PTC Therapeutics, Inc.
Q4 2019 Earnings Call Transcript

Published: 3 Mar 2020

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the PTC Therapeutics Fourth Quarter and Year-End 2019 Financial Results Conference Call. At this time all participants are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program may be recorded.And now, I'd like to introduce your host for today's program, Alex Kane, Head of Investor Relations. Please go ahead, sir.

[Alex Kane:]

Good afternoon and thank you for joining us to discuss the PTC Therapeutics 2019 fourth quarter and year-end corporate updates and financial results. Joining me on today's call is our Chief Executive Officer, Stuart Peltz; our Chief Operating Officer, Marcio Souza; and our Chief Financial Officer, Emily Hill.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 the slides posted on our Investor Relations website in conjunction with the call, which contains our forward-looking statements and other details shared during this call. 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 Annual Report on 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 Peltz.

[Stuart Peltz:]

Thanks, Alex, and thank you for joining us this afternoon, as we provide our update for the 2019 fourth quarter and end of year review. Significant progress was made across our platforms and programs in 2019, which has continued in 2020. Our vision is to continue to grow with a diversified rare disorders company, with multiple science platforms, with the goal of at least $1.5 billion in revenue by 2023.PTC's recent transformation has been remarkable to experience. Over the past five years, we have transitioned from a single-product company with Translarna to treat nonsense mutation Duchenne muscular dystrophy patients to accompany with two Duchenne muscular dystrophy products, Translarna and Emflaza to where we are now.We are now selling four products globally and have the capabilities to bring therapies to patients in 50 countries. With potential approval for risdiplam to treat SMA patients in our gene therapy for AADC deficiency, our commercial portfolio is expected to further expand. Our pipeline is also expanding across multiple scientific platforms, which will continue to drive innovation and lead to value creation.Let's start with our splicing platform. We recently presented the full results from our successful SUNFISH part 2 pivotal trial. This trial enrolled the broadest population of type 2 and 3 SMA patients every study and more closely represent the type of patients that physicians typically see in practice.Importantly, the vast majority of type 2 and 3 patients are not currently on disease modifying treatment. The positive and statistically significant results observed in this trial confirmed the potential of risdiplam to be the most competitive global product for a broad range of SMA patients.SUNFISH part 2 studied non-ambulant SMA patients two to 25 years of age without any limitation to their motor function capabilities as evidenced by their baseline history. We believe that these results further support potential approval and reimbursement for a broad patient population.We also recently announced successful top line results from the pivotal FIREFISH study in type 1 SMA patients. This trial met its primary endpoint and was statistically significant. Complete results from FIREFISH part 2 will be presented at AAN in late April. With these studies now completed, we anticipate that MAA filing with the EMA next quarter and look forward to the coming PDUFA date on May 24.The next selective splicing modifier are moving towards the clinic is for Huntington's disease. We have selected a development candidate, which is in GLP safety toxicology studies and expect to have an IND filed by the end of the year.As a reminder, there are no currently approved therapies for the treatment of Huntington's disease. In pre-clinical studies, our Huntington's disease development candidate demonstrated uniform Huntington lowering systematically and throughout the whole range, including in the Striatum, Cortex and Cerebellum. This is critically important as Huntington's disease affects virtually all parts of the brain.Similar to our SMA program, where we measured SMN2, MRNA and protein levels in healthy volunteers, we will also have the ability to measure Huntington lowering implied. In mice, we have shown that the level of Huntington lowering observed in blood reflects the level of Huntington lowering in all tissues in the brain with near one-to-one brain to blood the Huntington lowering ratio. This is exciting because it will allow us to rapidly demonstrate target engagement and clinically affects early in Phase 1clinical program.Moving on our next scientific platform. Late last year, we acquired assets for BioElectron, focused on redox pathways, which we now refer to our Bio-e platform. These compounds are all small molecules orally by available, highly selective and efficiently cross the blood-brain barrier, similar to our other small molecule therapies. We're very excited about the progress in our Bio-e platform with two potentially registrational study to begin later this year.I want to take a moment to discuss science behind this platform. PTC743 and PTC857 were both enter the clinic later this year, target assisting 15-lipoxygenase, a key regulator of oxidative stress, lipid taste neuroinflammation, alpha nucleon oxidation and aggregation and cell death. In addition of 15-lipoxygenase leads to the reduction of key disease markers such as T-cell activation and justifying on depletion. These critical modulators underpin pathogenesis across broad range of neurogenerative and mitochondrial diseases. Marcio will provide additional details on this platform later in the call.Turning to our gene therapy platform. Our strategy is to replace genes of interest by targeting specific tissues, which limit systemic exposure and potentially lessens immunogenicity, by administering small doses, we also reduce our manufacturing burden. Furthermore, we are pursuing diseases and tissues with lower cell turnover, such as in the CNS and the eye, which may lead to improved durability of response.Being able to control our manufacturing space is key to our gene therapy strategy. In 2019, we entered into a long-term lease for a state-of-the-art biologics manufacturing facility. We expect to begin in-house gene therapy manufacturing efforts in the facility later this year. Importantly, we were able to retain the vast majority of biologics manufacturing talent at this facility. We are now well positioned to start gene therapy manufacturing on our own with the essential facilities, equipment and talent in place.I want to highlight our most advanced gene therapy program for AADC deficiency, which has shown impressive clinical results in 28 patients. The AADC deficiency marketing authorization has been filed and accepted in the EMA. We plan to submit the BLA to the FDA in the second quarter of this year.Our patient identification efforts are ongoing, and we continue to identify patients globally with AADC deficiency. AADC deficiency is a rare and devastating inherited disorder that globally affects roughly 5,000 patients, with an annual incidence of approximately 300 patients.Well, originally, there was a concept that AADC was confined to a genetically defined population in Southeast Asia. Approximately 80 different human use have been identified globally. This highlights that AADC deficiency is a genetic disorder that impact patients all across the world. We anticipate more than 300 addressable patients will be identified by launch across the U.S., Europe and Latin America.Taking all these updates into account, we are now well positioned to drive continuous value creation with a number of exciting upcoming milestones and a deep pipeline to drive sustainable innovation moving forward. We look forward to sharing more detailed information on our platform and pipeline on our Analyst Day on June 16.With that, let me turn the mic over to Marcio. Marcio?

