PTC Therapeutics(US:PTCT)2025-05-06 20:34PART I—FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents the company's unaudited consolidated financial statements and accompanying detailed notes Consolidated Balance Sheets (unaudited) Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $1,480,231 | $779,709 | $700,522 | 89.8% | | Marketable securities | $546,950 | $359,987 | $186,963 | 51.9% | | Total current assets | $2,316,406 | $1,365,531 | $950,875 | 69.6% | | Total assets | $2,655,387 | $1,705,024 | $950,363 | 55.7% | | Total liabilities | $2,841,147 | $2,803,095 | $38,052 | 1.4% | | Total stockholders' deficit | $(185,760) | $(1,098,071) | $912,311 | (83.1%) | Consolidated Statements of Operations (unaudited) Consolidated Statements of Operations Highlights (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net product revenue | $153,426 | $177,604 | $(24,178) | (13.6%) | | Collaboration and license revenue | $986,231 | $— | $986,231 | 100% | | Royalty revenue | $36,439 | $31,154 | $5,285 | 17.0% | | Total revenues | $1,176,096 | $210,118 | $965,978 | 459.7% | | Total operating expenses | $205,871 | $255,571 | $(49,700) | (19.4%) | | Research and development | $108,973 | $116,129 | $(7,156) | (6.2%) | | Selling, general and administrative | $80,961 | $73,272 | $7,689 | 10.5% | | Net income (loss) attributable to common stockholders | $866,562 | $(91,576) | $958,138 | (1046.2%) | | Net income (loss) per share—diluted | $10.04 | $(1.20) | $11.24 | (936.7%) | Consolidated Statements of Comprehensive Income (Loss) (unaudited) Consolidated Statements of Comprehensive Income (Loss) Highlights (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change ($k) | | :--- | :--- | :--- | :--- | | Net income (loss) | $866,562 | $(91,576) | $958,138 | | Foreign currency translation gain (loss), net of tax | $12,025 | $(3,831) | $15,856 | | Comprehensive income (loss) | $878,499 | $(95,851) | $974,350 | Consolidated Statements of Stockholders' Deficit (unaudited) Consolidated Statements of Stockholders' Deficit Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change ($k) | | :--- | :--- | :--- | :--- | | Total stockholders' deficit | $(185,760) | $(1,098,071) | $912,311 | | Net income | $866,562 | — | $866,562 | | Share-based compensation expense | $18,060 | — | $18,060 | Consolidated Statements of Cash Flows (unaudited) Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change ($k) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $870,103 | $70,761 | $799,342 | | Net cash used in investing activities | $(184,360) | $(114,932) | $(69,428) | | Net cash provided by financing activities | $9,410 | $540 | $8,870 | | Net increase (decrease) in cash and cash equivalents | $700,546 | $(45,661) | $746,207 | | Cash and cash equivalents, and restricted cash end of period | $1,495,862 | $564,623 | $931,239 | Notes to Consolidated Financial Statements (unaudited) 1. The Company - PTC Therapeutics is a global biopharmaceutical company focused on rare disorders, with a mission to provide access to best-in-class treatments for patients with limited options28 - Translarna (nmDMD) marketing authorization in the EEA was not renewed as of March 28, 2025, but individual EU countries may allow continued commercial use; an NDA resubmitted to the FDA in July 2024 was accepted for review in October 2024303133 - Emflaza (DMD) orphan drug exclusivity for patients aged five years and older expired in February 2024, potentially impacting net product revenue, while exclusivity for patients aged two to less than five expires in June 202629195 - Upstaza/Kebilidi (AADC deficiency) received FDA accelerated approval in November 2024 and is marketed as Kebilidi in the United States34196 - Sepiapterin (PKU) achieved its primary endpoint in a Phase 3 trial, received a positive CHMP opinion in April 2025, and has an FDA target action date of July 29, 202537201 - PTC518 (Huntington's disease) Phase 2 study met primary endpoints, received FDA Fast Track designation, and a collaboration with Novartis closed in January 2025, including a $1.0 billion upfront cash payment3940204 - Vatiquinone (Friedreich's ataxia) showed durable treatment benefit in long-term studies, and its NDA was granted priority review by the FDA with a target action date of August 19, 202541205 - The Company had an accumulated deficit of approximately $2.8 billion as of March 31, 2025, but expects to fund operations for at least the next twelve months43 2. Summary of significant accounting policies - The Company operates as a