PTCT - NASDAQ

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

Good afternoon, and thank you for joining us to discuss PTC Therapeutics' Fourth Quarter and Year-end 2025 Corporate Update and Financial Results. I am 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 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 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. Matt?

Thank you all for joining the call today. 2025 was a year of many significant successes for PTC, positioning us well for 2026 and beyond. I'll start by reviewing the highlights from 2025 and then share our key objectives for 2026. The main highlight of 2025 was the initial global approvals and launch of Sephience for children and adults living with PKU. As we have discussed, Sephience will be the foundational product for PTC's near-term growth. In 2025, we gained approval for Sephience in the U.S., EU, Japan and other countries, all within several months. The global launch is off to a strong start with broad uptake across all key patient segments and age groups. In 2025, we also made a number of advances in our R&D pipeline, including achieving positive results from the Phase II PIVOT-HD study of votoplam and progressing a number of early-stage programs, including those from our RNA splicing platform. And in 2025, we delivered another year of strong revenue performance. Fourth quarter net product and royalty revenue was $263 million, and full year 2025 total net product and royalty revenue was $831 million, exceeding guidance of $750 million to $800 million. Total revenue includes $587 million of net product revenue with solid contributions from our mature products and from the early Sephience launch. For Sephience in the fourth quarter, we achieved $92 million in revenue. And for 2025 since launch, we achieved $111 million, a really impressive start. In addition to the strong revenue performance, non-GAAP R&D and SG&A OpEx for 2025 was $728 million, coming in below our guidance of $730 million to $760 million. With our strong commercial execution, disciplined OpEx management as well as the monetization of the remainder of the Evrysdi royalty for $240 million in December 2025, we ended the year with $1.95 billion in cash. This financial strength will enable us to continue to support our commercial and R&D portfolios as well as engage in strategic business development. For 2026, we are providing product revenue guidance of $700 million to $800 million, with the majority coming from Sephience. This guidance represents 19% to 36% year-over-year product revenue growth. The 2026 revenue guidance excludes Evrysdi royalty revenue given the sale of the remaining portion of the Evrysdi royalty. We are providing expense guidance of $680 million to $720 million. And based on our revenue and expense guidance, we have the potential to reach cash flow breakeven in 2026, a significant milestone for the company. As we move into 2026, our main focus will be continuing the strong momentum of the Sephience launch. To date, we have seen broad uptake across all disease severities and age groups. This year, we expect revenue growth through increased penetration in our current markets as well as expansion into additional geographies. By the end of 2026, we expect to have patients on commercial drug in 20 to 30 countries across multiple regions, including Japan, where we gained approval in December and expect to launch in the coming weeks. Based on Sephience's highly differentiated profile, the large unmet need for adults and children with PKU and the early broad uptake into all patient segments, we believe Sephience has a potential multibillion-dollar global revenue opportunity. In 2026, we also look forward to progress across our R&D portfolio. For the votoplam Huntington's disease program, an end of Phase II meeting was held with FDA in the fourth quarter of 2025, where alignment was reached on the Phase III study design. Novartis will be initiating the Phase III trial INVEST-HD in the first half of this year. This trial could serve as the confirmatory study in the context of accelerated approval or as a registration trial. We also expect to have results from the Phase II PIVOT-HD extension study in the first half of 2026 once all participants cross the 24-month time point. For vatiquinone, we had a Type C meeting with FDA last December, where we discussed potential next steps in the development program following the CRL for the vatiquinone NDA. FDA has indicated that additional study will be necessary to support NDA resubmission and stated in the meeting minutes that this study could be a single-arm study with a natural history comparator group. We plan to meet with FDA in the second quarter to align on the protocol for this open-label study, including the matching strategy for the natural history control arm. In 2026, we expect to advance several programs from our innovative R&D platforms, RNA splicing and ferroptosis and inflammation. We expect to elect a development candidate for our MSH3 program for HD and myotonic dystrophy as well as to advance some of our earlier preclinical programs. From our inflammation platform, we look forward to initiating the Phase I study for our NLRP3 program by midyear and to potentially elect a development candidate for our ferroptosis Parkinson's disease program as well as our NRF2 activator program. In summary, with our robust commercial engine, innovative R&D programs and strong financial position, we look forward to a successful 2026. I'll now turn the call over to Eric to discuss our commercial performance, including details on the Sephience launch. Eric?

