On August 4, 2016 PTC Therapeutics, Inc. (NASDAQ: PTCT) reported a corporate update and reported financial results for the second quarter ending June 30, 2016 (Press release, PTC Therapeutics, AUG 4, 2016, View Source [SID:1234514293]).
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"Making Translarna available to all Duchenne muscular dystrophy patients globally who may benefit continues to be our top priority," said Stuart W. Peltz, Ph.D., Chief Executive Officer, PTC Therapeutics, Inc. "Global sales are on a strong growth trajectory as we continue to expand access outside of the U.S. We are excited patients in England can now access reimbursed Translarna and have received our first commercial order in England following NICE’s final guidance recommending Translarna. On the regulatory front, we are optimistic that our interactions with the EMA will support the renewal of Translarna’s marketing authorization coupled with an obligation to conduct an agreed upon clinical trial, and we look forward to our next steps in the appeal process of the FDA’s Refuse to File letter."
Key Second Quarter and Other Corporate Highlights:
Translarna revenue of $15.4M in second quarter represents 150% year-over-year growth. PTC continues to grow its global commercial footprint and expand access to Translarna. In addition to Europe, PTC is now providing Translarna to patients on a commercial basis in the Middle East and Latin America.
NICE issues final guidance recommending Translarna for patients in England. The National Institute for Health and Care Excellence (NICE) issued final guidance recommending Translarna for the treatment of ambulatory patients aged five years and older with nmDMD in England in connection with a Managed Access Agreement (MAA) with National Health Services (NHS) England. As part of the MAA, NHS England is waiving the typical three-month implementation period under local regulation, making Translarna immediately available to patients in England.
EMA review of European marketing authorization for Translarna continues. Over the last several months, PTC has been engaged in constructive discussions with the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) regarding the renewal of Translarna’s marketing authorization. The company has been informed that the renewal assessment procedure cannot be completed by mid-year 2016. The CHMP has agreed to the proposal by PTC to submit a draft clinical trial protocol for further discussion, which includes seeking scientific advice from the EMA. The company is optimistic that these interactions will support the renewal of the marketing authorization of Translarna coupled with an obligation to conduct an agreed upon clinical trial.
PTC has submitted an appeal to the FDA via the formal dispute resolution process. PTC has appealed the Refuse to File (RTF) letter issued on February 22, 2016 with respect to the company’s New Drug Application (NDA) for Translarna for the treatment of nmDMD. This process elevates the discussion to the next level of FDA management and exists to encourage open, prompt discussion of scientific and procedural disputes that arise during the drug development process between FDA and companies.
ACT CF Phase 3 clinical trial remains on track while EMA review of cystic fibrosis filing for Translarna is ongoing. PTC’s confirmatory Phase 3 ACT CF trial is currently ongoing with the results from this trial expected in early 2017. The EMA is currently reviewing the company’s variation submission to Translarna’s marketing authorization, which requests EMA approval for the treatment of nonsense mutation cystic fibrosis (nmCF). Based on recent interactions with the CHMP, PTC no longer anticipates that the CHMP will issue its opinion regarding this submission in 2016 and believes that ACT CF results may be required prior to any approval in this indication.
Phase 2 Clinical Trial of Translarna for nmDMD in pediatric patients initiated. PTC has initiated a Phase 2 clinical trial of Translarna for the treatment of nmDMD in patients between the ages of two and five years of age. This open-label, multiple-dose study will evaluate the safety and pharmacokinetics of Translarna in pediatric patients and will support the potential expansion of Translarna’s label to younger patients.
Second Quarter Financial Highlights:
Translarna net product sales were $15.4 million for the second quarter of 2016, representing a 150% increase versus $6.2 million in the second quarter of 2015. The increase in sales is a result from the continued global commercial expansion and access to Translarna. Translarna net product sales decreased sequentially from $18.9 million reported in the first quarter of 2016. In the first quarter, Translarna net product sales were positively impacted by a significant order from Brazil, where purchasing is often fulfilled in national bulk orders. 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 second quarter of 2016 were $15.6 million compared to $6.8 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.