single 'life science' operating and reporting segment, focusing on medicines for rare disorders5253 - Collaboration and license revenue for Q1 2025 included $989.8 million from the Novartis Agreement, partially offset by a $3.6 million refund for a prior collaboration177 - Inventory write-downs of $3.5 million and $3.7 million were recorded for the three months ended March 31, 2025 and 2024, respectively59 - The liability for sale of future royalties is amortized using the effective interest method, with an effective interest rate of 9.3% as of March 31, 2025142 - Changes to IRC Section 174 requiring R&D capitalization are anticipated to increase current taxable income by $45.3 million for the year ending December 31, 20257778 Restricted Cash (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Restricted cash included in deposits and other assets | $15,631 | $15,607 | 3. Leases Lease Liabilities (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finance lease liabilities- current | $5,047 | $3,000 | | Finance lease liabilities- noncurrent | $13,833 | $15,574 | Operating Lease Costs (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total operating lease cost | $5,041 | $6,858 | Weighted-Average Lease Terms and Discount Rates (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Weighted-average remaining lease terms - operating leases (years) | 11.48 | | Weighted-average discount rate - operating leases | 7.60% | | Weighted-average remaining lease terms - finance lease (years) | 7.76 | | Weighted-average discount rate - finance lease | 7.80% | 4. Fair value of financial instruments and marketable securities - The fair value of the 2026 Convertible Notes was $340.6 million as of March 31, 2025, and $321.3 million as of December 31, 2024111 - Contingent consideration payable was written down to zero as of March 31, 2025, as the probability of triggering the remaining consideration was determined to be remote112 Fair Value of Financial Assets (March 31, 2025, in thousands) | Asset Category | Total Fair Value | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Marketable securities - available for sale | $518,763 | $— | $518,763 | $— | | Marketable securities - equity investments | $28,187 | $28,187 | $— | $— | | ClearPoint Equity Investments | $10,637 | $10,637 | $— | $— | 5. Accounts payable and accrued expenses - Bad debt expense for the three months ended March 31, 2025, was $1.9 million, compared to an immaterial amount for the same period in 202472 Accounts Payable and Accrued Expenses (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Accounts payable and accrued expenses | $317,807 | $304,292 | | Income tax payable | $64,622 | $4,701 | | Milestone payable | $— | $11,025 | 6. Capitalization - As of March 31, 2025, $93.0 million of common stock remains available for issuance under the At the Market Offering Sales Agreement, with no shares sold in Q1 2025 or Q1 2024114 7. Net income (loss) per share Net Income (Loss) Per Share (Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income (loss) per common share, basic | $11.09 | $(1.20) | | Net income (loss) per common share, diluted | $10.04 | $(1.20) | | Weighted-average common shares outstanding, diluted | 86,385,922 | 76,496,127 | 8. Stock award plan - As of March 31, 2025, 4,984,677 shares were available under the Amended 2013 LTIP, and 1,894,422 shares under the 2020 Inducement Stock Incentive Plan120124 - During Q1 2025, 802,745 stock options were issued with a weighted average grant date fair value of $25.24 per share126127 - During Q1 2025, 1,537,675 restricted stock units were issued129 - Approximately $170.3 million of total unrecognized compensation cost remains, expected to be recognized over approximately 2.9 years132 Share-Based Compensation Expense (Three Months Ended March 31, in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Research and development | $8,663 | $8,967 | | Selling, general and administrative | $9,397 | $9,411 | | Total | $18,060 | $18,378 | 9. Debt - The Company has sold 90.49% of its right to receive Evrysdi royalties to Royalty Pharma for a total of $1.9 billion in upfront cash consideration141 - The Company retains 9.51% of the Evrysdi royalty, which increases to 16.67% after the assigned royalty cap is met141 - The 2026 Convertible Notes bear cash interest at 1.50% per year and mature on September 15, 2026143151 Liability for Sale of Future Royalties (in thousands) | Metric | March 31, 2025 | | :--- | :--- | | Beginning balance as of December 31, 2024 | $2,081,776 | | Less: Non-cash royalty revenue payable to Royalty Pharma | $(32,974) | | Plus: Non-cash interest expense recognized | $49,661 | | Ending balance | $2,098,463 | | Effective interest rate as of March 31, 2025 | 9.3% | 2026 Convertible Notes (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Principal | $287,500 | $287,500 | | Net carrying amount | $285,712 | $285,412 | 10. Commitments and contingencies - Potential sales milestones for Upstaza/Kebilidi of $50.0 million are deemed remote, and contingent consideration for FA and Angelman syndrome is not expected to be achieved155 - Under the Censa Merger Agreement, $95.0 million of development and regulatory milestones for sepiapterin have been paid, with up to $109.0 million for new indications and $160.0 million in sales milestones remaining158 - The Company is not currently aware of any material legal proceedings against it161 11. Revenue recognition - Translarna net revenues outside the US were $86.2 million in Q1 2025, down from $103.6 million in Q1 2024, primarily due to the timing of bulk patient orders164254 - Collaboration and license revenue increased by $986.2 million in Q1 2025, driven by the $1.0 billion upfront payment from the Novartis Agreement for the PTC518 HD program171177255 - Royalty revenue from Evrysdi sales increased by 17% to $36.4 million in Q1 2025 from $31.2 million in Q1 2024170256 - Manufacturing revenue was $0 in Q1 2025, down from $1.4 million in Q1 2024, as the gene therapy manufacturing business was sold in June 2024178179257258 Net Product Sales (Three Months Ended March 31, in millions) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Outside United States | $105.6 | $120.1 | | United States (Emflaza) | $47.8 | $57.5 | 12. Intangible assets and goodwill - Amortization expense decreased significantly to $3.8 million in Q1 2025 from $51.5 million in Q1 2024, as the Emflaza rights intangible asset was fully amortized as of February 2024182260 - The weighted average remaining amortization period for definite-lived intangibles was 8.9 years as of March 31, 2025182 - Goodwill remained unchanged at $82.3 million as of March 31, 2025183 Definite-Lived Intangible Assets, Net (in thousands) | Metric | March 31, 2025 | | :--- | :--- | | Total definite-lived intangibles, net | $118,448 | 13. Segment information - The Company operates as a single 'life science' segment185 Segment Net Income (Loss) (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $1,176,096 | $210,118 | | Segment Net Income (Loss) | $866,562 | $(91,576) | 14. Subsequent events - No material subsequent events impacting the consolidated financial statements or disclosures were identified through the filing date186 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, liquidity, and key corporate updates Our Company - PTC Therapeutics is a global biopharmaceutical company focused on discovering, developing, and commercializing clinically differentiated medicines for rare disorders189 Corporate Updates - Translarna's conditional marketing authorization in the EEA was not renewed by the European Commission on March 28, 2025193 - The FDA accepted the resubmission of the New Drug Application for Translarna for nmDMD in October 2024194 - Emflaza's orphan drug exclusivity for patients five years and older expired in February 2024, which is expected to have a significant negative impact on net product revenue195 - The FDA granted accelerated approval for the gene therapy for AADC deficiency in November 2024, marketed as Kebilidi in the United States196 - The CHMP issued a positive opinion on the Marketing Authorization Application for Sephience™ (sepiapterin) for PKU in April 2025201 - The Phase 2 study of PTC518 for Huntington's disease met its primary endpoints, and the collaboration with Novartis closed in January 2025, providing a $1.0 billion upfront payment204210 - The FDA accepted the NDA for vatiquinone for Friedreich's ataxia in February 2025, granting priority review with a target action date of August 19, 2025205 Financial operations overview - Net product revenues primarily consist of sales of Translarna outside the U.S. and Emflaza in the U.S221222 - Collaboration and license revenue for Q1 2025 included $989.8 million from the Novartis Agreement231 - Research and development expenses decreased by $7.2 million (6%) to $109.0 million in Q1 2025238239261 - Selling, general and administrative expenses increased by $7.7 million (10%) to $81.0 million in Q1 2025248262 - Interest expense, net decreased by $6.7 million (17%) to $34.1 million in Q1 2025, primarily due to increased investment income249265 - No material changes to critical accounting policies were reported during the three months ended March 31, 2025251 Results of operations - The decrease in net product revenue was primarily due to a 17% decrease in Emflaza sales ($9.7 million) and a 17% decrease in Translarna sales ($17.4 million)254 - Amortization of acquired intangible assets decreased significantly by 93% due to the Emflaza rights intangible asset being fully amortized as of February 2024260 - The increase in income tax expense was attributable to the recognition of revenue associated with the Novartis Agreement267 Revenue Comparison (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net product revenue | $153,426 | $177,604 | $(24,178) | (13.6%) | | Collaboration and license revenue | $986,231 | $— | $986,231 | 100% | | Royalty revenue | $36,439 | $31,154 | $5,285 | 17.0% | | Manufacturing revenue | $— | $1,360 | $(1,360) | (100%) | | Total revenues | $1,176,096 | $210,118 | $965,978 | 459.7% | Expense Comparison (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of product, collaboration and license sales (excl. amortization) | $12,862 | $14,740 | $(1,878) | (12.7%) | | Amortization of acquired intangible assets | $3,798 | $51,530 | $(47,732) | (92.6%) | | Research and development expense | $108,973 | $116,129 | $(7,156) | (6.2%) | | Selling, general and administrative expense | $80,961 | $73,272 | $7,689 | 10.5% | | Change in the fair value of contingent consideration | $(800) | $(100) | $(700) | (700%) | | Tangible asset impairment and losses on transactions, net | $77 | $— | $77 | 100% | | Interest expense, net | $(34,092) | $(40,834) | $6,742 | 16.5% | | Other (expense) income, net | $(6,305) | $1,591 | $(7,896) | (496.3%) | | Income tax expense | $(63,266) | $(6,880) | $(56,386) | (819.6%) | Liquidity and capital resources - As of March 31, 2025, the Company had $2.03 billion in cash, cash equivalents, and marketable securities277 - Net cash provided by operating activities was $870.1 million for Q1 2025, primarily driven by the $1.0 billion upfront payment from the Novartis Agreement278 - The Company expects existing cash and cash flows to be sufficient to fund operations for at least the next twelve months282 - Future funding requirements include significant expenses for commercialization, ongoing R&D, and potential milestone payments281284285 - Expected milestone payments include $57.5 million in 2025 for sepiapterin and $75.0 million in 2026 for vatiquinone288289 Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk or its management were reported for the period ended March 31, 2025 - No material changes in market risk or how market risk is managed were reported during the three months ended March 31, 2025293 Item 4. Controls and Procedures Management concluded that disclosure controls were effective and no material changes to internal controls occurred - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025296 - No change in internal control over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or is reasonably likely to materially affect, internal control over financial reporting297 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company reports no material legal proceedings to which it is currently a party - The Company is not currently aware of any material legal proceedings to which it is a party or of which any of its property is subject299 Item 1A. Risk Factors This section refers to the comprehensive risk factors detailed in the company's 2024 Annual Report - Readers are referred to Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024, for a more complete understanding of risks concerning the Company300 Item 5. Other Information This section details the adoption of Rule 10b5-1 trading arrangements by two company directors Director and Officer Trading Arrangements (Q1 2025) | Name (Title) | Action Taken (Date) | Type of Trading Arrangement | Nature of Trading Arrangement | Aggregate Number of Securities | | :--- | :--- | :--- | :--- | :--- | | Allan Jacobson (Director) | Adoption (March 12, 2025) | Rule 10b5-1 trading arrangement | Sale | Up to 38,000 shares | | Emma Reeve (Director) | Adoption (March 4, 2025) | Rule 10b5-1 trading arrangement | Sale | Up to 85,733 shares | Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report, including certifications and XBRL data - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, SCH, CAL, LAB, PRE, DEF, 104)305