PTC Therapeutics(PTCT) - 2023 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION This section provides the unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the first quarter of 2023 Item 1. Financial Statements (unaudited) This section presents the unaudited consolidated financial statements for PTC Therapeutics, Inc. as of March 31, 2023, including balance sheets, statements of operations, cash flows, and comprehensive notes Consolidated Financial Statements The consolidated financial statements show a net loss of $139.0 million for Q1 2023, with total assets decreasing to $1.61 billion and $29.5 million cash used in operations Consolidated Statements of Operations (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Total revenues | $220,382 | $148,735 | | Net product revenue | $187,557 | $129,832 | | Royalty revenue | $30,831 | $18,896 | | Total operating expenses | $337,997 | $235,257 | | Research and development | $195,124 | $140,078 | | Selling, general and administrative | $86,914 | $73,271 | | Loss from operations | ($117,615) | ($86,522) | | Net loss | ($138,959) | ($126,726) | | Net loss per share—basic and diluted | ($1.88) | ($1.78) | Consolidated Balance Sheet Highlights | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $167,495 | $279,834 | | Total current assets | $613,392 | $693,785 | | Total assets | $1,608,839 | $1,705,619 | | Total current liabilities | $441,634 | $406,236 | | Long-term debt | $572,091 | $571,722 | | Total liabilities | $2,066,400 | $2,052,705 | | Total stockholders' deficit | ($457,561) | ($347,086) | Consolidated Statements of Cash Flows Highlights (Q1 2023) | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | | Net cash used in operating activities | ($29,491) | | Net cash used in investing activities | ($28,971) | | Net cash provided by financing activities | $4,094 | | Net decrease in cash and cash equivalents | ($62,331) | Notes to Consolidated Financial Statements The notes detail accounting policies, revenue recognition, debt, and commitments, highlighting an accumulated deficit of $2.8 billion and reliance on product sales and financing for R&D - The company's portfolio includes commercial products Translarna and Emflaza for DMD, Upstaza for AADC deficiency, and a broad pipeline in neurology, metabolism, and oncology[29][30][31] - As of March 31, 2023, the company reported an accumulated deficit of approximately $2.8 billion, with current cash and expected product sales deemed sufficient for the next twelve months[44] Net Product Sales by Geography and Product (Q1 2023 vs Q1 2022) | Category | Q1 2023 (in millions) | Q1 2022 (in millions) | | :--- | :--- | :--- | | Net Product Sales (U.S.) | $54.6 | $48.6 | | Emflaza | $54.6 | $48.6 | | Net Product Sales (ex-U.S.) | $133.0 | $81.2 | | Translarna | $115.1 | $79.2 | | Tegsedi, Waylivra, Upstaza | $17.9 | $2.0 | - Royalty revenue from Evrysdi, in collaboration with Roche, increased to $30.8 million in Q1 2023 from $18.9 million in Q1 2022[72][197] - Significant future commitments include potential milestone payments for acquisitions: up to $331 million (development/regulatory) and $150 million (sales) to Agilis, up to $200 million to BioElectron, and up to $217.5 million to Censa for two lead programs[181][183][184] - In February 2023, a $30.0 million development milestone for the sepiapterin program (Censa acquisition) was triggered, payable primarily in common stock shares[185] - As of March 31, 2023, the company holds $283.3 million in 1.50% convertible senior notes due 2026 and a $300.0 million senior secured term loan from Blackstone[152][167] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 44% increase in net product revenue to $187.6 million in Q1 2023, total revenues reaching $220.4 million, and a net loss of $139.0 million, while affirming sufficient liquidity for the next twelve months Corporate Updates and Pipeline PTC reports strong Q1 2023 sales for Translarna ($115.1 million) and Emflaza ($54.6 million), with key clinical data readouts for PTC518, vatiquinone, and sepiapterin expected in Q2 2023, and a Upstaza BLA submission anticipated in Q3 2023 - The company anticipates an EMA CHMP opinion in Q2 2023 concerning the conversion of Translarna's conditional marketing authorization to a standard one[217] - The BLA submission for Upstaza in the U.S. is now projected for Q3 2023, a delay from Q2 2023, due to ongoing FDA bioanalytical data queries[223][244] - Key clinical data readouts are expected in Q2 2023 for PTC518 (Huntington's disease Phase 2), vatiquinone (mitochondrial disease Phase 2/3), and vatiquinone (Friedreich ataxia Phase 3)[226][229] - Results from Part 2 of the registration-directed Phase 3 trial for sepiapterin for PKU are anticipated in May 2023[230] Results of Operations Total revenues for Q1 2023 increased 48% to $220.4 million, driven by product and royalty revenue growth, while operating expenses rose 44% to $338.0 million, resulting in a net loss of $139.0 million Q1 2023 vs. Q1 2022 Financial Results (in thousands) | Line Item | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $220,382 | $148,735 | $71,647 | 48.2% | | Net product revenue | $187,557 | $129,832 | $57,725 | 44.5% | | Royalty revenue | $30,831 | $18,896 | $11,935 | 63.2% | | Total Operating Expenses | $337,997 | $235,257 | $102,740 | 43.7% | | R&D Expense | $195,124 | $140,078 | $55,046 | 39.3% | | SG&A Expense | $86,914 | $73,271 | $13,643 | 18.6% | | Net Loss | ($138,959) | ($126,726) | ($12,233) | 9.7% | - The increase in R&D expenses primarily resulted from increased investment in research programs and clinical pipeline advancement, including a $30.0 million success-based development milestone for the sepiapterin for PKU trial[284] - The rise in SG&A expenses reflects ongoing investment to support the company's expanding commercial portfolio and activities[285] - Other income totaled $10.0 million compared to an $11.9 million expense in the prior year, primarily due to unrealized foreign exchange gains and equity investment gains in Q1 2023[289] Liquidity and Capital Resources As of March 31, 2023, the company held $286.3 million in cash and equivalents, used $29.5 million in operating activities, and believes existing capital is sufficient for the next twelve months despite anticipating continued high expenses - The company held cash, cash equivalents, and marketable securities totaling $286.3 million as of March 31, 2023[302] - The company believes existing cash and expected cash flows from product sales will sufficiently fund operations and capital expenditures for at least the next twelve months[310] - Significant upcoming cash outlays include a potential $20.0 million milestone payment to former Agilis equityholders upon FDA acceptance of the Upstaza BLA and $50.0 million in potential milestones to former Censa securityholders in 2023[317] - The company funded a $50.0 million reserve account during Q1 2023 as mandated by the Blackstone Credit Agreement[301] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reported no material changes in its market risk profile or management during Q1 2023 compared to its 2022 Annual Report on Form 10-K - No material changes occurred in the company's market risk profile during the first quarter of 2023[321] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2023[324] - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2023[325] PART II—OTHER INFORMATION This section covers legal proceedings, risk factors, and a list of exhibits filed with the quarterly report Item 1. Legal Proceedings The company is subject to ordinary course legal claims but is not currently aware of any material legal proceedings against it - The company is not currently aware of any material legal proceedings to which it is a party[327] Item 1A. Risk Factors This section refers readers to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2022 - The report directs readers to the risk factors detailed in the Annual Report on Form 10-K for the year ended December 31, 2022[328] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including agreements, CEO/CFO certifications, and Inline XBRL documents - Exhibits filed include a consulting agreement, CEO/CFO certifications under Sarbanes-Oxley, and XBRL data files[330]