PTC Therapeutics (NASDAQ:PTCT)
On Monday, PTC Therapeutics fell by 40% to $7.97 per share after the company had announced that the FDA refused its appeal for a refuse-to-file letter. PTC Therapeutics has not been able to get the FDA to back its Duchenne Muscular Dystrophy — DMD — drug. What happened was that PTC had filed an appeal to the agency to reconsider its refuse-to-file letter date back in February of this year. This further signifies that the FDA is not interested in approving PTC’s drug Translarna. Another deadly blow to PTC Therapeutics, which has not been having the best year at all. News of this appeal denial by the FDA led the PTC stock lower by 40%.
A major problem or hurdle for PTC is that, while its commitment to get its drug approved to treat DMD patients is sound, it is not highly justified at all. The reason being is that it had run two phase 3 clinical trials that had both failed. Thinking about this more clearly, it doesn’t make too much sense on why PTC is still pursuing this indication at all. Both phase 3 trial were completed and both had failed the primary endpoints of the studies. PTC has a claim of its own on why it is still considering to pursue the DMD indication. It has noted that despite failing both phase 3 trials, there might be a subset of patients that would greatly benefit from treatment with Translarna.
Not Backing Down
PTC had sent its appeal to the FDA and had the request denied. Instead of taking this as a hint that maybe the efficacy of its drug is not as strong as intended, the company is pushing forward. It has stated that it will now send the appeal to a higher level in the agency. The problem is that sending an appeal to the next higher level of the FDA may not work. In that case, PTC may have to end up submitting multiple appeals to each higher level. Even if it does this there can be no guarantee that it will have a positive outcome. After all, if the lower branch of the FDA doesn’t feel that the drug provides enough efficacy, then why would the higher level of the FDA feel differently? It might be a good idea for PTC to move on towards other drugs in the pipeline.
One of the many reasons that PTC might be pushing forward is that it is pointing towards Sarepta’s case. Sarepta Therapeutics just received approval for its DMD drug Eteplirsen about a month ago. While PTC does have a point that Sarepta didn’t back enough clinical efficacy to warrant approval, it doesn’t have the backing by the FDA at all. At least when Sarepta submitted its application for its NDA, the FDA took at a look into it. Even then, it was awfully close as the FDA raised concerns over Eteplirsen as well. Sarepta may have been lucky or may have had the proper papework. In any case, it at least got to have an advisory committee review and FDA review of its drug. This is where PTC lacks because it has to file a massive amount of appeals in hopes that it can get the FDA to give it a chance for possible approval.
It doesn’t seem like things are going well for PTC Therapeutics on the U.S. front with the FDA. That means the stock will continue to fall, especially after this most recent denial for appeal. The good news is that the company has an application submitted in Europe which may prove to be helpful. Europe is more so trying to work with PCT about getting Translarna approved. The company has submitted additional supplemental information to the European Agency, and a decision for this country will come down sometime before the end of the year. If PTC receives a positive recommendation from Europe, then there is a possibility that the stock might be able to recover.