[Marcio Souza:]

Hey, thanks, Stuart. Let me start with the commercial side of the business. Our DMD franchise remains the foundation for our growth. For Translarna, there is growth potential for multiple ongoing efforts. We expect increased penetration in existing territories, including Brazil, for which recently received ANVISA approval. Geographic expansion into new territories, increased disease awareness and early diagnose will also contribute to growth moving forward.For Emflaza, we expect continued positive momentum with new patients and those switching from prednisone. With the recent label expansion, we are now able to treat all DMD patients two years and older and continue to increase treatment with Emflaza in these younger patients.Our PTC care team is actively engaged with physicians and payers to ensure that patients receive access to treatment as quickly as possible. Emflaza clinical differentiation is further supported with new data recently published in the Journal of Comparative Effectiveness. In that study, treatment with the deflazacort was associated with a more than two-year delay in loss of ambulation, relative to treatment with prednisone.In addition, the onset of complications like scoliosis was significantly delayed among patients treated with the deflazacort versus prednisone and further functional benefits were observed in deflazacort patients. The data also demonstrated the positive risk-benefit of switching the deflazacort from prednisone.PTC continues to leverage our strong Latin America infrastructure to support ongoing and upcoming launch. The Tegsedi launch continues to trend well, with hundreds of newly diagnosed patients genetically confirmed through PTC supported programs. We are finding and treating new patients and due to the hereditary nature of the disease, the process is likely to accelerate in the future.As a reminder, Tegsedi was the first approved hATTR silencer treatment for stage 1 and 2 polyneuropathic adult patients by ANVISA. There are an estimated 6,000 patients with hATTR in Latin America, the vast majority of them in Brazil. We believe that Tegsedi is well-differentiated in the best fit for these patients.Tegsedi is a subcutaneous at-home injection formed by patients. In a region where infusion clinicals are often at or near capacity, and in which travel requirements can be challenging, self-administration is the best solution for patients and healthcare professionals. Through our early access program, patients are able to enter our patient service and obtain access and other kinds of support, allowing us to build a strong brand loyalty and lasting relationships.Let me now touch upon the BioE platform that is still referenced earlier. As mentioned, we are very excited about these programs, and they fit within our current portfolio and the future with both the platforms and stand-alone therapies. To reiterate, PTC743 and 857 are advancing in the clinic, and they both targets 15-lipoxygenase.An additional compound, PTC589 targets a different set of enzymes, and it has been partnered with a Japanese company Sumitomo Dainippon Pharma. And it's currently being developed for the treatment of ALS and potentially other neurological disease.Following the recent completion of positive proof-of-concept study, Sumitomo is planning to move forward with the development of PTC589 for ALS. Sumitomo has commercialization rights in North America and Japan, while PTC remains commercialization rights in the rest of the world, including Latin America and Europe.Moving back to our lead compounds, PTC743, the first indication is in refractory mitochondrial epilepsy, and we'll be initiating a potential registrational trial next quarter.743 is rather unique in that it has already been used to treat over 400 patients with mitochondrial disease for a series of compassion use and indication specific studies. Of note, PTC743 was studied in an expanded access program from 2009 to 2012 were 94 patients throughout the U.S., Europe and Latin America with inherited mitochondrial disease and within 90 days of end-of-life care were enrolls.There was a specific criteria, 43 of these 94 patients remain alive and on treatments today, which is remarkable considering the expectations at the beginning of treatment of survival of only 90 days or less. This patient has also experienced a meaningful reduction in seizure frequency.The upcoming 743 trial, we enroll approximately 60 patients globally who have inherited mitochondrial disease and associated refractory epilepsy. All patients will be followed for one month to ensure a baseline seizure frequency and then will be randomized to receive either PTC743 or placebo for six months.The endpoint for the trial is reduction in seizure. We expect that there are 5,000 to 6,000 addressable mitochondrial epilepsy patients in the U.S. and Europe combined. We also plan to initiate another registrational trial with 743 in Friedreich ataxia in the following quarter, the third quarter of this year, which should complement our gene therapy approach.In an earlier Phase 2 trial in 63 FA patients in the U.S. treatment with 743 was associated with an improvement in long-term disease severity and neurological function when related to natural history. The private endpoint in that trial was measured at six months, which now understands is not sufficient to show separation from placebo.From a safety perspective, 743 has been dosed in hundreds of patients and has generally been well tolerated in the clinic, incorporating the understandings from the fields that have emerged since the initial proof-of-concept trial, the upcoming trial of 743 in FA we enroll approximately 100 patients. We will be focusing on the younger cohorts and run a trial for one year in a one-to-one randomization scheme with placebo. As a reminder, we expect that there are 25,000 addressable FA patients globally.Finally PTC857, which we believe is ideally suitable for larger patient populations, will enter into the Phase 1 healthy volunteer trial in the third quarter. Based on a very strong preclinical rationale, we are targeting GBA defined Parkinson's as the first indication.Now, I wanted to provide some perspective on the Translarna, Aniridia trial. For background, Aniridia is a genetic disorder often caused by a nonsense mutation in the PAX6 gene, which is associated with ocular defects and typically leads to blindness. This trial was randomized placebo-controlled study that followed patients for 48 weeks with an additional nine six weeks open-label extension. 39 patients were randomized and the primary endpoint was the change from baseline to week-48 in the maximum reading speeds as measured by the MNREAD accurate charts only in patients older than eight years of age.While the trial did not meet statistical significance, a trend of observed in favor of ataluren. For reference, the data has been included in our slide deck, posted in conjunction with this call.As a next step, we intend to discuss the results with experts on the following weeks and decide the path forward for the program. Importantly, the stage profile in Aniridia patients was similar to that of previous studies and the ongoing commercial use of ataluren.Moving on to DMD. We expect results from the ataluren U.S. dystrophin trial in the second quarter of this year. This is a 40-week open-label single study in 20 nonsense mutation DMD boys age two to seven. Needle biopsies were taken at baseline and 40-weeks following treatment with ataluren.The primary endpoint is the percent dystrophin change from baseline as measured by ECL. With a positive and statistically significant results as we expect, we intend to submit for accelerated approval in the U.S., which would be in conjunction with the current clinical data for atalauren from other studies.Moving now to our ADC deficiency program. We continue to make good progress in patient identification, using a multipronged approach. No cost blood testing has been deployed globally and we have observed increased patient identification to the sample blood test after launching last year, particularly for patients with symptoms that mimic cerebral palsy in epilepsy, which was across all regions including Europe and Latin America. As we can see you see, PTCT is poised for continued growth with upcoming clinical, regulatory and commercial catalysts across all our platforms.I will now hand the call over to our CFO, Emily Hill. So she can review the financial progress. Emily?

