SEC Filing | PTC Therapeutics, Inc.

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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, 2023

☐ 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.)


100 Corporate Court
South Plainfield, NJ		07080
(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 1, 2023, there were 75,344,951 shares of Common Stock, $0.001 par value per share, outstanding.

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TABLE OF CONTENTS

PTC Therapeutics, Inc.


	Page No.
PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)	4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40

Item 3. Quantitative and Qualitative Disclosures About Market Risk	59

Item 4. Controls and Procedures	59

PART II—OTHER INFORMATION

Item 1. Legal Proceedings	60

Item 1A. Risk Factors	60

Item 5. Other Information	60

Item 6. Exhibits	62

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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;

●

expectations with respect to our ability to commercialize Upstaza^TM(eladocagene exuparvovec) for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC deficiency, in the European Economic Area, or EEA, any potential regulatory submissions and potential approvals for our product candidates, our manufacturing capabilities and the potential financial impact and benefits of our leased biologics manufacturing facility and the potential achievement of development, regulatory and sales milestones and contingent payments that we may be obligated to make;

●

our ability to maintain our marketing authorization of Translarna^TM(ataluren) for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in the EEA, which is subject to the specific obligation to conduct and submit the results of Study 041 to the European Medicines Agency, or EMA, and annual review and renewal by the European Commission following reassessment of the benefit-risk balance of the authorization by the EMA;

●

our ability to utilize results from Study 041 to support a conversion of the conditional marketing authorization for Translarna for the treatment of nmDMD in the EEA to a standard marketing authorization and to support a marketing approval for Translarna for the treatment of nmDMD in the United States;

●

the anticipated period 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 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 Waylivra^TM (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;

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●

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 in our splicing, metabolic, Bio-e and oncology 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;

●

our ability to complete Study 041, a multicenter, randomized, double-blind, 18-month, placebo-controlled clinical trial of Translarna for the treatment of nmDMD followed by an 18-month open-label extension, according to the protocol agreed with the EMA;

●

the potential receipt of revenues from future sales of our products or product candidates;

●

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 the discontinuation of our preclinical and early research programs in gene therapy and reduction in workforce;

●

our expectations with respect to the COVID-19 pandemic and related response measures and their effects on our business, operations, clinical trials, potential regulatory submissions and approvals, our collaborators, contract research organizations, suppliers and manufacturers;

●

our ability to complete any post-marketing requirements imposed by regulatory agencies with respect to our products;

●

our expectations with respect to the potential financial impact and benefits of our leased biologics manufacturing facility and our ability to satisfy our obligations under the terms of the lease agreement for such facility;

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●

our ability to satisfy our obligations under the terms of the credit agreement with funds and other affiliated entities advised or managed by Blackstone Life Sciences and Blackstone Credit and Wilmington Trust, National Association, as the administrative agent;

●

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, metabolic, Bio-e and oncology programs;

●

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, 2022, 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, 2022 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.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PTC Therapeutics, Inc.

Consolidated Balance Sheets (unaudited)

In thousands (except shares)


	June 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	208,393	$	279,834
Marketable securities		129,550		130,871
Trade and royalty receivables, net		177,503		155,614
Inventory, net		32,018		21,808
Prepaid expenses and other current assets		42,227		105,658
Total current assets		589,691		693,785
Fixed assets, net		82,129		72,590
Intangible assets, net		451,629		705,891
Goodwill		82,341		82,341
Operating lease ROU assets		96,686		102,430
Deposits and other assets		35,648		48,582
Total assets	$	1,338,124	$	1,705,619
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable and accrued expenses	$	358,562	$	320,366
Deferred revenue		—		1,351
Operating lease liabilities- current		10,199		9,370
Finance lease liabilities- current		2,230		3,000
Liability for sale of future royalties- current		105,351		72,149
Total current liabilities		476,342		406,236
Long-term debt		572,643		571,722
Contingent consideration payable		37,500		164,000
Deferred tax liability		51,928		102,834
Operating lease liabilities- noncurrent		100,425		100,860
Finance lease liabilities- noncurrent		17,184		18,675
Liability for sale of future royalties- noncurrent		661,229		685,737
Other long-term liabilities		141		2,641
Total liabilities		1,917,392		2,052,705
Stockholders’ deficit:
Common stock, $0.001 par value. Authorized 250,000,000 shares; issued and outstanding 75,318,233 shares at June 30, 2023. Authorized 250,000,000 shares; issued and outstanding 73,104,692 shares at December 31, 2022.		75		72
Additional paid-in capital		2,416,904		2,305,020
Accumulated other comprehensive (loss) income		(1,431)		4,796
Accumulated deficit		(2,994,816)		(2,656,974)
Total stockholders’ deficit		(579,268)		(347,086)
Total liabilities and stockholders’ deficit	$	1,338,124	$	1,705,619

