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| | Page No. |
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| PART I | |
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| Item 1. Business | 6 |
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| Item 1A. Risk Factors | 54 |
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| Item 1B. Unresolved Staff Comments | 103 |
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| Item 1C. Cybersecurity | 103 |
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| Item 2. Properties | 104 |
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| Item 3. Legal Proceedings | 104 |
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| Item 4. Mine Safety Disclosures | 104 |
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| PART II | |
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| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 105 |
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| Item 6. [Reserved] | 105 |
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| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 105 |
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| Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 129 |
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| Item 8. Financial Statements and Supplementary Data | 131 |
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| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 188 |
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| Item 9A. Controls and Procedures | 188 |
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| Item 9B. Other Information | 191 |
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| Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections | 192 |
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| PART III | |
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| Item 10. Directors, Executive Officers and Corporate Governance | 193 |
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| Item 11. Executive Compensation | 193 |
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| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 193 |
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| Item 13. Certain Relationships and Related Transactions, and Director Independence | 193 |
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| Item 14. Principal Accountant Fees and Services | 193 |
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| PART IV | |
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| Item 15. Exhibits and Financial Statement Schedules | 194 |
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| SIGNATURES | 201 |
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i
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:
| ● | the outcome of pricing, coverage and reimbursement negotiations with third party payors for our products or product candidates that we commercialize or may commercialize in the future; |
| ● | expectations with respect to Sephience for the treatment of phenylketonuria, or PKU, including commercialization and the potential achievement of sales milestones and contingent payments that we may be obligated to make; |
| ● | our ability to maintain marketing authorization of Translarna for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in geographies in which it has approval, including the effect of the European Commission's adoption of the negative opinion from the Committee for Medicinal Products for Human Use on Translarna, and the impact of the withdrawal of the Translarna new drug application in the United States, on existing approvals; |
| ● | the ability and willingness of individual countries within the European Union, or EU to leverage Articles 117(3) and 5(1) of the EU Directive 2001/83 to allow continued commercial use of Translarna; |
| ● | expectations with respect to our license and collaboration agreement with Novartis Pharmaceuticals Corporation, or Novartis, for votoplam for the treatment of Huntington's disease including our right to receive development, regulatory and sales milestones, profit sharing and royalty payments from Novartis, the design and expected timing of clinical trials and studies, the availability of data, and regulatory submissions and responses, including potential accelerated approval; |
| ● | expectations with respect to vatiquinone for the treatment of Friedreich’s ataxia, including with respect to the design and expected timing of clinical trials and studies, the availability of data, and regulatory submissions and responses and potential approvals and other matters; |
| ● | expectations with respect to Upstaza/Kebilidi for the treatment of Aromatic L-Amino Decarboxylase deficiency, including commercialization, manufacturing capabilities, and the potential achievement of sales milestones and contingent payments that we may be obligated to make; |
| ● | our expectations with respect to the commercialization of Evrysdi® (risdiplam) under our program directed against spinal muscular atrophy in collaboration with F. Hoffmann La Roche Ltd and Hoffmann La Roche Inc. and the Spinal Muscular Atrophy Foundation and our estimates regarding future revenues from the achievement of milestones in that program; |
| ● | our expectations and the potential financial impact and benefits related to our Collaboration and License Agreement with a subsidiary of Ionis Pharmaceuticals, Inc., including the commercialization of Tegsedi and Waylivra, and our expectations with respect to royalty payments by us based on our potential achievement of certain net sales thresholds; |
| ● | significant business effects, including the effects of industry, market, economic, political or regulatory conditions; |
| ● | changes in tax and other laws, regulations, rates and policies; |
| ● | the eligible patient base and commercial potential of our products and product candidates; |
