PTC Therapeutics, Inc. has entered into an asset purchase agreement with Marathon Pharmaceuticals to acquire all rights to Emflaza (deflazacort), which was approved in February by the U.S. Food Drug Administration to treat Duchenne muscular dystrophy patients 5 years and older, regardless of their genetic mutation.
News about the agreement, which enables PTC Therapeutics to have all rights to distribute Emflaza in the U.S., was announced by PTC Therapeutics in a March 16 press release. The news follows a recent dispute about Marathon’s hike in the price of Emflaza to $89,000, and a delay in the release of Emflaza pending a resolution of the controversy.
DMD treatment guidelines for DMD, an inheritable disorder that affects mostly males, recommend steroids as a main component of the standard of care. Emflaza, which is a kind of steroid that has been used for decades outside the U.S. to treat DMD, reduces inflammation, in order to preserve muscle function and delay disease progression.
“Our goal has always been to ensure Emflaza is studied, understood and available to any Duchenne patient who needs it, and we determined that this transaction is the best path for ensuring that will happen,” said Jeff Aronin, president and CEO, Marathon Pharmaceuticals, LLC. “Now that we have achieved FDA approval of Emflaza, the focus can turn to ensuring patients have access to this important therapy. PTC is well known by the Duchenne community and is ideally positioned to achieve this shared goal,” he said.
“With our nearly 20-year commitment to the Duchenne community, it is deeply meaningful for us to bring this critical therapy to U.S. patients,” said Stuart W. Peltz, PhD, CEO of PTC Therapeutics, Inc. “We believe Emflaza is a disease-modifying therapy that has been shown to slow disease progression. In keeping with PTC’s mission, we are excited to work with the community to raise the standard of care for DMD patients.”
“Based on our long-standing experience with DMD and strong partnership with the community, we believe PTC is uniquely positioned to launch Emflaza in the U.S.,” added Mark Rothera, PTC’s chief commercial officer.
Under the terms of the asset purchase agreement, “Marathon will receive total upfront consideration of $140 million upon closing of the transaction, comprised of approximately $75 million in cash and approximately $65 million in PTC common stock, subject to a maximum 6.9 million share limit (with any shortfall to be made whole with additional cash consideration). Marathon is also entitled to receive payments from PTC based on annual net sales of Emflaza beginning in 2018, which PTC expects will range as a percentage of net sales between the low to mid-20s on a blended average basis. In addition, Marathon has the opportunity to receive a single $50 million sales-based milestone,” according to the March 16 announcement.
The transaction is expected to close in the second quarter of this year, subject to customary closing conditions.