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, 2024

☐ 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.

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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	42

Item 3. Quantitative and Qualitative Disclosures About Market Risk	62

Item 4. Controls and Procedures	62

PART II—OTHER INFORMATION

Item 1. Legal Proceedings	63

Item 1A. Risk Factors	63

Item 5. Other Information	63

Item 6. Exhibits	65

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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;

●

our ability to maintain our conditional marketing authorization for Translarna^TM(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 Upstaza^TM(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 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 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;

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●

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.

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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,
	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.

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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,
	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.

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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,
	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.

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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.

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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		6,117		9,196
Supplemental disclosure of non-cash investing and financing activity
Unrealized (loss) gain on marketable securities, net of tax	$	(556)	$	451
Right-of-use assets obtained in exchange for operating lease obligations		1,723		—
Acquisition of product rights and licenses		3,105		36,879
Fixed asset additions through tenant improvement allowance		16,739		—
Milestone payable		37,500		2,500
Debt issuance costs related to senior secured term loan		—		38
Capital expenditures unpaid at the end of the period		—		36

See accompanying unaudited notes.

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PTC Therapeutics, Inc.

Notes to Consolidated Financial Statements (unaudited)

June 30, 2024

In thousands (except share and per share amounts unless otherwise noted)

1. The Company

PTC Therapeutics, Inc. (the “Company” or “PTC”) is a global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. PTC’s ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines. PTC’s mission is to provide access to best-in-class treatments for patients who have little to no treatment options. PTC’s strategy is to leverage its strong scientific and clinical expertise and global commercial infrastructure to bring therapies to patients. PTC believes that this allows it to maximize value for all of its stakeholders. PTC has a diversified therapeutic portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology and metabolism.

The Company has two products, Translarna™ (ataluren) and Emflaza® (deflazacort), for the treatment of Duchenne muscular dystrophy (“DMD”), a rare, life threatening disorder. Translarna has marketing authorization in the European Economic Area (the “EEA”) for the treatment of nonsense mutation Duchenne muscular dystrophy (“nmDMD”) in ambulatory patients aged two years and older. Translarna also has marketing authorization in Russia for the treatment of nmDMD in patients aged two years and older and in Brazil for the treatment of nmDMD in ambulatory patients two years and older and for continued treatment of patients that become non-ambulatory, as well as in various other countries. Emflaza is approved in the United States for the treatment of DMD in patients two years and older.

The Company’s marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission (“EC”) following reassessment by the European Medicines Agency (“EMA”) of the benefit-risk balance of the authorization, which the Company refers to as the annual EMA reassessment. In September 2022, the Company submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension. In February 2023, the Company also submitted an annual marketing authorization renewal request to the EMA. In September 2023, the Committee for Medicinal Products for Human Use (“CHMP”), gave a negative opinion on the conversion of the conditional marketing authorization to full marketing authorization of Translarna for the treatment of nmDMD and a negative opinion on the renewal of the existing conditional marketing authorization of Translarna for the treatment of nmDMD. In January 2024, the CHMP issued a negative opinion for the renewal of the conditional marketing authorization following a re-examination procedure. In May 2024, the EC decided not to adopt the CHMP’s negative opinion for the renewal of the conditional marketing authorization of Translarna and returned such opinion to the CHMP for re-evaluation. On June 27, 2024, following the EC’s request for re-review, the CHMP issued a negative opinion on the renewal of the conditional marketing authorization of Translarna for the treatment of nmDMD. Per EMA guidelines, the Company has requested a re-examination of the CHMP’s negative opinion regarding the renewal of the existing conditional marketing authorization. The marketing authorization for Translarna remains in effect, pending the outcomes of the re-examination procedure and subsequent EC adoption. Based on the timeline of these procedures, the Company expects the marketing authorization for Translarna to remain in effect through the end of 2024 even if the CHMP’s negative opinion is maintained and adopted.

Translarna is an investigational new drug in the United States. Following the Company’s announcement of top-line results from the placebo-controlled trial of Study 041 in June 2022, the Company submitted a meeting request to the U.S. Food and Drug Administration (“FDA”) to gain clarity on the regulatory pathway for a potential re-submission of a New Drug Application (“NDA”) for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support an NDA re-submission. The Company held a Type C meeting with the FDA in the fourth quarter of 2023 to discuss the totality of Translarna data. Based on feedback from the FDA, the Company

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re-submitted the NDA in July 2024, based on the results from Study 041 and from the Company’s international drug registry study for nmDMD patients receiving Translarna.

The Company has developed Upstaza (eladocagene exuparvovec), a gene therapy used for the treatment of Aromatic L-Amino Acid Decarboxylase (“AADC”) deficiency (“AADC deficiency”), a rare central nervous system (“CNS”) disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the EC approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare Products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom. In March 2024, the Company submitted a biologics license application (“BLA”) for our gene therapy for the treatment of AADC deficiency in the United States. In May 2024, the FDA has accepted for filing the BLA and granted priority review with a target regulatory action date of November 13, 2024.

The Company holds the rights for the commercialization of Tegsedi^® (inotersen) and Waylivra^® (volanesorsen) for the treatment of rare diseases in countries in Latin America and the Caribbean pursuant to the Collaboration and License Agreement (the “Tegsedi-Waylivra Agreement”), dated August 1, 2018, by and between the Company and Akcea Therapeutics, Inc. (“Akcea”), a subsidiary of Ionis Pharmaceuticals, Inc. Tegsedi has received marketing authorization in the United States, the European Union (the “EU”) and Brazil for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis (“hATTR amyloidosis”). In August 2021, ANVISA, the Brazilian health regulatory authority, approved Waylivra as the first treatment for familial chylomicronemia syndrome (“FCS”) in Brazil. In December 2022, ANVISA approved Waylivra for the treatment of familial partial lipodystrophy (“FPL”). Waylivra has also received marketing authorization in the EU for the treatment of FCS.

The Company also has a spinal muscular atrophy (“SMA”) collaboration with F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc. (referred to collectively as “Roche”) and the Spinal Muscular Atrophy Foundation (“SMA Foundation”). The SMA program has one approved product, Evrysdi® (risdiplam), which was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the EC in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies. Evrysdi has also received marketing authorization for the treatment of SMA in over 100 countries. In May 2022, the FDA approved a label expansion for Evrysdi to include infants under two months old with SMA. In August 2023, the EC approved an extension of the Evrysdi marketing authorization to include infants under two months old in the EU.

One of the Company’s most advanced clinical stage molecules is sepiapterin. Sepiapterin is a precursor to intracellular tetrahydrobiopterin, which is a critical enzymatic cofactor involved in metabolism and synthesis of numerous metabolic products. In May 2023, the Company announced that the primary endpoint was achieved in its registration-directed Phase 3 trial for sepiapterin for phenylketonuria (“PKU”). The primary endpoint of the study was the achievement of statistically-significant reduction in blood Phe level. In March 2024, the Company submitted a marketing authorization application (“MAA”) to the EMA for sepiapterin for the treatment of PKU in the EEA, which was validated and accepted for review by the EMA in May 2024. Additionally, the Company participated in a pre-NDA meeting with the FDA in the third quarter of 2023. At that meeting, the FDA stated that the sepiapterin clinical safety and efficacy data supported NDA submission for the treatment of pediatric and adult PKU patients. However, the FDA requested that PTC complete a 26-week nonclinical mouse study to assess sepiapterin carcinogenicity potential prior to NDA submission. In July 2024, following completion of the in-life portion of the study, the Company submitted an NDA to the FDA for sepiapterin for the treatment of PKU. PTC also expects to make regulatory submissions for sepiapterin for the treatment of PKU in Japan and Brazil later in 2024.

In addition to the Company’s SMA program, the Company’s splicing platform also includes PTC518, which is being developed for the treatment of Huntington’s disease (“HD”). The Company initiated a Phase 2 study of PTC518 for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on PTC518 biomarker effect. In June 2023, the Company announced interim data from the 12-week placebo-controlled phase. In June 2024, the Company announced additional interim results from the Phase 2 study of PTC518. At month 12, PTC518 treatment demonstrated durable dose-dependent lowering of mutant HTT (“mHTT”) protein in the blood and dose-dependent lowering of mHTT protein in the cerebrospinal fluid in the interim cohort of stage 2 patients. In addition,

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favorable trends were demonstrated on several relevant HD clinical assessments. Furthermore, following 12 months of treatment, PTC518 continued to be well tolerated. Based on its review of the interim Phase 2 study data, the FDA lifted the partial clinical hold on the program.

The Company’s ferroptosis and inflammation platform consists of small molecule compounds that target oxidoreductase enzymes that regulate oxidative stress and inflammatory pathways central to the pathology of a number of CNS diseases. The two most advanced molecules in the Company’s ferroptosis and inflammation platform are vatiquinone and utreloxastat. The Company announced topline results from a registration-directed Phase 3 trial of vatiquinone in children and young adults with Friedreich ataxia, called MOVE-FA, in May 2023. While the study did not meet its primary endpoint, vatiquinone treatment did demonstrate significant benefit on key disease subscales, including the upright stability subscale, as well as on other disease relevant endpoints. In the first quarter of 2024, the Company met with the FDA, who expressed willingness to review an NDA for vatiquinone for the treatment of Friedreich ataxia based on the MOVE-FA trial as well as data from the ongoing open label extension study following the MOVE-FA trial. The Company plans to submit an NDA for vatiquinone in late 2024. The Company initiated a Phase 2 registration directed trial of utreloxastat for amyotrophic lateral sclerosis, or ALS, in the first quarter of 2022. The Company expects topline results from this trial in the fourth quarter of 2024.

In addition, the Company has a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas for rare diseases.

As of June 30, 2024, the Company had an accumulated deficit of approximately $3,474.3 million. The Company has financed its operations to date primarily through the private offerings of convertible senior notes (see Note 9), public and “at the market offerings” of common stock, proceeds from royalty purchase agreements (see Note 2), net proceeds from the Company’s borrowings under its credit agreement with Blackstone (see Note 9), private placements of its convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company’s product candidates. The Company has also relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States since 2014, Emflaza for the treatment of DMD in the United States since 2017, and Upstaza for the treatment of AADC deficiency in the EEA since May 2022. The Company has also relied on revenue associated with milestone and royalty payments from Roche pursuant to the License and Collaboration Agreement (the “SMA License Agreement”) dated as of November 23, 2011, by and among the Company, Roche and, for the limited purposes set forth therein, the SMA Foundation, under its SMA program. The Company expects that cash flows from the sales of its products, milestone and royalty payments from Roche, together with the Company’s cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months.

2. Summary of significant accounting policies

The Company’s complete listing of significant accounting policies is set forth in Note 2 of the notes to the Company’s audited financial statements as of December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 29, 2024 (the "2023 Form 10-K"). Selected significant accounting policies are discussed in further detail below.

Basis of presentation

The accompanying financial information as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2023 and notes thereto included in the 2023 Form 10-K.

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In the opinion of management, the unaudited financial information as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations, stockholders’ deficit, and cash flows. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ended December 31, 2024 or for any other interim period or for any other future year.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, royalty revenue, certain accruals related to the Company’s research and development expenses, valuation procedures for liability for sale of future royalties, fair value of the contingent consideration, and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.

Restricted cash

Restricted cash included in deposits and other assets on the consolidated balance sheet contains an unconditional, irrevocable and transferable letter of credit that was entered into during the twelve-month period ended December 31, 2019 in connection with obligations under a facility lease for the Company’s facility in Hopewell Township, New Jersey. The amount of the letter of credit was $7.5 million and was to be maintained for a term of not less than five years and had the potential to be reduced to $3.8 million if after five years the Company was not in default of its lease. In June 2024, in connection with an amendment and restatement of the lease, the letter of credit was reduced to $5.0 million, and has the potential to be reduced to $3.0 million if after July 1, 2025, the Company is not in default of its lease. Refer to Note 3 for further details. Restricted cash also contains an unconditional, irrevocable and transferable letter of credit that was entered into during June 2022 in connection with obligations for the Company’s new facility lease in Warren, New Jersey. The amount of the letter of credit is $8.1 million and has the potential to be reduced to $4.1 million if after five years the Company is not in default of its lease. Both amounts are classified within deposits and other assets on the consolidated balance sheet due to the long-term nature of the respective letters of credit. Restricted cash also includes a bank guarantee of $0.6 million denominated in a foreign currency.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheet that sum to the total of the same amounts shown in the statement of cash flows:


	End of			Beginning of
	period-		period-
	June 30,		December 31,
	2024		2023
Cash and cash equivalents	$	654,779	$	594,001
Restricted cash included in deposits and other assets		13,763		16,283
Total Cash, cash equivalents and restricted cash per statement of cash flows	$	668,542	$	610,284

Marketable securities

The Company’s marketable securities consists of both debt securities and equity investments. The Company considers its investments in debt securities with original maturities of greater than 90 days to be available for sale securities. Securities under this classification are recorded at fair value and unrealized gains and losses within accumulated other comprehensive income. The estimated fair value of the available for sale securities is determined based on quoted market prices or rates for similar instruments. In addition, the cost of debt securities in this category is adjusted for amortization of premium and accretion of discount to maturity. For available for sale debt securities in an unrealized loss position, the Company assesses whether it intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value. If the criteria are not met, the Company evaluates whether the decline in fair value has resulted from a credit loss or other factors. In making this assessment, management considers, among

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other factors, the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized costs basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. For the three and six months ended June 30, 2024 and 2023, no allowance was recorded for credit losses.

Marketable securities that are equity investments are measured at fair value, as it is readily available, and as such are classified as Level 1 assets. Unrealized holding gains and losses for these equity investments are components of other (expense) income, net within the consolidated statement of operations.

Inventory and cost of product sales

Inventory

Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. Products which may be used in clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes. Inventory used for marketing efforts are charged to selling, general and administrative expense. Amounts related to clinical development programs and marketing efforts are immaterial.

The following table summarizes the components of the Company’s inventory for the periods indicated:


	June 30, 2024		December 31, 2023
Raw materials	$	1,113	$	952
Work in progress		24,033		17,991
Finished goods		6,680		11,634
Total inventory	$	31,826	$	30,577

The Company periodically reviews its inventories for excess amounts or obsolescence and writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. For the three months ended June 30, 2024, the inventory write-downs were immaterial. For the six months ended June 30, 2024, the Company recorded inventory write-downs of $2.6 million, primarily related to adjustments to inventory reserves and product approaching expiration. For the three and six months ended June 30, 2023, the Company recorded inventory write-downs of $0.3 million and $0.4 million, respectively, primarily related to product approaching expiration. Additionally, though the Company’s product is subject to strict quality control and monitoring which it performs throughout the manufacturing processes, certain batches or units of product may not meet quality specifications resulting in a charge to cost of product sales. For the three and six months ended June 30, 2024 and 2023, these amounts were immaterial.

Cost of product sales

Cost of product sales consists of the cost of inventory sold, manufacturing and supply chain costs, storage costs, amortization of the acquired intangible asset, royalty payments associated with net product sales, and royalty payments to collaborative partners associated with royalty revenues and collaboration revenue related to milestones. Production costs are expensed as cost of product sales when the related products are sold or royalty revenues and collaboration revenue milestones are earned.

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Revenue recognition

Net product revenue

The Company’s net product revenue primarily consists of sales of Translarna in territories outside of the U.S. for the treatment of nmDMD and sales of Emflaza in the U.S. for the treatment of DMD. The Company recognizes revenue when its performance obligations with its customers have been satisfied. The Company’s performance obligations are to provide products based on customer orders from distributors, hospitals, specialty pharmacies or retail pharmacies. The performance obligations are satisfied at a point in time when the Company’s customer obtains control of the product, which is typically upon delivery. The Company invoices its customers after the products have been delivered and invoice payments are generally due within 30 to 90 days of the invoice date. The Company determines the transaction price based on fixed consideration in its contractual agreements. Contract liabilities arise in certain circumstances when consideration is due for goods the Company has yet to provide. As the Company has identified only one distinct performance obligation, the transaction price is allocated entirely to product sales. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers product to when the customers pay for the product is typically less than one year. Customers in certain countries pay in advance of product delivery. In those instances, payment and delivery typically occur in the same month.

The Company records product sales net of any variable consideration, which includes discounts, allowances, rebates related to Medicaid and other government pricing programs, and distribution fees. The Company uses the expected value or most likely amount method when estimating its variable consideration, unless discount or rebate terms are specified within contracts. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained.

For the three months ended June 30, 2024 and 2023, net product sales outside of the United States were $85.9 million and $108.9 million, respectively, consisting of sales of Translarna, Tegsedi, Waylivra, and Upstaza. Translarna net revenues made up $70.4 million and $96.5 million of the net product sales outside of the United States for the three months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, net product sales in the United States were $47.3 million and $65.7 million, respectively, consisting solely of sales of Emflaza. During the three months ended June 30, 2024, two countries, the United States and Brazil, accounted for at least 10% of the Company’s net product sales, representing $47.3 million and $30.4 million of net product sales, respectively. During the three months ended June 30, 2023, three countries, the United States, Russia, and Brazil, accounted for at least 10% of the Company’s net product sales, representing $65.7 million, $19.1 million, and $23.1 million of net product sales, respectively.

For the six months ended June 30, 2024 and 2023, net product sales outside of the United States were $206.0 million and $241.8 million, respectively, consisting of Translarna, Tegsedi, Waylivra, and Upstaza. Translarna net revenues made up $173.9 million and $211.6 million of the net product sales outside of the United States for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, net product sales in the United States were $104.8 million and $120.3 million, respectively, consisting solely of Emflaza. During the six months ended June 30, 2024, three countries, the United States, Russia, and Brazil, accounted for at least 10% of the Company’s net product sales, representing $104.8 million, $54.8 million, and $39.1 million of net product sales, respectively. During the six months ended June 30, 2023, three countries, the United States, Russia, and Brazil, accounted for at least 10% of the Company’s net product sales, representing $120.3 million, $63.7 million, and $48.9 million of net product sales, respectively.

In relation to customer contracts, the Company incurs costs to fulfill a contract but does not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. The Company considers any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense.

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Collaboration and royalty revenue

The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events.

At the inception of a collaboration arrangement, the Company needs to first evaluate if the arrangement meets the criteria in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 808 “Collaborative Arrangements” to then determine if ASC Topic 606 is applicable by considering whether the collaborator meets the definition of a customer. If the criteria are met, the Company assesses the promises in the arrangement to identify distinct performance obligations.

For licenses of intellectual property, the Company assesses, at contract inception, whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for nonrefundable, upfront license fees when the license is transferred to the customer and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license will be bundled with other promises in the arrangement into one distinct performance obligation. The Company needs to determine if the bundled performance obligation is satisfied over time or at a point in time. If the Company concludes that the nonrefundable, upfront license fees will be recognized over time, the Company will need to assess the appropriate method of measuring proportional performance.

For milestone payments, the Company assesses, at contract inception, whether the development or sales-based milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable of being achieved until the applicable regulatory approvals or other external conditions are obtained as such conditions are not within the Company’s control. If it is probable that a significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will re-assess the development and sales-based milestones each reporting period to determine the probability of achievement. The Company recognizes royalties from product sales at the later of when the related sales occur or when the performance obligation to which the royalty has been allocated has been satisfied. If it is probable that a significant revenue reversal will not occur, the Company will estimate the royalty payments using the most likely amount method.

The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities.

For the three and six months ended June 30, 2024 and 2023, the amounts recognized for the collaboration revenue related to the SMA License Agreement with Roche were immaterial.

For the three and six months ended June 30, 2024, the Company has recognized $53.2 million and $84.3 million of royalty revenue, respectively, related to Evrysdi. For the three and six months ended June 30, 2023, the Company has recognized $36.9 million and $67.7 million of royalty revenue, respectively, related to Evrysdi.

Manufacturing Revenue

The Company has manufacturing services related to the production of plasmid deoxyribonucleic acid (“DNA”) and adeno-associated virus (“AAV”) vectors for gene therapy applications for external customers. Performance obligations vary but may include manufacturing plasmid DNA and/or AAV vectors, material testing, stability studies, and other services related to material development. The transaction prices for these arrangements are fixed and include amounts stated in the contracts for each promised service. Typically, the performance obligations within a manufacturing contract are highly interdependent, in which case, the Company will combine them into a single performance obligation. The Company has determined that the assets created have no alternative use to the Company, and the Company has an enforceable right to

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payment for the performance completed to date, therefore revenue related to these services are recognized over time and is measured using an output method based on performance of manufacturing milestones completed to date.

Manufacturing service contracts may also include performance obligations related to project management services or obtaining materials from third parties. The Company has determined that these are separate performance obligations for which revenue is recognized at the point in time the services are performed. For performance obligations related to obtaining third party materials, the Company has determined that it is the principal as the Company has control of the materials and has discretion in setting the price. Therefore, the Company recognizes revenue on a gross basis related to obtaining third party materials.

Certain arrangements require a portion of the contract consideration to be received in advance at the commencement of the contract, and such advance payment is initially recorded as a contract liability. A contract asset may be recognized in the event the Company’s satisfaction of performance obligations outpaces customer billings.

For the three and six months ended June 30, 2024, the Company recognized $0.3 million and $1.7 million of manufacturing revenue, respectively, related to plasmid DNA and AAV vector production for external customers. For the three and six months ended June 30, 2023, the Company recognized $2.4 million and $4.4 million of manufacturing revenue, respectively, related to plasmid DNA and AAV vector production for external customers. As of June 30, 2024, the Company has no contract assets and no remaining performance obligations related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. For the period ended December 31, 2023, the Company had contract assets of $0.2 million and remaining performance obligations of $0.8 million related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers.

Allowance for doubtful accounts

The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. The Company also assesses whether an allowance for expected credit losses may be required which includes a review of the Company’s receivables portfolio, which are pooled on a customer basis or country basis. In making its assessment of whether an allowance for credit losses is required, the Company considers its historical experience with customers, current balances, levels of delinquency, regulatory and legal environments, and other relevant current and future forecasted economic conditions. For the three and six months ended June 30, 2024 and 2023, no allowance was recorded for credit losses. The allowance for doubtful accounts was $0.6 million as of June 30, 2024, and $1.2 million as of December 31, 2023. For the three and six months ended June 30, 2024 and 2023, bad debt expense was immaterial.

Liability for sale of future royalties

In June 2024, the Company, Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) and Royalty Pharma plc, entered into an amendment to the Amended and Restated Royalty Purchase Agreement, dated as of October 18, 2023 (as amended, the “A&R Royalty Purchase Agreement”). The A&R Royalty Purchase Agreement amended and restated in its entirety the original Royalty Purchase Agreement, dated as of July 17, 2020 (the “Original Royalty Purchase Agreement”). Pursuant to the A&R Royalty Purchase Agreement, the Company has sold to Royalty Pharma a portion of the Company’s right to receive sales-based royalty payments (the “Royalty”) on worldwide net sales of Evrysdi and any other product developed pursuant to the License and Collaboration Agreement (the “License Agreement”), dated as of November 23, 2011, by and among the Company, Roche and, for the limited purposes set forth therein, the SMA Foundation under the SMA program.

Pursuant to the guidance in ASC 470-10-25-2, the Company determined that cash consideration obtained pursuant to the A&R Royalty Purchase Agreement should be classified as debt and recorded it as “liability for sale of future royalties-current” and “liability for sale of future royalties-noncurrent” on the Company’s consolidated balance sheet based on the timing of the expected payments to be made to Royalty Pharma at the time of the transaction. Under the A&R Royalty Purchase Agreement, the Company exercised a put option in June 2024, resulting in the Company receiving $241.8 million in cash consideration. In connection with the put option exercise, the change in rights and obligations resulted in a change

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in the terms of the liability for sale of future royalties, which was evaluated by the Company in accordance with ASC 470-50, Debt —Modifications and Extinguishments. The Company determined that the present value of the cash flows after the put option exercise was not substantially different and was therefore determined to be a modification. The $241.8 million in cash consideration obtained was added to the liability for sale of future royalties and the annual effective interest rate under the A&R Royalty Purchase Agreement was determined to be 9.9%. The liability is amortized using the effective interest method over the life of the arrangement, in accordance with the respective guidance, utilizing the prospective method to account for subsequent changes in the estimated future payments to be made to Royalty Pharma and the Company updates the effective interest rate on a quarterly basis. Refer to Note 9 for further details.

To date, the Company has sold to Royalty Pharma a total of 90.49% of the Royalty, which will be reduced to 83.33% (the “Assigned Royalty Rights”) after Royalty Pharma receives $1.3 billion in aggregate payments (the “Assigned Royalty Cap”) from the Royalty assigned at the closing of the Original Purchase Agreement. In exchange for the Assigned Royalty Rights, Royalty Pharma has paid to the Company upfront cash consideration totaling $1.9 billion, less Royalty payments received by the Company with respect to the Assigned Royalty Rights. The Company currently retains 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met. The Company has the option under the A&R Royalty Purchase Agreement to sell its retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by the Company with respect to the Assigned Royalty Rights. The A&R Royalty Purchase Agreement will terminate 60 days following the date on which Roche is no longer obligated to make any payments of the Royalty pursuant to the License Agreement.

Indefinite-lived intangible assets

Indefinite-lived intangible assets consist of in process research and development ("IPR&D"). IPR&D acquired directly in a transaction other than a business combination is capitalized if the projects will be further developed or have an alternative future use; otherwise, they are expensed. The fair values of IPR&D projects and license agreement assets acquired in business combinations are capitalized. Several methods may be used to determine the estimated fair value of the IPR&D and license agreement asset acquired in a business combination. The Company utilizes the "income method" and uses estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, and expected pricing and industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, the Company’s outlook and market performance of the Company’s industry and recent and forecasted financial performance.

Goodwill

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. The Company reassesses its reporting units as part of its annual segment review. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is

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necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

Income Taxes

On December 15, 2022, the EU Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (“OECD”) Pillar Two Framework that was supported by over 130 countries worldwide. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are also implementing similar legislation. As a result, the tax laws in the U.S. and other countries in which PTC and its affiliates do business could change on a prospective or retroactive basis and any such changes could materially adversely affect the Company’s business. The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries, including those within the European Union.

On December 22, 2017, the U.S. government enacted the 2017 Tax Cuts and Jobs Act (“TCJA”), which significantly revised U.S. tax law by, among other provisions, lowering the U.S. federal statutory corporate income tax rate to 21%, imposing a mandatory one-time transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the TCJA require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company has elected to account for GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the period ended June 30, 2024.

Since 2022, TCJA amendments to IRC Section 174 no longer permits an immediate deduction for research and development expenditures in the tax year that such costs are incurred. Instead, these IRC Section 174 development costs must now be capitalized and amortized over either a five- or 15-year period, depending on the location of the activities performed. The new amortization period begins with the midpoint of any taxable year that IRC Section 174 costs are first incurred, regardless of whether the expenditures were made prior to or after July 1, and runs until the midpoint of year five for activities conducted in the United States or year 15 in the case of development conducted on foreign soil. This tax law change is anticipated to result in an increased current taxable income of the Company by $93.0 million for the year ending December 31, 2024.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized.

On August 23, 2018, the Company completed its acquisition of Agilis Biotherapeutics, Inc. (“Agilis”), pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018 (the “Agilis Merger Agreement”), by and among the Company, Agility Merger Sub, Inc., a Delaware corporation and the Company’s wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC, (the “Agilis Merger”). The Company recorded a deferred tax liability in conjunction with the Agilis Merger of $122.0 million in 2018, related to the tax basis difference in the IPRD indefinite-lived intangibles acquired. The Company’s policy is to record a deferred tax liability related to acquired IPR&D which may eventually be realized either upon amortization of the asset when the research is completed, and a product is successfully launched or the write-off of the asset if it is abandoned or unsuccessful. In July 2022, the Company received EMEA approval for a portion of the IPR&D assets, and thus, began the amortization of the intangible.

In May 2023, the Company announced the discontinuation of its preclinical and early research programs in gene therapy as part of a strategic portfolio prioritization. In conjunction with the announcement, the Company recorded an impairment to its indefinite-lived intangible for IP research and development relating to the Friedreich ataxia and Angelman syndrome

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gene therapy assets. As a result of the impairment, the Company recorded a deferred tax benefit of $46.9 million during the 2023 tax year.

Leases

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company accounts for as a single lease component for all leases. Operating and finance leases are classified as right of use ("ROU") assets, short term lease liabilities, and long term lease liabilities. Operating and finance lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets are amortized and lease liabilities accrete to yield straight-line expense over the term of the lease. Lease payments included in the measurement of the lease liability are comprised of fixed payments.

Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company applies this policy to all underlying asset categories.

A lessee is required to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Leasehold improvements are capitalized and depreciated over the lesser of useful life or lease term. Refer to Note 3 for further details.

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

Tangible asset impairment and losses (gains) on transactions, net includes impairments identified on fixed assets, losses and gains on sales of fixed assets, and gains on lease terminations. For the three and six months ended June 30, 2024, these amounts consisted of a $4.2 million loss related to the sale of certain assets related to gene therapy manufacturing and $0.2 million of fixed asset impairments. These amounts were partially offset by a gain of $2.2 million on lease terminations (Note 3) and a $0.4 million gain on sales of fixed assets.

Recently issued accounting standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements, unless impracticable. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently planning to adopt this guidance when

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effective. The Company is assessing the impact of the adoption on the Company’s consolidated financial statements and accompanying footnotes.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 enhances the transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is effective for public business entities for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted. The Company is currently planning to adopt this guidance when effective. The Company is assessing the impact of the adoption on the Company’s consolidated financial statements and accompanying footnotes.

3. Leases

Effective April 2024, the Company began utilizing the Warren Premises, as described below, as its principal office space. The Company also leases office space in South Plainfield, New Jersey through August 2024, in addition to office and laboratory space in Bridgewater, New Jersey and other locations throughout the United States and office space in various countries for international employees primarily through workspace providers.

The Company has a lease agreement (the “Warren Lease”) with Warren CC Acquisitions, LLC (the “Warren Landlord”) relating to the lease of two entire buildings comprised of approximately 360,000 square feet of shell condition, modifiable space (the “Warren Premises”) at a facility located in Warren, New Jersey. The rental term of the Warren Lease commenced on June 1, 2022, with an initial term of seventeen years (the “Warren Initial Term”), followed by three consecutive five-year renewal periods at the Company’s option. The aggregate base rent for the Warren Initial Term is approximately $163.0 million; provided, however, that if the Company is not subject to an Event of Default (as defined in the Warren Lease), the Company is entitled to a base rent abatement over the first three years of the Warren Initial Term of approximately $18.6 million, reducing the Company’s total base rent obligation to $144.4 million.

The Company is entitled to an allowance of approximately $36.2 million to be provided by the Warren Landlord to be used towards such improvements. The Landlord is providing the allowance to cover those assets that are real property improvements, such as structural components, roofs, flooring, etc., whose useful lives are typically longer in nature. The Company evaluated the leasehold improvements under ASC 842 and determined that the Company will be the owner of the improvements, and therefore the $36.2 million allowance and $5.0 million due from the Landlord were treated as lease incentives at the commencement of the lease and included in the calculation of the lease ROU asset and lease ROU liability, effectively reducing both at the commencement date of the lease. As a result, the Company recorded an operating lease ROU asset of $28.9 million and an operating lease ROU liability of $28.9 million as of the commencement date of the lease.

The Company also leases office and laboratory space at a facility located in Hopewell Township, New Jersey pursuant to a Lease Agreement (the “Hopewell Lease”) with Hopewell Campus Owner LLC. In connection with the disposition of certain assets related to gene therapy manufacturing, on June 17, 2024, the Company and Hopewell Campus Owner LLC entered into an amendment and restatement of the Hopewell Lease (the “Hopewell Lease Amendment”). At its inception, the Hopewell Lease was determined to have four separate lease components. The Hopewell Lease Amendment terminated three of the four lease components, reducing the leased space from 220,500 square feet to 93,461 square feet and significantly reducing the corresponding rent subject to the lease. The Company did not pay any termination fees in connection with the Hopewell Lease Amendment. As a result of the three terminated lease components, the related ROU asset was written off, the lease liability was derecognized, and the Company recognized a gain of $2.2 million during the three months and six months ended June 30, 2024. The gain is included within tangible asset impairment and losses (gains) on transactions, net on the Company’s consolidated statements of operations. The Hopewell Lease Amendment did not fully or partially terminate the remaining lease component, which was therefore remeasured using an incremental borrowing rate at the date of modification of 7.5%, which resulted in an increase of the ROU asset and operating lease liability of $1.6 million, respectively. In connection with the Hopewell Lease Amendment, $2.5 million of the letter of credit was returned to the Company and recorded as part the Company’s cash balance as of June 30, 2024.

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The Company also has a finance lease related to its commercial manufacturing agreement with MassBiologics of the University of Massachusetts Medical School (“MassBio”). As of June 30, 2024, the balance of the finance lease liabilities-current and finance lease liabilities-noncurrent are $2.3 million and $15.6 million, respectively, and are directly related to the Company’s MassBio agreement. As of December 31, 2023, the balance of the finance lease liabilities-current and finance lease liabilities-noncurrent were $3.0 million and $17.2 million, respectively. Additionally, the Company recorded finance lease costs of $0.3 million and $0.7 million related to interest on the lease liability during the three and six months ended June 30, 2024, respectively. The Company recorded finance lease costs of $0.4 million and $0.7 million related to interest on the lease liability during the three and six months ended June 30, 2023, respectively.

The Company also leases certain vehicles, lab equipment, and office equipment under operating leases. The Company’s leases have remaining operating lease terms ranging from 0.2 years to 14.9 years and certain of the leases include renewal options to extend the lease for up to 15 years. Rent expense was $6.8 million and $7.2 million for the three months ended June 30, 2024 and 2023, respectively, and $13.6 million and $14.3 million for the six months ended June 30, 2024 and 2023, respectively.

The components of operating lease expense were as follows:


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
		June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Operating Lease Cost
Fixed lease cost	$	5,549	$	5,500	$	11,124	$	10,973
Variable lease cost		973		1,411		2,042		2,764
Short-term lease cost		228		292		442		595
Total operating lease cost	$	6,750	$	7,203	$	13,608	$	14,332

Total operating lease cost is a component of operating expenses on the consolidated statements of operations.

Supplemental lease term and discount rate information related to leases was as follows as June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Weighted-average remaining lease terms - operating leases (years)	12.16		11.55
Weighted-average discount rate - operating leases	8.12	%	8.69	%
Weighted-average remaining lease terms - finance lease (years)	8.51		9.01
Weighted-average discount rate - finance lease	7.80	%	7.80	%

Supplemental cash flow information related to leases was as follows as of June 30, 2024 and 2023:


	Six Months Ended June 30,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,617	$	7,624
Financing cash flows from finance lease		1,490		1,379
Operating cash flows from finance lease		1,510		1,621

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	1,723	$	—

Changes due to lease modification and termination:
Net decrease in right-of-use assets	$	31,763	$	—
Net decrease in operating lease liabilities		33,908		—

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Future minimum lease payments under non-cancelable leases as of June 30, 2024 were as follows:


	Operating Leases		Finance Lease
2024 (excludes the six months ended June 30, 2024)	$	10,080	$	—
2025		16,184		3,000
2026		15,635		3,000
2027		13,406		3,000
2028 and thereafter		135,123		15,000
Total lease payments		190,428		24,000
Less: Imputed Interest expense		97,596		6,134
Total	$	92,832	$	17,866

4. Fair value of financial instruments and marketable securities

The Company follows the fair value measurement rules, which provideguidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority).

●

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date.

●

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

●

Level 3—Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available.

Cash equivalents and marketable securities are reflected in the accompanying financial statements at fair value. The carrying amount of receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments.

The Company owns common stock in ClearPoint Neuro, Inc. (“ClearPoint”) (formerly MRI Interventions, Inc.), a publicly traded medical device company. The ClearPoint equity investments (collectively, the “ClearPoint Equity Investments”) represent financial instruments, and therefore, are recorded at fair value, which is readily determinable. The ClearPoint Equity Investments are components of prepaids and other current assets on the consolidated balance sheet as of June 30, 2024 and December 31, 2023. The Company classifies the ClearPoint Equity Investments as Level 1 assets within the fair value hierarchy, as the value is based on a quoted market price in an active market, which is not adjusted.

In January 2020, the Company purchased a $10.0 million convertible note from ClearPoint that the Company can convert into ClearPoint shares at a conversion rate of $6.00 per share at any point throughout the term of the loan, which matures five years from the purchase date. The Company determined that the convertible note represents an available for sale debt security and the Company has elected to record it at fair value under ASC 825. The Company classifies its ClearPoint convertible debt security as a Level 2 asset within the fair value hierarchy, as the value is based on inputs other than quoted prices that are observable. The fair value of the ClearPoint convertible debt security is determined at each reporting period by utilizing a Black-Scholes option pricing model, as well as a present value of expected cash flows from the debt security utilizing the risk-free rate and the estimated credit spread as of the valuation date as the discount rate. The convertible debt security is included as a component of prepaids and other current assets on the consolidated balance sheet as of June 30,

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2024 and as a component of deposits and other assets as of December 31, 2023. Other than the ClearPoint Equity Investments and the ClearPoint convertible debt security, no other items included in prepaids and other current assets on the consolidated balance sheets are fair valued.

The Company has investments in mutual funds, including one that is denominated in a foreign currency. All of these are equity investments and are classified as marketable securities on the Company’s consolidated balance sheets. These equity investments are reported at fair value, as they are readily available, and as such are classified as Level 1 assets. Unrealized holding gains and losses for these equity investments are included as components of other (expense) income, net within the consolidated statement of operations.

The table presented below is a summary of changes in the fair value for the Company’s marketable securities – equity investments, ClearPoint Equity Investments, and ClearPoint convertible debt security for the three and six months ended June 30, 2024 and June 30, 2023:


	Ending				Foreign						Ending
	Balance at				Currency						Balance at
	March 31,		Unrealized		Unrealized		Investments		Redemptions/		June 30,
	2024		Gain/(Loss)		Loss		Purchased		Sale		2024
Marketable securities - equity investments	$	30,379		401		(2,864)		8,340		(19,367)	$	16,889
ClearPoint Equity Investments		6,083		(1,261)		—		—		—		4,822
ClearPoint convertible debt security		12,719		(2,097)		—		—		—		10,622
Total Fair Value	$	49,181	$	(2,957)	$	(2,864)	$	8,340	$	(19,367)	$	32,333


	Ending						Foreign						Ending
	Balance at						Currency						Balance at
	March 31,		Unrealized		Realized		Unrealized		Investments		Redemptions/		June 30,
	2023		Gain/(Loss)		Loss		Gain		Purchased		Sale		2023
Marketable securities - equity investments	$	108,559		2,256		—		1,177		18,159		(2,206)	$	127,945
ClearPoint Equity Investments		10,926		(1,073)		(782)		—		—		(2,594)		6,477
ClearPoint convertible debt security		15,290		(1,597)		—		—		—		—		13,693
Total Fair Value	$	134,775	$	(414)	$	(782)	$	1,177	$	18,159	$	(4,800)	$	148,115


	Ending				Foreign						Ending
	Balance at				Currency						Balance at
	December 31,		Unrealized		Unrealized		Investments		Redemptions/		June 30,
	2023		Gain/(Loss)		Loss		Purchased		Sale		2024
Marketable securities - equity investments	$	22,634		1,111		(3,689)		17,406		(20,573)	$	16,889
ClearPoint Equity Investments		6,074		(1,252)		—		—		—		4,822
ClearPoint convertible debt security		12,553		(1,931)		—		—		—		10,622
Total Fair Value	$	41,261	$	(2,072)	$	(3,689)	$	17,406	$	(20,573)	$	32,333


	Ending						Foreign						Ending
	Balance at						Currency						Balance at
	December 31,		Unrealized		Realized		Unrealized		Investments		Redemptions/		June 30,
	2022		Gain/(Loss)		Loss		Gain		Purchased		Sale		2023
Marketable securities - equity investments	$	108,261		4,364		—		1,410		18,159		(4,249)	$	127,945
ClearPoint Equity Investments		10,965		(1,112)		(782)		—		—		(2,594)		6,477
ClearPoint convertible debt security		15,231		(1,538)		—		—		—		—		13,693
Total Fair Value	$	134,457	$	1,714	$	(782)	$	1,410	$	18,159	$	(6,843)	$	148,115

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Fair value of marketable securities that are classified as available for sale debt securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining available for sale debt securities, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices.

The following represents the fair value using the hierarchy described above for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:


	June 30, 2024
			Quoted prices		Significant
			in active		other		Significant
			markets for		observable		unobservable
			identical assets		inputs		inputs
	Total		(level 1)		(level 2)		(level 3)
Marketable securities - available for sale	$	421,625	$	—	$	421,625	$	—
Marketable securities - equity investments	$	16,889	$	16,889	$	—	$	—
ClearPoint Equity Investments	$	4,822	$	4,822	$	—	$	—
ClearPoint convertible debt security	$	10,622	$	—	$	10,622	$	—
Contingent consideration payable- development and regulatory milestones	$	9,800	$	—	$	—	$	9,800
Contingent consideration payable- net sales milestones	$	11,500	$	—	$	—	$	11,500


	December 31, 2023
			Quoted prices		Significant
			in active		other		Significant
			markets for		observable		unobservable
			identical assets		inputs		inputs
	Total		(level 1)		(level 2)		(level 3)
Marketable securities - available for sale	$	260,104	$	—	$	260,104	$	—
Marketable securities - equity investments	$	22,634	$	22,634	$	—	$	—
ClearPoint Equity Investments	$	6,074	$	6,074	$	—	$	—
ClearPoint convertible debt security	$	12,553	$	—	$	12,553	$	—
Contingent consideration payable- development and regulatory milestones	$	26,600	$	—	$	—	$	26,600
Contingent consideration payable- net sales milestones and royalties	$	9,700	$	—	$	—	$	9,700

No transfers of assets between Level 1, Level 2, or Level 3 of the fair value measurement hierarchy occurred during the periods ended June 30, 2024 and December 31, 2023.

The following is a summary of marketable securities accounted for as available for sale debt securities at June 30, 2024 and December 31, 2023:


	June 30, 2024
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Commercial paper	$	133,081	$	—	$	(113)	$	132,968
Corporate debt securities		14,906		—		(7)		14,899
Government obligations		273,868		39		(149)		273,758
Total	$	421,855	$	39	$	(269)	$	421,625

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	December 31, 2023
	Amortized		Gross Unrealized
	Cost		Gains		Losses		Fair Value
Commercial paper	$	117,044	$	128	$	(12)	$	117,160
Corporate debt securities		1,650		—		(2)		1,648
Government obligations		141,084		212		—		141,296
Total	$	259,778	$	340	$	(14)	$	260,104

For available for sale debt securities in an unrealized loss position, the Company assesses whether it intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value. For the three and six months ended June 30, 2024 and 2023, no write downs occurred. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company also reviews its available for sale debt securities in an unrealized loss position and evaluates whether the decline in fair value has resulted from credit losses or other factors. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may be related to credit issues. For the three and six months ended June 30, 2024 and 2023, no allowance was recorded for credit losses. Unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income in stockholders’ deficit.

For the three and six months ended June 30, 2024, the Company did not have any realized gains or losses from the sale of available for sale debt securities. For the three and six months ended June 30, 2023, the Company had $0.3 million and $0.3 million realized losses from the sale of available for sale debt securities, respectively. Realized gains and losses are reported as a component of interest expense, net in the consolidated statement of operations. Reclassified amounts from other comprehensive items were determined using the actual realized gains and losses from the sales of marketable securities.

The unrealized losses and fair values of available for sale debt securities that have been in an unrealized loss position for a period of less than and greater than or equal to 12 months as of June 30, 2024 are as follows:


	June 30, 2024
	Securities in an unrealized loss				Securities in an unrealized loss
	position less than 12 months				position greater than or equal to 12 months				Total
	Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value
Commercial paper	$	(113)		103,505		—		—		(113)	$	103,505
Corporate debt securities	$	(7)		14,899		—		—		(7)	$	14,899
Government obligations	$	(149)		175,487		—		—		(149)	$	175,487
Total	$	(269)	$	293,891	$	—	$	—	$	(269)	$	293,891


	December 31, 2023
	Securities in an unrealized loss				Securities in an unrealized loss
	position less than 12 months				position greater than or equal to 12 months				Total
	Unrealized losses		Fair Value		Unrealized losses		Fair Value		Unrealized losses		Fair Value
Commercial paper	$	(12)		44,446		—		—		(12)	$	44,446
Corporate debt securities	$	—		—		(2)		1,648		(2)	$	1,648
Total	$	(12)	$	44,446	$	(2)	$	1,648	$	(14)	$	46,094

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Available for sale debt securities at June 30, 2024 and December 31, 2023 mature as follows:


	June 30, 2024
	Less Than		More Than
	12 Months		12 Months
Commercial paper	$	132,968	$	—
Corporate debt securities		14,899		—
Government obligations		273,758		—
Total	$	421,625	$	—


	December 31, 2023
	Less Than		More Than
	12 Months		12 Months
Commercial paper	$	117,160	$	—
Corporate debt securities		1,648		—
Government obligations		141,296		—
Total	$	260,104	$	—

The Company classifies all of its marketable securities as current as they are all either available for sale debt securities or equity investments and are available for current operations.

Convertible senior notes

In September 2019, the Company issued $287.5 million of 1.50% convertible senior notes due September 15, 2026 (the “2026 Convertible Notes,”). The fair value of the 2026 Convertible Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the 2026 Convertible Notes observed in market trading which are Level 2 inputs. The estimated fair value of the 2026 Convertible Notes at June 30, 2024 and December 31, 2023 was $276.1 million and $265.3 million, respectively.

Level 3 valuation

The contingent consideration payable is fair valued each reporting period with the change in fair value recorded as a gain or loss within the change in the fair value of contingent consideration on the consolidated statements of operations. The fair value of the development and regulatory milestones is estimated utilizing a probability adjusted, discounted cash flow approach. The discount rates are estimated utilizing Corporate B rated bonds maturing in the years of expected payments based on the Company’s estimated development timelines for the acquired product candidate. The fair value of the net sales milestones is determined utilizing a valuation framework that estimates net sales volatility to simulate a range of possible payment scenarios. The average of the payments in these scenarios is then discounted to calculate present fair value. As of June 30, 2024, the contingent consideration balance, consisting solely of the Upstaza related contingent milestones, was $21.3 million.

As of June 30, 2024, the weighted average discount rate for the Upstaza development and regulatory milestones was 6.1% and the weighted average probability of success was 95%. As of June 30, 2024, the weighted average discount rate for the Upstaza net sales milestones was 12.0% and the weighted average probability of success for the net sales milestones was 98%.

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The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuations for the contingent consideration payable for the periods ended June 30, 2024 and June 30, 2023:


	Level 3 liabilities
	Contingent consideration payable-		Contingent consideration payable-
	development and regulatory		net sales milestones and royalties
	milestones
Beginning balance as of December 31, 2023	$	26,600	$	9,700
Additions		—		—
Change in fair value		3,200		1,800
Reclassification to accounts payable and accrued expenses		(20,000)		—
Payments		—		—
Ending balance as of June 30, 2024	$	9,800	$	11,500


	Level 3 liabilities
	Contingent consideration payable-		Contingent consideration payable-
	development and regulatory		net sales milestones and royalties
	milestones
Beginning balance as of December 31, 2022	$	82,500	$	81,500
Additions		—		—
Change in fair value		(56,100)		(70,400)
Payments		—		—
Ending balance as of June 30, 2023	$	26,400	$	11,100

In May 2024, the BLA for our gene therapy for the treatment of AADC deficiency was accepted for filing by the FDA. The application has been granted priority review with a target regulatory action date of November 13, 2024. The acceptance triggered a $20.0 million milestone payment to the former equityholders of Agilis in accordance with the terms of the Agilis Merger Agreement and was recorded in accounts payable and accrued expenses on the Company’s consolidated balance sheet as of June 30, 2024.

The following significant unobservable inputs were used in the valuation of the contingent consideration payable for the periods ended June 30, 2024 and December 31, 2023:


	June 30, 2024
	Fair Value	Valuation Technique	Unobservable Input	Range
Contingent consideration payable- development and regulatory milestones	$9,800	Probability-adjusted discounted cash flow	Potential development and regulatory milestones Probabilities of success Discount rates Projected years of payments	$0 - $11 million 95% 6.0% - 6.2% 2024 - 2026
Contingent considerable payable- net sales milestones and royalties	$11,500	Option-pricing model with Monte Carlo simulation	Potential net sales milestones Probabilities of success Potential percentage of net sales for royalties Discount rate Projected years of payments	$0 - $50 million 95% - 100% 0% 12% 2026 - 2034


	December 31, 2023
	Fair Value	Valuation Technique	Unobservable Input	Range
Contingent consideration payable- development and regulatory milestones	$26,600	Probability-adjusted discounted cash flow	Potential development and regulatory milestones Probabilities of success Discount rates Projected years of payments	$0 - $31 million 85% - 92% 5.8% - 6.1% 2024 - 2026
Contingent considerable payable- net sales milestones and royalties	$9,700	Option-pricing model with Monte Carlo simulation	Potential net sales milestones Probabilities of success Potential percentage of net sales for royalties Discount rate Projected years of payments	$0 - $50 million 85% - 100% 0% 11% 2026 - 2034

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The contingent consideration payables are classified Level 3 liabilities as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the various inputs to the valuation approaches, including but not limited to, assumptions involving probability adjusted sales estimates for the gene therapy platform and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined.

5. Accounts payable and accrued expenses

Accounts payable and accrued expenses at June 30, 2024 and December 31, 2023 consist of the following:


	June 30,		December 31,
	2024		2023
Employee compensation, benefits, and related accruals	$	36,711	$	62,643
Income tax payable		3,699		—
Consulting and contracted research		21,814		27,500
Professional fees		2,429		2,246
Sales allowance		66,780		77,176
Sales rebates		118,652		131,334
Royalties		14,942		74,111
Accounts payable		24,279		6,045
Milestone payable		37,500		—
Other		11,994		10,928
Total	$	338,800	$	391,983

As of June 30, 2024 and December 31, 2023, there were $0.7 million and $9.0 million, respectively, of accrued restructuring costs included above within employee compensation, benefits, and related accruals from a reduction in workforce in the year ended December 31, 2023 in connection with the Company’s strategic pipeline prioritization and discontinuation of its preclinical and early research programs in its gene therapy platform.

6. Capitalization

In August 2019, the Company entered into an At the Market Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald and RBC Capital Markets, LLC (together, the “Sales Agents”), pursuant to which, the Company may offer and sell shares of its common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. No shares were sold during the three and six months ended June 30, 2024 and 2023. The remaining shares of the Company’s common stock available to be issued and sold, under the At the Market Offering, have an aggregate offering price of up to $93.0 million as of June 30, 2024.

7. Net loss per share

Basic and diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Potentially dilutive securities were excluded from the diluted calculation because their effect would be anti-dilutive.

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The following tables set forth the computation of basic and diluted net loss per share:


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Numerator
Net loss	$	(99,179)		$	(198,883)		$	(190,755)		$	(337,842)
Denominator
Denominator for basic and diluted net loss per share		76,725,070			74,730,433			76,610,598			74,232,624
Net loss per share:
Basic and diluted	$	(1.29)	*	$	(2.66)	*	$	(2.49)	*	$	(4.55)	*

* In the three and six months ended June 30, 2024 and 2023, the Company experienced a net loss and therefore did not report any dilutive share impact.

The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period.


	As of June 30,
	2024	2023
Stock Options	9,281,739	11,674,491
Unvested restricted stock awards and units	3,602,845	3,616,939
Total	12,884,584	15,291,430

8. Stock award plan

In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long-Term Incentive Plan, which became effective upon the closing of the Company’s initial public offering. On June 8, 2022 (the “Restatement Effective Date”), the Company’s stockholders approved the Amended and Restated 2013 Long-Term Incentive Plan (the “Amended 2013 LTIP”). The Amended 2013 LTIP provides for the grant of incentive stock options, nonstatutory stock options, restricted stock units and other stock-based awards. The number of shares of common stock reserved for issuance under the Amended 2013 LTIP is the sum of (A) the number of shares of the Company’s common stock (up to 16,724,212 shares) that is equal to the sum of (1) the number of shares issued under the 2013 Long-Term Incentive Plan prior to the Restatement Effective Date, (2) the number of shares that remain available for issuance under the 2013 Long-Term Incentive Plan immediately prior to the Restatement Effective Date and (3) the number of shares subject to awards granted under the 2013 Long-Term Incentive Plan prior to the Restatement Effective Date that are outstanding as of the Restatement Effective Date, plus (B) from and after the Restatement Effective Date, an additional 8,475,000 shares of Common Stock. As of June 30, 2024, awards for 6,819,140 shares of common stock are available for issuance under the Amended 2013 LTIP.

There are no additional shares of common stock available for issuance under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan or 2013 Stock Incentive Plan.

In January 2020, the Company’s Board of Directors approved the 2020 Inducement Stock Incentive Plan. The 2020 Inducement Stock Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards for, initially, up to at the time, an aggregate of 1,000,000 shares of common stock. Any grants made under the 2020 Inducement Stock Incentive Plan must be made pursuant to the Nasdaq Listing Rule 5635(c)(4) inducement grant exception as a material component of the Company’s new hires’ employment compensation. In December 2020, the Company’s Board of Directors approved an additional 1,000,000 shares of common stock that may be issued under the 2020 Inducement Stock Incentive Plan. In April 2022, the Company’s Board of Directors approved a reduction in the total number of shares of common stock that may be issued under the 2020 Inducement Stock Incentive Plan to 1,300,000 shares. In December 2022, the Company’s Board of Directors approved an additional 1,700,000 shares of common stock that may be issued under the 2020 Inducement Stock Incentive Plan. As of June 30, 2024, awards for 1,996,946 shares of common stock were available for issuance under the 2020 Inducement Stock Incentive Plan.

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The Board of Directors has the authority to select the individuals to whom options are granted and determine the terms of each option, including (i) the number of shares of common stock subject to the option; (ii) the date on which the option becomes exercisable; (iii) the option exercise price, which, in the case of incentive stock options, must be at least 100% (110% in the case of incentive stock options granted to a stockholder owning in excess of 10% of the Company’s stock) of the fair market value of the common stock as of the date of grant; and (iv) the duration of the option (which, in the case of incentive stock options, may not exceed ten years). Options typically vest over a four-year period.

Inducement stock option awards

From January 1, 2024 through June 30, 2024, the Company issued a total of 864,855 stock options to various employees. Of those, 11,310 were inducement grants for non-statutory stock options, all of which were made pursuant to the 2020 Inducement Stock Incentive Plan.

Stock option activity—A summary of stock option activity is as follows:


				Weighted-
		Weighted-		average		Aggregate
		average		remaining		intrinsic
	Number of	exercise		contractual		value(in
	options	price		term		thousands)

Outstanding at December 31, 2023	9,600,399	$	43.59
Granted	864,855	$	25.70
Exercised	(192,210)	$	22.10
Forfeited/Cancelled	(991,305)	$	45.80
Outstanding at June 30, 2024	9,281,739	$	42.13	5.77	years	$	14,161
Vested or Expected to vest at June 30, 2024	1,904,403	$	37.27	8.54	years	$	4,115
Exercisable at June 30, 2024	7,177,321	$	43.68	4.94	years	$	9,453

The fair value of grants made in the six months ended June 30, 2024 was contemporaneously estimated on the date of grant using the following assumptions:


		Six months ended
		June 30, 2024
Risk-free interest rate		4.23% - 4.66%
Expected volatility		53% - 54%
Expected term		5.5 years

The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the six months ended June 30, 2024 was $13.50 per share.

The expected term of options was estimated based on the Company’s historical exercise data and the expected volatility of options was estimated based on the Company’s historical stock volatility. The risk-free rate of the options was based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option.

Restricted Stock Awards and Restricted Stock Units—Restricted stock awards and restricted stock units are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards and restricted stock units, which have been determined based upon the market value of the Company’s shares on the grant date, are expensed over the vesting period. From January 1, 2024, through June 30, 2024, the Company issued a total of 1,800,930 restricted stock units to various employees. Of those, 17,955 were inducement grants for restricted stock units, all of which were made pursuant to the 2020 Inducement Stock Incentive Plan.

