PTC Therapeutics, Inc. (PTCT) Q2 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Ellen Cavaleri, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us to discuss PTC Therapeutics' Second Quarter 2025 Corporate Update and Financial Results. I'm joined today by our Chief Executive Officer, Dr. Matthew Klein; our Chief Business Officer, Eric Pauwels; and our Chief Financial Officer, Pierre Gravier. Today's call will include forward-looking statements based on our current expectations. These statements are subject to certain risks and uncertainties, and actual results may differ materially. Please review the slide posted on our Investor Relations website in conjunction with the call, which contains information about our forward-looking statements and our most recent quarterly report on Form 10-Q and annual report on Form 10-K filed with the SEC, as well as our other SEC filings for a detailed description of applicable risks and uncertainties that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. Additionally, 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 are available in today's earnings release. I will now pass the call over to our CEO, Dr. Matthew Klein.

Thank you all for joining today. I'm pleased to share results from another strong quarter, highlighted by the first approvals for Sephience for the treatment of children and adults with PKU. We expect Sephience to be the foundational product for PTC's sustainable growth and path to profitability. In the second quarter, we again had solid revenue performance with total revenue of $179 million, with continued contributions from our DMD franchise, including in Europe. Following the nonrenewal of the Translarna conditional marketing authorization, we have reached agreements with about half of European countries based on the unprecedented use of Article 117 to provide paid Translarna product. For the remainder of 2025, we expect to be able to maintain approximately 25% of European revenue from prior to authorization nonrenewal. The highlight of the quarter was the EU approval of Sephience in late June with a broad label inclusive of all disease subtypes and age groups. And last week, we announced FDA approval of Sephience with similar broad labeling for patients aged 1 month and above. Based on the strong Sephience data package and the significant unmet need for PKU patients, Sephience is positioned to become the new standard of care for children and adults living with PKU. As we have discussed, we believe the Sephience revenue opportunity in the U.S. exceeds $1 billion, and our global customer-facing teams are excited to bring this therapy to all those that could benefit. We initiated the European launch in Germany in mid-July and are leveraging early access mechanisms in other European countries while formal pricing and reimbursement discussions proceed. In the U.S., we plan to ship the first commercial drug to patients within the next 2 weeks and look forward to a robust early launch. Eric will provide further details on the Sephience launches shortly. Given the potential significant revenue opportunity for Sephience, PTC has reached an agreement to purchase the annual global net sales payment obligation of 8% to 12% that was part of the acquisition of Censa Pharmaceuticals in 2020. PTC will pay the participating Censa rights holders approximately $225 million upfront and additional future sales milestones for approximately 90% of our net sales payment obligation. We view this transaction as a constructive use of our cash reserves given the expected value creation based on the transaction terms. Now with the FDA approval of Sephience, we have 2 NDAs that remain under FDA review for vatiquinone and Translarna. For the vatiquinone NDA for Friedreich's ataxia, a late cycle meeting was held in July. At that meeting, FDA shared that the application is still under active review and confirmed they do not plan to hold an advisory committee meeting. Turning to the PTC518 or votoplam Huntington's disease program. Following the positive Phase II PIVOT-HD study results, we continue to collaborate with Novartis on next steps for votoplam and aim to meet with FDA in the fourth quarter to discuss the Phase III trial study design and potential accelerated approval pathway. Finally, we remain in a very strong financial position, closing the quarter with approximately $1.99 billion in cash, allowing us to fully support all planned commercial and R&D initiatives, engage in strategic business development activities and achieve cash flow breakeven without the need for additional capital. I will now turn the call over to Eric to discuss our commercial performance and our Sephience global launch. Eric?

