Marathon Sells Emflaza to PTC Therapeutics
US drugmaker Marathon Pharmaceuticals has sold all rights to its Duchenne muscular dystrophy (DMD) drug Emflaza (deflazacort) to PTC Therapeutics in a deal that could be potentially worth more than $190 million.
Since Emflaza was approved by the US Food & Drug Administration (FDA) on Feb. 9 2017, Marathon had put its commercialization plans on hold after a backlash on the drug’s $89,000 annual price tag. Critics have pointed out that deflazacort is a decades-old steroid that has been available for a long time in some countries for just $1,000 a year.
Following a period of review, Marathon said it had concluded that the best path forward was for PTC to commercialize Emflaza, given that company’s deep-rooted experience with DMD. It added that PTC provides a broader platform for patient access and is committed to ongoing research to advance the knowledge, diagnosis and treatment of this rare and fatal genetic disorder.
Emflaza is the first drug to be approved in US for all DMD patients of five years and older. The disease causes progressive muscle weakness from early childhood and leads to premature death from heart and respiratory failure.
Upon closure of the deal, Marathon will receive a total upfront payment of $140 million, comprised of approximately $75 million in cash and about $65 million in PTC common stock. Beginning in 2018, the Northbrook, Illinois-based company will be also entitled to receive payments from PTC based on annual net sales of Emflaza, which PTC expects will range in the low-to-mid 20s as a percentage of net sales. In addition, Marathon could receive a single sales-based milestone payment of $50 million.
The transaction is expected to be accretive to both earnings and cash flow starting in 2018. Closure is expected in the second quarter of 2017, subject to the usual conditions and regulatory approval.
