Ladies and gentlemen, thank you for standing by, and welcome to the PTC Fourth Quarter 2020 Financial Results Conference Call. [Operator instructions] I would now like to hand the conference over to your speaker today, Kylie O'Keefe, Head of Investor Relations. Please go ahead, ma'am..

Good afternoon, and thank you for joining us to discuss PTC Therapeutics' fourth quarter and year end 2020 corporate update and financial results. Joining me on today's call is our Chief Executive Officer, Stuart Peltz; our Chief Financial Officer, Emily Hill, our Chief Development Officer, Matthew Klein and our Chief Business Officer, Eric Pauwels.

Before we start, let me remind you that today's call will include forward-looking statements based on current expectations. Please take a moment to review our slide posted on investor relations website in conjunction with the call, which contains our forward-looking statements.

Our actual results could materially differ from these forward-looking statements as any and such risks can materially and adversely affect our business and results of operation.

For a detailed description of applicable risks and uncertainties, we encourage you to review the company's most recent quarterly report Form 10-K filed with the Securities and Exchange Commission, as well as the company's other SEC filings. We will disclose certain non-GAAP information during this call.

Information regarding our use of GAAP and non-GAAP financial measures and a reconciliation of GAAP to non-GAAP is available in today's earnings release.

With that, let me pass the call over to our CEO, Stuart?.

Thanks Kylie. And thanks for joining us today. In 2020, we have made significant progress and moving our pipeline forward to bring new therapies to patients on all fronts for research and development through commercial. Despite the COVID-19 pandemic, we initiated five clinical trials, including two registration directed trial with particular note.

Let me begin with the Duchenne Muscular Dystrophy franchise, we continue to see strong global growth and geographic expansion. Our DMD franchise sales in 2021 were approximately $331 million.

Specifically in the US, the annual revenue of Emflaza totaled $139 million, which is a 38% increase from last year, the annual revenue for Translarna total $192 million, and it was driven by geographic expansion, new patient and labor modification. For example, Translarna received marketing authorization in Russia in the fourth quarter.

We have also continued to drive additional geographic expansion in Central and Eastern Europe and in Latin America. Even during the turmoil caused by COVID-19 pandemic we secured a Brazilian group purchase order for Translarna and Eric will go into these details shortly.

As a reminder, we also recently reported the results from the 045 dystrophin study. We plan to discuss these results along the Translarna's totality of evidence, including existing clinical and real-world data with the FDA. Our goal has always been to bring Translarna to US patients who have long been waiting for this therapy as quickly as possible.

Moving to our splicing platform, the approval of the Evrysdi in 2020 was an important milestone for PTC partners Roche and the SMA Foundation. Evrysdi is a groundbreaking treatment, which has a benefit for all SMA patients, with particular benefits on durability and broad tissue distribution.

As a consequence of the benefits of Evrysdi and it's continued to show a strong uptake and Roche expect that Evrysdi will become the treatment of choice in the US in 2021. With the near term expected European approval, followed by the Japanese approval, Evrysdi should see continued significant growth this year.

Another accomplishment of 2020 with regards to Evrysdi is the royalty monetization deal, which put $650 million on our balance sheet. The structure of the deal allows PTC to receive approximately 60% of the royalty revenue and reverts to 100% once our royalty monetization partner receives $1.3 billion.

Our next most advanced molecule from the validated splicing platform is PTC518 for the treatment of Huntington's disease. As a reminder, PTC518 is an orally bioavailable small molecule that crosses the blood brain barrier and reaches all regions of the brain.

Preclinical results demonstrated a dose dependent reduction in the HTT mRNA and protein in cells of the striatum cortex and cerebellum in the back HD mouse model. This is critically important as Huntington's disease is a whole brain disease. HTT reduction is clearly titrating based on PTC518 levels.

So the degree of HTT lowering can be tightly controlled. In addition to the whole brain distribution, PTC518 achieved uniform exposure, and HTT lowering in all tissues analyzed, showing a near one to one ratio between CNS and blood.

This is important because it shows the exposure and effect within the brain just analogous to what we see in the blood cell. PTC518 is currently in a single and multiple ascending dose Phase 1 trial in healthy volunteers.

We will be measuring both HTT mRNA and protein levels in cells within the blood, allowing us to quickly demonstrate drug activity that results in HTT lowering. This will allow us to select the dose with the desired level of activity.

This same approach was successfully used in the risdiplam program, where proof of concept was demonstrated in the healthy volunteer study. We expect the same trajectory in the Huntington's disease program. We are very excited about this program and look forward to the results that are expected in the first half of 2021.

Now turning to our virology platform, the second and final stage of the FITE19 registrational trial for COVID-19 has commenced. As a reminder, PTC-299 is an oral small molecule with a dual mechanism of action that demonstrates both antiviral and anti-inflammatory effects. PTC- 299 inhibits SARS-CoVID-2 viral replication and calms the cytokine storm.

PTC-299 functions by targeting a cellular enzyme dihydroorotate dehydrogenase or DHODH. The advantage of targeting the cellular enzyme instead of a viral protein is that it's less likely to elicit drug resistance.

Though there have been great strides made in the development of vaccines, the lack of effective COVID-19 treatments has significantly hampered our ability to resume normal life and therefore the continued focus on developing treatments is key. Now let me turn to our bio e-platform.

We have initiated two registration directed trials with particular note, one in mitochondrial epilepsy and one with Friedreich ataxia and are enrolling patients in both studies. The global prevalence of mitochondrial epilepsy is estimated at 20,000 patients and the global prevalence of FA is approximately 25,000 patients.

Let me now touch on our gene therapy platform. Our initial focus is to launch our first gene therapy for patients with AADC deficiency, which is expected to occur in Europe during the second half of 2021. The BLA submission is also on track for the second quarter of this year.

As a reminder, PTC AADC is a transformative gene therapy that has the potential to produce meaningful changes in the AADC deficient patients. PTC-AADC has robust clinical data that demonstrates durability effect for up to 10 years post treatment, a crucial consideration in a single dose gene therapy. Now let me discuss our plans for PTC923.

As a reminder, there's an estimated global prevalence of 58,000 PKU patients and the vast majority are not well addressed by current therapies and therefore we're excited about the potential of PTC923 as a clinically differentiated therapy to address this high unmet medical need.