Thanks, Matt. Our global customer-facing teams performed well again this quarter, achieving $118 million in second quarter revenue from our marketed products, and we are excited to have initiated the global launch of Sephience following approvals in both Europe and the U.S. We will review details of our Sephience launch efforts shortly. We generated $96 million revenue in the second quarter from our global DMD franchise. As Matt mentioned, despite the nonrenewal of the EU conditional license, we have continued supplying paid Translarna to several European countries, leveraging mechanisms specific to each country in accordance with Article 117. Outside of Europe, we continue to generate Translarna revenue, including in Latin America, the Commonwealth of Independent States, the Middle East and North Africa. Our experienced U.S. neurology team is ready to bring Translarna to nonsense mutation DMD patients following potential FDA approval. Now turning to Emflaza. As expected, with additional generic entrants, we have seen continued market erosion. However, we continue to see meaningful revenue and our PTC Cares team has done an outstanding job ensuring new patient starts and maintaining high levels of brand loyalty for Emflaza with the DMD community. Shifting to Tegsedi and Waylivra in Latin America. We continue to identify and treat new patients in the region and have received group purchase orders in Brazil. For Upstaza and KEBILIDI, we are pleased that new AADC patients have been treated across multiple regions and our commercial efforts remain focused on where patients are identified, including those countries with AADC deficiency founder effects. We expect a steady cadence of AADC patients to be treated in the U.S., Europe, Asia Pacific and Latin America throughout 2025. Turning now to Sephience for PKU. Our world-class commercial team is in place to successfully launch Sephience following the U.S. and European approvals. We are well positioned to leverage our core launch capabilities in rare disease with more than a decade of commercial experience to drive early and rapid Sephience adoption. We initiated the first launch in Germany in mid-July and engaged key PKU centers in the country. We are very pleased with the initial feedback from health care providers and the first patients have already received commercial therapy. Our teams in Europe have identified other key markets where paid early access programs are available for Sephience, and we'll leverage them as soon as possible. We are thrilled with the recent FDA approval of Sephience, which we believe is well positioned to redefine the standard of care for PKU. In the U.S., our dedicated team is already calling on health care providers in 104 PKU centers of excellence who account for more than 80% of PKU claims and treat the highest concentration of U.S. patients, including those diagnosed at birth, children, adolescents and adults. The clinical data support the ability of Sephience to address the full spectrum of the approximately 17,000 patients in the U.S. In terms of sequencing, our initial focus is on the patients who recently failed or are not well controlled on existing therapies, and those who could be switched from existing oral therapies who are seeking greater Phe reduction. We will then progress to treatment- naive patients who could benefit from a new effective treatment. Our payer meetings continue to be productive following presentations of the clinical data and the value proposition of Sephience from our market access and medical affairs teams. We have actively engaged with key commercial, Medicaid and Medicare payers covering over 220 million lives and have received positive feedback on access and coverage of Sephience with minimal restrictions. We are equally excited about the anticipated regulatory approvals of Sephience in Japan and Brazil before the end of the year, building on the launch momentum that has already begun in the U.S. and Europe. Initial feedback from health care providers worldwide is highly positive, and we look forward to continuing to provide updates on the Sephience global trajectory in the next several quarters. In addition to our team's focus on the Sephience launch, we have also been preparing for the potential launch of vatiquinone in the U.S. Our experienced teams in neurology are ready to launch the product and address the significant unmet need for both children under 16 who currently have no approved therapy, as well as adults with FA who may benefit from a well-tolerated and effective therapy. With that, I will now turn the call over to Pierre for a financial update. Pierre?

Thanks, Eric. I will begin by reiterating our excitement for the approval of Sephience, a pivotal milestone both for patients and for PTC. As we discussed, Sephience has the potential to become the standard of care for PKU and will serve as the cornerstone product driving our path to profitability. Today, we announced the purchase of Sephience' annual global net sales payment obligation owed to Censa. This strategic transaction is accretive based on the terms we negotiated and underscores our confidence in the market opportunity. I'll now share the financial highlights of our second quarter of 2025. Beginning with top line results. Total product, collaboration and royalty revenue for the second quarter was $179 million, including DMD franchise revenue of $96 million. Starting with the DMD franchise. Translarna net product revenue in the quarter was $59 million and Emflaza net product revenue was $36 million. For Evrysdi, Roche achieved second quarter global revenue of approximately USD 559 million, resulting in royalty revenue of $58 million for PTC. For the second quarter of 2025, non-GAAP R&D expense was $104 million, excluding $9 million in noncash stock-based compensation expense compared to $123 million for the second quarter of 2024, excluding $9 million in noncash stock-based compensation expense. Non-GAAP SG&A expense was $76 million for the second quarter of 2025, excluding $10 million in noncash stock-based compensation expense compared to $60 million for the second quarter of 2024, excluding $10 million in noncash stock-based compensation expense. Cash, cash equivalents and marketable securities totaled $1,989 million as of June 30, 2025, compared to $1,140 million as of December 31, 2024. Our strong financial position provides us with the necessary resources to seamlessly execute on our strategy, successfully launch all our new commercial products globally, achieve all our anticipated milestones, as well as advance our novel R&D efforts and accelerate our trajectory towards cash flow breakeven and profitability. Furthermore, this strong foundation provides us with the ability to explore business development opportunities to enhance our commercial portfolio and pipeline for long-term growth. I will now turn the call over to the operator for Q&A. Operator?

[Operator Instructions] And now we're going to take our first question, and it comes from the line of Kristen Kluska from Cantor Fitzgerald.

Congrats on a great quarter. I have 2. The first is just on Huntington's. What is going to be on your wish list related to the trial design you and your partners' talk with the FDA? And will you have any additional data to share with them at that time? And then for Translarna in Europe, under this Article 117, which I'm less familiar with, do you have to renew this every year? Should we be expecting this 25% revenues on a go-forward basis?