See accompanying unaudited notes.

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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,
	2023		2022		2023		2022
Revenues:
Net product revenue	$	174,592	$	143,701	$	362,149	$	273,534
Collaboration revenue		—		—		6		7
Royalty revenue		36,853		21,825		67,684		40,721
Manufacturing revenue		2,363		—		4,351		—
Total revenues		213,808		165,526		434,190		314,262
Operating expenses:
Cost of product sales, excluding amortization of acquired intangible assets		12,731		9,639		26,875		19,774
Amortization of acquired intangible assets		47,397		26,294		86,812		49,767
Research and development		185,874		157,263		380,998		297,341
Selling, general and administrative		88,449		79,892		175,363		153,162
Change in the fair value of contingent consideration		(128,900)		(15,200)		(126,500)		(26,900)
Intangible asset impairment		217,800		—		217,800		—
Total operating expenses		423,351		257,888		761,348		493,144
Loss from operations		(209,543)		(92,362)		(327,158)		(178,882)
Interest expense, net		(29,415)		(21,976)		(56,745)		(45,490)
Other income (expense), net		1,479		(34,357)		11,434		(46,214)
Loss before income tax benefit (expense)		(237,479)		(148,695)		(372,469)		(270,586)
Income tax benefit (expense)		38,596		(3,392)		34,627		(8,227)
Net loss attributable to common stockholders	$	(198,883)	$	(152,087)	$	(337,842)	$	(278,813)
Weighted-average shares outstanding:
Basic and diluted (in shares)		74,730,433		71,372,940		74,232,624		71,294,458
Net loss per share—basic and diluted (in dollars per share)	$	(2.66)	$	(2.13)	$	(4.55)	$	(3.91)

See accompanying unaudited notes.

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PTC Therapeutics, Inc.

Consolidated Statements of Comprehensive Loss (unaudited)

In thousands


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net loss	$	(198,883)	$	(152,087)	$	(337,842)	$	(278,813)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of tax		397		(156)		451		(3,069)
Foreign currency translation (loss) gain, net of tax		(241)		29,015		(6,678)		37,602
Comprehensive loss	$	(198,727)	$	(123,228)	$	(344,069)	$	(244,280)

See accompanying unaudited notes.

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PTC Therapeutics, Inc.

Consolidated Statements of Stockholders’ (Deficit) Equity (unaudited)

In thousands (except shares)


						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 a 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
Three months ended June 30, 2022	Common stock			paid-in		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		(loss) income		deficit		deficit
Balance, March 31, 2022	71,337,041	$	71	$	2,152,639	$	(18,608)	$	(2,224,683)	$	(90,581)
Exercise of options	27,832		—		754		—		—		754
Restricted stock vesting and issuance, net	49,753		—		—		—		—		—
Issuance of common stock in connection with an employee stock purchase plan	91,263		—		3,107		—		—		3,107
Share-based compensation expense	—		—		27,730		—		—		27,730
Net loss	—		—		—		—		(152,087)		(152,087)
Comprehensive income	—		—		—		28,859		—		28,859
Balance, June 30, 2022	71,505,889	$	71	$	2,184,230	$	10,251	$	(2,376,770)	$	(182,218)


						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)


						Accumulated
				Additional		other				Total
Six months ended June 30, 2022	Common stock			paid-in		comprehensive		Accumulated		stockholders’
	Shares	Amount		capital		(loss) income		deficit		equity (deficit)
Balance, December 31, 2021	70,828,226	$	71	$	2,123,606	$	(24,282)	$	(2,097,957)	$	1,438
Exercise of options	125,020		—		3,198		—		—		3,198
Restricted stock vesting and issuance, net	461,380		—		—		—		—		—
Issuance of common stock in connection with an employee stock purchase plan	91,263		—		3,107		—		—		3,107
Share-based compensation expense	—		—		54,319		—		—		54,319
Net loss	—		—		—		—		(278,813)		(278,813)
Comprehensive income	—		—		—		34,533		—		34,533
Balance, June 30, 2022	71,505,889	$	71	$	2,184,230	$	10,251	$	(2,376,770)	$	(182,218)

See accompanying unaudited notes.

