PTCT - NASDAQ

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics Third Quarter 2025 Earnings Conference Call. [Operator Instructions] 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' Third 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, 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 the call today. I'm excited to share our outstanding third quarter results. The highlight of the quarter was the initiation of the Sephience global launch in Europe and the United States. As we have discussed, we expect Sephience to be the foundational product for PTC's sustainable growth and near-term path to profitability. Overall, third quarter revenue totaled $211 million, which includes the first revenue from the Sephience launch as well as continued contributions from our DMD franchise. With this strong quarter performance, we are narrowing our 2025 full year revenue guidance to $750 million to $800 million, the upper end of the initial revenue guidance range. The Sephience launch is off to a great start. As of September 30, Sephience generated $19.6 million in revenue. This includes $14.4 million in the U.S. and $5.2 million ex U.S. We have seen a great deal of enthusiasm upon launch with 521 patient start forms received from U.S. centers as of September 30. We have received start forms for patients of all ages, including adults, all disease severities, including classical PKU and various treatment histories, including patient switches, previous treatment failures and treatment-naive patients. While these are still early days, the fact that we are seeing demand from all key patient segments underscores the significant unmet need for PKU patients and the potential for Sephience to become the standard of care, providing a safe and effective therapy for both classical and nonclassical PKU patients. While we are presenting results today through September 30, the results for the month of October show sustained momentum. We are encouraged by the strong initial numbers and broad interest from the physician and patient communities. To sustain broad uptake, our teams are continuing to gather data to help reinforce the highly differentiated Sephience profile. At the International Metabolism Meeting in September, we presented the results from the AMPLIFY head-to-head study comparing phenylalanine lowering between Sephience and BH4. In this crossover study, Sephience treated resulted in an average of 70% greater reduction in phenylalanine levels compared to BH4, demonstrating once again the robust and clinically differentiated benefits Sephience can provide. Additional presentations at the conference highlighted Sephience benefits on cognitive function and diet liberalization, including in the most severe patients with classical PKU or BH4 non-responsive mutations. We are also finalizing a publication on the Sephience mechanism of action, including in vitro, in vivo and clinical efficacy data in the most severe PKU mutations, supporting the potential ability of Sephience to provide a safe, well-tolerated and efficacious therapy for the full spectrum of PKU patients. Eric will provide additional details on the launch. I will now briefly provide an update on the development and regulatory status of our other programs. Starting with the votoplam Huntington's disease program, a meeting with FDA is planned for the fourth quarter to align on the study design for the next efficacy study as well as to discuss the data package that could potentially support an accelerated approval application. For the vatiquinone Friedreich's ataxia program, we are planning to meet with FDA this quarter to discuss potential next steps for the program. And for Translarna, the NDA remains under FDA review. Finally, we remain in a very strong financial position, ending the third quarter with approximately $1.68 billion in cash. As we have discussed, this enables us to reach cash flow breakeven as well as participate in strategic business development activities to complement our R&D and commercial portfolios. Additionally, as the company continues to build for future success, we will be hosting an R&D Day on Tuesday, December 2nd, to share progress on our research programs, including those from our splicing platform. I will now turn the call over to Eric to discuss details of the Sephience launch and our commercial performance. Eric?

