PTC Therapeutics, Inc. (NASDAQ: PTCT) today announced a corporate update and reported financial results for the second quarter ending June 30, 2020.
“We are pleased with the progress in our pipeline and the strong commercial performance of our global Duchenne franchise,” said Stuart W. Peltz, Ph.D., CEO of PTC Therapeutics. “Our growing revenue stream allows us to continue to invest in the development of treatments leveraging our novel technology platforms. We have a robust pipeline and with more than $1 billion in cash are well positioned to advance multiple differentiated therapies for patients living with rare disorders, not only in the near term, but also for many years to come.”
Key Second Quarter and Other Corporate Updates:
- Our Duchenne muscular dystrophy franchise had strong performance in the second quarter. The greater than 30% year-over-year increase in second quarter sales for Emflaza was driven by ongoing improvements in our commercial business. New Duchenne patients continue to be identified in Europe, LATAM and other key markets for Translarna™ despite the challenges of COVID-19.
- As part of the annual renewal process for Translarna, the European Medicines Agency (EMA) confirmed its risk/benefit profile for the sixth consecutive year. In addition, PTC previously announced that the Committee for Medicinal Products for Human Use (CHMP) of the EMA recommended to remove the statement “efficacy has not been demonstrated in non-ambulatory patients” from the SmPC for Translarna. This label change enables healthcare professionals to use their clinical judgement to make treatment decisions for their patients on Translarna who have lost ambulation and should support reimbursement agencies granting continued access to Translarna.
- In the second quarter, PTC strengthened its pipeline and platforms with the acquisition of a late-stage asset for phenylketonuria (PKU). PTC923 is a clinical-stage investigational therapy for inborn errors of metabolism, including PKU and other diseases associated with defects in the tetrahydrobiopterin (BH4) biochemical pathways diagnosed at birth. PTC is currently conducting nonclinical studies to support the long-term dosing for the planned phase 3 trial in PKU in 2021.
- The U.S. Food and Drug Administration (FDA) PDUFA date for risdiplam is August 24, 2020. In addition, a submission of a marketing authorization application (MAA) to EMA for risdiplam is imminent. The filing of the MAA would trigger a $15 million milestone payment to PTC from Roche. Roche has submitted applications for approval in Brazil, Chile, China, Indonesia, Russia, South Korea and Taiwan.
- PTC recently announced an agreement to monetize a portion of the rights to the risdiplam royalty stream for a $650 million up front payment from Royalty Pharma plc, providing PTC with significant non-dilutive capital. PTC retains nearly 60% of the risdiplam royalty stream up until a $1.3 billion threshold is reached, after which PTC retains 100% of the risdiplam royalty stream. PTC also retains all economics associated with up to approximately $400 million in remaining regulatory and sales milestones.
- Launch activities for Tegsedi®continue to focus on patient finding. Pricing discussions in Brazil are ongoing and are expected to be completed by the end of the year.
- The submission of an application for marketing authorization for Waylivra® in patients with familial chylomicronemia syndrome (FCS) has been filed with ANVISA and a decision is expected in 2021. Patient finding and early access programs are ongoing.
- PTC continues to develop manufacturing capabilities for its gene therapy products. It has expanded its collaboration with MassBiologics for the manufacturing of the aromatic L-amino acid decarboxylase deficiency (AADCd) commercial supply. In addition, PTC gained occupancy under its lease of ~220,000 square feet at the former BMS site in Hopewell, NJ. Manufacturing of clinical materials for its gene therapy programs at this site is expected to initiate in 2021.
- PTC recently launched a global internship program, the Talent Pipeline Program (TPP), aimed at providing recent graduates, especially those in minority communities, with real-world experience in the biopharmaceutical industry and related professions, including research, finance, commercial, compliance, quality, legal, information technology, and communications. The TPP will provide approximately 30 interns with a one-year paid program with real-world training experience.
Updates in PTC’s Diverse Product Pipeline
- In its Bio-e platform, PTC expects to initiate potential registrational trials with vatiquinone, formerly known as PTC743, in refractory mitochondrial epilepsy in the third quarter of 2020 and in Friedreich ataxia in the fourth quarter of 2020.
- The first subject has been dosed in the Phase 1 trial for PTC857, PTC’s second compound from the Bio-e platform. Data from the single ascending dose and multiple ascending dose studies is expected by the end of 2020.
- PTC recently initiated a Phase 2/3 clinical trial for PTC299 for COVID-19 called FITE-19. PTC expects Stage 1 to be completed in the second half of 2020 and anticipates reporting top-line results from both stages in the first half of 2021. Multiple sites have been opened in the U.S., Brazil, Spain and Australia with additional countries for Stage 2 expected to initiate in the coming months.
- In the novel splicing platform, the Huntington disease program remains on track for the initiation of first-in-human studies in 2020.
- PTC expects to initiate submission of the biologics license application (BLA) to the U.S. FDA in the second half of 2020 for its AADCd gene therapy program.
