PTC Therapeutics ($PTCT) will axe nearly a fifth of its workforce, just weeks after the FDA knocked back its application for the muscular dystrophy drug Translarna (ataluren).
The job cuts--which will primarily hit its U.S. workforce and contractors--will begin immediately as the firm plans to complete its decision on who goes by June 30.
New Jersey-based PTC also expects to have to stump up $2.5 million in severance and benefit packages--although it will save more money in the long term.
The cuts come after the US regulator sent a "refuse to file" letter at the end of Feb. for Translarna's application to treat nonsense mutation Duchenne muscular dystrophy (nmDMD)--which represents around 13% of all DMD sufferers. The FDA told the biotech that its back-to-back studies for ataluren, both of which failed, didn't meet the agency's standards for proving efficacy.
PCT's stock plummeted on the news, destroying its share price and at the very least significantly delaying any approval of the drug, with some analysts speculating this may in fact be the end for Translarna in the U.S. This will also delay or completely stop a much needed revenue stream for the firm--hence the need to eliminate such a large proportion of staff.
It is the latest victim of a series of rejections by the FDA in the Duchenne field. CA-based BioMarin ($BMRN) had its drug candidate drisapersen rejected the FDA earlier this year with Cambridge, MA-based Sarepta ($SRPT) also enduring a harsh internal review from regulators for its candidate eteplirsen.
Many patients and families have been stunned by the FDA's hard line on Duchenne muscular dystrophy, given that it is a rare disease that first cripples and then kills its victims, with no available drugs to blunt its progress.
PTC has filed an application with the EMA using the now failed Phase III data. The biotech received an accelerated approval to market its drug in Europe in the summer of 2014--but it was conditional on the success of the Phase III.
That approval is subject to annual review and could be threatened by PTC's latest setback in the U.S.
PTC said in a statement that it "remains focused on the global development of Translarna and commercialization outside of the U.S. for nmDMD". It added that the firm intends to work with the FDA to "determine the best path forward to bring Translarna to patients in the U.S."
The drug works as a protein restoration therapy designed to enable the formation of a functioning protein in patients with genetic disorders caused by a nonsense mutation.
-see the release