Joe Coletti
00:05
Hello and welcome to Pathfinders, podcast series from RBC Capital Markets, where we uncover the key trends and catalysts shaping the fast moving world of biopharma and healthcare. I'm your host, Joe Coletti. Today we're at RBC’s Global Healthcare conference here in New York, and I'm joined by Dr Matt Klein, CEO of PTC Therapeutics, a global biotech advancing treatments for rare diseases. Under Matt's leadership, PTC is pushing forward high impact programs in PKU, Huntington's disease, Friedrich’s ataxia and more. Matt, thanks for joining us.
Matt Klein
00:39
Joe. Great to be here.
Joe Coletti
00:40
So I want to talk about the fact that you guys have really been a pioneer in RNA target therapies and rare disease treatments. Can you talk a little bit about your company's mission, how it's evolved under your leadership, and what really is kind of core to that mission, so our audience learns a little bit more about you.
Matt Klein
00:57
Yeah, PTC was founded over 25 years ago. We started, as you pointed out, with an initial focus on RNA. In fact, I think we're probably one of the first companies to drug RNA and understanding the incredible potential there is in targeting RNA to affect a number of different diseases. Our initial efforts were in something called nonsense suppression, which was specifically targeting RNA where there had been a nonsense mutation to allow for the production of a normal protein which otherwise would not have been produced. And our early focus was in Duchenne muscular dystrophy. In fact, we were the first ever company to develop a drug for Duchenne, and we're very proud to have pioneered the field of therapies, not only RNA therapies, but therapies for Duchenne. And we've grown. We, our RNA expertise had led us to founding a platform in small molecule splicing. In fact, we were the first company to develop a small molecule splicing therapy. The first product of our splicing efforts is a drug called Evrysdi, which we developed along with Roche and is now the leading therapy for spinal muscular atrophy worldwide. That platform now has gone on to develop and grow. We have a therapy for Huntington disease in development, PTC 518, which we partner Novartis, and we have a number of other splicing programs at various stages of pre-clinical development, targeting neurology, metabolism and other therapeutic areas. And we've migrated beyond RNA (2:26) to continue to be that company that looks for innovative science, new ways of tackling challenging problems so that we can bring impactful therapies to patients with rare diseases.
Joe Coletti
02:36
What defines a high impact program in your pipeline right now? You mentioned a lot, of different therapies there, and a lot of drug development, like, how do you focus your efforts accordingly across these?
Matt Klein
02:47
We focus on the things that we know we can do that others can't. And we have a long view. I mean, we understand that it may take several efforts. We understand that if you don't succeed at first, that's really a learning opportunity to go back and do, be better the second time. I think a great example of this is the number of years it took to develop Evrysdi for spinal muscular atrophy. Took a very long time. It took still many years once we started developing PTC 518, for Huntington's disease. But it took less time. We've now through continuous learning have developed something we call PT Seek (3:22), which is a high throughput screening engine that has cut down in years the time it takes to identify a target for splicing and small molecules that can affect that target. So that's just an example of by focusing on something that we uniquely can do you get better over time, which is really the definition of a platform, which is it's not just a one off. You have a systematic way of doing things, but we've also been very thoughtful in terms of combining both home-grown science and business development. Our history is about not only things that we've done ourselves at PTC, science that we've pioneered, but also being able to bring in other pioneering approaches to treating diseases. We acquired a company that allowed us to build our ferroptosis and inflammation platform. Ferroptosis is a very important pathway for the way cells die in neurological diseases, and also for the way in which cancer works. And so we're one of the first companies to have figured out how to drug this pathway effectively, We have a drug, vatiquinone, which is right now in front of the FDA for potential approval for Friedrich’s ataxia, and have a whole set of programs behind that looking at targeting ferroptosis for neurological disorders, as well as potentially other therapeutic areas where this pathway is known to be important. We acquired a company called Censa, which brought us our PKU program, which is also in front of the FDA now for approval.
Joe Coletti
04:48
You've surpassed your key financial milestones, including 2024 revenue guidance. Congratulations. How are you thinking about capital allocation and sort of sustaining this investment in all these innovations moving forward?
Matt Klein
05:00
So we've thought a lot about that. I took over as CEO of PTC about two years ago, and one of my priorities was to continue to evolve the company, not only in terms of what we do from a science and product standpoint, but also to move towards being cash flow break even and ultimately profitable. So a lot of our work over the past two years in terms of building the balance sheet and thinking about capital allocation, has been about being able to continue to grow our revenue base, continue to effectively manage operating expenses, and also be very creative in the way that we can monetize different elements of our portfolio. For example, we did, I think, what is the largest ever Phase 2a single-asset deal with Novartis last fall, which was a deal for our PTC five way Huntington's program that included $1 billion up front, $1.9 billion in both development and commercial milestones, as well as a 40% profit share in the US. With that money coming in, we closed Q1 of 2025 with over $2 billion in cash. So we're a company that has significant revenue potential, current revenue and future revenue potential. We're managing our expenses and now have sufficient capital to do all that we plan to do, including potential commercial launches for our several programs in front of the FDA right now and get to cash flow break even without needing to raise additional capital. And so I think we're in a unique place for a company our size to have the cash, have the balance sheet, that we can be self-sufficient, weather what are now a number of macro uncertainties and still continue to grow the company in a very thoughtful, constructive and valuable way.
Joe Coletti
06:42
So you mentioned your partnership with Novartis. What's your sort of philosophy around partnerships, business development?
