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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Commission file number: 001-35969

PTC Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

    

04-3416587

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

500 Warren Corporate Center Drive

    

Warren, NJ

07059

(Address of principal executive offices)

(Zip Code)

(908) 222-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, $0.001 par value per share

PTCT

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

þ

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No þ

As of August 6, 2024, there were 76,924,170 shares of Common Stock, $0.001 par value per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms and processes on a timely basis, or at all, with third-party payors for our products or product candidates that we commercialize or may commercialize in the future;
our ability to maintain our conditional marketing authorization for TranslarnaTM (ataluren) for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in the European Economic Area, or EEA, including whether the European Medicines Agency, or EMA, determines in the re-examination process of the Committee for Medicinal Products for Human Use’s negative opinion for the renewal of the conditional marketing authorization of Translarna that the benefit-risk balance of Translarna authorization supports renewal of such authorization, or our ability to identify other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA;
our ability to maintain our marketing authorizations in other jurisdictions in which Translarna has been approved;
our ability to utilize results from Study 041 and from our international drug registry study to support a marketing approval for Translarna for the treatment of nmDMD in the United States;
expectations with respect to our ability to commercialize UpstazaTM (eladocagene exuparvovec) for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC deficiency, in the EEA, any potential regulatory submissions and potential approvals for our product candidates, and the potential achievement of development, regulatory and sales milestones and contingent payments that we may be obligated to make;
our expectations with respect to the commercial status of Evrysdi® (risdiplam) and our program directed against spinal muscular atrophy in collaboration with F. Hoffmann La Roche Ltd and Hoffmann La Roche Inc. and the Spinal Muscular Atrophy Foundation and our estimates regarding future revenues from sales-based royalty payments or the achievement of milestones in that program;
our expectations and the potential financial impact and benefits related to our Collaboration and License Agreement with a subsidiary of Ionis Pharmaceuticals, Inc. including with respect to the timing of regulatory approval of Tegsedi® (inotersen) and WaylivraTM (volanesorsen) in countries in which we are licensed to commercialize them, the commercialization of Tegsedi and Waylivra, and our expectations with respect to royalty payments by us based on our potential achievement of certain net sales thresholds;
the timing and scope of our commercialization of our products and product candidates;
our estimates regarding the potential market opportunity for our products or product candidates, including the size of eligible patient populations and our ability to identify such patients;
our ability to obtain additional and maintain existing reimbursed named patient and cohort early access programs for our products on adequate terms, or at all;

1

our estimates regarding expenses, future revenues, third-party discounts and rebates, capital requirements and needs for additional financing, including our ability to maintain the level of our expenses consistent with our internal budgets and forecasts and to secure additional funds on favorable terms or at all;
the timing and conduct of our ongoing, planned and potential future clinical trials and studies for sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications, including the timing of initiation, enrollment and completion of the trials and the period during which the results of the trials will become available;
our ability to realize the anticipated benefits of our acquisitions or other strategic transactions, including the possibility that the expected impact of benefits from the acquisitions or strategic transactions will not be realized or will not be realized within the expected time period, significant transaction costs, the integration of operations and employees into our business, our ability to obtain marketing approval of our product candidates we acquired from the acquisitions or other strategic transactions and unknown liabilities;
the rate and degree of market acceptance and clinical utility of any of our products or product candidates;
the ability and willingness of patients and healthcare professionals to access our products and product candidates through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome;
the timing of, and our ability to obtain additional marketing authorizations for our products and product candidates;
the ability of our products and our product candidates to meet existing or future regulatory standards;
the potential receipt of revenues from future sales of our products or product candidates;
the expected impact of our loss of market exclusivity for Emflaza® (deflazacort) for the treatment of Duchenne muscular dystrophy in the United States under the Orphan Drug Act of 1983;
our sales, marketing and distribution capabilities and strategy, including the ability of our third-party manufacturers to manufacture and deliver our products and product candidates in clinically and commercially sufficient quantities and the ability of distributors to process orders in a timely manner and satisfy their other obligations to us;
our ability to establish and maintain arrangements for the manufacture of our products and product candidates that are sufficient to meet clinical trial and commercial launch requirements;
the extent, timing and financial aspects of our strategic pipeline prioritization and reductions in workforce;
our ability to complete any post-marketing requirements imposed by regulatory agencies with respect to our products;
our ability to satisfy our obligations under the terms of our lease agreements;
our ability to satisfy our obligations under the indenture governing our 1.50% convertible senior notes due September 15, 2026;
our regulatory submissions, including with respect to timing and outcome of regulatory review;
our plans to advance our earlier stage programs and pursue research and development of other product candidates, including our splicing and ferroptosis and inflammation programs;

