PTC Therapeutics Chops 18% of Workforce
Published: Mar 24, 2016
March 24, 2016
By Alex Keown, BioSpace.com Breaking News Staff
SOUTH PLAINFIELD, N.J. – Shares of PTC Therapeutics plunged in overnight trading Wednesday night after the company announced it was reducing its workforce by 18 percent following the rejection of its Duchenne muscular dystrophy (DMD) by the U.S. Food and Drug Administration.
PTC said the layoffs are part of the company’s program to “optimally manage operating expenses.” The company said it remains focused on development of Translarna, its treatment for nonsense mutation DMD, in markets outside the United States. PTC added it will continue to work with the FDA to bring Translarna to regulatory approval in the U.S. The terminations are expected to be complete by June 30. PTC said it expects to incur $2.5 million in expenses related to the layoffs.
Stuart W. Peltz, chief executive officer of PTC Therapeutics, expressed regret at the terminations, but said it was a “necessary step” to align company resources and bring Translarna to approval.
Translarna is a protein restoration therapy designed to enable the formation of a functioning protein in patients with genetic disorders caused by a nonsense mutation, according to PTC data. In February, the FDA issued a Refuse to File letter, which rejected PTC’s New Drug Application for Translarna. In the letter the FDA said PTC’s application was “not sufficiently complete to permit a substantive review.”
Duchenne muscular dystrophy is an X-linked degenerative neuromuscular disorder causing severe progressive muscle loss and premature death. One of the most common fatal genetic disorders, DMD affects approximately one in every 3,500 boys born worldwide. DMD is associated with specific errors in the gene that codes for dystrophin, a protein that plays a key structural role in muscle fiber function. Progressive muscle weakness in the lower limbs spreads to the arms, neck and other areas. Eventually, increasing difficulty in breathing due to respiratory muscle dysfunction requires ventilation support, and cardiac dysfunction can lead to heart failure. The condition is universally fatal, and death usually occurs before the age of 30. The nonsense mutation is an alteration in the genetic code that prematurely halts the synthesis of an essential protein.
Translarna is licensed in the European Economic Area (EEA) for the treatment of nonsense mutation Duchenne muscular dystrophy in ambulatory patients aged five years and older. The EMA reevaluated the drug and granted conditional approval based on “some evidence of effectiveness” and the fact that there was little if any alternative to the drug. It is the only Phase III-approved treatment for DMD in the world.
PTC Therapeutics is not the only company to be stymied this year when it comes to seeking regulatory approval for DMD. In January the FDA did not approve BioMarin ’s Kyndrisa for DMD. The FDA will also require additional time to complete its review of the New Drug Application (NDA) for Sarepta Therapeutics ’ DMD drug, eteplirsen. The Prescription Drug User Fee Act (PDUFA) date for eteplirsen has been extended to May 26, 2016.
PTC Therapeutics’ stock is trading at $5.50 per share as of this writing. Shares have been on a steady decline since a March 2015 high of $77.53 per share.