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The following table summarizes information on the Company’s restricted stock awards and units:


	Restricted Stock Awards and Units
		Weighted
		Average
		Grant
	Number of	Date
	Shares	Fair Value
Unvested at December 31, 2023	2,866,270	$	41.82
Granted	1,800,930		25.72
Vested	(891,879)		44.35
Forfeited	(172,476)		37.61
Unvested at June 30, 2024	3,602,845	$	33.35

Performance-based Restricted Stock Units—In December 2023, the Company granted 150,000 performance-based restricted stock units (“PSUs”) to its Chief Executive Officer, Dr. Matthew Klein, which will vest only if certain regulatory milestones are achieved over an approximately two year performance period. As of June 30, 2024, the achievements of the performance goals have not yet been deemed probable and therefore no expense has been recognized to date.

Employee Stock Purchase Plan—In June 2016, the Company established an Employee Stock Purchase Plan (as amended, “ESPP” or the "Plan”), for certain eligible employees. The Plan is administered by the Company’s Board of Directors or a committee appointed by the Company’s Board of Directors. In June 2021, the Plan was amended to increase the total number of shares available for purchase under the Plan from one million shares to two million shares of the Company’s common stock. Employees may participate over a six month period through payroll withholdings and may purchase, at the end of the six month period, the Company’s common stock at a purchase price of at least 85% of the closing price of a share of the Company’s common stock on the first business day of the offering period or the closing price of a share of the Company’s common stock on the last business day of the offering period, whichever is lower. No participant will be granted a right to purchase the Company’s common stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company or any subsidiary of the Company after such purchase. For the three and six months ended June 30, 2024, the Company recorded $0.6 million and $1.1 million, respectively, in compensation expense related to the ESPP.

The Company recorded share-based compensation expense in the statement of operations related to incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units and the ESPP as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Research and development	$	9,428	$	15,529	$	18,395	$	30,842
Selling, general and administrative		9,815		13,842		19,226		27,344
Total	$	19,243	$	29,371	$	37,621	$	58,186

As of June 30, 2024, there was approximately $134.6 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s equity award plans. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 2.3 years.

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9. Debt

Liability for sale of future royalties

The following table shows the activity within the “liability for sale of future royalties- current” and “liability for sale of future royalties- noncurrent” accounts for the six months ended June 30, 2024:


	Six Months Ended June 30,
Liability for sale of future royalties- (current and noncurrent)	2024
Beginning balance as of December 31, 2023	$	1,814,097
Less: Non-cash royalty revenue payable to Royalty Pharma		(73,349)
Plus: Non-cash interest expense recognized		102,340
Plus: Cash received from Royalty Pharma		241,792
Ending balance	$	2,084,880
Effective interest rate as of June 30, 2024		9.9%

Non-cash interest expense is recorded in the statement of operations within “Interest expense, net”.

Senior Secured Term Loan

On October 27, 2022 (the “Closing Date”), the Company entered into a credit agreement (the “Blackstone Credit Agreement”) for fundings of up to $950.0 million consisting of a committed loan facility of $450.0 million and further contemplating the potential for up to $500.0 million of additional financing, to the extent that the Company requested such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms, among the Company, certain subsidiaries of the Company (together with the Company, the “Loan Parties”) and funds and other affiliated entities advised or managed by Blackstone Life Sciences and Blackstone Credit (collectively, “Blackstone”, and such lenders, together with their permitted assignees, the “Lenders” and each a “Lender”) and Wilmington Trust, National Association, as the administrative agent for the Lenders.

The Blackstone Credit Agreement provided for a senior secured term loan facility funded on the Closing Date in the aggregate principal amount of $300.0 million (the “Initial Loans”) and a committed delayed draw term loan facility of up to $150.0 million (the “Delayed Draw Loans” and, together with the Initial Loans, the “Loans”) to be funded at the Company’s request within 18 months of the Closing Date subject to specified conditions. In addition, the Blackstone Credit Agreement contemplated the potential for further financings by Blackstone, by providing for incremental discretionary uncommitted further financings of up to $500.0 million. The Company capitalized approximately $11.6 million of debt issuance costs which are presented on the balance sheet as a direct deduction from the debt liability and are being amortized over the term of the senior secured term loan facility using the effective interest rate method.

The Loans were to mature on the date that is seven years from the Closing Date. Borrowings under the Blackstone Credit Agreement bore interest at a variable rate equal to, at the Company’s option, either an adjusted Term SOFR rate plus seven and a quarter percent (7.25%) or the Base Rate plus six and a quarter percent (6.25%), subject to a floor of one percent (1%) and two percent (2%) with respect to Term SOFR rate and Base Rate (each as defined in the Blackstone Credit Agreement), respectively. Payment of the Loans were subject to certain premiums specified in the Blackstone Credit Agreement, in each case, from the date of the applicable Loan funded.

On October 19, 2023, the Company terminated the Blackstone Credit Agreement. In connection with the termination of the Credit Agreement, the Company repaid outstanding principal of $300.0 million, accrued interest of $2.1 million, an additional $82.0 million in prepayment premiums, exit fees, and creditor expenses, and $0.2 million in legal fees. The Company recorded a loss on the extinguishment of debt of $92.7 million which was included on the statement of operations for the period ended December 31, 2023. The loss on extinguishment of debt consisted of $82.0 million in prepayment premiums, exit fees, and creditor expenses and debt issuance costs of $10.7 million. All liens and security interests securing the loans made pursuant to the Blackstone Credit Agreement were released upon termination.

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The Blackstone Credit Agreement consisted of the following:


	June 30, 2024		December 31, 2023
Principal	$	—	$	300,000
Less: Debt issuance costs		—		—
Repayment of senior secured term loan		—		(300,000)
Net carrying amount	$	—	$	—

The following table sets forth total interest expense recognized related to the Blackstone Credit Agreement:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Contractual interest expense	$	—		$	9,354		$	—		$	18,532
Amortization of debt issuance costs		—			272			—			423
Total	$	—		$	9,626		$	—		$	18,955
Effective interest rate		—	%		13.4	%		—	%		13.4	%

2026 Convertible Notes

In September 2019, the Company issued, at par value, $287.5 million aggregate principal amount of 1.50% convertible senior notes due 2026, which included an option to purchase up to an additional $37.5 million in aggregate principal amount of the 2026 Convertible Notes, which was exercised in full by the initial purchasers. The 2026 Convertible Notes bear cash interest at a rate of 1.50% per year, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2020. The 2026 Convertible Notes will mature on September 15, 2026, unless earlier repurchased or converted. The net proceeds to the Company from the offering were $279.3 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company.

The 2026 Convertible Notes are governed by an indenture (the "2026 Convertible Notes Indenture") with U.S Bank National Association as trustee (the "2026 Convertible Notes Trustee").

Holders of the 2026 Convertible Notes may convert their 2026 Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2026 only under the following circumstances:

●

during any calendar quarter commencing on or after December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

●

during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2026 Convertible Notes Indenture) per $1,000 principal amount of 2026 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

●

during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or

●

upon the occurrence of specified corporate events.

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On or after March 15, 2026, until the close of business on the business day immediately preceding the maturity date, holders may convert their 2026 Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or any combination thereof at the Company’s election.

The conversion rate for the 2026 Convertible Notes was initially, and remains, 19.0404 shares of the Company’s common stock per $1,000 principal amount of the 2026 Convertible Notes, which is equivalent to an initial conversion price of approximately $52.52 per share of the Company’s common stock. The conversion rate may be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

The Company was not permitted to redeem the 2026 Convertible Notes prior to September 20, 2023. The Company may redeem for cash all or any portion of the 2026 Convertible Notes, at its option, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2026 Convertible Notes, which means that the Company is not required to redeem or retire the 2026 Convertible Notes periodically.

If the Company undergoes a “fundamental change” (as defined in the 2026 Convertible Notes Indenture), subject to certain conditions, holders of the 2026 Convertible Notes may require the Company to repurchase for cash all or part of their 2026 Convertible Notes at a repurchase price equal to 100% of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The 2026 Convertible Notes represent senior unsecured obligations and will rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the notes, equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated, effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) incurred by the Company’s subsidiaries. The 2026 Convertible Notes Indenture contains customary events of default with respect to the 2026 Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the 2026 Convertible Notes when due and payable) occurring and continuing, the 2026 Convertible Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2026 Convertible Notes by notice to the Company and the Convertible Notes Trustee, may, and the 2026 Convertible Notes Trustee at the request of such holders (subject to the provisions of the 2026 Convertible Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2026 Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the 2026 Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately.

The 2026 Convertible Notes consist of the following:



	June 30, 2024		December 31, 2023
Principal	$	287,500	$	287,500
Less: Debt issuance costs		(2,694)		(3,287)
Net carrying amount	$	284,806	$	284,213

As of June 30, 2024, the remaining contractual life of the 2026 Convertible Notes is approximately 2.2 years.

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The following table sets forth total interest expense recognized related to the 2026 Convertible Notes:


		Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Contractual interest expense	$	1,066		$	1,066		$	2,142		$	2,135
Amortization of debt issuance costs		295			290			591			578
Total	$	1,361		$	1,356		$	2,733		$	2,713
Effective interest rate		1.9	%		1.9	%		1.9	%		1.9	%

10. Commitments and contingencies

Under various agreements, the Company will be required to pay royalties and milestone payments upon the successful development and commercialization of products. The Company has entered into funding agreements with The Wellcome Trust Limited ("Wellcome Trust") for the research and development of small molecule compounds in connection with the Company’s oncology and antibacterial programs. As the Company has discontinued development under its antibacterial program, it no longer expects that milestone and royalty payments from the Company to Wellcome Trust will apply under that agreement, resulting in a change to the total amount of development and regulatory milestone payments the Company may become obligated to pay for this program. Under the oncology program funding agreement, to the extent that the Company develops and commercializes program intellectual property on a for-profit basis itself or in collaboration with a partner (provided the Company retains overall control of worldwide commercialization), the Company may become obligated to pay to Wellcome Trust development and regulatory milestone payments and single-digit royalties on sales of any research program product. The Company’s obligation to pay such royalties would continue on a country-by-country basis until the longer of the expiration of the last patent in the program intellectual property in such country covering the research program product and the expiration of market exclusivity of such product in such country. The Company made the first development milestone payment of $0.8 million to Wellcome Trust under the oncology platform funding agreement during the second quarter of 2016. During the year ended December 31, 2022, the Company incurred $2.5 million of development milestones in connection with the enrollment of patients in the registration-directed Phase 2/3 trial of unesbulin for the treatment of LMS, which is recorded in accounts payable and accrued expenses on the balance sheet and will be payable upon the earlier to occur of the first dose administered to the last patient enrolled in the study or the termination of dosing of all patients in the study. However, as part the Company's continuous platform review, the Company has decided to deprioritize its programs for unesbulin for the treatment of diffuse intrinsic pontine glioma and leiomyosarcoma. Accordingly, the Company no longer expects to pay additional milestones to Wellcome Trust under this agreement.

The Company has also entered into a collaboration agreement with the SMA Foundation. The Company was obligated to pay the SMA Foundation single-digit royalties on worldwide net product sales of any collaboration product that was successfully developed and subsequently commercialized or, with respect to collaboration products the Company outlicensed, including Evrysdi, a specified percentage of certain payments the Company received from its licensee. The Company was not obligated to make such payments unless and until annual sales of a collaboration product exceeded a designated threshold. Since inception, the SMA Foundation has earned $52.5 million in royalty payments, all of which was paid as of June 30, 2024. During the year ended December 31, 2023, the Company had reached its obligations to make such payments to the SMA Foundation of an aggregate of $52.5 million, and therefore, there are no further payment obligations due.

Pursuant to the asset purchase agreement ("Asset Purchase Agreement") between the Company and Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC) (“Marathon”), Marathon is entitled to receive contingent payments from the Company based on annual net sales of Emflaza up to a specified aggregate maximum amount over the expected commercial life of the asset.

Pursuant to the Agilis Merger Agreement, Agilis equityholders were previously entitled to receive contingent consideration payments from the Company based on (i) the achievement of certain development milestones up to an aggregate maximum amount of $60.0 million, (ii) the achievement of certain regulatory approval milestones together with a milestone payment following the receipt of a priority review voucher up to an aggregate maximum amount of $535.0 million, (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $150.0 million, and (iv) a percentage

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of annual net sales for Friedreich ataxia and Angelman syndrome during specified terms, ranging from 2%-6%. The Company was required to pay $40.0 million of the development milestone payments upon the passing of the second anniversary of the closing of the Agilis Merger, regardless of whether the applicable milestones have been achieved.

On April 29, 2020, the Company, certain of the former equity holders of Agilis (“the Participating Rightholders”), and, for the limited purposes set forth in the agreement, Shareholder Representative Services LLC, entered into a Rights Exchange Agreement (the “Rights Exchange Agreement”). Pursuant to the terms of the Rights Exchange Agreement, the Participating Rightholders canceled and forfeited their rights under the Agilis Merger Agreement to receive (i) $174.0 million, in the aggregate, of potential milestone payments based on the achievement of certain regulatory milestones and (ii) $37.6 million, in the aggregate, of $40.0 million in development milestone payments that would have been due upon the passing of the second anniversary of the closing of the Agilis Merger, regardless of whether the milestones are achieved.

The Rights Exchange Agreement has no effect on the Agilis Merger Agreement other than to provide for the cancellation and forfeiture of the Participating Rightholders’ rights to receive $211.6 million, in the aggregate, of the milestone payments described above. As a result, all other rights and obligations under the Agilis Merger Agreement remain in effect pursuant to their terms, including the Company’s obligation to pay up to an aggregate maximum amount of $20.0 million upon the achievement of certain development milestones (representing the remaining portion of potential development milestone payments for which rights were not canceled and forfeited pursuant to the Rights Exchange Agreement while excluding the remaining $2.4 million milestone payment that was due and paid upon the passing of the second anniversary of the closing of the Agilis Merger), up to an aggregate maximum amount of $361.0 million upon the achievement of certain regulatory milestones (representing the remaining portion of potential regulatory milestone payments for which rights were not canceled and forfeited pursuant to the Rights Exchange Agreement), up to a maximum aggregate amount of $150.0 million upon the achievement of certain net sales milestones and a percentage of annual net sales for Friedreich ataxia and Angelman syndrome during specified terms, ranging from 2% to 6%, pursuant to the terms of the Agilis Merger Agreement.

In July 2022, the European Commission approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. As a result of such approval, the Company paid the former equityholders of Agilis $50.0 million in accordance with the terms of the Agilis Merger Agreement in the year ended December 31, 2022. In May 2023, as part of the Company’s strategic portfolio prioritization, the Company decided to discontinue its preclinical and early research programs in its gene therapy platform, which included Friedreich ataxia and Angelman syndrome. As a result, the Company does not expect the milestones related to Friedreich ataxia and Angelman syndrome to be achieved. In addition, the Company does not expect to pay the 2% to 6% royalties on annual net sales related to Friedreich ataxia and Angelman syndrome.

In March 2024, the Company submitted a BLA to the FDA for our gene therapy for the treatment of AADC deficiency in the United States. In May 2024, the FDA accepted the filing for the BLA and granted priority review with a target regulatory action date of November 13, 2024. The acceptance triggered a $20.0 million milestone payment to former equity holders of Agilis, which was recorded in accounts payable and accrued expenses on the consolidated balance sheet as of June 30, 2024. As of June 30, 2024, the remaining potential regulatory milestones the Company expects to achieve is $11.1 million, and the remaining potential sales milestones the Company expects to achieve is $50.0 million, both of which relate solely to Upstaza.

On October 25, 2019, the Company completed the acquisition of substantially all of the assets of BioElectron Technology Corporation (“BioElectron”), a Delaware corporation, including certain compounds that the Company has begun to develop as part of its Bio-e platform, pursuant to an asset purchase agreement by and between the Company and BioElectron, dated October 1, 2019 (the “BioElectron Asset Purchase Agreement”). BioElectron was a private company with a pipeline focused on inflammatory and central nervous system (CNS) disorders. The lead program, vatiquinone, is in late stage development for Friedreich ataxia with substantial unmet need and significant commercial opportunity that are complementary to PTC’s existing pipeline.

Subject to the terms and conditions of the BioElectron Asset Purchase Agreement, BioElectron may become entitled to receive contingent milestone payments of up to $200.0 million (in cash or in shares of the Company’s common stock, as

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determined by the Company) from the Company based on the achievement of certain regulatory and net sales milestones. Subject to the terms and conditions of the BioElectron Asset Purchase Agreement, BioElectron may also become entitled to receive contingent payments based on a percentage of net sales of certain products.

Subject to the terms and conditions of the Agreement and Plan of Merger, dated as of May 5, 2020 (the “Censa Merger Agreement”) by and among the Company, Hydro Merger Sub, Inc., the Company’s wholly owned, indirect subsidiary, and, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Censa, Shareholder Representative Services LLC (such merger pursuant thereto, the “Censa Merger”), former Censa securityholders may become entitled to receive contingent payments from the Company based on (i) the achievement of certain development and regulatory milestones up to an aggregate maximum amount of $217.5 million for sepiapterin’s two most advanced programs and receipt of a priority review voucher from the FDA as set forth in the Censa Merger Agreement, (ii) $109.0 million in development and regulatory milestones for each additional indication of sepiapterin, (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $160.0 million, (iv) a percentage of annual net sales during specified terms, ranging from single to low double digits of the applicable net sales threshold amount, and (v) any sublicense fees paid to the Company in consideration of any sublicense of Censa’s intellectual property to commercialize sepiapterin, on a country-by-country basis, which contingent payment shall equal to a mid-double digit percentage of any such sublicense fees.

In February 2023, the Company completed enrollment of its Phase 3 placebo-controlled clinical trial for sepiapterin for PKU. In connection with this event and pursuant to the Censa Merger Agreement, the Company paid a $30.0 million development milestone to the former Censa securityholders during the three months ended March 31, 2023. The Company elected to pay this milestone in the form of shares of its common stock, less certain cash payments in accordance with the Censa Merger Agreement. Pursuant to such election, the Company issued 657,462 shares of its common stock and paid $0.4 million to the former Censa securityholders.

In May 2024, the Company announced the validation and acceptance for review of an MMA for sepiapterin by the EMA for the treatment of PKU. Pursuant to the Censa Merger Agreement, the acceptance triggered a $15.0 million regulatory milestone to the former Censa securityholders during the three months ended June 30, 2024. The $15.0 million regulatory milestone was recorded in accounts payable and accrued expense on the Company's consolidated balance sheet as of June 30, 2024. The Company expects to make additional payments to the former Censa securityholders of $50.0 million in the aggregate in cash upon the potential achievement in 2024 of regulatory milestones relating to sepiapterin pursuant to the Censa Merger Agreement.

The Company also has the Tegsedi-Waylivra Agreement for the commercialization of Tegsedi and Waylivra, and products containing those compounds in countries in Latin America and the Caribbean. Akcea is entitled to receive royalty payments subject to certain terms set forth in the Tegsedi-Waylivra Agreement.

The Company has employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control or termination without cause, occur. Additionally, the Company has royalty payments associated with Translarna, Emflaza, and Upstaza net product revenue, payable quarterly or annually in accordance with the terms of the related agreements.

From time to time in the ordinary course of its business, the Company is subject to claims, legal proceedings and disputes. The Company is not currently aware of any material legal proceedings against it.

11. Revenue recognition

Net product sales

The Company views its operations and manages its business in one operating segment.

During the three months ended June 30, 2024 and 2023, net product sales outside of the United States were $85.9 million and $108.9 million, respectively, consisting of sales of Translarna, Tegsedi, Waylivra, and Upstaza. Translarna net revenues made up $70.4 million and $96.5 million of the net product sales outside of the United States for the three months

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ended June 30, 2024 and 2023, respectively. During the three months ended June 30, 2024 and 2023, net product sales in the United States were $47.3 million and $65.7 million, respectively, consisting solely of sales of Emflaza. During the three months ended June 30, 2024, two countries, the United States and Brazil, accounted for at least 10% of the Company’s net product sales, representing $47.3 million and $30.4 million of the net product sales, respectively. During the three months ended June 30, 2023, three countries, the United States, Russia, and Brazil, accounted for at least 10% of the Company’s net product sales, representing $65.7 million, $19.1 million, and $23.1 million of the net product sales, respectively. For the three months ended June 30, 2024 and 2023, two of the Company’s distributors each accounted for over 10% of the Company’s net product sales.

As of June 30, 2024 and December 31, 2023, the Company does not have a contract liabilities balance related to net product sales, and has not made significant changes to the judgments made in applying ASC Topic 606.

Collaboration and Royalty revenue

In November 2011, the Company and the SMA Foundation entered into a licensing and collaboration agreement with Roche. Under the terms of the SMA License Agreement, Roche acquired an exclusive worldwide license to the Company’s SMA program.

Under the agreement, the Company is eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product.

The SMA program currently has one approved product, Evrysdi, which was approved in August 2020 by the FDA for the treatment of SMA in adults and children two months and older. As of June 30, 2024, the Company does not have any remaining research and development event milestones that can be received. The remaining potential sales milestones that can be received is $150.0 million.

For the three and six months ended June 30, 2024 and 2023, the amounts recognized for the collaboration revenue related to the licensing and collaboration agreement with Roche were immaterial.

In addition to research and development and sales milestones, the Company is eligible to receive up to double-digit royalties on worldwide annual net sales of a commercial product under the SMA License Agreement. For the three and six months ended June 30, 2024, the Company has recognized $53.2 million and $84.3 million of royalty revenue, respectively, related to Evrysdi. For the three and six months ended June 30, 2023, the Company has recognized $36.9 million and $67.7 million of royalty revenue related to Evrysdi, respectively.

Manufacturing Revenue

For the three and six months ended June 30, 2024, the Company recognized $0.3 million and $1.7 million of manufacturing revenue, respectively, related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. For the three and six months ended June 30, 2023, the Company recognized $2.4 million and $4.4

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million of manufacturing revenue, respectively, related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. The Company has not made significant changes to the judgments made in applying ASC Topic 606 for the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024, the Company does not have a contract liabilities balance related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. As of December 31, 2023, the Company had a contract liabilities balance of $0.8 million related to the production of plasmid DNA and AAV vectors for external customers, which is recorded within deferred revenue on the consolidated balance sheet. For the six-month period ended June 30, 2024, the Company recognized $0.8 million related to the amounts included in the contract liability balance at the beginning of the period.

As of June 30, 2024, the Company has no contract assets related to plasmid DNA and AAV production for external customers. As of December 31, 2023, the Company had contract assets of $0.2 million related to plasmid DNA and AAV production for external customers, which is recorded within prepaid expenses and other current assets on the consolidated balance sheet.

In June 2024, the Company sold its gene therapy manufacturing business in Hopewell Township, New Jersey. Accordingly, the Company does not expect to have manufacturing revenue going forward.

Remaining performance obligations

There are no remaining performance obligations as of June 30, 2024. The Company’s remaining performance obligations of $0.8 million as of December 31, 2023 were fully recognized during the six months ended June 30, 2024.

12. Intangible assets and goodwill

Definite-lived intangibles

Definite-lived intangible assets consisted of the following at June 30, 2024 and December 31, 2023:


		Ending Balance at				Foreign		Ending Balance at
Definite-lived		December 31,				currency		June 30,
intangibles assets, gross		2023		Additions		translation		2024
Emflaza	$	527,417	$	—	$	—	$	527,417
Waylivra		10,218		2,130		(324)		12,024
Tegsedi		13,322		3,149		(422)		16,049
Upstaza		89,550		—		—		89,550
Total definite-lived intangibles, gross	$	640,507	$	5,279	$	(746)	$	645,040


		Ending Balance at				Foreign		Ending Balance at
Definite-lived		December 31,				currency		June 30,
intangibles assets, accumulated amortization		2023		Amortization		translation		2024
Emflaza	$	(478,618)	$	(48,799)	$	—	$	(527,417)
Waylivra		(3,965)		(756)		131		(4,590)
Tegsedi		(3,311)		(1,108)		113		(4,306)
Upstaza		(10,882)		(3,732)		—		(14,614)
Total definite-lived intangibles, accumulated amortization	$	(496,776)	$	(54,395)	$	244	$	(550,927)

Total definite-lived intangibles, net							$	94,113

Marathon was entitled to receive contingent payments from the Company based on annual net sales of Emflaza beginning in 2018, up to a specified aggregate maximum amount over the expected commercial life of the asset, which expired

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February 2024. In accordance with the guidance for an asset acquisition, the Company recorded the milestone payments when they became payable to Marathon and increased the cost basis for the Emflaza rights intangible asset. As of June 30, 2024, the Emflaza rights intangible asset was fully amortized, therefore for the six months ended June 30, 2024, the milestone payment was recorded on the consolidated statement of operations within cost of product sales, excluding amortization of acquired intangible assets.

Akcea is entitled to receive royalty payments subject to certain terms set forth in the Tegsedi-Waylivra Agreement related to sales of Waylivra and Tegsedi. In accordance with the guidance for an asset acquisition, the Company records royalty payments when they become payable to Akcea and increase the cost basis for the Waylivra and Tegsedi intangible assets. For the six months ended June 30, 2024, royalty payments of $3.1 million and $2.1 million were recorded for Tegsedi and Waylivra, respectively. As of June 30, 2024, a royalty payable of $2.7 million and $0.5 million for Tegsedi and Waylivra, respectively, was recorded on the consolidated balance sheet within accounts payable and accrued expenses.

For the three months ended June 30, 2024 and 2023, the Company recognized amortization expense of $2.9 million and $47.4 million, respectively, related to the Emflaza rights, Upstaza, Waylivra, and Tegsedi intangible assets. For the six months ended June 30, 2024 and 2023, the Company recognized amortization expense of $54.4 million and $86.8 million, respectively, related to the Emflaza rights, Upstaza, Waylivra, and Tegsedi intangible assets. The estimated future amortization of the Upstaza, Waylivra, and Tegsedi intangible assets is expected to be as follows:


	As of June 30, 2024
2024	$	5,719
2025		11,429
2026		11,429
2027		11,429
2028 and thereafter		54,107
Total	$	94,113

The weighted average remaining amortization period of the definite-lived intangibles as of June 30, 2024 is 9.0 years.

Indefinite-lived intangibles

Indefinite-lived intangible assets consisted of the following at June 30, 2024 and December 31, 2023:


		Ending Balance at						Ending Balance at
Indefinite-lived		December 31,						June 30,
intangibles assets		2023		Additions		Impairment		2024
Upstaza	$	235,766	$	—	$	—	$	235,766
Total indefinite-lived intangibles	$	235,766	$	—	$	—	$	235,766

Total intangible assets, net							$	329,879

In connection with the acquisition of the Company’s gene therapy platform from Agilis, the Company acquired rights to Upstaza, for the treatment of AADC deficiency. AADC deficiency is a rare CNS disorder arising from reductions in the enzyme AADC that result from mutations in the dopa decarboxylase gene. In accordance with the acquisition method of accounting, the Company allocated the acquisition cost for the Agilis Merger to the underlying assets acquired and liabilities assumed, based upon the estimated fair values of those assets and liabilities at the date of acquisition. The Company classified the fair value of the acquired IPR&D as indefinite lived intangible assets until the successful completion or abandonment of the associated research and development efforts. There have been no changes to the indefinite lived intangible assets balance since the year ended December 31, 2023. Accordingly, the indefinite lived intangible asset balance as of June 30, 2024 is $235.8 million.

Goodwill

As a result of the Agilis Merger on August 23, 2018, the Company recorded $82.3 million of goodwill. As of June 30, 2024, there have been no changes to the balance of goodwill since the date of the Agilis Merger. Accordingly, the goodwill balance as of June 30, 2024 is $82.3 million.

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13. Subsequent events

In July 2024, the Company announced the submission of an NDA to the FDA for sepiapterin for the treatment of pediatric and adult patients with PKU, including the full spectrum of ages and disease subtypes. Pursuant to the Censa Merger Agreement, the decision to submit the NDA triggered a $25.0 million regulatory milestone to the former Censa securityholders. The $25.0 million regulatory milestone will be recorded in research and development expense for the three and nine months ended September 30, 2024.

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

The following discussion and analysis is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and certainty of cash flows from operations and from outside resources, so as to allow investors to better view our company from management’s perspective. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes to those financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2024, as amended, or our 2023 Annual Report. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth in Part II, Item 1A. (Risk Factors) of this Quarterly Report on Form 10-Q and Part I, Item 1A. (Risk Factors) of our 2023 Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements.

Our Company

We are a global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines. Our mission is to provide access to best-in-class treatments for patients who have little to no treatment options. Our strategy is to leverage our strong scientific and clinical expertise and global commercial infrastructure to bring therapies to patients. We believe that this allows us to maximize value for all of our stakeholders. We have a diversified therapeutic portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology and metabolism.

