Good day, and thank you for standing by. Welcome to the PTC Fourth Quarter and Full Year 2021 Financial Results Conference Call. [Operator Instructions]. I'd now like to hand the conference over to your host today, Kyle O'Keefe, Senior Vice President of Global Commercial and Corporate Strategy. Please go ahead.

Good afternoon, and thank you for joining us today to discuss the PTC Therapeutics fourth quarter and full year 2021 corporate update and financial results. I am joined today by our Chief Executive Officer, Stuart Peltz; our Chief Operating Officer, Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Emily Hill. Today's call will include forward-looking statements based on current expectations. Please take a moment to review the slide posted on our investor website in conjunction with the call, which contains our forward-looking statements. Our actual results could materially differ from these forward-looking statements as such statements are subject to risks that can materially and adversely affect our business and results of operations. 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 to 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. Stu?

Thanks, Kyle. I'm excited to share with you today the significant progress in 2021. Over the last two decades, we have advanced innovative therapies from ideas and discovery to commercializing and distributing them to patients around the globe. These efforts have positioned us to continue to grow to an enduring innovative biopharmaceutical company with substantial revenues. Our vision is to build our pipeline such that at steady state, we can commercialize a new product every two to three years. This will allow us to continue to create value for all of our stakeholders. Executing on our strategy over the last few years has led us to having a robust pipeline with five registration-directed studies ongoing and we anticipate results for many of them this year. Along with the growth of our pipeline, I'm pleased to report that the commercial engine has performed exceedingly well. We have reached $539 million in total revenue in 2021. The Duchenne muscular dystrophy franchise continued to grow, contributing $423 million in net product revenue. These products demonstrate robust growth years after approval and we expect this growth to continue based on the treatment benefit, maintaining treatment compliance and continuing with geographic expansion. Our goal is to bring Translarna to nonsense mutation Duchenne muscular dystrophy boys globally, and we see continued geographic opportunity in regions like Asia Pacific, Central and Eastern Europe, Middle East, North Africa and Latin America. In addition, with the potential of successful results of Study 041 mid-year, we look forward to pursuing the registration path to bring Translarna to patients in the United States. We anticipate that the commercial team will execute flawlessly and will have a stellar year. Based on this, we're confident that we'll continue to have a strong and growing revenue base, and our revenue guidance for 2022 is…

Thanks, Stu. We made tremendous progress across our broad development pipeline in 2021 and I'm happy to provide some key updates on the team's progress. I'll start with our Bio-e platform. Our first compounds in the Bio-e platform is vatiquinone, which targets the enzyme 15-Lipoxygenase, a key regulator of the inflammation and oxidative stress underpinning a number of CNS diseases. As Stu highlighted, we have two ongoing registration-directed trials with vatiquinone, MIT-E trial and the MOVE-FA trial. MIT-E trial is a placebo-controlled study of vatiquinone in patients with mitochondrial disease associated seizures. This study will enroll approximately 60 patients from study sites in North America, Europe, Australia and Asia. The study includes a 28-day observational phase to ensure subjects are having a minimum number of observable motor seizures, followed by a 24-week placebo-controlled phase, during which subjects are randomized to receive either vatiquinone or placebo. The primary endpoint of the trial is a reduction in observable motor seizures with secondary endpoints assessing different aspects of seizure pathology, as well as overall disease morbidity. We expect results from this study in the fourth quarter of 2022. The second registration-directed trial of vatiquinone MOVE-FA is being conducted in patients with Friedreich Ataxia. MOVE-FA is a randomized, placebo-controlled 72-week trial with the primary endpoint being change in the modified FARS disease rating scale with the key secondary endpoint being improvement in activities of daily living as assessed by the freeditaxia ADL scale. The trial is fully enrolled and we expect results in the second quarter of 2023. The second compound in the Bio-E platform, PTC857, also targets 15-lipoxygenase and is a potent inhibitor of paraptosis, a recently described cell-death pathway demonstrated to be key to neurodegenerative disease pathology. The first indication for PTC857 is ALS. With the successful completion of the Phase I…

