive top-line revenue. We have a number of things coming from our research platforms coming into the clinic. It's going to be a matter of looking for an opportunity that can complement what we have already very nicely. Clearly, it'll be in our sweet spot of rare disease. It could be CNS. It could be non-CNS. I think it's going to be something that would have to be the right opportunity that we felt could complement our existing programs and expertise.

Thank you. Congrats again.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Joseph Thome from TD Cowen. Your line is open. Please ask your question.

Speaker 2

Hi, this is Peyton on for Joe. Kind of asking a little bit about the vatiquinone scenarios. Saying that it is approved around the FDA, how quickly could you launch therapy? Is there a particular population that you would go after? Along with that, would you then move it to try and get a registration in Europe? In the case that you do not get it approved, would you be open to running another trial? If you could walk us through that as well, that'd be great.

The date and our focus right now is on clinical success. I would say that our teams are in position and ready, and the infrastructure is built, and we'd be ready to launch this right away. As we talked about with there not being any approved drugs for patients under 16, we clearly see that as the first place that we would go. We are proud of having a longstanding collaboration with the Friedreich ataxia centers in the U.S., many that treat pediatric patients and treat pediatric and adult patients. I think it would be a very exciting opportunity for us, and we'd be ready to go day one.

If there wasn't success, would you consider running another trial, or would you shelter the program?

As I said, we're thinking about success right now. We believe that this is a, we believe that vatiquinone provides, as the data show, an effective therapy, not only for children who need a safe and effective therapy, but also for adults who would benefit from having a safe, well-tolerated, and effective treatment option. That's what we believe the data show versus what's supported the NDA submission. You can expect that we have a commitment to patients that we will always look to try to support.

Great. Thank you so much.

Speaker 4

Thank you. We are going to take our next question. This comes to the line of Luke Herman from BID. Your line is open. Please ask your question.

Speaker 2

Hi, guys. Thanks for taking the question. Just two quick regulatory ones from me. First, a follow-up on the vatiquinone review. Has the FDA given you any sort of indication around when labeling discussions could potentially get underway? Second, on Translarna, has the FDA given you a sort of runway or timeline for when an action date could be put in place?

Yeah. Luke, on your first question, there was no formal timetable. As we said, the mid-side, the late-cycle meeting was just a few weeks ago, and there were still some questions that we were talking with them about at the time. No specific timeline for next steps was given. As you know, I think things are quite busy at the FDA these days. In terms of the Translarna NDA, there will not be a PDUFA date issued, just given the particulars of that application, that it was a resubmission of an NDA that received a 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. A PDUFA date will not be given.

Okay, thank you so much.

Speaker 4

Thank you. Now we'll proceed with our next question. This comes to the line of Paul Choi from Goldman Sachs. Your line is open. Please ask your question.

Speaker 1

Hi. This is Daniel on for Paul. Thanks for taking our question. We're curious about what's the pricing assumption after the six-month free drug program ends in Germany? Thank you.

Speaker 2

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

Speaker 3

Yeah. 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, six months later, we'll be in negotiations following a medical benefit assessment. 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 Saphiance, particularly those who are poorly controlled, who have failed.

I think the real-world data over the next six months and the support from our key opinion leaders and centers are going to help us with that benefit assessment. Stay tuned. This is a process that will take at least 12 months during the whole process for us to work. I think we're very optimistic about maintaining a very close and narrow pricing corridor.

Speaker 4

Thank you. Now we're going to take our next question. The question comes to the line of Gina Wang from Buckley. Your line is open. Please ask your question.

Thank you for taking my questions. I have one regarding Saphiance. I just want to confirm that there is no IP protection, and it will be relied on the author designation market exclusivity in the U.S., Europe, and Japan. I missed the beginning part of the call. I apologize if I already asked. Should we start to see revenue contribution in 3Q 2025? The second question is very quickly regarding vatiquinone in Friedreich ataxia. I know you mentioned that late-cycle review was discussed a few weeks ago. I'm just wondering if you can provide a little bit more color. What was discussed during that late-cycle review? Did any label discussion come up during the discussion or afterwards?