Thank you very much for the questions, Kristen. On the first question, so look, I think this is exactly as we said we hope to be doing with our partner, Novartis, which is once we completed the readout of PIVOT-HD, engage with the FDA to discuss 2 things: one, the design of the efficacy trial based on some of the key learnings that we talked about from PIVOT-HD, as well as discuss pathways to accelerated approval, whether that's on the existing data we've shared thus far with PIVOT-HD or the additional data that we could continue to collect as the open-label extension is ongoing. As we talked about, we would fully expect the efficacy trial to be a large trial as has been done previously with Huntington's disease. And as you know, there's a fairly finite universe of endpoints and certain factors that could go into discussion. So I would say our wish list is to come away with alignment for what the key elements of that efficacy trial will be. And obviously, we have confidence that, that should happen as well as clarity on the data that we'll need, whether it's the data we have at hand now, showing long-term cUHDRS changes NfL, some of the other biomarker changes to support accelerated approval or whether there are going to be additional data that we could use once we get further into the open-label extension. On your second question, I would -- ARC-117 is something that was referenced in the European Commission's adoption of the CHMP opinion. And actually, there's 2 articles. There's Article 117 and Article 5, which together -- which referenced specific things in the European Commission doctrines. And what they allowed together is individual countries to allow Translarna to still be commercially available despite the fact that the license has not been renewed. So it's basically an umbrella or a directive that each individual country can elect to leverage or not based on individual country-by-country mechanisms that they have. And as we said, we've seen about half the countries look -- leverage that availability. And that's, again, based on a lot of the feedback we've gotten from patients and physicians who have clearly communicated the benefits they've observed with Translarna as well as the lack of alternative therapies. And so, in countries where possible, we've been able to provide paid drug. Other countries have elected not to do it. And so we're about half now. We've said that we expect to be able to maintain about 25% revenue through the rest of 2025. And I think it's going to -- we're going to see how different countries, different contracts and things play out over time. 117 doesn't need to be renewed. It will be at the discretion of individual countries about renewing and in some countries, for example, Italy has publicized they're allowing for 6 months and then it will be revisited. Other countries have not given a time line. So it's going to be very variable, which is why we've said we expect the 25% for the remainder of the year. But look, this is all an incredible upside given the context of the situation when you consider that the license wasn't renewed. And again, this is really based on a lot of the feedback from the patients and the physicians about the clear perceived benefits of Translarna. And we're, one, happy to be able to still harvest revenue from Europe, but two, really happy to be able to still provide this therapy to patients who really need it.

And the question comes from the line of Tazeen Ahmad from Bank of America Securities.

For Sephience, Matt, can you give us clarity on the metrics that we should expect to see in the early innings of the launch, presumably on the 3Q call? And then can you clarify if you've already started receiving scripts? And if so, do you have any kind of sense on what types of patients are receiving scripts first?

Thank you for the question, Tazeen. I think it's early days, as you say, and I think we're happy with how things have gone, and in particular, what we've seen in the public, a lot of social media and a lot of patients talking about how happy they are. This is data that they wish for and hoped for. And just a lot of positive feedback, which, one, is incredibly gratifying and two, is really consistent with our understanding of the significant unmet need that Sephience can fill. Eric, do you want to go into a little more detail on Tazeen 's 2 questions on the early -- on the metrics we plan to share in early dynamics?

Yes. Thanks for the question, Tazeen. I mean, as we said earlier, the metrics we're going to continually provide on a quarterly basis will be prescriptions, patient start forms, the number of commercial patients that are currently available on treatment. We'll also provide information regarding health care provider, as well as payer sort of prescribing dynamics and coverage dynamics. We'll also provide you some color on the rollout and the international flavor of Sephience, where we -- which countries we will actually be bringing on board. So there's a number of key metrics here. But more importantly, I think you're going to see this as -- it's still early days, but you're going to see the metrics really centered around the number of prescriptions and the number of health care providers who have prescribed.

On the scripts received so far, if any?

Yes. And just to provide you some -- we're thrilled that we've already gotten prescriptions in the U.S. We have patient start forms that came in on the very first day. And we -- the feedback from health care providers has been excellent so far. As I mentioned, we also have our first patients on commercial therapy in Europe already. The feedback from physicians has been very positive. Our teams have been promoting the benefits of Sephience immediately. The characteristics that we've seen, and again, it's very early days, it kind of matches up very closely to what we've seen. Physicians are looking to bring in patients who are poorly controlled or have failed. Many of them have interest in switching patients to get better feed control, and we've also seen prescriptions for naive patients.

And it comes from the line of Brian Cheng from JPMorgan.

Two from us. It's probably still in the early days to understand how contracting and the eventual net pricing for Sephience is. But I know that you already have been in touch with a sizable portion of commercial payers out there. So just curious if you had some feedback that can help us to think through the level of contracting. And then I have a quick follow-up.