We will start a registrational trial evaluating the PTC923 for treating PKU called APHENITY, mid this year. Last year, we achieved many important milestones. We anticipate an exciting year in 2021. That will continue to create substantial value for all our stakeholders. I'll now turn the call over to Matt, for key updates on our clinical programs.

Matt?.

Thanks, Stu. I want to build on Stu's comments on our development team's achievements in 2020. We have worked hard at PTC to navigate the many challenges of the past year and are excited to continue to deliver on planned development milestones across our multiple platforms. I'd like to start with our Bio-e platform.

This platform focuses on diseases of oxidative stress by targeting a special class of enzymes called oxido reductase. Oxido reductases are a family of enzymes that perform important electron transfer reactions, and are known to have important biological functions.

Particularly known, the first compound being developed for the Bio-e platform targets the oxidoreductase 15-lipoxygenase. 15-lipoxygenase is a key regulator of inflammation and oxidative stress pathways and has been implicated in a number of CNS diseases.

As Stu mentioned, we have initiated two vatiquinone registrational trials in mitochondrial epilepsy, and Friedreich ataxia. As a reminder, the vatiquinone has extensive safety data, particularly in pediatric patients, with the longest duration of exposure being over 10 years.

For the first indication, mitochondrial epilepsy, and previous clinical studies demonstrated vatiquinone had a positive effect on seizures and seizure related morbidity across multiple mitochondrial disease subtypes.

These results give us confidence that the vatiquinone has the potential to show clinically differentiated improvement for mitochondrial epilepsy patients. The ongoing mitochondrial epilepsy trial, the MIT-E trial, is a randomized, placebo controlled study enrolling 60 children at centers worldwide.

The primary endpoint of the study is a reduction in observed motor seizures, with secondary endpoints capturing other aspects of seizure activity and seizure related morbidity. Enrollment is underway and data are expected in the third quarter of next year. We are very excited to bring this therapy to children with mitochondrial disease.

The second particular known registrational trial is in Friedreich ataxia, which is a rare, inherited progressive neuromuscular disease that affects the nervous system in heart. In a previous Phase 2 trial, particularly known treatment demonstrated significant improvement in disease severity, compared to a Natural History cohort over 24 months.

These results support that vatiquinone can deliver a meaningful effect to Friedreich ataxia patients. The Phase III FA trial MOVE-FA is a 72 week randomized placebo-controlled study. The primary endpoint of the trial is change from baseline and the modified Friedreich ataxia reading scale, or mFARS.

The key secondary endpoint is the change from baseline in activities of daily living, as assessed by the FA-ADL scale. This endpoint strategy was developed in consultation with regulatory authorities in the US and EU. We began trial enrollment in fourth quarter of last year, and we anticipate results in 2023.

Now let me turn to our PTC518 vatiquinone disease program.

PTC518 is an orally bioavailable small molecule developed from our splicing platform that was designed specifically to treat Huntington disease, given the need to effectively target every region of the brain, the molecule is designed to cross the blood brain barrier and avoid efflux, a significant advantage for treating neurodegenerative disease.

The Phase 1 healthy volunteer trial is underway and includes both single ascending and multiple ascending dose regimens. As a reminder, this healthy volunteer trial is designed to not only capture key safety and pharmacology data, typical to Phase 1 study, but to also establish proof of splicing mechanism and guide dose selection for future studies.

The SAD study includes five dosing cohorts, each with six active and two placebo subjects. The MAD study is expected to have three to five cohorts, each with six active and two placebo subjects.

In the Phase 1 study, we are monitoring drug concentration in both the CSF and blood and we'll be measuring levels of HTT mRNA and protein in the cells of the blood. This ability to gain key proof of splicing mechanism data is similar to what we were able to accomplish in risdiplam Phase 1 healthy volunteers study.

The data from the PTC518 SAD and MAD studies are expected in the first half of this year. Now turning to our gene therapy platform, we remain on schedule to the CHMP opinion on the PTC-AADC MAA and for the BLA submission to the FDA in the second quarter of this year.

In addition, we are continuing to progress our FA gene therapy program and expect first in human dosing before year end. Turning to our PTC299 FITE19 clinical trial; we recently announced that enrollment of the first stage of the study was completed.

As planned, the DSMB reviewed the interim safety data and unanimously recommended continuing with the second stages of the study. We have already initiated enrollment in the second stage and data are expected in the second half of 2021. In 2021, we look forward to advancing additional programs through our pipeline.

We are on schedule to initiate the APHENITY Phase 3 trial for PTC923 in patients with PKU in mid-2021, the data expected by the end of 2022. As Stu mentioned, despite existing therapies, PKU remains a high unmet medical need.

To summarize, we look forward to building on the successful execution of our clinical development programs in 2021and sharing important updates in these programs when available. I'll now turn the call to Eric to provide more detail on our commercial business..

Thanks, Matt. We are very excited with the progress of our late stage clinical pipeline, which is poised to potentially deliver multiple innovative neurology therapies that we can leverage with our global, commercial footprint and existing expertise in rare diseases.

As Stu highlighted, the DMD franchise had strong growth in 2020, with both in Emflaza and Translarna generating significant revenue. Despite the challenges of the pandemic, we continue to see year-over-year growth of the DMD franchise.

For Translarna, the only treatment for nonsense mutations DMD patients, ages two and older, we saw revenues of $192 million in 2020. The growth was due to the ongoing expansion of the patient base, high compliance, recent label updates, allowing broader access and continued geographic expansion.

With the recent approval of Translarna in Russia in Q4, 2020, we are excited to bring this therapy to nonsense mutation DMD patients, and expand the use of Translarna globally, which is now available in over 50 countries. In Latin America, we continue to see good progress.

As a reminder, last October, we entered into a purchase agreement with Brazil's Ministry of Health to supply Translarna for both new and existing patients. This order was important given the governmental administrative delays in Brazil hit exceptionally hard by the pandemic.

The agreement specified two shipments; we are excited to announce that both shipments were received by Brazil's Ministry of Health last year, including the last shipment in Q4, 2020 to ensure continuity of the growing base of Brazilian non sense mutation DMD patients.