Corporate Updates

Global Commercial Footprint

Global DMD Franchise

We have two products, Translarna™ (ataluren) and Emflaza® (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder. Translarna currently has conditional marketing authorization in the European Economic Area, or EEA, for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in ambulatory patients aged two years and older. Translarna also has marketing authorization in Russia for the treatment of nmDMD in patients aged two years and older, and in Brazil for the treatment of nmDMD in ambulatory patients two years and older and for continued treatment of patients that become non-ambulatory, as well as in various other countries. During the quarter ended June 30, 2024, we recognized $70.4 million in net sales of Translarna. We hold worldwide commercialization rights to Translarna for all indications in all territories. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. During the quarter ended June 30, 2024, we recognized $47.3 million in net sales of Emflaza.

Our marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission, or EC, following reassessment by the European Medicines Agency, or EMA, of the benefit-risk balance of the authorization, which we refer to as the annual EMA reassessment. In September 2022, we submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension as further described below. Study 041 was an 18-month, placebo-controlled trial, followed by an 18-month open-label extension of Translarna in the treatment of ambulatory patients with nmDMD aged five years or older. In February 2023, we also submitted an annual marketing authorization renewal request to the EMA. In September 2023, the Committee for Medicinal Products for Human Use, or CHMP, gave a negative opinion on the conversion of the conditional marketing authorization to full marketing authorization of Translarna for the treatment of nmDMD and a negative opinion on the

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renewal of the existing conditional marketing authorization of Translarna for the treatment of nmDMD. In January 2024, the CHMP issued a negative opinion for the renewal of the conditional marketing authorization following a re-examination procedure. In May 2024, the EC decided not to adopt the CHMP’s negative opinion for the renewal of the conditional marketing authorization of Translarna and returned such opinion to the CHMP for re-evaluation. On June 27, 2024, following the EC’s request for re-review, the CHMP issued a negative opinion on the renewal of the conditional marketing authorization of Translarna for the treatment of nmDMD. Per the EMA guidelines, we have requested a re-examination of the CHMP’s negative opinion regarding the renewal of the existing conditional marketing authorization. The marketing authorization for Translarna remains in effect, pending the outcomes of the re-examination procedure and subsequent EC adoption. Based on the timeline of these procedures, PTC expects the marketing authorization for Translarna to remain in effect through the end of 2024 even if the negative opinion is maintained and adopted. We are exploring other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA if the negative opinion is adopted by the EC.

Each country, including each member state of the EEA, has its own pricing and reimbursement regulations. In order to commence commercial sale of product pursuant to our Translarna marketing authorization in any particular country in the EEA, we must finalize pricing and reimbursement negotiations with the applicable government body in such country. As a result, our commercial launch will continue to be on a country-by-country basis. We also have made, and expect to continue to make, product available under early access programs, or EAP programs, or similar styled programs both in countries in the EEA and other territories. Our ability to negotiate, secure and maintain reimbursement for product under commercial and EAP programs can be subject to challenge in any particular country and can also be affected by political, economic and regulatory developments in such country.

There is substantial risk that if the EC adopts the CHMP’s negative opinion following re-examination, or we are otherwise unable to renew our EEA marketing authorization during any annual renewal cycle, or we are unable to identify other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA should the EC adopt the CHMP’s negative opinion or our product label is materially restricted, we would lose all, or a significant portion of, our ability to generate revenue from sales of Translarna in the EEA and other territories.

Translarna is an investigational new drug in the United States. During the first quarter of 2017, we filed a New Drug Application, or NDA, for Translarna for the treatment of nmDMD over protest with the United States Food and Drug Administration, or FDA. In October 2017, the Office of Drug Evaluation I of the FDA issued a Complete Response Letter for the NDA, stating that it was unable to approve the application in its current form. In response, we filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied our appeal of the Complete Response Letter. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production in nmDMD patients’ muscles. We followed the FDA’s recommendation and collected, using newer technologies via procedures and methods that we designed, such dystrophin data in a new study, Study 045, and announced the results of Study 045 in February 2021. Study 045 did not meet its pre-specified primary endpoint. In June 2022, we announced top-line results from the placebo-controlled trial of Study 041. Following this announcement, we submitted a meeting request to the FDA to gain clarity on the regulatory pathway for a potential re-submission of an NDA for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support NDA re-submission. We held a Type C meeting with the FDA in the fourth quarter of 2023 to discuss the totality of Translarna data. Based on feedback from the FDA, we re-submitted the NDA in July 2024, based on the results from Study 041 and from our international drug registry study for nmDMD patients receiving Translarna.

We have previously relied on Emflaza’s seven-year marketing exclusivity period in the United States for its approved indications under the provisions of the Orphan Drug Act of 1983, or the Orphan Drug Act, when commercializing Emflaza. Emflaza’s seven-year period of orphan drug exclusivity related to the treatment of DMD in patients five years and older expired in February 2024. We expect the expiration of this orphan drug exclusivity to have a significant negative impact on Emflaza net product revenue. Emflaza’s orphan drug exclusivity related to the treatment of DMD in patients two years of age to less than five expires in June 2026.

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Upstaza^TM(eladocagene exuparvovec)

Our product Upstaza is a gene therapy used for the treatment of Aromatic L-Amino Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the EC approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare Products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom. In March 2024, we submitted a biologics license application, or BLA, to the FDA for Upstaza for the treatment of AADC deficiency in the United States. In May 2024, the FDA has accepted for filing the BLA for our gene therapy for the treatment of AADC deficiency and granted priority review with a target regulatory action date of November 13, 2024.

Tegsedi^® (inotersen) and Waylivra™ (volanesorsen)

We hold the rights for the commercialization of Tegsedi and Waylivra for the treatment of rare diseases in countries in Latin America and the Caribbean pursuant to a Collaboration and License Agreement, or the Tegsedi-Waylivra Agreement, dated August 1, 2018, by and between us and Akcea Therapeutics, Inc., or Akcea, a subsidiary of Ionis Pharmaceuticals, Inc. Tegsedi has received marketing authorization in the United States, European Union, or EU, and Brazil for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. In August 2021, ANVISA, the Brazilian health regulatory authority, approved Waylivra as the first treatment for familial chylomicronemia syndrome, or FCS, in Brazil. In December 2022, ANVISA approved Waylivra for the treatment of familial partial lipodystrophy, or FPL. Waylivra has also received marketing authorization in the EU for the treatment of FCS.

Evrysdi^® (risdiplam)

We also have a spinal muscular atrophy, or SMA, collaboration with F. Hoffman La Roche Ltd. and Hoffman La Roche inc., which we refer to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. The SMA program has one approved product, Evrysdi® (risdiplam), which was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the EC in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies. Evrysdi also received marketing authorization for the treatment of SMA in over 100 countries. In May 2022, the FDA approved a label expansion for Evrysdi to include infants under two months old with SMA. In August 2023, the EC approved an extension of the Evrysdi marketing authorization to include infants under two months old in the EU.

Diversified Development Pipeline

Sepiapterin

One of our most advanced clinical stage molecules is sepiapterin. Sepiapterin is a precursor to intracellular tetrahydrobiopterin, which is a critical enzymatic cofactor involved in metabolism and synthesis of numerous metabolic products. In May 2023, we announced that the primary endpoint was achieved in our registration-directed Phase 3 trial for sepiapterin for phenylketonuria, or PKU. The primary endpoint of the study was the achievement of statistically-significant reduction in blood Phe level. The primary analysis population included those patients who have a greater than 30% reduction in blood Phe levels during the Part 1 run-in phase of the trial. Sepiapterin demonstrated Phe level reduction of approximately 63% in the overall primary analysis population and Phe level reduction of approximately 69% in the subset for classical PKU patients. Additionally, sepiapterin was well tolerated with no serious adverse events. Following the placebo-controlled study, patients were eligible to enroll in a long-term open-label study, which is still ongoing and will evaluate long-term safety, durability and Phe tolerance. In March 2024, we submitted a marketing authorization application, or MAA, to the EMA for sepiapterin for the treatment of PKU in the EEA, which was validated and accepted for review by the EMA in May 2024. Additionally, we participated in a pre-NDA meeting with the FDA in the third quarter of 2023. At that meeting, the FDA stated that the sepiapterin clinical safety and efficacy data supported NDA submission for the treatment of pediatric and adult PKU patients. However, the FDA requested that we complete a 26-week nonclinical mouse study to assess sepiapterin carcinogenicity potential prior to NDA submission. This nonclinical study was not initially required when we acquired sepiapterin, as the NDA submission was planned under the Section 505(b)(2) pathway.

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Given that sepiapterin is a novel therapy with distinct pharmacology, biodistribution, mechanism of action and differentiated efficacy, we subsequently decided to make the NDA submission under the Section 505(b)(1) pathway, which requires the 26-week study, which is considered a required NDA component needed to inform labeling and is typically completed prior to submission. In July 2024, following completion of the in-life portion of the study, we submitted an NDA to the FDA for sepiapterin for the treatment of PKU. We also expect to make regulatory submissions for sepiapterin for the treatment of PKU in Japan and Brazil later in 2024.

Splicing Platform

In addition to our SMA program, our splicing platform also includes PTC518, which is being developed for the treatment of Huntington’s disease, or HD. We announced the results from our Phase 1 study of PTC518 in healthy volunteers in September 2021 demonstrating dose-dependent lowering of huntingtin messenger ribonucleic acid and protein levels, that PTC518 efficiently crosses blood brain barrier at significant levels and that PTC518 was well tolerated. We initiated a Phase 2 study of PTC518 for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on PTC518 biomarker effect. In June 2023, we announced interim data from the 12-week placebo-controlled phase. The study demonstrated dose-dependent lowering of Huntingtin, or HTT, protein levels in peripheral blood cells, reaching an approximate mean 30% reduction in mutant HTT levels at the 10mg dose level. In addition, PTC518 exposure in the cerebrospinal fluid was consistent with or higher than plasma unbound drug levels. Furthermore, PTC518 was well tolerated with no treatment-related serious adverse events. In June 2024, we announced additional interim results from the Phase 2 study of PTC518. At month 12, PTC518 treatment demonstrated durable dose-dependent lowering of mutant HTT, or mHTT, protein in the blood and dose-dependent lowering of mHTT protein in the cerebrospinal fluid in the interim cohort of stage 2 patients. In addition, favorable trends were demonstrated on several relevant HD clinical assessments. Furthermore, following 12 months of treatment, PTC518 continued to be well tolerated. Based on its review of the interim Phase 2 study data, the FDA lifted the partial clinical hold on the program.

Ferroptosis and Inflammation Platform

Our ferroptosis and inflammation platform consists of small molecule compounds that target oxidoreductase enzymes that regulate oxidative stress and inflammatory pathways central to the pathology of a number of CNS diseases. The two most advanced molecules in our ferroptosis and inflammation platform are vatiquinone and utreloxastat. We announced topline results from a registration-directed Phase 3 trial of vatiquinone in children and young adults with Friedreich ataxia, called MOVE-FA, in May 2023. While the study did not meet its primary endpoint of statistically significant change in modified Friedreich Ataxia Rating Scale, or mFARS, score at 72 weeks in the primary analysis population, vatiquinone treatment did demonstrate significant benefit on key disease subscales and secondary endpoints. In addition, in the population of subjects that completed the study protocol, significance was reached in the mFARS endpoint and several secondary endpoints, including the upright stability subscale. Furthermore, vatiquinone was well tolerated. In the first quarter of 2024, we met with the FDA, who expressed willingness to review an NDA for vatiquinone for the treatment of Friedreich ataxia based on the MOVE-FA trial as well as data from the ongoing open label extension study following the MOVE-FA trial. We plan to submit an NDA for vatiquinone in late 2024. In the third quarter of 2021, we completed a Phase 1 trial in healthy volunteers to evaluate the safety and pharmacology of utreloxastat. Utreloxastat was found to be well-tolerated with no reported serious adverse events while demonstrating predictable pharmacology. We initiated a Phase 2 registration directed trial of utreloxastat for amyotrophic lateral sclerosis, or ALS, in the first quarter of 2022. We expect topline results from this trial in the fourth quarter of 2024.

Multi-Platform Discovery

In addition, we have a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas, including rare diseases.

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Funding

The success of our products and any other product candidates we may develop, depends largely on obtaining and maintaining reimbursement from governments and third-party insurers. Our revenues are primarily generated from sales of Translarna for the treatment of nmDMD in countries where we were able to obtain acceptable commercial pricing and reimbursement terms and in select countries where we are permitted to distribute Translarna under our EAP programs or through similar styled programs, and from sales of Emflaza for the treatment of DMD in the United States. We also generate revenue from sales of Upstaza for the treatment of AADC deficiency in the EEA and have recognized revenue associated with milestone and royalty payments from Roche pursuant to a License and Collaboration Agreement, or the SMA License Agreement, by and among us, Roche and, for the limited purposes set forth therein, the SMA Foundation, under our SMA program.

To date, we have financed our operations primarily through the private offerings of convertible senior notes, public and “at the market” offerings of common stock, proceeds from royalty purchase agreements, net proceeds from our borrowings under our credit agreement with Blackstone, private placements of our convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by our product candidates.. We have relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States since 2014, Emflaza for the treatment of DMD in the United States since 2017 and Upstaza for the treatment of AADC deficiency in the EEA since 2022. We have also relied on revenue associated with milestone and royalty payments from Roche pursuant to the SMA License Agreement, under our SMA program.

In June 2024, we entered into an amendment with Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, and Royalty Pharma plc, to the Amended and Restated Royalty Purchase Agreement, dated October 18, 2023, or the A&R Royalty Purchase Agreement, which amends and restates in its entirety the Royalty Purchase Agreement, dated as of July 17, 2020, or the Original Royalty Purchase Agreement. Pursuant to the A&R Royalty Purchase Agreement, we have sold to Royalty Pharma a portion of our right to receive sales-based royalty payments, or the Royalty, on worldwide net sales of Evrysdi and any other product developed pursuant to the SMA License Agreement under the SMA program. To date, Royalty Pharma has paid to us cash consideration of $1.9 billion (less Royalty payments received by us with respect to assigned Royalties, or the Assigned Royalty Rights) in exchange for 90.49% of the Royalty, which will be reduced to 83.33% after Royalty Pharma receives $1.3 billion in aggregate payments, or the Assigned Royalty Cap, from the Royalty assigned under the Original Royalty Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met. We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and capital resources—Sources of Liquidity” for additional information.

The 2026 Convertible Notes consist of $287.5 million aggregate principal amount of 1.50% convertible senior notes due 2026. The 2026 Convertible Notes bear cash interest at a rate of 1.50% per year, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2020. The 2026 Convertible Notes will mature on September 15, 2026, unless earlier repurchased or converted. We received net proceeds of $279.3 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us.

In August 2019, we entered into an At the Market Offering Sales Agreement, or the Sales Agreement, with Cantor Fitzgerald and RBC Capital Markets, LLC, or together, the Sales Agents, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or the Securities Act. During the three months ended June 30, 2024, we did not issue or sell any shares of common stock pursuant to the Sales Agreement. The remaining shares of our common stock

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available to be issued and sold, under the Sales Agreement, have an aggregate offering price of up to $93.0 million as of June 30, 2024.

As of June 30, 2024, we had an accumulated deficit of $3,474.3 million. We had a net loss of $190.8 million and $337.8 million for the six months ended June 30, 2024 and 2023, respectively.

We anticipate that we will continue to incur significant expenses in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including expenses related to our commercial infrastructure and corresponding sales and marketing, legal and regulatory, and distribution and manufacturing undertakings as well as administrative and employee-based expenses. In addition to the foregoing, we expect to continue to incur significant costs in connection with 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. We continue to seek marketing authorization for Translarna for the treatment of nmDMD in territories that we do not currently have marketing authorization in. Additionally, in response to the CHMP’s negative opinion for Translarna for the treatment of nmDMD, we have submitted a request for re-examination per EMA guidelines. We are also exploring other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA if the EC adopts the CHMP’s negative opinion on the renewal of the conditional marketing authorization of Translarna following a re-examination procedure. In March 2024, we submitted a BLA to the FDA for our gene therapy for the treatment of AADC deficiency in the United States. In May 2024, the FDA accepted the filing for the BLA and granted priority review with a target regulatory action date of November 13, 2024. In March 2024, we submitted an MAA, to the EMA for sepiapterin for the treatment of PKU in the EEA. In July 2024, we submitted an NDA to the FDA for sepiapterin for the treatment of PKU. These efforts may significantly impact the timing and extent of our commercialization and manufacturing expenses.

We may seek to expand and diversify our product pipeline through opportunistically in-licensing or acquiring the rights to products, product candidates or technologies and we may incur expenses, including with respect to transaction costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction, which would increase our future capital requirements.

In May 2024, the MAA submission for sepiapterin for the treatment of PKU was validated and accepted by the EMA. The acceptance triggered a $15.0 million regulatory milestone to the former securityholders of Censa Pharmaceuticals, Inc., or Censa, during the three months ended June 30, 2024. The $15.0 million regulatory milestone was recorded in accounts payable and accrued expense on the consolidated balance sheet as of June 30, 2024. We expect to make additional payments to the former securityholders of Censa of $50.0 million in the aggregate in cash upon the potential achievement in 2024 of further regulatory milestones relating to sepiapterin pursuant to the Agreement and Plan of Merger, dated as of May 5, 2020, or the Censa Merger Agreement, by and among us, Hydro Merger Sub, Inc., our wholly owned, indirect subsidiary, Censa and, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Censa, Shareholder Representative Services LLC.

In March 2024, we submitted a BLA for our gene therapy for the treatment of AADC deficiency to the FDA. In May 2024, the BLA submission was accepted for filing by the FDA. The acceptance triggered a $20.0 million milestone payment to the former equityholders of Agilis Biotherapeutics, Inc., or Agilis for the three months ended June 30, 2024. The $20.0 million milestone was recorded in accounts payable and accrued expense on the consolidated balance sheet as of June 30, 2024. Additionally, we expect to pay $4.5 million in regulatory milestone payments upon the approval of the BLA from the FDA pursuant to the Agreement and Plan of Merger, dated as of July 19, 2018, or the Agilis Merger Agreement, by and among us, Agility Merger Sub, Inc., a Delaware corporation and our wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC.

We also have certain significant contractual obligations and commercial commitments that require funding and we have disclosed these items under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Funding Obligations” in our 2023 Annual Report. There were no material changes to these obligations and commitments during the period ended June 30, 2024. Furthermore, since we are a public company, we have incurred and

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expect to continue to incur additional costs associated with operating as such including significant legal, accounting, investor relations and other expenses.

We have never been profitable and we will need to generate significant revenues to achieve and sustain profitability, and we may never do so. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or our commercialization efforts.

Financial operations overview

Revenues

Net product revenues. To date, our net product revenues have consisted primarily of sales of Translarna for the treatment of nmDMD in territories outside of the United States and sales of Emflaza for the treatment of DMD in the United States. We recognize revenue when performance obligations with customers have been satisfied. Our performance obligations are to provide products based on customer orders from distributors, hospitals, specialty pharmacies or retail pharmacies. The performance obligations are satisfied at a point in time when our customer obtains control of the product, which is typically upon delivery. We invoice customers after the products have been delivered and invoice payments are generally due within 30 to 90 days of invoice date. We determine the transaction price based on fixed consideration in its contractual agreements. Contract liabilities arise in certain circumstances when consideration is due for goods not yet provided. As we have identified only one distinct performance obligation, the transaction price is allocated entirely to the product sale. In determining the transaction price, a significant financing component does not exist since the timing from when we deliver product to when the customers pay for the product is typically less than one year. Customers in certain countries pay in advance of product delivery. In those instances, payment and delivery typically occur in the same month.

We record product sales net of any variable consideration, which includes discounts, allowances, rebates related to Medicaid and other government pricing programs, and distribution fees. We use the expected value or most likely amount method when estimating variable consideration, unless discount or rebate terms are specified within contracts. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained. During the three months ended June 30, 2024 and 2023, net product sales outside of the United States were $85.9 million and $108.9 million, respectively, consisting of sales of Translarna, Tegsedi, Waylivra, and Upstaza. Translarna net revenues made up $70.4 million and $96.5 million of the net product sales outside of the United States for the three months ended June 30, 2024 and 2023, respectively. During the three months ended June 30, 2024 and 2023, net product sales in the United States were $47.3 million and $65.7 million, respectively, consisting solely of sales of Emflaza. During the three months ended June 30, 2024, two countries, the United States and Brazil, accounted for at least 10% of the Company’s net product sales, representing $47.3 million and $30.4 million of the net product sales, respectively. During the three months ended June 30, 2024, three countries, the United States, Russia, and Brazil, accounted for at least 10% of the Company’s net product sales, representing $65.7 million, $19.1 million, and $23.1 million of the net product sales, respectively. For the three months ended June 30, 2024 and 2023, two of the Company’s distributors each accounted for over 10% of the Company’s net product sales.

During the six months ended June 30, 2024 and 2023, net product sales outside of the United States were $206.0 million and $241.8 million, respectively consisting of sales of Translarna, Tegsedi, Waylivra and Upstaza. Translarna net revenues made up $173.9 million and $211.6 million of the net product sales outside of the United States for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, net product sales in the United States were $104.8 million and $120.3 million, respectively, consisting solely of sales of Emflaza. During the six months ended June 30, 2024, three countries, the United States, Russia, and Brazil, accounted for at least 10% of our net product sales, representing $104.8 million, $54.8 million, and $39.1 million of net product sales, respectively. During the six months ended June 30, 2023, three countries, the United States, Russia, and Brazil, accounted for at least 10% of our net product sales, representing $120.3 million, $63.7 million, and $48.9 million of net product sales, respectively. For the six

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months ended June 30, 2024 and 2023, we had a total of two and two distributors, respectively, that each accounted for over 10% of our net product sales.

In relation to customer contracts, we incur costs to fulfill a contract but do not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. We consider any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense.

Roche and the SMA Foundation Collaboration. In November 2011, we entered into the SMA License Agreement pursuant to which we are collaborating with Roche and the SMA Foundation to further develop and commercialize compounds identified under our SMA program with the SMA Foundation. The research component of this agreement terminated effective December 31, 2014. We are eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product. As of June 30, 2024, we had recognized a total of $310.0 million in milestone payments and $426.1 million royalties on net sales pursuant to the SMA License Agreement. As of June 30, 2024, there are no remaining research and development event milestones that we can receive. The remaining potential sales milestones as of June 30, 2024 are $150.0 million upon achievement of certain sales events.

For the three and six months ended June 30, 2024 and 2023, the amounts recognized for the collaboration revenue related to the SMA License Agreement with Roche were immaterial.

For the three and six months ended June 30, 2024, we recognized $53.2 million and $84.3 million of royalty revenue, respectively, related to Evrysdi. For the three and six months ended June 30, 2023, we recognized $36.9 million and $67.7 million of royalty revenue, respectively, related to Evrysdi.

In July 2020, we entered into the Original Royalty Purchase Agreement. Pursuant to the Original Royalty Purchase Agreement, we sold to Royalty Pharma 42.933%, or the Original Assigned Royalty Rights, of the Royalty for $650.0 million. At that time, we retained a 57.067% interest in the Royalty and all economic rights to receive the remaining potential regulatory and sales milestone payments under the SMA License Agreement.

Pursuant to the A&R Royalty Purchase Agreement, Royalty Pharma has paid to us aggregate cash consideration of $1.9 billion (less Royalty payments received by us with respect to the Assigned Royalty Rights) in exchange for 90.49% of the Royalty, which will be reduced to 83.33% of the Royalty after Royalty Pharma receives $1.3 billion in aggregate payments from the Royalty assigned at the closing of the Original Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met, and all economic rights to receive the remaining potential regulatory and sales milestone payments under the SMA License Agreement.

We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and capital resources—Sources of Liquidity” for additional information.

Research and development expense

Research and development expenses consist of the costs associated with our research activities, as well as the costs associated with our drug discovery efforts, conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings. Our research and development expenses consist of:

●external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants;

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●employee-related expenses, which include salaries and benefits, including share-based compensation, for the personnel involved in our drug discovery and development activities; and

●facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, IT, human resources and other support functions, depreciation of leasehold improvements and equipment, and laboratory and other supplies.

We use our employee and infrastructure resources across multiple research projects, including our drug development programs. We track expenses related to our clinical programs and certain preclinical programs on a per project basis.

We expect our research and development expenses to fluctuate in connection with our ongoing activities, particularly in connection with Study 041 and other studies for Translarna for the treatment of nmDMD, our activities under our splicing and ferroptosis and inflammation programs and performance of our post-marketing requirements imposed by regulatory agencies with respect to our products. The timing and amount of these expenses will depend upon the outcome of our ongoing clinical trials and the costs associated with our planned clinical trials. The timing and amount of these expenses will also depend on the costs associated with potential future clinical trials of our products or product candidates and the related expansion of our research and development organization, regulatory requirements, advancement of our preclinical programs, and product and product candidate manufacturing costs.

The following tables provides research and development expense for our most advanced principal product development programs, for the three and six months ended June 30, 2024 and 2023.



	Three Months Ended June 30,
	2024		2023

	(in thousands)
Development	$	49,931	$	82,542
Research		18,204		22,767
Milestones		15,000		—
Payroll, benefits, and share-based stock compensation		37,302		67,545
Facilities and other		11,732		13,020
Total research and development	$	132,169	$	185,874


	Six Months Ended June 30,
	2024		2023

	(in thousands)
Development	$	103,355	$	149,350
Research		31,703		44,527
Milestones		15,000		30,000
Payroll, benefits, and share-based stock compensation		76,654		131,257
Facilities and other		21,586		25,864
Total research and development	$	248,298	$	380,998

Development. Consists of costs incurred for product candidates following initiation of a clinical trial.

For the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, the decrease in development expenses primarily reflected the decrease in program spend related to our strategic pipeline prioritization as we continue to focus our resources on our differentiated, high potential research and development programs.

Research. Consists of costs incurred for product candidates before initiation of a clinical trial.

For the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, the decrease in research expenses was primarily related to our strategic pipeline prioritization where we discontinued several preclinical and early research programs. In 2024, we continue to focus our resources on our differentiated, high potential research and development programs which has increased spend compared to the prior period.

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Milestones. Consists of development and regulatory milestone expenses incurred in connection with our collaborative arrangements.

For the three months ended June 30, 2024, compared to the three months ended June 30, 2023, the increase in milestone expenses primarily related to the achievement of a $15.0 million success-based regulatory milestone for the validation and acceptance of an MMA for sepiapterin for PKU in May 2024. For the six months ended June 30, 2024, compared to the six months ended June 30, 2023, the decrease in milestone expenses primarily related to the achievement of a $30.0 million success-based development milestone for the completion of enrollment of a Phase 3 clinical trial for sepiapterin for PKU in 2023.

Payroll, benefits, and share-based stock compensation. Consists of costs incurred for salaries and wages, bonus, payroll taxes, benefits and stock-based compensation associated with employees involved in research and development activities. Stock-based compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates stock-based grants are issued.

For the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023, the decrease in payroll, benefits, and share-based stock compensation expenses primarily relates to our reduction in workforce in connection with our strategic pipeline prioritization and discontinuation of our preclinical and early research programs in our gene therapy platform.

Facilities and other. Consists of indirect costs incurred for the benefit of multiple programs, including information technology, and other facility-based expenses, such as rent expense.

The successful development of our products and product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

●

the scope, rate of progress and expense of our clinical trials and other research and development activities;

●

the potential benefits of our products and product candidates over other therapies;

●

our ability to market, commercialize and achieve market acceptance for any of our products or product candidates that we are developing or may develop in the future, including our ability to negotiate pricing and reimbursement terms acceptable to us;

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clinical trial results;

●

the terms and timing of regulatory approvals; and

●

the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.

A change in the outcome of any of these variables with respect to the development of our products or product candidates could mean a significant change in the costs and timing associated with the development of those products or product candidates. For example, if the EMA or FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of any of our products or product candidates or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Selling, general and administrative expense

Selling, general and administrative expenses consist primarily of salaries and other related costs for personnel, including share-based compensation expenses, in our executive, legal, business development, commercial, finance, accounting, information technology and human resource functions. Other selling, general and administrative expenses include facility-related costs not otherwise included in research and development expense; advertising and promotional expenses; costs

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associated with industry and trade shows; and professional fees for legal services, including patent-related expenses, accounting services and miscellaneous selling costs.

We expect that selling, general and administrative expenses will increase in future periods in connection with our continued efforts to commercialize our products, including increased payroll, expanded infrastructure, commercial operations, increased consulting, legal, accounting and investor relations expenses.