Thanks, Matt. It is exciting to see the great progress of our late-stage clinical pipeline and our global customer-facing team is well poised to leverage our expertise and footprint to bring these treatments to patients. Our team has delivered another excellent quarter worldwide, building on the significant momentum created during the year and closing out what has been the strongest year for PTC commercial success. Our global DMD franchise continues to grow across existing main markets and via new geographic expansion. We delivered on key milestones for our products in Latin America, where we are actively commercializing a portfolio of three innovative rare disease products. And importantly, we are well positioned to execute on our potential launch of the PTC-AADC gene therapy in Europe and other international markets this year. Turning to our DMD franchise. Our 2021 revenue for the franchise was $423 million, which is an impressive 28% growth over 2020. The foundation of the Emflaza business continues to be solid. Our 2021 Emflaza franchise sales was $187 million, an impressive 35% growth over 2020. Operational excellence drove new patient starts, more favorable access, continued high compliance, appropriate weight-based dosage and lower treatment discontinuation. Now turning to Translarna. We achieved $236 million in 2021 net revenue, a remarkable 23% growth over 2020. The growth was due to ongoing expansion of the patient base, high compliance, as well as continued geographic expansion. While Russia was the key driver of the growth, we also continued to see growth in our main markets in Europe. In Brazil, we successfully secured a group purchase order for Translarna for both new and existing nonsense mutation DMD patients with the first part of that order delivered in December. Now turning to Tegsedi and Waylivra. The Latin American team has delivered on significant milestones for both…

Thanks, Eric. In 2021, we continued to see strong commercial growth and achievements across our pipeline. We have worked to position PTC to deliver on a number of planned value-creating milestones in 2022. The press release issued earlier this afternoon summarizes the details of our fourth quarter and year-end 2021 financial results. I will take a few minutes now to review those financial results and our 2022 guidance. Please refer to the press release for any additional details. Let me begin with our top line results. We reported $538.6 million in total revenue for the full year 2021 compared to $380.8 million for the full year 2020. Revenue growth was primarily driven by our global DMD franchise, with total franchise revenue of $423 million as compared to $331 million in 2020. Translarna net product revenues were $236 million for the year compared with $191.9 million for the full year 2020 for a year-over-year growth of 23%. For Emflaza, net product revenues were $187 million for 2021 compared to $139 million for the full year 2020. We recorded $109.7 million in collaboration and royalty revenue for the full year 2021 as compared to $47.4 million in the full year 2020. This increase was due to an increase in Evrysdi royalty revenue and three milestone payments. In 2021, we recognized royalty revenue of $54.6 million compared to $4.8 million in 2020. We achieved milestones in 2021 of $20 million for the first commercial sale in the EU, $10 million for the first commercial sale in Japan and a $25 million sales-based milestone reaching $500 million in sales. Turning now to 2022. Our total revenue guidance is $700 million to $750 million, which includes expected revenue contributions from all of our approved commercial products and projected revenue sales of PTC-AADC. Also included in…

[Operator Instructions]. Our first question comes from Alethia Young with Cantor.

Maybe just like one and then maybe a little quick one, throw in there. Can you just maybe frame for us -- I know Germany may be the first market for ADC. Just is there any more color you can give about like how many patients you kind of think might be there? How we should think about kind of the contribution of Europe? And then the second part of that question is just, in the United States, can you just give us a refresher on where you are exactly with kind of getting to the finish line and have any kind of new other matters or concerns kind of popped up?

I think -- yes, so we've been working hard to identify patients, develop sites, centers of excellence, so that on approval, we're ready to be moving forward. And I think as you've probably seen in some of the cliffs that we have is clearly a transformational drug. Maybe, Eric, why don't you talk a little bit about where we are in terms of getting ready for the launch? And then Matt can talk a little bit about the trial question.