We continue to see further growth coming from new patients in the region and expect the next Brazil order in the second half of this year. Now moving on to Emflaza, which is the first and only corticosteroids approved for all DMD patients, ages two and older.

We saw revenues of $139 million in 2020, which is a 38% year-over-year growth, driven primarily from new patient starts, a reduction in bridge and PAP free of charge programs, and increasing compliance and lower treatment discontinuations.

Importantly, we continue to see strong new prescription growth into 2021, supported by publications of emflaza's real-world clinical benefit over prednisone, which is now driving patients to seek switching treatment from their healthcare providers.

We expect the DMD global franchise growth to continue in 2021 with geographic expansion for Translarna and new patients for both in Emflaza and Translarna. Based on this, our revenue guidance for the DMD franchise for 2021 is $355 million to $375 million.

Now switching to Tegsedi and Waylivra; we continue discussions with CMED for pricing of Tegsedi in Brazil. During this process, we continue to provide medical education, genetic testing, and patient program support as needed.

For both Tegsedi and Waylivra, we continue to engage in patient findings in Latin America, with ongoing success in these programs. We also continue to engage in early access programs in the region, as we await a decision on the Waylivra ANVISA filing in Brazil, which is expected in Q3, 2021.

Now moving on to AADC; PTC-AADC is a transformative gene therapy that has the potential to produce meaningful changes in AADC patients. As a reminder, AADC deficiency is a highly morbid and fatal pediatric neurological disorder. There are currently no approved diseases modifying therapies available.

In clinical trial, PTC-AADC gene therapy, demonstrated significant and durable neurological and muscular improvements shown to continue for up to 10 years after treatment. PTC is currently preparing for our first gene therapy launch for patients with AADC deficiency, which is expected to occur in Europe during the second half of 2021.

As part of these efforts, identification and preparation of expert pediatric neurological Centers of Excellence is underway throughout the US, Europe and Latin America. Patient finding activities are also accelerated with over 60 screening programs in over 20 countries to identify 300 patients by the time of launch.

I continue to take pride in our global customer facing teams as they ensure continuity of access to PTC products for rare disease patients in need.

We continue to expand our commercial expertise with the upcoming launch for AADC deficiency in neurology, and build on our success in translating groundbreaking science to transform the lives of rare disease patients worldwide. Now, let me turn the call over to Emily for a financial update..

Thanks Eric. In 2020, PTC saw strong continued revenue growth and progress across multiple platforms of our pipeline. We are executing on a number of fronts to deliver on many potentially value creating milestones this year. The press release issued earlier this afternoon summarizes the details of our fourth quarter and year end 2020 financial results.

I will take a few minutes now to review these financial results and our 2021 guidance. Please refer to the press release for additional details. Starting with our top line results, we reported $380.8 million in total revenue for the full year 2020 compared to $307 million for the full year 2019.

This increase was driven primarily by three factors, Emflaza growth due to both new patient's charts and high compliance; Translarna driven by broader access, geographic expansion and label updates, as well as Evrysdi driven by royalties and milestones associated with the US approval and launch.

Revenue growth was due primarily to our global DMD franchise. Translarna net product revenues were $191.9 million for the year, compared to $190 million for the full year 2019. For Emflaza, we reported net product revenues of approximately $139 million for the full year 2020, which compares to $101 million from the prior year.

This represents a 38% year-over-year growth. The total DMD franchise net product revenue was $331 million for 2020. Our 2021 DMD franchise revenue guidance is between $355 million and $375 million and this guidance does not reflect any other anticipated revenue contribution.

The royalty purchase agreement with RPI has allowed PTC to diversify its market risk of having a future royalty stream currently tied to one product by transforming its potential future cash flows into $650 million cash assets.

This has created real value for PTC's financial position as the cash is being invested to support PTC's research and development platforms and patient care initiatives.

Additionally, by retaining the majority interest in the future royalties due from Roche, tapping the potential payout to RPI at $1.3 billion to retain future upside, and the rights to receive the remaining potential regulatory and sales milestone, PTC has retained its ability to receive consistent cash flows in future periods.

We recognize $42.6 million in collaboration revenue in 2020, an increase of $26.9 million from the prior year. The increase is primarily related to three regulatory milestones that were triggered from Roche in 2020.

We also recognize $4.8 million in royalty revenue in 2020, due to the FDA approval of Evrysdi in August, as we are entitled to royalties on worldwide annual net sales.

Non-GAAP R&D expenses were $438.9 million for the full year 2020, excluding $38.7 million in non cash stock based compensation expense, compared to $236.6 million for the full year 2019. Excluding $20.8 million in non cash stock based compensation expense.

This increase in R&D expenditures reflects costs associated with advancing the gene therapy, splicing and Bio-e platform, increase investment in research programs and the advancement of the clinical pipeline. Additionally, the increase in R&D expenses includes one time charges of $53.6 million related to the acquisition of Censa pharmaceuticals.

And $41.4 million related to the MassBio agreement with commercial manufacturing of our lead gene therapy program in AADC deficiency.

Non-GAAP SG&A expenses were $213.6 million for the full year 2020, excluding $31.6 million in non cash stock based compensation expense compared to $181.2 million for the full year 2019, excluding $21.3 million in non cash stock based compensation expense.

We anticipate non-GAAP R&D and SG&A expenses for the full year 2021 to be between $725 million and $755 million, excluding approximately $100 million in estimated non cash stock based compensation expense. Cash, cash equivalents and marketable securities totaled $1.1 billion as of December 31, 2020, compared to $686.6 million as of December 31 2019.

I'll now hand the call over to the operator to start our question-and-answer session.

Operator?.

[Operator Instructions] Our first question comes from Eric Joseph with JPmorgan..

Good evening. Thanks for taking the questions. And just a couple from me. First with PTC-AADC assuming positive CHMP decision. Perhaps you could just sort of walk us through the initial launch strategy in Europe.

And of the 200 patients that you're anticipating to identify at launch what countries, excuse me, I guess how should we be thinking about the regional distribution? What proportions are in Europe? And then also, I guess, and just thinking about the risk benefit -- and just thinking about the age either for wide population as well.

Can you talk a little bit of the risk benefit profile? Has it varies by age? Are there any challenges with stereotactic delivery in older juveniles compared to what's been sort of described today in infants? Thanks. .