| ● | the timing and scope of our commercialization of our products and product candidates; |
| ● | our estimates regarding the potential market opportunity for our products or product candidates, including the size of eligible patient populations and our ability to identify such patients; |
| ● | our ability to obtain additional and maintain existing reimbursed named patient and cohort early access programs for our products on adequate terms, or at all; |
| ● | our estimates regarding expenses, future revenues, third-party discounts and rebates, capital requirements and needs for additional financing, including our ability to maintain the level of our expenses consistent with our internal budgets and forecasts; |
| ● | our ability to realize the anticipated benefits of our acquisitions or other strategic transactions, including the possibility that the expected impact of benefits from the acquisitions or strategic transactions will not be realized or will not be realized within the expected time period, significant transaction costs, the integration of operations and employees into our business, our ability to obtain marketing approval of our product candidates we acquired from the acquisitions or other strategic transactions and unknown liabilities; |
| ● | the rate and degree of market acceptance and clinical utility of any of our products or product candidates; |
| ● | the ability and willingness of patients and healthcare professionals to access our products and product candidates through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome; |
| ● | the timing of, and our ability to obtain additional marketing authorizations for our products and product candidates; |
| ● | the ability of our products and our product candidates to meet existing or future regulatory standards; |
| ● | the potential receipt of revenues from future sales of our products or product candidates; |
| ● | the expected impact of our loss of market exclusivity for Emflaza® (deflazacort) for the treatment of Duchenne muscular dystrophy in the United States under the Orphan Drug Act of 1983; |
| ● | our scientific approach and general development progress; |
| ● | our sales, marketing and distribution capabilities and strategy, including the ability of our third-party manufacturers to manufacture and deliver our products and product candidates in clinically and commercially sufficient quantities and the ability of distributors to process orders in a timely manner and satisfy their other obligations to us; |
| ● | our ability to establish and maintain arrangements for the manufacture of our products and product candidates that are sufficient to meet clinical trial and commercial launch requirements; |
| ● | our ability to complete any post-marketing requirements imposed by regulatory agencies with respect to our products; |
| ● | our ability to satisfy our obligations under the terms of our lease agreements; |
| ● | our ability to satisfy our obligations under the indenture governing our 1.50% convertible senior notes due September 15, 2026; |
| ● | our regulatory submissions, including with respect to timing and outcome of regulatory review; |
| ● | the timing and conduct of our ongoing, planned and potential future clinical trials and studies for our splicing and inflammation and ferroptosis programs as well as studies in our products for maintaining authorizations, label extensions and additional indications, including the timing of initiation, enrollment and completion of the trials and the period during which the results of the trials will become available; |
| ● | our plans to advance our earlier stage programs and pursue research and development of other product candidates, including our splicing and inflammation and ferroptosis programs; |
| ● | the sufficiency of our cash resources and our ability to obtain adequate financing in the future on favorable terms or at all, for our foreseeable and unforeseeable operating expenses and capital expenditure requirements; |
| ● | whether we may pursue business development opportunities, including potential collaborations, alliances, and acquisition or licensing of assets and our ability to successfully develop or commercialize any assets to which we may gain rights pursuant to such business development opportunities; |
| ● | the potential advantages of our products and any product candidate; |
| ● | our intellectual property position; |
| ● | the impact of government laws and regulations; |
| ● | the impact of litigation that has been or may be brought against us or of litigation that we are pursuing against others; and |
| ● | our competitive position. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly under the heading “Summary of Risk Factors” and the risk factors detailed further in Part I, Item 1A. Risk Factors that we believe could cause actual results or events to differ materially from the forward-looking statements that we make.
Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
In this Annual Report on Form 10-K, unless otherwise stated or the context otherwise requires, references to “PTC,” “PTC Therapeutics,” “we,” “us,” “our,” “the Company,” and similar references refer to PTC Therapeutics, Inc. and, where appropriate, its subsidiaries. The trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners.
All website addresses given in this Annual Report on Form 10-K are for information only and are not intended to be an active link or to incorporate any website information into this document.
SUMMARY OF RISK FACTORS
Below is a summary of the principal risk factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found in Item 1A. Risk Factors, of this Annual Report on Form 10-K, and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities Exchange Commission, before making an investment decision regarding our common stock. The forward-looking statements discussed above are qualified by these risk factors. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.