Thanks, Matt. We are incredibly pleased with the strong launch of Sephience reflecting its differentiated safety and efficacy profile and the experience and preparation of our global commercial organization. The PTC team has delivered on all key aspects of the early launch. Our customer-facing team's engagement across all key segments, including centers of excellence, health care providers, payers and patient advocacy groups has accelerated adoption of Sephience following FDA and EMA regulatory approvals. The breadth of adoption we are seeing across all patient segments in the first few months of the launch is highly encouraging. In the fourth quarter of 2025, global Sephience revenue was approximately $92 million, including $81 million in the U.S. and $11 million ex U.S. Sephience generated $111 million in revenue worldwide in 2025 since launch and is expected with the U.S. accounting for the vast majority of the revenue. As of December 31, 2025, we had 946 patients on commercial therapy worldwide and in the U.S. received 1,134 patient start forms. As Matt mentioned, we are seeing uptake from the full spectrum of the disease severity and patient age, including therapy-naive adults. We are also seeing breadth in terms of prescription base with 80% of PKU centers of excellence in the U.S. having written prescriptions for one or more patients. We are hearing positive feedback from health care providers highlighting broad adoption and have seen many patients of various disease severities, treatment histories and all ages from newborns to 80-year olds. We are pleased to see that treatment-naive adults, many who have been called "lost to follow-up" or those who have tried and failed therapies in the past have actively been seeking Sephience in the initial stages of the launch. While it's still early, we continue to see high refill rates and low discontinuation rates, which we view as an important sign of building on the launch momentum. Importantly, the PKU community has been very active on social media, playing a meaningful role in sharing real-world experiences, driving awareness and influencing other patients to engage earlier with their health care providers. We continue to see favorable payer mix dynamics with the majority of prescriptions covered under commercial payer plans. Importantly, the AMPLIFY head-to-head study demonstrating significant superiority over BH4 has been well received by payers who are supporting open Sephience access with very few barriers, including no step edits and 12-month refills before reauthorization. Our teams are also working on geographic expansion of the launch outside the U.S. We achieved regulatory approval in Japan in December and are finalizing pricing and reimbursement. While the U.S. continues to be the main driver for growth near term, we expect Sephience commercial patients to come from 20 to 30 countries by year-end, steadily building international presence in terms of both revenue and patients. In Europe, we have submitted health technology assessment dossiers for pricing and reimbursement in key markets and are leveraging paid early access programs for PKU patients to receive treatment as we finalize pricing negotiations. As we accelerate the launch in 2026, we believe the long-term opportunity for Sephience remains significant. In the U.S. alone, there are approximately 17,000 patients and new patients being identified via newborn screening with the majority of these patients tied to PKU centers of excellence. The clinical data package of Sephience highly differentiated efficacy, safety and dual mechanism of action supports broad penetration across the PKU population and position Sephience as the potential standard of care. These compelling data and the large orphan patient pool create a significant runway for the future growth of the brand. In the fourth quarter and throughout 2025, we continue to generate revenue from our more mature products, including the DMD franchise, given our ability to successfully defend Translarna and Emflaza despite significant headwinds. In conclusion, we are very pleased with the exceptional results delivered by the customer-facing teams in 2025. We are excited by the early launch Sephience metrics as we continue to build and execute on a world-class rare disease product launch. With that, I will now turn the call over to Pierre for a financial update. Pierre?

Thanks, Eric. I will now share the financial highlights of our fourth quarter and full year 2025. Beginning with top line results. Total net product and royalty revenue for the fourth quarter was $263 million, including Sephience net product revenue of $92 million. DMD franchise revenue for the quarter was $66 million, with Translarna net product revenue of $39 million and Emflaza net product revenue of $27 million. For Evrysdi, Roche achieved fourth quarter global revenue of approximately USD 584 million, resulting in royalty revenue of $79 million. Our full year 2025 total net products and royalty revenue was $831 million, exceeding guidance. Total product revenue for 2025 was $587 million, including $111 million of Sephience revenue and $382 million of DMD franchise revenue. For Evrysdi, full year royalty revenue was $244 million. For the fourth quarter of 2025, non-GAAP R&D expense was $124 million, excluding $9 million in noncash stock-based compensation expense compared to $116 million for the fourth quarter of 2024, excluding $9 million in noncash stock-based compensation expense. Non-GAAP SG&A expense was $87 million for the fourth quarter of 2025, excluding $10 million in noncash stock-based compensation expense compared to $76 million for the fourth quarter of 2024, excluding $8 million in noncash stock-based compensation expense. In December 2025, we sold the remainder of our Evrysdi royalty to Royalty Pharma for $240 million upfront and up to $60 million in sales-based milestones. Importantly, we maintained the right to receive $150 million milestone from Roche based on single-year Evrysdi sales of $2.5 billion. Based on the prior accounting method for the royalty, we will continue to show Evrysdi in our financial statements. However, there will be no cash proceeds for PTC. We have provided product revenue guidance for 2026 of $700 million to $800 million. This represents 19% to 36% product revenue growth from 2025. We anticipate non-GAAP R&D and SG&A expense for the full year 2026 of $680 million to $720 million, excluding estimated noncash stock-based compensation expense of $95 million. Based on this revenue and OpEx guidance, we have the potential to reach cash flow breakeven in 2026. Cash, cash equivalents and marketable securities totaled $1.95 billion as of December 31, 2025, compared to $1.14 billion as of December 31, 2024. Our strong financial position provides a solid foundation to pursue our strategic objectives, including supporting our commercial and R&D programs as well as potentially pursuing business development opportunities. And I will now turn the call over to the operator for Q&A. Operator?

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

Congrats on a really strong start for the Sephience launch. So first question for me. I just wanted to ask what's baked into your internal and external guidance for Sephience sales this year. Understandably, most of the sales will come from the U.S., but I would imagine if you're going to be in 20 countries versus 30, that will have an influence as well. So anything you can guide us for what's baked in and if you would consider this conservative at this stage?