Yes. Thanks, Eric. And thanks for the call. Maybe I'll start and then I'll turn it over to Eric, who talked to you more about commercial planning.

So I thought I'd start just by saying, just to remind everyone, that the AADC treatments that we have for gene therapy, actually, we think is really a transformative gene therapy that really can make very meaningful differences in the lives of patients with AADC deficiency.

And that is it's just to remind you it's an ultra orphan highly morbid and a fatal pediatric disorder, and much like when you think about SMA in the severe form of these patients, they really are developmentally arrested and unable to hold their head up, roll over to stand and move, and they can die within a few years of life.

There are really no approved therapies and nothing really for disease modifying therapy that's available for them.

And I think in the clinical trials, we showed that there was really transformative changes in these patients where patient that probably that were developmentally arrested like this, they all improved, and we have patients that went from not being able to move to be capable of a rolling, sitting, standing and walking.

So we saw substantial progression as a consequence of this. So really, highly transformative results, clinical data for five years, five years are showing improvement after 10 years of which we continued to follow them. And we saw this in all pediatric age groups that we may serve, including older children and adolescence.

So we saw a very nice benefit as a consequence of it. We didn't see any really anything from the standpoint of surgeries -- challenges related as a consequence to the surgeries.

So we think it's a highly valuable product, we believe because of we think it's one of the best packages, clinical packages because of durability, the ability to see a biomarker where you can see changes in dopamine levels that we continue to see. And so I think that's actually was really what is really powerful.

And so what we've been working on in terms of launches, obviously, are getting ready to identify, getting ready and identifying patients getting centers of excellence. And so Eric, why don't you to talk through a bit about the potential launch and what we're doing for launching that..

Sure. Thanks for the question there. First of all, most importantly, we have a number of key activities that Stu outlined in preparing that regional rollout. So those included an increase in disease educational programs who are driving genetic testing, we now have 60 screening programs.

Now in over 20 countries, the vast majority in Europe, as well as LATAM, in other central parts -- central and eastern Europe and other places where we know there will be access and reimbursement for gene therapy products and ultra rare disease products.

We've done a number of things in terms of global country and specific webinars and virtual symposium. So the level of the preparation in the marketplace is been extremely, I would say aggressive in terms of how and where we're preparing, in terms of our patient finding activities and education.

And as Stu mentioned, one of the key areas as well is making sure that those sites, the centers of excellence are prepared to not only treat the patients but also follow them. And we've been doing that in many of the key areas, the regional rollout is going to be specific, as you would expect, with first commercial launches in Germany.

But we will immediately roll out a number of Early Access Programs and take full advantage of the mechanisms by which European as well as Latin American, and other areas of the world will have once the final opinion and approval comes from Europe.

So we would anticipate Germany of course, and then Early Access Programs in countries like France, Italy, Spain, Northern Europe, and Scandinavia and others, and we will take full advantage of Early Access Programs in Latin America as well, based on the European approval. We're very confident at this point.

And we're -- most important, I would say I'm excited that we've seen an acceleration of patient finding, since we've implemented a large number of these programs and we anticipating to have 300 patients addressable at the time of launch. And these will be in countries where we have access in reimbursement to gene therapy..

Our next question comes from Gena Wang with Barclays..

This is David on for Gina. Thank you for taking my questions. I have a few questions that are on the -- for the Huntington disease program PTC518. First question here is just around the dose.

So can you discuss what dose levels you're testing in healthy volunteers? And what's the half-life and dosing frequency?.

Yes, so thanks for that, just to remind everybody that we have PTC518, the role of this to cause splicing to induce an intron into the RNA so that there's a premature stuff going on. So that it will then be, it would get prematurely stopped, so you don't make the protein and the RNA is rapidly degraded.

And then so that's so we designed this, it's an orally bioavailable, small molecule that crosses the blood brain barrier; it reaches all regions of the brain.

And I think most importantly, as well, one of the major characteristics is, it's not an efflux out of the brain, and that just for everyone, the reason that is so critical of a property is that many things can pass the blood brain barrier, but the brain protects itself and moves out many things that are potential, but the basic is potentially toxic to it.

And so that efflux, so there's many pumps that do that, we've made sure that PTC518 to pass the blood barrier and stayed within that, and that's a critical property. So that and therefore you know the level of what you see in the blood is what you see in the cells within the whole brain.

And so, what we've shown in animal models, that HTT reduction was clearly titrated, based on its exposure level, so that the degree of HTT lowering can be tightly controlled. And I think that really distinguishes 518 because of that it achieves uniform exposure.

And that the Huntington lower is in all cells of the tissues analyzed, and then all cells within the brain. And therefore it shows a near one to one ratio between the PTC518 levels that are observed in brain cells in all parts of the brain. And what we see in the cells of the blood, that's because it passes the blood brain barrier.

And so we see the same levels in blood brain, so we have a very good measurement to show. That's indeed the case. So when we think about the trials that we did, it was based on, obviously, working on what the levels that we saw in the mouse rat, non human primate.

And based on our understanding of, the experience that we've seen in splicing, that kind of that what we did, is obviously screen from the molecules for specificity in bio distribution. So we selected really date -- the molecule on that, then we moved in the clinic.

And the levels that we did is based on the results that we saw in the animal models, and the predictions of what we would see in people is how we chose the levels of drug that we would begin with.

So I think that's how we did this, where we identify what we think is the right dose, start low and move continue to move up to be within regions that we were predict the CHTT lower rate and choose it based on that. So that's how we chose the doses to go into a human and have -- and look for what levels were changed.

David, is that helped you?.

Yes, that's very helpful.

And just to follow up on that, Stu, I guess the question is what level of HTT reduction are you looking for in healthy volunteers, to enable you to select dose for the Huntington's disease patients in your next trial?.

Yes. So the way we think about this is we're going to do a single ascending dose and multiple ascending doses.

And so we'll be able to know what exposure gives us a targeted number to be able to move forward, and so and that's the beauty of the fact it's really, really great that we're capable of identifying, knowing what the dose is characterized in exposure, and then measuring the level of RNA changes in the RNA over time.

And both doing that in a single ascending dose and a multiple ascending dose, we get a very good characteristic of what's the dose that gives this steady state level of reduction. And that's actually, so we can act.

