PTC Therapeutics, Inc. (PTCT) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics' Fabry Disease Transaction Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Dr. Matthew Klein, Chief Executive Officer. Please go ahead.

Thank you all for joining this afternoon's call. Before I begin, I refer you to our forward-looking statements on the slide posted on our website as well as our Risk Factors section in our most recent 10-K. I'm excited to share the details of our planned acquisition of the ST-920 Fabry gene therapy asset. This was an opportunity to advance our strategy of leveraging our accomplished existing rare disease global commercial infrastructure and accelerate short- and intermediate-term revenue growth. Our customer-facing teams have repeatedly demonstrated the ability to deliver rare disease therapies to patients worldwide regardless of treatment modality, including oral small molecule, ASO and gene therapy. The ST-920 Fabry gene therapy program provided a unique opportunity to acquire a potentially transformative therapy at BLA stage without the need for significant investment or build-out of development, regulatory or commercial capabilities. This is a potential value-accretive transaction that puts another innovative and valuable product in the demonstrated capable hands of our customer-facing teams. In fact, we have several commercial leaders at PTC with specific experience in marketing the existing approved Fabry therapies. We see the potential here for significant return on investment without impacting our potential to reach cash flow breakeven in 2026. PTC was selected as the winning bidder for the ST-920 asset through a competitive bankruptcy auction. The terms include $111 million cash payment at deal closing and regulatory milestones of $80 million for FDA acceptance -- FDA accelerated approval and $20 million for FDA full approval. Of course, deal closing is subject to certain conditions. As one of the few companies to have gained FDA approval for an AAV-based gene therapy, we applied that knowledge and experience to a detailed diligence process. In addition to review of the clinical efficacy and safety data, our teams focused on the various aspects of product manufacturing and quality that we know are critical to regulatory approval. We are confident in the demonstrated safety and clinically differentiated profile of ST-920 as well as in the manufacturing and related quality processes. In addition, we believe there is clarity on the regulatory path and that our experience in gaining FDA approval for an AAV gene therapy product increases the probability of success. ST-920 is a onetime intravenously administered AAV gene replacement therapy that enables the production of the alpha-Gal A enzyme deficient in Fabry disease. Notably, treatment administration does not require pre- or concomitant immunosuppression. The BLA for accelerated approval is based on the findings of meaningful effect on alpha-Gal A enzyme production, renal function and other aspects of clinical benefit recorded in the Phase I/II STAAR study. The STAAR study included 33 adults with Fabry disease, both men and women with a variety of subtypes and ERT treatment history. Based on discussions with FDA, the key efficacy endpoint for the BLA is the mean positive eGFR slope from baseline to week 52 following gene therapy administration. The finding of positive eGFR slope over 52 weeks is differentiated from other Fabry therapies, which demonstrated improved renal function, but still negative eGFR slope from baseline. Furthermore, all 18 study participants on enzyme replacement therapy at study start were withdrawn from ERT. Durability of effect has been demonstrated with sustained increased alpha-Gal A activity maintained for up to 4.5 years for the earliest treated study participant with evidence of maintained improvements in renal function. Importantly, ST-920 has been demonstrated to be safe and well tolerated. The most common adverse events in the STAAR study were fever, COVID-19 and headache. ST-920 has received regenerative medicine advanced therapy designation as well as orphan and Fast Track designations from FDA. As I mentioned, the BLA submission for accelerated approval is based on the intermediate clinical endpoint of annualized eGFR at week 52 as aligned with FDA, with 104-week results from the STAAR study planned to provide confirmatory evidence to support full approval. The non-clinical and clinical BLA modules have already been submitted as part of a rolling submission, with the CMC package expected to be submitted in Q4 2026. PTC also plans to pursue regulatory approval outside of the United States, again, leveraging existing regulatory and commercial rare disease infrastructure. From a commercial standpoint, we see this as a potential meaningful global opportunity. There are an estimated 11,000 individuals with Fabry disease in the U.S. and a similar prevalence rate worldwide in countries where we intend to pursue registration. In addition, the disease community is well aggregated and there are Fabry centers of excellence where the majority of patients are treated. Furthermore, there are several U.S. states and countries in which Fabry disease is included as part of newborn screening programs. In summary, we are excited to bring another meaningful rare disease therapy to patients in need worldwide. The terms of this transaction preserve our firepower as we pursue our strategy to leverage business development to complement our existing product portfolio and demonstrated rare disease development and commercial capabilities. I'll now turn the call over to the operator for questions on this transaction. Operator?

And the first question comes from Kristen Kluska with Cantor.