Yes. Kristen, thanks so much for the questions. So as you indicated, the total -- so the revenue guidance this year is strictly product revenue, as we highlighted in the call of $700 million to $800 million, which is 19% to 36% growth over last year. We expect the vast majority of it to be from Sephience. The remainder, obviously, from our more mature products, as we said, we'll continue to have headwinds on the DMD franchise, including a larger number of generics in the U.S. for Emflaza and such. So we've been conservative in that regard of understanding where that could go. And as usual, as we get more visibility into DMD franchise as we move into the year, we can always adjust and raise guidance as needed. On the Sephience front, we expect the majority of revenue to come from the U.S. with contributions ex U.S. that should -- as Eric and I both highlighted, we expect to have commercial patients in 20 or 30 countries by the end of the year, but we'll expect those revenue contributions to come later in the year. And I'll let Eric go into more detail on those dynamics in just a second. But I'll say that, again, we're still very early in the launch with 1.5 quarters as we ended 2025 with an incredibly strong start. We continue to see great momentum. And with just 2 points on the line thus far, obviously, we'll make adjustments to guidance as needed as we continue to move in the year and have greater visibility on the revenue trajectory. Eric, do you want to provide a little bit more color on the rollout globally and the contributions to overall revenue?

Yes. And thanks for the question, Kristen. I'll just add, Matt said a lot of different things here, and I think it's really important that you know that the U.S. will continue to drive the vast majority of our revenue during the course of this year. We continue to see very nice momentum in Germany as well. And we have prepared HTA dossiers in Europe as well. So much of this pricing and reimbursement will take place during the course of the second half of the year. We're also really excited that we have the Japanese launch that's coming up in the second quarter. We finalized pricing and reimbursement. We will do that in the next few weeks and anticipate revenue to start in Q2, but more meaningful revenue in the second half. The good news as well is we had approval this week in Brazil, a very important market as well, and we'll begin processes with the named patient programs. And then as Matt said, when you potentially add 20 to 30 countries during the course of 2026, incrementally, they will be contributing over the course of the second half of this year, but really set us up nicely for 2027.

And then my follow-up question is in your prepared remarks, you mentioned that you are seeing some of these patients that are "lost to follow-up" now becoming aware and wanting to get on the therapy. How is that dynamic working? How are they becoming aware of it? And do you think that they've just kind of been "lost to follow-up" because there was really no reason for them to go to office in the past? And maybe if you could just comment on some of the trends you're seeing within each of these specialty centers uniquely, like some of the feedback we hear is physicians are trying it on their more difficult patients first and if they respond well, then they're kind of encouraging others to consider treatment as well.

Yes. Thanks, Kristen. You've captured a number of the complex dynamics that we're seeing early on. So let's first start with this "lost to follow-up" bucket, which I think was a term, I think that really started with the physician saying that there's a lot of adults that they don't see who are not on therapies and they don't see them in clinic. And what we've learned is that there's a number of these adults out there who still have -- some of them still have associations with the clinic, whether it's periodic with dietitians or nurse practitioners and others who maybe not are associated with the center. But I think what they have in common, and I believe this came out in your session today with the [indiscernible], adults want to be on therapies. And so I think what was a little bit misunderstood early on is "lost to follow-up" and not coming to see a doctor was equated with not wanting to be on therapy, and that's not the case. I mean it's 2026 now, social media [indiscernible] people are plugged into what's going on in the community. And I think as you talked about as well, what we see is a lot of activity on social media sharing the transformative benefits a lot of the patients have had with Sephience including being able to try foods for the first time, having Phe control, overall feeling better. And this gets out there. I mean there's actually social media influencers in the PKU community. So there are -- just because someone is not seeing a doctor doesn't mean they're not in network, doesn't mean they don't want to be on the therapy. So I think what we're starting to see is engagement of these folks as a new therapy is available that has demonstrated to be safe, at ease of use and has been able to deliver benefits that are so, so important to patients. In terms of the center dynamics, it's not a one size, fits all necessarily, but we are seeing early on that centers are tending to want to try those who are therapy naive or tried and failed other therapies before those who are on therapies. And as you pointed to, we've heard from a few centers, they're trying -- some of them are more challenging patients who desperately need therapy. And the feedback there has been really positive with some of the more severe patients having really strong responses, which is really helping to put Sephience right there as first-line therapy to try for all patients regardless of severity. And then, of course, if it works in the most severe patients, there's greater confidence over time that those who are on current therapies, including oral therapies could get switched over. So overall, it's been a very strong response. And I would point out this "lost to follow-up" doesn't mean "lost to follow-up," it's just one of those lessons that when a drug is launched and you're out in the real world, the dynamics play out as the dynamics are not always as the docs may have predicted. And again, overall, it's just been really impressive to see that those hardest-to-treat patients and hardest-to-reach patients are being reached and helped so early in the launch.

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

I wanted to get a little bit of color on vatiquinone. So FDA has asked for an additional study for FA. Can you provide any color on details? So do you know what kind of a study you would need to run? How many patients? Over what time period? Any kind of color that you could provide would be great here?