GAAP R&D expenses were relatively flat at $28.8 million for the second quarter of 2016 compared to $28.2 million for the same period in 2015. Non-GAAP R&D expenses were $24.7 million for the second quarter of 2016, excluding $4.1 million in non-cash, stock-based compensation expense, compared to $24.2 million for the same period in 2015, excluding $4.0 million in non-cash, stock-based compensation expense.
GAAP SG&A expenses were $23.4 million for the second quarter of 2016 compared to $17.2 million for the same period in 2015. Non-GAAP SG&A expenses were $18.7 million for the second quarter of 2016, excluding $4.6 million in non-cash, stock-based compensation expense, compared to $12.8 million for the same period in 2015, excluding $4.4 million in non-cash, stock-based compensation expense. The increase in SG&A expense for the second 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 second quarter of 2016 was $2.1 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 second quarter of 2016 was $38.9 million compared to a net loss of $38.4 million for the same period in 2015.
During the first quarter of 2016, PTC announced a workforce reduction of approximately 18% of its employees and contractors, which resulted in a one-time charge of approximately $2.5 million. PTC incurred $0.6 million of this charge in the second quarter.
Cash, cash equivalents, and marketable securities totaled approximately $273 million at June 30, 2016 compared to approximately $339 million at December 31, 2015.
Shares issued and outstanding as of June 30, 2016 were 34.3 million, which includes 0.2 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 over $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. In management’s opinion, these non-GAAP measures are useful to investors and other users of our financial statements by providing greater transparency into the operating performance at PTC and the company’s future outlook.
PTC Therapeutics, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Revenues:
Net product revenue
$15,437
$6,161
$34,314
$11,230
Collaboration and grant revenue
196
613
214
3,026
Total revenues
15,633
6,774
34,528
14,256
Operating expenses:
Research and development (1)
28,827
28,190
60,226
56,128
Selling, general and administrative (2)
23,366
17,210
49,304
34,825
Total operating expenses
52,193
45,400
109,530
90,953
Loss from operations
(36,560)
(38,626)
(75,002)
(76,697)
Interest (expense) income, net
(2,060)
498
(4,016)
1,022
Other (expense) income, net
(387)
(88)
(1,107)
(456)
Loss before income tax expense
(39,007)
(38,216)
(80,125)
(76,131)
Income tax benefit (expense)
93
(145)
(22)
(145)
Net loss
($38,914)
($38,361)
($80,147)
($76,276)
Weighted-average shares outstanding (in shares):
Basic and diluted
34,000,333
33,600,653
33,959,751
33,335,674
Net loss per share – basic and diluted (in dollars per share)
($1.14)
($1.14)
($2.36)
($2.29)
(1) Research and development reconciliation
GAAP research and development
$28,827
$28,190
$60,226
$56,128
Less stock-based compensation expense
4,087
3,957
8,415
8,624
Non-GAAP research and development
$24,740
$24,233
$51,811
$47,504
(2) Selling, general and administrative reconciliation
GAAP selling, general and administrative
$23,366
$17,210
$49,304
$34,825
Less stock-based compensation expense
4,649
4,371
9,236
9,452
Non-GAAP selling, general and administrative
$18,717
$12,839
$40,068
$25,373
PTC Therapeutics, Inc.
Summary Consolidated Balance Sheet
(In thousands, except share amounts)
June 30,
December 31,
2016
2015
Cash, cash equivalents and marketable securities
$272,893
$338,925
Total assets
$305,563
$365,281
Total debt
$94,936
$91,848
Total deferred revenue
726
139
Total liabilities
$139,939
$139,280
Total stockholders’ equity (34,083,319 and 33,916,559 common shares
issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
165,624
226,001
Total liabilities and stockholders’ equity
$305,563
$365,281
Upcoming Events:
PTC will participate in the following upcoming conference:
2016 Wedbush PacGrow Healthcare Conference, August 17th at 1:20 p.m. in New York, NY
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.