PTC Therapeutics to buy Marathon's DMD therapy Emflaza for $140 million upfront

PTC Therapeutics announced a deal Thursday to acquire all rights to Marathon Pharmaceuticals' Duchenne muscular dystrophy (DMD) therapy Emflaza (deflazacort) for an upfront payment of $140 million. Emflaza was approved in the US in February to treat patients aged five years and older with DMD regardless of genetic mutation, making it the first clearance of a corticosteroid to treat the disease, although the product's launch has been delayed amid concerns over its annual list price of $89 000.

The launch delay followed a request by US Representative Elijah Cummings and Senator Bernie Sanders for Marathon to justify the drug's list price, noting the therapy is available in other countries, including Canada and the UK, for about $1000 a year, while US patients had been able to import the therapy for "decades." Marathon has estimated that the net price of Emflaza in the US following discounts and rebates would be $54 000 a year (for related analysis, see Spotlight On: PhRMA's hands may be tied when it comes to dealing with Marathon). Meanwhile, Cummings and Sanders have since also asked the FDA to provide information about the "unusual circumstances" surrounding Emflaza's approval, notably on the data used to evaluate the drug and why Marathon was given market exclusivity for a 20-year-old treatment that the company did no significant research on. 

Commenting on the agreement with PTC Therapeutics, Marathon CEO Jeff Aronin remarked "our goal has always been to ensure Emflaza is studied, understood and available to any Duchenne patient who needs it, and we determined that this transaction is the best path for ensuring that will happen." He said with the US approval, "the focus can turn to ensuring patients have access to this important therapy," adding that PTC Therapeutics "is ideally positioned to achieve this shared goal."

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Under the terms of the Emflaza deal, which is expected to close in the second quarter, the upfront consideration consists of about $75 million in cash and roughly $65 million in PTC Therapeutics' common stock. Marathon is also eligible to receive payments based on annual net sales of Emflaza beginning in 2018, which PTC Therapeutics expects will range as a percentage of net sales between the low to mid-20s. Further, Marathon has the opportunity to receive a single sales-based milestone of $50 million. PTC Therapeutics anticipates that the transaction will be accretive to both earnings and cash flow beginning in 2018.

Stuart Peltz, chief executive officer of PTC Therapeutics, stated "we believe Emflaza is a disease-modifying therapy that has been shown to slow disease progression," while chief commercial officer Mark Rothera indicated that the company plans to "re-examine the price" and will "share more information after the transaction closes."

Last November, the European Medicines Agency's Committee for Medicinal Products for Human Use recommended the renewal of conditional approval of PTC Therapeutics' Translarna (ataluren) for the treatment of nonsense mutation DMD in ambulatory patients aged five years and older. The FDA had issued a refuse-to-file letter in 2016 for PTC Therapeutics' new drug application for Translarna, but the company announced earlier this month that the agency recently acknowledged the filing. Meanwhile, the drug recently failed a Phase III study in patients with nonsense mutation cystic fibrosis. 

The only other DMD drug approved in the US is Sarepta Therapeutics' Exondys 51 (eteplirsen), which the FDA cleared last year for patients who have a confirmed mutation of the dystrophin gene amenable to exon 51 skipping. 

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