Yes. Sure, Tazeen. Thank you for the questions. As we've talked about before and is visible to everyone publicly, the CRL for vatiquinone was really based on statistical considerations. We had demonstrated significant effect on the upright stability scale, which is the most relevant and meaningful scale for the young patients enrolled in that study. This drug continued to show to be safe. And I think in our discussions with FDA, this may be FDA giving us an opportunity to provide additional data through an open-label or single-arm study within natural history control. And I think that, again, this speaks to the potential need to just have some additional evidence beyond what was there in MOVE-FA to provide the totality needed to gain approval. So we obviously want to meet with FDA as they have suggested we do to go over that open-label protocol, go through all the details of the matching criteria with the FACOMS natural history database as we've talked about before, Friedreich's ataxia and the FA community has done a great job of building a rigorous and robust natural history database that was used by Reata for approval, so this is regulatory precedent using it. And so we will again be using that. And we're just in the process now of finalizing what the subject number would look like and duration of treatment. So more to come on that. We expect to meet with the FDA in the second quarter. That meeting has been requested and scheduled so that we can get final alignment and then we can share those details and look to get this study started as quickly as possible. Obviously, we're excited to have an opportunity to do a study like this that wouldn't subject younger patients to a placebo and really allows us to get that additional treatment evidence that we would need for approval.

So then just a follow-up on that. Since they gave you a suggestion, should we just assume that, that's what you are planning on doing? And is that also baked into your OpEx guidance for this year -- OpEx expenses for this year?

Yes, absolutely. They had written it into the minutes that this is -- that this was an option for us to take to collect the additional evidence and so that will be what we'll pursue, discussions would be on that protocol. There is some OpEx for the FA study, and there'd be no change to that. It's entirely possible with an open-label study, it obviously be less costly since it's a little less involved than having to manufacture placebo and all the blinding and some of the logistics required in the CRO operations, but no -- for sure, no increased OpEx related to doing this study.

Our next question comes from Ellie Merle with Barclays.

On Sephience, first, just what are your expectations for the discontinuation rate commercially? Specifically, how long do you think physicians will wait to see if patients respond or not? And I guess, the threshold that physicians view for response. And then just a separate question, just in terms of the cadence of new starts from here. Are you seeing a steady number of new start forms this year so far? Or did you see a bolus upfront? And if you could just talk to sort of how you see the rate of new starts evolving, I guess, in the U.S. over the course of the year.

Thank you very much for the questions, Ellie. I'll just start and I'll pass it over to Eric. As we've talked about thus far, it's still early days in the launch, and we're seeing very low numbers of discontinuations, very high prescription renewal rate. It's still early days, but it's obviously very encouraging. Eric, do you want to talk a little bit how we're thinking about that dynamic over time and cadence of starts going forward?

Yes. I mean on the discontinuation rate, that's really important because obviously, part of what we're doing is building a prevalence and where discontinuation rates as well, as refills are something we're watching very carefully. As we've mentioned before, we have very low dropouts, single digits. And usually, these are based on patient decisions, not necessarily for clinical reasons, safety or efficacy, which is incredibly encouraging. With regards to cadence, we see we have gone through. And of course, we've gone through the course of the 5.5 months of the launch. We continue to see very nice momentum with new patient starts. And we anticipate that cadence to continue throughout. It is a combination of consistency of bringing in new patients and maintaining the base of patients that we have by ensuring that our case managers and our teams are involved in making sure that medical education awarenesses, reauthorizations, dose adjustments and all of that are taking place. So we're very, very confident that not only the momentum that we've had that we started in the first 5 months will continue, but adding 20 to 30 countries over the course of the second half of the year will bring in meaningful revenue to this truly global launch.

Our next question comes from Brian Cheng with JPMorgan.

How should we think about Sephience's growth in Europe once we reach the end of the 6-month free pricing period. Specifically, how is the negotiated price balance out the projected uptick in the market?

Thanks very much for the questions, Brian. And Eric, do you want to talk a little bit about German dynamics and pricing?

Sure. First of all, we're really pleased with the launch because the vast majority of the centers of excellence in Germany have prescribed Sephience. So we have an incredibly experienced team that's been managing that process. Keep in mind, we've also had a number of products that we've launched. And we've gone through this process right now to get pricing and reimbursement. We have already gotten the assessment from G-BA and AMNOG on the benefit rating. And we're in this process right now for pricing and reimbursement. We've submitted our HTA dossier. It has a very strong clinical package right now that includes both all of the APHENITY data as well as the AMPLIFY data, which will give us a lot of really important strength in terms of supporting the highest possible price. These discussions are ongoing, and they will be going for the next 5 to 6 months before we finalize pricing and reimbursement with the AMNOG process. So I think we need to stay tuned. But we're anticipating with the strength of the data that we'll be able to maintain the highest possible list price and lowest rebate.

Our next question comes from Judah Frommer with Morgan Stanley.

Maybe just a follow-up on Sephience. Anything you can point to in reimbursement dynamics that have kind of shifted as we move through the initial stages of the launch, maybe specifically for those patients getting approved to be on first-line therapy with Sephience? And then separately, just on the comments around potential to pursue business development. I guess, how do you think about prioritizing the internal early-stage pipeline and bolting on to that versus kind of going in alternate directions?

Yes. Thank you for the questions, Judah. I'll let Eric talk a little bit about the color on reimbursement dynamics and Pierre briefly on BD. So Eric, you want to go first?