Thanks, Matt. We are very pleased with the early momentum of the Sephience global launch. Our seasoned customer-facing teams are off to a strong start, leveraging their years of preparation and experience and delivering across all fronts. We are excited to simultaneously launch Sephience in the U.S. and Europe following regulatory approvals, and we are actively preparing for the upcoming launch in Japan following MAA approval anticipated in Q4. As of September 30th, Sephience global revenue reached $19.6 million and 341 patients on commercial therapy, driven by robust performances in both the U.S. and Germany. Following FDA approval on July 28th, our U.S. team made the first Sephience shipments to patients approximately 2 weeks afterwards. Through the end of the third quarter, our PTC Cares teams received 521 patient start forms from 141 unique prescribers. The response thus far from U.S. health care providers has been overwhelmingly positive with a high willingness to prescribe Sephience to a wide range of PKU patients, including switches, poorly controlled or failed and treatment-naive individuals as well as to children and adults. Many of these health care providers have shared their observations of the rapid benefits of Phe lowering and improved patient outcomes and indicated their intent to continue to prescribe Sephience to a broad spectrum of PKU patients. U.S. payer engagement continues to be positive. And our market access and medical affairs teams have met with more than 35 payers covering approximately 250 million lives. U.S. payers continue to recognize the highly differentiated profile and strong value proposition of Sephience. We have seen initially favorable payer policies that maintain broad access with coverage that includes prior authorizations to the label, no or limited step edits and refills for 6 to 12 months. Although we are still in the early stages of the launch, we have seen a favorably higher commercial payer ratio and expect this payer mix to stabilize at 65-35 as Medicaid and Medicare plans finalize their policies in Q4. Likewise, the launch in Germany is off to a great start as we quickly converted compassionate use program patients that were on Sephience prior to EMEA approval onto commercial therapy. We have also received prescriptions for new patients from Germany and additional EU countries on a named patient basis and are preparing health technology assessment dossiers to secure pricing and reimbursement across many international markets with early access programs. Throughout Europe and other key markets, we see similar dynamics with health care providers prescribing Sephience to a broad range of PKU patients. Along with the positive feedback from health care providers, we have also seen a highly engaged response from the PKU patient community worldwide. Social media serves as a powerful platform to see firsthand patients experience with Sephience and is also a strong channel for patient-to-patient communication. Instagram and other channels, including stories and posts from patients who have started Sephience, some who are even tasting new foods for the first time. The excitement for Sephience is equally tangible at PKU community events such as NPKUA Annual Gathering in September, where many PKU patients shared their desire for new treatment options. Our customer-facing teams continue to lead medical education programs at key congresses such as ICIEM and ESPKU in September, featuring roundtables, scientific exchanges and investigator meetings in the U.S., Europe and Japan, highlighting the strong clinical data of Sephience. As Matt mentioned, these activities featured new Sephience data, including long-term results from the APHENITY extension study and new data from the head-to-head study, further supporting the differentiated efficacy of Sephience. Additionally, data were presented in Japanese patients showing robust Phe lowering and safety results consistent with the global PKU population. We continue to expand the global launch with our experienced teams in key international markets. We recently received approval for Sephience in Canada, and we anticipate regulatory approval in Japan and Brazil later this year. As we have previously discussed, we will continue to maintain a narrow pricing corridor throughout this early stage of the launch. Now turning to our established portfolio, we continue to defend our DMD franchise by maintaining patients on Translarna across the majority of European markets, leveraging Article 117 and fostering brand loyalty for Emflaza with targeted programs for health care providers and DMD patients in the U.S. despite multiple generic entries. In summary, the early global rollout of Sephience is off to a great start. We are very pleased with the early results in the quarter with the U.S. being our main engine for product growth, supplemented by other key international markets that we expect to bring on board over the next 12 months. With that, I will now turn the call over to Pierre for a financial update. Pierre?

Thanks, Eric. I'll now share the financial highlights of our third quarter of 2025. Beginning with top line results. Total revenue for the third quarter was $211 million. Starting with Sephience. Net product revenue in the quarter was $19.6 million, as of September 30. DMD franchise revenue for the quarter was $86 million with Translarna net product revenue of $51 million and Emflaza net product revenue of $35 million. For Evrysdi, Roche achieved third quarter global revenue of approximately USD 532 million, resulting in royalty revenue of $71 million for PTC. For the third quarter of 2025, non-GAAP R&D expense was $91 million, excluding $9 million in noncash stock-based compensation expense compared to $152 million for the third quarter of 2024, excluding $9 million in noncash stock-based compensation expense. Non-GAAP SG&A expense was $74 million for the third quarter of 2025, excluding $10 million in noncash stock-based compensation expense compared to $63 million for the third quarter of 2024, excluding $10 million in noncash stock-based compensation expense. Cash, cash equivalents and marketable securities totaled $1,688 million as of September 30, 2025, compared to $1,140 million as of December 31, 2024. The third quarter cash balance reflects the previously announced purchase of 90% of our Sephience annual global net sales payment obligation of 8% to 12% owed to former Censa shareholders for approximately $225 million upfront and future sales-based milestone payments. Given the significant Sephience revenue opportunity, we expect meaningful value creation based on the transaction terms. We remain well capitalized to reach cash flow breakeven and profitability as well as pursue business development opportunities that will further enhance our commercial portfolio and expand our innovative pipeline. I will now turn the call over to the operator for Q&A. Operator?