And I think that's one of the major advantages that we have is that we have a small molecule that where we know the exposure, in the blood and in the brain, and we've shown that once you've seen the blood is equal to what you see in the brain. And we've seen that across all of the animals, including non human primates.

So we're very comfortable knowing that. So as what we're doing is, as we measure in people we will be measuring the levels of drug and then the reduction of HTT RNAs in the blood. So we'll have a very good dose response level that we can take that we can define what dose we want.

So we're probably starting to think about looking at probably a 50% reduction within that. But and then we'll look for that in terms of clinical benefit.

I think there are results out there, when you look at clinical data in terms of some myths that you see in patients where if you lower it 50%, they have a substantial improvement in terms of nine years greater -- without disease demonstration. So there's pretty good clinical data that suggests that a 50% will have a benefit.

But we're also at the -- we're also have the capability that as we learn more if should we go lower or not? We could titrate that. But I think we're starting to look at when we can go lower if we think it's correct to do so. But we're starting to think to look at the reduction as starting at looking at a 50% level.

But we'll be able to identify if we can go lower and even further, what would be the dose that we can -- we'll be able to define that dose.

Does that help you David?.

Our next question comes from Olivia Young with Cantor..

Hey, guys, this is Li on for Olivia. Thanks for the update. Just wanted to follow up on Huntington program, the Phase 1 study.

Can you just give us a quick update on where you are in the trial now? Or have you moved to the net portion of the study?.

So you already know, right, so as we've talked about, in terms of the trial, we've obviously been doing the trial, we're looking at both the SAD, the single ascending dose and they going into the multiple ascending dose trial. So we've obviously been doing both of those. So we are -- we said hat we'd have it by -- within the first half of the year.

So it's underway and that we've been moving forward. And so just to remind everyone, that's right, where it's designed to capture, obviously, the safety and pharmacological data. And so what I said is there in the single ascending dose study includes up to six cohorts, each with six patients who have active six with active drug with placebo.

The MAD study is expected, we'll have -- it could be up to five cohorts, again with six subjects that can have active drug while two would have placebo. And so things have been dosed and moving forward without any issues. We're actually pretty excited about it.

And then just to remind everyone, that in the Phase 1 study, what we're monitoring is obviously, the drug concentration in the blood, the levels of the 100 HTT messenger RNA and ultimately protein in blood cells. We will have one cohort that will measure PTC518 blood levels as well as blood levels in the CSF.

Now, as a reminder, these are healthy volunteer studies and the subjects don't have Huntington's disease. So we don't expect to have in the sense the proteins of interest that people have talked about in the CSF.

The purpose is to do exploratory TK measurement studies in the CSF, and to be able to correlate that with the blood, and at the end of the day, I think what you'll see is that we're going to show proof of splicing mechanisms, determined the pharmacokinetic characteristics of PTC518, be able to define the dose and be able to say what those exposure levels that allow us to target the level of HTT reduction that we're shooting for.

And to know if we wanted to go higher what dose we would need. So these and I think these results are going to be really analogous to what we were able to accomplish when we did the SMA trial, the risdiplam in the healthy volunteers subjects, which worked out really beautifully.

So we're on track to share the data for PTC518 for the both the single ascending dose and the multiple ascending dose, and expect to have that within the first half of this year.

And, of course, we're planning to have a deep dive with that will help -- we will talk further with you so you can see much of the data that of the science and the data that we have in the preclinical studies ahead of that..

Okay, thanks for the color. And then my second question is just on AADC, just wondering for you to file BLA in second quarter.

What are the remaining steps? And in terms of the cannula study, can you just give us an update on where you are right now?.

Sure. I just want to remind you obviously, we've already talked a bit about it. Again, we think this is a transformative gene therapy, and that we've seen what it does for patients already, both in the durability and the 10 year post treatment. Follow up we know about this quite well.

And just to remind everyone, the EU and MAA are moving forward to expect a CHMP opinion in the second quarter of this year.

Matt, you want to talk a little bit about where we are right now?.

Yes, sure. Yes, so thanks Stuart. As we've talked about before, one of the gating factors to this mission BLA was conducting additional surgeries with the cannula we intend to use commercially. And that cannula is CE Mark in Europe for the delivery of gene therapy, which is why obviously; it wasn't an issue with the MAA submission.

It's been used in many gene therapies before, and it was just a matter of us getting experience demonstrating the safety of the cannula delivering our specific gene therapy to our intended patient population. And so we've actually completed two of those studies or two of those surgeries already.

The procedures went well, there were no complications from the surgery, and recovery is on schedule. And again, just as a reminder, these surgeries are to evaluate the safety of cannula given that we already have extensive safety and efficacy data that Stu mentioned accumulated over a number of years with the gene therapy product.

We plan to conduct one additional surgery, and then once those data are collected will align with the FDA and move forward with the BLA submission..

Our next question comes from Robyn Karnauskas with Truist Securities..

Hi, thanks, everyone, for taking our questions. This Minh on for Robyn. And so just back on Huntington's when you present the data, are you going to get data from all the dose cohorts or will it be whatever the child has enrolled.

And that's where you can present so maybe passages just few cohorts from the SAD study? I guess it's the first question around there..

Yes, so I think what we've said in the past, we're going to have both, obviously, what we have we're on track to share the data for both the SAD and MAD studies within the first half of the year, and what we were planning to have is a deep diver ahead of that.

So if we get to that point, if we -- when we get to that point where we would have by the end of the year both the SAD and the MAD data on that. We'll share the dose level with you at that time..

I see. And then I guess last question, we are already -- if you have an idea or a sense where that therapeutic dose may be and where that may fall in? And then sorry one more question as well.

Yes, I guess that one first, any idea where that therapeutic dose may fall within the MAD or SAD study?.

Yes, I think, we're -- again, we're based on the data and based on what we're doing, we had a pretty good indication of what we thought that would be, in terms of defining the dose.

And so, we've been, it's been moving forward, so I think we'll be in pretty good shape, we'll be able to have a dose response curve in terms of measuring, both the splicing, and then the where the dose is.