Congrats on this deal. I wanted to ask, normally, when we see gene therapies approved for indications where standard of care is already existing, these therapies don't do as well as some of the ones where there's already -- where there's no options at all. Why not you believe this is going to be the case with this asset? Maybe it sounds like the kidney benefits in particular, are going to drive a lot of the events. And then separately, does this program have rare pediatric disease designation? And is there potential for PRV associated with that?

Kristen, let me take the second question first and then the first question second. So the study included only adults, though we clearly realize that there is the potential and one of the things we'll think about as we advance the program forward is to go into younger Fabry patients, certainly adolescent patients. So for right now, the main study included adults that did not have rare pediatric indications -- rare pediatric designation, though again, I think we see a potential here to explore that following the completion of the transaction. Fabry is a pretty diverse and large population that includes individuals on ERT, not on ERT as well as Galafold. And I think one of the things as we were doing diligence here that was very attractive to us is how differentiated this therapy is. And the trial included all patients with different ERT history, different genetic subtypes, men and women. And as I mentioned in the prepared remarks, when we actually look at the patients who were on ERT during the study, 18 of them, they were withdrawn from the ERT during the study. So that's our way of saying that we believe this is a very differentiated therapy and has the potential to make meaningful impacts for all patients, whether those who are on existing therapies, not on existing therapies and have different treatment histories.

And our next question will come from Tazeen Ahmad with Bank of America.

I wanted to get a better sense about how you're thinking about eligibility of ST-920 based on patients who have pre-existing antibodies, level of severity of disease, if there is, like what proportion of the Fabry population do you think would be particularly amenable to 920? And what's your view of -- it seems like the low-hanging fruit would be switch patients, but how are you thinking about newly diagnosed patients and what it would take to make this the first treatment that they get?

Thanks, Tazeen. I'll start and then I'll turn over -- turn the part of the question over to Eric for his comments. I think if you look at the inclusion criteria for the clinical trial, they were pretty broad, again, in terms of treatment history, men or women, genetic background, and there were certain -- an important limitation as an AAV6 gene therapy. So clearly, if you have demonstrated history of AAV6 antibodies, you would not be eligible for the therapy, and the inclusion criteria also included those with GFR of over 40. Now that's been clinical trial inclusion. Obviously, one of the things we'll do as we dig further into this and work on our commercial planning, we'll look to understand broadening potential eligibility, ensuring as always, which is very important with all gene therapies, that safety first. But we believe that given the differentiated characteristics of this therapy, it could have broad utility across the full spectrum of patients. Eric, do you want to comment? I'll also comment that Eric himself has experience having launched Fabrazyme years ago, and a lot of his team is -- a lot of our existing commercial team, including leaders in market access and other parts of the organization, have specific Fabry gene therapy commercial experience, which, again, made this sort of such a nice fit for the company.

Tazeen, thanks for the question. Yes, I was involved in some of the very first launches, as you know, globalizing Replagal. And what I think Matt described is really begins with clinical differentiation. If we look at the data, the durability of kidney and cardiac is incredibly important and meaningful and there hard endpoints. This onetime infusion with no pre medication is also something critically important. And we see durable, meaningful improvements, both in the kidney and the heart. And what we learned about Fabry is early diagnosis and early treatment means better outcomes. And that the data that we saw showed that this durability happens irrespective of sex, whether it's prior ERT, Fabry subtypes. So we believe that ultimately, the label will be the label, but we look at this in the long term as a broad use for Fabry patients.

Okay. And how are you thinking about switch versus newly diagnosed?

And to Matt's point, we looked at the market -- and the marketplace is really segmented with ERTs. In some markets, particularly if you look at the key ones, U.S., Japan, Europe, Latin America, particularly Brazil, about 2/3 of those markets are ERT, okay? And there's a burden behind that. There's pre-medication. There are infusions that require every 2 weeks. There's people that have to travel to the clinics. Those are a number of different things that have to happen compared to a onetime infusion in the clinic. And then what you're doing is monitoring, if you will, kidney function and cardiac function. So I think the target here is a broad use. We've been able to show that irrespective of Fabry subtypes that this is effective, and we will be looking at this in a broader context. I think ERT is potentially a lower-hanging fruit, but earlier treatment will be the better choice. And that's something we'll be going after.

And the next question comes from Eric Joseph with Citi.

Just two from us. I'm wondering if there's potential for -- as part of the planned BLA or completion of the planned BLA submission, I'm wondering if there's potential for perhaps full approval given that I think about 2/3 of patients have already completed their 104-week follow-up. And just coming back to the point around expected durability, any thoughts on -- or could you share some thoughts on what you think the ultimate durability of ST-920 to continuously express alpha-Gal A would be, just appreciating that some other AAV programs have resulted in attenuated gene product expression over time?