2

whether we may pursue business development opportunities, including potential collaborations, alliances, and acquisition or licensing of assets and our ability to successfully develop or commercialize any assets to which we may gain rights pursuant to such business development opportunities;
the potential advantages of our products and any product candidate;
our intellectual property position;
the impact of government laws and regulations;
the impact of litigation that has been or may be brought against us or of litigation that we are pursuing against others; and
our competitive position.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A. Risk Factors as well as in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023 completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to “PTC,” “PTC Therapeutics,” “the Company,” “we,” “us,” “our,” and similar references refer to PTC Therapeutics, Inc. and, where appropriate, its subsidiaries. The trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

All website addresses given in this Quarterly Report on Form 10-Q are for information only and are not intended to be an active link or to incorporate any website information into this document.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PTC Therapeutics, Inc.

Consolidated Balance Sheets (unaudited)

In thousands (except shares)

June 30, 

December 31, 

    

2024

    

2023

Assets

Current assets:

 

 

  

Cash and cash equivalents

$

654,779

$

594,001

Marketable securities

 

438,514

 

282,738

Trade and royalty receivables, net

 

187,150

 

160,822

Inventory, net

 

31,826

 

30,577

Prepaid expenses and other current assets

 

45,641

 

150,491

Total current assets

 

1,357,910

 

1,218,629

Fixed assets, net

 

65,987

 

87,089

Intangible assets, net

 

329,879

 

379,497

Goodwill

 

82,341

 

82,341

Operating lease ROU assets

57,135

91,896

Deposits and other assets

 

23,103

 

36,246

Total assets

$

1,916,355

$

1,895,698

Liabilities and stockholders’ deficit

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable and accrued expenses

$

338,800

$

391,983

Deferred revenue

 

 

801

Operating lease liabilities- current

13,714

13,002

Finance lease liabilities- current

2,292

3,000

Liability for sale of future royalties- current

254,997

194,314

Total current liabilities

 

609,803

 

603,100

Long-term debt

 

284,806

 

284,213

Contingent consideration payable

 

21,300

 

36,300

Deferred tax liability

 

55,911

 

55,905

Operating lease liabilities- noncurrent

79,118

97,627

Finance lease liabilities- noncurrent

15,574

17,184

Liability for sale of future royalties- noncurrent

1,829,883

1,619,783

Other long-term liabilities

141

141

Total liabilities

 

2,896,536

 

2,714,253

Stockholders’ deficit:

 

  

 

  

Common stock, $0.001 par value. Authorized 250,000,000 shares; issued and outstanding 76,900,123 shares at June 30, 2024. Authorized 250,000,000 shares; issued and outstanding 75,708,889 shares at December 31, 2023.

 

76

 

75

Additional paid-in capital

 

2,510,574

 

2,466,233

Accumulated other comprehensive loss

 

(16,498)

 

(1,285)

Accumulated deficit

 

(3,474,333)

 

(3,283,578)

Total stockholders’ deficit

 

(980,181)

 

(818,555)

Total liabilities and stockholders’ deficit

$

1,916,355

$

1,895,698

See accompanying unaudited notes.

4

PTC Therapeutics, Inc.

Consolidated Statements of Operations (unaudited)

In thousands (except shares and per share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2024

    

2023

    

2024

    

2023

Revenues:

 

  

 

  

  

 

  

Net product revenue

$

133,220

$

174,592

$

310,824

$

362,149

Collaboration revenue

 

 

 

6

Royalty revenue

53,183

36,853

84,337

67,684

Manufacturing revenue

301

2,363

1,661

4,351

Total revenues

 

186,704

 

213,808

 

396,822

 

434,190

Operating expenses:

Cost of product sales, excluding amortization of acquired intangible assets

 

15,527

12,731

 

30,267

 

26,875

Amortization of acquired intangible assets

 

2,865

47,397

 

54,395

 

86,812

Research and development

 

132,169

185,874

 

248,298

 

380,998

Selling, general and administrative

 

69,500

88,449

 

142,772

 

175,363

Change in the fair value of contingent consideration

 

5,100

(128,900)

 

5,000

 

(126,500)

Intangible asset impairment

217,800

217,800

Tangible asset impairment and losses (gains) on transactions, net

1,761

1,761

Total operating expenses

 

226,922

 

423,351

 

482,493

 

761,348

Loss from operations

 

(40,218)

 

(209,543)

 

(85,671)

 

(327,158)

Interest expense, net

 

