PTC Therapeutics has announced an expansion of its previously planned workforce reductions as European regulatory concerns cast a shadow over the future of its Duchenne muscular dystrophy (DMD) drug. Originally slated to affect 8% of its staff, the layoffs will now encompass a quarter of the company’s employees. The impact will be most heavily felt in early-stage research programs and at the gene therapy manufacturing facility in Hopewell, New Jersey, along with associated selling, general, and administrative expenses (SG&A) roles.
This intensified restructuring effort is a response to the evolving landscape since May when the initial layoffs were proposed. PTC Therapeutics had faced setbacks, including a disappointing outcome for its Friedreich ataxia drug, vatiquinone, which exhibited no superior efficacy over a placebo in treating the rare seizure disorder. However, the most concerning development was a recent recommendation by the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) not to renew marketing authorization for PTC’s DMD drug, Translarna.
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The CHMP highlighted that the initial authorization had always been conditional, pending further data evaluation. Unfortunately, a requested study within a specific patient subgroup failed to demonstrate a statistically significant improvement in patients’ walking ability. A comprehensive review of existing and long-term data could not alleviate the committee’s concerns about Translarna’s efficacy.
This recommendation raises the possibility of Translarna losing its authorization across all European Union member states. In the second quarter of 2023, the drug generated $96.5 million in revenue for PTC across all approved territories, including the EU, Brazil, and Russia. The company had been anticipating discussions with the FDA in the latter part of this year regarding approval in the United States.
PTC Therapeutics has indicated its intention to submit a reexamination request to the EMA’s committee in response to the decision.
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“We remain confident that we have the data to address the concerns raised by CHMP in its negative opinion. The totality of evidence collected in three placebo-controlled trials and in the STRIDE registry provide clear evidence of Translarna’s benefit. In addition, the patient and physician communities strongly believe in the benefits of Translarna and have shared their motivation to support the efforts to maintain authorization for the only approved Duchenne muscular dystrophy therapy in Europe.”
– Matthew B. Klein, M.D., Chief Executive Officer, PTC Therapeutics
William Blair analysts characterized the committee’s decision as “unfortunate and surprising,” but expressed confidence in PTC’s ability to reverse the CHMP opinion. They noted PTC’s track record of successful negotiations with the EMA and the strong advocacy of physician and patient groups.
Following the CHMP’s decision on September 15, PTC Therapeutics’ stock experienced a drop from $37 to $26 per share. The stock has continued to experience slight declines, hovering around $23.70 in premarket trading as of Friday.