Yes, absolutely, Alethia. We have been very excited with the progress that we've been making in terms of patient finding. We've expanded a lot of our activity screening programs in many of those countries in Europe. We do anticipate the first country to launch will be germinate. And, of course, we'll have free pricing for a period of time and we hope to treat as many AADC patients, but we will also be exploring early access programs that are currently available through these treatments. So clearly, there are a number of European countries and international markets that following the European approval, we will be able to begin to access and begin to discuss the value proposition. Our focus has really been to prepare sites of centers of excellence and patient identification. And the majority of our efforts have really paid off. We've been seeing new patients coming in quarter-on-quarter. The disease and educational programs that we have and the testing that we've been doing has been giving us much higher yields, particularly in those enriched populations. So, the sequence will be a typical kind of European sequence with Germany, a number of key early access markets and then international markets that follow following the first launch in Germany.

And then the U.S.?

Yes, it is Matt. I can take that question. So first, just as you pointed out, we expect to be moving forward in Europe and expect an opinion now in April of 2022. There were some additional manufacturing bioanalytical data that the CHMP had asked for. We're in the process of collecting that data. We'll have that in by the end of this quarter and put us in a position for the opinion in April. We're in the process of getting ready to meet with the FDA to align on the submission package. And obviously, we're going to avail ourselves on the new bioanalytical data we're generating in support of the MAA. And so we'll be including that along with the data we have from the carrying the treatment cases. And with that, we plan to submit the BLA in the second quarter of this year.

Our next question comes from Joseph Thome with Cowen.

Maybe just a couple more on AADC. In terms of the label itself, do you anticipate any sort of guidance on age group or patient size, either in the U.S. or a European label? And then when you talk about reimbursement, I know for what this may cost others have used kind of pay-for-performance models. Are you debating various ways to get this reimbursed?

Great. Yes. So Matt, do you want to take the first one?

Yes, absolutely. I think what's really impressive, Joe, about the package for AADC is the consistent demonstration of treatment effect across patients of all pediatric age groups even into early adulthood. So, what we really have is a body of data demonstrating not only an important biomarker response in the early months following treatment begin, significant improvement in motor function and achieving motor milestones. We had children who are unable to move at all and can now walk. So it's really an impressive clinical package that has been demonstrated in patients of all different age groups. And part of that is because AADC is not a neurodegenerative disorder rather all of the networks and coordination that would be needed for motor function remain in place what's missing is dopa. And so with the provision of the gene therapy, the dopamine can now be produced and all of those coordinated movements and such could happen. And I bring that up because that's the reason why we wouldn't expect there to necessarily be a treatment effect difference based on age, while the younger patients certainly do well. We're seeing impressive results in all different age groups. So, at this point, really, the package includes that breadth of age and we can't comment whether there'd be any restrictions in age at this point and again we're putting forward a data package that's really strong in terms of treatment effect across all the ages that we treat.

And in terms of reimbursement, let me just say that, first of all, I think from a payer perspective, I'd say we have a really strong package where we have really five years of clinical data, five years a follow-up after that. We show all the patients actually responding to it's transformative where you see younger children being able to go from the weak floppy babies to walk in. So -- and then there's biomarker data demonstrating that dopamine is made considering those for long periods of time. So from a payer's perspective, I think the package is actually quite strong. It's obviously also a ultra-rare patient population. And so we expect that will have a really small budget impact within. If you look at another ultra-orphan products such as in the Orchard Gene therapy for MLD that was priced at $3.5 million and that's about twice as big as AADC. So I think -- we think the -- but the package is incredibly strong, highly valuable product. So, I think we're excited about this. And so on approval, we'll talk more about the pricing, but we think it's a highly valuable product.

Our next question comes from Eric Joseph with J.P. Morgan.