(43,490)

(29,415)

 

(84,324)

 

(56,745)

Other (expense) income, net

 

(2,025)

1,479

 

(434)

 

11,434

Loss before income tax (expense) benefit

 

(85,733)

 

(237,479)

 

(170,429)

 

(372,469)

Income tax (expense) benefit

 

(13,446)

38,596

 

(20,326)

 

34,627

Net loss attributable to common stockholders

$

(99,179)

$

(198,883)

$

(190,755)

$

(337,842)

Weighted-average shares outstanding:

Basic and diluted (in shares)

 

76,725,070

74,730,433

 

76,610,598

 

74,232,624

Net loss per share—basic and diluted (in dollars per share)

$

(1.29)

$

(2.66)

$

(2.49)

$

(4.55)

See accompanying unaudited notes.

5

PTC Therapeutics, Inc.

Consolidated Statements of Comprehensive Loss (unaudited)

In thousands

Three Months Ended June 30, 

Six Months Ended June 30, 

     

2024

     

2023

     

2024

     

2023

Net loss

$

(99,179)

$

(198,883)

$

(190,755)

$

(337,842)

Other comprehensive (loss) income:

 

  

 

  

 

 

  

Unrealized (loss) gain on marketable securities, net of tax

 

(112)

397

 

(556)

 

451

Foreign currency translation loss, net of tax

 

(10,826)

(241)

 

(14,657)

 

(6,678)

Comprehensive loss

$

(110,117)

$

(198,727)

$

(205,968)

$

(344,069)

See accompanying unaudited notes.

6

PTC Therapeutics, Inc.

Consolidated Statements of Stockholders’ Deficit (unaudited)

In thousands (except shares)

 

 

Accumulated

 

 

 

Additional

 

other

 

Total

Three months ended June 30, 2024

Common stock

paid-in

 

comprehensive

Accumulated

stockholders’

    

Shares

    

Amount

    

capital

    

loss

    

deficit

    

deficit

Balance, March 31, 2024

76,653,960

$

76

$

2,486,722

$

(5,560)

$

(3,375,154)

$

(893,916)

Exercise of options

 

71,552

2,636

2,636

Restricted stock vesting and issuance, net

 

67,466

Issuance of common stock in connection with an employee stock purchase plan

 

107,145

1,973

1,973

Share-based compensation expense

 

19,243

19,243

Net loss

 

(99,179)

(99,179)

Comprehensive loss

 

(10,938)

(10,938)

Balance, June 30, 2024

 

76,900,123

$

76

$

2,510,574

$

(16,498)

$

(3,474,333)

$

(980,181)

 

 

Accumulated

 

 

 

Additional

 

other

 

Total

Three months ended June 30, 2023

Common stock

paid-in

 

comprehensive

Accumulated

stockholders’

    

Shares

    

Amount

    

capital

    

(loss) income

    

deficit

    

deficit

Balance, March 31, 2023

 

74,012,034

    

$

73

    

$

2,339,886

    

$

(1,587)

    

$

(2,795,933)

    

$

(457,561)

Exercise of options

 

481,051

1

14,273

14,274

Restricted stock vesting and issuance, net

 

50,382

Issuance of common stock in connection with an employee stock purchase plan

117,304

3,805

3,805

Issuance of common stock in connection with milestone payable

657,462

1

29,569

29,570

Share-based compensation expense

 

29,371

29,371

Net loss

 

(198,883)

 

(198,883)

Comprehensive income

 

 

 

 

156

 

156

Balance, June 30, 2023

 

75,318,233

$

75

$

2,416,904

$

(1,431)

$

(2,994,816)

$

(579,268)

 

 

Accumulated

 

 

 

Additional

 

other

 

Total

Six months ended June 30, 2024

Common stock

paid-in

 

comprehensive

Accumulated

stockholders’

    

Shares

    

Amount

    

capital

    

loss

    

deficit

    

deficit

Balance, December 31, 2023

 

75,708,889

$

75

$

2,466,233

$

(1,285)

$

(3,283,578)

$

(818,555)

Exercise of options

 

181,444

4,747

 

4,747

Restricted stock vesting and issuance, net

 

902,645

1

1

Issuance of common stock in connection with an employee stock purchase plan

 

107,145

1,973

1,973

Share-based compensation expense

 

37,621

37,621

Net loss

 

(190,755)

(190,755)

Comprehensive loss

 

(15,213)

(15,213)

Balance, June 30, 2024

 

76,900,123

$

76

$

2,510,574

$

(16,498)

$

(3,474,333)

$

(980,181)

