On March 6, 2018 PTC Therapeutics, Inc. (NASDAQ: PTCT) reported a corporate update and reported financial results for the fourth quarter and full year ended December 31, 2017 (Press release, PTC Therapeutics, MAR 6, 2018, View Source [SID1234524463]).
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"Our mission for the past 20 years has been to develop and bring treatments to patients with rare genetic disorders," said Stuart W. Peltz, Ph.D., Chief Executive Officer, PTC Therapeutics, Inc. "We are thrilled with the progress we made in 2017. We now have two approved commercial products for patients living with Duchenne muscular dystrophy and have built a global commercial platform. We are also excited with the progress in our splicing platform including the rapidly advancing SMA program. Our commercial success and our developing pipeline positions PTC as a fast-growing, global rare disorder company."
Fourth Quarter and Full Year 2017 Financial Highlights:
Total revenues for the fourth quarter of 2017 were $78.0 million compared to $25.2 million in the fourth quarter of 2016. For the full year 2017, total revenues were $194.4 million compared to $82.7 million in 2016. The change in total revenue was a result of the expanded commercial launch of Translarna, the successful U.S. Emflaza launch and a $20 million milestone payment achieved from Roche for the initiation of the pivotal portion of the SMA clinical trial.
Translarna net product sales were $41.0 million for the fourth quarter of 2017, representing 63% growth over $25.1 million reported in the fourth quarter of 2016. For the full year 2017, Translarna generated $145.2 million in net product sales, representing 78% growth compared to $81.4 million in 2016.
Emflaza net product sales were $17.0 million for the fourth quarter of 2017 and $28.8 million for the full year 2017.
GAAP R&D expenses were $29.2 million for the fourth quarter of 2017 compared to $26.0 million for the same period in 2016. For the full year 2017, GAAP R&D expenses were $117.5 million compared to $117.6 million in 2016. The increase in GAAP R&D expense for the fourth quarter of 2017 as compared to the prior year period was due to increased clinical activities and regulatory spend.
Non-GAAP R&D expenses were $25.7 million for the fourth quarter of 2017, excluding $3.5 million in non-cash, stock-based compensation expense, compared to $21.9 million for the same period in 2016, excluding $4.1 million in non-cash, stock-based compensation expense. For the full year 2017, non-GAAP R&D expenses were $102.0 million, excluding $15.5 million in non-cash, stock-based compensation expense, compared to $100.0 million for 2016, excluding $16.8 million in non-cash, stock-based compensation expense and $0.8 million in one-time restructuring expense.
GAAP SG&A expenses were $35.5 million for the fourth quarter of 2017 compared to $24.2 million for the same period in 2016. For the full year 2017, GAAP SG&A expenses were $121.3 million compared to $97.1 million in 2016. The increase in SG&A expenses for the fourth quarter and year ended December 31, 2017, as compared to the prior year periods, was primarily due to the continued commercial support for the Emflaza launch.
Non-GAAP SG&A expenses were $32.5 million for the fourth quarter of 2017, excluding $3.0 million in non-cash, stock-based compensation expense, compared to $19.9 million for the same period in 2016, excluding $4.3 million in non-cash, stock-based compensation expense. For the full year 2017, non-GAAP SG&A expenses were $106.2 million, excluding $15.1 million in non-cash, stock-based compensation expense, compared to $77.3 million for 2016, excluding $18.2 million in non-cash, stock-based compensation expense and $1.6 million in one-time restructuring expense.
Net interest expense for the fourth quarter of 2017 was $3.4 million compared to net interest expense of $2.1 million in the same period in 2016. For the full year 2017, net interest expense was $12.1 million compared to net interest expense of $8.3 million in 2016. The increase in net interest expense for the fourth quarter and year ended December 31, 2017, as compared to the prior year periods, is primarily a result of increased interest expense related to the $40 million secured loan facility which we closed during the second quarter of 2017 partially offset by interest income from investments.