A few on Translarna. From a first, maybe, Eric, can you kind of speak to the brand exposure to Russia and whether you see any impact in being able to access that market in sort of the rising geopolitical tensions with Ukraine? Is your top line guidance at risk at all on the lower end with sales in Russia? And then looking longer term, I guess, given all the experience in commercial exposure in DMD, what, if any, are the avenues to extend the market exclusivity of Translarna and Emflaza beyond their current terms? How should investors be thinking of any additional R&D or BD activity within DMD to backfill the franchise?

Yes, sure. So in terms of, obviously, it's unfortunate what's occurring between Russia and Ukraine is obviously a highly volatile situation and we'll be closely watching the geopolitical tensions. And as the situation unfold, we'll plan accordingly on how to adjust the business. But we've always had puts and takes within our guidance. So, as such, we're not taking the guidance as a consequence of that. We'll need to learn more, obviously, about what the sanctions and if that will affect things like medical. So that's time will always tell somewhat about that. Then the second question was commercial exposure and how in terms of what we're doing with Tegsedi and Waylivra in the long run. Eric, do you want to...

It was more about -- sorry, Stu, it's more about DMD IP runway. Any strategies to extend it and whether you're doing additional investment in that.

Eric, do you want to talk a little bit about that?

Yes, sure. And Eric, I would just say just on the Russia situation, we're watching that closely, but we have a very important and dedicated team in Russia on the ground that will ensure the continuity of product. We have patients on Translarna and as you know, they received Translarna already. So we're watching that very, very closely, and we don't think there's going to be an overall impact to the overall revenue guidance that Emily and Stuart provided. On the IP situation, we know that the IP -- loss of exclusivity for Emflaza will be in 2024, but we have a number of different programs that we're actually working on at this stage that look at various ways to capture the patient, hold the patient because we've been providing exceptional service around Emflaza. And we don't know at this point in time that there's going to be the kind of rapid erosion. We have a feeling that we're going to be able to maintain a number of these patients. And we have a number of key programs, both in terms of model to distribution and patient capturing and retainment for Emflaza. For Translarna, we obviously have extended patent protection that goes beyond well into 2029 and potentially beyond. Our goal is to continue to innovate. And of course, with the upcoming results, hopefully, of 041, we could also have a nice runway in the U.S. with Translarna potential approval in the FDA. So -- and that would give us an additional amount of runway. So we have dedicated teams that are working on all aspects around the IP for both products. And I have to say that we're really doing a lot at the patient level to ensure that we're capturing and making that the best experience. I hope that answers your question.

If I could sneak in one more. related to Evrysdi. As we're looking towards the potential label expansion, the pre-symptomatic population based on the Rainbowfish study. Can you just maybe describe how you are relative to thinking about the incremental market opportunity there and its competitive positioning? Are there any particular geographies that might be more receptive to Evrysdi over Zolgensma and Spinraza in the pre-symptomatic patient population?

Yes. I think as you alluded to, we recently announced some results from the Rainbowfish study where we evaluated both the safety and efficacy of Evrysdi in presymptomatic SMA baby from birth to six weeks of age. And we saw that overwhelming number about 80% of the pre-symptomatic infants that were treated with Evrysdi for at least 12 months achieved the motor milestones such as sitting, rolling, crawling, standing and walking independently in the sense similarly to what normal healthy babies do. So it's really quite exciting in that we put an sNDA in for that, so that these kids could get that. And I think -- first of all, I think, obviously, in places in particular, where they're doing -- and Europe does a fair amount more of this in terms of identification of newborn screening and filing. We think in those countries that would make it available. And so the trick here is really to be the first to be able to do that. I think one of the major advantages that you could do with a whole treatment for a pre-symptomatic babies that who have SMA. So, I think -- we think that's a real major advantage and that will -- and all over the world, we think this is something that people will want to take and to take not only during the early stage but throughout the life and getting it's efficacy over the long term as a major advantage as such.

