PTC and Genzyme in $437M Gene Therapy Deal

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Talk about a good week for PTC.

A day after announcing the Cystic Fibrosis Foundation is dropping $25M on PTC124 (PTC’s novel oral therapy in late-stage development for the treatment of genetic disorders due to nonsense mutations) and funding the phase 2 trial, Genzyme (GENZ) and PTC Therapeutics announced an exclusive global collaboration to develop and commercialize PTC124.

Deal Terms
- PTC will commercialize PTC124 in the United States and Canada, and Genzyme will commercialize the treatment in all other countries.
- Genzyme will make a $100 million up- front payment to PTC Therapeutics.
- PTC will conduct and be financially responsible for the phase 2b trial of PTC124 in DMD, the phase 2b trial in CF, and two proof-of-concept studies in other indications to be determined.
- Once these four studies are completed, the companies will share research and development costs equally.
- Genzyme and PTC will each bear the sales, marketing and other costs associated with commercialization of PTC124 in their respective territories.
- PTC is eligible to receive up to $337 million in total milestone payments, as follows: up to $165 million in development and approval milestones, the majority of which are to be paid upon approvals in Genzyme territories; and up to $172 million in sales milestones, contingent upon the achievement of specific sales levels. The sales milestone payments begin when annual net revenues reach $300 million, and increase in increments through revenues of $2.4 billion.
- PTC is also eligible to receive tiered double-digit royalties from sales in Genzyme territories.

About PTC124
PTC124 is an orally delivered, investigational new small molecule drug for the treatment of genetic disorders due to nonsense mutations. Nonsense mutations are single-point alterations in the genetic code that prematurely stop the translation process, preventing production of a full-length, functional protein. In phase 2a clinical trials in nonsense-mutation-mediated cystic fibrosis and in nonsense-mutation-mediated Duchenne muscular dystrophy, PTC124 has demonstrated the ability to produce functional protein across a variety of nonsense mutation types.

Opinion
While Genzyme paid a pretty hefty upfront, this is a pretty good deal all around. Genzyme gets a promising candidate that fits perfectly with it’s orphan/niche market pipeline and PTC gets some pretty hefty cash and a partner willing to go the distance with a therapy that will never reach blockbuster status.

One caveat though, it should be stated that this type of therapy would only be appropriate for those patients who contain at least one mutant allele that is a premature stop codon. The majority of CF (~ 95%) and DMD (~ 85 to 90%) patients would not benefit from this treatment because they have other forms of the disorders that are not caused by stop mutations.

The upside for Genzyme here is that after CF and DMD, PTC-124 could be extended for use as a potential therapy in other single gene disorders with nonsense mutations such as hemophilia, neurofibromatosis, retinitis pigmentosa, bullous skin diseases, and lysosomal storage disorders.

Comments

[Tom B]

Nice to see companies working on targets that "not everybody else" is working on (like kinases...).