[Operator Instructions] Our first question comes from Kristen Kluska with Cantor Fitzgerald.

Congrats on an amazing start for Sephience really exciting to see that. I wanted to ask what's going to give you confidence that beyond this really strong out-of-the-gate launch, you're going to see maintained durability and that patients will be on therapy for a while.

Kristen, thanks so much for the question. We too are quite excited with the start and seeing a lot of what we believed we would see, which is given the highly differentiated profile of Sephience uptake in all segments, right, including those who have been on previous therapies, therapy-naive patients, who're getting -- adults who are therapy naive, who people thought were so remote, that would be hard to get. And what we're consistently hearing -- and I should add also classical, nonclassical full spectrum of severity. And what we're continuing to hear from physicians and from the patient community is great response. We're seeing on social media, patients being able to eat food for the first time that they couldn't eat before like hamburgers and pizza and then a lot of physician feedback that some of the more severe patients that they wanted to try first are responding and are responding really well. We even heard from one of the early skeptics, one of the physicians, who was a bit skeptical at first to whether or not Sephience could have a place for the classical and more severe patients. And we heard recently, she said, I'm converted, and I'm ready to try all my patients on Sephience, which is something we're hearing again and again from a number of physicians. So we've got this broad interest in trying patients. We're getting initial feedback that patients are responding, responding in terms of lowering Phe as well as being able to start to liberalize their diet. Look, it's early days. We're only a few weeks into the launch, but what we're seeing early looks good and we'll see. We'll see as things continue to unfold. We keep in mind that in our clinical studies, we saw up to 75% response rate in patients of the full spectrum, which again suggests that we can deliver benefit to the broad spectrum of patients. And of course, as you've talked about a lot in some of the research notes that you've written that patients really want to have lower Phe and also see the diet liberalization, and that's really going to be a key factor in adherence.

Our next question comes from Tazeen Ahmad with Bank of America.

Congrats from me as well on a really strong launch out of the gate. Matt, maybe I wanted to ask you a couple of questions. So can you just talk to me about what magnitude of Phe reduction are doctors and payers looking for in order to keep a patient on treatment beyond the trial period? Maybe related to that as well, what's your expectation for percentage of patients that are going to stay on treatment following this initial trial? And how are you thinking about guiding the Street on that particular dynamic as well?

Yes, absolutely. Thanks for the question, Tazeen. I'll give an initial response, and I'll ask Eric to provide a little bit of color. On your first question, of magnitude of response. We're hearing different things from different folks, right? We're hearing that for some patients, certainly ones that are more severe that have never had a therapy that they could tolerate or respond to that 15% Phe reduction could be meaningful for them, 20% Phe reduction. Others say we're going to look for maybe 30% Phe reduction, which is what we used in the trial and others say it's not really a number. Are patients feeling better. And one of the exciting pieces of data we reported at the International Metabolism Meeting in Japan is that we are able to see in the clinical study that patients' cognitive function, executive function and mood are improving. That's another aspect of benefit that is not as easy to quantify, but it's another example of the kinds of things that physicians would be looking for in addition to quantifiable reductions in phenylalanine. Patients report that they can liberalize their diet in this overall sense that they're feeling better. So I think it's going to be a combination of factors. And again, I'll ask Eric to comment a little bit what we're hearing in terms of the dynamics in terms of payer requests and things like that. In terms of expectations for patients to stay on it, look, it's early. It's also too early to your third question to provide specific guidance as we get further into the launch, we'll be able to do that. But again, we've fallen back a bit on the clinical trial data, which shows that we have anywhere between a 66% to 75% response rate, looking at 15% or 30% as a threshold for Phe reduction with very good adherence given the safety, the tolerability, the ease of administration of the drug. So again, that's why we're so excited about being able to see early starts from all segments of the population because our experience has been that patients regardless of their age, regardless of their severity or previous treatment history, once they get on the therapy, it's a low burden to take and the vast majority of patients report having some benefit. Eric, do you want to provide a little bit more color on what we're hearing in terms of defining [ responsers ] and staying on therapy.