Thanks for the question, Judah. First of all, we're really pleased with the interactions that we've had with both the U.S. commercial payers and the government payers. I mean, we've had some pretty experienced teams of our field-based teams with both MSLs as well as market access, that they have met with payers now that cover more than 250 million lives. We've been leveraging again the APHENITY data. But more importantly, the AMPLIFY data has really, really opened up a lot of good discussion in terms of policies. Government and commercial policies have been written. It shifted in the positive sense in the context that -- where they've been written, they've been favorable to Sephience. They're primarily prior authorization to label. They're either limited or no step edits with refills from 6 to 12 months. And some of the biggest commercial payers have finalized their policies with refills to 12 months and no step edits. So that's very encouraging. In terms of reauthorization, the processes seem to be very straightforward and generally positive. After 6 to 12 months, the criteria seems to be fairly consistent with our clinical results, so they're looking for fee reduction, goal attainment for dietary needs as well as potentially the physicians or healthcare provider's judgment on clinical improvement. So all in all, I think the shift has been very quite positive, and we're seeing now a number of plans, both at the government and commercial level that have been favorable to Sephience.

And on BD, first of all, we're in a strong financial position with $1.95 billion cash as we start the year. Sephience is off to a great start, and we see it to be a multibillion dollar opportunity. We're obviously focused on the launch and continuing to expand globally as well as develop our internal R&D pipeline. Rest assured, we have enough cash to do both at the same time, no problem. But we're open to accelerate top line growth via business development opportunities. We will be disciplined, and we will make sure to always look at maximizing shareholder returns.

Our next question comes from Ben Burnett with Wells Fargo.

I wanted to ask also about Sephience. Just, what kind of Q1 dynamics should we expect? I guess, any color on discounting or any other sort of typical Q1 dynamics that we should be modeling? And then also, like where do you expect kind of the majority of the demand to kind of come from going forward? So kind of talked about some of these, lots of follow-up patients. But is -- going forward, are the switches kind of the more important group? Or do you see kind of adoption from both?

Thanks for the questions, Ben. Let me grab the second question -- take the second question first. Look, I think one of the things that has been impressive to us early on in the launch is the breadth of uptake both in terms of age with patients as young as a couple of months of age up to 80 years, as well as the full spectrum of severity, seeing less severe patients, classical patients with non-BH4 responses and different patient segments, those that are currently on therapies with those who are in therapy naive, and I just talked about. And I think we had the majority thus far coming from those who've tried and failed previous therapies. Being that we're still in the early stages of the launch, I think what we expect in the short term is continued broad penetration as we go deeper and deeper. There's no reason to see a slowdown in those that have tried and failed coming on, those that may be therapy naive. And I think over time, we'll probably see more of the switches that goes on therapies for the simple reason that what we're hearing is there's a preference at the centers to try to get those who don't have a therapy right now or have tried and failed therapy, to get on a correct therapy first before switching. Of course, the AMPLIFY data shows as well as other studies continue to show every patient who's been on BH4, generic or branded, has a much better response to Sephience whether that's in terms of fee lowering or fee lowering and diet liberalization. So time and time again, that is the case. And there's awareness about that in the healthcare provider community, which is why we expect over time, we'll see those switches come. But for now, I think the story is going to continue to be breadth, breadth in terms of the segments, breadth in terms of severity. And the other thing I'll point out that early on, as Eric raised in his comments, we've gotten prescriptions from over 80% of the centers of excellence. And at this stage of the launch, it's usually the opposite. It's usually 20 have prescribed, and you're trying to get into the larger numbers. What we're seeing again is a story of breadth. We're getting penetration into these expert centers, which again, we expect will continue over time.

Our next question comes from Clara Dong with Jefferies.

This is [indiscernible] on for Clara. I just wanted to ask, for Sephience, as you think about Japan and Brazil and these other ex-U.S., ex-EU markets that you could launch in, how would you kind of force-rank those by revenue contribution potential? And then also on timeline to kind of contributing meaningfully?

Great. Thank you for the question. As we said, we expect going forward, the majority will continue to come from the U.S., but we'll start seeing those contributions from ex U.S. And Eric, do you want to talk little bit how we're thinking about timing and contribution\?

Yes, timing and contribution in those key markets are very important. We're already getting to the very end of this quarter, and we will have price, negotiated pricing and reimbursement in Japan. I think we're really pleased with the approval there. It's a full and broad label. Our staff is already on the ground. They're fully trained. They're profiling the centers of excellence. And we anticipate first commercial sales from Japan in the second quarter, with more meaningful revenue in the second half. I want to remind you, there's about 1,000 PKU patients in Japan. However, it's a very, very high priced and premium-priced market with 10 years of orphan drug exclusivity. So we've got a long runway and a very experienced team there. We're also really pleased with the dynamics of Brazil, because Brazil has over 5,000 diagnosed patients, and they're concentrated in major cities. We're pleased because our team there is incredibly experienced. They've launched multiple products in the rare disease space. They know how to navigate the named patient program aspects in Brazil. So the team has gone through already for more than a year, profiled a number of the centers of excellence, healthcare providers, KOLs and the advocacy groups. And the named patient programs are in place and ready to go since the approval this week. So we have a number of patients already identified. Pricing submission will take place shortly in the coming days. And we anticipate, again, more meaningful revenue because the name patient programs do take a little longer to go through in Brazil, but we would anticipate more meaningful revenue towards the end of this year.

