PTC shares rocket up as European regulators offer a thumbs-up on Duchenne drug marketing

PTC Therapeutics CEO Stuart Peltz

PTC Therapeutics CEO Stuart Peltz

A few days after warning investors of the rising uncertainty it faced in the ongoing European review of its conditional approval for Translarna, shares of PTC Therapeutics $PTCT skyrocketed this morning after regulators gave it a thumbs up on keeping the controversial Duchenne drug on the market.

There is a condition attached to the recommendation from the Committee for Medicinal Products for Human Use. The CHMP wants PTC to conduct a placebo-controlled, 18-month study of their drug followed by an 18-month extension study, with data expected in early 2021. That would give them a clear marketing runway of close to 5 more years, if the EMA formerly accepts the recommendation.

PTC’s shares, beaten down by the skepticism is faced, shot up more than 100% on the news.

PTC skeptics abound. Its drug has repeatedly failed clinical trials and a number of analysts have speculated that EU regulators would jerk the drug, which was given a conditional approval back in 2014, ahead of a failed Phase III study. The FDA recently refused to even consider its application, saying PTC had too weak a case to merit a thorough review.

PTC is appealing that decision, looking to get its drug and its patient advocates in front of the same regulators that gave Sarepta an approval for Exondys 51, even though insiders at the agency waged a hard fought campaign insisting that the drug had never come close to meeting the FDA’s standards for an approval.

But Duchenne muscular dystrophy is a field unto itself, where the hard logic and high regulatory bar that often triggers drug rejections have been blunted by patient advocates desperate to have some drug available that might slow a disease that gradually kills its young victims. That desire to have something, anything, available has been a boon to PTC and Sarepta, even as critics shake their heads at the idea of experimental drugs with little evidence of efficacy being sold to patients for six-figure prices.

Barclays followed up with a discussion with PTC execs and came away with this:

In speaking with management, it is clear that there was significant discussion and engagement with EMA over the past year. CHMP determined that the drug does slow progression and has a favorable risk benefit profile. The company has not yet disclosed other aspects of the trial, namely endpoints and inclusion/ exclusion criteria, but noted that the trial will be similar in size to ACT DMD (230 enrollment). Management emphasized that this update only pertains to EMA, as FDA discussions are still ongoing. While the company would like to align trial efforts between the EU and US, they noted that they hope that Atalauren would be available in the US well before the 2021 read out of this new confirmatory trial. Given the high level of uncertainty around nmDMD in the US we continue to assign no value in our NPV analysis.

“We are pleased with this outcome which took into account all available data for Translarna,” said Stuart W. Peltz, PhD, Chief Executive Officer, PTC Therapeutics, Inc. “This decision reflects the benefit that Translarna is having for patients suffering from nonsense mutation Duchenne muscular dystrophy.”

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