Net income for the fourth quarter of 2017 was $1.3 million compared to a net loss of $26.8 million for the same period in 2016. Net loss for the full year 2017 was $79.0 million, compared to $142.1 million for the same period in 2016.
Cash, cash equivalents, and marketable securities totaled approximately $191.2 million at December 31, 2017 compared to $231.7 million at December 31, 2016.
Shares issued and outstanding as of December 31, 2017, were 41.6 million.
2018 Guidance:
Full year 2018 net product revenues to be between $260 and $295 million. PTC anticipates Translarna net product revenue for the full year 2018 to be between $170 and $185 million. PTC projects a 5-year (December 31, 2022) compound annual growth rate of 15% for net product revenues representing continued strong growth year-over-year by increasing penetration in current countries and pursuing opportunities for label expansion. PTC anticipates Emflaza net product revenue for the full year 2018 to be between $90 and $110 million.
GAAP R&D and SG&A expense for the full year 2018 to be between $280 and $290 million.
Non-GAAP R&D and SG&A expense for the full year 2018 to be between $250 and $260 million, excluding estimated non-cash, stock-based compensation expense of approximately $30 million.
Key Fourth Quarter and Full Year 2017 Corporate Highlights:
Strong commercial execution has led to robust year over year revenue growth. In 2017, our Duchenne muscular dystrophy franchise generated $174 million dollars.
Translarna reported revenue of approximately $145 million dollars, a 78% increase over the prior year. The demand for Translarna continues to increase in established regions such as Western Europe, LATAM, and most recently in the Middle East and Central and Eastern Europe. PTC plans for continued growth for Translarna by increasing penetration in current countries and pursuing opportunities for label expansion. In January, we guided to a 5-year, 15% CAGR through year end of 2022.
Since launching in May, Emflaza reported revenue of approximately $29 million in 2017. The reception of Emflaza by both patients and healthcare providers has been very strong. We are focused on enabling all eligible patients to have access to this therapy. In line with PTC’s mission, PTC has established programs with the goal of ensuring that all eligible patients will have access to Emflaza regardless of financial or insurance status.
Data demonstrating that Emflaza is a differentiated product over prednisone were published in top-tier peer-reviewed journal and in recently published Duchenne treatment guidelines. These data indicate that Emflaza delays the loss of major milestones by 2 to 3 years compared to prednisone. Based on the understanding of both our own internally generated results and independently published data, we believe that Emflaza should be the standard of care for all Duchenne muscular dystrophy patients.
Regulatory update for Translarna in the US. The Office of New Drugs of the U.S. Food and Drug Administration has reiterated the FDA’s prior position and denied PTC’s appeal of the Complete Response Letter in relation to the New Drug Application (NDA) for ataluren. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production. We intend to follow the FDA’s recommendation and will collect such dystrophin data using newer technologies via procedures and methods that will be mutually agreeable to us and the FDA. The response also stated that Study 041, which is currently enrolling, could serve as the confirmatory post-approval trial required in connection with the accelerated approval framework.
SMA program advancing with two registration-directed trials. The SUNFISH trial in the spinal muscular atrophy (SMA) program transitioned to the pivotal portion which triggered a $20M milestone payment from Roche in the fourth quarter of 2017. A dose has been selected in the FIREFISH trial and it is anticipated to transition to the pivotal stage in the coming weeks. A recent presentation at the International Scientific Congress on SMA in Krakow reviewed the ongoing, dose-finding Part 1 of FIREFISH in the Type 1 SMA infants highlighting survival data, as well as safety and interim clinical data. No patients had discontinued due to adverse events. Early interim clinical data reported no patient lost the ability to swallow and no patient has required tracheostomy or reached permanent ventilation. The program also includes an additional study, JEWELFISH, for patients who have previously received splicing therapies. The SMA program is a joint collaboration with Roche and the SMA Foundation.
PTC to provide details of its developing R&D pipeline at its Analyst Day, April 17th. PTC will outline its plans for the continued sustainable growth of its internally developed programs.