Yes. Thanks, Matt. Thanks, Tazeen, for the question. Clearly, what we're seeing is a very, very quick and rapid response from these centers of excellence. We -- it's very early days, but we're really pleased not only with the interactions that we've had with the payers, but also the way the physicians have adopted Sephience. The clinical data that has been highlighted that we provided, including the APHENITY long-term extension and the AMPLIFY data has been leveraged not only with physicians but also with payers. And the things we see right away is that the robust efficacy is seen within days, days and weeks. It's rapid acting, and I think that's something that patients and physicians look at. The safety profile has been excellent. It's an ease of administration with once-daily oral administration. Physicians like that. The value proposition to payers right now, we have seen no major obstacles and no significant restrictions at all right now for access to Sephience. And the teams have been really working very closely and productively with these payers now covering more than 250 million lives, and the clinical data and the value proposition is clearly what has been driving some of these policies. So it's early days now, but these policies are very favorable, and we're seeing physicians who are not only writing their first prescriptions, but also we're seeing good momentum in October with refills.

Our next question comes from Brian Abrahams with RBC Capital Markets.

Congrats on the launch. I was wondering if you could talk a little bit about just what the time line is like from a new start form to a patient receiving a prescription and actually getting the drug, getting access. And then should we be -- I guess, how should we be thinking about the patients who for whom there are start forms, new start forms who are not yet on Sephience, should we expect those patients to roll on to treatment in the fourth quarter?

Yes. Thanks for the question, Brian. I think, again, so far, things have been moving through quite well. Eric can give a little bit more detail, but I just want to give a particular mention to our PTC Cares team, which is our team of case managers who are incredibly experienced and provide a white glove service. Again, they were with us through all the Emflaza days, they're battle-tested through that and are really at the front lines now working with the patients, working with the physicians' offices, working with nurse practitioners, who are writing a lot of the prescriptions to really get the start forms and then quickly get those start forms processed and shepherd them through the system so we can get these patients on drug as quickly as possible. Eric, do you want to provide some detail on the time lines?

Yes. And again, Brian, keep in mind, it's early days. It's only been a few weeks here, but we're really surprised to see that there's already a number of commercial payers that have written policies, highly favorable ones. This has really helped in terms of the speed from the time of PSF to actual fill. The one thing we have to look at is, have there been denials or restrictions, and we haven't seen that. In the case, it's very limited. If there are denials, there are no hard denials. And of course, we're working through those through medical necessity documentation. As Matt said, our PTC Cares team is very experienced at managing this for the last 8.5 years in DMD, and we're working through all of these very, very quickly. I would say that right now, we're seeing somewhere -- depending on the plan, whether it's a commercial plan, it could actually be from the time of PSF to fill could be days. On average, we're somewhere between 2 to 4 weeks and that's really depending on the plan. We would anticipate that many of the government plans, Medicare, Medicaid, it's probably going to take a little longer for them to write there and finalize their policies. But even then, we're seeing patients on Medicare, Medicaid and Tricare being reimbursed.

Our next question comes from Brian Cheng with JPMorgan.

I just want to pass on my congrats here as well. Just on the 521 start form number, how should we think about the rate of start form that is coming in? I think earlier, you said that October, you're seeing sustained momentum. Can you provide just more color on that comment? Is that specifically referring to the pace of uptick in start form or access with payers? What is the momentum specifically based on?

Thanks for the question, Brian. So there's not much more color we can provide because we are still very much early days other than to say we've seen pretty consistent rates in the start forms and patients getting on to drug. We'll continue to watch this as we head through the rest of the fourth quarter. Of course, there's Thanksgiving, there's Christmas, there's holidays and things, which may or may not affect the dynamics. But again, for now, things seem to be from the start until now, pretty consistent.

Our next question comes from Judah Frommer with Morgan Stanley.

Let me say congrats, too. So a couple on Sephience. I guess, first, just can you help us with the narrowing of the full year guide? Is that solely tied to Sephience? Any other moving pieces you'd call out like the legacy portfolio coming in ahead this quarter? And second, I guess, just for those centers of excellence, I think you called out 104 of them. Can you talk maybe in numbers, how far you've penetrated those centers, what the opportunities left are within those?

