On May 5, 2016 PTC Therapeutics, Inc. (NASDAQ: PTCT) reported a corporate update and reported financial results for the first quarter ending March 31, 2016 (Press release, PTC Therapeutics, MAY 5, 2016, View Source [SID:1234512058]).
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"We are working hard to make Translarna available to all Duchene muscular dystrophy patients globally who may benefit," said Stuart W. Peltz, Ph.D., Chief Executive Officer, PTC Therapeutics, Inc. "To that end, we are in dialogue with the FDA about the Refuse to File letter we received earlier this year. In Europe, we are also continuing discussions with the CHMP surrounding our regulatory submissions for DMD and CF. We are seeing growth in Translarna global sales and continue to expand access for DMD patients outside of the U.S. We were pleased with the positive recommendation from NICE, and anticipate access for patients in England once the market access agreement with NHS England is finalized. We are also excited that the second SMA compound in our collaboration is advancing in the clinic."
Key First Quarter and other Corporate Highlights:
Actively pursuing regulatory approvals for Translarna in DMD globally. PTC has engaged in dialogue with the U.S. Food and Drug Administration (FDA) to discuss the matters described in the Agency’s Refuse to File letter regarding Translarna for nonsense mutation Duchenne muscular dystrophy (nmDMD) and to seek a potential path forward to bring Translarna to patients in the U.S. Given the sensitivity around these discussions as well as their iterative nature, PTC will provide an update once it has clarified the regulatory strategy for Translarna in the U.S.
In the first quarter of 2016, PTC submitted the ACT DMD Phase 3 results to the European Medicines Agency (EMA) in support of the marketing authorization for Translarna for the treatment of nmDMD in ambulatory patients aged five and over, and separately, submitted a request for renewal of its current conditional marketing authorization. PTC is in the process of responding to requests for supplementary information from the Committee for Medicinal Products for Human Use (CHMP) to assist in determining whether the results of ACT DMD support a positive benefit-risk assessment for Translarna. PTC anticipates that the CHMP will issue its recommendation in mid-2016.
In Canada, PTC plans to submit a New Drug Submission for Translarna to Health Canada incorporating the results of the company’s Phase 3 ACT DMD study in the second half of 2016.
PTC recently initiated a Phase 1 pharmacokinetics study to assess the effects of Translarna in Japanese healthy volunteers. This study is the first step in pursuing regulatory approval for Translarna for nmDMD in Japan, one of the world’s largest pharmaceutical markets.
Translarna revenue of $18.9M in first quarter, which represents 49% growth over prior quarter. PTC has established a strong global commercial footprint launching the first approved therapy in nmDMD. By the end of 2016, PTC anticipates expanding commercial access to Translarna in over 35 countries across Europe, the Middle East, Latin America and Asia Pacific.
Translarna received recommendation in draft guidance from NICE. In the UK, the National Institute for Health and Care Excellence (NICE) has recommended Translarna for ambulatory patients aged five years and older with nmDMD in connection with a Managed Access Agreement (MAA) with NHS England. The provision of patient access is subject to the completion of the MAA with NHS England and finalization of the NICE draft guidance. NICE recently extended the timeframe for finalization of its guidance.
German patients accessing Translarna through alternate distribution channel. In Germany, PTC has delisted Translarna from the pharmacy ordering system. Since delisting in April, initial orders for German patients have already been successfully fulfilled via a foreign importation pathway. This pathway allows patients with high unmet medical needs to receive reimbursed access to treatments not directly available in Germany.
ACT CF Phase 3 clinical trial on track for completion by year-end 2016 with top-line results expected early 2017. During the third quarter of 2015, PTC submitted a variation to its marketing authorization requesting EMA approval of Translarna for the treatment of nonsense mutation cystic fibrosis (nmCF) based on the company’s previous Phase 3 study. The company anticipates the CHMP will issue its opinion regarding this submission in mid-2016. PTC’s confirmatory Phase 3 ACT CF trial is currently ongoing, and there is substantial risk that the results from this trial will be required for approval.
SMA program progressing with proof of concept achieved in Phase 1 study of RG7916 and clinical study in SMA patients planned for second half of 2016. Clinical development of the spinal muscular atrophy (SMA) program, a collaboration with Roche and the SMA Foundation, continued with the completion of a Phase 1 study of RG7916 in healthy volunteers. Preliminary results indicate that RG7916 was well tolerated and treatment resulted in increases of full length SMN2 mRNA. A clinical study of RG7916 in SMA patients is expected to begin in the second half of 2016.
First Quarter Financial Highlights:
Translarna net product sales were $18.9 million for the first quarter of 2016, representing 49% growth over $12.7 million reported in the fourth quarter of 2015; and significant growth versus $5.1 million in the first quarter of 2015. Translarna net product sales were positively impacted by a significant order from Brazil, where purchasing is often fulfilled in six-month orders, partially offset by a lower sales price for existing stock in Germany as a result of a mandatory discount imposed by the German Federal Association of the Statutory Health Insurances (GKV-SV) prior to delisting. The effect of larger but less frequent orders from Brazil may result in fluctuations in quarterly sales reporting during the course of the year.