Our next question comes from Brian Abrahams with RBC.

This is Joe on for Brian. I wanted to ask on votoplam. Can you walk us through the Phase III study design? How are you thinking about potential approval pathways there? What might be some scenarios that could enable approval prior to primary reading out? And separately, can you also quickly comment on your net pricing expectations for Sephience?

Sure. Joe, thanks for the questions. Let me take the first one, and then I'll turn it over to Pierre to talk about net pricing. So this -- as we talked about that we -- there was an FDA meeting in the fourth quarter, where the key focus of that meeting was achieving alignment with FDA on the design of this Phase III study, INVEST-HD. As you know, this will be conducted fully by Novartis, funded fully by Novartis, but obviously, we participate as a member of the Joint Development Committee. And the idea was to set this study up to either serve as a confirmatory study in the context of potential accelerated approval based on the PIVOT-HD open-label extension data or itself as a registration study. And as we shared at JPMorgan, this will be a placebo-controlled study with a 3 to 2 randomization of votoplam to placebo and a targeted enrollment of approximately 770 participants in over 30 countries with a primary end point in change in cUHDRS. There is an interim analysis planned for both efficacy and futility, so there is that potential that if accelerated approval is not achievable based on the PIVOT-HD study with an interim analysis, that could potentially bring an earlier approval prior to the completion of all patients getting through that INVEST-HD study. Pierre, you want to talk a little bit on net pricing?

Yes, absolutely. The interesting dynamic in the PKU pricing is 2/3 of the patients are commercial, which is very rare. And usually in some other settings, for instance, Duchenne, it's 50-50 split. And we said we expect the gross to net between 15% to 25%. At the start of the launch will be in the lower hand of that side, and as we get to steady state will increase over time.

You next question comes from Joseph Thome with TD Cowen.

Maybe to follow-up on the Huntington's program. I guess now that Novartis is in charge of the program, are they also in charge of any further disclosures from Phase I/II program? Or should we expect anything in May of this year? Kind of how does that work? And then I guess is there another planned FDA meeting on the data that you have right now, I guess, to use that package for accelerated approval? Just trying to understand that component. And then lastly, in the Phase III, what triggers that interim analysis?

Thanks for the question, Joe. So the -- as we talked about the other objective of that fourth quarter FDA meeting was to just have a high-level discussion around the potential for accelerated approval and not surprising the neurology division in CDER is open to that potential given the significant unmet need for those living with Huntington's disease. I think it's quite clear from the comments we've made publicly and Novartis has made publicly that there's a great enthusiasm in both companies to pursue that pathway based on the data, if that's possible. Clearly, the next step is the analysis of the open-label data, which will occur once all subjects across 24 months. That would give us an opportunity to look at those data, make a decision through the Joint Development Committee, consisting both of Novartis and PTC, whether we believe we have data there worthy of a discussion about accelerated approval. And then as you can imagine, there would be a subsequent needed regulatory and feeding to get an alignment with the division about the data and the potential for accelerated approval. That analysis will be done by Novartis as they're overseeing the program now. We would expect that we would have a disclosure. The details of that will get worked out, as we go through the analysis. And as we said that, that analysis will occur in the first half of this year. So we would expect to be sharing the data. Those details are still to come. In terms of triggering the interim, those details haven't been disclosed as of yet. I think the idea, though, is to make sure that there is a sufficient number of subjects that have gotten through a significant duration of treatment to allow for an opportunity to understand if there's a sufficient efficacy signal that could allow for potential stopping or at least a data cut and analysis to support discussions around accelerated approval.

Our next question comes from Sami Corwin with William Blair.

Congrats on the progress. I was curious how we should interpret the Translarna sales allowance in France, and if we could see a similar adjustment in the future? And then regarding the vatiquinone, did the FDA have any recommendations or input as to whether you could use upright stability as the primary endpoint? Or if they prepare you to use mFARS?

Thanks, Sami. On the first question on the Translarna France allowance, this was kind of a unique thing to France. It's a onetime France specific thing that we had sold Translarna there under an early access program since the beginning of time where we set the price when the license wasn't renewed, France ended the early access program and set their own price and they issued a charge for the difference. So this is a something specific to the France early access system. In fact, it's something specific to Translarna that I think would never happen again for any other drug in, and it was a one-time thing. On vatiquinone, so I think one of the questions in terms of what the end point is will be based on the duration of that study because one of the important findings we had in the MOVE-FA study was that certainly, over the short term, 12 to 18 months that upright stability is clearly the endpoint that could capture is most sensitive to capture treatment effect in the population we enrolled in MOVE-FA, which would be consistent with the one that we would enroll in this new study. However, what we saw in the data is that by 18 months and certainly as we went out to 36 months, we continued to record significant effect on slowing of disease progression. But now that slowing was captured on the other subscales as well, including lower limb and upper limb. So that's why I say that depending on the duration of the study, if we're looking at something a little bit longer than 18 months, then it would probably make the most sense to have the mFARS as the primary endpoint. Because really, the goal here is to demonstrate significant effect on slowing of progression and how that's done with mFARS and the subscale is based on the patients and the duration of the study.