Absolutely, Judah, thanks so much for the questions. Pierre, do you want to talk first briefly about guidance and what went into that? And then Eric, if you want to talk a little bit about the center of excellence and the high penetration rate we've seen?

Yes. On the guidance, I would say this is the upper end of our initial guidance, which highlights our confidence in our ability to execute on our launch and all our products. And the delta is really Emflaza. We always talked about the delta being Emflaza, and that's the main delta from the $750 million to the $800 million. Eric, do you want to talk about PKU?

Yes. Let me just add in that because Judah, when we started the year, we were $600 million to $800 million, thinking that we could [indiscernible] Emflaza last year came in at $208 million. And the question was with all the generic entrants, where would that be? Would we see a rapid decline. And so a lot of that wide gap was around Emflaza. Now that we've come through 3 quarters, and we're seeing -- despite there being 6 generics, we're still seeing consistent performance on Emflaza, which gives us the confidence along with the early Sephience numbers as well as the remaining portfolio continuing to do well to narrow to that upper end of the guidance of $750 million to $800 million.

And to answer your question regarding the centers of excellence, so we have called on every center of excellence. There's 100% awareness of Sephience in each one of these centers, and we've received prescriptions from all of them. However, and what we're really interested in is how many of these centers have actually prescribed more than one. And we've seen about 2/3 of these centers actually prescribe more than 1 prescription. And of course, there are some that are a little higher concentration than others. But overall, I think the centers of excellence are really bringing in patients at a nice cadence, and we're working with each one of them to increase the volume of patients to get on Sephience.

Our next question comes from Clara Dong with Jefferies.

Congratulations on a great launch. So can you share a little bit more details on the patient profile for new prescribers? And specifically, are you seeing any initial uptake more concentrated in one group than the other? And also, just want to get your updated thoughts on the size of the overall opportunity given such very strong early launch momentum in [ U.S. including ] [indiscernible].

Clara, thanks so much for the questions. Look, again, it's early days. So it's really hard to give specific numbers on the breakout. of how many from each segment. But I think what we're seeing importantly is contributions from all segments. Again, as we said, we're seeing treatment-naive patients. We're seeing switches from other therapies, including Palynziq. We have a full age range. I think we have patients down as young as 2 to 3 months of age. We have a patient as old as 79 years of age who's been prescribed. So I think what we're seeing is this full spectrum of patients getting put on therapy. So it's -- and again, so as we get further into the launch, I think we'll be able to give more concrete metrics [ size ] penetration into each segment. But again, the important point is we're seeing that we are getting patients from every possible segment. And so the start has been great. I think it's still a little too soon for us to give revenue projections. What we've said all along is we've always thought of Sephience, as a highly differentiated rare disease therapy. And therefore, as we think about the market opportunity with 17,000 patients in the U.S., we think of it, again, very much like you would think about with a new, highly differentiated, safe and well-tolerated therapy with a strong data package that can provide potential benefit to the full spectrum of that 17,000 patients.

Our next question comes from Paul Choi with Goldman Sachs.

Congrats on the early progress with the Sephience launch. I want to ask with regard to Europe, any additional coverage updates you could provide for both Germany and the other major markets there? And my second question is, as you think about sort of the outlook for '26, it looks like you guys are in a position to start generating leverage maybe ahead of Street expectations. Can you maybe just sort of comment on the trajectory of OpEx and just how you're thinking about it perhaps versus where consensus estimates are?

Yes. Absolutely. Thanks for the questions, Paul. Eric, do you want to take the first just about how dynamics are playing in Europe? And then Pierre, do you want to talk a little bit how we're thinking about balance sheet?

Sure. Yes. Thanks for the question, Paul. So in Germany, we're still in the free pricing period at this point in time. And obviously, we'll be looking at benefit assessment and going through the MNOG process, which will take it for approximately another 6 months into 2026. So that process right now will keep going. And we have -- in addition to that, we have actually submitted HTA dossiers in most of the countries in Southern Europe. We're working in parallel there with a number of their mechanisms for early access and named patient programs that are being paid at prices, which are equivalent to the German price. We've also opened up other markets in Southern -- Central and Eastern Europe as well. And those patients -- those countries also have mechanisms. We've received prescriptions as well in the Middle East as well as in Latin America. And again, we are working through all the named patient programs country by country as they have specific rules. But we're very pleased so far with the progress. Keep in mind that in Europe, is usually a relative -- Southern Europe, particularly is a long-term process, somewhere between 6 to 12 months between HTA assessment and then final price negotiations.