Our next question comes from Raju Prasad with William Blair.

I just want to get your thoughts on some of the clinical holes that we've seen in some of the PKU programs? And maybe how that impacts or how are you looking at the commercial market kind of in the long term for 923 given kind of the gene therapy holdups?

Yes. So I think that's -- obviously, that's an interesting point you've seen where we've seen it in two different trials with two different viral vectors, having issues as a consequence of -- in terms of the viral vectors that they both have been put on hold. And so that's -- with the gene therapy and the exact consequences of that could be for large quantities of the enzyme that were produced. It's unknown really, but again, the advantage that we have is that it's an orally bioavailable molecule. And that -- I think that's a real major advantage for us that you could take that right to taken orally. We know that you can do this without the sort of issue. So we think, obviously, that's a real advantage to us. If you think of it compared to what we're trying to do in terms of our gene therapy. So,we think there's a real advantage in terms of our molecule, which we think has a real advantage there. But also when you think about it in terms of targeted gene therapy and the strategy that we've taken, which is that really goes directly to the tissue that we need to get the gene therapy to add and to do relatively low levels, I think, is a major advantage for what we're doing in terms of gene therapy. And that's one of the reasons why we took this approach. We didn't want to have a systemic use concentration at the very beginning and be able to spend more time understanding and would be able really to go into low levels at first move into gene therapy that way. So I think clearly, in the PKU, there's been no really proof of concept in PKU yet. So I think there's obviously a need for an oral therapy.

And then on AADC, I know in previous quarters, you've kind of talked about a number of patients that have been identified. At this point, is there -- do you have a sense of number of patients that have been identified in EMA territories versus the U.S. and kind of how you're looking at -- I think someone else asked about kind of country by country, but how are you looking at the launch just given where you've identified patients so far?

Yes. No, I think -- I understand we've been obviously really been working hard in terms of identification. We said we've identified about 300 patients worldwide. We haven't talked in and out. But I think we're in a pretty good position to be able to -- on approval, be able to rapidly bring patients be able to perform this, get center of excellences up in terms of being able to do that. So, we think we're in a good position to keep going. And I think at the end of the day, we're making very good progress in terms of finding patients. And I think we'll continue to find patients, in particular, on approval and the fact and even now, we're seeing just a quicker uptake in terms of patient numbers as a consequence of people beginning to understand that there will be a treatment for it. We've seen this time and time again with ultra-orphan diseases that as treatments begin to come on board, you find more and more patients, and there's more and more patients than you thought there would be as a consequence of that because there's now a treatment for these patients and physicians begin to look at them carefully. So we think we're well positioned to be able to not only have identified a number of patients that get them treated for next year -- this year on the -- based on the approval.

Our next question comes from Brian Abrahams with RBC Capital Markets.

A couple of quick ones on PKU. For 923, I'm curious what the key parameters that you're going to be looking for in the APHENITY study, particularly the lead-in portion to guide who's going to optimally respond to 923 and how it's going to be used in the real world? I'm curious if you envision this being used primarily in classical patients or some Kuvan non-responders or perhaps more broadly in order to get more patients to be able to normalize their diet. And then my second question is also on 923. Can you remind us where you are on the chronic tox studies? And maybe any similarities or differences to what preclinical signals have been observed with Kuvan at comparable doses?

Sure. Matt, do you want to take that?

