After being stung by a fierce backlash over its plans to sell a cheap, old steroid for Duchenne muscular dystrophy for $89,000 a year, Marathon Pharmaceuticals is getting out. The company announced this morning that it is selling deflazacort (Emflaza) to Duchenne MD player PTC Therapeutics $PTCT, which has been struggling to get the FDA to provide a serious review for its own failed drug.
Marathon is getting $140 million in cash and stock in the deal, along with a shot at a one-time $50 million sales bonus on the table and a royalty stream that will account for a low-to-mid 20s percentage of the revenue.
PTC CEO Stuart Peltz doesn’t say in the release how much he plans to charge for deflazacort. The company’s stock slid 13% after the news hit.
Marathon triggered a storm of criticism with its plans, which is continuing unabated now with a new focus on the FDA’s role in the approval. A large number of Duchenne parents were able to buy generic deflazacort overseas for around $1,000 a year, and critics saw Marathon’s move as another in a series of price gouging scandals.
That scandal is now PTC’s to deal with.
“With our nearly 20-year commitment to the Duchenne community, it is deeply meaningful for us to bring this critical therapy to U.S. patients,” said Peltz in a statement. “We believe Emflaza is a disease-modifying therapy that has been shown to slow disease progression. In keeping with PTC’s mission, we are excited to work with the community to raise the standard of care for DMD patients.”
Claiming that deflazacort is a disease modifying therapy will surprise many in the Duchenne community. Like any steroid, it strengthens patients at a cost. Many of the parents came to prefer deflazafort over prednisone because it is associated with less weight gain.
In acquiring the old steroid to be sold as a branded therapy, PTC is also adopting Marathon’s claim that the approval makes it possible to expand access — now “limited to a small number of patients,” Peltz said in a call with analysts today — to all patients over the age of 5.
“We plan to reexamine the price of Emflaza,” added Mark Rothera, PTC’s chief commercial officer. “This is a classic orphan drug launch that we’re facing in the United States.”
“It really wasn’t available to patients,” Peltz told analysts, estimating that fewer than 10% of the patients had access to the steroid.
According to Duchenne advocate Christine McSherry, though, quite a few families had no problem getting overseas supplies of the steroid. McSherry initially estimated that 40% to 50% of the DMD kids are already on deflazacort and will now be forced to switch to the higher priced US supplier, then adjusted that down to a conservative 25%.
Lawmakers, including Senator Bernie Sanders, have blasted Marathon’s claims that it needed to charge a high price to eventually regain the cost of development.
Peltz has tried and failed to prove that PTC’s drug ataluren — which failed back-to-back studies and recently flopped for cystic fibrosis — could benefit Duchenne parents. He continues to insist that the “totality” of the data proves its worth, but the FDA refused to even file their application, saying they didn’t have the data needed for a review. PTC, though, recently leveraged the regulations to force a PDUFA date for their drug. And execs styled this new deal as an opening to start US commercialization efforts as it prepares to push ataluren into the market.
European regulators, meanwhile, did give the drug a conditional approval, extending that with a new requirement to complete an additional study in the next five years.
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