And in terms of OpEx trajectory, I will say a few things. Number one, as usual, we will provide 2026 guidance at JPMorgan. It's a bit early. However, you should expect OpEx to decline.

Our next question comes from Joon Lee with Truist Securities.

Really congrats on the strong launch. I was a little bit surprised to hear that you're seeing switches even from Palynziq. Is that an outlier? Or is there any reason why someone on Palynziq would consider BH4 or even Sephience? Or is there -- are there people who are on Sephience, who really should be on Sephience? And a quick follow-up on how quickly could you launch in Japan post approval by year-end? And where would you put the peak opportunity in Japan vis-a-vis U.S. versus EU? I think you said that at least $1 billion in U.S. and half that in EU. Just curious where you would put that Japan in that spectrum.

Jim, thanks so much for the questions. On your first question regarding Palynziq switches, look, we're just reporting what we're seeing and hearing from the field. Again, it's early days to say what's going to be a trend and not a trend. But what we have heard from KOLs, and I think several folks who've done KOL calls have shared similarly, the realization that the physicians and nurse practitioners and care teams have that Sephience can provide significant benefit to patients with severe mutations, including patients with GPV values of 0, which is the most severe genotypes, classical PKU patients. And for them, it's the question of can we give a once-a-day, well-tolerated oral therapy that can deliver significant reductions in phenylalanine and the ability to liberalize diet. And when you consider that opportunity with Sephience, that is something that physicians want to try, certainly considering the potential tolerability profile of Palynziq. But again, this is what we're hearing, and also, again, emphasizing that we're hearing that a number of physicians are saying their intent is to try all patients on Sephience knowing that, of course, not every patient is going to respond. But certainly, given the fact that the severe patients, classical PKU patients can respond, can have Phe lowering, can liberalize their diet and the once-a-day oral well-tolerated profile of Sephience really makes that the attractive place to start. And then, Eric, do you want to talk a little bit about the timing of Japan launch and the dynamics there and pricing?

Sure. Yes. Absolutely. Yes, Japan for us is an important market, a key market. This will be our first approval, and we're anticipating that before the end of the year. So Sephience is we're anticipating like the U.S. and Europe, a very broad label. We -- prevalence right now for PKU patients is approximately 1,000 patients. However, this is -- while it's smaller market in terms of overall prevalence, it's very high value. Both Kuvan as well as Palynziq are approved, and we anticipate the price of Sephience to be at a premium to that given our clinical data, which would make that higher price than in Germany and higher than the U.S. We have a full team that is experienced and is already on the ground right now, ready to promote Sephience once it is approved. And we will likely be in discussions for the next few months to finalize the price. There will be one discussion, and it should probably be done through that period and negotiation by the first quarter. And at that point in time, we'll be able to launch with fully reimbursed. So Japan is incredibly important to the overall sequence. We anticipate approvals in other markets as well, but we'll be maintaining a very narrow pricing corridor, which makes Japan very attractive.

Our next question comes from Gena Wang with Barclays.

I also wanted to congrats on the super impressive first quarter. So regarding -- since we are talking about price, I did my quick math. You delivered $19.6 million, you treated 341 patients. So this is 2 months of the full quarter. So if my math is correct, net price is about $350,000. Is that the right calculation? And should we think about the net price that is that the right benchmark? So this is the first question. And then second question is, what is the average time patient on drug right now? Have you seen how the -- sorry, retention of the patient so far? I know it's still very early, but have you seen any -- like so far, all the patients doing very well on the drug? And then lastly, very quickly, how do you book the revenue? Is that the monthly review? And then every month, once patient review, you will book the revenue?