Summary of Risk Factors
| ● | We may be unable to continue to execute our commercial strategy for our products, fail to obtain renewal of, or satisfy the conditions of our marketing authorization for our products; |
| ● | Delays or failures in obtaining regulatory approval would materially impair our commercialization capabilities; |
| ● | We may be unable to continue to commercialize Translarna for nmDMD in the EEA if individual countries in the EU do not leverage Articles 117(3) and 5(1) of the EU Directive 2001/83 to allow continued commercial use of Translarna. The loss of the Translarna marketing authorization in the EEA may affect future reauthorizations in other jurisdictions; |
| ● | We may not qualify for certain specialized pathways to develop our product candidates or to seek approval; |
| ● | We or our collaborators may experience any of a number of possible unforeseen events in connection with clinical trials related to our products and product candidates; |
| ● | Subgroup, retrospective, post-hoc, and certain statistical analyses may not be reliable and typically will not form the basis for regulatory approval; |
| ● | We may experience delays or difficulties in the enrollment of patients in our clinical trials; |
| ● | We may identify serious adverse side effects during the development or further development of any product or product candidate; |
| ● | Our products and product candidates may be difficult to manufacture; |
| ● | Our products and product candidates may fail to achieve market acceptance in the medical community; |
| ● | We may be unable to establish or maintain sales, marketing and distribution capabilities or enter into agreements with third parties to market, sell and distribute our products or product candidates; |
| ● | A significant portion of our commercial sales currently occurs in territories outside of the United States which subjects us to additional business risks and laws and regulations, including those governing export restrictions and economic sanctions; |
| ● | We face substantial competition; |
| ● | Our products or product candidates may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; |
| ● | There may be future changes in legal and regulatory requirements that may materially impact our results of operations; |
| ● | We have incurred significant losses since our inception and expect to continue to incur significant operating expenses for the foreseeable future. We may need additional funding and we may never generate profits from operations or maintain profitability; |
| ● | We may engage in strategic transactions to acquire assets, businesses, or rights to products, product candidates or technologies or from collaborations or make investments in other companies or technologies that could harm our business and dilute our stockholders’ ownership; |
| ● | Raising additional capital may dilute our stockholders’ ownership, restrict our operations or require us to relinquish rights to our technologies or product candidates; |
| ● | We may not be able to comply with applicable laws and regulations for our products or product candidates; |
| ● | We may not be able to obtain orphan drug exclusivity for our products or product candidates in either the United States or the EU; |
| ● | All pharmaceutical products for which marketing authorization has been granted are subject to extensive and rigorous regulation; |
| ● | Failure to obtain and maintain acceptable pricing and reimbursement terms for our products would delay our commercialization efforts; |
| ● | Legislative and regulatory changes affecting the pharmaceutical industry or the healthcare system more broadly may negatively affect our business; |
| ● | We may fail to properly allocate our resources; |
| ● | We contract with third parties for the manufacture and distribution of our products and certain of our product candidates and these third parties may encounter issues that affect our business; |
| ● | We rely on third parties to conduct our preclinical and clinical trials and other essential services; |
| ● | We currently depend, and expect to continue to depend, on collaborations with third parties for the development and commercialization of some of our products and product candidates; |
| ● | Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our, or our collaborators’ or third-party vendors’, cyber-security; |
| ● | We may be subject to product liability and other civil lawsuits; |
| ● | We may be unable to retain our key executives; |
| ● | We may be unable to obtain or maintain patent protection for our technology and products; |
| ● | We may become involved in lawsuits to protect or enforce our intellectual property or in connection with allegations that we are infringing on third-party intellectual property rights; |
| ● | Without patent protection, our marketed products may face generic competition; |
| ● | We may not obtain or maintain adequate trademark protection for our brand names; |
| ● | Our rights to develop and commercialize Upstaza/Kebilidi are subject, in part, to the terms and conditions of licenses granted to us by others; |
| ● | We may not have sufficient cash flow from our business to make payments on our debt; and |
| ● | The price of our common stock may be volatile and fluctuate substantially. |