- Due to COVID-19 related delays, PTC now expects the final opinion from the CHMP on the MAA for the AADCd program in the first quarter of 2021.
- Given the evolving COVID-19 situation in the U.S., the final study muscle biopsies have not yet been collected from 8 remaining boys in the Translarna (ataluren) dystrophin study. PTC is continuously monitoring the situation to determine when it will be possible to safely obtain the final biopsies and is exploring all potential options in order to have a data read out by the end of 2020. All patients in the study remain on Translarna until they are able to complete the final study visit.
- Total net product revenues were $75.2 million across our commercial portfolio for the second quarter of 2020, compared to total net product revenues of $85.5 million for the second quarter of 2019.
- Translarna net product revenues were $38.6 million for the second quarter of 2020, compared to $57.8 million for the second quarter of 2019. Revenues for the second quarter of 2020 were impacted by the timing of a group purchase order from Brazil, which is the primary driver for the year-over-year decrease, as the second quarter of 2019 included a significant group purchase order from Brazil. Due to the impact of the pandemic, there was an administrative delay by the Brazilian Ministry of Health in receiving the centralized Translarna group purchase order. PTC anticipates a group purchase order from Brazil later this year.
- Emflaza net product revenues were $36.2 million for the second quarter of 2020, compared to $27.6 million for the second quarter of 2019. Growth in net product revenues was driven by new patient prescriptions and continued operational improvements and efficiencies in our commercial business.
- Generally accepted accounting principles in the U.S. (GAAP) research and development (R&D) expenses were $176.5 million for the second quarter of 2020, compared to $60.0 million for the second quarter of 2019. The increase in R&D expenses includes one-time charges of $53.6 million related to the acquisition of Censa Pharmaceuticals, and $41.2 million related to the MassBiologics of the University of Massachusetts Medical School agreement for commercial manufacturing of our lead gene therapy program in AADCd.
- Non-GAAP R&D expenses were $168.0 million for the second quarter of 2020, excluding $8.6 million in non-cash, stock-based compensation expense, compared to $54.5 million for the second quarter of 2019, excluding $5.5 million in non-cash, stock-based compensation expense.
- GAAP selling, general and administrative (SG&A) expenses were $53.7 million for the second quarter of 2020, compared to $49.2 million for the second quarter of 2019. The increase reflects continued investment to support our commercial activities including our expanding commercial portfolio.
- Non-GAAP SG&A expenses were $45.3 million for the second quarter of 2020, excluding $8.3 million in non-cash, stock-based compensation expense, compared to $43.8 million for the second quarter of 2019, excluding $5.4 million in non-cash, stock-based compensation expense.
- Change in the fair value of deferred and contingent consideration was $7.7 million for the second quarter of 2020, compared to $5.3 million for the second quarter of 2019. The change in fair value of deferred and contingent consideration is related to the fair valuation of potential future consideration to be paid to former equity holders of Agilis Biotherapeutics, Inc. (Agilis) in connection with PTC’s acquisition of Agilis, which closed in August 2018.
- Settlement of deferred and contingent consideration was $10.6 million for the second quarter of 2020. The settlement of deferred and contingent consideration is related to a loss upon the settlement of the deferred and contingent consideration liabilities as a result of the rights exchange agreement with certain former shareholders of Agilis, whereby such former shareholders exchanged their pro rata share of specific future cash milestone payments in the aggregate amount of $225 million for a mixture of cash and equity of PTC. Under this agreement, which the former shareholders and PTC entered into on April 29, 2020, PTC has paid $36.9 million in cash and issued 2,821,176 shares of common stock in exchange for the cancellation and forfeiture of the participating shareholders’ rights to receive (i) $174.0 million, in the aggregate, of potential milestone payments based on the achievement of certain regulatory milestones and (ii) $37.6 million, in the aggregate, of $40.0 million in development milestone payments that would have been due upon the passing of the second anniversary of the closing of the Merger, regardless of whether the milestones are achieved.
- Net loss was $181.4 million for the second quarter of 2020, compared to net loss of $41.8 million for the second quarter of 2019.
- Cash, cash equivalents and marketable securities were $498.9 million as of June 30, 2020, compared to $686.6 million as of December 31, 2019.
- Shares issued and outstanding as of June 30, 2020 were 67,240,679.
Non-GAAP Financial Measures:
In this press release, the financial results of PTC are provided in accordance with GAAP and using certain non-GAAP financial measures. In particular, the non-GAAP financial measures exclude non-cash, stock-based compensation expense. These non-GAAP financial measures are provided as a complement to financial measures reported in GAAP because management uses these non-GAAP financial measures when assessing and identifying operational trends. In management’s opinion, these non-GAAP financial measures are useful to investors and other users of PTC’s financial statements by providing greater transparency into the historical and projected operating performance of PTC and the company’s future outlook. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. Quantitative reconciliations of the non-GAAP financial measures to their respective closest equivalent GAAP financial measures are included in the table below.