Gena, thank you very much for your questions. On the first one, respectfully said, I think your math is a bit off just because it may be that the patients -- you have to consider when we actually were able to ship the first drug, which wasn't from the start of the -- it wasn't from approval, it's when we're able to do launch. And then also, of course, different patients are coming on at different times. I'll let Eric give more color on how we're thinking about gross to net at this point. But we've talked about the WACC being somewhere around $490,000 with an expectation that the average patient is approximately 45 kilograms. What we're seeing is that we are, in fact, in that ballpark at this point, which again is not surprising, but it's also early days. Do you want to talk a bit, Eric, just any color you want to give about how we're thinking about gross to net over time, booking revenue and such?

Yes, sure. I mean, first of all, we book revenue and we recognize revenue and we ship to our specialty pharmacies. We book our revenues immediately in Germany because we ship directly to pharmacies immediately after a prescription is written. There's very little inventory that's actually kept. It's usually just on demand as needed. So that's one thing. But importantly, around the gross to net, I think it will be important what drives that is, of course, in the U.S., our payer mix. And the payer mix right now is slightly more favorable to commercial. We anticipated that. That's generally the case with most orphan launches anyway because commercial plans tend to write their policies quicker, and we've had very favorable policies in the beginning. Now it's still early stages, and we're seeing that PKU patients in general and the PKU population is more skewed to commercial anyway. And so that's what's helping in terms of the favorability of gross to net. However, we also know that Medicare and Medicaid will be writing their plans and Tricare and a number of other government plans will be finalizing them over the next few weeks. We've guided that ultimately, when this stabilizes, this will be about a 65% to 35% patient mix, meaning 65% is commercial. We're tracking a little higher than that right now, but that's as expected.

And then, Eric, do you want to also comment on what we're seeing in terms of refill dynamics. As we said, it is early days, so it's really hard to see that. But…

So this is very early days. And interestingly enough, the vast majority of patients that we've seen both in Germany as well as in the U.S., the ones that were put on prescriptions in August or early September, we're seeing refills, the vast majority of them. And it's interesting more than not is that these physicians and the health care providers who have prescribed Sephience for the vast majority of them, these have been patients who have been the most challenging. So they're the ones who are poorly controlled, the ones who are failed on previous therapies. And so, when we look at that patient population and we see the results and very fairly good momentum in terms of refill rates, I mean, that gives us some real good confidence moving forward.

Our next question comes from Sami Corwin with William Blair.

I want to share my congrats as well on the strong launch. Matt, I know you said that the average weight is falling within the ballpark of 45 kilograms. But can you provide a bit more granularity on if you're seeing these initial patients are [ skewing ] more towards pediatric or adults? And then switching gears a little bit. Given the recent news from a competitor, how are you and Novartis thinking about the registrational trial for Huntington's disease? And what are you hoping to get out of that meeting with FDA?

Yes. Thanks so much for the question, Sami. On your first question, we're seeing a good mix. As we said, we're seeing this full age spectrum. We've had infants all the way up to septuagenarians, which is pretty interesting. And also, I'd say on average, we're late adolescent and 17 years old, I think, is probably where we are in terms of an average. So again, things that we pretty much expected. And again, still early days. We'll know better as time moves on. In terms of HD, I mean, look, we all saw the news yesterday. Look, I mean, we have a very different therapy and a very different program. Votoplam is an oral small molecule. We've conducted a placebo-controlled study that has over 140 patients. We've been able to provide proof of target engagement and mechanism of action, dose-dependent effects. consistent safety profile in that large population and a protocol for the long-term extension that prespecified that we'll be doing a natural history comparison to determine treatment benefit over the long term. So we think we're in a kind of different context here. We expect that all patients [ will cross ] 24 months in the spring. We'll analyze those data. And then with Novartis, make a plan to go to FDA to talk about the potential for accelerated approval based on those data. The fourth quarter meeting what we've talked about has 2 objectives, right? One is to talk about what a path to accelerated approval could look like, but then also to align on what that efficacy trial would look like, whether that's a Phase III approval trial or whether that would be done as a confirmatory study in the context of a potential accelerated approval. But again, I think we're in a very different framework with votoplam.

Our next question comes from Joe Schwartz with Leerink Partners.

Congrats on a strong launch so far. Can you quantify for us how the response rate for Sephience is tracking in the real world based on refills or any other metrics you have? I heard Eric mentioned you have good momentum in October with refills. It would be helpful to hear how the response rate is tracking relative to APHENITY in the real world.