Speaker 2

Thanks, Gina. Let me correct the first question. We have guided IP to 2039. We have a polymorph patent that goes out to 2038 that we believe will provide. It's a composition of matter or polymorph that we believe we support protection from 2038, and then conservatively estimating at least a year patent term extension beyond that to 2039. Of course, we're continuing to work to expand, as we always do, the IP portfolio to see if we can take protection out even further beyond 2039. That applies not only to the U.S., the 2039 guidance, but to the key markets globally. We will expect there to be revenue in Q3 from Saphiance as we have already begun delivering commercial product in Germany. We've gotten patient start forms in the U.S. and expect to be able to ship Saphiance to patients in the next couple of weeks.

We've said that there's in the wide guidance that there is some new product revenue baked in there, and that upper end of the guidance that stays in the 100 is allowing for the potential of upside from new products. In terms of vatiquinone, the late-cycle meeting was a relatively brief meeting where we discussed the mainly focused on discussion of the evidence, where they are in the review, and their assurances that they're actually still working through the review. Not surprisingly, one of the main questions in the review is the fact that upright stability wasn't pre-specified as a primary endpoint. Would that support persuasiveness of evidence and effect, which along with the confirmatory evidence could support approval?

Of course, they acknowledged and were aware of their recent guidance that others have received that upright stability can itself be an efficacy endpoint and it will be used as a primary endpoint, for example, in the Skyklaris pediatric trial, which I think supports the FDA's evolving understanding that upright stability is the most relevant measurement of efficacy in ambulatory pediatric and adolescent patients. As we said, we've not had any labeling discussions beyond anything that was discussed in the late-cycle meeting at this time.

Speaker 4

Thank you. Now we're going to take our next question. This comes to the line of Joseph Schwartz from Leerink Partners. Your line is open. Please ask your question.

Hey, guys. This is Ginny on for Joe. Thank you for taking our questions. 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. If approved, should we be looking at the Skyclarys launch as a template? If not, how should we be thinking about that? Do you see any potential for combinations of Skyclarys and vatiquinone in Friedreich ataxia patients? Thanks.

Speaker 2

Yeah, thanks for the question, Ginny. There was no discussion of not meeting timelines. I'm not sure there would be one, even if there was a chance that could happen. I think we all understand that there's been a lot of changes over at FDA and a lot of work. Certainly, we've seen examples, as recently as this week, of programs in the neurology division maybe not meeting certain timelines. We look forward to continuing to work collaboratively with the division and getting to what we hope will be a positive outcome on time. If not on time, when the time can be. As we talked about, we see the launch dynamics being quite different for a number of reasons. I can let Eric go into that. Yeah, you want to talk a bit about it?

Speaker 3

Yeah, I think we have an experienced team already that have been calling for the last eight and a half years in pediatric neurology. We've already profiled all the key centers specific to Friedreich ataxia, and we know the prescribers. We know through claims data where they are and the high unmet needs, plus the clinical differentiation. We're already very well poised to launch and begin the process like we have with Saphiance to get patient start forms on day one. Our teams not only are experienced in this, but we're looking at a number of different things, which include not only the pediatric, but a number of those patients who are adults who have failed on Skyklaris. Some of them are poorly controlled, and there's still quite a bit of naive patients.

All in all, I think the opportunity is very significant, and our team is experienced and ready to go on day one.

Speaker 2

Yeah, to your other point, just to add to that also, we would see certainly we wouldn't expect there to be any monitoring. Obviously, the pediatric patients have a much different dynamic than adults do. I think we would see the launch dynamics quite different for that reason. In terms of combination therapy, I think that's something that people talk about. I think those close to the Friedreich ataxia community have always believed, rightfully so, that Friedreich ataxia is going to be optimally managed with a cocktail of therapies like any other complex disorder. We certainly imagine that they'd be interested in looking at combining both vatiquinone and Skyclarys.

Speaker 4

Excuse me, Ginny, any further questions?

Oh, no, that's it. Thank you.

Thank you so much. 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.

Speaker 2

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 Saphiance. We're incredibly excited 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. Thank you all again and have a great evening.

Speaker 4

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