Interest expense, net

Interest expense, net consists of interest expense from the liability for the sale of future royalties related to the Original Royalty Purchase Agreement, the A&R Royalty Purchase Agreement, the 2026 Convertible Notes outstanding, the Blackstone Credit Agreement that we repaid and terminated in October 2023, offset by interest income earned on investments.

Critical accounting policies and significant judgments and estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions.

During the three and six months ended June 30, 2024, there were no material changes to our critical accounting policies as reported in our 2023 Annual Report.

Results of operations

Three months ended June 30, 2024 compared to three months ended June 30, 2023

The following table summarizes revenues and selected expense and other income data for the three months ended June 30, 2024 and 2023.


	Three Months Ended
	June 30,				Change
(in thousands)	2024		2023		2024 vs. 2023
Net product revenue	$	133,220	$	174,592	$	(41,372)
Royalty revenue		53,183		36,853		16,330
Manufacturing revenue		301		2,363		(2,062)
Cost of product sales, excluding amortization of acquired intangible assets		15,527		12,731		2,796
Amortization of acquired intangible assets		2,865		47,397		(44,532)
Research and development expense		132,169		185,874		(53,705)
Selling, general and administrative expense		69,500		88,449		(18,949)
Change in the fair value of contingent consideration		5,100		(128,900)		134,000
Intangible asset impairment		—		217,800		(217,800)
Tangible asset impairment and losses (gains) on transactions, net		1,761		—		1,761
Interest expense, net		(43,490)		(29,415)		(14,075)
Other (expense) income, net		(2,025)		1,479		(3,504)
Income tax (expense) benefit		(13,446)		38,596		(52,042)

Net product revenues. Net product revenues were $133.2 million for the three months ended June 30, 2024, a decrease of $41.4 million, or 24%, from $174.6 million for the three months ended June 30, 2023. The decrease in net product revenue was primarily due to a decrease in net product sales of Translarna and Emflaza. Emflaza net product revenues were $47.3

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million for the three months ended June 30, 2024, a decrease of $18.4 million, or 28%, compared to $65.7 million for the three months ended June 30, 2023. These results were driven by the expiration of Emflaza’s orphan drug exclusivity in February 2024. Translarna net product revenues were $70.4 million for the three months ended June 30, 2024, a decrease of $26.1 million, or 27%, compared to $96.5 million for the three months ended June 30, 2023. These results were due to the timing of bulk government orders.

Royalty revenue. Royalty revenue was $53.2 million for the three months ended June 30, 2024, an increase of $16.3 million, or 44%, from $36.9 million for the three months ended June 30, 2023. The increase in royalty revenue was due to higher Evrysdi sales in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. In accordance with the SMA License Agreement, we are entitled to royalties on worldwide annual net sales of the product.

Manufacturing revenue. Manufacturing revenues were $0.3 million for the three months ended June 30, 2024, a decrease of $2.1 million, or 87%, from $2.4 million for the three months ended June 30, 2023. The decrease is due to less manufacturing services related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers being performed in the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. In June 2024, we sold our gene therapy manufacturing business in Hopewell Township, New Jersey. Accordingly, we do not expect to have manufacturing revenue going forward.

Cost of product sales, excluding amortization of acquired intangible assets. Cost of product sales, excluding amortization of acquired intangible assets were $15.5 million for the three months ended June 30, 2024, an increase of $2.8 million, or 22%, from $12.7 million for the three months ended June 30, 2023. Cost of product sales consist primarily of royalty payments associated with Emflaza, Translarna, and Upstaza net product sales, costs associated with Emflaza, Translarna, and Upstaza products sold during the period, and royalty expense related to royalty revenues and collaboration milestone revenues. The increase in cost of product sales, excluding amortization of acquired intangible asset, is primarily due to increases in royalty costs driven by Emflaza. As of February 2024, the Emflaza rights intangible asset was fully amortized, therefore for the three months ended June 30, 2024, the milestone payment was recorded on the consolidated statement of operations within cost of product sales, excluding amortization of acquired intangible assets.

Amortization of acquired intangible assets. Amortization of acquired intangible assets were $2.9 million for the three months ended June 30, 2024, a decrease of $44.5 million, or 94%, from $47.4 million for the three months ended June 30, 2023. These amounts are related to the Emflaza rights acquisition, as well as the Waylivra, Tegsedi, and Upstaza intangible assets, which are all being amortized on a straight-line basis over their estimated useful lives. The amortization decrease is driven by the Emflaza rights intangible asset being fully amortized as of February 2024, and therefore, for the three months ended June 30, 2024, the milestone payment was recorded on the consolidated statement of operations within cost of product sales, excluding amortization of acquired intangible assets.

Research and development expense. Research and development expense was $132.2 million for the three months ended June 30, 2024, a decrease of $53.7 million, or 29%, from $185.9 million for the three months ended June 30, 2023. The decrease in research and development expenses reflects strategic portfolio prioritization as we continue to focus our resources on our differentiated, high potential research and development programs. Research and development expense also includes a $15.0 million regulatory success-based milestone payable to the former Censa securityholders for the three months ended June 30, 2024.

Selling, general and administrative expense. Selling, general and administrative expense was $69.5 million for the three months ended June 30, 2024, a decrease of $18.9 million, or 21%, from $88.4 million for the three months ended June 30, 2023. The decrease reflects lower employee costs as a result of the reduction in workforce in 2023.

Change in the fair value of contingent consideration. The change in the fair value of contingent consideration was a loss of $5.1 million for the three months ended June 30, 2024, a change of $134.0 million, or over 100%, from a gain of $128.9 million for the three months ended June 30, 2023. The change is primarily related to our strategic portfolio prioritization and decision to discontinue our preclinical and early research programs in our gene therapy platform, which included Friedreich ataxia and Angelman syndrome, which was announced in May 2023. As a result, we fully impaired the Friedreich ataxia and Angelman syndrome intangible assets and determined that the fair value for all of the contingent consideration payable related to Friedreich ataxia and Angelman syndrome was $0. As a result, we recorded a fair value

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change of $129.8 million for the contingent consideration related to Friedreich ataxia and Angelman syndrome during the three months ended June 30, 2023.

Intangible asset impairment. Intangible asset impairment was $0.0 for the three months ended June 30, 2024, a decrease of $217.8 million, or 100%, from intangible asset impairment of $217.8 million for the three months ended June 30, 2023. The change is due to our strategic portfolio prioritization and decision to discontinue our preclinical and early research programs in our gene therapy platform, which included Friedreich ataxia and Angelman syndrome, which was announced in May 2023. As a result, we fully impaired the Friedreich ataxia and Angelman syndrome intangible assets and recorded impairment expense of $217.8 million during the three months ended June 30, 2023.

Tangible asset impairment and losses (gains) on transactions, net. Tangible asset impairment and losses (gains) on transactions, net was $1.8 million for the three months ended June 30, 2024, an increase of $1.8 million, or 100%, from $0.0 million for the three months ended June 30, 2023. The increase is due to the loss on sale of $4.2 million of certain assets related to gene therapy manufacturing and $0.2 million of fixed asset impairments. These amounts were partially offset by a gain of $2.2 million on lease terminations and a $0.4 million gain on sales of fixed assets.

Interest expense, net. Interest expense, net was $43.5 million for the three months ended June 30, 2024, an increase of $14.1 million, or 48%, from $29.4 million for the three months ended June 30, 2023. The increase in interest expense, net was primarily due to interest expense recorded from the liability for the sale of future royalties related to the A&R Royalty Purchase Agreement, offset by a decrease in interest expense due to the termination of our Blackstone Credit Agreement.

Other (expense) income, net. Other expense was $2.0 million for the three months ended June 30, 2024, a change of $3.5 million, or over 100%, from other income, net of $1.5 million for the three months ended June 30, 2023. The change in other (expense) income, net primarily relates to net unrealized losses of $3.4 million from our ClearPoint Neuro. Inc. debt and equity investments, offset by a net realized and unrealized gain from foreign currency of $0.9 million for the three months ended June 30, 2024. Other income, net for the three months ended June 30, 2023 was primarily related to realized and unrealized foreign exchange gains, net, of $2.9 million, and unrealized gains of $2.3 million on marketable securities – equity investments, offset by unrealized and realized losses, net, on our equity investments in ClearPoint Neuro, Inc. of $1.9 million and unrealized losses on our convertible debt security in ClearPoint Neuro, Inc. of $1.6 million.

Income tax (expense) benefit. Income tax expense was $13.4 million for the three months ended June 30, 2024, an increase of $52.0 million, or over 100%, compared to income tax benefit of $38.6 million for the three months ended June 30, 2023. The change in income tax (expense) benefit is attributable to the recognition of the revenue associated with the Royalty Pharma agreement of 2023. Additionally, we incur income tax expenses in various foreign jurisdictions, and our foreign tax liabilities are largely dependent upon the distribution of pre-tax earnings among these different jurisdictions.

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Six months ended June 30, 2024 compared to six months ended June 30, 2023

The following table summarizes revenues and selected expense and other income data for the six months ended June 30, 2024 and 2023.


	Six Months Ended
	June 30,				Change
(in thousands)	2024		2023		2024 vs. 2023
Net product revenue	$	310,824	$	362,149	$	(51,325)
Collaboration revenue		—		6		(6)
Royalty revenue		84,337		67,684		16,653
Manufacturing revenue		1,661		4,351		(2,690)
Cost of product sales, excluding amortization of acquired intangible assets		30,267		26,875		3,392
Amortization of acquired intangible assets		54,395		86,812		(32,417)
Research and development expense		248,298		380,998		(132,700)
Selling, general and administrative expense		142,772		175,363		(32,591)
Change in the fair value of contingent consideration		5,000		(126,500)		131,500
Intangible asset impairment		—		217,800		(217,800)
Tangible asset impairment and losses (gains) on transactions, net		1,761		—		1,761
Interest expense, net		(84,324)		(56,745)		(27,579)
Other (expense) income, net		(434)		11,434		(11,868)
Income tax (expense) benefit		(20,326)		34,627		(54,953)

Net product revenues. Net product revenues were $310.8 million for the six months ended June 30, 2024, a decrease of $51.3 million, or 14%, from $362.1 million for the six months ended June 30, 2023. The decrease in net product revenue was primarily due to a decrease in net product sales of Translarna and Emflaza. Translarna net product revenues were $173.9 million for the six months ended June 30, 2024, a decrease of $37.7 million, or 18%, compared to $211.6 million for the six months ended June 30, 2023. These results were due to the timing of bulk government orders. Emflaza net product revenues were $104.8 million for the six months ended June 30, 2024, a decrease of $15.5 million, or 13%, compared to $120.3 million for the six months ended June 30, 2023. These results were driven by the expiration of Emflaza’s orphan drug exclusivity in February 2024.

Collaboration revenue. Collaboration revenue was $0.0 thousand for the six months ended June 30, 2024, a decrease of $6.0 thousand, or 100%, from $6.0 thousand for the six months ended June 30, 2023. No milestones were triggered in the six months ended June 30, 2024. The activity for collaboration revenue was immaterial for the six months ended June 30, 2023.

Royalty revenue. Royalty revenue was $84.3 million for the six months ended June 30, 2024, an increase of $16.7 million, or 25%, from $67.7 million for the six months ended June 30, 2023. The increase in royalty revenue was due to higher Evrysdi sales in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. In accordance with the SMA License Agreement, we are entitled to royalties on worldwide annual net sales of the product.

Manufacturing revenue. Manufacturing revenues were $1.7 million for the six months ended June 30, 2024, a decrease of $2.7 million, or 62%, from $4.4 million for the six months ended June 30, 2023. The decrease is due to less manufacturing services related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers being performed in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. In June 2024, we sold our gene therapy manufacturing business in Hopewell Township, New Jersey. Accordingly, we do not expect to have manufacturing revenue going forward.

Cost of product sales, excluding amortization of acquired intangible assets. Cost of product sales, excluding amortization of acquired intangible assets were $30.3 million for the six months ended June 30, 2024, an increase of $3.4 million, or 13%, from $26.9 million for the six months ended June 30, 2023. Cost of product sales consist primarily of royalty payments associated with Emflaza, Translarna, and Upstaza net product sales, costs associated with Emflaza, Translarna,

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and Upstaza products sold during the period, and royalty expense related to royalty revenues and collaboration milestone revenues. The increase in cost of product sales, excluding amortization of acquired intangible assets, is primarily due to increases in royalty costs driven by Emflaza. As of February 2024, the Emflaza rights intangible asset was fully amortized, and therefore for the six months ended June 30, 2024, the milestone payment was recorded on the consolidated statement of operations within cost of product sales, excluding amortization of acquired intangible assets.

Amortization of acquired intangible assets. Amortization of acquired intangible assets were $54.4 million for the six months ended June 30, 2024, a decrease of $32.4 million, or 37%, from $86.8 million for the six months ended June 30, 2023. These amounts are related to the Emflaza rights acquisition, as well as the Waylivra, Tegsedi, and Upstaza intangible assets, which are all being amortized on a straight-line basis over their estimated useful lives. The amortization decrease is driven by the Emflaza rights intangible asset being fully amortized as of February 2024, and therefore, for the six months ended June 30, 2024, the milestone payment was recorded on the consolidated statement of operations within cost of product sales, excluding amortization of acquired intangible assets.

Research and development expense. Research and development expense was $248.3 million for the six months ended June 30, 2024, a decrease of $132.7 million, or 35%, from $381.0 million for the six months ended June 30, 2023. The decrease in research and development expenses reflects strategic portfolio prioritization as we continue to focus our resources on our differentiated, high potential research and development programs. Research and development expense also includes a $15.0 million regulatory success-based milestone payable to the former Censa securityholders for the six months ended June 30, 2024.

Selling, general and administrative expense. Selling, general and administrative expense was $142.8 million for the six months ended June 30, 2024, a decrease of $32.6 million, or 19%, from $175.4 million for the six months ended June 30, 2023. The decrease reflects lower employee costs as a result of the reduction in workforce in 2023.

Change in the fair value of contingent consideration. The change in the fair value of contingent consideration was a loss of $5.0 million for the six months ended June 30, 2024, a change of $131.5 million, or over 100%, from a gain of $126.5 million for the six months ended June 30, 2023. The change is primarily related to our strategic portfolio prioritization and decision to discontinue our preclinical and early research programs in our gene therapy platform, which included Friedreich ataxia and Angelman syndrome, which was announced in May 2023. As a result, we fully impaired the Friedreich ataxia and Angelman syndrome intangible assets and determined that the fair value for all of the contingent consideration payable related to Friedreich ataxia and Angelman syndrome was $0. As a result, we recorded a fair value change of $129.8 million for the contingent consideration related to Friedreich ataxia and Angelman syndrome during the six months ended June 30, 2023.

Intangible asset impairment. Intangible asset impairment was $0.0 million for the six months ended June 30, 2024, a decrease of $217.8 million, or 100%, from intangible asset impairment of $217.8 million for the six months ended June 30, 2023. The change is due to our strategic portfolio prioritization and decision to discontinue our preclinical and early research programs in our gene therapy platform, which included Friedreich ataxia and Angelman syndrome, which was announced in May 2023. As a result, we fully impaired the Friedreich ataxia and Angelman syndrome intangible assets and recorded impairment expense of $217.8 million during the six months ended June 30, 2023.

Tangible asset impairment and losses (gains) on transactions, net. Tangible asset impairment and losses (gains) on transactions, net was $1.8 million for the six months ended June 30, 2024, and increase of $1.8 million, or 100%, from $0.0 million for the six months ended June 30, 2023. The increase is due to the loss on sale of $4.2 million of certain assets related to gene therapy manufacturing and $0.2 million of fixed asset impairments. These amounts were partially offset by a gain of $2.2 million on lease terminations and a $0.4 million gain on sales of fixed assets.

Interest expense, net. Interest expense, net was $84.3 million for the six months ended June 30, 2024, an increase of $27.6 million, or 49%, from $56.7 million for the six months ended June 30, 2023. The increase in interest expense, net was primarily due to interest expense recorded from the liability for the sale of future royalties related to the A&R Royalty Purchase Agreement, offset by a decrease in interest expense due to the termination of our Blackstone Credit Agreement.

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Other (expense) income, net. Other expense, net was $0.4 million for the six months ended June 30, 2024, a change of $11.9 million, or over 100%, from other income of $11.4 million for the six months ended June 30, 2023. The change in other (expense) income primarily relates to net realized and unrealized gains from foreign currency of $2.1 million for the six months ended June 30, 2024, and a decrease of $9.1 million from net realized and unrealized gains from foreign currency of $11.2 million for the six months ended June 30, 2023. The remaining change in other (expense) income primarily relates to unrealized net losses of $3.2 million from our ClearPoint Neuro, Inc. debt and equity investments for the six months ending June 30, 2024, compared to unrealized net losses of $2.6 million from our ClearPoint Neuro, Inc. debt and equity investments for the six months ending June 30, 2023.

Income tax (expense) benefit. Income tax expense was $20.3 million for the six months ended June 30, 2024, a change of $55.0 million, or over 100%, compared to income tax benefit of $34.6 million for the six months ended June 30, 2023. The change in income tax expense (benefit) is attributable to the recognition of the revenue associated with the Royalty Pharma agreement of 2023. Additionally, we incur income tax expenses in various foreign jurisdictions, and our foreign tax liabilities are largely dependent upon the distribution of pre-tax earnings among these different jurisdictions.

Liquidity and capital resources

Sources of liquidity

Since inception, we have incurred significant operating losses.

As a growing commercial-stage biopharmaceutical company, we are engaging in significant commercialization efforts for our products while also devoting a substantial portion of our efforts on research and development related to our products, product candidates and other programs. To date, our product revenue has primarily consisted of sales of Translarna for the treatment of nmDMD in territories outside of the United States and from Emflaza for the treatment of DMD in the United States. Our ongoing ability to generate revenue from sales of Translarna for the treatment of nmDMD is dependent upon our ability to maintain our marketing authorizations in Brazil, Russia and in the EEA and secure market access through commercial programs following the conclusion of pricing and reimbursement terms at sustainable levels in the member states of the EEA or through EAP programs or similar styled programs in the EEA and other territories. In January 2024, the CHMP issued a negative opinion for the renewal of the conditional marketing authorization following a re-examination procedure. In May 2024, the EC decided not to adopt the CHMP’s negative opinion for the renewal of the conditional marketing authorization of Translarna and returned such opinion to the CHMP for re-evaluation. On June 27, 2024, following the EC’s request for re-review, the CHMP issued a negative opinion on the renewal of the conditional marketing authorization of Translarna for the treatment of nmDMD. Per EMA guidelines, we have requested a re-examination of the CHMP opinion regarding the renewal of the existing conditional marketing authorization. The marketing authorization for Translarna remains in effect, pending the outcomes of the re-examination procedure and subsequent EC adoption. Based on the timeline of these procedures, we expect the marketing authorization for Translarna to remain in effect through the end of 2024 even if the negative opinion is maintained and adopted. We are exploring other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA if the negative opinion is adopted by the EC. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. Our ability to generate product revenue from Emflaza will largely depend on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors. Additionally, Emflaza’s seven-year period of orphan drug exclusivity related to the treatment of DMD in patients five years and older expired in February 2024. We have previously relied on this exclusivity period to commercialize Emflaza in the United States. We expect the expiration of this orphan drug exclusivity to have a significant negative impact on Emflaza net product revenue. Emflaza’s orphan drug exclusivity related to the treatment of DMD in patients two years of age to less than five expires in June 2026.

We have historically financed our operations primarily through the issuance and sale of our common stock in public offerings, our “at the market offering” of our common stock, proceeds from the A&R Royalty Purchase Agreement, the private placements of our preferred stock, collaborations, bank and institutional lender debt, private offerings of convertible senior notes and convertible debt financings and grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates. We expect to continue to incur significant expenses and operating losses for at least the next fiscal year. The net losses we incur may fluctuate significantly from quarter to quarter.

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In August 2019, we entered into the Sales Agreement, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate Updates—Funding” for additional information.

In September 2019, we closed a private offering of $287.5 million aggregate principal amount of 1.50% convertible senior notes due 2026 including the full exercise by the initial purchasers of an option to purchase an additional $37.5 million in aggregate principal amount of the 2026 Convertible Notes. The 2026 Convertible Notes bear cash interest at a rate of 1.50% per year, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2020. The 2026 Convertible Notes will mature on September 15, 2026, unless earlier repurchased or converted. We received net proceeds of $279.3 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us.

In October 2022, we entered into the Blackstone Credit Agreement for fundings of up to $950.0 million consisting of a committed loan facility funded on the Closing Date, in the aggregate principal amount of $300.0 million, and a delayed draw term loan facility of up to $150.0 million to be funded at our request within 18 months of the Closing Date subject to specified conditions, and further contemplating the potential for up to $500.0 million of additional financing, to the extent that we request such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms. In October 2023, we terminated the Blackstone Credit Agreement. All liens and security interests securing the loans made pursuant to the Blackstone Credit Agreement were released upon termination.

We have received fundings from Royalty Pharma under the A&R Royalty Purchase Agreement in July 2020, October 2023 and June 2024 totaling $1.9 billion (less Royalty payments received by us with respect to the Assigned Royalty Rights). In exchange for these fundings, we sold Royalty Pharma 90.49% of the Royalty, which will be reduced to 83.33% after Royalty Pharma receives $1.3 billion in aggregate payments, or the Assigned Royalty Cap, from the Royalty assigned under the Original Royalty Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met. We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights.

The A&R Royalty Purchase Agreement includes specified negative and affirmative covenants with respect to our rights under the SMA License Agreement as well as other customary representations and warranties, covenants and other provisions. The A&R Royalty Purchase Agreement will terminate 60 days following the date on which Roche is no longer obligated to make any payments of the Royalty pursuant to the SMA License Agreement.

Cash flows

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $1.09 billion.

The following table provides information regarding our cash flows and our capital expenditures for the periods indicated.


	Six Months Ended
	June 30,
(in thousands)	2024	2023
Cash provided by (used in):
Operating activities	(692)	(43,611)
Investing activities	(180,855)	(52,723)
Financing activities	247,022	22,554

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Net cash used in operating activities was $0.7 million for the six months ended June 30, 2024 and the net cash used in operating activities was $43.6 million for the six months ended June 30, 2023. The net cash used in operating activities for the six months ended June 30, 2024 was primarily related to spend supporting clinical development and commercial activities, partially offset by the cash received from the sales milestone of $100.0 million for the achievement of $1.5 billion in worldwide net sales from Evrysdi. The net cash used in operating activities for the three months ended June 30, 2023 primarily relates to supporting clinical development and commercial activities.

Net cash used in investing activities was $180.9 million for the six months ended June 30, 2024 and net cash used in investing activities was $52.7 million for the six months ended June 30, 2023. Cash used in investing activities for the six months ended June 30, 2024, was primarily related to the acquisition of product rights, purchases of marketable securities, and purchases of fixed assets, partially offset by net sales and redemption of marketable securities and proceeds from sale of fixed assets. Cash used in investing activities for the six months ended June 30, 2023 was primarily related to the acquisition of product rights, purchases of marketable securities-equity investments, and purchases of fixed assets, partially offset by net sales and redemption of marketable securities and sale and redemption of ClearPoint Neuro, Inc. equity investments.

Net cash provided by financing activities was $247.0 million for the six months ended June 30, 2024 and $22.6 million for the six months ended June 30, 2023. Cash provided by financing activities for the six months ended June 30, 2024 was primarily attributable to proceeds from sales of future royalties, proceeds from our employee stock purchase plan, and proceeds from the exercise of options, partially offset by payments on our finance lease principal. Cash provided by financing activities for the six months ended June 30, 2023 was primarily attributable to cash received from the exercise of options, and proceeds from our employee stock purchase plan, partially offset by payments on our finance lease principal.

Funding requirements

We anticipate that we will continue to incur significant expenses in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including expenses related to our commercial infrastructure and corresponding sales and marketing, legal and regulatory, and distribution and manufacturing undertakings as well as administrative and employee-based expenses. In addition to the foregoing, we expect to continue to incur significant costs in connection with 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. We continue to seek marketing authorization for Translarna for the treatment of nmDMD in territories that we do not currently have marketing authorization in. Additionally, in response to the CHMP’s negative opinion on the renewal of the conditional marketing authorization of Translarna for the treatment of nmDMD, we have submitted a request for re-examination per EMA guidelines. We are exploring other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA if the EC adopts the CHMP’s negative opinion for Translarna following a re-examination procedure. In March 2024, we submitted a BLA to the FDA for our gene therapy for the treatment of AADC deficiency in the United States. In May 2024, the FDA has accepted the filing of the BLA and granted priority review with a target regulatory action date of November 13, 2024. Also in March 2024, we submitted an MAA to the EMA for sepiapterin for the treatment of PKU, which was validated and accepted for review by the EMA in May 2024. In July 2024, we submitted an NDA to the FDA for sepiapterin for the treatment of PKU. These efforts may significantly impact the timing and extent of our commercialization and manufacturing expenses.

In addition, our expenses will increase if and as we:

●

seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations;

●

execute our commercialization strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets;

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●

are required to complete any additional clinical trials, non-clinical studies or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in order to advance Translarna for the treatment of nmDMD in the United States or elsewhere;

●

are required to take other steps to maintain our current marketing authorization in the EEA, Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications;

●

initiate or continue the research and development of sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications;

●

seek to discover and develop additional product candidates;

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seek to expand and diversify our product pipeline through strategic transactions;

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maintain, expand and protect our intellectual property portfolio; and

●

add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.

We believe that our cash flows from product sales, together with existing cash and cash equivalents, and marketable securities, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

●

our ability to maintain our marketing authorization for Translarna for the treatment of nmDMD in the EEA following the CHMP’s negative opinion on the conditional marketing authorization pending a re-examination procedure or identify other potential mechanisms by which we may provide Translarna to nmDMD patients in the EEA;

●

our ability to maintain the marketing authorization for Translarna and our other products in territories outside of the EEA;

●

our ability to commercialize and market our products and product candidates that may receive marketing authorization;

●

our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and products candidates;

●

the amount of generic drug competition that we face for Emflaza following its loss of orphan drug exclusivity related to the treatment of DMD in patients five years and older;

●

our ability to obtain marketing authorization for sepiapterin for the treatment of PKU in the United States and EEA;

●

our ability to obtain marketing authorization for Upstaza for the treatment of AADC deficiency in the United States;

●

the costs, timing and outcome of our efforts to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC

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assessments or analyses at significant cost which, if successful, may support approval of Translarna for nmDMD in the United States;

●

unexpected decreases in revenue or increase in expenses resulting from potential widespread outbreaks of contagious disease, such as COVID-19;

●

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

●

the progress and results of activities 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;

●

the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for any of our products and for any of our other product candidates that may receive marketing authorization or any additional territories in which we receive authorization to market Translarna;

●

the costs, timing and outcome of regulatory review of sepiapterin and our splicing and ferroptosis and inflammation programs and Translarna and Upstaza in other territories;

●

our ability to satisfy our obligations under the indenture governing the 2026 Convertible Notes;

●

the timing and scope of any potential future growth in our employee base;

●

the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those in our splicing and ferroptosis and inflammation programs;

●

revenue received from commercial sales of our products or any of our product candidates;

●

our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for Translarna for the treatment of nmDMD on adequate terms, or at all;

●

the ability and willingness of patients and healthcare professionals to access Translarna through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome;

●

our ability to satisfy our obligations under the terms of our lease agreements;

●

the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims;

●

the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, our ferroptosis and inflammation platform and Censa and our licensing of Tegsedi and Waylivra; and

●

our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements.

With respect to our outstanding 2026 Convertible Notes, cash interest payments are payable on a semi-annual basis in arrears, which will require total funding of $4.3 million annually.

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In May 2024, the MAA for sepiapterin for the treatment of PKU was validated and accepted for review by the EMA. The acceptance triggered a $15.0 million regulatory milestone to the former Censa securityholders during the three months ended June 30, 2024. The $15.0 million regulatory milestone was recorded in accounts payable and accrued expense on the consolidated balance sheet as of June 30, 2024. We expect to make additional payments to the former Censa securityholders of $50.0 million in the aggregate in cash upon the potential achievement in 2024 of regulatory milestones relating to sepiapterin pursuant to the Censa Merger Agreement. In March 2024, we submitted a BLA to the FDA for Upstaza for the treatment of AADC deficiency in the United States. In May 2024, the FDA accepted the filing for the BLA for our gene therapy for the treatment of AADC deficiency and granted priority review with a target regulatory action date of November 13, 2024. The acceptance triggered a $20.0 million milestone payment to former equity holders of Agilis, which was recorded in accounts payable and accrued expenses on the consolidated balance sheet as of June 30, 2024. As of June 30, 2024, the remaining potential regulatory milestones we expect to achieve is $11.1 million, and the remaining potential sales milestones we expect to achieve is $50.0 million, both of which relate solely to Upstaza.