So we'll know, we'll be able to give you a pretty accurate prediction of what dose gives a particular exposure, that leads to in the sense of this, we want to say a 30%, or 50%, or 70%, reduction of HTT, I think we'll be in a pretty good position to be able to tell you that, and then and to be able to move forward based on that.

And between the SAD and MAD, we're going to have a very good picture in terms of both safety, as well as the dose, the exposure and the level of traction by the, and I said as the first half went by the first half of, at the end of the first half of this year..

Got it. That's helpful.

And then sorry my question regarding on your comments around titration, I guess, will you have enough, I guess enough sense to know whether there's more safety risks that would come on with going with a greater than 50% reduction, I guess, how do you know there won't be any longer-term safety risks that the child may not be able to measure should you push beyond 50%?.

Well. So I think what we're shooting for right now is around that, the way I think about this is that there's plenty of data in terms of have -- people who either one allete -- or as a consequence of that people are -- there are no safety findings that we see of that. So I don't think there's going to be a risk in terms of that.

In terms of going lower, there isn't really a lot of data beyond that. We clearly know that it's important during early embryonic development, but there isn't a lot of data that says after that.

After that, what is the how low can you go? I can tell you from a genetic point of view, when you look at the level of most things that when you say, well, how much do you normally need? I mean, if you have like some of the factors, if you have 10% of them, you're pretty much normal.

So the question is at what level? How far can you go where you don't see any effect? And so I think there are some ways where we're thinking of being able to test them in animal models that have human HTT, where we can actually use titration of our compounds to reduce its level of interest.

And we might be able to do some animal studies to be able to define that.

And the reason we would be able to do that with 518, with a humanize HTT mouse if that we're really capable of doing achieve uniform exposures that continually reduce levels versus we want 50% down, we could see 50% down in virtually every tissue in the body, and certainly within the brain, that will include the cortex and cerebellum and every other tissue within the brain.

So we know that from the work we've done. And so we've been working with the groups to be -- to be able to build that molecule. And if we're able to do that, we can actually at least get some data that would suggest can we go lower or not. But we're obviously shooting for 50% right now.

And I think that's a target that I think we'll certainly be able to achieve..

Our next question comes from Joel Beatty with Citi..

Hi, thanks for taking the questions.

First, are there ways to assess using biomarkers in the clinical data for PTC518, if you're generating uniform knockdown throughout the body, or how important is it assess that clinically?.

Yes, I think clinically, I mean, the biomarker that we're choosing is looking at the reduction of Huntington levels within the blood with which we've done extensive analysis in both mouse rat and non human primates. And we've been able to show that the reduction there goes along with the reduction that we've seen in other tissue types.

So that's going to be a pretty good biomarker, and that's in the set, obviously, just so everyone knows that HTT is the intracellular protein, right. So we're looking, when we do the analysis, we're looking directly within the cells and the blood cells are good marker for the level of reduction that we've seen there.

We've seen in all other tissues, where we worked in mouse models. So we know we'll be able to do that direct correlation based on the blood. And what we see the reduction in protein and RNA levels.

Does that help you, Joe?.

Yes. Great. And then maybe switching gears for Evrysdi.

Could you remind us what additional potential milestones payment?.

What?.

Milestone payments?.

Oh, milestone, oh, yes, sure. Emily, I thought you were going to talk today. But I'll give -- pass it to Emily..

Thank you so much. Thanks Joel for the question. I appreciate it. So you are correct. We have retained all of our milestones for Evrysdi is with the -- after the royalty monetization, and we do have about $300 million in milestones remaining largely.

So based and regulatory, the most real term, near term milestones upcoming is about $55 million in total, potentially for 2021. $20 million would be in the first commercial sale in the EU; $10 million for the commercial sale in Japan. And then it's potential $25 million sales base milestone upon Roche shooting $500 million in sales..

Our next question comes from the line of Brian Abrahams with RBC..

Hi, there. Thanks so much for taking my questions. A few on the Huntington's program.

Given what's known or not known about HTT protein turnover, in the context of the timeframe of the study, I was wondering how you guys are thinking about looking at mRNA versus protein changes? What's going to guide your decision as to whether to move into those additional two MAD cohorts versus just running three? And then as you sort of look past the study, how do you think about how the blood brain barrier properties in Huntington's patients might impact the overall plasma to CSF ratio? And how you might be thinking about dose adjusting when you go into patients? Thanks..

Yes, thanks, Brian.

So obviously, what we're -- when we think about the drug concentration within blood, and the levels that we'll see in the reduction that we'll see in the HTT mRNA and protein within the cells, we're also taking the CSF that will, we anticipated the level that we see in blood in the CSF levels, would be equal in that similar to what we've done in non human primates.

So we think that's going to be very telling to, so we'll be able to just confirm the ratio that we've seen previously. So I think that's good, at least we'll have a potential to see that. So that's what's going to help us in terms of defining what the exposure is in terms of and what that would be.

And so that's the way one could look at that in terms of to make sure that you see the correct level that could be done elsewhere as well.

But I think that's a really important way for us to be able to be sure in terms of the PK, and then equating the PK to reduction of RNA and protein, you bring up actually a pretty good point in terms of, when you think of RNA and protein, it lot depends to half-life of the protein and the RNA.

And so we'll be able to get a pretty good handle on that in the multiple ascending doses, and looking at what happened with both the RNA level, and what we're obviously trying to do is to in the multiple ascending doses to reach steady state, and then be able to model the HD, RNA and proteins, and so we know that they in some way, they have a -- HD has a leaky blood brain barrier.

I think that's what you're referring to. So but -- so I think that something that we'll have to take into consideration as we model another PK of them in patient..

Got it, thanks so much..

Yes, great. And I was just making the other point, we don't have issues with the efflux, so that shouldn't cause any sort of issues for us..

Our next question comes from the line of Vincent Chen with Bernstein..

Thank you very much for taking the questions on congrats on progress. A couple more for you on Huntington's disease.

The first is in your preclinical RNA-seq experiments, how many other RNA splicing events were identified that were modulated by PTC518? Which ones and how much were a modulated? And then the second question is thinking about the ongoing study, how many doses do the MAD healthy volunteers get? And what's your sense for how much run out is needed to assess the risk of off target toxicities?.

Yes, I think so the -- could you just say the first question one more time?.

Sure.

