Good day, ladies and gentlemen, and welcome to the PTC Therapeutics Third Quarter 2016 Earnings Conference Call. At this time, all participants lines are in a listen-only mode to reduce background noise but later we will be holding a question-and-answer session after the prepared remarks and instructions will follow at that time [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to introduce your first speaker for today, Emily Hill, for opening remarks. You have the floor ma’am.

Thank you, and welcome to our conference call. Today, we will discuss PTC’s third quarter 2016 financial result and provide a corporate update. Before we start, let me remind you that today’s call will include forward-looking statements based on current expectations. These include statements about our future expectations regarding clinical development, regulatory and commercialization timelines and potential outcomes including statements related to our ability to resolve the matters set forth in the Refuse to File letter we received from the FDA in connection with our New Drug Application for Translarna for the treatment of Duchenne muscular dystrophy for the pursuant to continue to feel otherwise and statements related to our ability to obtain and maintain marketing authorizations for Translarna, including with respect to our pending request to renew Translarna’s authorization for nmDMD in the EU and the nature of any conditions or restrictions that may be placed on any such renewal if such renewal is granted the potential success of our products and product candidates, addressable patient populations and financial projections. Actual results may differ materially from those indicated by these statements as a result of a variety of risks and uncertainties including the timing and outcome of interactions PTC has with the FDA with respect to Translarna, including whether we are required to perform additional clinical or non-clinical studies at significant costs whether if successful may enable FDA review of an NDA; whether the EMA determines that the risk benefit balance of Translarna supports continuation of our marketing authorization in the EEA, the timing and outcome of [indiscernible], the outcome of pricing and reimbursement negotiations in those countries in which we are authorized to sell Translarna and the price which we are able to sell Translarna; and those risks discussed under the headings Special Note Regarding Forward-Looking Statements and Risk Factors in our most recent Form 10-Q. Such statements represent our judgment as of today and PTC undertakes no obligation to publicly update any forward-looking statements except as required by law. Information regarding our use of GAAP and non-GAAP financial measures and a reconciliation of GAAP to non-GAAP is available in today’s financial results press release. With that, let me pass the call over to Stuart.

Good afternoon, and thank you for joining us on the call. We are pleased to report on the progress we made in the third quarter across many fronts. Today, I will summarize the ongoing Translarna regulatory activities in the EU and the U.S., other important updates include continued progress on our Translarna commercialization efforts, the start of the study in SMA type II, III patients, developments in our clinical pipeline and financial results for the quarter. Let me start with the EMA’s review of our current marketing authorization of Translarna for Duchenne muscular dystrophy. As you know, we are seeking to renew the conditional marketing approval obtained from Translarna from the European Medicine Agency in 2014. Translarna is now available to patients in countries through commercial sales or reimbursed early access programs in Europe, Latin America and the Middle East. As a condition of our approval in Europe, we submitted the results of our ACT DMD Phase 3 clinical trials to the EMA in January. In parallel, we also submitted the request for annual renewal of our marketing authorization. As we previously said, we have been working with the EMA to design an appropriate clinical trial that would affirm the risk benefit profile of Translarna in nonsense mutation DMD. At our CHMP meeting in October, the committee requested additional information regarding the risk-benefit profile of Translarna, its efficacy and the design of a potential study that would provide comprehensive clinical data on these matters. While we have provided information in response to their requests and expect to continue to engage in future interactions, recent dialogue has introduced a higher degree of uncertainty as to the outcome. We are in the process of responding to those requests and anticipate we will participate in another oral explanation meeting before the CHMP this…

Thanks Stu. This was another strong quarter for Translarna sales reaching $22 million and representing a 125% growth over the third quarter of last year. Our goal is to make Translarna available to nonsense mutation DMD patients around the world as promptly as possible since everyday counts for them. Our strategy is to achieve this through both rapid geographic commercial expansion and increasing penetration of markets where reimbursed Translarna is already available. Increasing penetration is achieved both through the conversion of known nonsense mutation DMD patient on to drugs and the continued focus on patient identification through DMD awareness programs and genetic testing activities. In addition, we continue to be pleased with the remarkably high level of compliance to Translarna therapy. While pricing and reimbursement discussions are ongoing in a number of key European countries, I am happy to say that we are making great progress at securing access to patients in new countries and at a price level that is sustainable to our organization. And I would like to speak more to this point on our call today. Our latest achievement is an agreement on terms with AIFA, the Italian Medicines Agency which enabled commercial access for Italian patients including switching those patients currently receiving Translarna either through our extension trial or reimburse early access. These commercial terms will become effective in the New Year. We also achieved agreement on pricing and reimbursement terms with both the Swedish national county council as well as the Romanian Ministry of Health during the third quarter. These developments will enable reimbursed access for additional nonsense mutation Duchenne patients in Europe. During the third quarter of 2016, Translarna also become available to patients in England following the issuance of final guidance by the National Institute for Health and Care Excellence or NICE. Since…