Our next question comes from Geoff Meacham with Citigroup.

This is Jarwei on for Geoff. Maybe going back to Sephience and thinking about OUS geographies. A lot of the early trends that we've been seeing in the U.S. are pretty encouraging with regard to capturing the loss to follow-up patients and some of these early start trends and also awareness on social media. So maybe thinking about Japan and Brazil and other geographies you're thinking about. Could these trends also be similar or is your internal expectation, that is just too early to tell?

Thanks, Jarwei, for the questions. I would say that it's probably a little early to tell, but what we do know is true is that patients, regardless if they live in the U.S., if they live in Brazil, or they live in Germany, or they live in Spain, or they lived in Japan, UAE, they're networked. There's social media networks everywhere. There's patient organizations, there's aggregation of patients. And so there are -- these communication channels like we're seeing in the U.S. that drive awareness, that enable patients to share the stories of success in trying foods for the first time and such. We see that globally. What may differ, Jarwei, in country to country is a little bit of just the dynamics of patients attached to centers. For example, I already talked about the number of patients in Japan 1,000. It's much more concentrated, about 12 centers of excellence. There's a number of centers of excellence in Germany where things are concentrated. So the dynamics in the segments may differ a little, but I think what there is in common in some of these countries is a higher attachment to the centers of excellence and social media channels. And I think the dynamics in Brazil may be different yet. But as Eric pointed out, our teams have a lot of experience working in all of the different regions in states of Brazil, understanding the dynamics of patient organizations, the importance of local governments and advocacy groups, how do you establish access, what's necessary to leverage the digitalization process for early treatments while still trying to get access and reimbursement through CMED and CONITEC. So I think this is where having that experience in understanding the dynamics unique to certain geographies will allow us to have early success as we launch.

Maybe one follow-up is that you mentioned earlier that about 80% or maybe slightly over 80% of centers of excellences in the U.S. have prescribed Sephience. So maybe just thinking about the remaining 20% of the pie, what do you think they need to see in order for them to get on board Sephience, proven efficacy and excellent tolerability and safety profile?

Yes, I'll let Eric talk about that. I mean, we're -- because this is a unique dynamic at this stage of launch to be an 80/20 instead of the 20/80, but Eric...

I mean to Matt's point, it's remarkable to have after 5 months, 80% of your centers that have written multiple prescriptions in the U.S. And we have seen the same dynamics in Germany in these centers of excellence. So that's very encouraging. It means that the efficacy -- clinical efficacy of the product in the real world experience is playing out. Of course, there's always going to be a few laggers. We have a number of key things that we're doing in the field. We have frequent touch points with all of the centers of excellence on either daily or weekly basis. And with those few laggers, we're doing a number of key medical education programs that peer to peer. We have newly published data that is now going to be in peer review, obviously, with the APHENITY, the long-term extension, AMPLIFY, the mechanism of action. Number of these things that we can bring forward. But I think one of the main points is patient demand, social media, and the push through that these inquiries will have on these centers to accelerate adoption. I think these patient testimonies from other centers that have utilized this will move those remaining few laggers.

Our next question comes from Luke Herrmann with Baird.

Just another on vatiquinone. Are you able to share some additional color on your base case for the external control matching strategy in order to maximize the likelihood of a statistical hit. And I guess, what are the key features you need to align on with FDA at this point?

Thanks for the question, Luke. Obviously, we have experience from the MOVE-FA study of having done this natural history match on key factors that we had aligned with FDA on as part of the statistical analysis plan and had 50% slowing over 3 years relative to natural history. So I think we've got a good sense as does FDA on those matching factors, and there are the things exactly that you'd expect, age, age of onset based on mFARS scores, things that get at making sure that you have similar baseline severity as well as similarities and things that drive progression. Again, we're fortunate to be in a situation where there's regulatory precedent for using these natural history matching with the FA natural history of registry. We've done it ourselves and FDA is familiar with it. So that really helps. So really, what comes down to the alignment is making certain that the FDA is comfortable with this matching approach, details of the model, statistical aspects of the model, how we're going to do the analysis and duration of study and subject numbers. So really those key points. So as we move down what is a relatively unprecedented path for a neurological disease having this opportunity to do it have an open-label natural history comparison to allow for us to file. We just want to make sure that everything is buttoned up and we're as aligned as much as possible prior to starting that.

Our next question comes from Joon Lee with Truist.

Congrats on the strong quarter. This is [indiscernible] on for Joon, just a couple from us. So firstly, Palynziq has an upcoming PDUFA for adolescents with PKU coming up in the next week. Is that something that we should be paying attention to? And just quickly on the gross to net, the move towards the 15% to 25% range you previously mentioned, should we expect that this year?

Thanks for the questions, [indiscernible]. So the first question is the potential label expansion of Palynziq to adolescents. Look, I think as we've talked about, one thing that's becoming clear to us is Sephience is reaching that point where it will become the first line of treatment. It will be the first line of care, given that it is oral, convenient, strong safety tolerability profile and demonstrated efficacy across the full spectrum of patients. And I think even if Palynziq is approved in younger patients, I think given its history of safety tolerability, challenges with administration, duration for lengthy time for titration to get to a dose that may be effective and safe. All of those things, I think, will keep it as sort of second line behind Sephience. As you can imagine, for adolescents, there would be a lot of benefits to being having an effective drug that's oral, strong safety and tolerability record versus one that may have more challenges in that regard. Your question on G to N, 15% to 25%, Pierre, do you want to follow up on that?