Yes, Joe, I think it's too early for us to give those numbers. Again, we have -- we started with the first shipment of drug in August, and it's really too soon now to give any kind of granularity detail on that. I think as we get further into launch, we may have a better handle on that other than the color we provided that we're hearing very good response rates and the commentary Eric gave on the refills thus far, though, and with the caveat that it's all very early.

Our next question comes from Peyton Bohnsack with TD Cowen.

Congratulations on the strong launch. I guess talking maybe about the Sephience launch in Brazil, assuming it's approved, can you kind of quantify the opportunity for us? And then maybe talk about any difference in patient population in terms of history of disease severity? And then what the steps are from a potential approvement to a launch?

Sure, Peyton. As we said, we expect the Brazil authorization would come this quarter. We're still expecting it to come this quarter. I'll let Eric talk a little bit about the dynamics in Brazil and what happens between approval and how we get on to the market there.

Yes. I mean Brazil will be an important market for us. I think there's a lot of differences in terms of how Brazil approaches PKU differently than perhaps the U.S. and Europe and other markets. I mean, there are certain states that do newborn screening, but not across the board. Patients are going to be likely going to be diagnosed and they're going to be a little older in age. They're going to be adolescents in some places. But in terms of the process itself, we're first going to have registration. Obviously, we have a very experienced team in there that's been managing right now 4 rare disease products over the last 10 years. So they understand the dynamics, whether it's small molecules, DMD, metabolics with FCS, TEGSEDI, WAYLIVRA, all of that. So as we know right now, the experience of that team is first going to get -- after the registration, we'll get pricing from ANVISA-CMED. That will be referenced to the prices that will be currently available at the time, which will be Germany, Japan and the U.S. and other markets, where we maintain a narrow pricing corridor. There will be a process afterwards by which once the product is approved, we already will be working with many of the key centers to ensure that patients are diagnosed and on to therapy. Some of these processes may include some judicialization. But for the most part, we believe that the opportunity will be very, very similar to other key markets. Certainly, the number of patients, well over 6,000 patients right now means that there is a significant opportunity. And then, of course, diagnosing new patients at younger ages will be another key area. But I would go back and say that Brazil is a very important market. Our experience there with rare disease means that we will be working very closely to bring this on board in -- likely in revenue in 2026.

Our next question comes from Luke Herrmann with Baird.

Congrats on the quarter and the Sephience launch project -- progress. Just a follow-up on patient weight thus far. Given the commentary around trying new foods, do you think diet liberalization can be a tailwind to patient weight over time, particularly for those starting with poorly controlled disease?

Luke, thanks so much for the question. It's hard to say. I would say that not all PKU patients are many individual PKU have average typical weights for their height. They're not all underweight. In fact, we have patients who've had lifelong PKU who have much greater body weight than one would anticipate. In terms of the diet liberalization, this is something we haven't thought about in terms of a tailwind. What we've been thinking a lot about with diet liberalization is making sure we are working very closely with the dietitians and nutritionists at the PKU centers so that we ensure that when patients do begin to liberalize their diet, they do so in a very steady, gradual way. And then it's being done very thoughtfully in terms of the diets and the nutrition quality of the foods being introduced into an individual's diet. So I think we're thinking of it more in terms of setting individuals up for success, the ability to liberalize their diet doing so in a gradual fashion, which is not such an easy thing sometimes, right? If you have an individual, a teenager, who is going to have a hamburger for the first time, they may want to have a hamburger for lunch and pizza for dinner. But this has to be done in a very thoughtful, managed way. And we've, again, worked very hard with the centers of excellence to ensure that there's protocols for diet liberalization so that we set all patients up for success so they can enjoy as much diet liberalization as possible and still maintain control of phenylalanine.

That concludes today's question-and-answer session. I'd like to turn the call back to Dr. Klein for closing remarks.

Thank you all again for joining the call today. We're excited about the performance for the quarter and the strong start to the Sephience launch. This really reflects a lot of work by our team over the past 2 years to get ready for this launch and really a strong desire to ensure that we could provide what we view as a very efficacious, safe and well-tolerated therapy to as many individuals with PKU as possible. Thank you all again. We look forward to keeping you updated on the launch as we progress, and have a good evening.