Thanks Mark. Let me now turn to our program for Translarna in cystic fibrosis. We anticipate the results from our global confirmatory Phase 3 clinical trial Axia [ph] towards the end of the first quarter of 2017. I want to discuss some of the important development surrounding the trial design and analysis. We actively solicited feedback regarding our statistical analysis plan from the FDA through a Type C meeting during the third quarter of 2016. Following receipt of feedback from the FDA and our CHMP repators [ph], we revised our protocol and made corresponding changes to our statistical analysis plan for Axia [ph]. These changes were aimed to align with precedence with respect to the more recent approval of the cystic fibrosis related therapy. The primary endpoint was adjusted from a measurement of relative change to an absolute change of FEV1 over 48 weeks. Additionally, we plan to measure the change in FEV1 from baseline to the average of reading at the last two visit as opposed to baseline versus the final visit. Measuring the average of the last two visit reduces the impact of their ability on the endpoint. This change in the primary endpoint to measure absolute FEV1 does not impact the statistical power of Axia [ph] the trial was originally designed to be powered for 6% relative change with a 90% component and is now designed for a 3% absolute change. As a reminder, we submitted a type II variation to our marketing authorization in Europe to request approval for Translarna for nonsense mutation cystic fibroses during the third quarter of 2015. We believe Translarna is the only product candidate in clinical trial to address the underlying cause of nonsense mutation CF which is considered one of the most difficult to treat populations. The submission was based…

Thanks Stuart. As mentioned earlier in the call, we generated $22 million Translarna net product sales in the third quarter of 2016. This represents a 125% increase versus the same quarter in 2015. Year-to-date through the first nine months of this year, we have generated over $56 million in net sales which gives us confidence in out ability achieved the middle of our revenue guidance of $65 million to $85 million in Translarna net product sales for the full year 2016. We reported a net loss of approximately $35 million for the third quarter of 2016 compared to approximately $43 million for the same period of 2015. Our net loss decreased sequentially versus approximately $39 million in the second quarter of 2016 largely in part due to our growing revenue stream. Non-GAAP R&D expenses in the third quarter were approximately $27 million which were relatively flat compared to the same period in 2015 and non-GAAP R&D expenses increased sequentially versus the second quarter of 2016 by approximately $2 million. Non-GAAP SG&A expenses were $19 million for the third quarter of 2016 compared to approximately $17 million for the same period of 2015 and non-GAAP SG&A expenses were relatively flat compared to the second quarter of 2016. Our net cash burn for the third quarter was $24.6 million which represent a monthly burn rate of approximately $8 million. We ended the quarter in a strong position with $248 million in cash and marketable securities on our balance sheet. With respect to our operating expense guidance, we now anticipate non-GAAP operating expenses to be between $180 million and $190 million for the full year 2016 excluding approximately $35 million in non-cash stock based compensation expense for total operating expenses of approximately $215 million to $225 million for 2016, a reduction of approximately $10 million from our prior guidance and we expect to finish 2016 with approximately $220 million in cash and cash equivalents on our balance sheet. We will now turn the call over to the operator to start Q&A.

Thank you [Operator Instructions] Our first question comes from the line of Tazeen Ahmad from Bank of America. Your line is open.

Hi good afternoon, guys. Thanks for taking my questions. Maybe one first, Stu, as you continue discussions with CHMP, you mentioned that you are going to have another oral meeting with them. Given the fact that you know your drug has been on the market now for quite some time and the agency should be you know relative familiar with the attributes of it, can you give us a little bit more color on what topics they have been wanting to discuss particularly since your Phase 3 data came out and then maybe one question for Mark, how is the sales trend going in Germany, not having an official price there has that been a meaningful deterrent for uptake in your guess, thanks.

