PTC Therapeutics has entered into an asset purchase agreement with Marathon Pharmaceuticals to acquire all rights to Emflaza (deflazacort). Emflaza is the first treatment approved in the U.S. for all Duchenne muscular dystrophy (DMD) patients five years and older, regardless of their genetic mutation. DMD is a rare and fatal genetic disorder that results in progressive muscle weakness from early childhood and leads to premature death due to heart and respiratory failure. Emflaza aligns with PTC's mission to bring therapies to patients who have rare diseases with limited or no treatment options.
"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, Ph.D., chief executive officer of PTC Therapeutics. "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."
DMD treatment guidelines recommend steroids as a foundational component of the standard of care. Emflaza reduces inflammation, which is critical to preserving muscle function and delaying disease progression. It received FDA approval on February 9, 2017 and has the potential to benefit many DMD patients in the U.S.
"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. "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."
"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. "We are finalizing our commercialization plans and intend to share more information after the transaction closes."
Transaction Overview 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.
The transaction is expected to be accretive to both earnings and cash flow beginning in 2018. The transaction is expected to close in the second quarter of 2017, subject to customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Act.