[Emily Hill:]

Thank you. Marcio and Stuart outlined our several development and commercial products that place us in a strong financial position to have revenues and royalties that fund our ongoing innovation to drive us toward our $1.5 billion target in 2023. We made good progress towards that goal in 2019. The press release issued earlier this afternoon summarizes the details of the fourth quarter and year-end 2019 financial results. And I will take a few minutes now to review key details for the year and our guidance for the full year 2020. Please refer to the press release for additional details.Starting with our top line results. We reported $307 million in combined net revenue for the full year 2019 compared to $264.7 million for the full year 2018. This includes a $15 million milestone payment to PTC from Roche, triggered by the acceptance of the risdiplam NDA.Translarna net product revenues were $190 million for the year compared to $171 million for the full year 2018. This growth reflects the expanded commercialization of Translarna. As a reminder, Translarna was the first therapy approved in Brazil for DMD last April, with a near-term price impact, but which should in long-term expanded market access.For Emflaza, we reported net product revenues of approximately $101 million for the full year 2019, which compares to $92 million for the full year 2018. Emflaza sales were impacted by an increase in the utilization of Medicaid, which changed our gross to net assumptions and the transition to a new specialty pharmacy distributor. These factors impacted Emflaza sales in the third quarter of 2019, in particular, and we saw improvements in the fourth quarter that have continued through early 2020.Total DMD franchise net product revenue was $291 million for 2019, and we anticipate full year 2020 DMD franchise net product revenue to be between $320 million and $340 million. New product launches, including Tegsedi revenue and potential risdiplam milestones and royalties are also expected to contribute in 2020.Non-GAAP R&D expenses were $236.6 million for the full year 2019, excluding $20.8 million in non-cash stock-based compensation expense, compared to $155.9 million for the full year 2018, excluding $16.1 million in non-cash stock-based compensation expense.The increase in R&D expense reflects costs associated with advancing the gene therapy platform, increased investment in research programs, advancement of the clinical pipeline and the upfront $10 million payment for the acquisition of BioElectron assets.Non-GAAP SG&A expenses were $181.2 million for the full year 2019, excluding $21.3 million in non-cash stock-based compensation expense, compared to $136.4 million for the full year 2018, excluding $17.2 million in non-cash stock-based compensation expense. The increase in SG&A expense was primarily due to continued investment to support our commercial activity.We anticipate non-GAAP R&D and SG&A expense for the full year 2020 to be between $545 million and $575 million, excluding approximately $65 million, an estimated non-cash stock-based compensation expense. The anticipated increase in R&D and SG&A expense are based in part on highly leverageable and scalable investments towards the $1.5 billion projected revenue target in 2023, including gene therapy manufacturing, an increase in the number of programs advancing into the clinic and commercial launches.Net loss for the full year 2019 was $251.6 million compared to a net loss of $128.1 million for the full year 2018. Cash, cash equivalents and marketable securities totaled $686.6 million as of December 31, 2019, compared to $227.6 million as of December 31, 2018.I will now hand the call over to the operator to start our questions-and-answer session. Operator?

[Operator:]

Certainly. [Operator Instructions] Our first question comes from the line of Alethia Young from Cantor Fitzgerald. Your question, please.

[Alethia Young:]

Hey, guys. Thanks for taking my question and congrats to all the progress over this last quarter. I guess, I just wanted to maybe ask you two questions. One, just kind of I want to get your perspective on how you guys kind of think about the risdiplam data as it relates to maybe the FIREFISH upcoming readout, which some may believe may lead to a more comparable data set of stores?And then the second one just is, can you talk about the synergies between Friedreich ataxia and gene therapy and with the readout platform please? Thanks.