Yes, absolutely. I think, as I mentioned, we're on the lower end, and it will take multiple quarters to reach the top end. So it's going to be a slow and steady, and it will not be our expectation to hit the top end this year.

Our next question comes from Joseph Schwartz with Leerink Partners.

It's [indiscernible] on for Joe. Just one question from us. At R&D Day, you highlighted your new splicing and inflammation programs. What are the first clinical proof-of-concept milestones that would provide validation and/or how you view the catalyst path for these programs? And how are you prioritizing capital allocation as you target cash flow breakeven for these?

Thanks for the question. I think, first of all, in terms of splicing, we can confidently say that has been a well-validated platform. I think certainly, both, Evrysdi, the success of Evrysdi and the success of votoplam certainly substantiates the potential for splicing to deliver transformational and very valuable therapies. So I think as we move through in terms of specific program validation, as we move forward, we look -- as I mentioned in the prepared remarks, we look forward to bringing that, the MSH3 molecule to development candidate status this year and then as quickly as we can trying to get that into the clinic. So the next step really is making sure we have all the necessary preclinical work done in IND-enabling studies done to allow us to move that into the clinic. Similarly, on the inflammation and ferroptosis platform, there, we've got some clinical stage programs, as we talked about being able to move into Phase I within our NLRP3 inhibitor program, which we expect to do by mid-year. The next big stage gate there are your typical Phase I type things of being able to understand the safety and the pharmacology. We also have the potential to start the Phase II program for the DHODH inhibitor this year. And then the early stage programs I highlighted both the Parkinson's ferroptosis program as well the NRF2 activator program and both are nearing that DC stage. So we're still at that point where we're ticking the boxes to make sure we have all those gearing nonclinical toxicology and pharmacodynamic studies done to allow us to move those forward. So we look forward to hitting those milestones and being able to get these programs forward as quickly as possible. Pierre, do you want to talk a bit about capital allocation?

Yes. I will mention a few things. Number one, we demonstrated over the last few years that we're very disciplined from an OpEx management. You see revenue increase and strong Sephience launch and OpEx over the years. We've been very disciplined. We'll continue to be. That's important to us to reach cash flow breakeven and be cash flow positive after that. We are highly focused on the momentum of Sephience and expanding globally. That's important to us. You mentioned R&D Day and our R&D programs, which will continue to develop both on the splicing platform as well as ferroptosis and information. And finally, we're open to look at the opportunities, as I mentioned, and ways to accelerate top line growth.

Our next question comes from Paul Choi with Goldman Sachs.

Congrats on all the progress. And I also wanted to ask on the early-stage pipeline as well, Matt, which is just with regard to your [ NFRP ] program, as you mentioned. Is there a particular area of fibrosis, which, in your view, allows for the shortest clinical development time and time to market. And then for your NLRP3 program, I think you guys were still in the stage of indication selection. Can you maybe just comment on what your latest thoughts are on that program and just sort of where your target focus might be?

Just to clarify your first question is, I mean NRF2 program, is that correct?

Yes. Just sort of what area of fibrosis or fibrotic disease, I guess, provides you the sort of the easiest or shortest path to market?

Yes. So I think the way we're thinking about it for both programs is 2 things, right? One is where can we see overlap between the target pathway, the mechanism and mechanism of drug and disease state. And then the second is how do we think about that in terms of efficiency and moving things forward? When you talked about the R&D day, how our NRF2 activator program is pretty unique in that it has a differentiated mechanism of action that has what we like to consider comprehensive NRF2 activation which modulates both the cellular stress response as well as inflammation pathways. So we're able to see effects and as we share data from both kidney studies, and I believe lung studies as well showing great activity and benchmarked to others. So I would say at this point, while we're still doing indication selection there, we should have a beat on that soon. But where we want to go is understand where there's been a clear evidence that by targeting NRF2 the way we can that we can deliver clinical effect. And obviously, we're going to be in the rare disease realm. And as usual, from a developability standpoint, we'll look for things that have allow us to have objective biomarkers or clinical effect that can not only facilitate the development program, but also get to that acceleration piece you talked about, get confidence early that we're having a meaningful effect that could either open up an accelerated approval portal or allow us to move forward faster in initiating a registrational study. On the NLRP3 front, as we shared at the R&D Day, PTC612 has demonstrated really strong potency due to its selectivity and we benchmarked it to a number of compounds as we shared that day with favorable potency. We talked a bit about that day and continue to believe that our initial targets will be lung inflammation of fibrosis, given the overlap between the NLRP3 pathways and lung fibrosis. So we are still honing on final indications, but I think our first goal will be at pulmonary fibrotic conditions.

Thank you. I would now like to turn the call back over to Dr. Matthew Klein for any closing remarks.

Thank you all very much for joining the call today. 2025 was a really successful year for PTC. We're excited about the Sephience launch, the R&D platform, our strong financial position, all of which really sets us up for great success in 2026 and beyond. Thank you all again, and have a great evening.