Sure. Hi, Brian. So your first question regarding the trial, we -- just as a reminder, there was a Phase 2 trial done with PTC923 comparing it head-to-head with Kuvan, where we demonstrated it was a crossover study. So also that treated with both 923 and Kuvan, and we were able to demonstrate that 50% more patients responded to PTC923 than to Kuvan. And when you looked at the subjects who had a response to both 923 and Kuvan, there was actually an over 200 greater mmol/L reduction in phenylalanine in the 923 patients relative to Kuvan. So we're seeing that 923 is able to deliver benefit to more patients, including the classical PKU patients and those are those with baseline levels of phenylalanine greater than or equal to 1,200 mmol/L. And when there was a signal of effect with Kuvan, 923 had a much stronger response. So that's what gives us a great deal of confidence that we can address the still need for an effective therapy in the PKU marketplace. As we move forward to the Phase 3 trial, we believe this 923 will be able to provide benefit for all patients of all ages. So this study includes pediatric and adult populations and has this run-in phase where basically all potential subjects who pass screening will receive therapy with 923 for two weeks and we'll ask a simple question. Is there a marked reduction in phenylalanine levels following treatment with 923? If the answer is yes, those subjects will then get randomized to receive 923 or placebo for the six-week placebo-controlled phase and the primary endpoint of that placebo-controlled phase is reduction in phenylalanine levels in 923 relative to placebo. So, again, based on the mechanism and based on the data we have to date, we expect to be able to provide benefit in all populations and all genotypes and degrees of severity even those classical PKU patients, where we've already been able to record the benefit in the phase 2 study. In terms of the chronic tox, we have completed all the necessary tox work created to allow for not only obviously the six-week placebo-controlled phase, which is the prior efficacy study or formal basis for the efficacy component of an NDA pending the data, but also for the long-term safety component in which -- long-term open label safety portion of the study into which all patients will roll over once they complete the placebo-controlled phase. So those studies are now complete and we're able to now move forward with the full trial, the six-week placebo-controlled phase and the open-label extension.

Our next question comes from Gena Wang with Barclays.

I just have one regarding Translarna confirmatory study 041 data in mid-2022. Could you provide different scenarios of the outcome and its impact to Translarna launch in Europe market?

Yes, sure. So just to remind everybody what we've done is there's study 041 that will be done in the middle of this year. We're pretty excited about '041 because I think that we were able to utilize all the learnings that we had from the clinical trials that were performed to really to be able to define what's the run of the right endpoints, what's the right patient population that we can study. And so, I think we're in a really good position to be able to define -- to show that Translarna is working and to use the right patient population and they use the right endpoints. And so Matt, do you want to talk a little bit about the details of how we're moving forward.

Yes, sure. So as Stu mentioned, we really were in a position to leverage all of our learnings from the previous study. I think there's always -- previous studies -- there's always -- the key is really understanding the right patient population, the appropriate inclusion criteria and the appropriate endpoint and the appropriate duration. And I think we have all of those coming to bear in this study. The primary analysis group is a population of seven to 16-year-olds with a baseline 6-minute walk distance greater than equal to 300 meters of a stand to supine time of greater than equal to 5 seconds. Of note, when we look at the previous studies -- when we look at our previous few studies 007 and 020 and we look at this group in those studies, we saw that we had a markedly significant effect. For example, the -- in study 007, the -- it was a difference of 46 meters -- 46 meters greater in walk distance and treating relative to placebo in 020, there was 43 meters relative -- 43 million greater distance relative to placebo and those again both from the market is statistically significant. So now to be able to design this study with that exact Goldilocks population as the primary analysis population is what gives us confidence in the design of the study. And as you mentioned, we expect to have results of this study in mid-year. We believe, obviously, that with a positive study, we'll be in a position to go to the FDA and be able to submit an NDA and make Translarna to all the kids in the U.S. In Europe, where obviously, this is a component of a conditional marketing authorization, we feel that one of the more important considerations is the STRIDE registry that we have, where we've been able to, over the course of years, consistently demonstrate a significant benefit in Translarna relative to loss of ablation and loss of pulmonary function, which when you think about it, the clinical trials are really designed to give a picture of what you might be able to do for those significant events in the life of the DMD boys. We really use a 6-minute walk test in a shorter period of time to try to say what we might be able to do in terms of preventing loss of ambulation. So to be able to continue to provide those data to CHMP, which we've been able to do and we just form the basis of our annual renewal of the commissioning marketing authorization other than showing the most recent data an extension of a five-year difference in terms of loss of ambulation as well as the prevention of loss of pulmonary function, we believe is really a compelling part of the picture and I think will be an important component -- remaining component of how the CHMP use Translarna.

