A Look at Duchenne Muscular Dystrophy: Part 1 – Marathon Pharmaceuticals, PTC Therapeutics, and Drug Pricing
In February of this year, Marathon Pharmaceuticals received approval for Emflaza (deflazacort) tablets and oral suspension for the treatment of patients over the age of five years with Duchenne muscular dystrophy (DMD), regardless of the particular genetic mutation associated with their condition. The drug — an older corticosteroid with no patent protection which has long been approved outside the United States, but had never been approved within the country — is intended to reduce inflammation and immune activity and thus keep DMD patients ambulatory longer.
Marathon’s application for approval was supported with data licensed from two pivotal trials conducted in over 200 DMD patients around 20 years ago. According to the company, which did some further unspecified analysis of older studies as well as conducting “17 new preclinical and clinical studies,” these data showed that Emflaza treatment improved muscle strength and other functional outcomes in responding patients, as well as as improvements in ambulation in one study. The company received a Priority Review for Emflaza (cutting four months off the usual FDA review process) as well Rare Pediatric Drug Status, which led to Marathon’s receipt of a Priority Review Voucher (PRV), once the drug was approved. Such PRV’s are “go to the head of the line” cards that recipient companies can use for any of their own drugs or which can be sold to other drug developers. As such, they are quite valuable awards; the latest sale of a PRV went for $125 million (the sale of Sarepta’s PRV for their own DMD drug, Exondys 51, to Gilead in February 2017) but sales of PRVs have claimed as much as $350 million in the past. Marathon was also granted seven years market exclusivity for the drug.
On Emflaza’s approval, Marathon said that they planned to price the drug at $89,000 per year — a shock to many, especially to patients and families who had been importing the drug for their use at a cost of about $1,000 per year. A public outcry ensued, including threats of Congressional hearings and scoldings by PhRMA. As a result, the company was forced to delay its launch of Emflaza.
In March, Marathon passed ownership of Emflaza to PTC Therapeutics in a deal expected to close before the end of June. In exchange for rights to the drug, Marathon received $75 million in cash, $65 million in PTC stock, and a percentage of net sales expected to be in the low to mid 20’s starting in 2018. Marathon also stands to gain another $50 million milestone payment tied to drug sales, the details of which were undisclosed. And in doing the deal, Marathon has passed on the drug pricing controversies to PTC.
PTC has yet to reveal how they intend to price Emflaza, saying that they are re-examining the price set by Marathon. While PTC’s price is likely to be lower than Marathon’s $89,000 per year, the drug is likely to be priced higher than the $1,000 per year paid by the estimated 25% (or more) of families who were formerly able to access the drug from overseas.
Why did PTC do the deal? It enables the company to expand its US footprint in the DMD marketplace ahead of the potential approval for its own flagship DMD drug, ataluren (Translarna). That compound was conditionally approved in Europe in 2014. The FDA twice declined to consider its approval in the United States, citing the need for more and better data (the drug failed in three clinical trials — two in DMD and one in cystic fibrosis). However, PTC is currently trying a third time, having filed for approval over the FDA’s protests, with an agency decision expected in October 2017. We will talk more about Translarna in our next post.