Yes great, thanks for the question. And so, given and as I said in our prepared remarks that given that we’re really in the middle of the dialog with the agency, and that we are completing this process, you know, we really provided all the information that we can on the call today. So we are not able to comment further where and given then we are so close to completing this, we expect that to participate in a call later on once we get a final decision. In terms of the, I sorry…

No, go ahead.

So I think, you know, I think, we’ve said all we could say right now in terms of where we are and then we expect to get an oral explanation and complete by the end of the year as we said.

Has the agency told you that they will have an answer for you by the end of the year, or do you feel that you will have one just based on where you are?

I think it’s based on where we are, we think, we will complete the process by the end of the year.

Okay and then maybe on the commercial question?

So, thank you for that question. In fact, as you know the foreign importation pathway exist where there is a very high unmet medical need and the product is not accessible within the German marketplace. And as we mentioned before since we delisted, all patients have been able to transition on to that pathway that were on drugs and in fact since then we’ve added new patients as well So in fact we are seeing growth in the German market.

And do you think that this growth can continue even in the absence of a negotiated commercial price there?

That’s what we are seeing. That’s our current expectation. Now in addition, we submitted the G-BA dossier with the updated data from ACT DMD and that will be going through a further assessment and we will get the outcome of that by the end of this year and then following that, we can take the decision to reengage with the umbrella health insurance organization and potentially think about coming to an agreement on a sustainable pricing model to get back into the German market which might be easier for all parties, that’s the choice we can make down the line.

But there wouldn’t be any potential disruptions, you know, should you end up getting to agreement on a commercial price with supplying the patients that you already have in Germany, is that right.

No that’s the least. Because what we have already shown is that we’ve no disruption ready for the supply in the first place going through the foreign importation pathway and it’s clearly in the interest of all parties that if we you know negotiate to come back into the Germen listing that we don’t want patients to go off drugs. So I don’t think that would be the case.

Okay, thanks very much.

Thank you. Our next question comes from the line of Geoff Meacham from Barclays. Your line is open.

Hi, all. This is Evan [ph] on for Geoff. Thanks for taking the questions. One on the commercial performance. So if I look kind of a sequential quarter-over-quarter growth if I take the midpoint, it seems that we are actually going to be down in fourth quarter, am I thinking about this correctly or is there, am I missing something. And then with the new G-BA analysis, you know, what has changed in their assessment, what else are they looking at to potentially get a more favorable view of Translarna and then how is enrollment going for the SMA program given the updates from biogen iones [ph] recently. Thank you. Lots of questions.

Yes.

Evan thanks for the question. On the first part in terms of the guidance, I think we are updating our guidance somewhat to say that we anticipate our ability, our confidence and our ability to hit the middle of the range. And therefore, as you point out we are $56 million through the first nine months, therefore the middle of range being in and around $75 million, I think we have our confidence, our ability to achieve that. Is there potential to or upside we will see. But I think that would certainly indicate fourth quarter in the same area as this quarter, we had talked previously about fluctuations from quarter-to-quarter depending on ordering patterns from certain countries and in particular Latin America.

Okay and then about the new G-BA analysis or assessment?

Sorry, would you mind repeating what the question on the G-BA was?

So I guess what new information or what else are they – what are they re-assessing, what’s going to potentially change their view of Translarna and I guess one would, and you said it would get by the end of the year?

Yes the, the point here was that we actually made a commitment, we go back to the G-BA with our ACT DMD data which they hadn’t previously integrated into their evaluation. The initial evaluation was done on the Phase 2b study alone, so we promised to go back to provide that data so they could do the fuller assessment, which includes the ACT DMD data.

And probably once you remind them that the G-BA assessment was a score of 3 which is actually is a good score that was, the issue wasn’t really in terms of the score because we got a score that said that it was a quantifiable benefit.

Right.

And so the issue was the insurance company, we couldn’t come to an agreement on a sustainable price but the G-BA gave it a very good score.

So if the G-BA gave it a good score, I guess what’s the rationale for potentially getting a better price from the insurance company and the insurance provider in Germany?

Well, it appears that at the beginning of this year we were kind of caught up in a tension between the G-BA rating system and the health insurance system and slightly different views on how to deal with orphan drug price. There is kind of a public debate going on. Now, you know, we are in a different place today and you know there may well be a possibility of coming to a different agreement with the health insurance umbrella organization now that more time has passed and the drug is already being made available within the German market. So it could be in the interest of all parties to have the drug supplied within the German market itself.

