PTC Therapeutics Inc. plans to buy privately-held Marathon Pharmaceuticals' controversial Duchenne muscular dystrophy drug for about $75 million in cash and $65 million in PTC common stock. Marathon is also eligible for annual net sales-based payments starting next year, and one $50 million sales-based milestone payment, with the purchase expected to close in the second quarter of 2017. The drug, Emflaza, was approved by the Food and Drug Administration in February and quickly became controversial once Marathon set its price at $89,000-a-year. Marathon paused the drug's launch after the outcry. While high price tags are common for rare disease drugs, Emflaza is part of a class of drugs called corticosteroids that are used for DMD in other parts of the world. PTC Therapeutics Chief Commercial Officer Mark Rothera said the company plans to "re-examine the price of Emflaza," and that more details would be released once the purchase closes. But company leadership also maintained that the drug is a "best-in-class anti-inflammatory disease-modifying therapy," as Chief Executive Officer Stuart Peltz said on the company's earnings call. "We believe from both published data and data from our own clinical trial, then Emflaza has approved efficacy and a desirable safety profile over existing steroid-based treatment." This type of argument is commonly used by drugmakers to justify high price tags. But the company claimed it is committed to patient access, adding that about 9,000 DMD patients could benefit from the drug and "only a small fraction of these patients have been able to access Emflaza," Chief Financial Officer Shane William Charles Kovacs said. PTC Therapeutics shares declined 6.6% in pre-market trade Thursday after reporting fourth-quarter earnings and announcing the drug acquisition. Company shares have declined 12.3% over the last three months, compared with a 5.6% rise in the S&P 500 .
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