[Stuart Peltz:]

Hey, thanks Alethia, thanks for the question. I think from the perspective, yeah, I think you're absolutely right in terms of the notion of the SUNFISH trial that we recently had data. That was a very broad trial with patients 25 years of age with a very broad inclusion criteria. So it's much like the pacing population that the physicians really see day-to-day in their patients, so.And we did that on purpose, because that's what we wanted to see how the drug will function in that line. And obviously we saw a 1.5 points difference that was statistically significant, but we're pretty happy with that.In terms of the FIREFISH, I think that's probably in some ways a homogeneous population, although there are differences. But I think you saw even in part 1, how well is the plan function and even in comparison you can see that it did quite well. And from my perspective was really sure to be the most competitive drug where we anticipate for part 2 the same event.We already said that it was statistically significant. And that we expect as you'll see coming up in AAN, the results of that is more clearly, and so we're excited about that. And I think you'll be able to more clearly have a little better comparison when you say how well did we do versus other drugs.So I think that's probably – well, nothing is absolutely perfect in terms of apple-to-apple that's probably as close as you can get, and I think you’ll see that risdiplam will do quite well.In terms of FA, both gene therapy and – the drug, one is obviously gene therapy that will be directed into the -- directly into the brain whereas the other one is molecule, different mechanism maybe Marcio wants to go through a little bit.

[Marcio Souza:]

Thanks Stuart. Hi, Alethia, thanks for the question. So what we mentioned before where I said our interest as a company, our goal at the end of the day is interesting patient. When you look into disease like Friedreich ataxia, you have a component that is systemic, specifically for this amongst many others, the heart is cardio affected and then you have deterioration of duration that occur with the stations over time specifically in their teenage years and later.What you're looking into what the two modalities really to try to address most if not all of the issues this patients will prove by injecting directly into the dense phase nucleus of the cerebellum, we expect to stop the progression of the disease and hopefully will start some function there neurologically.And by giving 743, it would have a more systemic measure including the heart. So we see both approaches quite complementary. They are in similar development timelines, although 743 is more advanced in terms of the stage of the trial. So when we start the trial later this year, pulling enrolled out about 100 patients, we expect that after one year and the results would be a pivotal trial. So we should be able to register 743 before our gene therapy candidate.

[Alethia Young:]

Great. Thank you.

[Marcio Souza:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Joe Thome from Cowen and Company. Your question please.

[Joe Thome:]

Hi, there. Thank you for taking my question. The first one is on the Aniridia data that were presented today. I guess, do the placebo arm performed as you would have expected with that 3.3% change? And is there anything different about sort of the patients that did respond to Translarna therapy and those that didn’t in terms of their – your current disease severity? And then one more on – a follow-up to the first question in Friedreich ataxia. In order to use the two products in combination if they are can we combine mechanisms do you have to study those in a formal clinical study or just achieve independent registration? Thank you.

[Stuart Peltz:]

Yes. Hey, thanks Joe for the all the question. So maybe the first one on Aniridia, let me just say that, you're partially going to – what we expect in sort of – in a way we didn't know necessarily what to expect in terms of the first trial really ever done in Aniridia in terms of following it.So the real natural history and understanding of the disease wasn't all that well understood. And in fact, we initially have the trial since there was sort of an early trial via safety study compared to placebo as a treatment. We just thought that retains to looking at MRNA to be able that if we saw something that we'd be able to go and talk to regulators.But I think at the end of the day I think, at the end of the day it was hard to be able to power directly what we thought the trial would be because there wasn't just enough information. But that being said, in a way we learned a lot about this. And I think as you go and look at the data in the deck you'll see why we think that while the drug was effective in these patients. So when you compare the number of cases that were – that saw benefits versus the placebo why we think that is just the change in variability of the assays I think that were prevented from being statistically significant. I mean, that's what we look at it. Marcio maybe…

[Marcio Souza:]

Yes. Just a little detail to complement that. Thanks, Stuart. The patients were now randomized based on this criteria, right? So we had something that like bioavailable coming from the randomization itself. That was not that well balance. So your question about placebo. The placebo behave similarly to what we're expecting.There was one patient that you saw there that had a response or somewhat and expected. But in general that was not an issue. It's more the size of the trial and the fact that they were domiciliary balance at baseline. Since this was not the regional endpoint.As Stuart said, we were looking for safety and some biomarkers originally. So we learned a lot with you that for this size of the trial, when the point estimates maybe on the right direction it does not negates the effect we're expecting to see and very important lessons of warrants in the market in several countries for GENZ, the safety profile is exactly what we're expecting there.

[Stuart Peltz:]

And then the two products FA gene therapy versus being a small molecule, so we're going to have two independent trials that will be going up. So I don't think you initially had actually do them both together. So I don't think that would be an issue we're going to be having two products that then might – with very different one, the underlying cause of the disease that have the protein itself which is lost in the disease.And the second one really affects most likely information. And so, the combination of those two, we think -- obviously, when you have the information, you have the fulminant and then reducing the dissolve, especially with chronic information. The second one though in terms of bringing the protein that has not made would be important. So that can be worked together but we don't think right now that we have to do a combination study.

[Joe Thome:]

Great. Thank you and congrats on the progress.

[Operator:]

Thank you. Our next question comes from the line of Martin Auster from Credit Suisse. Your question, please.

[Martin Auster:]

Hi, all. Thanks for taking the call. I had a couple of questions for you as well. From the Aniridia pivotal data, I'm curious, if you see any read-through to the ongoing dystrophin study. I don't know, as you look through maybe more of the secondary endpoints you had any chance to analyze some of those. Is there's anything in there that kind of elevates your conviction in the drug's MOA and kind of supports and expectation for demonstration of dystrophin expression of that study. And I know you've set some fairly grounded expectations around that one.And then, the second, you guys have generally sounded, I would say, incrementally more excited about the BioE platform since that deal was signed and closed. And I'm curious then at the R&D day, is there going to be any new data presented then? Or will we be seeing just internal presentations of preclinical and clinical results you've outlined to us already? Thanks.