So sorry, just a follow-up. So, if trial fail, what additional data you would need to provide to maintain Translarna on the market in Europe?

Yes. So I think that's what Matt was saying that we have the STRIDE registry, which has demonstrated years longer in terms of preventing loss of ambulation, pulmonary function, being able to get off the ground. The data is really quite compelling. I think you've probably seen this as well in the publications that we've shared with you and we know that the European regulatory agents are very interested in that as well. So, that would be a big piece of data that we think really demonstrates Translarna's ability to prevent people of what really matters to DMD patients, which is maintaining motor function. So, we think a lot of the renewals, as we've talked about in the past, we had been focused on the real-world evidence on the STRIDE data. So if -- like you said, you want to play devil's advocate, if that were to happen, we believe that the STRIDE data itself is strong enough that would keep it on the EU marketplace for patients to get.

Our next question comes from Danielle Brill with Raymond James.

This is Alex on for Danielle. Could you remind us where the Angelman gene therapy program stands. Based on my notes, I'm looking at, I think you were originally targeting 2021 for the IND filing. So we're just curious what needs to be done there to get that IND filed?

Yes. Sure. Matt, you want to go through this a little bit?

Yes, absolutely. Hi, Alex. We previously shared that we were in the process of completing the gating tox work to move the program into the clinic. We did have a number of delays related to COVID in terms of both its impact on our CDMOs and manufacturing CMOs as well as the global shortage of nonhuman primates. I'm happy to report that we are moving forward now and are continuing our work towards having the IND or CTA ready to get that program into the clinic in the near future.

Our next question comes from Robyn Karnauskas with Truist Securities.

Again, congrats on all the progress, and you've got a lot reading out this year. I just want to -- I actually had a question on MDS in the Bio-e platform, it's going to be coming into focus. Can you just talk a little bit more about the MIT-E trial a little bit? I know you're enrolling patients that are -- have to have a lot of seizures within 14 days, the run-in period within the last month. Like what percentage of the population with MDS that you talk about, kind of would fit that bucket? And can you help us understand like what are any of the risks of the placebo-controlled portion with the range of patients that you're enrolling in age? How variable is it that these patients have like a group of seizures and they thought and then they go on again. Just help us to understand try to think about that study? And then the second question just on the terrible -- lot of mid-caps and platforms are on sale and thoughts on like your interest in doing M&A in this state?

So Matt, do you want to take the mitochondrial disease associated seizures?

Yes, sure. Hi, Robyn. So the mitochondrial disease associated seizures, let me just talk a little bit about them for a second. So, about 40% to 50% of all patients with mitochondrial disease have seizures as an important part of their pathology. And these seizures in mitochondrial disease patients tend to be refractory to traditional antiepileptics. That's because the energetic pathways that are disturbed in mitochondrial disease that cause these seizures are not addressed by the existing antiepileptic therapies. In fact, many antiepileptic therapies exacerbate the energetic defects that are positive of seizures in these patients. So whatever potential benefit they would have from the pure antiepileptic mechanisms of these drugs are offset by the exacerbation of the pathology causing seizures. So that's a long way of saying these kids who have seizures have a lot of them. They're severe, they're hot source of a high degree of morbidity, recurrent infections and are typically a cause of early mortality in these patients. Over the course of the development of vatiquinone, we've studied vatiquinone in a number of different mitochondrial disease subtypes. So, these subtypes are a result of different mutations in the mitochondrial or nuclear genome responsible for mitochondrial structure and function. And what we've seen across in many different subtypes we've treated is that there's a consistent treatment effect with regards to seizure pathology, including the reduction of seizure frequency, the disruption of refractory status epilepticus, reduction in disease-related morbidity, as well in some cases where we -- there is robust enough natural history data, we've been able to demonstrate a protective effect with regard to mortality. And so coming into the MIT-E study, we really base this study on what we've seen to date in terms of effects on seizure, seizure related morbidity and quality of life in…

So Robyn, I think with your question on what's in this space, there's a fair amount of M&A and you wanted us to comment on. Is that what you do...