In the preclinical RNA-seq experiments that you did, how many other RNA splicing events were identified that were modulated by PTC518? Which ones were they and how much were they modulating?.

Yes, so maybe it's worth talking a little bit about how we optimize the compounds in general. I think that's actually an important point. So when the way we do the optimization. And looking for in selectivity, so selectivity is a pretty important point for us.

And so we begin, when we do the high throughput screening with the small molecules, we screen them in the Huntington in fiber blasts for them, and then we optimize those molecules for efficacy and potency, which also includes selectivity and pharmaceutical property.

So we look very much so for the select for molecules that may start out to be less selective. But build in -- as much selectivity as we can.

So at the end of the day, we found we've identified these molecules and obviously spent a lot of time to show that they really do have favorable properties, a safety window that we've seen in the sight of in the animal models, strong potency, and the ability -- in a pretty selective HTT, that alters the select, we learn a lot about the mechanism, and the specificity of that.

And just contrast that with, for instance, a competitor molecule that was for one molecule than the other, I can tell you that, for instance, the specificity of our molecule versus SMA is substantially different than the selectivity that's built in, it's far more selective say for SMA and for HD than SMA.

And that was a consequence of really spending the time to build in the selectivity within the molecule to be able to do that.

And that's really a consequence of both understanding the specific sequences, the differences between them, understanding, how the new one there works so where we can build in the selectivity in the RNA-seq, I think, and in the deep dive that's coming up, we'll spend some more time on the questions that you're asking, and probably we'll be discussing that more during the deep dive time..

Actually that's very helpful.

I guess the second question was simply how many doses do the healthy volunteers in the multiple ascending dose study get? And what's your sense for how much run out you would need to assess the risk of off-target toxicities? If I think of slicing part of disease how quickly would you expect those to show up and how much run out do you need?.

Yes. So obviously for the multiple ascending doses that are a 14 day dosing period, followed by 28 days of observation.

And so that's what we do in terms of defining the dose, but you got to remember also that we're all doing completing the long-term safety toxicity studies that will help us and I just don't -- I don't want it when in the community -- in the -- to the folks that are listening to think there's something different about splicing toxicities versus any other toxicities, whether it's all targets for splicing or other molecule or some other function, the key is, we spent a lot of time looking for selectivity and specificity.

And then we look at toxicity could be off-target and it could be for whatever the reason is, and so that's why we do those studies to look for the off-target toxicities, but I don't think you can make the argument there's something unique about these toxicities versus any other drugs toxicity and that's why we do these experiments, to safety toxicology experiments to be able to identify the toxicities understand the risks to be able to move forward.

I think this is a very standard and stepwise approach that in the targeting of splicing is no different than doing kinases, phosphatases, transcription factors, other things that other people do. I wouldn't try and make it there's something special here versus other things..

Our next question comes from Milan Raju Prasad with William Blair..

Hey, this is Sami on for Raju. Thanks for taking my question. I was curious if there's any update on your Angelman syndrome, gene therapy, and I believe previously, you said that the Angelman program and Friedreich ataxia gene therapy programs were delayed because of COVID.

Just wondering if that's still the case, or if there's any other behind the scenes things going on? And then just secondly, how are you thinking in terms of the FDA recent guidance for gene therapies for CNS diseases? How do you receive that guidance influencing those trial designs? And do you plan on using the same endpoints that will be used for the tuck-in trial for Friedreich ataxia? Thank you..

Sure. So yes, you're right. We've talked about this in the past. And I do think one of the -- so one of the things that happened during the pandemic is that there are really COVID related delays that push programs out. But we're really working hard and we're progressing on the FA gene therapy program and its effect the human dosing before year end.

Similarly, we're pushing hard on the Angelman syndrome. I don't think we actually gave particular timelines on that. But there have been some, we're moving forward on that. And we'll probably talk more about that as we get closer. So and we'll talk through over time as we do this.

And so maybe, Matt, do you want to add any other color to this?.

Sure. Thanks for the question, Sami. So on the -- I think you have some questions about our Friedreich ataxia gene therapy program and the recent FDA guidance, maybe I just tackle the guidance first, quite frankly, not a lot of surprises there.

It's sort of read very standard FDA guidance in the development of therapies for neurodegenerative diseases, I think they're obviously communicating the need to have rigorous control groups, even for gene therapy.

And they obviously also wanted to spend a lot of time talking about the importance of device and device comparability and using making sure that your product works over the device and having consistency throughout the development program.

So all things that, one not really different from general guidance around CNS drug development, and then second, with specific gene therapies. It's all things that we learned and become quite familiar with along the way with our experience in gene therapy development.

And I think the other thing that we're obviously having our programs, which is very important is we're taking a targeted CNS approach and one of the few benefits to that one is that we're able to deliver the gene therapy product to the specific anatomic areas where the pathology of the disease really results from, so for example, in our AADC program, we're delivering our gene therapy products, vatiquinone, which is really the key area for dopaminergic neuron function.

In Friedreich ataxia, we're delivering a gene therapy precisely to the -- close to the cerebellum. Obviously, the cerebellum is a key component of ataxia, which is obviously a key component of the Friedreich ataxia disease.

And so by doing targeted gene therapy, not only this look, it allows us to have lower doses, which obviously lowers risk and exposure to the vectors. And obviously it also lowers our manufacturing burden.

Switching now to your questions regarding the Friedreich ataxia gene therapy program, I think we're actually incredibly excited to be able to be developing two therapies for Friedreich ataxia.

We have our oral small molecule vatiquinone, which has broad distribution in the CNS and other organ systems, as well as our gene therapy program, which is delivering targeted dentate nucleus.

I think these are really complementary approaches, I think, while Friedreich ataxia has a great deal of pathology resulting from the dentate nucleus, it's also a whole brain disease and a whole body diseases as the heart for example, is a significant source of disease, morbidity and mortality risk if it attacks.

So we view our approach is incredibly complimentary. And we're excited to be able to offer both of these therapies in a complimentary way.

In terms of the development itself and endpoint selection, I think one of the great advantages of working at Friedreich ataxia is the well established natural history, the community as well as needing a very rigorous natural history, particularly around the disease rating scale that was developed by the community as well as the activities of daily living scale.