Yes. Thanks, Brian, for the question. We've been having really good meetings with payers so far. As I mentioned, it's been really dozens of payers and quite a good mix between both commercial, Medicaid and Medicare. We continue to have these meetings now post launch. And I think really more than anything else, it's going as well as what we expected. We see right now that the clinical profile of Sephience is being very well received. Payers already see that it's highly differentiated, and there's a high willingness to cover the product. Importantly, very minimal restrictions, prior authorizations to the label and only a few have said that we would implement step edits. So overall, minimal restrictions. Regarding your question around contracting, we haven't gotten -- it's still early days. We haven't gotten into that at this point in time. We don't necessarily see the need at this point in time either to contract with payers. And as I said, we will be providing metrics around gross to net further down the line as we get the payer mix, which we anticipate at this point in time to be 65% commercial and approximately 35% to be Medicaid or Medicare. So at this point in time, it's a bit early. But overall, I think it's going as well as we expect it to go.

Great. And then maybe one for Pierre. Is there any meaningful inventory build that we should think through? And also, how should we also think about any changes in terms of the SG&A line that we should expect for the Sephience launch?

Yes. Thanks for the question, Brian. As we mentioned, we are leveraging our existing infrastructure. So there will be no additional OpEx. And then in terms of inventory, everything is ready, right, just to be clear. So all the patients have what they need.

Yes. And I would just add -- I can add a little more color to that, Pierre. In the context of inventory, we plan to ship to patients sometime around mid-August. And clearly, we were working with 2 specialty pharmacies that will carry just-in-time inventory levels. So it's not really something that we're looking at in terms of building. But what we are doing right now is anticipating that demand based on the number of start forms that we've already started to accumulate. As we've mentioned, there has been incredible excitement around the launch of Sephience and the community now is really poised to begin that. So we'll be monitoring that very closely. But again, Brian, we're not really going to be building inventory at all. We're just going to be managing accordingly with our specialty pharmacies.

And it comes from the line of Judah Frommer from Morgan Stanley.

Congrats on the update. I guess, can you provide a little more color on the decision to allocate capital to these prior Censa shareholders? Is there anything you can share in terms of kind of hurdles for your decisions to do that on kind of a returns basis relative to maybe allocating that capital somewhere else, business development on potentially earlier-stage assets or just investing further in your pipeline?

Thanks for the question, Judah. As we talked about, we have accumulated and built significant cash reserves. We closed the second quarter with almost $2 billion still in cash on the balance sheet. And what we said we're going to use that for. We're going to deploy it strategically. We're going to support our commercial programs, our R&D program -- pipeline programs as well as be thoughtful about business development and corporate developments. And I would put this under the heading of a strategic deployment of our capital. Pierre, do you want to give a little bit more detail on the thinking around this and why it was a strategic deployment of capital?

Yes, absolutely. Look, given the revenue potential of Sephience and our ability to achieve $1 billion plus of revenues in the U.S. alone, this is a thoughtful use of our cash. We said that we will be disciplined. We will focus on creative value transaction, and that's exactly how we thought about it. And this is a very high return on capital. So that's how we thought about it. Furthermore, as Matt mentioned, we have a very strong financial position that will not preclude us for additional opportunity for BD or pipeline investments or own R&D efforts. We have a lot of firepower remaining.

Okay. Great. And then just on Huntington's, is there anything you can share on interactions you've had with Novartis since providing the update?

Judah, I would say that the teams have worked very well together. There's a clear shared sense of urgency in getting this program forward and getting a therapy to patients that could be beneficial. There's a shared enthusiasm for the mechanism of Huntington lowering and the positive attributes of votoplam or PTC518 being an oral small molecule splicing agent. And I think what we've done in the past few weeks is really take 2 very aligned teams, work together and make sure that we take the next necessary important step, which is meeting with the FDA to align on the efficacy trial design as well as understanding with the data we have at hand and what additional data we could have, what the potential pathway for accelerated approval looks like.

And it comes from the line of Kelly Shi from Jefferies.

Congrats on the progress. Maybe first on PKU launch, specifically on how to timely capture those who are under care and recently failed other therapies, how soon could they get Sephience? And will there be some wait time between -- for logistical reasons? Also, on the sales guidance for full year '25 remain the same from Q1 from $650 million to $800 million. Curious if this number include any revenues from PKU launch? And also, I have a follow-up.

Thank you for the questions, Kelly. I'll start and then pass to Eric and Pierre. First, we've talked about the ability to provide benefit to the full spectrum of PKU patients. But in terms of sequencing that there are a relatively large number of patients who are at these specialty centers, 104 specialty centers that we talked about, who are either on existing therapy -- oral therapies and can certainly benefit from one that could provide greater lowering and Phe greater diet liberalization, others who've recently tried and failed and others who may be in recent contact with the centers and therapy naive. So it's that group of patients that we've talked about that we see as the first that we would be targeting in terms of sequence. And then, of course, those who may be in less contact with the center as time goes on. But there's a large number, as we shared on the call last week, somewhere around 7,000 patients fit into that first wave of the sequence. Eric, do you want to talk a little bit about wait times and how quickly patients can get therapy?

Yes, Kelly, thanks for the question. I think really, that's going to depend. Again, it's very early days, and part of that is going to be based on the patient's profile. If they've already been controlled on current therapies and would like to switch to Sephience, then it may take a little bit longer. However, most of these patients that Matt described are either poorly controlled or they failed. And some of them are looking for better Phe control. If there's documentation, usually, that will go much quicker through the payer. So for us, we anticipate that, that first wave will already have previous documentation, and we will be able to, if you will, address many of the prior authorizations and if required, some of the step edits very quickly. We have a lot of experience with that over the last 8.5 years. Our teams have been dealing with that with prednisone and Emflaza. And the good news here is Sephience and the activity of Sephience and Phe can be measured very quickly. So we can get to the point of prescription and dispense relatively quickly, particularly in that group that Matt mentioned, that initial wave of close to 7,000 patients.

Maybe just quickly on FA, could you share any comments on your latest engagements with the regulatory agency and also, your confidence level for the PDUFA given it's only 12 days away?

Yes. Thanks, Kelly. I can answer that and then I can pass it to Pierre to answer your question about guidance because I don't think we got to that one. So on assay, we had a late cycle meeting a few weeks ago. It was a very constructive meeting. We were told by the agency that they're still actively reviewing the application. And so, we're just waiting for any additional information and questions that we can address as they continue their review despite it being so close to PDUFA. Pierre, did you just want to comment on guidance and the inputs?

Yes. Guidance, $650 million to $800 million, as we discussed, the bulk of it is our existing product portfolio and obviously includes new product launch as well. There are still some uncertainties, as you can imagine, on Emflaza, for instance, that's probably how you derive the $650 million at the bottom end and the $800 million will be dependent on how fast we ramp up and the upside potential there as well.

And it comes from the line of Brian Abrahams from RBC Capital Markets.

This is Kevin on for Brian. I just had a couple on Sephience in the EU. Just maybe can you talk about what uptake is expected in other EU countries with early access that you've identified? And sort of more generally, how we should think about the EU opportunity? And then I believe you mentioned no G&A impact given these launches. Does that -- I'm assuming that also applies to the EU as well?

Kevin, thanks for the questions. I'll just tackle the second one first and let Eric talk about European dynamics. No, we don't expect any OpEx changes for Sephience. It's all currently covered. As Pierre said, we're leveraging our existing infrastructure. Similarly, for vatiquinone, if approved and launch there, the OpEx is already baked in as we'll be leveraging our existing neurology commercial infrastructure in the U.S. Eric, do you want to talk a little bit about what we're seeing or expecting in Europe beyond the Germany early access program?

Yes. Thanks for the question, Kevin. The European opportunity will be very significant. And of course, Germany is the second largest market in the world. So for us, it's incredibly important to get off to a really good start and establish, if you will, the pricing corridor. We're going to be leveraging a number of key markets in Europe that have early access programs and then patient programs. Those are typically the Southern European markets as well as Central and Eastern European markets, and there are some in the North. We would anticipate somewhere between 5 to about up to 10 markets that could potentially contribute during the course of this year and through the first half of next year. And the European opportunity will be incredibly important if we can maintain and we will maintain a very narrow pricing corridor. But in addition to that, we also expect approval in Japan and Brazil and coming on board there, we will also add some of the momentum that we've built from the U.S. and Europe. So these are 2 also incredibly important markets to our growth in the future.

And the question comes from the line of Ellie Merle from UBS.

This is Tejas on for Ellie. I know you mentioned you had some scripts coming in. Have you guys seen any approvals yet for coverage? I know it's ahead of any drug getting shipped, but just anything anecdotal? And then a little bit on the ex U.S. opportunity. How does the distribution of patients work in some of these countries? Are they concentrated at major centers? Or are they a bit more spread out through these countries?

Thanks for the questions, Tejas. On the first one, it's still early days to answer that question. So it's nothing more to add on that. But Eric, do you want to talk a little bit about distribution of patients in Europe?

Yes. And just going back on the insurance, we're in the process. We're just in a few days. And so, as you can understand, we're going through the process of insurance verification in the U.S. That process price was lifted, insurance verification and then co-pay assistance, that takes a few days for all that to happen. But as we progress, we'll be providing a little bit more color there. In terms of major centers of excellence, in fact, I think Germany is a great example where we were able through our compassionate use program to target more than half of the centers in Germany that actually oversee close to 8,000 patients. And with that, our compassionate use program was actually rolled out and has been incredibly important in converting some of those patients immediately. Most of these patients are seen in centers of excellence, very much like the U.S. where you have a patient that's diagnosed at birth. So they're actually moved immediately into that center and followed throughout adolescents and then their adulthood. So we see in Europe a very high concentration in the major cities, and it's really not as diffuse. It's actually far more centralized.

I guess just with those compassionate use programs, just around the world, how many patients are on them, including in the U.S.? And how fast do you think you could convert those?

Yes, Tejas, this was a very specific early access program in Germany that we launched because for 2 reasons. One, with the pricing -- with listing of the price initiating the German launch, those patients pretty quickly turn right over to commercial and also was an opportunity for us to get the drug in the hands of those physicians at the concentrated centers. So we did not institute a global early access program. This was a specific decision made in Germany or a global compassionate use program. This is a specific decision made in Germany due to the dynamics of the launch, listing of the price and the 6 months of free pricing you get as soon as you initiate the launch.

And the question comes from the line of Geoff Meacham from Citigroup.

This is Jarwei on for Geoff. Two questions. Just to your earlier comment on the early scripts coming in, could you provide some color on the cadence and types of patients coming in? Have these patients lined up more with their scheduled visits? Or have these early patients been coming in voluntarily for a medication switch? And then second question, based on your latest conversations with FDA on vatiquinone, what has been your sense on the agency stance on a broad label for all age groups? And is there a possibility that the agency could perceive demonstration of benefit on certain mFAR subgroups to be more appropriate for certain portions of the patient population? And on that topic of labeling, have those discussions begun?

Thanks for the question, Jarwei. On the first question, look, it's still early days. And what we can tell you is that, there's no rules or patterns we see other than we know there are a lot of patients who are really interested in getting on drug really quickly. We're seeing a lot in social media patients saying we're writing our doctors right away. We're trying to -- we're going to get in as quickly as possible. And again, a lot of the prescription decisions and prescription writing at these centers can be MDs, could be the doctors, could be nurse practitioners. And so, it's really kind of a mix. We've also talked about a lot of centers, particularly in the U.S. having waitlist of patients. So there's -- they can be working off that as well. So there's no clear rules, but exactly as we expected, you're seeing a broad swath of patients wanting to get access to drug and physicians wanting to provide a drug for all those different segments, as Eric has talked about. On vatiquinone, we would expect, based on our conversations that the label will be inclusive of all age groups, while the MOVE-FA study was focused in pediatric and adolescent patients for whom there's an unmet need without approved therapies now. We have data in adults in that study as well that are consistent with what we've seen in the younger patients as well as data from our longer-term extension studies that were provided in terms of confirmatory evidence, including data from an earlier study where we see in adults, both ambulatory and non-ambulatory, significant effect in terms of slowing of disease progression over years. So taken together, the data package clearly supports benefit and certainly safety in the full age spectrum and full spectrum of disease severity for FA. We have not gone formally into labeling negotiations yet at this point.

And the question comes from the line of Joon Lee from Truist.

When you talk to the FDA for the Huntington's, my guess is that it will be with CDER, but CBER is also looking at AMT-130 for Huntington's and is expected to run their decision on accelerated approval path this quarter. So given the same disease indication with the decision by CBER, is that any sort of regulatory precedent that may impact CDER and your program? And also quickly, do you still owe royalties to Shiratori?

Thanks for the questions, Joon. On the first question, we're obviously watching with great interest on the FDA interactions that CBER is having around the gene therapy. Look, we've talked a lot about there's potential benefits of the gene therapy administered to one part of the brain through direct administration to lower HTT. If there's benefits there, we think that reads through incredibly well to lowering Huntington protein throughout the whole brain and to be able to do that in a durable way and also allowing for dose titration and monitoring peripherally of HTT lowering. We've always thought from a development standpoint, there are very good read- throughs. And certainly on the regulatory side, I think there has been increasing desire by the agency to have alignment, particularly when it comes to their views on rare disease, whether it's in CBER or CDER. Obviously, there have been a lot of changes in FDA recently. But I think that concept and that desire to have alignment remains. So with that in mind, we're clearly very interested in understanding what the pathway could look like as we shared at the PIVOT-HD readout in May, we were very happy to demonstrate the statistically significant benefit after 2 years relative to a well-matched natural history cohort from the ENROLL-HD database, as well as the signals of dose-dependent longer NfL after 24 months. So, obviously, we're going to be very keen to see the FDA's position with regard to using the natural history comparator with [ CH ] to address. Obviously, we have the additional benefit of being able to provide the peripheral Huntington lowering biomarker data as well, which is clearly an important piece of evidence that we're having a favorable effect on what matters most of the disease that toxic Huntington protein. And then, Pierre, do you want to comment on remaining royalties for Shiratori?

Yes, we still owe low single-digit royalty to Shiratori.

And it comes from the line of Sami Corwin from William Blair.

Congrats on the progress. I was curious if you could provide an update on the Translarna review in the U.S. I think the last we heard there have been some clinical site inspections. And then given your strong balance sheet and revenue projections, what are your thoughts on additional BD opportunities or early pipeline investments?

Thanks for the question, Sami. On Translarna, that NDA remains under active review, as we mentioned that we had had the clinical site inspections completed in the spring. We have got IRs in the early part of the summer that we were able to easily address. And so, now obviously, without the PDUFA date, it's hard to know exactly when the agency will reach an action, but we have had back and forth in terms of IRs in addition to the inspections as we previously talked about. In terms of the balance sheet, clearly, we still remain with significant firepower and look to do strategic BDs. Pierre, do you want to just talk a little bit how we've been thinking about the potential BD opportunities and timing?

Yes. As Matt mentioned, we have a significant financial position, and we're actively looking at BD opportunities. We have a global infrastructure. We know how to get drug approved globally, and we know how to obviously commercialize this drug worldwide. And so, these are -- so we're looking at assets that we could cast it in our existing infrastructure. Furthermore, we're also looking at pipeline assets that will complement our R&D portfolio, and that's how we're thinking about BD opportunities. And we demonstrated today that we will be disciplined and that we will do transactions that create value for our shareholders.

A kind of follow-up question on the BD. Is there a sweet spot in terms of the stage of clinical development that you're looking at?

Yes. I think we're looking pretty broadly, Sami. I think a lot -- certainly on the commercial side, we'll see what we have in terms of all the regulatory decisions, and that will dictate whether we're busy doing multiple launches or whether we'll have capacity -- commercial capacity with our existing infrastructure to bring something and to continue to develop -- to drive top line revenue. We have a number of things coming from our research platforms coming into the clinic. So it's going to be a matter of looking for an opportunity that can complement what we have already very nicely. But clearly, it will be in our sweet spot of rare disease, could be CNS, could be non-CNS. I think it's going to be something that would have to be the right opportunity that we felt could complement our existing programs and expertise.

And it comes from the line of Joseph Thome from TD Cowen.

This is Peyton on for Joe. So kind of asking a little bit about the vatiquinone scenarios. Saying that it is approved around the PDUFA date, how quickly could you launch therapy? And is there a particular population that you would go after? And then kind of along with that, would you then move it to try and get a registration in Europe? And then in the case that you do not get it approved, would you be open to running another trial? If you can walk us through that as well, that would be great.

So, Peyton, our focus right now is on potential success. So I would say that our teams are in position and ready and the infrastructure is built and we'd be ready to launch this right away. As we talked about with there out being any approved drugs for patients under 16, we clearly see that as the first place that we would go. We are proud of having a long-standing collaboration with the Friedreich's ataxia centers in the U.S., many that treat pediatric patients and treat pediatric and adult patients. So I think it will be relatively -- it will be a very exciting opportunity for us, and we'd be ready to go day 1.

And then if there wasn't success, would you consider running another trial? Or would you shelter the program?

Yes. As I said, we're thinking about success right now. We believe that this is a -- we believe that vatiquinone provides as the data show, an effective therapy, not only for children who need a safe and effective therapy, but also for adults who would benefit from having a safe, well-tolerated and effective treatment option. That's what we believe the data show, and which is what supported the NDA submission. And we can expect that we have a commitment to patients that we will always look to try to support.

And it comes from the line of Luke Herrmann from Baird.

Just 2 quick regulatory ones for me. First, a follow-up on the vatiquinone review. Has FDA given you any sort of indication around when labeling discussions could potentially get underway? And then second, on Translarna, again, has FDA given you sort of runway or time line for when an action date could be put in place?

Yes. So, Luke, on your first question, there was no formal timetable as we said, the late cycle meeting was just a few weeks ago, and there are still some questions about that we were talking to them about at the time and no specific time line for next steps was given. As you know, I think things are quite busy at FDA these days. And in terms of the Translarna, and there will not be a PDUFA date issued just given the particulars of that application that it was a resubmission of an NDA that was received the CRL following a submission following an RTF. Anyway, just the legacy of this going back many, many years, it is not going to be as part of the PDUFA program. So PDUFA date will not be given.

And it comes from the line of Paul Choi from Goldman Sachs.

This is Daniel on for Paul. We're curious about like what's the pricing assumption after the 6-month free drug program ends in Germany?

Thanks for the question, Daniel. Eric, do you want to talk about our global pricing strategy?

Yes. Thanks for the question, Daniel. Look, right now, we're working to provide a very narrow pricing corridor. We've already announced the price in the U.S. and in Germany. They're very close to each other. In fact, we anticipate with the launch of Japan and other European markets to maintain that very narrow pricing corridor. Regarding your specific question, it's a process in Germany. The AMNOG process provides you free pricing. And then after that 6 months later, we will be in negotiations following a medical benefit assessment, and we'll be supporting that with all of the clinical data to help differentiate for all the same reasons why patients in Germany should actually obtain Sephience, particularly those who are poorly controlled who have failed. And I think the real-world data over the next 6 months and the support from our key opinion leaders and centers are going to help us with that benefit assessment. So stay tuned. This is a process that will take at least 12 months during the whole process for us to work. And I think we're very optimistic about maintaining a very close and narrow pricing corridor.

And the question comes from the line of Gena Wang from Barclays.

I have one regarding Sephience. Just want to confirm that there is no IP protection and it will be rely on the orphan designation market exclusivity in U.S., Europe and Japan. And I missed the beginning part of the call, just apologize if already asked. So should we start to see revenue contribution in 3Q '25? And then second question is very quickly regarding the vatiquinone in FAE (sic) [ FA ]. I know you mentioned that late cycle review was discussed a few weeks ago. And just wondering if you can provide a little bit more color what was discussed during that late cycle review. And then any label discussion come up during the discussion or afterwards?

Thank you, Gena. Let me correct the first question. We have guided IP to 2039. We have a polymorph patent that goes out to 2038 that we believe will provide -- it's a combination of matter of polymorph that we believe can support protection through 2038 and then conservatively estimating at least a year of patent term extension beyond that to 2039. And of course, we're continuing to work to expand, as we always do, the IP portfolio to see if we can take protection even further beyond 2039. And that applies, not only to the U.S., the 2039 guidance, but to the key markets globally. We have -- we will expect there to be revenue in Q3 from Sephience as we have already begun delivering commercial product in Germany, and we've gotten patient start forms in the U.S. and expect to be able to ship Sephience to patients in the next couple of weeks. We've said that there's -- in the wide guidance that there is some new product revenue baked in there and that upper end of the guidance that stays $800 million is allowing for the potential of upside from new products. In terms of vatiquinone in the late cycle meeting was a relatively brief meeting that -- where we discussed the -- mainly focused on discussion of the evidence where they are in their review and their assurances that they're actually still working through the review. Not surprisingly, one of the main questions of the review is the fact that upright stability wasn't prespecified as a primary endpoint, would that support persuasiveness of evidence of effect, which along with the confirmatory evidence could support approval. Of course, they acknowledged and we're all aware of their recent guidance that others have received that upright stability can itself be an efficacy endpoint and has -- it will be used as a primary endpoint, for example, in the SKYCLARYS pediatric trial, which I think supports the FDA's evolving understanding that upright stability is the most relevant measurement of efficacy in ambulatory pediatric and adolescent patients. As we said, we've not had any labeling discussions beyond anything that was discussed in the late cycle meeting at this time.

And it comes from the line of Joseph Schwartz from Leerink Partners.

This is Jenny on for Joe. I just have a few follow-ups on vatiquinone. First, has the FDA given any indication that the review has been delayed and/or may be delayed due to staffing issues? We know it's kind of crazy over there. And then if approved, should we be looking at the SKYCLARYS launch as a template? And if not, how should we be thinking about that? And do you see any potential for combinations of SKYCLARYS and vatiquinone in FA patients?

Thanks for the question, Jenny. There was no discussion of not meeting time lines. I'm not sure there would be one even if there was a chance that could happen. I think we all understand that there has been a lot of changes over at FDA and a lot of work. And certainly, we've seen examples as recently as this week of programs from the neurology division, maybe not getting -- meeting certain time lines. But look, we look forward to continuing to work collaboratively with the division and getting to what we hope will be a positive outcome on time and if not on time, when the time can be. As we talked about, we see the launch dynamics being quite different for a number of reasons. I can let Eric go into that. Do you want to talk a bit about...

Yes. I think we have an experienced team already that have been calling for the last 8.5 years in pediatric neurology. So we've already profiled all the key centers specific to FA. And we know the prescribers. We know through claims data where they are and the high unmet needs plus the clinical differentiation. So we're already very well poised to launch and begin the process like we have with Sephience to get patient start forms on day 1. Our teams, not only are experienced in this, but we're looking at a number of different things, which include, not only the pediatric, but a number of those patients who are adults who have failed on SKYCLARYS and some of them are poorly controlled, and there's still quite a bit of naive patients. So all in all, I think the opportunity is very significant, and our team is experienced and ready to go on day 1.

Yes. And then to your other -- just add to that also, we would see -- we wouldn't expect there to be any monitoring. And obviously, the pediatric patients have a much different dynamic than adults do. So I think we would see the launch dynamics quite different for that reason. And in terms of combination therapy, look, I think it's something that people talk about. I think those close to the FA community have always believed rightfully so that Friedreich's ataxia is going to be optimally managed with the cocktail of therapies like any other complex disorder. So we certainly imagine that they'd be interested in looking at combining both vatiquinone and SKYCLARYS.

Excuse me, Jenny, any further questions?

No, that's it.

Dear speakers, there are no further questions. I would now like to hand the conference over to your speaker, Chief Executive Officer, Dr. Matthew Klein. Please go ahead.

Thank you all again for joining the call today. We're excited to have had another strong quarter. We're still seeing continued contributions, meaningful contributions from our DMD franchise, which is great because we now can have that in hand as we now embark on the future, which is the launch of Sephience, and we're incredibly excited how things are going in the early days and all indicators we're seeing from everywhere in the world that this will meet our expectations of being our foundational product for building PTC going forward. So thank you all again, and have a great evening.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.