PTC slammed after EMA spurns its bid for early OK of DMD drug

PTC Therapeutics CEO Stuart Pelz

Shares of PTC Therapeutics took a hit this morning, dropping about 20% after the European Medicines Agency threw its considerable weight against the biotech's application to gain a conditional approval for its Duchenne muscular dystrophy drug ataluren.

But it's hard to tell why anyone would have been surprised by the news. While PTC ($PTCT) never put out a press release at the time, its IPO filing included a dire assessment from the EMA on the data that were presented to back up the application. In the spring of last year the EMA noted "insufficient evidence of efficacy based on our single Phase IIb clinical trial, resulting in a negative risk-benefit balance for purposes of conditional approval, uncertainties about the effective dose and questions about whether our confirmatory Phase III clinical trial for this indication could be continued if the EMA grants conditional approval."

PTC's statement this morning zeroed in on the enrollment issue, adding that the biotech plans to appeal the decision in the hope that it can move ahead with a conditional OK when enrollment is being completed.

"We pursued this approach because we believe ataluren has shown a clinically meaningful benefit for nmDMD patients in our trials, has been generally well tolerated and should be made available to patients as soon as possible," said CEO Stuart Peltz. "Furthermore, we have made meaningful progress both in validating the 6-minute walk distance as an outcome measure in DMD clinical studies and in sharing an understanding of the natural history of this disorder as its relates to changes in ambulation."

Ataluren failed both a Phase IIb study for DMD as well as a Phase III study for cystic fibrosis, yet the biotech went on to wrap one of 2013's hottest IPOs in the resurgent biotech field, grabbing $125 million from investors. And over the last month its stock price jumped 37%.

Peltz has argued for years now that even though ataluren hasn't produced statistically significant results in later stage studies, the improvements in walking distance warranted an approval. But the EMA has now formally said no, leaving the drug's fate to be decided by a late-stage study the biotech describes as "confirmatory."

South Plainfield, NJ-based PTC, a 2007 Fierce 15 biotech, says that enrollment will be wrapped in the middle of this year with results ready in mid-2015.

PTC's failure on DMD has been mirrored by a host of setbacks in the field. Prosensa's ($RNA) Big Pharma partner GlaxoSmithKline ($GSK) recently bowed out of their collaboration after the failure of a major late-stage program. And Sarepta's ($SRPT) shares have been on a roller coaster ride fueled by speculation around a long-shot effort to gain an accelerated approval on data from a very small study of the drug.

- here's the release