Eric, so look, there was pretty good alignment with the FDA in our review of the regulatory documents that this would be an accelerated approval based on 52-week data. Those data, the clinical module has been submitted. I think once all the data are available longer term, there will obviously be a process of going through that, analyzing that and at the right time, discussing with the FDA. I think our base assumption and operating case right now is continuing with the plan as it was designed, which is that this clinical set would serve for accelerated approval, and then we would look to bring the long-term data for full approval. Clearly, we'll get a better idea of what that time looks like and whether that could be accelerated as we go a little further into the process. And as you know, typically in the BLA process, you'll have your mid-cycle meetings and other opportunities to share what data may be available that could influence how the agency thinks about it. In terms of durability, look, we're -- what we've seen so far in this product is really encouraging to have the 4.5-year maintenance of enzyme production levels, I think, is really, really important. And while one could say, sure there could be changes over time, what we've seen so far has been really impressive to us. And again, that durability effect we've seen, I think, gives us greater confidence in the strength of this therapy and what it could provide for patients.

And the next question is going to come from Ben Burnett with Wells Fargo.

This is [indiscernible] calling in for Ben. We just have a quick one. So what kind of CMC information are you -- can you share with this asset? I assume that this is probably working with the CDMO, kind of what kind of information do you know?

Sure. Look, as I mentioned, having taken a gene therapy across the finish line for approval as we did with our AADC program, we have a very good understanding not only of the importance of the CMC package, quality characteristics, CDMO, all that, but how difficult and challenging this is. So clearly, one part of diligence that was particularly important to us was ensuring that the CMC package looked good, which it does. There's a very clear process with specifications well thought out and PPQ lots being conducted. And then the CDMO. CDMO for the production of this product is Thermo Fisher, which I think is a best-in-brand CDMO. And again, not surprisingly, in preparation for the file, there's already been mock inspections, and we'll continue to do those and make sure everything is in order for any potential inspection. But again, I think what we've seen of the CMC program based on our experience and the quality work that the Sangamo team has done gives us a lot of confidence on the CMC package, and it's always reassuring to have a best-in-brand CDMO responsible for the manufacturing of the gene therapy.

And the next question is going to come from Ellie Merle with Barclays.

Congrats on the deal. Just a question on sort of the commercial landscape. I guess, how would you characterize the heterogeneity of the disease severity in Fabry? And I think of the 11,000 patients you cited, I guess, which of those do you think would be the most interested in gene therapy? Is it patients that are progressing on their current ERT or Galafold or showing symptoms? Or is it more of the burden of administration of ERT? And if you can elaborate on sort of how you're thinking about that segmentation of the patients.

Thanks for the question, Ellie. Again, I think what we see here is a pretty broad opportunity that was one thing that came through in the clinical data. I'll let Eric talk a little bit about how his team is starting in these very early hours thinking about the population market segmentation and a plan of attack. Eric?

Yes. I think we said that -- thanks, Ellie, for the question. From the commercial landscape, first of all, we have a footprint right now across multiple markets, and we know how to market not only gene therapy but rare disease, but also really get inside these clinics. And these clinics have a variety of patients. When I launched Replagal, we -- in the very early days, what we thought in terms of severity were males, adult males that had symptomatic. And what we found out over time was that this is X-linked and of course, females, perhaps less symptomatic were also on enzyme replacement therapy. I think there's a natural progression to think that there is definitely severity, and severity will certainly drive this. But with the durability of this data and the durability that we see not only in kidney function and heart function, this really is for a broader use. The Galafold, obviously, there's only a segment of the market that can actually utilize this. So there's only certain Fabry subtypes. So far, what we've seen is that vast majority of subtypes going to may be able to respond to gene therapy and have a durable treatment, not having to take oral therapy every single day. So again, all of these factors play into broad use for Fabry.

And our next question is going to come from Brian Cheng with JPMorgan.

Just a quick one. As we think about the launch, can you talk a little bit about how much work needs to be done for the build-out of the commercial capacity? Do you have a sense of the capacity that you will have in place at the time you launch this product?

Brian, for us, I think one of the key factors here is the fact that we have the existing infrastructure globally with capacity. Obviously, we have a number of different products in the commercial portfolio at different stages of their lifespan. And we really believe that we have the capability to really just set this in with the existing infrastructure. And that includes -- it's not only commercial in terms of launch but also regulatory and global regulatory capacity and understanding because getting this across the finish line, we have that experience, and I think we're very well suited to do that. So again, this was really -- this is what made this a pretty special opportunity for us. We have existing capacity, existing expertise, and this is something that we could set in to what we have without any significant build needed.