So as we think about gene therapy to the gene therapy development program, obviously, we're looking to those where there's significant natural history, so we can really appreciate the impact of a gene therapy on the long-term trajectory of the disease.

But obviously, in our first in human studies, we'll also be exploring other endpoints that are both biomarkers, biochemical mediators, imaging modalities, and also other clinical endpoints that we know to be important to disease certainly captured the ability of gene therapy to have a significant effect on our disease trajectory..

Our next question comes from the line of Danielle Brill with Raymond James..

Hi, guys. This is [Neil Gupta] on from Danielle, thank you for taking the question. On the 518 had a question on 518.

How uniform was the HTT reduction in animal models for given dose? And if the reduction affected by the length of nucleotide piece? Or any other factors that you could identify?.

Yes, sure. Thanks for the question. So actually, that's the beauty the fact that one thing that I think really pushes PTC518 is that it really achieves uniform exposure.

So when we look for instance, in HTT lower in the cells and tissues analyzed, we'll see, if we see a 50% reduction in blood, we saw in animal models, a 50% reduction within the brain, and in particular, 50% reduction in the cortex, striatum, cerebellum. So it's amazingly uniform. And that's good, right.

And that's a demonstration of really, as I said; we had a one to one ratio in terms of what we saw lowering in the blood within the brain. But that's true within all tissues as well.

So and that actually turns out to be, I think, very important, because, I know, people have talked about Huntington and striatum cortex, but I think when you look, you see that Huntington's disease as a whole brain disease.

So it's very important to emphasize that, based on our preclinical results, that we'll see a dose dependent reduction of HTT, mRNA and protein in all cells within the brain that includes the striatum, cortex and cerebellum. And so it gets everywhere.

And then again, I think they're really critical point is that in the end, this is I think, this was true for SMA, I think it's going to be true here as well as that we have the ability to measure the reduction based on exposure, since we could -- we can determine that within the blood, and that that same ratio that we see in the blood occurs in other tissues as well..

Right, thank you, that's helpful. In terms of the like the HTT gene itself and the variation in the nucleotide repeat within HTT.

Does that have any effect on HTT reduction?.

No..

Given this --.

Yes, that's near -- that's in a different location. It's the way this is working is there's a -- it's within an intron of the pseudoexone, the piece of the RNA within the intron, that gets that normally doesn't get spliced in, but because of the molecule, it does get spliced into the mRNA.

And that leads to, again, premature termination and rapid degradation of the RNA that's not in the CAG repeat and it doesn't matter, as a consequence of that. So that there is no issue with that. And therefore, that's the beauty of this; this will be good for all patient types.

And obviously in the long run you can see because it's orally bioavailable, that the advantage here is that we would anticipate over time that it would be for patients, well, we'll be looking initially and those that are manifesting symptoms, and you can imagine over time, we'll be able to do that in for patients before they have symptoms, because it's so easy to take.

So I think that's important. So at the end of the day, so the question is that pseudoexone incorporation occurs regardless of the degree of HTT expansion..

Our next question comes from the line of Joseph Thome with Cowen & Company..

Hi, there, thank you for taking my question.

Just one on the Bio-e platform, curious with PTC857 after you sees these healthy volunteer data of any -- what are you looking for? And to kind of when can we see that advancement into a potential GBA, Parkinson's study? And then as 857 and vatiquinone both target 15-LO? Can you kind of tell us, what are the differences that make an 857 maybe more amenable to the Parkinson's disease indication? Thanks..

Yes, sure. So I think part of what we're doing, it does have different properties. And in terms of that probably would be an advantage for something that we're taking long term for a lot of people, again, it's an orally bioavailable molecule.

And for indications, like GBA, as you said, Parkinson, obviously, it's a different, it's in a different number of patient populations versus a vatiquinone and where that's going now. So we thought it'd be best to have a different molecule with perhaps different properties.

And so that's sort of in the sense it has a different value for the size of the patient population. And so we thought it was important to have another molecule.

Matt, do you want to talk a little bit of where we're at in terms of the trial and what we're thinking about?.

Yes. So, Joseph thanks for the question. So as you mentioned, we've been studying 857 in the Phase 1 study, which was the single ascending and multiple ascending dose studies, fairly standard, and healthy volunteer studies where the focus has really been safety and pharmacology, we completed the dosing in those studies.

And we're in the process of doing the analysis.

And really what we're looking for here is understanding the pharmacology making sure that it's -- that the molecule is behaving in humans as we've been able to model what's in the preclinical studies, and also identifying the dose level that gives us the exposures that we saw to be efficacious in all the preclinical work that we've done.

So we want to walk away from this study with the dose level that we know is safe that has predictable pharmacology and would be consistent with delivering the exposure that's necessary to achieve the preclinical effects you've seen now as a bit of background, 857 target 15-lipoxygenase, which is a key governor of a number of pathways, which independently have known to be important in Parkinson's disease pathologies, such as microglial activation, alpha-synuclein, oxidation, aggregation, glutathione depletion and with the base oxidative stress.

And so what we're able to do by targeting 15-LO, is affect simultaneously, all four of those pathways. So we do have an extensive amount of preclinical work, demonstrating effect.

And again, what we want to see in the Phase 1 study is identifying that dose level that brings a side exposure that matches up with what we've seen in the preclinical studies and then we'd be in a position to move forward with the next stage of development..

Yes. Thanks, Matt. I think the really important point here as well is that oxidative stress, right, really extra electrons cause oxidative stress; there are multiple diseases that we can go into 857. So having another molecule to go into other indications with different properties, we think it's going to be valuable..

Thank you. I'm not showing any further questions. I will now turn the call over to Stuart Peltz for closing remarks..

Well, thanks. Thanks a lot for joining us today. And as many of you may be aware, the Rare Disease Days upcoming this Sunday, and this is oftentimes where we take stock of where we've been and where we're going as a company.

And it serves as a report and reminder to us that we do this work, ultimately, the benefits to patients, and I hope that you see just how strong our execution has been in 2020, and how this sets up for really for us for many value creating milestones in 2021.

So we're excited about the programs that we have, and we look forward to, in particular, I know everyone's been interested to see by the question, the interest in the Phase 1 Huntington's disease read out, and we look forward to sharing that with you within the second quarter. Again, thank you for joining us. Have a good evening..

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect..