PTC Therapeutics, Inc. (PTCT) Q1 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to PTC Therapeutics' First Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference 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' First Quarter 2026 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 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. We are off to a terrific start to 2026. We had a record quarter of product revenue, led by the continued strong momentum of the Sephience launch as well as contributions from our mature products. First quarter total revenue was $273 million, including $226 million of product revenue. With this revenue performance, we are raising our 2026 full-year product revenue guidance to $750 million to $850 million, with expected total revenue of $1.08 billion to $1.18 billion. I'll begin by providing an update on the Sephience global launch. In the first quarter, the launch continued at a strong pace, with all signs indicating sustained growth and breadth of uptake. First quarter Sephience global revenue was $125 million, representing 36% quarter-over-quarter growth with U.S. revenue of $112 million. As of March 31, we had 1,244 commercial patients globally. And in the U.S., we surpassed the 1,500 patient start or mark in the quarter with a consistent cadence of prescription starts averaging 140 per month over the past few months. We see this robust cadence of U.S. starts continuing for the foreseeable future. In addition to the sustained momentum in the U.S., growth is accelerating internationally through both commercial access and paid early access programs. We had our first Sephience sale in Japan in late March, ahead of schedule and remain on plan to have commercial sales in up to 30 countries by year-end. I'm incredibly proud of the execution of our global teams. Within 9 months, we have gained marketing authorization in the U.S., Europe, Japan, Brazil and several other countries and are well positioned to serve the global addressable market of over 58,000 children and adults with PKU, making Sephience a blockbuster rare disease product. We continue to see broad adoption across age groups, disease severities and treatment histories, including treatment-naive patients and those who have not responded to existing therapies. We are also seeing rapid penetration into centers of excellence in the U.S., with now over 90% of centers having prescribed Sephience. Persistence remains strong, supported by high refill rates, underscoring the long-term commercial opportunity. Feedback from patients, their families and health care providers continues to be positive. We have seen social media reports of meaningful reductions in phenylalanine and the ability to liberalize diet and enjoy certain foods for the first time. We also continue to gather, present and publish real-world evidence on success of diet liberalization as well as effects on other aspects of disease, including mood and cognition. I'm also pleased to report that our manuscript describing Sephience's novel differentiated dual mechanism of action has been accepted for publication. This manuscript nicely details how the dual mechanism of action supports the ability of Sephience to provide greater benefit to those who have a response to BH4, as well as the potential for Sephience to deliver benefit to those individuals with more severe mutations not responsive to BH4, typically associated with classical PKU. Based on Sephience's highly differentiated efficacy and safety profile, the strong start to the launch as well as our ability to maintain momentum in the U.S. and accelerate growth globally, we remain confident in the $2 billion-plus global commercial opportunity for Sephience. Turning to the votoplam Huntington's disease program. Last week, we reported positive top line results from the 24-month interim analysis of the PIVOT-HD long-term extension study. At 24 months, votoplam demonstrated dose-dependent slowing of disease progression on cUHDRS with an average slowing of 52% relative to a matched natural history cohort at the 10-milligram dose level in participants with Stage 2 disease. In addition, the safety profile continues to be favorable across doses and disease stages. These data support that the significant dose-dependent HTT lowering observed in the 12-month PIVOT-HD study are manifesting in dose-dependent clinical benefit over long-term treatment. In addition, the interim study results give us increased confidence for the success of the now enrolling global Phase III INVEST-HD study funded and led by our partner, Novartis. INVEST-HD has a target enrollment of approximately 770 individuals with early symptomatic disease who will be randomized 3 to 2 to receive votoplam 10 milligrams or placebo. The study also includes an interim analysis. The PTC and Novartis teams are still reviewing the data from the Phase II long-term extension interim readout and will discuss potential plans to meet with regulatory authorities. For vatiquinone, we had a Type C meeting with FDA in April to discuss the design of a new trial to provide additional data to support NDA resubmission. Based both on written comments and meeting discussion, we are moving forward with an open-label study with a matched natural history control group from the robust FACOMS disease registry. The study will have a target enrollment of approximately 120 individuals with Friedreich's ataxia from age 7 to 21. The primary endpoint will be a change in mFARS from baseline to 24 months. We look forward to initiating this study within the next few months and believe the design of the study, along with our learnings from previous studies, significantly increases the probability of success. Turning to our earlier-stage pipeline. In the second quarter, we expect to initiate the Phase I study of PTC612, our oral NLRP3 inhibitor. While the majority of the study will be conducted in healthy volunteers, we will look to include a dosing cohort of individuals with elevated inflammatory biomarkers to enable an early assessment of PK/PD. As we have discussed, PTC612 benchmarks favorably to other NLRP3 inhibitors in terms of potency. We expect to develop PTC612 for inflammatory lung disorders, where there is overlap between the NLRP3 inflammasome and disease pathology. We also continue to make good progress on our other pipeline programs, including our wholly owned MSH3 oral splicing program for HD and DM1. The MSH3 program for HD could complement the HTT reduction approach of the votoplam program as well as be particularly suited to target the juvenile HD population. We are also making good progress on several programs from our Inflammation and Ferroptosis platform, including our Phase II-ready PTC844 DHODH program, ferroptosis Parkinson's disease program and NRF2 activator program. Overall, we're off to a great start in 2026. We look forward to the sustained momentum of the Sephience global launch over the course of 2026 and continued favorable developments in our R&D portfolio. Our strong cash position enables us to continue to support all current programs, as well as to look for accretive business development opportunities that can leverage the strength of our global rare disease commercial engine to accelerate short- and intermediate-term growth. I will now turn the call over to Eric to provide a commercial update, including more details on the Sephience launch. Eric?

Thanks, Matt. To start, we are very proud of our commercial team's performance as they continue to execute on the launch of Sephience with excellence. Our outstanding performance in the first quarter reached our highest level of product revenue in the history of the company and has laid the foundation for continued success in 2026. The global launch of Sephience continues to accelerate, driven by continued strong growth in the U.S. and growing contributions internationally. First quarter Sephience revenue was $125 million, including $112 million in the U.S. and $13 million internationally, representing 36% growth from the fourth quarter of 2025. We continue to see growth with new prescriptions in all PKU patient segments, irrespective of age and severity and are seeing the rapid adoption of Sephience as we expand our global footprint with our experienced teams. Since the initial launches in the U.S. and Germany last summer and as of March 31, 2026, our commercial operations have generated over 2,200 prescriptions worldwide. In the first quarter, we continue to see momentum in the U.S. in terms of new patient starts and low discontinuation rates. As Matt mentioned, uptake in the U.S. continues to be broad with over 90% of U.S. PKU centers of excellence prescribing Sephience. We are also seeing broad adoption across the full spectrum of disease severities, including classical patients. We continue to see new patients with various treatment histories, including treatment-naive adults, past treatment failures and patient switches. Refill rates remain strong and discontinuation rates remain low in the low double digits, reinforcing our confidence in the sustained launch momentum. U.S. payer dynamics for Sephience remain favorable. Most commercial and government provider policies are in place, covering over 2/3 of the U.S. population with limited restrictions and flexible criteria for reauthorization. The AMPLIFY head-to-head data demonstrating superior clinical benefits of Sephience versus BH4 continues to strengthen the value proposition with payers, further supporting broad access in the U.S. and ongoing pricing and reimbursement discussions in Europe. Our Sephience launch momentum continues to build globally with the launch in Japan, which has progressed ahead of plan. We had our first commercial patients and revenue recorded in Q1, which was earlier than expected, and we are very pleased with the positive feedback from Japanese health care providers and patients in the early stages of the launch. We also secured Sephience regulatory approval in Brazil, where our local team is fully engaged in creating awareness for access via named patient programs while we finalize pricing in the second half of the year. In Germany, we're seeing good progress, with centers of excellence accelerating new patient starts, including adults, while we finalize pricing and reimbursement this summer. In other European markets, health technology assessment dossiers are being actively reviewed with paid early access programs already in place, while pricing and negotiations advance in France, Italy, Spain and other key European markets. While the U.S. remains a key near-term growth driver, we expect international revenue to continue to ramp with commercial patients in up to 30 countries by year-end. Sephience represents a significant global commercial opportunity long term. Its differentiated efficacy and safety profile and dual mechanism of action support broad adoption and positions Sephience as a potential standard of care, which gives us confidence to achieve multi-billion peak revenue. Going forward, as the Sephience business grows and diversifies globally, the launch metrics we provide will include only global revenue and the number of active patients on Sephience treatment worldwide. We believe these metrics will best illustrate the long-term trajectory of Sephience growth. Now turning to our DMD franchise. We delivered solid first growth performance despite significant headwinds. Translarna revenue was driven by a large government purchase order in Brazil, and we continue to support nonsense mutation DMD patients on therapy across Europe. In the U.S., Emflaza generated $22 million in quarterly revenue despite multi-generic erosion, supported by strong brand loyalty and high-touch patient services. Our experienced global commercial team have successfully executed multiple rare disease product launches for over a decade. Looking ahead, we are confident in our ability to drive strong performance and continued growth in building Sephience into a blockbuster brand for PTC. With that, I will now turn the call over to Pierre for a financial update. Pierre?

Thank you, Eric. I will now share the financial highlights of our first quarter of 2026. Beginning with top line results, total product and royalty revenue for the first quarter was $273 million and total net product revenue across the commercial portfolio was $226 million compared to $153 million for the first quarter of 2025, representing 47% growth. First quarter 2026 product revenue includes Sephience net product revenue of $125 million and DMD franchise revenue of $81 million. Translarna net product revenue was $59 million, including a large one-time government purchase order. And Emflaza net product revenue was $22 million. For Evrysdi, Roche achieved first quarter global revenue of approximately USD 585 million, resulting in royalty revenue of $47 million. As a reminder, we continue to report Evrysdi royalty revenue in our financial statements. However, there are no cash proceeds to PTC. For the first quarter of 2026, non-GAAP R&D expense was $90 million, excluding $11 million in non-cash, stock-based compensation expense compared to $100 million for the first quarter of 2025, excluding $9 million in non-cash, stock-based compensation expense. Non-GAAP SG&A expense was $74 million for the first quarter of 2026, excluding $12 million in non-cash, stock-based compensation expense compared to $72 million for the first quarter of 2025, excluding $9 million in non-cash, stock-based compensation expense. Cash, cash equivalents and marketable securities totaled $1.89 billion as of March 31, 2026, compared to $1.95 billion as of December 31, 2025. Our strong financial position supports continued development of our commercial and R&D portfolios and preserves flexibility for strategic and disciplined business development to further enhance long-term growth. And I will now turn the call over to the operator for Q&A.

[Operator Instructions] Our first question coming from the line of Kristen Kluska with Cantor Fitzgerald.

Congrats on the record quarter for the company. Now that you have a couple of quarters under your belt for Sephience, I was hoping you can give us a little bit more color and clarity about patterns that are emerging in the real world around making sure that patients and physicians are working conservatively in measuring Phe and slowly increasing the protein uptake and how that's been resonating in terms of compliance, long-term utilization and also how these patients that are staying on therapy, is it entirely driven by diet liberalization? Or are there in other instances, other factors that are playing a key role?

Kristen, thanks for the questions. Look, I think we're incredibly excited about the continued launch momentum we're seeing. We think we're in a stage now of consistent growth in the U.S. of acceleration ex-U.S., which is what's going to make this such a valuable product for us. And as a global launch, this is exactly what we've been working for and exactly as we expected. In terms of dynamics now a couple of quarters in, in general, I think, again, we're seeing this consistent theme of breadth, breadth of uptake across all patient segments, including those naive patients who many thought were lost to follow-up. It was really just a matter of being able to offer them a safe and potentially effective therapy, full age range, babies up to, as we talked about octogenarians and broad uptake across centers of excellence in the U.S. as well as outside the U.S. In terms of folks staying on drug, it's a combination of factors. Of course, the ability for individuals on the drug to liberalize their diet and try foods for the first time, the things we're seeing all over social media are so incredibly impactful and so motivating not only for those individuals to stay on drug, but it's also continuing to increase the enthusiasm and desire of others to get on drug. I think that's really been an effective way in this launch that the demand keeps growing in the patient communities, which is great to see. We have, of course, worked very hard with the centers where, as you know, there's dietitians on staff. They're an important part of PKU management even when an individual is not on therapy. And so this idea of making sure that when someone gets on the drug that there's first evidence of Phe lowering and getting into that range where you can liberalize diet and then proceeding slowly so that we're set up for success. I'll also add, we're hearing a lot about other benefits that have been really important for patients. And what's really interesting about this is for a lot of the prescribers and the patients, it's not necessarily about a number. It's about being able to liberalize diet. And others are saying, I just feel better. I have improved anxiety, improved cognition, less brain fog. And that's really also some of the impactful things that clients has been able to do. And as Eric mentioned in his script and I did as well, these are things that we're codifying now in real-world evidence papers as well as presentations. We have a number of them coming up at the SSIEM in September, talking about all these different ways in which benefit is provided to patients and really supporting, again, not only persistent and in some cases, growing demand, but also adherence, which remains very high.

And our next question coming from the line of Tazeen Ahmad with Bank of America.

I have a couple. So when you talk about the cadence of around 140 new start forms, you've been careful to make sure you say this is consistent. So, do you expect this trend to continue? Or do you think this could accelerate, especially in the U.S. over the course of the coming year? And then can you also comment on discontinuation? So, you've talked about that a little bit, but for patients who are discontinuing, what's the main reason?

Tazeen, thanks for the questions. So in terms of the start forms, when we talk about the consistency of about 140 per month, that's going back to the later parts of 2025. As expected coming into the new year around the holidays, there was a bit of a decrease. It's completely expected with seasonal effects and all the things that everyone knows about. We had one of the strongest months in March actually. We're seeing that continued momentum into April. So, we think that the 140 probably represents a reasonable run rate for the foreseeable future, knowing that there'll probably be ups and downs and things, and just the typical dynamics one sees in a launch, essentially being early on. But we believe that's a very solid number, and we're excited about being able to have those starts added to already a very substantial base of patients, which are maintained on the drug, which, of course, is a key to driving the revenue opportunity over time. I'll make a brief comment about discontinuations and then turn it over to Eric for a bit more color on this. As he mentioned on the call, we're in low double digits at this point in the launch. We're starting to approach steady state. I think what's really encouraging is that we know that the earliest individuals put on Sephience were tended to be those not on a therapy, the more challenging patients, those therapy-naive adults. And so to be able to have this kind of adherence rate in the context of the most challenging patients coming on first is obviously incredibly encouraging for the strength and growth of the launch over time. Eric, do you want to provide a little more color on what we're seeing?

Yes. Thanks for the question. In fact, I think we're very pleased because in the very first phase of the launch, we would call that an accelerated phase. The vast majority of these patients were the ones who actually in the real world were failed or had poorly controlled based on previous treatments. What we're seeing right now is that even that hard-to-treat group has benefited really well, and we have low double-digit discontinuations. And in fact, the amount of discontinuations is even lower for clinical reasons in terms of efficacy or safety. Some of the reasons are obviously because maybe patients don't respond or safety reasons, but it's very low. The others are just patient choice. And that could be a variety of different reasons. But overall, when you think about the number of patients that have come in, we're building this very large base of patients. And as Matt said, it's an accelerated but a robust cadence. And as we build that, part of what we're going to do is sustain the momentum and continue to grow and maintain high refill rates and work very diligently on discontinuations and making sure they're very low.

And our next question coming from the line of Ben Burnett with Wells Fargo.

I wanted to ask about kind of what you're seeing in terms of average weight or average price. And as you kind of add Japan and some of these ex-U.S. territories to the mix, would you foresee any changes to kind of the long-term sort of average price estimate?

Ben, look, we said at the beginning, we expected average weight to be around 45 kilos and our studies had shown that we'd be somewhere in the 45 to 50 range. And I think we're very much in that ballpark. And as you alluded to, the international dynamics play into that as well, right? We have some adults who came on. We said that the average age now is around 17 or so globally, but different rates of patients in different regions in different areas. We're seeing very young patients be put on first, especially in some of the early access programs where there's a preference to get infants on drug because there's a keen concern for the neuroprotective effects or the neurodevelopment protective effects that we see with the drug. And in an early access scheme, those are the kinds of things that could get someone on paid drug ahead of formal pricing and reimbursement. So, I'd say overall, we're still in the ballpark we thought we'd be in. We anticipate that for a while. But obviously, we'll continue to watch that dynamic as the launch plays out.

Our next question coming from the line of Eliana Merle with Barclays.

Just a follow-up question on how to think about the ex-U.S. opportunity and the near and long term for Sephience? I guess, specifically, how we should think about the pricing for Sephience and then how we should think about the cadence of ex-U.S. sales over the course of the year?

Yes. Thanks, Ellie. And as we talked about, we've always been very intent on maintaining a rigid pricing corridor that went into our launch strategy. I'll let Eric detail that and talk a little bit about how we're seeing price globally and the cadence of contribution ex-U.S.

Yes. I think very importantly, the international business right now will be a very important future contributor to the revenues. However, the U.S. will still be the main driver at this point for this year. We know that each country that comes on incrementally up to 30 countries that we anticipate this year will be incrementally very important, but the U.S. is still our main driver this year. Japan, we got off to an early start. We're very pleased. And we're seeing a lot of the launch dynamics there. And we've been able to maintain pricing and reimbursement. We were able in Japan to lock that down in Q1 and finalize pricing, and it will be locked down for the next 10 years during orphan exclusivity. Currently, we have pricing in HTA assessments in dossiers in Europe and where the HTAs are being assessed and pricing and reimbursement discussions would be finalized towards the second half of this year and early parts of next year. I think it's safe to say that the U.S. will be, again, the near-term driver in terms of revenue and will continue to play a very important role. However, over time, each one of these countries will be adding incrementally revenue in patients, and that will be important for the long term.

And our next question coming from the line of Brian Cheng with JPMorgan Chase.

Can you hear me?

Yes.

Congrats on the quarter. Matt, you sounded very confident in the 140 patient start forms per month run rate continuing and you see growth accelerating in your prepared remarks. You mentioned over 90% of the centers have now prescribed Sephience. So, what is holding back the remaining 10% of the centers? Just curious if you can talk a little bit about the phenotype of the center of excellence that's holding out. Is it just a matter of reaching out to those doctors and increase the touch points? Or is there something else that we should also consider?

Thanks, Brian. I'll start by saying that we are very bullish on the opportunity in the U.S. and globally, right? This is a true global launch, and we're at a point to be able to add, we believe, 140 starts per month on top of already a very strong base is why we believe we're going to reach the very promising revenue potential we think is out there for us. So, we're incredibly excited about that and everything we're seeing continues to support our confidence there. I'll let Eric talk about the center dynamics, but I'll also say that we're now sitting here after the second full quarter of a rare disease launch. The fact that we have prescriptions from over 90% of the centers for us is the headline. That's incredible progress, thanks to all the work our team did in market development and establishing relationships with the centers. And as you can imagine, these tend to be the larger centers where we are. But I'll let Eric talk about the dynamic. But I just want to emphasize that we're incredibly proud to have that degree of penetration at this early part of the launch. Eric?

Yes. This is a very strong penetration when you think about -- and the centers right now that are giving are obviously some of the ones that are in the large metropolitan areas. These are what I would call the Tier 1s who have already written many prescriptions and continue the breadth and depth of the prescriptions, particularly the new starts. But keep in mind, we're also -- these centers also have many patients on therapy. So, we're working not only to get new starts, but maintain many of these patients and get those refill rates high, make sure discontinuations are low. When we look at just the remaining 10% or so, which are just a small handful, these are typically what we see with any centers. They're late adopters. They're probably smaller centers. We call on all of them, by the way. And in many cases, they're just not staffed adequately and they're not really proactive as much with patients. So when we go and we look at where the bulk of our prescriptions are coming from, 90% in those big metropolitan centers. They're working very hard right now. They're very strong and robust cadence from those centers.

Our next question coming from the line of Judah Frommer with Morgan Stanley.

Congrats on the progress here. Two quick ones for us. I guess, first, just on the guidance update. Can you separate out that one-time Translarna order from the rest of the guidance raise? And then just on vatiquinone, any indication within that meeting or written feedback as to how prior data would be treated, specifically subcomponents of the mFARS? Or should we think about this as kind of starting from scratch in a late-stage trial?

Judah, so on your first question, just looking at overall guidance, we came into the year and we said, look, there's a couple of things we know for sure. We are incredibly confident in the growth trajectory and strength of the Sephience launch, and we believe the vast majority of product revenue will come from Sephience. We also know that there's uncertainty in the mature products, specifically the DMD franchise. We have, in Translarna, business in Europe, which we're continuing to maintain without a license. So, that longevity is hard to predict. And we know that we're facing headwinds in some of the countries like Brazil, like Russia, where we get large purchase orders. On the Emflaza side, we're already seeing in Q1, we are down from Q4 last year. There's 10 generics in the market. And while there's been no major price drops, we do expect erosion to continue. So, we basically increased guidance based on the overall performance of the quarter. And as we go forward in the year and understand better the trajectory of the science and understand what we get from other government orders for Translarna as well as the Emflaza erosion, we'll then be in a situation to raise or narrow guidance whatever is appropriate based on the dynamics that we're seeing. On the Friedreich's ataxia side, look, I think we were excited to have gotten the suggestion from FDA itself that the additional data to support NDA resubmission could come from a natural history controlled study. Obviously, the safety profile of vatiquinone is very favorable and very well established. There's no need to have a placebo-controlled study to identify new safety signals. And the data from MOVE-FA do provide a signal of efficacy. So, this is really -- we view this as a way to get additional data that will support the already established data set of safety as well as signs of benefit, particularly in younger patients. Now, I'll say that the endpoint selection here is really a function of duration of the study. The natural history of FA in young individuals has been very well characterized now in a number of publications. And it's clear that over the shorter period of time, about 12, up to maybe 18 months that the upright stability subscale is likely the most sensitive component of the mFARS rating scale to capture progression and therefore, treatment benefit. We're now doing a 24-month study, and the literature clearly shows that as you get to 18 months out to 24 months, you start seeing other components of the mFARS scale capture progression and therefore, capable of capturing treatment effect. We actually saw this in MOVE-FA as well. Once we got to 18 months out to 24, we started seeing upper limb, lower limb start to contribute. So, this is really a question of choosing an endpoint that's most appropriate, yes, to our population, but also importantly, to the duration of the study of 24 months.

And our next question coming from the line of Geoff Meacham with Citigroup.

This is Jarwei on for Jeff. Maybe just thinking about the OUS opportunity. Maybe a 2-parter. First, if you can help quantify or help paint the picture for how the early Japan launch pattern has looked? Have you guys seen a similar uptick pattern from the early days of the U.S. initial launch? And then also, I guess, as a follow-up to that, the second part. The U.S. launch has seen great success with using social media as a leverage to gain awareness among patients. And I guess, can we expect similar success in other geographies just given maybe there are different patient to physician dynamics versus stateside? And then third question, if I may, just real quick. Given vatiquinone's open-label study, the plans will be open label, I guess, how sensitive is mFARS to potential protocol deviations or data?

Jarwei, thanks for the questions. Let me take the third one first, the second one second, then I'll turn it over to Eric to handle the second and the first. Okay. Third one, look, I think the -- I'll say in general, FDA has very well thought out guidance if you're going to use a natural history comparator group as a control arm. And I think we know that the agency has used the FACOMS, the FA registry before to support regulatory decision-making in public forum. They held that out as a model of a patient registry where you can get quality data because that very well characterizes and captures disease progression. Obviously, we had to set up the treatment portion of the study with vatiquinone to match a lot of the dynamics in the natural history registry, including timing of assessments and such. Obviously, again, in selecting natural history cohort from the registry, we're going to be sure to make sure that they do have the appropriate endpoint information at the key time points, clearly baseline, clearly 24 months and 12 months in the middle. So, these are all things that we are thinking of ahead of time. We've included in the protocol, the statistical analysis plan to make sure that this we can get as robust a comparison as possible. And again, I think we're afforded -- we have the luxury that the FA community has developed such a robust and rigorously collected and protocolized natural history registry for the key endpoints that are relevant for clinical trials. Your second question was about social media being so important in the U.S. and what's going on outside the U.S. Look, I think it's different use in different places. I think the important thing is that globally, there's well-aggregated communities that communicate with each other and there's global communities as well. So there's the flow of information not only in the U.S., what happens in the U.S., it goes outside the U.S. And social media is global. And then we also know that there's communities in other countries as well where there's sharing of information, whether that's on social media or other form. Let me turn it over to Eric to talk a little bit about the Japan dynamics and if he wants to add anything to the question about social media.

Our Japanese launch is really off to a really great start, again, ahead of schedule. And we believe that this will be an important and significant opportunity for us. Keep in mind that we actually did get approval in December, and we were promoting and profiling a lot of the centers there. But in Q1, we actually did finalize the pricing and reimbursement, which, as I mentioned, has been locked in now with no price decreases for the next 10 years due to orphan exclusivity and no referencing. So, that's incredibly important for us in terms of that sustained business. What we've seen in the early stages of the launch in Japan, and keep in mind, this is just early stages, is that there is some similarities to the U.S. There are patients who are seeking treatment that have failed or uncontrolled, but we are also pleasantly surprised that there are adults and naive patients that have come in. So, so far, we've seen a lot of the similar, what I would call, accelerated dynamics that we saw in the U.S., in Japan as well.

And our next question coming from the line of Brian Abrahams with RBC Capital Markets.

This is Kevin on for Brian. Maybe just on Sephience and payer dynamics there. I know you mentioned sort of increasing coverage there across commercial and government. Can you talk maybe a little bit about any -- the types of step edits that you're seeing or maybe you had anticipated at this point? And then just what percentage of prescriptions, if you can comment, are sort of currently facing prior authorization delays and maybe how you see that metric evolving from here?

Thanks, Kevin, for the questions. Eric, do you want to take those payer dynamics and then any challenges in authorization?

Yes. Absolutely. I mean, payer dynamics have been as expected. Prior authorizations are typically in place based on the label. And so most, if not all payers are requiring, obviously, PKU assessment and understanding requirements that are within the label. These are very simple and easy to get through. And right now, we've seen the vast majority of commercial payers as well as government payers have already written their policies. And it's really been very favorable with very few limitations, including step edits, very few step edits. And of course, the vast majority of patients have already some kind of documented history, either they've been on Kuvan or Palynziq, or they have actually failed on any of those therapies. So, prior exposure is incredibly important for moving them through. Even it does require step edits, it's something that we can measure very quickly and sometimes days and in just a few weeks and provide that information to insurers. So right now, everything is going according to plan, and we see very few limitations. And in fact, our time from PSF to dispense has improved continuously because of those policies now being in place. In terms of answering your question about the split, we've historically said it's a little over 2/3, 1/3. It's holding very well. In fact, in the last quarter, we had a slight tick up towards more commercial. We anticipate around 65% to 35%, being 65% commercial payers right now that are being covered.

And our next question coming from the line of Yifan Xu with Jefferies.

This is Yifan for Faisal. Congratulations on the quarter. Can you maybe provide some additional color on the PKU patient split? And for the current quarter, like what percentage of revenue like contribution from mild to moderate patients and what percentage for from classic PKU patients? And for your $2 billion peak sales guidance, how is that split?

So Yifan, in terms of the breakdown, we don't collect specifically whether you're classical, moderate or mild. What we have seen from the beginning and are continuing to see is up to 1/3 of the patients are treatment naive, and those tend to be the more classical patients who were never tried on other therapies that were not thought to provide benefit to classical patients. And then again, the remainder are between those who have tried and failed existing therapies or those who are switching from existing therapies. But I think we're seeing more tried and failed as we've heard from centers that at first, there's a priority to get those who are not currently on a therapy on to a therapy. I think the important part of this is the feedback we are receiving and what we're seeing, which is that the more severe patients, as we expected, they're benefiting from Sephience. We have a number of these patients, which are showing significant reductions in Phe, diet liberalization. And so what we're seeing is consistency of effect across moderate, classical, mild, which is really, really encouraging. And obviously, we're doing a lot of work with the mechanism of action paper to support why that's the case, the fact that there is this independent chaperone effect that provides benefit in the more severe mutations and obviously, as well getting the physicians to put together these real-world evidence studies that clearly document how these more severe patients and those therapy-naive patients, those that are thought to have lost follow-up are coming in and having important responses, including Phe reduction, including the ability to liberalize diet and then other benefits like we talked about in terms of cognition and anxiety and other things. Eric, do you want to talk a little bit how we're thinking about the -- we said $2 billion plus, multi-billion. Those are the words we're using. So, I wouldn't limit it just to $2 billion. But let Eric, do you want to talk a bit about how we think the splits can and contributions can play out?

I think the contributions are going to be consistent, with the U.S. being, again, the main driver longer term. So, we understand that the U.S. will play a very, very important role. However, we've always said that there are 58,000 addressable patients worldwide. That means that out of the 17,000 to 20,000 in the U.S., there's 2/3 of them that are available in many other markets. We'll continue to work very hard to ensure that there's a narrow pricing corridor, that access and reimbursement is available to as many of these countries. And as we bring these 30 countries -- up to 30 countries along, we're going to continue to add patients internationally as well as grow the business in the U.S. One of the most important things is getting new patients in, but also building the base and maintaining that base. That's what we do in rare disease. And it's important that we continue to not only add new patients and add new countries, but also maintain patients with all the services, education and program that we can and at the same time, minimize any kind of discontinuation and maximize adherence and compliance. So overall, that gives us the confidence that we can actually build this blockbuster brand in multiple countries, and it will be truly a global launch.

And our next question coming from the line of Jacob Ormes with TD Cowen.

This is Jacob on for Joseph Thome at TD Cowen. I just wanted to ask, so regarding Sephience and time it takes for patients to get on drug, we're wondering if you had any insights on how that might differ based on geography?

Jacob, thanks for the question. I don't think you mean geography being country-wide within the U.S. or outside the U.S. I'll just say, in general, in the U.S., we're continuing, as Eric said, to get folks on fairly quickly. Some take longer, some take shorter, but on average, we're still seeing very, very rapid throughput. Eric, do you want to talk a little bit about the global dynamics and in particular, why we say going forward, we're going to really focus on global patients given the complexities of the global dynamic?

Yes. And it's a good question given the fact that the complexity is now with multiple countries and everyone has their own unique systems for access. What we see in the U.S. is dispenses that can be just in a matter of a couple of weeks. And in some cases, just a few days depending on the insurance, the policy and the requirements. In Germany and Japan, likewise, it's just a few days because the products are either reimbursed and/or listed and available in the pharmacies. As we get to the complexities of named patient programs in Southern Europe or Latin America or Middle East and others, the times can be days, weeks or it can be months. And each country is unique and different. But the most important metric is the prescription because our teams are really behind working with health care providers and centers and patients to ensure those prescriptions turn into commercial therapy and move those as quickly as possible. So it's very hard to tell you that there's an average out there, but certainly, named patient programs can take sometimes weeks or months in timing. But in other cases, once pricing and reimbursement is finalized, you'll see a much more accelerated and rapid adoption. So, that's why we believe going back to those metrics of providing global revenue as well as the number of active patients will be an important metric to measuring our ability to get to that multibillion-dollar status.

And our next question coming from the line of Luke Herrmann with Baird.

I had 2. First on Sephience. A follow-up on U.S. reimbursement. Is there any sort of bolus of patients who haven't been able to get reimbursed yet that you think can be in the future? And then secondly, on vatiquinone, on the open-label study, can you just walk us through how you're treating Skyclarys use here? And do patients need to wash out for how long? Any details there would be helpful.

Luke, so let me take the second question first, and then I'll let Eric talk a little bit about the favorable payer dynamics that we're continuing to see. So on vatiquinone, one of the key things in this study was to make sure that if you're going to use a natural history comparator group that matches or that the treated patients would match the natural history, if you will. It has to match both ways. And given that there's not been an extensive experience with individuals on Skyclarys for a prolonged period of time, we can't allow concomitant use of Skyclarys as we've done in the open-label extension of MOVE-FA, for example. So, there are going to be some provisions in the protocol for those who've been on it for a short amount of time and have washed out of it, but we can't allow concomitant use or long-term priority use of Skyclarys because we have to make sure that the natural history data we're using can accurately capture any other concomitant therapies. And again, Skyclarys is relatively new. So the natural history data don't have that well captured. And again, this is just an example. It's a really good question and a really good example of all of the thought, planning and alignment with FDA that's needed if we're going to go ahead and prospectively identify a matched natural history cohort and use that to support the resubmission. Eric, do you want to talk a little bit about on the payer dynamics and questions about any areas we're seeing challenges?

Yes. In fact, there have been very few limitations. Things are going as planned with U.S. payers. In fact, I think what we're seeing right now is very few of these patients right now are being denied. If they are, they're not hard denials. It's to work through medical necessity. We do not have a bolus, or a very large number of patients that are either on patient assistance programs or bridge. And if we do, we work very carefully to ensure that we bridge them to commercial therapy in matters of days or weeks. So, there isn't a very significant number at all. There's a smaller number. And we've been very pleased so far that the time to dispense is becoming more and more efficient, and we're doing that. We're seeing scripts being filled in a matter of a couple of weeks or less. And reauthorizations have not been onerous at all. They've been basically reauthorizations for 6 to 12 months. And we see that medical assessment of the physician and the patient along with Phe and -- Phe lowering and diet liberalization are enough for that patient to continue to get therapy. So overall, I would say the simple answer is the vast majority of these patients are actually on treatment.

Our next question coming from the line of Joseph Schwartz with Leerink Partners.

This is Jenny on for Joe. Maybe just one on the longer-term PKU competitive setup with oral genotypes independent SLC approaches now in late-stage trials, how are you thinking about the parts of the PKU market where Sephience is most defensible long term? Is the differentiation around Phe lowering, diet liberalization or physician comfort with this BH4 pathway or something else? And relatedly, are there any patient segments where you think future oral competition could expand the treated pool rather than directly compete with Sephience?

Yes. Thanks, Jenny. While we acknowledge there's other therapies in late-stage development for adults, the Phase III study being done in adults, look, we don't -- we're not worried about a significant threat here. We have a significant first-mover advantage. We're very well penetrated into the market. And the general view in the marketplace, i.e., amongst the prescribers is they would be looking for something to add on to Sephience and not replace Sephience. And of course, in PKU, this is already a community where they're used to cocktail approaches. Their whole life is about supplements and mixing and matching different things. So the idea of being able to add something on to Sephience to potentially even get even better benefit, whether that could be complete diet liberalization, Phe lowering -- additional Phe lowering in more severe cases. So, again, I think the view here is very much as it being complementary. Of course, if there are segments of patients, the small numbers who have tried Sephience and have not had the success with it in terms of efficacy. We know it doesn't work for every patient. Clearly, we see those folks getting tried on the other kidney-directed drugs. But I think this is why when we talk about what we've been able to do in the launch, the penetration we have, this is becoming first-line therapy and standard of care. And anything that comes later would obviously be added on top of it or would be for those who aren't being served by Sephience.

And our next question coming from the line of Paul Choi with Goldman Sachs.

I wanted to also follow up on vatiquinone. And Matt, I was wondering if you could comment on since the MOVE-FA study and the commercial availability of Skyclarys, any changes in understanding of what the natural history in FA looks like versus when the other studies were run previously? And then secondly, just on the cash balance, Matt, I guess, as you think about sort of the catalyst and data cards that have yet to -- won't turn over for a bit in terms of your late-stage pipeline, I guess, sort of what's the rate-limiting factor for additional business development here?

Thanks, Paul, for the questions. First, on vatiquinone, I think what's so interesting about FA natural history and the natural history registry, it's been incredibly well characterized and it's incredibly consistent. So if you look over time at the number of publications that have been done using the FACOMS registry, the rate of progression has been fairly consistent, 2 to 2.5 points a year on the mFARS. The components that contribute to that are -- as we talked earlier, are a function of age and a function of time. So even with approved therapy, that natural history has remained pretty consistent. And again, I think in the discussions with FDA regarding the use of FACOMS as a natural history comparator, it's that consistency over time. It's that robust data. It's the large number of patients and the completeness of that registry that have, I think, given them comfort that we can further substantiate efficacy with vatiquinone using this type of study design. In terms of the cash balance, look, we've talked a lot about this. We're incredibly excited for having gotten the company into this position where we've been able to launch Sephience, which is clearly a foundational product for our growth. The launch is going very much as we hoped and anticipated, and we still expect very strong growth and for this to be a multibillion-dollar product. As you alluded to with FA now with what we view as a trial with a high probability of success coming later in the decade and of course, the PIVOT-HD data really derisking the Phase III trial that Novartis is now -- has up and running for Huntington's disease that does have an interim analysis. These are 2 really attractive potential commercial revenue contributors later in the decade. There is an opportunity, and we have capital. And I think really what it comes down to is finding the right fit for us, something that we could bring in to set and leverage our existing commercial infrastructure and still remain in a strong financial position. So, I'd say the limiting factor is really identifying something that fits what we want to do in terms of the right size and something that we think we can set in. We're incredibly excited about our R&D portfolio. As we outlined in the research -- in the R&D Day, we have a lot of exciting things coming. We're finally getting -- I think we're leveraging all the learnings we've made in splicing, and that's a truly highly differentiated mRNA therapy platform that we're now just really learning to apply and get therapies forward. So again, I think as we look at things now, I think the company is in an incredibly strong position. We have a number of opportunities, and we have the luxury to be able to find the right thing to set in to ensure that we're continuing to grow our top line in the short, intermediate and long term.

And I'm showing no further questions in the queue at this time. I will now turn the call back over to the CEO, Dr. Matthew Klein, for any closing remarks.

Thank you all for joining the call this afternoon. Look, as I just stated in response to Paul, we're incredibly excited where the company is now. We work very hard to build PTC, to be in this position with a very strong launch for Sephience, a global opportunity that we're well positioned to take advantage of. And I'm incredibly proud of the team's performance, and we're positioned now to continue to grow in the U.S., accelerate growth outside of the U.S. and realize that multi-billion-dollar opportunity as well as all the advances in the R&D platform and the cash position, as Paul alluded to, which gives us the ability to continue to drive value in both the short and intermediate term. So, thank you all again for joining the call.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.