[Stuart Peltz:]

Sure. Yes. So, yes, Aniridia and dystrophin, I don't think, are -- we need to save one from the other. The one is trying to understand the clinical manifestations that would occur with treating, which we're learning in terms of -- which we learned as a consequence of that and the variability of the given endpoints.In discipline, we feel pretty comfortable that we've done all we can do in terms of assuring that as best we can that this will be a positive study. We think that the assay that we have is incredibly sensitive and linear. And so, we think we're in pretty good shape in terms of gaining that and we're hopeful that we're going to see, in a sense, we have data already from the 004 study and this is -- we think, is there's more sense of the effort that can replicate that. That being said, we've looked at this as of being able to have a positive result and then be able to go to the FDA for approval in the United States.In terms of the BioE platform, yes, we're excited about that. We think it's an important platform in a novel set of compound of that working a different way than other companies have worked on before. So we're pretty excited about that. And, I think, you see on Analyst Day, we'll talk more about the -- not only the mechanism but more in detail of some of the things we studied.We alluded to into the talk here today in terms of the work with Sumitomo in terms of ALS and we'll talk more about that. And so, you -- more in terms of preclinical, clinical data in that as well. So, I think, there'll be a lot that you'll learn as a consequence of the BioE platform on June 16 day.

[Martin Auster:]

Great. Thanks.

[Operator:]

Thank you. Our next question comes from the line of Vincent Chen from Bernstein. Your question, please.

[Vincent Chen:]

Hey, thank you very much for taking the question. Congrats on the progress. I was wondering if you could just -- following up on Translarna in DMD, I was wondering if you could describe the powering assumptions around the Translarna U.S. study. And what gives you confidence that the trial is adequately powered? For example, what are your assumptions around the variability in dystrophin levels in the absence of drug and in the expected effect size?

[Stuart Peltz:]

Sure. Marcio you want to --

[Marcio Souza:]

Yes. Hey, Vince, it's Marcio here. So the power the -- we believe that in all the scenarios there, we look interesting likely since we've been looking to just one scenario here with an absolute chain, we power at more than 90% for -- to show a difference that is of significance on that trial.The way we control the variability or exactly the point that has to be controlled through a series of studies leading to -- an validation work leading to this where multiple cause were analyzed and different biopsies as well. And we were able to really control that, so we’re now concern that would be an issue.There are, obviously, scenarios where a few patients show a large increase in the patients through a very small increase versus another one that I would say more likely that you see an increase throughout, but of smaller magnitude in either of them we can see that trial being well powered to show benefit that is of significant versus the baseline since this is the measure.Based on our validation work as well what it means that the best patients are going to be below the lower level of transition. So that is to be replicated or we're going to have problems in terms of like the noise that we've seen from some of the other measures, one of the reasons why we like this method, and the -- both from the acquisition of biopsy and identification of dystrophin as we did.

[Vincent Chen:]

Thank you.

[Operator:]

Our next question comes from the line of Robyn Karnauskas from SunTrust Robinson Humphrey. Your question please.

[Robyn Karnauskas:]

Hi, thanks for taking my question, and congrats on a progress. So, a couple. The number one, a big picture. You've guided as you have the $4 million to $1.5 billion over the next few years. What are your thoughts on making sure that that can help you achieve some profitability? Just I know you can't give guidance but what's your thought on your goals there? And how you're going to think about business development now versus you have in the past?Second question is on AADC. For the patient population that you have identified, can you give us a little more clarity as far as more recent splits in the United States and ex-U.S.?And then third on the Aniridia data, if you were to exclude that high patient -- high responder patient, is there any difference between placebo and the treatment arm? Thanks.

[Emily Hill:]

Hello, Robyn, this is Emily Hill. Nice to talk to you. And now to your question about reaching that $1.5 billion revenue target by 2023, what you've seen in the past couple of years is we've really invested in driving innovation to continue to grow our revenue and we'll plan to do that. Actually we have new launches coming onboard this year, it's a study and deliver and AADC and the rest of prime royalty.We assess and invest in our redox platform, our gene therapy platform and our splicing platform. Obviously as we get towards that $1.5 billion target, there's likely a threshold of profitability but I wouldn't say that's our priority, our priority right now is to really invest in accelerating those pipelines to continue to drive innovation.And we've done that in the past both through internal innovation and as you mentioned through business development and while we have a lot on our plate on the internal side, we always pass through that and landscape the business development opportunities and we'll be selectively opportunistic as they arise.

[Stuart Peltz:]

And so now the risk of the AADC deficiency, I think the big picture is we've been finding new patients in all the areas that we've been working and we have more legal –So, I mean, in a sense some of the questions I had is that there were small populations on the foundries in fact that turns out clearly not to be the case. And so I think the split I think Marcio your team has been working pretty hard on that. So why don’t you give a look we're looking going to very period.

[Marcio Souza:]

Of course. So this study you have been seeing pretty even I would say between the U.S. and the key regions outside of U.S. just to remind you are focusing on five counties at this first wave. So Brazil, the U.S. and the three largest markets in Europe, so France, Italy and Germany.We're secondarily looking to a number of other markets and we're seeing as well an increase in the number of patients there but it's very balanced. In terms of the key results that we expect from one of the teams and that's how we are managing performance and how we're putting resource again.It's the split between the U.S. and outside of the U.S. So we expect about half of the patients to continuously coming from the Americas region and then other parts from the European region between like Eric and Adrian leaderships there.The – in terms of the things we're doing as well, just to start a number of new programs as we learn more the things are happening and that are working or not working very well. We've cycled through them very quickly. And this probably include having more people in the field in the U.S. for example and some of the points of contact that you're seeing returning more patients. So as we learn we're able to again focus the result to refocus the result towards growth.

