As part of its cost-cutting efforts and in response to potential challenges in the European market, PTC Therapeutics is taking steps to secure funding through a new royalty agreement.
In a collaboration with Royalty Pharma, which could amount to $1.5 billion, PTC has agreed to sell 67% of its royalty interest in the spinal muscular atrophy drug Evrysdi, developed in partnership with Roche.
The agreement encompasses an upfront payment of $1 billion, and PTC retains the option to sell its remaining royalty interest for up to an additional $500 million. Presently, PTC will retain approximately 19% of its royalty interest in the drug, originally licensed to Roche’s Genentech in 2011.
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This strategic move provides PTC with “enhanced financial flexibility as we pursue our strategic objectives,” remarked Dr. Matthew Klein, Chief Executive of PTC Therapeutics, in a statement. The company has recently undergone a workforce reduction in New Jersey, with over 300 layoffs, amidst the potential market withdrawal of its Duchenne muscular dystrophy drug, Translarna, in Europe.
PTC intends to utilize the capital from this agreement to settle its debt with Blackstone Life Sciences, which invested up to $1 billion in the company last year. In contrast, Evrysdi, approved in 2020 as the first oral treatment for spinal muscular atrophy in the United States, represents a significant milestone.
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PTC received its initial commercial milestone payment of $20 million from Genentech shortly after the drug’s approval, followed by an additional $20 million in 2021 following its first sale in the European Union. Meanwhile, PTC is facing potential challenges in Europe, particularly regarding its Duchenne muscular dystrophy therapy, Translarna. The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recently declined to convert the drug’s conditional marketing authorization into full approval, a decision that took PTC by surprise and left them “extremely disappointed,” according to Klein.
In the last quarter, Translarna generated $77 million in revenue for PTC, while Evrysdi royalties from Roche amounted to $36.9 million during the same period.