We have never been profitable and we will need to generate significant revenues to achieve and sustain profitability, and we may never do so. We may need to obtain substantial additional funding in connection with our continuing operations. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs primarily through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product and product candidates and marketing, distribution or licensing arrangements. Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity, debt or other financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

During the period ended June 30, 2024, there were no material changes in our market risk or how our market risk is managed, compared to those disclosed under the heading “Quantitative and Qualitative Disclosures about Market Risk” in our 2023 Annual Report.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required

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to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the ordinary course of our business, we are subject to claims, legal proceedings and disputes, including as a result of patients seeking to participate in our clinical trials or otherwise gain access to our product candidates. We are not currently aware of any material legal proceedings to which we are a party or of which any of our property is subject.

Item 1A. Risk Factors.

We have set forth in Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2023, risk factors relating to our business, our industry, our structure and our common stock. Readers of this Quarterly Report on Form 10-Q are referred to such Item 1A for a more complete understanding of risks concerning us.

Item 5. Other Information.

Director and Officer Trading Arrangements

A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) is in the form of equity awards and, from time to time, directors and officers engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or other Company securities, including to satisfy tax withholding obligations when equity awards vest or are exercised, and for diversification or other personal reasons.

Transactions in Company securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in Company securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.

The following table describes, for the quarterly period covered by this report, each trading arrangement for the sale or purchase of Company securities adopted or terminated by our directors and officers that is either (1) a contract, instruction

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or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), or a “Rule 10b5-1 trading arrangement”, or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K):


Name (Title)	Action Taken (Date of Action)	Type of Trading Arrangement	Nature of Trading Arrangement	Duration of Trading Arrangement	Aggregate Number of Securities
Jerome B. Zeldis (Director)	Adoption (May 22, 2024)	Rule 10b5-1 trading arrangement	Sale	Until May 30, 2025, or such earlier date upon which all transactions are completed.	Up to 24,000 shares

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Item 6. Exhibits.


Exhibit Number		Description of Exhibit

10.1*†		Amended and Restated Exclusive License and Supply Agreement, dated June 2, 2023, by and between PTC Therapeutics, Inc. and Faes Farma, S.A.
10.2*††		Amendment No. 1 to Amended and Restated Royalty Purchase Agreement and First Put Option Exercise Agreement, dated June 17, 2024, by and among PTC Therapeutics, Inc., Royalty Pharma Investments 2019 ICAV, and Royalty Pharma plc
31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Database
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL

* Submitted electronically herewith.

† Confidential treatment has been granted for certain portions that are omitted from this exhibit. The omitted information has been filed separately with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the registrant’s application for confidential treatment. In addition, schedules have been omitted from this exhibit pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the registrant may request confidential treatment for any document so furnished.

†† Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	PTC THERAPEUTICS, INC.


Date: August 8, 2024	By:	/s/ Pierre Gravier
		Pierre Gravier
		Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Signatory)

Exhibit 10.1

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) is the type of information that the registrant treats as private or confidential. Double asterisks denote omissions.

AMENDED AND RESTATED EXCLUSIVE LICENSE AND SUPPLY AGREEMENT

THIS AMENDED AND RESTATED EXCLUSIVE LICENSE AND SUPPLY AGREEMENT (this

"Agreement") is made and entered into as of the date of signature (the "Effective Date"), by and between Faes Farma, S.A., a corporation (sociedad anonima) organized under the Laws of Spain and having offices located at Avenida Autonomia 10, 48.940 Leioa (Biscay) Spain ("Faes"), and PTC Therapeutics, Inc., corporation organized under the Laws of the State of Delaware (U.S.A.) and having offices located at 100 Corporate Court, South Plainfield, NJ U.S.A.("PTC"). Faes and PTC are sometimes individually referred to herein as a "Party" and collectively as the "Parties".

Recitals

WHEREAS, Faes owns the Faes Product and owns or controls (whether by license or otherwise) the Licensed Assets.

WHEREAS, as of May 12th, 2015, Faes and Complete Pharma Holdings LLC (f/k/a Marathon Pharmaceuticals LLC) entered into a license and supply agreement by virtue of which Complete Pharma Holdings LLC acquired for the Territory certain rights on the Faes Product and the Licensed Assets and committed to purchase exclusively from Faes all of its requirements of Finished Product for the Territory during the Exclusive Manufacturing Term and to pay Faes Royalties during the Royalty Term (as such terms are defined in the referred agreement) on and subject to the terms and conditions set forth therein (the “Original Supply Agreement”).

WHEREAS, as of April 20th, 2017 PTC was assigned the Original Agreement by Complete Pharma Holdings LLC subrogating in its position and subsequently assuming its rights, duties and obligations under the Original Agreement. a.

WHEREAS, the Parties represent that certain sections of the Original Agreement regulated issues that have already been overcome and/or contained obligations that have been fulfilled by the corresponding Party and, subsequently, the Parties agree to remove them in order to streamline the Agreement.

WHEREAS, furthermore, the Parties desire to amend and restate the terms and conditions of the Original Agreement to memorialize certain modifications, agreements and understandings of the Parties for the continued manufacture and supply of the Finished Product(s) in accordance with the terms and conditions provided in this Agreement.

NOW, THEREFORE, for and in consideration of the covenants, conditions and undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, on and subject to the terms and conditions hereof, the Parties, intending legally to be bound hereby, agree as follows:

Section 1 Definitions; Interpretation

1.1Definitions. The following words, phrases, and capitalized terms, when used in this Agreement, shall have the following meanings:

"Act" shall mean the United States Federal Food, Drug and Cosmetic Act of 1938, (21 U.S.C. 301 et seq.), as amended from time to time, and all regulations promulgated thereunder.

"Active Pharmaceutical Ingredient" or "API" means, with respect to the Finished Product, the applicable active pharmaceutical ingredients.

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, a Person shall be deemed to “control” another Person if such Person (a) owns, directly or indirectly, beneficially or legally, more than fifty percent (50%) of the outstanding voting securities or capital stock of such other corporation or company; or (b) has the power to direct or cause the direction of the management and policies of such other Person.

"[**]" has the meaning set forth in Section 5.4.

"Annual Net Sales" means, with respect to any Royalty Payment Year within the Royalty Term, the aggregate sales revenues of PTC or its Affiliates, subsidiaries or sublicensees with respect to sales of the PTC Suspension Product in the Territory to Third Parties (excluding for such purposes any Non-Commercial PTC Suspension Product) during such Royalty Payment Year, reduced by accruals in accordance with GAAP (to the extent applicable) for customer returns, refunds, discounts, rebates and other credits and allowances made with respect to such sales of the PTC Suspension Product during or with respect to such Royalty Payment Year (including, but not limited to, prompt pay discounts, product returns, bad debt, Medicaid, chargebacks, fees-for- service and Tricare), which are consistent with standard industry custom and practice.

"API Specifications" means, with respect to the API, the applicable specifications contained in PTC's effective FDA-approved IND for investigational product use and in PTC's FDA-approved NDA for commercial product use, as in effect from time to time during the Manufacturing Term, which shall consider the API specifications communicated by Faes to PTC.

"Business Day" means mean any day except a Saturday, Sunday or a day on which a commercial bank in Madrid, Spain, Leioa, Bizkaia, Spain, Derio, Bizkaia, Spain or New Jersey, U.S.A. is authorized to close.

"Calendar Quarter" shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31, with the first Calendar Quarter being the one commencing closest to ten (10) calendar months prior to the then reasonably anticipated FDA Approval date for the PTC Suspension Product in the Territory.

"Calendar Year" shall mean a period of twelve (12) consecutive calendar months ending on December

31st.

“Confidential Information” has the meaning set forth in Section 7.5.

"Cost of Goods Sold" or "COGS" means, with respect to Finished Product Manufactured and supplied to PTC by Faes under Section 5, the sum of the Direct Expenses and Manufacturing Overhead incurred by Faes in, and reasonably allocable to, the Manufacture of such Finished Product, where, as used herein:

(a)"Direct Expenses" means (i) those direct material and labor expenses which are incurred specifically to Manufacture such Finished Product, including costs of raw materials. Direct labor expenses include salary and fringe benefits (but exclude amounts associated with equity compensation or option plans) for personnel directly involved in the Manufacture of such Finished Product in accordance with specified quality requirements (e.g., cGMP, ISO) such as production, quality control, quality assurance and other personnel who participate directly in the production of such Finished Product and components thereof, and (ii) logistics expenses for supplying such Finished Product to PTC, including import and export duties, applicable Taxes, reasonable and customary brokerage fees, shipping insurance fees, port fees and storage fees, shipping and handling, quality control and quality assurance.

Direct Expenses shall also include reasonable out- of-pocket payments to Third Parties for direct services performed in the Manufacture of such Finished Product or components thereof; and

(b)"Manufacturing Overhead" means a reasonable allocation of other Manufacturing expenses associated with the Manufacture of quantities of such Finished Product, including (i) Faes personnel supporting the direct Manufacturing of such Finished Product, including labor and materials for quality control, quality assurance, raw material acquisition and acceptance, document control, calibration/validation of equipment used in the Manufacture of such Finished Product and other similar expenses, (ii) depreciation of or rent/lease expenses for property, plant or equipment used in the Manufacture of such Finished Product, (iii) direct plan management (e.g., supervisors and purchasing), (iv) plant services (e.g., engineering and production planning) associated with the Manufacture of such Finished Product, (v) plant maintenance, (vi) costs of plant fire insurance coverage, and (vii) other direct Manufacturing costs associated with the Manufacture of such Finished Product, in each case to the extent incurred by Faes in connection with the Manufacture of such Finished Product and reasonably allocable to the Manufacture of such Finished Product.

For purposes of this Agreement, Cost of Goods Sold shall be calculated in accordance with IFRS and shall be consistent from year-to-year during the Manufacturing Term. The methodology to be used in making the allocations of any costs included in Cost of Goods Sold shall upon PTC's request be reviewed by the Parties. As of the Effective Date, the Cost of Goods Sold with respect to a Unit manufactured and commercialized by Faes without complying with applicable U.S. FDA standards is €[**] per Unit. This Cost of Goods Sold may vary substantially if new investments or new procedures have to be implemented in the production process in order to comply with the applicable U.S. FDA standards or in case of modifications of certain specifications mutually agreed by the Parties.

"current Good Manufacturing Practice" or "cGMP" means all current good manufacturing practices (cGMP) and all applicable rules and regulations of Governmental Entities, both inside the Territory and in Spain (provided, however, that in the event any of the Manufacturing is performed in a jurisdiction or jurisdictions outside the Territory or Spain, cGMP shall also include all then applicable current good manufacturing practices and applicable rules and regulations of Governmental Entities of such additional jurisdictions), as applied at the Facility site(s) of manufacture and control, as amended from time to time and in effect during the Manufacturing Term.

"Develop", "Development" and "Developing" means, with respect to the PTC Suspension Product, drug development activities, including, but not limited to, CMC development, test method development and stability testing, assay development, audit development, toxicology, formulation, quality assurance/quality control development, statistical analysis, clinical studies, packaging development, regulatory affairs and the preparation, filing and prosecution of an NDA in the Territory.

“Disclosing Party” has the meaning set forth in Section 7.5.

"Exclusive Manufacturing Term" means the period commencing on the Effective Date and ending on the twelfth (12th) anniversary of the FDA Approval Date, subject to earlier termination in accordance with Section 5.12 (b).

"Facility" means Faes' manufacturing facilities located in [**], together with any other Faes facility in which the Manufacturing of the Finished Product occurs.

"Faes Information” has the meaning set forth in Section 7.5.

"Faes Product(s)" means the deflazacort oral suspension pharmaceutical product(s) as owned and currently supplied by Faes in certain markets in the world.

"FDA" means the U.S. Food and Drug Administration or any successor thereof.

"FDA Approval" means written approval by the FDA of the first PTC Suspension Product NDA filed by or on behalf of PTC or its Affiliates, subsidiaries, designees or sublicensees with an approved label indication for the treatment in humans of duchenne muscular dystrophy or another indication.

"Finished Product" means finished, labeled, bottled and packaged (in primary and/or secondary packaging, as mutually agreed upon by the Parties) PTC Suspension Product for commercial sale Manufactured and supplied to PTC by Faes under Section 5.

"Force Majeure Event" means, with respect to a Party, any event which is beyond the reasonable control of such Party, including, but not limited to, the following events: earthquake, storm, flood, fire or other acts of nature, epidemic, war, riot, public disturbance, strike or lockouts, customs closure, failure or default of public utilities or common carriers, government actions, terrorist attack, involuntary destruction of production facilities or the like (including, but not limited to, with respect to Faes, an inability to secure the necessary API, despite Faes' best efforts to do so, or, with respect to either or both Parties, a change in the FDA's related requirements).

"GAAP" means United States generally accepted accounting principles, consistently applied.

"Governmental Entity" means any court, agency, authority, department, legislative or regulatory body or other instrumentality of any government or country or of any national, federal state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member or quasi-governmental authority or self-regulatory organization of competent authority, including, but not limited to, the FDA.

"IFRS" means International Financial Reporting Standards, consistently applied.

"IND" means an Investigational New Drug application filed with the FDA or any successor thereof in the Territory.

"IND Materials" means the materials listed in Appendix 1 to this Agreement.

"Intellectual Property" means any patents, patent applications, patent disclosures and inventions, trade secrets and other confidential and proprietary information (including, but not limited to, Inventions (whether patentable or unpatentable), and other intellectual property rights (excluding trademarks, service marks and trade names) and all copies and embodiments thereof (in whatever form or medium) and all modifications, improvements, additions, supplements, updates, renewals, continuations, continuations-in-part, reexaminations, reissues and extensions thereof.

"Inventions" means any inventions, developments, discoveries, improvements, works of authorship, or expressions thereof, whether or not subject to patent, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice.

"Know-How" means any and all tangible and intangible information and materials, including research and development data, regulatory submissions and correspondence, manufacturing information and processes, formulations, assays, cell lines, sequences, composition of matter, constructs, discoveries, improvements, modifications, processes, methods, protocols, formulas, utility, data (including physical, chemical, biological, toxicological, pharmacological, preclinical, clinical, and veterinary data), results, inventions, know-how and trade secrets, patentable or otherwise, and all other scientific, marketing, financial and commercial information or data.

"Knowledge" means, with respect to a Party, the actual knowledge of such Party and its directors, managers, officers and employees, after due inquiry.

"Law" means any statute, law, ordinance, regulatory rule, code or order of a Governmental Entity.

"License Term" means the period commencing on the Effective Date and continuing in perpetuity.

"Licensed Assets" means the Faes Product dossier and all chemistry, manufacturing and controls ("CMC") data, Intellectual Property, Know-How, Technology and other information owned or controlled (whether by license or otherwise) (a) by Faes as of the Effective Date or (b) is developed by Faes during the Manufacturing Term, which in either case supports, or would support an NDA requirements in the Territory by PTC for the PTC Suspension Product, including, but not limited to, the IND Materials.

"Lien" means any lien, mortgage, security interest, pledge, defect of title and other similar encumbrance.

"Losses" has the meaning set forth in Section 9.11.

"Manufacture" and "Manufacturing" means all activities related to the production, manufacture, processing, filling, finishing, labeling, packaging, shipping and holding of the Finished Product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterization, stability testing, quality assurance and quality control.

"Manufacturing Term" means the Exclusive Manufacturing Term, together with any Renewed Manufacturing Terms.

"PTC Suspension Product" means a deflazacort oral suspension pharmaceutical product Developed by PTC under this Agreement based upon the Faes Product and utilizing the Licensed Assets and approved by the FDA for the treatment in humans of duchenne muscular dystrophy or another indication pursuant to an NDA filed by PTC or its Affiliates, subsidiaries, designees or sublicensees.

"PTC Tablet Product" means a deflazacort tablet pharmaceutical product for the treatment in humans of duchenne muscular dystrophy or another indication.

"NDA" means a New Drug Application, validly issued and approved by the FDA or any successor thereof in the Territory.

"Non-Commercial PTC Suspension Product" means any PTC Suspension Product Manufactured and supplied by Faes to PTC under Section 5 and used or distributed by PTC or its Affiliates, subsidiaries or sublicensees under or in connection with sampling programs, compassionate use/patient assistance/indigent care programs or clinical studies, programs or trials (including PTC's Expanded Access Program).

"Non-Commercial PTC Suspension Product Units Prepayment Amount" means the result of the following formula for the relevant period: [**].

"Non-Commercial PTC Suspension Product Units Report" means, with respect to the Non- Commercial PTC Suspension Product during the Royalty Term, a written report or reports showing each of the following with respect to the Non-Commercial PTC Suspension Product in the Territory: (a) Volume in Units of Non-Commercial PTC Suspension Product used or distributed, stating the applicable batch number of such Units; and (b) a description of the non-commercial use of those Units.

"Non-Exclusive Manufacturing Term" means the Manufacturing Term, excluding the Exclusive Manufacturing Term.

"Per Unit Supply Price" means (a) with respect to the Initial Royalty Term, €[**] Euros) per Unit; and (b) with respect to the Subsequent Royalty Term, an amount per Unit equal to Faes' actual COGS per Unit (not to exceed in any event €[**] Euros) per Unit); provided, however, that (1) in the event that Faes' actual COGS per Unit during such Subsequent Royalty Term exceed €[**] Euros) per Unit, Faes shall have the right to terminate its obligation to Manufacture and supply Finished Product to PTC under Section 5 of this Agreement on at least twelve (12) calendar months' prior written notice of such termination (provided that, as a condition to exercising such termination right, Faes shall [**], in which case, PTC shall be [**]; and (2) in the event that Faes' does not terminate its obligation to Manufacture and supply Finished Product to PTC under Section 5 of this Agreement in accordance with the foregoing clause (1), [**].

"Person" means any individual, corporation, partnership, joint venture, limited liability company, trust or unincorporated organization or government or any agency or political subdivision thereof.

"Pharmacovigilance Agreement" means the mutually acceptable Pharmacovigilance Agreement to be entered into between the Parties.

"Product Specifications" means, with respect to Finished Product to be Manufactured and supplied under this Agreement, the applicable specifications contained in PTC's effective FDA-approved IND for investigational product use and in PTC's FDA-approved NDA for commercial product use, as in effect from time to time during the Manufacturing Term, which shall consider the product specifications communicated by Faes to PTC; provided, however, Faes provides prompt advance notice of any planned or proposed changes to the product specifications and/ or changes to the manufacturing of the Finished Product .

“PTC Information” has the meaning set forth in Section 7.5.

"Quality Agreement" means the quality or technical agreement covering the Finished Product(s) Manufactured and supplied by Faes to PTC under this Agreement and in accordance with Section 5, which shall set out, among other things, the policies, procedures, and standards by which the Parties will coordinate and implement the operational and quality assurance activities and regulatory compliance objectives contemplated under this Agreement with respect to the Finished Product in and for the Territory (including, but not limited to, change control processes, changes to the Specifications and other changes to the API and/or PTC Suspension Product).

“Receiving Party” has the meaning set forth in Section 7.5.

"Regulatory Filings" means, with respect to the PTC Suspension Product, any submission to the FDA of any appropriate regulatory application, and shall include any IND or NDA.

"Renewed Manufacturing Term" has the meaning set forth in Section 5.12 (b).

"Royalties" has the meaning set forth in Section 6.1.

"Royalty Term" means with respect to the PTC Suspension Product, the period commencing on the FDA Approval date and ending on the twelfth (12th) anniversary thereof, February, 2029."Royalty Payment Year" means, with respect to the PTC Suspension Product, each calendar year (or portion thereof) during the Royalty Term.

"Royalty Payments" has the meaning set forth in Section 6.1.

"Sales & Royalty Report" means, with respect to the PTC Suspension Product during the Royalty Term, a written report or reports showing each of the following (in US Dollars) with respect to the PTC Suspension Product in the Territory: [**].

"[**]" has the meaning set forth in Section 5.4.

"Specifications" means the API Specifications and the Product Specifications.

"Subsequent Royalty Term" means, with respect to the PTC Suspension Product, the period commencing on the twelfth (12th) anniversary of the FDA Approval date and ending on the twelfth (12th)

anniversary of the Effective Date.

"Taxes" means all taxes of any kind, and all charges, fees, customs, levies, duties, imposts, required deposits or other assessments, including all federal, state, local or foreign net income, capital gains, gross income, gross receipt, property, franchise, sales, VAT, use, excise, withholding, payroll, employment, social security, worker's compensation, unemployment, occupation, capital stock, ad valorem, value added, transfer, gains, windfall profits, net worth, asset, transaction, and other taxes, and any interest, penalties or additions to tax with respect thereto, imposed upon any Party by any taxing authority or other Governmental Entity under applicable Law.

"Technology" means any processes, techniques, batch records, specifications, formulations, assays, know-how, trade secrets and proprietary data rights.

"Territory" means the United States of America and its territories, possessions, commonwealths and protectorates.

"Third Party" means a Person who is not a Party or an Affiliate or subsidiary thereof.

"Unit" means one 13 ml bottle of Finished Product.

"Unit Prepayment Amount" means, with respect to any Calendar Quarter, the product of (a) the number of Units sold by PTC and its Affiliates, subsidiaries and sublicensees to Third Party customers during such Calendar Quarter, times (b) the applicable Per Unit Supply Price for such Units.

1.2

Interpretation. In this Agreement, unless otherwise specified:

(a)

“includes” and “including” shall mean respectively includes and including without limitation:

(b)words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders;

(c)the Schedules and other attachments form part of the operative provision of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Schedules and attachments;

(d)

references to Sections are to Sections of this Agreement unless otherwise specified;

(e)the headings in this Agreement are for information only and shall not be considered in the interpretation of this Agreement;

(f)any reference to "writing" or "written" includes faxes and any legible reproduction of words delivered in permanent and tangible form ;

(g)the words "hereof', "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(h)references to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; and

(i)the Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favour of or against any Party by reason of the extent to which any Party participated in its preparation.

Section 2 Representations and Warranties

2.1

Representations and Warranties of PTC. PTC represents and warrants to Faes that:

(a)

PTC is a corporation duly formed under the Laws of the State of Delaware (U.S.A.);

(b)PTC has all requisite corporate power and authority to execute, deliver and perform this Agreement, and, upon the execution and delivery of this Agreement by the Parties hereto, this Agreement will constitute a valid and binding obligation of PTC, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws affecting the enforcement of creditors' rights generally and to general principles of equity;

(c)the execution, delivery and performance of this Agreement by PTC do not conflict with, or constitute a breach of, any material contract or agreement to which PTC is a party or by which PTC is bound;

(d)there is no litigation, proceeding or claim pending or, to PTC's Knowledge, threatened before any Governmental Entity that would prevent the consummation of any of the transactions contemplated by this Agreement, and no consent, authorization or approval of any Third Party (including, but not limited to, a Governmental Entity) is required or necessary in connection with this Agreement or the consummation of the transactions contemplated hereby; and

(e)there is no broker, finder or financial advisor acting or who has acted on behalf of PTC or its Affiliates who is entitled to receive any brokerage or finder's or financial advisory fee in connection with the transactions contemplated by this Agreement.

2.2

Representations and Warranties of Faes. Faes represents and warrants to PTC

(a)

Faes is a corporation (sociedad anónima) duly organized under the Laws of Spain;

(b)Faes has all requisite corporate power and authority to execute, deliver and perform this Agreement, and, upon the execution and delivery of this Agreement by the Parties hereto, this Agreement will constitute a valid and binding obligation of Faes, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws affecting the enforcement of creditors' rights generally and to general principles of equity;

(c)the execution, delivery and performance of this Agreement by Faes do not conflict with, or constitute a breach of, any material contract or agreement to which Faes is a party or by which Faes is bound;

(d)there is no litigation, proceeding or claim pending or, to Faes' Knowledge, threatened before any Governmental Entity (i) relating to the Faes Product or any of the Licensed Assets, or (ii) that would prevent the consummation of any of the transactions contemplated by this Agreement, and no consent, authorization or

approval of any Third Party (including, but not limited to, a Governmental Entity) is required or necessary in connection with this Agreement or the consummation of the transactions contemplated hereby;

(e)Faes has (i) good and valid title to the Faes Product and the Licensed Assets to be licensed to PTC by Faes under this Agreement, with the full right, power and authority to grant to PTC the licenses contemplated by this Agreement, and (ii) a valid, irrevocable and perpetual license and right to hold, use and sublicense to PTC the Licensed Assets to be sublicensed to PTC by Faes under this Agreement, in each case free and clear of any and all Liens;

(f)neither Faes nor its Affiliates have granted to any Third Party any license, sublicense or other right or interest in or with respect to the Faes Product or any of the Licensed Assets in or with respect to the Territory, and no Third Party has a superior right to Faes or its Affiliates in or with respect to the Faes Product or the use of any of the Licensed Assets in or with respect to the Territory;

(g)to Faes' Knowledge, no Third Party is engaging in any activity that contravenes, infringes or encroaches upon, misappropriates or otherwise violates any of the Licensed Assets. None of the Licensed Assets

(i) contravenes, infringes or encroaches upon, misappropriates or otherwise violates the intellectual property or other proprietary rights or interests of any Third Party or (ii) is involved in any cancellation, nullification, reissue, interference, re-examination, or opposition proceedings, and no inequitable conduct that would be in violation of 37 C.F.R. § 1.56, or its foreign equivalent, if applicable, has been committed in the prosecution of any of the same; all maintenance fees, annuity fees, renewal fees and similar payment obligations with respect to the Licensed Assets have been timely paid; no litigation, proceeding or claim is pending or, to Faes' Knowledge, threatened against Faes or its Affiliates (A) based upon, challenging or seeking to deny or restrict the use of any of the Licensed Assets or (B) alleging that the use of any of the Licensed Assets contravenes, infringes or encroaches upon, misappropriates or otherwise violates the intellectual property or other proprietary rights or interests of any Third Party; and

(h)there is no broker, finder or financial advisor acting or who has acted on behalf of Faes or its Affiliates who is entitled to receive any brokerage or finder's or financial advisory fee in connection with the transactions contemplated by this Agreement.

2.3Data Protection. All personal data obtained or shared during the Term of the Agreement will be processed in accordance with all applicable data protection laws and regulations on a controller to controller basis, including compliance with the REGULATION (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (“GDPR”). Each Party will process any personal data received from the other Party or processed under the Agreement in order to fulfill its respective obligations. The legal basis that legitimizes the Parties for the processing of personal data is the execution of this Agreement. The Parties shall preserve the personal data until the end of the contractual relationship and, subsequently, for the legal demanded time periods. The Parties may disclose personal data to its Affiliates, if necessary. Each Party warrants that it shall inform or obtain the prior written consent of each individual, employee or contractor, as required by applicable law, for the disclosure of their respective personal data to the other Party and processing in accordance with this Section 2.3. In the event any of the Partis is provided or otherwise obtain access to, or treats in any manner, personal data as data processor for which the other Party is considered a data controller, Appendix 3 shall apply. In addition, each Party will promptly and without undue delay in any case no later than [**] from becoming aware of a data breach, report (i) any potential or actual personal data breach and provide all relevant information in order for the other Party to meet its data breach reporting obligations under applicable laws and (ii) any other notification or request a Party may receive from a supervisory authority during an inspection or of an audit to start, if this also affects the personal data belonging to a Party to this Agreement. Notices to the Parties, including the exercise of rights by data subjects (right of access, rectification, erasure, restriction of processing, data portability, not being object of automated decisions) shall be made to PTC to its Data Privacy team at [**] and to Faes to [**].

Furthermore, the Parties include herein as Appendix 4 a separate agreement in order to cover the international transfer of personal data, being one Party a data controller based on the EU and the other Party a data controller based in the United States.