[Stuart Peltz:]

And then on the Aniridia outcome in terms of looking at the sensitivity analysis of removing, we already have a pretty small patient population but I don’t know maybe want to comment on that.

[Marcio Souza:]

Yes. So it's more patient population, Stuart just said. Look it's obviously if we remove that one patient with the large results placebo affect would be seen our largest operation here and reaching nominal that is co significance. But I don't think it would be appropriate for us to speculate because we don't know if that patient is an outlier or not.What we're seeing is in the distribution of one of the reasons we put the waterfall in the slide, we see the distribution clearly skews toward increase with ataluren. So it gave us confidence not only for this study but also to some extent to do the overall platform of ataluren.

[Stuart Peltz:]

Yes. And again when we look at that study, when you look at the waterfall post, which I think probably in the small patient population is a nice way to see. It's pretty appearance at the effect of the drug on these patients over placebo. And so we look at this as a – so we're going to be talking to physicians in the coming weeks and the key opinion leader and so I think we've learned a lot of this and I think it helps as Marcio said, we’ve given people confidence in terms of the effectiveness of the drug.

[Emily Hill:]

Great. Thank you.

[Stuart Peltz:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Raju Prasad from William Blair. Your question, please.

[Sami Corwin:]

Hi, there. It's Sami on for Raju. I was wondering if what format you might be presenting the dystrophin results, what kind of form you'll be presenting them and whether it will be a medical conference or a press release. And if you have had any discussions or if you plan on having any discussions with the FDA ahead of that resubmission?

[Stuart Peltz:]

Okay. Yes, we haven't yet defined -- whether we'll do it at a meeting or a press release. But our goal is that we know this to get this out as rapidly as possible. So there's a good chance that if -- yes, we'll put something out as a press release, so people know. And then we could be able to present, either at or a call, even if we -- we'll figure that out. And then, the second part was -- Marcio, you want to -- ?

[Marcio Souza:]

Yes. Sure. So the -- in terms of interactions with the FDA, so we're having interaction throughout the planning phase and the execution of this study. We intend to have a pre-NDA meeting as well if we come to that, if the study is positive. It's been discussed already with the agency, it should be in the books pretty soon.And there is many other matters, as you can imagine, other than they study itself, right? There's the update of the safety database, there's the update of the other studies, the completion of the DDI studies that were done between the two submissions. So a number of things there, we've been talking to the agency and having productive discussions with them.

[Sami Corwin:]

Great. And then, I was wondering if you could just discuss some of the potential outcomes or next steps for the Aniridia program depending on your conversations with experts. Are you guys, kind of, thinking of the program like a tabled or running another study and having it power differently? Just what your thoughts are?

[Stuart Peltz:]

So, I think, that's a good question. And I think that's why we're going to go and talk to the key opinion leaders and talk among ourselves for that. And then, we'll -- if we come to the plan, I think, we'd talk about next steps then.

[Sami Corwin:]

Okay.

[Operator:]

Thank you. Our next question comes from the line of Gena Wang from Barclays. Your question, please.

[Gena Wang:]

Thank you for taking my questions. My first question is also regarding the biomarker data for Translarna. Just wondering, could you remind us with muscle would the biopsy be taken? And then, would that be taken from the same side of the patients and how many biopsies taken from each patient each time?

[Marcio Souza:]

So, hey, Gena. Marcio here. So, we're taking two samples for every patient, two biopsies, three course per biopsy. So we'd have a total of six as a base. There's an alternate muscle as well that we haven't described before in case there is only fat coming from the six. So we have enough sample coming there.And as I mentioned on answer to Vincent earlier, we have run some of the tests in terms of the validation. We know based on the very kinds of information apparent in patients that -- we have from different patients that, it shouldn't be a problem. We're doing the biseptics and gastroids for -- despite the primary site and the TA as a secondary site or first area side, may I say here.So the primary is really to read the six course that we would have, one of them, I think, that during the validation as well is that when we compare the course we've seen very, very small variability. So we can use any of them to measure. Does that answer?

[Gena Wang:]

Yes, yes. But will you have individual data or you will prove this baseline data together?

[Marcio Souza:]

No. Yes. So that's a very good question. So we will show -- so the way the -- there is a difference for the individual patients from their baseline, right? Obviously, we're going to compute that in the FIREFISH later statistically. But each one of those patients are going to be looking versus their baseline, because while we expect that the baselines are going to be very, very small, even below the level of complication, we cannot guarantee that that's the case. So a simple tools, analysis and change, because you skew the results. So each one of them are going to be look individually and then going to compute the different -- any difference for all the patients.

[Gena Wang:]

So, Marcio, I was wondering say each individual patient they have six samples. Will these six examples compute together or will be individual like a six baseline?

[Marcio Souza:]

No. So just one -- so it's the best sample for baseline and four weeks for each one of the patients that's going to be used for the analysis.

[Gena Wang:]

Okay, great. And then I have questions regarding the mitochondrial epilepsy trial. Just wondering was the primary endpoint, was that based on the FDA discussion feedback? And also how do you measure the seizure and then do you capture both generalized seizure or partial seizure? And how do you report the seizure event especially for those -- seizure if you wanted to cover them?