Matt Klein
06:47
Yes, we think about it in two ways, right? Partnerships are things that we can do to bring assets into PTC to further drive our value, bring additional therapies to patients who need them. So in the short term that could be in-licensing a compound that's a commercial stage, whether that's a global partnership or something that we can cassette into our global commercial infrastructure. We have capabilities to sell drugs in every part of the world. We have a partnership with Ionis, for which we commercialize two drugs in Latin America, because we have a proven Latin America commercial infrastructure. We similarly have infrastructure in Europe, Middle East, North Africa, Japan and Asia Pacific. We can also look at bringing compounds of therapies into the development portfolio, if we think it meets our standards of high science and the potential to be a transformative [therapy]. We also think about business development in terms of out licensing. I mentioned we have two leading innovative platforms. We have our splicing platform and our ferroptosis platform. Those are two areas of science that PTC has uniquely leveraged to develop important therapies.
07:54
Well, that science has application beyond just the rare therapies that we might develop and commercialize. We believe they have broad applicability to larger neurodegenerative disease, oncology, cardiovascular, nephrology, pulmonology and so what we're also now working on is strategic partnerships where we have PTC science inside another company, where we can say, Look, we have a technology in ferroptosis or splicing that we think can be incredibly valuable in developing novel oncology therapies. Well, PTC is not an oncology company, but we sure would like to partner, and can partner, with someone who is and say, we can use our science to help you get further, and it's just another way that we can help more patients through our innovation.
Joe Coletti
08:42
You stepped into the CEO role at a pretty pivotal time. I wonder if you could talk a little bit about your principles and your approach to help put the company in this position, but also, you know, how you've also approached us in the midst of, like, an organization that's clearly evolving and continues to evolve?
Matt Klein
08:57
Yeah, I think it's been, it's been a lot of fun, first of all, and I consider myself incredibly lucky to have a team that we have at PTC around the globe who are singularly focused on our mission. And I think that's really the key, you know, our culture, which is patient-focused. We all get up every day, no matter what we do at PTC, with a singular focus on dedicating our work towards helping others. And I think that's been an important part of what I've tried to do, to say, look, we're growing, we're changing, we're evolving, but we're never going to get away from that patient-focused mission that we started with over a quarter century ago.
Joe Coletti
09:32
And you were a surgeon previously, correct?
Matt Klein
Yes.
Joe Coletti
So going from surgeon to CEO, is there anything you had to go through in terms of your mindset shift or that was trickier than you anticipated.
Matt Klein
09:45
I have to say so. I'm trained as a plastic surgeon. I had a career as a Chair and Professor of reconstructive burn surgery. So my focus was burn reconstruction, burn and trauma reconstruction. And I have to say that running an intensive care unit with severely injured children and adults, doing very complicated surgical procedures, was very good preparation for what I do as a CEO, having to make very important decisions on limited data, being able to lead a multidisciplinary team, working through challenges, doing difficult things, working in a high-pressure environment like an operating room, where literally, life and death hangs in the balance, but getting people to not be deterred by that anxiety and that challenge, but to focus on getting their work done, also working very long hours and knowing what that's like.
Joe Coletti
10:30
How do you and your colleagues approach rare diseases in a way that, it's not just sizing markets, but it's actually knowing and understanding them, knowing the patients, knowing the families, knowing the constituents, so that you can support them?
Matt Klein
10:42
You develop these relationships early on. As soon as we start thinking about a program, it may still be in the lab, we're already reaching out, working with the patients and the families, learning about the disease, learning about how to develop a drug, and knowing that developing a drug for individuals with rare disease is a partnership. You need everyone at that table working collaboratively.
17:59
Joe Coletti
11:05
Can we talk about some of the key milestones for PTC coming up in the next weeks, months that people should be paying attention to? And you talk a little bit about how you see the company sort of shaping the future of rare disease care over the next decade.
Matt Klein
11:18
I think nearest in for us is in terms of milestones, is in a decision from the FDA for our PKU program, which we're expecting at the end of July. Our therapy, Sephience, we believe has the potential to be transformational for kids and adults with PKU. We've already gotten a positive opinion on the approval from the European regulators from the CHMP, and now with the FDA approval expected in July, we're set for a global launch for what, again, what we believe can be a very important therapy. We also have pending FDA decisions for our vatiquinone program for kids and adults with Friedrich’s ataxia. If vatiquinone is approved by the FDA, it'll be the first ever therapy for kids with Friedrich’s ataxia, and that's really, really important, given how aggressive and debilitating Friedrich’s ataxia can be for pediatric patients. We're continuing with Novartis to move our Huntington's disease program forward and continuing a lot of the research on our future programs, PTC has long had an important role in the rare disease ecosystem. I think, by being a company that talks about sustained growth, talks about moving towards being cash flow breakeven, even talks about the potential for profitability, I think, allows us to be an example of a company that can start small and focused in drugging RNA for patients, and can grow into a company that's still patient focused, but is but is durable and valuable for all of our stakeholders.
Joe Coletti
12:47
Matt, I think that's a great point to end on. I've learned a lot today. I think our listeners have learned a lot today. Want to thank you for spending time with us while you're at the conference, and best of luck on all your meetings.
Matt Klein
12:58
Thanks, Joe.
Joe Coletti
13:05
Thanks for listening to Pathfinders in Biopharma, brought to you by RBC Capital Markets. Please remember to subscribe to get more great content and be alerted about future episodes. This episode was recorded on May 20, 2025. If you’d like to learn more or continue the conversation, please visit rbccm.com/biopharma. See you all next time.