Section 3 License Grant

3.1License Grants. During the License Term, Faes hereby grants to PTC (a) a right and license in, to and under the Faes Product and (b) a right and license or sublicense, as the case may be, in, to and under the Licensed Assets, in each case (i) including the right to grant sublicenses or sub-sublicenses, as the case may be, with respect thereto through multiple tiers to PTC's Affiliates or subsidiaries and/or Third Parties (on written notice to Faes), and (ii) to research, Develop, seek and obtain regulatory approval for, market, promote, distribute, offer to sell and/or sell, use, commercialize and, solely as expressly permitted under this Agreement, manufacture (or have manufactured by an Affiliate, subsidiary or Third Party) the PTC Suspension Product in and for the Territory. The foregoing rights and licenses shall be exclusive (even as to Faes and its Affiliates) during the Manufacturing Term and non-exclusive thereafter. If PTC grants a sublicense or sub-sublicense, as the case may be, with respect to its rights and licenses under this Section 3 to a Third Party, (A) each such sublicense or sub-sublicense shall be in writing, (B) the terms and conditions of such sublicense or sub- sublicense shall be consistent with the terms and conditions of this Agreement and shall not jeopardize, reduce or in any other way limit Faes' rights under this Agreement and (C) PTC shall be liable for any such sublicensee's or sub-sublicensee's breach of this Agreement or Losses caused to Faes as a result of such sublicenses or sub- sublicenses.

3.2Right to List or Otherwise Include Licensed Assets in Regulatory Filings. The rights and licenses granted in this Section 3 include the right for PTC or its Affiliates, subsidiaries, designees or sublicensees to list or otherwise include, as appropriate, any Licensed Assets in any Regulatory Filings (including the "Orange Book", if applicable) with respect to the PTC Suspension Product in the Territory.

3.3

Reservation of Rights by Faes and its Affiliates.

(a)The Parties acknowledge and agree that, subject to the terms and conditions of this Agreement, Faes and its Affiliates reserve all rights under the Licensed Assets to research, develop and manufacture the Faes Product for any and all purposes both inside the Territory (with PTC's prior written consent, not to be unreasonably withheld) or outside the Territory.

(b)The rights and licenses granted to PTC under this Agreement shall not include any right to research, develop, seek and obtain regulatory approval for, market, promote, distribute, offer to sell and/or sell, market, use, distribute, commercialize, import, manufacture and/or have manufactured the Faes Product and/or the PTC Suspension Product outside the Territory, provided, however, that, notwithstanding the foregoing, PTC may research, develop, import and (to the extent expressly permitted under this Agreement) manufacture and/or have manufactured PTC Suspension Product outside the Territory solely for purposes of seeking and obtaining FDA Approval for and marketing, promoting, distributing, offering to sell and/or selling, marketing, using, distributing or commercializing the PTC Suspension Product in the Territory.

(c)Notwithstanding the rights and licenses granted to PTC under this Agreement or anything else in this Agreement to the contrary, for the avoidance of doubt, (i) Faes shall retain the right (which shall be exclusive vis-a-vis PTC and its Affiliates and sublicensees) under the Faes Intellectual Property and Know-How to research, develop, make and have made, use, market, distribute, offer for sale, sell and import the Faes Product outside the Territory for any and all purposes, including seeking to obtain regulatory approval for the Faes Product in all countries outside the Territory; (ii) Faes shall retain the right (which shall be exclusive vis-a-vis PTC and its Affiliates and sublicensees) to research, develop, make, have made, use, market, offer for sale, sell and import the Faes Product for any and all uses in all countries, territories or jurisdictions other than the Territory; and (iii) Faes shall retain the right (which shall be exclusive vis-a-vis PTC and its Affiliates and sublicensees) with respect to the Faes Product to obtain, register or file any right and interest outside the

Territory in and to all issued patents or pending patent applications or similar rights, including all provisional patent applications, substitutions, continuations, continuations-in-part, divisions and renewals, all letters patent granted thereon, and all patents-of-addition, reissues, re-examinations and extensions or restorations by existing or future extension or restoration mechanisms (including regulatory extensions), and all supplementary protection certificates.

(d)For purposes of rights and licenses granted to PTC under this Agreement, for the avoidance of doubt, Faes expressly declares, and PTC expressly acknowledges, that as of the Effective Date the Licensed Assets do not include any patents or pending patent applications in the Territory with respect to, or that claim, the Faes Product or the Licensed Assets, and Faes shall have no liability or obligation whatsoever with respect to pursuing, obtaining, registering or filing patents and/or patent applications in the Territory with respect to, or that claim, the Faes Product or the Licensed Assets. This Agreement does not prohibit PTC, to the extent PTC deems it appropriate, to pursue, obtain, register or file patents and/or patent applications in the Territory in the name of PTC or its Affiliates, subsidiaries or sublicensees with respect to the PTC Suspension Product.

3.4No Implied License. Only the rights and licenses expressly granted to PTC under this Agreement shall be of legal force and effect as between the Parties, and no other right or license shall be created or deemed granted by or under this Agreement, whether by implication, estoppel or otherwise.

Section 4 Development

4.1Development Responsibility and Authority. PTC had the responsibility and authority (with Faes' input, advice and assistance) with respect to the Development of the PTC Suspension Product for the treatment in humans of duchenne muscular dystrophy or another indication designated by PTC, in its discretion and at its expense, in and for the Territory. PTC shall continue to have responsibility and authority (in PTC's discretion and at PTC's expense) for and with respect to (a) determining the regulatory plans, strategies and Regulatory Filings for the PTC Suspension Product in the Territory, (b) making all Regulatory Filings (either itself or through its Affiliates, subsidiaries, designees or sublicensees) with respect to the PTC Suspension Product in the Territory in the name of PTC or its Affiliates, subsidiaries, designees or sublicensees and (c) obtaining, owning and/or maintaining the NDA(s) and other Regulatory Filings with respect to the PTC Suspension Product in the Territory in the name of PTC or its Affiliates, subsidiaries, designees or sublicensees.

4.2Parties' Collaboration Regarding Manufacturing Research and Development. The Parties shall continue to work in good faith work collaboratively with each other with respect to the PTC Suspension Product for the Territory, if applicable and only as necessary to support PTC Suspension Product and approved NDA(s) in the Territory, which are convenient, advisable or appropriate in order to make the PTC Suspension Product viable in the Territory and (b) Faes shall use reasonable efforts with respect to manufacturing research of the PTC Suspension Product for the Territory (including the implementation thereof) as necessary to support PTC’s Suspension Product NDA filed in the Territory by PTC, including, but not limited to, using best efforts, within Faes' control, in order to assist PTC (at PTC’s expense), wherever reasonably possible, to meet PTC's requirements or commitments of the PTC Suspension Product in the Territory.

4.3Development Costs and Expenses. Should any new applicable U.S. FDA standards or regulation enter into force, PTC shall fund any potential expenses derived thereof and related to physical industrial improvements or adaptations of Facility and/or equipment or new manufacturing equipment required, provided that such expenses shall be subject to PTC’s prior written approval.

4.4Each of the Parties agree that in performing its obligations under this Agreement (including, but not limited to, this Section): (a) it shall comply with all applicable Laws, including, but not limited to, all applicable regulatory standards, including cGMP; and (b) it will not employ or use any Person that has been debarred by the FDA under Section 306(a) or 306(b) of the Act.

Section 5. Finished Product Supply

5.1Supply of Finished Product. Subject to the terms and conditions of this Agreement, during the Manufacturing Term, Faes shall Manufacture and supply the Finished Product to PTC, and PTC shall acquire the Finished Product from Faes, in and for the Territory as follows:

(a)

on an exclusive basis during the Exclusive Manufacturing Term; and

(b)

on a non-exclusive basis during the Non-Exclusive Manufacturing Term.

Faes acknowledges and agrees that the Finished Product Manufactured and supplied to PTC during the Manufacturing Term shall constitute the only deflazacort oral suspension product manufactured or supplied by Faes or its Affiliates for use in the Territory during the Manufacturing Term.

PTC acknowledges that (except as expressly provided for under this Agreement) PTC shall purchase exclusively from Faes all of its requirements for PTC Suspension Product for the Territory during the Exclusive Manufacturing Term, and that (except as expressly provided for under this Agreement) PTC shall cause PTC's Affiliates, subsidiaries and sub-licensees to purchase exclusively from Faes all of its requirements for PTC Suspension Product for the Territory during the Exclusive Manufacturing Term.

5.2

Forecasts and Purchase Orders.

(a)On or before the first [**] calendars days of each Calendar Month during the Manufacturing Term, PTC shall provide to Faes a written, good faith rolling forecast (each, a "Regular Forecast") of the quantity of Finished Product that PTC estimates ordering in or with respect to the coming [**] calendar month period of time under this Agreement. Only the first [**] calendar months of each Regular Forecast shall be binding with regard to the estimated quantities of Finished Product specified therein; the remaining [**] calendar months of each Regular Forecast shall be non-binding with regard to the estimated quantities of Finished Product specified therein.

(b) Firm purchase orders (each, a "Purchase Order") for quantities of Finished Product to be manufactured and supplied by Faes under this Agreement shall be submitted to Faes by PTC on or before the [**] during the Manufacturing Term. Such Purchase Orders shall, among other things, specify the desired delivery date of the applicable Finished Product, which specified desired delivery date shall not, in any event, be less than [**] calendar months after PTC's delivery of such Purchase Order to Faes.

5.3

Supply, Acceptance, Delivery and Remedies.

(a)During the Manufacturing Term, Faes shall supply the quantity of Finished Product specified in each Purchase Order on the specified desired delivery date; provided that (i) such Purchase Order has been submitted to Faes at least [**] calendar months prior to the specified desired delivery date in accordance with this Section 5 and (ii) no Force Majeure Event is preventing Faes from timely performing such supply obligation.

(b)Prior to the shipment of any Finished Product to be Manufactured and supplied by Faes to PTC under this Agreement, Faes shall deliver to PTC, for PTC's review and approval, the following release documentation with respect to such shipment of Finished Product: the applicable certificate of analysis, certificate of compliance, executed batch records, test records and other release documents specified in the Quality Agreement (collectively, the "Release Documentation"). PTC shall have [**] Business Days after its receipt of such Release Documentation to review such Release Documentation in order to determine, based upon such Release Documentation, whether such Finished Product does or does not conform to the applicable Specifications, cGMPs and Laws, the applicable Purchase Order and this Agreement and to either accept or reject such shipment of Finished Product as conforming or non-conforming by delivering written notice thereof to Faes prior to the end of such [**] Business Day period. If PTC either accepts such shipment of Finished Product as conforming, or fails to reject such shipment of Finished Product as non-conforming, in either case in writing in accordance with the preceding sentence, Faes shall be permitted to ship such Finished Product to PTC, with (i) delivery of such Finished Product to be made CIF sea or CIP air (at Faes' choice) (lncoterms 2000) from Bilbao, Spain port to PTC's specified designation using a freight carrier chosen by Faes and reasonably acceptable to PTC and (ii) title and risk of loss therein and thereto passing to PTC upon delivery of such Finished Product to the applicable freight carrier at Bilbao, Spain port.

(c)Upon PTC's receipt of any such shipment of Finished Product, PTC shall perform a visual inspection thereof to determine whether such Finished Product does or does not conform to the applicable Specifications, cGMPs and Laws, the applicable Purchase Order and this Agreement. PTC shall notify Faes in writing without unreasonable delay if it determines based on such inspection that such shipment of Finished Product is non-conforming in any respect. Except as to defects that could not reasonably have been discovered by such visual inspection, the Finished Product in such shipment shall be deemed to have been accepted by PTC if Faes has not received such written notice of non-conformance from PTC within [**] calendar days after the date of PTC's receipt of such shipment. PTC shall notify Faes of any latent defects in such shipment of Finished Product that could not reasonably have been discovered by such visual inspection within [**] calendar days after discovery thereof.

(d)If Faes receives timely notice from PTC pursuant to this Section 5.3 of the non-conformity of a shipment of Finished Product, and agrees that such shipment is non- conforming (or, in the event that Faes disagrees that such shipment is non-conforming, if an independent laboratory or expert mutually acceptable to the Parties determines that the shipment is non-conforming), Faes shall, at PTC's election, [**].

5.4

Failure to Supply Finished Product.

In the event that (A) Faes becomes aware at any time during the Manufacturing Term that it is unable or likely to be unable to fulfill any PTC Purchase Order in a timely manner (whether as a result of a Force Majeure Event or otherwise), or (B) Faes materially breaches its main obligations under Section 5 of this Agreement, Faes shall immediately notify PTC thereof (which notification shall include the underlying reason for such supply delay or breach, the proposed remedial measures and the date that such supply delay is expected to end or such material breach is expected to be cured). In the event that Faes so notifies PTC of [**] (each, a "Supply Failure"), the Parties shall [**]. In the event that the Parties [**], and with respect to [**] in accordance with Section [**], (a) PTC shall [**], (b) if [**], (c) PTC shall [**] and (d) PTC shall [**]. Faes shall [**], including, but not limited to, [**], with PTC [**]. Without prejudice of the foregoing, if Faes [**], Faes shall [**].

5.5

Supply Price; Invoicing.

(a)In consideration for each Unit of Finished Product Manufactured and supplied by Faes to PTC under this Section 5, PTC shall pay to Faes the Per Unit Supply Price, which, the Parties expressly acknowledge and agree, with respect to the Royalty Term, constitutes a prepayment, in part, of the Royalty Payments otherwise payable to Faes by PTC under Section 6.1 with respect to such Royalty Term.

(b)With respect to each shipment of Finished Product Manufactured and supplied by Faes to PTC under this Section 5, Faes shall invoice PTC for an amount equal to the product of (a) the number of Units included in such shipment of Finished Product, times (b) the Per Unit Supply Price, promptly after delivery of such shipment of Finished Product to PTC. PTC shall pay Faes such invoiced amount within [**] calendar days after its receipt of the invoice for such shipment of Finished Product.

5.6Finished Product Warranty. Faes represents, warrants and covenants to PTC that: (a) the Finished Product Manufactured and supplied by Faes to PTC under this Section 5 shall conform to the applicable Specifications, cGMPs, Laws and the Quality Agreement; (b) Faes will convey good and valid title to the Finished Product Manufactured and supplied by Faes to PTC under this Section 5, free and clear from any and all Liens; (c) as of the time of delivery of any such Finished Product to PTC hereunder, such Finished Product will not be adulterated or misbranded under the Act or other applicable Law; and (d) as of the time of delivery of any such Finished Product to PTC hereunder, such Finished Product will have a remaining shelf equal to or greater than [**] percent ([**]%) of its then current FDA approved shelf life (and, in no event, less than [**] months of its remaining shelf-life).

5.7[**]. During the Exclusive Manufacturing Term, PTC will [**]; provided, however, that (i) those [**] will be [**] under this Agreement,; and (ii) [**] under this Section 5.7 shall be [**].

5.8API Components and Raw Materials. Faes shall be responsible, at its cost, for the procurement, manufacture and qualification of the API and any components or raw materials required for the Manufacture of the Finished Product.

5.9Manufacturing Records. Faes shall maintain and/or cause its Third Party suppliers or API, components and raw materials to maintain all records and other materials necessary to comply with applicable cGMPs and all applicable Laws relating to the Manufacture and supply of the Finished Product under this Section 5. All such materials shall be maintained for such period as may be required by applicable Law; provided, however, that all records relating to the Manufacturing (including stability and quality control) of each batch of Finished Product shall be retained until at least the [**] of the end of its then-current FDA approved shelf-life, unless a longer period is required by applicable Law. Notwithstanding anything in this Section 5.9 to the contrary, if Faes desires to destroy or discard any such materials, Faes shall notify PTC (with specificity as to which materials that it desires to destroy or discard) in writing prior to doing so, and PTC shall have the right to take custody of such materials within [**] Business Days after receipt of such notice.

5.10Audits and Facility Access. During the Manufacturing Term, Faes shall allow, during regular business hours and on reasonable prior notice, PTC's quality assurance, quality control, compliance and other relevant personnel (including PTC's agents/consultants provided they are under the same confidentiality obligations as PTC regarding Faes confidential information), to audit the Facilities and related documentation and the Manufacture of Finished Product to be Manufactured and supplied under this Section 5 [**] without cause and additional times per Calendar Year as necessary for cause (each, an "Audit"). The purpose of any such Audit shall solely be to assess compliance with applicable cGMPs and Laws. Furthermore, Faes will allow inspectors from the FDA and other relevant Governmental Entities in the Territory to perform required inspections of such Facilities and related documentation with respect to the Finished Product. Faes shall, without delay, inform PTC of any such proposed or unannounced FDA or other such Governmental Entity inspections of such Facilities. Faes agrees to permit one or more qualified representative(s) of PTC to be present on site during any such FDA or other such Governmental Entity inspections pertaining to the Finished Product. Faes shall, without undue delay, provide a summary report of the results of any such FDA or other such Governmental Entity inspection to PTC. Faes shall, without delay, notify PTC of any FDA or other such Governmental Entity request for samples of the Finished Product.

5.11

Quality Agreement and Pharmacovigilance Agreement.

(a)The Parties have entered into a Quality Agreement, the most recent version dated [**], which shall remain in effect. Any changes requested by PTC shall follow the process set forth in the Quality Agreement.

(b)Pharmacovigilance. The Parties agree that PTC shall have primary responsibility for the monitoring of all filing of all required reports concerning the PTC Suspension Product in the Territory throughout its development and commercialization in the Territory. Faes its Affiliates or its Third Party partners shall have primary responsibility for the monitoring of all filing of all required reports concerning the Faes Product in the countries, territories or jurisdictions in which Faes (either directly or indirectly) or its Affiliates or Third Party partners commercialize with respect to, the Faes Product. Specific details regarding the management of information adverse events related to the PTC Suspension Product in the Territory and delineated in the Pharmacovigilance Agreement by the Parties remains in effect, provided, however, that in any event each Party agrees to provide the other Party with such information regarding adverse events with respect

to the PTC Suspension Product or the Faes Product, as the case may be, within such time frames as are required by applicable Laws.

5.12

Manufacturing Term.

(a)Upon expiry of the Exclusive Manufacturing Term, the Manufacturing Term shall automatically be renewed for a five (5) calendar year period (each, a "Renewed Manufacturing Term"), unless either Party gives the other Party written notice of non-renewal at least twelve (12) calendar months prior to the expiry of such Exclusive Manufacturing Term or Renewed Manufacturing Term, as the case may be.

(b)

The Manufacturing Term may be terminated at any time by mutual written agreement of the Parties.

Section 6. Other Financial Provisions

6.1Royalty Payments. In consideration for the rights and licenses granted to PTC under Section 3 of this Agreement, PTC shall pay royalties to Faes as set forth in this Section 6.1(collectively, the "Royalties"), with the amounts payable under this Section 6.1 sometimes being collectively referred to in this Agreement as the "Royalty Payments"):

(a)

Royalty Term. With respect to the Royalty Term:

PTC shall pay to Faes Royalties (which the Parties expressly acknowledge and agree are inclusive of the supply price prepaid to Faes by PTC under Section 5 with respect to Finished Product Manufactured and supplied by Faes to PTC thereunder) which shall be calculated as a percentage of - or as a fixed payment with respect to - the Annual Net Sales of the PTC Suspension Product in the Territory by PTC and its Affiliates, subsidiaries or sublicensees per Calendar Quarter during the Royalty Term in accordance with the table below (with each Royalty percentage or fixed payment, as the case may be, set forth below applicable only with respect to Annual Net Sales of PTC Suspension Product within the applicable range set forth below):

Annual Net Sales	Royalty Percentage or Fixed Payment
[**]	[**]
[**]	[**]
[**]	[**]

In making any Royalty Payments with respect to Royalties under this Section 6, PTC shall [**].

(b)Subsequent Royalty Term. With respect to the Subsequent Royalty Term, PTC shall pay to Faes Royalties equal to [**] percent ([**]%) of the Annual Net Sales of the PTC Suspension Product in the Territory by PTC and its Affiliates, subsidiaries, sublicensees or sub-sublicensees per Calendar Quarter.

(c)Sales & Royalty Reports. Within [**] calendar days after each Calendar Quarter during the Royalty Term, PTC shall provide to Faes a Sales & Royalty Report for such Calendar Quarter.

(d)Non-Commercial PTC Suspension Product Units Reports. Within [**] calendar days after each Calendar Quarter during the Royalty Term, PTC shall provide to Faes a Non-Commercial PTC Suspension Product Units Report for such Calendar Quarter.

(e)Royalty Payments. Royalty Payments payable under this Section 6.1 shall be calculated and paid on a Calendar Quarter basis by wire transfer of cash or other immediately available funds to the account designated in writing by Faes, within [**] calendar days after the end of each Calendar Quarter during the Royalty Term.

6.2Payment Terms; Currency. All payments to a Party by the other Party under this Agreement shall be made by wire transfer of cash or other immediately available funds to the credit of such bank account of such Party as may be designated by such Party in this Agreement or on written notice to the other Party from time to time as provided for in this Agreement. Any payment under this Agreement which falls due on a date which is not a Business Day shall be made on the next succeeding Business Day. Except as expressly set forth in this Agreement, all payments under this Agreement shall be made in US Dollars.

6.3Taxes; Withholding. Each Party shall bear sole responsibility with respect to any Taxes payable with respect to payments or other amounts received by such Party under this Agreement. To the extent that a Party making payments to the other Party under this Agreement is required under applicable Law to deduct and withhold an amount from such payment(s), such Party shall entitled to do so and such withheld amount(s) shall be treated for all purposes of this Agreement as having been paid, and proof of payment from the applicable taxing authority shall be provided to the Party on whose behalf the applicable Tax was paid.

6.4

Records and Audits

(a)PTC shall keep complete, true and accurate books and records in accordance with GAAP in relation to this Agreement and the transactions contemplated hereby, including, Annual Net Sales, Royalties and Royalty Payments. Faes shall keep complete, true and accurate books and records in accordance with IFRS in relation to this Agreement and the transactions contemplated hereby, including COGS. Each Party will keep such books and records for at least [**] calendar months following the applicable Calendar Quarter to which they pertain.

(b)Not more often than [**] during the Royalty Term, Faes shall have the right for a period of [**] calendar months following receipt of the applicable Sales & Royalty Report and the Non-Commercial PTC Suspension Product Units Report to audit, whether by itself or through its Affiliate(s) and/or to appoint an internationally-recognized independent accounting firm approved by PTC (whether Faes, its Affiliate or an independent accounting firm, the "Auditor") to audit the relevant books and records of PTC solely with respect to such Sales & Royalty Report and Non-Commercial PTC Suspension Product Units Report for purposes of verifying the accuracy thereof and of the Annual Net Sales, Royalties and Royalty Payments set forth therein. Where the Auditor is not Faes, such Auditor shall execute and deliver to PTC a confidentiality agreement, in form and substance acceptable to PTC, have the right to disclose to Faes and/or other Affiliates of Faes its conclusions regarding the applicable Sales & Royalty Report, Non- Commercial PTC Suspension Product Units Report and the Annual Net Sales, Royalties and Royalty Payments set forth therein. Faes agrees to hold in confidence all information received and all information learned in the course of any such audit, whether received or learned directly or through an Affiliate or other Auditor), except to the extent that such information is not confidential and/or it is necessary to disclose it to enforce its rights under this Agreement or if disclosure is required by applicable Law.

(c)[**].

(d)

If there is a dispute between the Parties following any audit performed pursuant to this Section

6.4 which is not resolved by mutual agreement of the Parties, either Party may [**]. In the event an [**], the Parties shall [**]: (i) the Party [**] of this Section 6.4(d); (ii) within [**] Business Days after the [**], the Parties shall [**]; (iii) the [**]; (iv) the [**]; (v) the [**] of any of the terms and conditions thereof; and (vi) [**].

6.5Right of Setoff. The Parties hereby expressly acknowledge and agree that each Party shall have the right to offset against any undisputed payments payable to the other Party under this Agreement any amounts owed by such other Party under this Agreement.

Section 7. Infringement of Licensed Assets by Third Parties

7.1Infringement. Each Party shall promptly notify the other Party of any actual, suspected or threatened infringement, violation or misappropriation of the Licensed Assets within the Territory ("Infringement") that comes to its attention and shall provide such other Party with available evidence of such Infringement.

7.2Right to Bring Action. PTC shall have the sole right (either itself or through its Affiliates, designees or sublicensees) to send notices and bring and conduct actions in relation to any Infringement. Faes will co-operate fully with PTC or its Affiliates, designees or sublicensees, as the case may be, in taking all reasonable steps requested thereby in connection with any Infringement action, including joining in legal proceedings. PTC shall bear the out- of pocket costs of any such legal proceedings, and shall be entitled to [**] percent ([**]%) of any damages, account of profits and/or awards of costs recovered.

7.3Exception. In the event that PTC does not take reasonable steps to prevent any individual Infringement within [**] days of becoming aware or receiving notice thereof, Faes shall thereafter have the right (but shall not be under any obligation in this regard) to send notices and bring and conduct actions in relation to such Infringement. PTC will co-operate fully with Faes in taking all reasonable steps requested by Faes in connection with any such Infringement action, including joining in legal proceedings. Faes shall bear the costs of any such legal proceedings, and shall be entitled to [**] percent ([**]%) of any damages, account of profits and/or awards of costs recovered.

7.4Settlements. The Parties shall reasonably consult with each other with respect to any such Infringement before accepting any settlement thereof or any judicial finding which is reviewable by a higher authority with respect thereto.

7.5

Confidentiality and Public Disclosure.

(a)The Parties shall comply with their respective obligations under the CDA. All obligations contained in the CDA shall form part of, be construed in accordance with and be subject to the provisions of the provisions of this Agreement. To the extent that any provisions of the CDA conflicts with a provision of this Agreement, the provisions in this Agreement with prevail except otherwise agreed herein. For the avoidance of doubt, the Parties expressly agree that Clause 7.1 of the CDA (“Term”) shall be replaced by Clause 8.5(f) of this Agreement.

(b)Faes will hold in strict confidence, and shall not disclose to any Third Party without PTC’s prior written consent, all proprietary or Confidential Information and materials provided by PTC and any information generated or derived from the foregoing (collectively, “PTC Information”). Faes further agrees that it shall not use or disclose PTC Information for any purpose out of the scope of this Agreement and that it will protect PTC Information by using the same degree of care, but in no event less than a reasonable degree of care, to prevent the unauthorized disclosure or use of such PTC Information as uses to protect Faes Information.

(c)PTC will hold in strict confidence, and shall not disclose to any Third Party without Faes’s prior written consent, all proprietary or Confidential Information and materials provided by Faes hereunder and any information generated or derived from the foregoing (collectively “Faes Information”).

(d)Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that the Receiving Party (as such term in defined in the CDA) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Know- How or other confidential and proprietary information and materials, patentable or otherwise, in any form (written, oral, photographic, electronic, magnetic, visual inspection or otherwise) that is disclosed to it by the Disclosing Party (as such term in defined in the CDA), including trade secrets, Know-How, inventions or discoveries, proprietary information, formulae, processes, techniques and information relating to the Disclosing Party’s past, present or future marketing, financial, or commercial activities of any Product or useful technology of the Disclosing Party or the pricing thereof and/or any other information defined as Confidential Information in the CDA, except to the extent that it can be established by the Receiving Party that such Confidential Information:

(i)was in the lawful knowledge and possession of the Receiving Party prior to the time it was first disclosed to the Receiving Party by the Disclosing Party, or was otherwise developed independently by the Receiving Party without reference to any of the Disclosing Party’s Confidential Information, as evidenced by written records kept in the ordinary course of business, or other documentary proof of actual use by the Receiving Party;

(ii)was generally available to the public or otherwise part of the public domain at the time of its first disclosure to the Receiving Party by the Disclosing Party;

(iii)became generally available to the public or otherwise part of the public domain after its disclosure to the Receiving Party by the Disclosing Party and other than through any act or omission of the Receiving Party in breach of this Agreement or the Existing Confidentiality Agreement; or

(iv)was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others.

(e)Neither Party (nor any of their respective subsidiaries and Affiliates) shall issue any press release or make any public announcement with respect to this Agreement and the transactions contemplated hereby without obtaining the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed), except as may be required by Applicable Law upon the advice of counsel and only if the

disclosing Party provides the non-disclosing Party with a reasonable opportunity to first review the release or other public announcement, to the extent practicable.

(f)These confidentiality obligations shall survive termination or expiration of this Agreement for a period of [**], provided that with respect to Confidential Information that is a trade secret under applicable laws, such rights and obligations will survive until, if ever, such Confidential Information loses its trade secret protection other than due to an act or omission of the Receiving Party or its representatives.

