PTC Therapeutics has announced that its layoffs will now go deeper and wider than previously announced as European regulators consider halting sales of the company’s Duchenne muscular dystrophy (DMD) drug.
A quarter of the company’s employees will now be heading for the exits, with most of the impact absorbed by those working in early-stage research programs and those at the gene therapy manufacturing facility in Hopewell, New Jersey, as well as associated selling, general and administrative expenses (SG&A) roles.
It marks a significant expansion of the layoff program, which, when first unveiled in May, was only expected to affect 8% of staff. While the biotech now intends to let go of three times as many employees, the amount of money likely to be clawed back in annual operational expenses is only increasing from the 15% target set out in May to 20% outlined in yesterday’s announcement.
Since May, the company’s troubles haven’t receded. First came another failure for the biotech’s Friedreich ataxia drug vatiquinone, which was revealed to be no better than placebo for treating the rare seizure disorder.
More worrying in the long term was a recommendation two weeks ago by the European Medicines Agency’s (EMA's) Committee for Medicinal Products for Human Use (CHMP) that the regulator shouldn’t renew the marketing authorization for PTC’s DMD drug Translarna.
The committee pointed out that the original authorization had only ever been conditional while more data were sought out. A requested study in a subgroup of patients failed to show a statistically significant improvement in patients’ ability to walk, and a review of existing and long-term data of the drug’s use was unable to satisfy the committee’s concerns about Translarna’s efficacy.
It means that PTC faces the very real possibility of the drug losing its authorization in all EU member states. Translarna brought in $96.5 million for the company in the second quarter of 2023 across all territories where it’s already approved, including the EU, Brazil and Russia. The biotech had been expecting to meet with the FDA in the second half of this year to discuss approval in the U.S.
PTC said in yesterday’s release that it plans to submit a reexamination request to the EMA’s committee.
"We remain confident that we have the data to address the concerns raised by CHMP in its negative opinion," CEO Matthew Klein, M.D., said in the Sept. 28 release. "The totality of evidence collected in three placebo-controlled trials and in the STRIDE registry provide clear evidence of Translarna's benefit.”
“In addition, the patient and physician communities strongly believe in the benefits of Translarna and have shared their motivation to support the efforts to maintain authorization for the only approved Duchenne muscular dystrophy therapy in Europe," Klein added.
William Blair analysts described the committee’s decision as “unfortunate and surprising.” But the analysts “remain confident in PTC’s ability to reverse the CHMP opinion given its history of successfully renegotiating with the EMA and vocal physician and patient advocacy groups,” they added in a Sept. 29 note.
PTC’s stock took another hit on the back of the committee’s decision Sept. 15, plunging from $37 to $26 per share. Since then, it’s continued to drop slightly, sitting at around $23.70 in premarket trading Friday.