Total revenues for the first quarter of 2016 were $18.9 million compared to $7.5 million in the same period of 2015. The change in total revenue was a result of the expanded commercial launch of Translarna, partially offset by lower grant revenue.
Non-GAAP R&D expenses were $27.1 million for the first quarter of 2016, excluding $4.3 million in non-cash, stock-based compensation expense, compared to $23.3 million for the same period in 2015, excluding $4.6 million in non-cash, stock-based compensation expense. GAAP R&D expenses were $31.4 million for the first quarter of 2016 compared to $27.9 million for the same period in 2015. The increase in R&D expense for the first quarter of 2016 as compared to the prior year period was primarily due to additional costs associated with our ongoing clinical trials.
Non-GAAP SG&A expenses were $21.3 million for the first quarter of 2016, excluding $4.6 million in non-cash, stock-based compensation expense, compared to $12.5 million for the same period in 2015, excluding $5.1 million in non-cash, stock-based compensation expense. GAAP SG&A expenses were $25.9 million for the first quarter of 2016 compared to $17.6 million for the same period in 2015. The increase in SG&A expense for the first quarter 2016 as compared to the prior year period primarily resulted from additional costs associated with commercial activities in support of Translarna across Europe and other regions.
Net interest expense for the first quarter of 2016 was $2.0 million compared to net interest income of $0.5 million in the same period in 2015. The increase in interest expense is primarily a result of the $150 million convertible debt offering completed during the third quarter 2015. The debt was recorded on PTC’s balance sheet at a discount, which will be amortized over the life of the bond.
Net loss for the first quarter of 2016 was $41.2 million compared to a net loss of $37.9 million for the same period in 2015.
During the quarter, PTC announced a workforce reduction of approximately 18% of its employees and contractors, which will result in a one-time charge of approximately $2.6 million. PTC incurred $1.9 million of this charge in the first quarter.
Cash, cash equivalents, and marketable securities totaled approximately $299 million at March 31, 2016 compared to approximately $339 million at December 31, 2015.
Shares issued and outstanding as of March 31, 2016 were 34.3 million, which includes 0.4 million shares of unvested restricted stock.
2016 Guidance:
Total ex-U.S. Translarna nmDMD revenues for 2016 are anticipated to be between $65 and $85 million. This guidance assumes current exchange rates and the continued commercial expansion for Translarna in nmDMD outside of the U.S.
Operating expenses for the full year 2016 are anticipated to be between $185 million and $195 million, excluding expected non-cash stock-based compensation expense of approximately $40 million, for total operating expenses of approximately $225 million to $235 million. These expenses will be primarily in support of our ongoing clinical trials for Translarna in nmDMD and nmCF, commercial launch activities for Translarna outside of the US, and the continued research and clinical development of other product pipeline candidates.
PTC expects to end 2016 with cash and cash equivalents of approximately $200 million.
Non-GAAP Financial Measures
In this press release, PTC’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results exclude stock-based compensation expense. These results are provided as a complement to results reported in GAAP, because management uses these non-GAAP financial measures when assessing and identifying operational trends.
PTC Therapeutics, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
March 31,
2016
2015
Revenues:
Net product revenue
$18,878
$5,069
Collaboration and grant revenue
17
2,413
Total revenues
18,895
7,482
Operating expenses:
Research and development (1)
31,399
27,938
Selling, general and administrative (1)
25,938
17,615
Total operating expenses
57,337
45,553
Loss from operations
(38,442)
(38,071)
Interest (expense)/income, net
(1,956)
524
Other expense, net
(721)
(368)
Loss before income tax expense
(41,119)
(37,915)
Income tax expense
(114)
—
Net loss
($41,233)
($37,915)
Weighted-average shares outstanding (in shares):
Basic and diluted
33,919,169
33,067,752
Net loss per share – basic and diluted (in dollars per share)
($1.22)
($1.15)
(1) Non-cash share-based compensation expense
included in operating expenses are as follows:
Research and development
$4,328
$4,667
Selling, general and administrative
4,587
5,081
Total share-based compensation expense
$8,915
$9,748
PTC Therapeutics, Inc.
Summary Consolidated Balance Sheet
(In thousands, except share amounts)
March 31,
December 31,
2016
2015
Cash, cash equivalents and marketable securities
$298,712
$338,925
Total assets
$335,232
$365,281
Total debt
$93,366
$91,848
Total deferred revenue
396
139
Total liabilities
$139,231
$139,280
Total stockholders’ equity (33,919,684 and 33,916,559 common shares
issued and outstanding at March 31, 2016 and December 31, 2015, respectively)
196,001
226,001
Total liabilities and stockholders’ equity
$335,232
$365,281
Upcoming Events:
PTC will participate in the following upcoming conference:
Bank of America 2016 Healthcare Conference, May 12 at 9:20 a.m. in Las Vegas, NV
The presentation will be webcast live on the Events and Presentations page under the investor relations section of PTC’s website at www.ptcbio.com and will be archived for two weeks following the presentation. PTC’s current investor presentation is available at the same website location.