Section 8. Perpetuity

At the expiry of the Subsequent Royalty Term, the rights and licenses granted to PTC under Section 3 shall automatically convert into royalty-free, fully paid-up and non-assessable rights and licenses.

Section 9. Miscellaneous

9.1

Governing Law. This Agreement shall be governed by, and construed under, the laws of the Kingdom of Spain.

9.2Assignment. Neither Party may assign its rights and obligations under this Agreement without the other Party's prior written consent, except that (a) either Party may assign its rights and obligations under this Agreement or any part hereof to one or more of its Affiliates without the consent of the other Party; and (b) PTC may assign this entire Agreement without Faes' prior written consent to a Third Party acquirer, successor or designee

(i) to all or substantially all of PTC's business or assets or (ii) to all of PTC's rights with respect to the PTC Suspension Product in the Territory, provided, however, that the assigning Party shall remain responsible for the assignee's full and accurate performance of its pre and post-assignment obligations under this Agreement.

Any attempted assignment in contravention of the foregoing shall be void.

Further, and without limiting the foregoing, PTC and Faes shall be permitted to engage their respective Affiliates and/or subsidiaries to perform services to assist the respective Party in performing its respective obligations under this Agreement, including with respect to the Manufacturing, Development and/or commercialization of the PTC Suspension Product in and for the Territory, provided that the applicable Party shall remain liable for the full and accurate performance of such respective obligations.

9.3Insurance. At all times while this Agreement is in effect and for [**] thereafter, Faes and PTC shall each maintain general liability insurance (including, without limitation product liability insurance, liability for property damage, personal injury and contractual liability) with Products/Professional at limits not less than

$[**] per occurrence/$[**] aggregate; and with respect to Faes only, maintain Workers’ Compensation as required by all Applicable Laws and Employer’s Liability coverage with a limit of not less than $[**]. Upon request, each Party shall provide Certificates of Insurance verifying insurance limits agreed upon as well as a [**] Notice of Cancellation.

9.4Force Majeure. If and to the extent that either Party is prevented or delayed by a Force Majeure Event from performing any of its obligations under this Agreement and promptly so notifies in writing the other Party, specifying the matters constituting such Force Majeure Event, together with such evidence in verification thereof as it can reasonably give and specifying the period for which it is estimated that the prevention or delay will continue, then the Party so affected shall be relieved of liability to the other for failure to perform or for delay in performing such obligations (as the case may be), but shall nevertheless use its commercially reasonable efforts to resume full performance thereof.

9.5Arbitration. All disputes arising out of or in connection with this Agreement shall be settled under the Rules of Arbitration of the International Chamber of Commerce (ICC) in force at the time of submitting the request of arbitration, by one arbitrator appointed in accordance with the said rules. The seat of the arbitration shall be Madrid, Spain. The language of the arbitration shall be English.

9.6Notices. All notices required or permitted hereunder shall be in writing addressed to the Parties at their respective addresses as set forth below, unless another address shall have been designated:

If to Faes, to:

[**] Faes Farma, S.A. Via de los Poblados 3 28033 Madrid, Spain

With a copy to (which shall not constitute notice):

[**]

[**] Faes Farma, S.A.

Avenida de Autonomia l 0 Leioa, Bizkaia, Spain

If to PTC, to:

PTC Therapeutics, Inc.

100 Corporate Court

South Plainfield, NJ 07080 U.S. A. Attn: [**]

With an electronic copy to: [**]

will be delivered by hand, by nationally recognized overnight courier, by registered or certified mail, postage prepaid or by facsimile, with confirmation sheet. Any and all notices to be given hereunder shall be deemed delivered on the first business day following delivery by hand, one (1) business day following delivery to a nationally recognized overnight courier for overnight delivery to the recipient and five (5) Business Days following deposit in registered or certified mail as aforesaid.

9.7Entire Agreement. This Agreement, together with certain Confidentiality Agreement, dated March 25, 2015, as amended (the “CDA”), Quality and Pharmacovigilance Agreement(s), current quotes or proposal, constitute the entire agreement of the Parties and supersede all prior representations, proposals, discussions, and communications, whether oral or in writing except as set forth in the next paragraph of this Section 9.7. This Agreement, together with the Quality Agreement and Pharmacovigilance Agreements, may be modified only through a writing signed by the Parties.

All actions performed by the Parties prior to this Agreement in accordance with the terms and provisions of the Original Agreement shall be held valid and not considered to be a breach of this Agreement. All disputes arising out of or in connection with any action performed by the Parties prior to this Agreement shall be settled under the terms and conditions of the Original Agreement.

9.8Severability. If any provision of this Agreement shall be held invalid or unenforceable, such provision shall be deemed deleted from this Agreement and replaced by a valid and enforceable provision, which so far as possible, achieves the Parties' intent in agreeing to the original provision. The remaining provisions of this Agreement shall continue in full force and effect.

9.9Remedies. Each Party agrees that his, her or its obligations hereunder are necessary and reasonable in order to protect the other Party and the other Party's business, and expressly agrees that monetary damages would be inadequate to compensate the other Party for any breach of any covenant or agreement set forth herein. Accordingly, each Party agrees and acknowledges that any such violation or threatened violation of this Agreement (including, but not limited to, Supply Failures as provided for in Section 5.4) will cause irreparable injury to the other Party, and that, in addition to any other remedies that may be available, in law, in equity, or otherwise, the other Party shall be entitled to seek specific performance for any breach or threatened breach, and to obtain injunctive relief against the threatened breach of this Agreement or continuation of any such breach, without the necessity of proving actual damages. No remedy provided for in this Agreement shall limit (or be construed as limiting) the aggrieved Party's right to any other remedies it may have under this Agreement or in Law, including, without limitation, the recovery of damages for breach of this Agreement, provided however that the limitations on claimable damages under this Agreements agreed in Sections 9.11 and 9.12 shall always apply, except as expressly provided in this Agreement.

9.10No Waiver. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term or condition hereof.

9.11Indemnification by Faes. Faes shall indemnify, defend and hold harmless PTC and its Affiliates and subsidiaries from and against all losses and liabilities and all damages, expenses, costs, and fees, including reasonable attorneys' fees (collectively, "Losses"), including, but not limited to, Losses arising from any claim, suit, action or proceeding (each a "Claim") brought against PTC or its Affiliates or subsidiaries by a Third Party, to the extent resulting or arising from any breach by Faes of any representation, warranty, covenant or agreement in this Agreement; provided, however, that Faes shall not be liable under any circumstance to PTC or its Affiliates or subsidiaries or to any other Third Party for any loss of profit ("lucro cesante"), special, consequential, incidental, punitive or indirect Losses arising from or relating to (a) any breach or inaccuracy of Faes' representations or warranties in this Agreement, (b) any breach by Faes of its obligations, undertakings or covenants under this Agreement and (c) any simple negligence in performing its obligations, undertakings or covenants under this Agreement, regardless of any notice of the possibility of such Losses; provided further, however, that the Parties expressly acknowledge and agree that Losses incurred by PTC involving the payment of monies to a Third Party as a result of Faes' breach of any of its representations, warranties, covenants or agreements in this Agreement (including those described in clauses (a) through (c) above)) shall not constitute (or be deemed to constitute) loss of profit ("lucro cesante "), special, consequential, incidental, punitive or indirect Losses for purposes of the exclusion in the preceding proviso.

9.12Indemnification by PTC. PTC agrees to indemnify, defend and hold harmless Faes and its Affiliates and subsidiaries from and against all Losses, including, but not limited to, Losses arising from any Claim brought

against Faes or its Affiliates or subsidiaries by a Third Party, to the extent resulting or arising from any breach by PTC of any representation, warranty, covenant or agreement in this Agreement; provided, however, that PTC shall not be liable under any circumstance to Faes or its Affiliates or subsidiaries or to any other Third Party for any loss of profit ("lucro cesante"), special, consequential, incidental, punitive or indirect Losses arising from or relating to (a) any breach or inaccuracy of PTC's representations or warranties in this Agreement, (b) any breach by PTC of its obligations, undertakings or covenants under this Agreement and (c) any simple negligence in performing its obligations, undertakings or covenants under this Agreement, regardless of any notice of the possibility of such Losses; provided further, however, that the Parties expressly acknowledge and agree that Losses incurred by Faes involving the payment of monies to a Third Party as a

result of PTC's breach of any of its representations, warranties, covenants or agreements in this Agreement (including those described in clauses (a) through (c) above)) shall not constitute (or be deemed to constitute) loss of profit ("lucro cesante ''), special, consequential, incidental, punitive or indirect Losses for purposes of the exclusion in the preceding proviso.

9.13Termination for Breach. In addition to the termination rights provided for in Section 5.12 (b), each Party shall have the right to terminate this Agreement in its entirety immediately upon written notice to the other Party is the other Party materially breaches its material obligations under this Agreement and, after receiving written notice under this Section 9.13 identifying such material breach in reasonable detail, fails to cure such breach within [**] calendar days after its receipt of such notice (or within [**] calendar days after its receipt of such notice in the event such breach is solely based upon the breaching Party's failure to pay any undisputed amounts due hereunder if such breaching Party fails to cure such breach within such [**] day period); provided, however, that if the Party alleged to in breach disputes such breach in good faith by written notice to the other Party within the applicable cure period (i.e., within the [**] day or, if applicable, [**] day period referred to above), then the Party alleged to be in breach shall not be deemed in breach and the non-breaching Party shall not have the right to terminate this Agreement pursuant to this Section 9.13 unless and until it has been determined in accordance with Section 9.5 that this Agreement was in fact so materially breached and the breaching Party fails to cure such breach within [**] calendar days after such determination. Any abuse or bad faith use by the breaching Party of the provisions of this Section 9.13 in order to avoid the termination of this Agreement hereunder shall be taken into account when determining the amount of damages to be paid by the breaching Party to the non-breaching Party as a result of such termination of this Agreement.

9.14Expenses. Each Party shall bear its own expenses (including, but not limited to, legal, investment banker, accountant, financial advisor fees and expenses) in connection with this Agreement and the transactions contemplated hereby.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.

FAES FARMA, S.A

By: /s/ Gonzalo Lopez

Name: Gonzalo Lopez

Title:

General Manager

Date 5/30/2023

PTC THERAPEUTICS, INC.

By: /s/ Michael Rice

Name: Michael Rice

Title: SVP Technical Operations

Date: 6/2/2023

Appendix 2 Faes' Hourly Rates

Faes’ Hourly Rates€[**] Euros) Per Hour

Exhibit 10.2

AMENDMENT NO. 1

AMENDED AND RESTATED ROYALTY PURCHASE AGREEMENT

AND

FIRST PUT OPTION EXERCISE AGREEMENT

This AMENDMENT NO. 1 to the AMENDED AND RESTATED ROYALTY PURCHASE AGREEMENT dated as of October 18, 2023 (the “Purchase Agreement”) and FIRST PUT OPTION EXERCISE AGREEMENT (“Amendment No. 1”), is entered into on this 17th day of June, 2024, by and among PTC Therapeutics, Inc., a Delaware corporation (the “Seller”), Royalty Pharma Investments 2019 ICAV, an Irish collective asset-management vehicle (the “Buyer”) and Royalty Pharma plc, a public limited company established under the laws of England and Wales. Capitalized terms not defined herein have the meanings assigned to them in the Purchase Agreement.

W I T N E S S E T H:

WHEREAS, the Buyer, Royalty Pharma plc and the Seller previously entered into the Purchase Agreement, pursuant to which the Buyer purchased a portion of the Royalty and the Seller was granted certain options to sell up to all of the Seller’s retained right, title and interest in and to the entire Royalty to the Buyer in up to five (5) equal tranches.

WHEREAS, the Buyer, Royalty Pharma plc and the Seller desire to amend the Purchase Agreement to modify the Seller’s options to provide that the Seller may sell its retained right, title and interest in and to the remaining Royalty to the Buyer in up to four (4) tranches as provided herein.

WHEREAS, the Seller is also hereby exercising its option to sell the First Put Royalty Payment Tranche (as defined below) to the Buyer and is accordingly simultaneously selling, and the Buyer is purchasing, the First Put Royalty Payment Tranche on the date hereof, notwithstanding any notice or timing provisions in Section 3.7 of the Purchase Agreement, which provisions are hereby waived for the First Put Closing.

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is acknowledged by the parties hereto, the Seller and Buyer hereby agree to the following:

1.Definitions.

(a)New Definitions. Section 1.1 of the Purchase Agreement is hereby amended to add the following definitions in the appropriate alphabetical order:

“Closing Quarter” means the Calendar Quarter during which the applicable Subsequent Put Closing occurs.

“First Put Closing” is defined in Section 3.7(a)(i).

“First Put Purchase Price” means $241,792,380.19.

“First Put Royalty Payment Tranche” means a percentage of the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty for all Calendar Year Net Sales arising on or after April 1, 2024 equal to (a) 9.5112%, until the 2020 Assigned Royalty Cap has been met, and (b) 16.6667%, from and after such time as the 2020 Assigned Royalty Cap is met.

“Fourth Put Closing Date” means the date on which the Put Closing in respect of the Fourth Put Royalty Payment Tranche occurs.

“Fourth Put Purchase Price” means an amount equal to $50,000,000, minus

(a) if the 2020 Assigned Royalty Cap has not been met by the Fourth Put Closing Date, the product of (i) the aggregate of all amounts paid by or on behalf of Licensee through the Fourth Put Closing Date in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 and (ii) 1.9021%; or

(b) if the 2020 Assigned Royalty Cap has been met by the Fourth Put Closing Date, the sum of (x) the product of (A) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 until the 2020 Assigned Royalty Cap was met and (B) 1.9021%, and (y) the product of (1) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising from and after the date when the 2020 Assigned Royalty Cap was met through the Fourth Put Closing Date and (2) 3.3332%.

Appendix A illustrates the calculation of the Fourth Put Purchase Price.

“Fourth Put Royalty Payment Tranche” means a percentage of the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty for all Calendar Year Net Sales arising on or after the first day of the applicable Put Purchased Quarter equal to (a) 1.9021%, until the 2020 Assigned Royalty Cap has been met, and (b) 3.3332%, from and after such time as the 2020 Assigned Royalty Cap is met.

“Prior Quarter” means the Calendar Quarter ending immediately prior to the Closing Quarter.

“Second Put Closing Date” means the date on which the Put Closing in respect of the Second Put Royalty Payment Tranche occurs.

“Second Put Purchase Price” means an amount equal to $100,000,000, minus

(a) if the 2020 Assigned Royalty Cap has not been met by the Second Put Closing Date, the product of (i) the aggregate of all amounts paid by or on behalf of Licensee through the Second Put Closing Date in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 and (ii) 3.8045%; or

(b) if the 2020 Assigned Royalty Cap has been met by the Second Put Closing Date, the sum of (x) the product of (A) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 until the 2020 Assigned Royalty Cap was met and (B) 3.8045%, and (y) the product of (1) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising from and after the date when the 2020 Assigned Royalty Cap was met through the Second Put Closing Date and (2) 6.6667%.

Appendix A illustrates the calculation of the Second Put Purchase Price.

“Second Put Royalty Payment Tranche” means a percentage of the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty for all Calendar Year Net Sales arising on or after the first day of the applicable Put Purchased Quarter equal to (a) 3.8045%, until the 2020 Assigned Royalty Cap has been met, and (b) 6.6667%, from and after such time as the 2020 Assigned Royalty Cap is met.

“Subsequent Put Closing” is defined in Section 3.7(a)(ii).

“Subsequent Put Option” is defined in Section 3.7(a)(ii).

“Subsequent Put Royalty Payment Tranche” means, as applicable, the Second Put Royalty Payment Tranche, the Third Put Royalty Payment Tranche and the Fourth Put Royalty Payment Tranche.

“Third Put Closing Date” means the date on which the Put Closing in respect of the Third Put Royalty Payment Tranche occurs.

“Third Put Purchase Price” means an amount equal to $100,000,000, minus

(a) if the 2020 Assigned Royalty Cap has not been met by the Third Put Closing Date, the product of (i) the aggregate of all amounts paid by or on behalf of Licensee through the Third Put Closing Date in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 and (ii) 3.8045%; or

(b) if the 2020 Assigned Royalty Cap has been met by the Third Put Closing Date, the sum of (x) the product of (A) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising on or after October 1, 2023 until the 2020 Assigned Royalty Cap was met and (B) 3.8045%, and (y) the product of (1) the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty for Calendar Year Net Sales arising from and

after the date when the 2020 Assigned Royalty Cap was met through the Third Put Closing Date and (2) 6.6667%.

Appendix A illustrates the calculation of the Third Put Purchase Price.

“Third Put Royalty Payment Tranche” means a percentage of the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty for all Calendar Year Net Sales arising on or after the first day of the applicable Put Purchased Quarter equal to (a) 3.8045%, until the 2020 Assigned Royalty Cap has been met, and (b) 6.6667%, from and after such time as the 2020 Assigned Royalty Cap is met.

(b)Amended Definitions. The definitions of “Assigned Royalty Payments,” “Put Closing,” “Put Purchase Price,” “Put Purchased Quarter” and “Put Royalty Payment Tranche” in Section 1.1 of the Purchase Agreement are each hereby amended and restated in their entirety respectively as follows:

“Assigned Royalty Payments” means, collectively, (a) the 2020 Assigned Royalty Payments, (b) the 2023 Assigned Royalty Payments, (c) following the First Put Closing, the First Put Royalty Payment Tranche and (d) following each Subsequent Put Closing, all Put Royalty Payment Tranche(s) sold in such Subsequent Put Closing(s). For clarity, following the First Put Closing and in the event the Seller exercises its option to sell all three (3) Subsequent Put Options pursuant to Section 3.7, then the Assigned Royalty Payments would equal 100.0000% of the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty for all Calendar Year Net Sales arising on or after the first day of the applicable Put Purchased Quarter in respect of the Fourth Put Royalty Payment Tranche.

“Put Closing” means each of (a) the First Put Closing and (b) the Subsequent Put Closings.

“Put Purchase Price” means, as applicable, the First Put Purchase Price, the Second Put Purchase Price, the Third Put Purchase Price and the Fourth Put Purchase Price.

“Put Purchased Quarter” means (a) the Prior Quarter, if, as of the applicable Subsequent Put Closing, the Seller has not yet received the aggregate amounts due, payable, owed or owing, accrued or otherwise to be paid to the Seller by or on behalf of Licensee in respect of the Royalty for the Calendar Year Net Sales for the Prior Quarter or (b) the Closing Quarter, if, as of the applicable Subsequent Put Closing, the Seller has received the aggregate amounts due, payable, owed or owing, accrued or otherwise to be paid to the Seller by or on behalf of Licensee in respect of the Royalty for the Calendar Year Net Sales for the Prior Quarter. For clarity, the parties intend that the applicable Put Purchased Quarter be the first Calendar Quarter for which the amounts due, payable, owed or owing, accrued or otherwise to be paid in respect of the Royalty have not yet been paid by or on behalf of Licensee.

“Put Royalty Payment Tranche” means, as applicable, the First Put Royalty Payment Tranche, the Second Put Royalty Payment Tranche, the Third Put Royalty Payment Tranche and the Fourth Put Royalty Payment Tranche.

(c)Deleted Definitions. The definitions of “Put Option” and “Put Percentage” are hereby deleted from Section 1.1 of the Purchase Agreement. Additionally, as further set forth below, the definitions of “Buyer Option Assigned Royalty Payments,” “Buyer Option Closing,” “Buyer Option Closing Date,” “Buyer Option Exercise Notice,” “Buyer Option Purchase Price,” “Buyer Option Purchased Quarter,” “Buyer Option Window” and “Option Percentage” (as used in this Amendment No. 1, collectively the “Buyer Option Terms”) are hereby deleted from Section 1.1 of the Purchase Agreement.

2.First Put Option Exercise and Closing. The Buyer and the Seller hereby acknowledge and agree that the Seller has the option to sell the First Put Royalty Payment Tranche to the Buyer, and the Seller hereby irrevocably elects to exercise, and is hereby exercising, such option. The Seller and the Buyer further hereby acknowledge and agree that the First Put Closing shall take place on the date hereof immediately following the execution and delivery of this Amendment No. 1 by the Buyer, the Seller and Royalty Pharma plc, notwithstanding any required notice or timing provisions set forth in this Agreement, which provisions the Buyer and the Seller each hereby waive for purposes of the First Put Closing. Accordingly, the Seller hereby sells, transfers, assigns and conveys to the Buyer, and the Buyer hereby purchases, acquires and accepts from the Seller, free and clear of all Liens, all of the Seller’s right, title and interest in and to the First Put Royalty Payment Tranche. In furtherance of the foregoing and in accordance with Section 3.7(b) of the Agreement, the Buyer will pay the First Put Purchase Price immediately following execution and delivery of this Amendment No. 1 by the Buyer, the Seller and Royalty Pharma plc.

3.Amendment to Section 3.7(a). Section 3.7(a) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“(a)Put Closing(s).

(i) First Put Closing. The Buyer and the Seller acknowledge and agree that, on June 17, 2024, the Seller has an, and hereby exercises its, option to sell to the Buyer the First Put Royalty Payment Tranche (such purchase and sale of such First Put Royalty Payment Tranche, the “First Put Closing”).

(ii) Subsequent Put Closing(s). Following the First Put Closing, at any time during the Put Option Window, the Seller shall have the option, in its sole discretion, to sell to the Buyer each of the Subsequent Put Royalty Payment Tranches (each such option, a “Subsequent Put Option”). If the Seller desires to exercise any Subsequent Put Option, and to sell to the Buyer any Subsequent Put Royalty Payment Tranche, the Seller shall provide the Buyer with an irrevocable written notice during the Put Option Window (a “Put Closing Notice”) that the Seller is electing to exercise one or more Subsequent Put Options. Such Put Closing Notice shall set forth the Subsequent Put Royalty Payment Tranche(s) that the Seller desires to sell and the expected Put Purchase Price for such Subsequent Put Royalty Payment

Tranche(s). If the Seller is not then in material breach of this Agreement, then on the [**] following delivery of such Put Closing Notice, the Seller shall sell, transfer, assign and convey to the Buyer, and the Buyer shall purchase, acquire and accept from the Seller, free and clear of all Liens, all of the Seller’s right, title and interest in and to such Subsequent Put Royalty Payment Tranche(s) (each such purchase and sale of such Subsequent Put Royalty Payment Tranche(s), a “Subsequent Put Closing”). Each Subsequent Put Option (i) must be exercised in whole and not in part and (ii) may be exercised separately or with one (1) or more other Subsequent Put Options at any time during the Put Option Window. The Subsequent Put Options may be exercised in up to three (3) Subsequent Put Closings, provided that (x) a Put Closing Notice is delivered for each such Subsequent Put Closing during the Put Option Window and (y) the Seller must exercise the Subsequent Put Options in numeric order (for which purpose simultaneously exercised Subsequent Put Options will be deemed exercised in their numeric order) and will not be permitted to exercise the Subsequent Put Option to sell the Fourth Put Royalty Payment Tranche unless and until the Seller has previously exercised, or concurrently exercises, a Subsequent Put Option for each other Subsequent Put Royalty Payment Tranches. For the avoidance of doubt, a Subsequent Put Option may only be exercised once for each of the Second Put Royalty Tranche, Third Put Royalty Payment Tranche and Fourth Put Royalty Payment Tranche.”

4.Amendment to Section 5.2(a). The last sentence of Section 5.2(a) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

“Promptly, and in any event within [**] following the Fourth Put Closing Date, if such Put Closing occurs, the Seller shall deliver to the Licensee an Updated Licensee Instruction Letter, in substantially the form attached hereto as Exhibit E-2, duly executed by the Buyer and the Seller, requesting that the Licensee pay all Royalty payments to an account designated by the Buyer.”

5.Amendment to Appendix A. Appendix A to the Purchase Agreement is hereby amended and restated in its entirety as set forth in Exhibit A attached hereto.

6.Deletion of Buyer Option Terms. The Buyer and the Seller acknowledge and agree that, as a result of the Seller’s sale of the First Put Royalty Payment Tranche to the Buyer at the First Put Closing on the date hereof, the Buyer’s option to purchase from the Seller the Buyer Option Assigned Royalty Payments as contemplated in the Purchase Agreement shall, from and after the First Put Closing, no longer be applicable. Accordingly, from and after the First Put Closing, Section 3.8 of the Purchase Agreement and any and all references to the Buyer Option Terms (and clauses relating thereto) are hereby deleted from the Purchase Agreement.

7.Other Provisions. Except as amended or modified by this Amendment No. 1, the Purchase Agreement is unchanged and remains in full force and effect. The parties’ waiver of the timing and notice provisions in this Amendment No. 1 for purposes of the First Put Closing shall not be deemed a waiver of such provisions for any Subsequent Put Closings.

8.Governing Law. This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to any choice or

conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

9.Counterparts. This Amendment No. 1 may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, facsimile or other similar means of electronic transmission, including “PDF,” shall be considered original executed counterparts, provided receipt of such counterparts is confirmed.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 and First Put Option Exercise to be executed and delivered by their respective representatives thereunto duly authorized as of the date first above written.

PTC THERAPEUTICS, INC.

By: /s/ Matthew Klein
Name: Matthew Klein
Title: Chief Executive Officer

ROYALTY PHARMA INVESTMENTS 2019 ICAV

By: RP Management, LLC, its Manager and

lawfully appointed attorney

By: __/s/ George W. Lloyd___________

Name: George W. Lloyd__________

Title: __EVP, Investments & Chief Legal Officer_______________________

ROYALTY PHARMA PLC

By: RP Management, LLC, its Manager

By: __/s/ George W. Lloyd___________

Name: George W. Lloyd__________

Title: __EVP, Investments & Chief Legal Officer_______________________

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED AND RESTATED PURCHASE AGREEMENT AND FIRST PUT OPTION EXERCISE AGREEMENT]

Exhibit A

Appendix A

Schedule of Percentages Following Each Put Closing and Purchase Price Calculations

Applicable Closing	Buyer Royalty Percentage (2020 Assigned Royalty Cap has not been met)	Buyer Royalty Percentage (2020 Assigned Royalty Cap has been met)	Seller Royalty Percentage (2020 Assigned Royalty Cap has not been met)	Seller Royalty Percentage (2020 Assigned Royalty Cap has been met)
2023 Closing	80.9777%	66.6667%	19.0223%	33.3333%
First Put Royalty Payment Tranche	90.4889%	83.3334%	9.5111%	16.6666%
Second Put Royalty Payment Tranche	[**]	[**]	[**]	[**]
Third Put Royalty Payment Tranche	[**]	[**]	[**]	[**]
Fourth Put Royalty Payment Tranche	[**]	[**]	[**]	[**]

Applicable Closing	Put Purchase Price if 2020 Royalty Cap has not been met at the time of such closing*	Put Purchase Price if 2020 Royalty Cap has been met at the time of such closing*
Second Put Royalty Payment Tranche	$100,000,000 – (AR x 3.8045%)	$100,000,000 – [(AR until the 2020 Royalty Cap was met x 3.8045%) + (AR from and after such time as when the 2020 Royalty Cap was met x 6.6667%)]
Third Put Royalty Payment Tranche	$100,000,000 – (AR x 3.8045%)	$100,000,000 – [(AR until the 2020 Royalty Cap was met x 3.8045%) + (AR from and after such time as when the 2020 Royalty Cap was met x 6.6667%)]
Fourth Put Royalty Payment Tranche	$50,000,000 – (AR x 1.9021%)	$50,000,000 – [(AR until the 2020 Royalty Cap was met x 1.9021%) + (AR from and after such time as when the 2020 Royalty Cap was met x 3.3332%)]P

* For purposes of the foregoing formulas, “AR” means the aggregate of all amounts paid by or on behalf of Licensee in respect of the Royalty through the applicable Put Closing Date for Calendar Year Net Sales arising on or after October 1, 2023.

Exhibit 31.1

CERTIFICATIONS

I, Matthew B. Klein, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PTC Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2024	By:	/s/ MATTHEW B. KLEIN
		Matthew B. Klein
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Pierre Gravier, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PTC Therapeutics, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2024	By:	/s/ PIERRE GRAVIER
		Pierre Gravier
		Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of PTC Therapeutics, Inc. (the “Company”) for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Matthew B. Klein, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2024	By:	/s/ MATTHEW B. KLEIN
		Matthew B. Klein
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of PTC Therapeutics, Inc. (the “Company”) for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Pierre Gravier, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2024	By:	/s/ PIERRE GRAVIER
		Pierre Gravier
		Chief Financial Officer
		(Principal Financial Officer)