[Marcio Souza:]

Sure. No absolutely. I would say the trial design to some extent is very similar to other drugs that were just approved with genetic epilepsy in general like I'm sure you know that once I mentioned, we are developing like a FIREFISH, specific disc trial that’s going to account for this patient population. So looking to generalize seizures at this point in time for these patients and looking for the change. Looks like there were, obviously, discussion with the different regulatory agents this year. The key design of the trial of agreed under our slight difference while we were working for protocol review with DMA and we're using this time for the FDA of course.

[Gena Wang:]

Okay. Sorry just one more question regarding generalize seizure, so in the case that patient, I'm just wondering, well, caregiver also have a follow – if a patient have generalize seizure and the patient actually wasn't aware he had a seizure, because he was passed out? And how would you recall the events like that?

[Marcio Souza:]

Well, that's going to be recorded by the caregiver, we have made that clear right? So, most of the patients we're talking about our infants or bottlers or young kid, so we're talking about the caregiver required to the dial…

[Gena Wang:]

Okay. Okay, thank you.

[Marcio Souza:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Brian Abrahams from RBC Capital Markets. Your question please.

[Brian Abrahams:]

Hey guys, thanks very much for taking my questions. Can you give us a sense of the agency's comfort around the ECL assay just in terms of validation and quantitative ability for dystrophin measurement relative to other techniques versus Western?Secondly, can you characterize in general how the regulatory interactions have been going for risdiplam initially and your level of confidence in a timely approval with broad label?And then lastly to maybe ask an earlier question a different way on risdiplam. Now that you guys have had an opportunity to further explore the FIREFISH and SUNFISH data and looking at potentially comparative subgroups and endpoints, what's your level of confidence that the magnitude of benefit is comparable to SPINRAZA in types 1, 2 and 3 patients? And are there any subtypes where you think efficacy may be better? Thanks.

[Stuart Peltz:]

Yeah, sure. So maybe we'll start with the dystrophin measurement. That was one, obviously, when we've had substantial discussions with the FDA on this. And it wasn't one where we -- in the essence we actually saw a number of discussing first saying, how I'm sure you would want the Western brand. They said no not really. And that's why they don't like Western brands. They understand the limitations of those, if you have a better assay would be interested. And so we had been working on and we have been using in our own laboratories this unique form over the light of the ECL. And so – and they like that. So they – we worked with them and Marcio and the team had worked for quite some time. And so maybe why don’t you talk a little bit about sort of the – it was sort of a six to eight months interaction and they were pretty much pleased I think very much with the work and the sensitivity. I mean, I think they were excited about this assay.

[Marcio Souza:]

That's right. That's right, Stuart. So we worked very closely with the FDA and specific officers there on the validation of the assay and they are completely on the stage as we are in terms of the measure itself, right? Obviously, the results are going to see after the trial if reads the results soon but the assay itself as a pivots underway was validated was obviously a concern, I would say in general for us and for the FDA from the beginning because this is full and they are certainly very different than what others were doing.We had to have an external standards. Once we are doing the ESL, the external standard has to be hyperpure and so while we did all this work with them and to the satisfaction of the agency and obviously ourselves as well.We decided to use our third part lab to do this – to eliminate the potential bias that an internal act could add to such measure not on guided study. So that was how we guide. Again, I think we're pleased to talk about a long time to validate and to discuss with the agents but we're on the same page now.

[Stuart Peltz:]

Yes. And in terms of the risdiplam in terms of the broad label I think we're – you know, I think we’re – in terms of the having FIREFISH and SUNFISH and the Part – Part 1 but part 2. I think both of them actually help really understand and further the drug itself and how effective it can be.I think in terms of the front space of a child. Really it's hard to compare to concern that no one of this down to two to 25-year-old trial. We're in such a broad label, a broad inclusion criteria that we have patients with Psoriasis with less than 10. And I should point out that those – in the real-life cases even in the two to five year old, 20% of the patients had [indiscernible] Psoriasis less than 10 and those are Psoriasis of contraction.And so you're really going to have a hard time. So we're pretty excited of the fact that there is a statistically significant improvement in this broad population. And we think that gives us a leg up and that no one else has when we talk not only the physicians but the payers that you've actually studied the types of patients that you're going to be treating.And in fact, no one else has that. I think in terms of – when you think about FIREFISH and a FIREFISH I think is anything comparable I think that becomes clear. And I think in terms of looking at age is probably the most determinative thing where you could see. And I think you can look at the risdiplam data and you know patients greater than five months of age you still saw increases in sharp in 10. And that wasn't seen in other child as well.So at the end of the day, I think, when you're going to compare -- if you want to do a comparison, those are the closest and you could look at the other trials and they have basically far younger patients than what we saw and yet, we saw a very strong data, not only the early patients, but also in the type 1 patients that were even older.And so, we're pretty happy about that. We look forward to actually talking far more about that at the AAN. So, I feel pretty strongly that risdiplam is a highly efficacious drug that will be used quite broadly in the population.

[Brian Abrahams:]

Thanks so much Stu. Thanks Marcio. And congrats on all the progress guys.

[Stuart Peltz:]

Thank you.

[Marcio Souza:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Joel Beatty from Citi. Your question, please.