 

 

Accumulated

 

 

 

Additional

 

other

 

Total

Six months ended June 30, 2023

Common stock

paid-in

 

comprehensive

Accumulated

stockholders’

    

Shares

    

Amount

    

capital

    

income (loss)

    

deficit

    

deficit

Balance, December 31, 2022

 

73,104,692

$

72

$

2,305,020

$

4,796

$

(2,656,974)

$

(347,086)

Exercise of options

692,612

 

1

 

20,324

 

 

20,325

Restricted stock vesting and issuance, net

746,163

 

1

 

 

 

1

Issuance of common stock in connection with an employee stock purchase plan

 

117,304

 

 

3,805

 

 

 

3,805

Issuance of common stock in connection with a milestone payable

657,462

1

29,569

29,570

Share-based compensation expense

 

 

 

58,186

 

 

 

58,186

Net loss

 

 

 

 

 

(337,842)

 

(337,842)

Comprehensive loss

 

 

 

 

(6,227)

 

 

(6,227)

Balance, June 30, 2023

 

75,318,233

$

75

$

2,416,904

$

(1,431)

$

(2,994,816)

$

(579,268)

See accompanying unaudited notes.

7

PTC Therapeutics, Inc.

Consolidated Statements of Cash Flows (unaudited)

In thousands

Six Months Ended June 30, 

    

2024

    

2023

Cash flows from operating activities

Net loss

$

(190,755)

$

(337,842)

Adjustments to reconcile net loss to net cash used in operating activities:

 

  

Depreciation and amortization

 

62,413

93,830

Non-cash operating lease expense

 

4,472

5,674

Non-cash royalty revenue related to sale of future royalties

(73,349)

(29,059)

Non-cash interest expense on liability related to sale of future royalties

102,340

37,753

Intangible asset impairment

217,800

Change in valuation of contingent consideration

 

5,000

(126,500)

Tangible asset impairment

168

Loss on sale of fixed assets

3,772

Gain on lease terminations

(2,179)

Unrealized loss on ClearPoint Equity Investments

 

1,252

1,112

Unrealized loss on ClearPoint convertible debt security

1,931

1,539

Unrealized gain on marketable securities- equity investments

(1,111)

(4,364)

Realized loss for the sale of ClearPoint Equity Investment

782

Non-cash stock consideration, milestone payment

29,570

Disposal of asset

133

Deferred income taxes

1

(50,907)

Amortization of discounts on investments, net

 

(6,993)

(88)

Amortization of debt issuance costs

 

591

1,001

Share-based compensation expense

 

37,621

58,186

Unrealized foreign currency transaction gains, net

 

(198)

(13,332)

Changes in operating assets and liabilities:

 

Inventory, net

 

(1,816)

(9,795)

Prepaid expenses and other current assets

 

99,791

63,951

Trade and royalty receivables, net

 

(31,310)

(18,022)

Deposits and other assets

 

10,062

6,936

Accounts payable and accrued expenses

 

(18,702)

32,437

Other liabilities

 

(2,892)

(3,055)

Deferred revenue

 

(801)

(1,351)

Net cash used in operating activities

$

(692)

$

(43,611)

Cash flows from investing activities

 

 

Purchases of fixed assets

$

(2,213)

$

(16,515)

Proceeds from sale of fixed assets

28,038

Purchases of marketable securities- available for sale

(291,734)

Purchases of marketable securities- equity investments

(17,406)

(18,159)

Sale and redemption of marketable securities- available for sale

136,650

21,544

Sale and redemption of marketable securities- equity investments

20,573

4,249

Sale and redemption of ClearPoint Equity Investments

2,594

Acquisition of product rights and licenses

(54,763)

(46,436)

Net cash used in investing activities

$

(180,855)

$

(52,723)

Cash flows from financing activities

 

 

Proceeds from exercise of options

$

4,747

$

20,325

Proceeds from employee stock purchase plan

1,973

3,805

Debt issuance costs related to secured loan

(197)

Proceeds from sales of future royalties

241,792

Payment of finance lease principal

(1,490)

(1,379)

Net cash provided by financing activities

$

247,022

$

22,554

Effect of exchange rate changes on cash

 

(7,217)

2,351

Net increase (decrease) in cash and cash equivalents

 

58,258

 

(71,429)

Cash and cash equivalents, and restricted cash beginning of period

 

610,284

295,925

Cash and cash equivalents, and restricted cash end of period

$

668,542

$

224,496

Supplemental disclosure of cash information

 

 

Cash paid for interest

$

3,666

$

22,310

Cash paid for income taxes