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PTC Therapeutics, Inc.

Consolidated Statements of Cash Flows (unaudited)

In thousands


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net loss	$	(337,842)	$	(278,813)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		93,830		55,494
Non-cash operating lease expense		5,674		4,295
Non-cash royalty revenue related to sale of future royalties		(29,059)		(17,482)
Non-cash interest expense on liability related to sale of future royalties		37,753		37,825
Intangible asset impairment		217,800		—
Change in valuation of contingent consideration		(126,500)		(26,900)
Unrealized loss (gain) on ClearPoint Equity Investments		1,112		(2,369)
Unrealized loss (gain) on ClearPoint convertible debt security		1,539		(1,995)
Unrealized (gain) loss on marketable securities- equity investments		(4,364)		11,356
Realized loss for the sale of Clearpoint Equity Investment		782		—
Non-cash stock consideration, milestone payment		29,570		—
Disposal of asset		133		82
Deferred income taxes		(50,907)		—
Amortization of (discounts) premiums on investments, net		(88)		1,540
Amortization of debt issuance costs		1,001		935
Share-based compensation expense		58,186		54,319
Unrealized foreign currency transaction (gains) losses, net		(13,332)		36,359
Changes in operating assets and liabilities:
Inventory, net		(9,795)		27
Prepaid expenses and other current assets		63,951		16,431
Trade and royalty receivables, net		(18,022)		(29,549)
Deposits and other assets		6,936		(974)
Accounts payable and accrued expenses		32,437		(9,060)
Other liabilities		(3,055)		(4,167)
Deferred revenue		(1,351)		—
Net cash used in operating activities	$	(43,611)	$	(152,646)
Cash flows from investing activities
Purchases of fixed assets	$	(16,515)	$	(18,012)
Purchases of marketable securities- available for sale		—		(40,429)
Purchases of marketable securities- equity investments		(18,159)		—
Sale and redemption of marketable securities- available for sale		21,544		257,534
Sale and redemption of marketable securities- equity investments		4,249		3,630
Sale and redemption of ClearPoint Equity Investments		2,594		—
Acquisition of product rights and licenses		(46,436)		(81,426)
Net cash (used in) provided by investing activities	$	(52,723)	$	121,297
Cash flows from financing activities
Proceeds from exercise of options	$	20,325	$	3,198
Proceeds from employee stock purchase plan		3,805		3,107
Debt issuance costs related to senior secured term loan		(197)		—
Payment of finance lease principal		(1,379)		(1,276)
Net cash provided by financing activities	$	22,554	$	5,029
Effect of exchange rate changes on cash		2,351		3,347
Net decrease in cash and cash equivalents		(71,429)		(22,973)
Cash and cash equivalents, and restricted cash beginning of period		295,925		197,218
Cash and cash equivalents, and restricted cash end of period	$	224,496	$	174,245
Supplemental disclosure of cash information
Cash paid for interest	$	22,310	$	8,273
Cash paid for income taxes		9,196		2,949
Supplemental disclosure of non-cash investing and financing activity
Unrealized gain (loss) on marketable securities, net of tax	$	451	$	(3,069)
Right-of-use assets obtained in exchange for operating lease obligations		—		68,642
Acquisition of product rights and licenses		36,879		26,687
Debt issuance costs related to senior secured term loan		38		—
Capital expenditures unpaid at the end of period		36		—
Milestone payable		2,500		50,000

See accompanying unaudited notes.

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PTC Therapeutics, Inc.

Notes to Consolidated Financial Statements (unaudited)

June 30, 2023

In thousands (except share and per shar