Okay and then I guess my final one on just SMA enrollment given [indiscernible]?

Yes so, obviously, we have remember let me just remind you that RG7916 is orally available compound that’s compared to the [indiscernible] with Roche has done a lot of work and that analyzes and it’s clear really that there are sufficient patients available globally to enroll the study, so they are confident that they will up to enroll these study.

Okay, great. Thanks for taking the questions. I really appreciate it.

Thank you.

Welcome.

Thank you. Our next question comes from the line of Heather Behanna from Wedbush Securities. Your line is open.

Hi, thanks for taking the question. Just a couple, the first is a followup on sort of the guidance on revenue and if you could comment if there were any, I know, you had commented that Brazil would be very six months potentially if there were any Latin America payments for the third quarter that contributed to the revenue from the third quarter?

Sure, so during the third quarter, we did receive both individual new patient orders from Brazil and also a bulk national order. However, just to put that in a relative sense, the overall impact of any particular given order at this quarter of that nature would not as significant as what we saw in Q1 this year.

Perfect, that’s very helpful. And then just switching gears for a second for an SMA question, you know, I think for RG7916, I was just curious about sort of the preclinical package and if the nine month toxicology work is done and if there potential for some of those data that we shared at a meeting, so we can try to understand the difference between the two potential SMA compounds in the future?

That’s a good question and so Roche has completed a significant part of the non-clinical tox studies with RG7916 although there are additional work that’s ongoing and they do anticipate presenting the results at a scientific meeting next year. I think, one point though that’s important is that based on the fact that we are moving forward in the clinical development of RG7916, I think it’s clear that we are comfortable with improved pharmacological properties of the molecule with its wider therapeutic window. So, importantly, we are now moving beyond the Phase 1 into the phase – into the clinical studies with the SMA patients.

Great, thanks for the color.

Thank you. Our next question comes from the line of Anupam Rama from JPMorgan. Your line is open.

Hi, guys. Thanks so much for taking the question. I was just thinking a little bit about the volume growth Translarna, if you could give a little bit of color on the breakdown of deeper penetration in the existing markets – some of the new geographies that you kind of layered on recently, maybe you would talk a little bit about if there has been any differences in what you are seeing on compliance rate? Thanks so much.

Okay, so thank you and as I mentioned on the call earlier, you know, the real drivers of our growth are a combination of geographic expansion but also continued penetration in our existing market. And so, while we are not giving specific breakdowns by region you know we are seeing considerable growth in all regions in Europe, in Latin America and more recently in the Middle Eastern region. And when we do an analysis of compliance rate by looking at repeat ordering patterns of patients, we are seeing a very high compliance rate of over 90% which I think is a really good level for a chronic everyday therapy particularly one that is taken three times a day. And you know, we are getting positive feedbacks from physicians and patients about the benefits they are feeling on their own therapy.

Great, thanks for taking the question.

Thank you. Our next question comes from the line of Alethia Young, you are from Credit Suisse. Your line is open.

Hi guys, this is Alion [ph] for Alethia. Thanks for taking my question. Just on the commercial side I think, can you characterize what proportion of DMD patient in your pep [ph] and genotype. Then also what strategies are you currently using to increase the number of diagnose in genotype patients and just can you update us on how this has all be going? Thanks.

Yes so perhaps the best way that to answer that is to focus on the big size EU countries just to give you a sense where we have already identified approximately 80% of the expected prevalence of on-label patients in those countries and now we are working through getting those patients through to access the therapies and that depends on the different country system. Globally, we are putting a lot of access still behind patient identification work through both DMD awareness but also putting in place genotyping also. So I think previously we talked about Latin America and Brazil where we really help the community put in more resource to enable that to happen.

Great, thanks.

Thank you. Our next question comes from the line of Joel Beatty from Citi. Your line is open.

Hi, thanks for taking the question. For the SUNFISH trial, just to ask what data will Roche be looking for from the patients in the first part of the trial and their assessment on whether to move onto the pivotal portion of the trial?

Yes, so thanks for that question. They will be looking at obviously exposure, safety and then SMN, the change of the SMN2 RNA that make the SMN RNA and then of course the protein level as well to identify the best level, the compound that will demonstrate the protein will be made. So that will be the first part and then it will seamlessly transition with the appropriate dose into the pivotal portion of the study to look at efficacy in those patients.