[Shawn Egan:]

Hi, guys. This is Shawn Egan calling in for Joel. A few questions from me today. First few on the LatAm franchise, [Indiscernible] getting ANVISA approval. Can you talk about what advantages having an established LatAm infrastructure give you guys for marketing Tegsedi? And then, on Waylivra following a positive Phase 3 broaden study in FPL, will any of the data be included when you guys submit in the second half? And then I'll have one follow-up on the redox agent. STUART PELTZ - CEO

[Marcio Souza:]

Sure. So thanks for the question. Talking a little bit about LatAm, right? So the approval of Tegsedi last year giving us a lot of advantage here in terms of the overall timing, first, a lot of things were done in between. So one of them -- obviously, you have to be able to price agreed with the government just to decide. That takes some time and we are underway here.The second is, the genotype infrastructure. As mentioned on my prepared remarks, about hundreds of patients now we cannot typically confirm hATTR, not only in Brazil but in Argentina and Colombia and other places. So we are way ahead of the game there.And then the last one that is not less important, I would say, together with the infrastructure that we have in the country, that is very robust since we have substantial sales of Translarna from the region, is the fact that the health system I can -- look at the situation we are right now. Discussing how system capacity in the words in general, don’t think you want to overload hospitals with IV deliveries in general.So the ability to deliver this on people's home, the ability to monitor them as we have the nursing network, have been quite fundamental and we've seen really positive feedback. So the launch is now underway and we're expecting to see -- we should expect to see more and more updates on this in relation to that.And your second question in relation to Waylivra, right? So the first approval we expect for FPL and shortly thereafter to complement that data set with FPL. So we wouldn't be -- at least our base case right now is not to have the two indications upfront.

[Shawn Egan:]

Got it. Thank you, Marcio. And then, on the 743 redox agent in epilepsy, for that pivotal study, can you maybe talk about how you plan to enroll? Will it be an all-comer study for patients with metabolic mutations? Or will you be enrolling any kind of particular mutations more or less?And then kind of going one step further, what could -- if the study is successful, what kind of the indication look like? And is there a potential for -- if there's like a clear benefit in some genetic subpopulations for like a smaller approval?

[Stuart Peltz:]

Yes. No, this is a great question. So, it's kind of both, right, in this study. As we went through the scientific advice what we've heard very loud and clear specifically from the MA that they wanted both a very general population in terms of genetically wise mitochondrial epilepsy with seizures that are not controlled, so we could potentially treat any patient, any covers after the approvals come, an approvals to come.We also do have the most common patients being represented. So I'm going to be discussing that a little bit more in detail, but there are four major groups of mutations that we're going to have a balance for those patients. One of them, one of the most common is Leigh syndrome, might be familiar in MELAS, as well amongst others.So on the June 16, we’re going to be well underway on planning that and hopefully executing as well, going to be discussing exactly what is the expectation of the trial and the market potential and so on. As I mentioned on the prepared remarks as well, we do expect about 5,000 to 6,000 patients in the geographical population here. So it's very large. And this patient because of the type of strength they have, they do not respond well to any of the common therapies that are available right now. So this will be really life-changing for them. And we really expect more powering effect from that.

[Shawn Egan:]

Great. Thanks, Marcio. I appreciate it.

[Marcio Souza:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Vincent Chen from Bernstein. Your question please.

[Vincent Chen:]

Great. Thanks for taking a few follow-up questions. Just a few on the DMD trial for Translarna. First one is simply, did I hear correctly that you'll be comparing the best sample of baseline and the best sample at the end? How is the best sample to determine and why not use the average?Second is, I was wondering you alluded to very low variability in the validation test. I was wondering if you could quantify the degree of variability you've seen and how are those run?And then - maybe a third actually, given the FDA has shown comfort with using Western brand historically even it has its imperfections, what was the rationale for going through the work to sort of move to ECL rather than using Western block given that regulators seem to be willing to use Western brand?

[Stuart Peltz:]

Yeah. So I’ll start with the last first. Well, they've been, I don’t think they’re actually all that comfortable with the Western brand. I think it's the best that they probably had, but they don't think that it's a great assay for a live protein that that will bloat very well.And that -- and so we thought also gives you that's -- I think that in the situation, it gives you rear view depending on how are we greater variability more chance for potential missing things that are positive.So at the end of the day, we think about a more reliable assay gives a better chance versus that. In the month of -- Marcio go through that.

[Marcio Souza:]

So, the decision about using the fast case, right? So, one, it obviously is all simulated and the rates are most reliable. So, one, you can have a situation or one of the cause or one of the symbol is contributed by SAP, so that's one of the reasons not to average, because it wouldn't be a through average right? We're just starting lucky to some extent and I think when looking to other sites, our study for an example all these studies we have gained by marine run to expand some of the others dose arm in the market, you do see samples that cannot be used or have to be heavily compensated because of that. So that's one of the reasons you use.The other is as you asked in terms of the validation. So the expectation, we didn't know where the sample was coming from upfront, right? We're asking the question, can I biopsy a patient multiple time and see the results that are very similar and the answer is yes was this method.One more reason not to use other methods, like if you're looking to both types of biopsy that were used before, number one, classification methods that were used before you see intra-sample bioavailable like 30% or 40% sometimes and that's obviously not acceptable.As Stuart said, when you brought approaching this big you're going to have intrinsic variability unless you are looking for super truncated part of the protein but that's not a case like we're were looking into full-length here.

[Vincent Chen:]

I see. Thank you very much.

[Marcio Souza:]

Thank you.

[Operator:]

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Stuart Peltz, CEO.

[Stuart Peltz:]

Thank you. Thanks for joining us today on the call. I don’t know as you may be aware the rare disease day over this past Saturday. And I think it's a good time for us to take start where we are as a company and the importance of the work that we do get ultimately with that of the patients.And so with that in mind we're quite proud to be a global commercial diversified biopharmaceutical company that's focusing on these therapies to help treat rare genetic disorders. So with that let me thank you again and we look forward to seeing you at our Analyst Day later this year. Thank you.

[Operator:]

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.