Why Is Gene Therapy Player PTC Therapeutics Stock Plunging Today?

In its Q3 earnings release, PTC Therapeutics Inc PTCT reported a delay to the planned submission of sepiapterin in phenylketonuria (PKU).

PTC planned to file for FDA approval in the fourth quarter. But, the FDA pushed the timeline at a recent meeting, informing PTC that it needs to complete a 26-week nonclinical mouse study before seeking authorization.

PTC explained that the original plan was to seek approval under the 505(b)(2) pathway, which would have allowed the company to use data on a different reference drug to support its application. 

However, PTC changed to the 505(b)(1) pathway after buying the candidate from Censa Pharmaceuticals.

In a written response to PTC, the FDA said it sees "the value of upright stability as a clinically meaningful endpoint." PTC has requested a meeting with the FDA to discuss the issues raised in the letter.

William Blair writes that PTC executives believe sepiapterin "is better suited for the Section 505(b)(1) pathway due to its differentiated mechanism." 

The delay will push the filing for FDA approval to the third quarter of next year unless the agency allows PTC to submit the mouse data during the review process. If that happens, PTC could file in the second quarter of next year.

The analysts called the PKU delay an "unfortunate … minor setback." The analysts continue "to view the results of the phase 3 APHENITY trial as supportive of approval" and see opportunities for the drug outside the U.S., where exposure to BioMarin Pharmaceutical's Inc's BMRN rival drug Kuvan is lower. 

PTC Therapeutics is also talking to the FDA regarding resuming U.S. enrollment in the PIVOT-HD study for PTC518 for Huntington's disease.

Enrollment is ongoing overseas but has been on hold in the U.S. for one year. 

The FDA told PTC, "six months of clinical safety data demonstrating a similar favorable safety profile could support 12-month dosing." 

Last month, PTC laid off 25% of its workforce, primarily working on early-stage research programs, employees at the gene therapy manufacturing facility in New Jersey.

Price Action: PTCT shares are down 22.40% at $18.60 on the last check Friday.