I think there's -- everyone ask this question because of the low valuations for a lot of mid-caps, what people are interested in or if they're interested in acquiring certain platforms, it's just sort of like gauging your interest given the tape and whether or not you think there's a high likelihood that we'll see more M&A in the back half of the year. I think that's the key question. We're all asking it on every earnings call.

I see. I guess my view on that a little bit is M&A is always a complicated question on people's capabilities on what their pipeline is like, what their commercial capabilities are. Could someone do it better? Do people want to -- are they building or are they looking to act relative to their goals to become acquired? So, it's sort of hard to say. I mean, obviously, there's a lot of interest in treating these diseases. But it's hard for me to say there's going to be more or less, I just think obviously, there's a lot of interest in these types of drugs.

Our next question comes from Judah Frommer with Credit Suisse.

Just a couple on 518 as you kind of head toward beginning enrollment there. Just maybe any feedback from the sites as you get them set up on kind of receptivity to route of administration maybe versus other Huntington's programs that are in the clinic? How important that is to patients and doctors and also to type tradability given lack of specificity toward mutant Huntington? And then also, you do have a functional endpoint in there as a secondary kind of how are you thinking about potential to show anything there given the length of the study?

Sure. I think -- from the first part, I think, obviously, with the orally bioavailable small molecule, the route administration, the ease of giving it is just a huge advantage, right? I mean, the fact is that it's easy to take, you could do it at home. But I think beyond that, the real advantage comes from that, you know that it gets distributed, it passes the blood brain barrier, it gets into the brain, it gets all over every tissue. You can measure the pharmacokinetics. So you know the precise concentration of free drug that's both in the plasma, that's also in the CSF. So you know -- there's so much you know and that when you know that when you get it into the CSF, you know the level that's within the whole brain. Then you can measure not only the level of reduction that occurs in the plasma. So you know there's a very good response as a consequence of that. And then you know, obviously, as a consequence of that, you could see the effect of -- on biomarkers like the HTT protein directly. So, there's so much you could learn and you're confident of it's getting to the right place and that when you see it's in the right place, it's all over the brain, so you know that it has an effect all over. So, everyone is really happy about that. I think both sites, patients, physicians are incredibly enthusiastic on learning that. And then from our point of view, we put the package together to look at not only the reduction of the HTT levels, but also to be able to look at biomarkers on NFL, HTT, MRI, with the volume or within the brain and changes that occur like that. And then see if -- while it's not long enough, if you have outcome measures, but then to be able, based on what the -- what's been said by Novartis and others that we're at least in a position for if it is possible to get accelerated approval to be able to do it on that and then be able to do long-term trials as a consequence for outcome measures for clinical benefit. So, I think we're in a real good position to look at reduction of protein levels, reduction of CSF of the HTT and the CSF, the neurofilament, preservation of blood, brain volume. I think that's a pretty good package.

That concludes today's question-and-answer session. I'd like to turn the call back to Dr. Stuart Peltz for closing remarks.

Okay. So first of all, let me thank you all for joining us today, so that we can discuss the progress that we've made really up to date to 2021. I'm really proud of the team that really continue to execute on the goals as we continue to grow. And I think we've made significant progress across our research and development pipeline with many upcoming milestones in 2022. And we're driven to bring these medicines to patients around the globe and that I anticipate that 2022 is going to be a real transformative year for us and we look forward to the progress and updates that we'll give you. So thank you for joining.

This concludes today's conference call. Thank you for participating. You may now disconnect.