Okay great and then one other question on Translarna in Europe, in the event that CHMP decides not to renew the authorization, are there any alternative ways that Translarna could sustain only the provided to patients in Europe?

Yes, Mark, why don’t you….

So in the event of an opinion from the CHMP not to renew our marketing authorization, our intention will be to appeal that decision, the appeal process, I guess is around 4 to 6 month period and on during that period, we can continue to market and sell Translarna until the EC ratify that final opinion. So essentially, we would maintain in the status quo until a final decision and it’s in the eventuality that leads to a continued negative decision then we may be forced at point to withdraw the drugs.

Okay, thank you.

Thank you. Our next question comes from the line of Simos Simeonidis from RBC Capital Markets. Your line is open. Mr. Simeonidis, your line may be on mute. Press the unmute one. Last call for Simos, I am not getting any audio from his line.

Hello, hello.

Yes, I can hear you now, sir.

Hi, this is Matt on for Simos, thanks for taking the question. So I wanted to ask if you could comment a little more specifically what is introduced the higher degree of uncertainty to the outcome of the Translarna renewal in Europe, you know is this based upon recent dialog that you are referring to – or is this subsequent dialog to the most recent regulatory update that you provided on October 17?

Yes, thanks for the question. As we have commented, we are in the middle of the process and given that we are so close to meeting next we expect to participate in that we are still close to completing this process that we are really not – we are reframing from answering any other thing other than what we have already made the comments on for the regulatory discussion.

Okay. And then you mentioned an alternative regulatory strategy for trends worn into U.S., could you talk anything about what that potentially maybe?

Well, as we said, we are in the middle of the appeal process and again that’s what we are doing right now. And so as we are in the middle of that, this is all we are going to comment on at the moment.

Okay, got it. And then finally, I wanted to ask a little bit about the change in the endpoint for ACT CF, specifically what prompted this meeting with the FDA and was this based upon any points that may have been raised during prior discussions with the CHMP?

Yes. Thanks for that. This is just was really based on what we have been thinking about the changes in light of designs from other cystic fibrosis trials that have been performed and how they recently approved therapies. So, what we have done is we took the time to go back and talk to both the FDA and the CHMP on this. So, that’s what that came through. That’s what these changes were a consequence of.

Okay, thank you.

Thank you. Our next question comes from the line of Gena Wang from Jefferies. Your line is open.

Hi, this is [indiscernible]. Thank you for taking our questions. So, just a quick follow-up on the SMA program, so just wondering if you can remind us like what level of full SMN-2 produced in the healthy volunteer during the Phase 1 and also what would be the threshold that you think will be required to achieve clinical benefit in SMA patients? Thank you.

Yes. So, as you might remember from the previous presentation, this was from a single dose patient where we saw a significant increase in terms of the amount of SMN-2 that went to SMN-1 transcription. You might remember from the RG7800 where we saw somewhere between 50% and 100% increase in that range. So, when we go to the next study we will be able to continuing dosing, we will be able to see where that lands up. We certainly if you would like, Sanju [ph], the poster from the CNS, the Child Neurology Meeting so that you can see those more directly.

Yes, that will be great. So, just – so for the 100% increase, do you think that will be expectations in the SMA to achieve the clinical benefits like, so I thought the primary endpoints would be the milestone like [indiscernible]. So, just wondering what would be the threshold that you expect to achieve?

Yes, so – and this is obviously when we had done this before in plasma. So, but you may remember from the preclinical studies where we had animal studies where we thought in that range where we saw substantial improvement in the animal SMN model. So, that’s what we think – that’s what makes us quite excited a little about those results. So, yes, so in that sense if they reflect what happens in an animal model that we would think these would be important changes.

Got it. Thank you.

Thank you. Ladies and gentlemen, that now concludes our question-and-answer session. I would like to turn the call back over to management for closing remarks.

Well, I would like to thank everyone for being on the line today. As you can see, we have had a lot of important developments in progress across many fronts and that we look forward to sharing more information with you upon the completion of the CHMP opinion. So, we expect to be able to talk to you more in the near future. Thank you for taking the time to be on.

Ladies and gentlemen, thank you again for your participation in today’s conference call. This now concludes the program and you may all disconnect at this time. Everyone have a great day.