PTC Therapeutics is reducing its employees even further. The layoffs are carried out to achieve a 20% decrease in annualized operational expenses. On September 28, 2023, the biopharmaceutical business announced that approximately 25% of its staff had been let go. This layoff is primarily for those working on early-stage research projects and at the Hopewell, New Jersey, facility that manufactures gene therapy.
At the end of May, the business also declared that it would be laying off 8% of its employees. “The workforce and operating expenses cuts continue the efforts we began in May. This is to focus resources on key R&D programs and our commercial enterprise,” Matthew Klein, chief executive officer, said.
PTC is a biopharmaceutical company that is driven by science and patient needs. PTC stated that the company had 1,410 employees as of the end of 2022 in its most recent annual filing. Let us know more about the layoffs at PTC Therapeutics in this article.
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About the company
An American pharmaceutical company is PTC Therapeutics. Its main objective is the development of small-molecule medicines for oral administration. Additionally, it concentrates on gene therapy. It controls gene expression by focusing on mechanisms of post-transcriptional control (PTC) in orphan diseases.
The headquarters of this drug development company are in South Plainfield, New Jersey. According to its website, the company has sixteen locations overseas and six in the U.S. PTC Therapeutics specializes in pharmaceuticals and gene treatments for indications in oncology, neurology, and metabolism.
PTC Therapeutics announced layoffs in 2016
On March 23, 2016, PTC Therapeutics, Inc. declared it would cut its staff by about 18%. It would mostly affect U.S. employees and contractors, the business claimed. This cut resulted from a program PTC had in place to manage operating costs as efficiently as possible. It was doing so in response to the setback caused by the FDA’s refusal to file a letter for Translarna (ataluren). This drug was developed to treat genetic disorders caused by a nonsense mutation. PTC Therapeutics, Inc. discovered Translarna.
PTC remains focused on the global expansion of Translarna and its sale to patients outside of the United States. Parallel to this, PTC intended to consult with the FDA to decide the best way to provide Translarna to patients in the United States. (As of 2016)
The first round of layoffs in 2023
PTC Therapeutics decided to stop its preclinical and early research programs. These programs work on its gene therapy platform. The layoff announcement came out in May 2023. The company said it would cut 8% of its workforce from this layoff.
Emily Hill, the company’s CFO, was also informed that her employment would end on August 20, 2023. Also, she would no longer hold that position, the company claimed.
According to PTC, Hill’s employment has ended without cause. Also, as part of a general separation agreement, she will be eligible for many severance benefits.
According to the firm, evaluating its preclinical and clinical research projects led to prioritizing the strategic pipeline.
The discontinued gene therapy programs include Preclinical programs in Friedreich ataxia and Angelman syndrome and several other programs targeting rare CNS and ophthalmological disorders in preclinical development.
“The gene therapy Upstaza will still be developed and sold internationally,” according to PTC. According to the business, the prioritization would enable focusing on other CNS and metabolic illnesses. Also, the business can focus on PTC’s proprietary splicing platform.
“We decided to drop our pipeline gene therapy programs. This will allow PTC to focus R&D efforts on our other innovative and distinctive scientific platforms. We feel it will position us for long-term growth and success,” stated Matthew Klein, CEO.
Klein continued by saying that the business will try to ensure other parties can develop discontinued gene therapy programs.
The 8% work reduction will primarily impact U.S. workers. It is scheduled to be finished by August 31. According to the business, pre-termination-linked payments, perks, and employee severance and benefit costs will total around $7 million. All of these costs are expected to be paid in cash.
PTC expects to achieve a 15% residual operating expense reduction. This is for the fiscal year ending December 31, 2023.
The business also said that a phase 3 trial of vatiquinone in kids and teenagers with Friedreich ataxia did not achieve its main goal. In the meantime, PTC Therapeutics signed a $1 billion collaboration in October.
Second round of layoffs in 2023
PTC is undergoing restructuring for the second time this year. This time, the EMA declined to renew a conditional approval for the company’s medicine, Translarna, which is why it’s happening. PTC launched two reorganization plans, removed its CEO, and let go of its CFO in the past year.
The initial layoffs were expected to affect 8% of the company’s staff. It follows the failure of research on the experimental medication vatiquinone in the genetic nerve condition Friedreich ataxia.
PTC declared at the time that it would concentrate on medicines with a potential “return on investment.” But it might soon lose a medicine that has been approved.
Since 2014, Translarna has gained limited authorization from the European Medicines Agency. It happened after being approved for the nonsense mutation Duchenne muscular dystrophy. In exchange for the renewal of that approval, PTC devoted itself to carrying out another placebo-controlled study of the medication in 2017.
However, the study still needs to achieve its goal. It did not achieve statistically significant results in the primary analysis subgroup. According to PTC, the EMA’s choice was influenced by the study’s data.
The business plans to review a new opinion in January 2024 and is appealing the decision. During the second quarter, Translarna generated net product revenues of $96 million for PTC. Outside of the E.U., the drug has licenses in some nations. This includes Brazil, Russia, and Great Britain.
PTC intensifies job cuts
The company’s Duchenne muscular dystrophy (DMD) medicine may no longer be sold in Europe. This prompts PTC Therapeutics to disclose that it will cut more jobs than previously stated.
Those working in early-stage research programs will feel most of the changes. It will affect those at the gene therapy manufacturing facility in Hopewell, New Jersey. Along with those, sales and general and administrative expenses (SG&A) roles will be affected. At present, a quarter of the company’s employees will be leaving.
The layoff program has grown since it was first introduced in May. The company now plans to fire three times as many staff. The amount that would likely be clawed back in annual operational expenses has increased from the 15% target in May to the 20% stated in the September 28 announcement.
The company’s problems have remained the same since May. The biotech company’s Friedreich ataxia medicine, vatiquinone, first suffered another setback. This happened when it was discovered that it was no more effective than a placebo at treating a rare seizure illness.
Long-term concerns were raised by a recent suggestion from the Committee for Medicinal Products for Human Use (CHMP). It is a committee of the European Medicines Agency (EMA). The regulator did not renew the marketing license for PTC’s DMD medication, Translarna.
The committee stressed that the first authorization was always conditional while additional data was being sought. A review of past and long-term data on the usage of the drug was unable to alleviate the committee’s worries about Translarna’s efficacy. A study requested in a subgroup of patients failed to prove a significant rise in patients’ ability to walk.
As a result, PTC must consider the very serious prospect that the medicine will no longer be allowed to be sold in all E.U. member states. In the second quarter of 2023, Translarna generated $96.5 million for the business in all regions with prior approval. To discuss U.S. approval, the biotech was expecting a meeting with the FDA in the second half of this year.
PTC stated in a press release that it intends to ask the EMA committee for a reexamination.
Conclusion
Analysts at William Blair referred to the committee’s decision as “unfortunate and shocking.” Analysts “remain hopeful in PTC’s potential to revoke the CHMP opinion. This is due to its history of successfully revising with the EMA and vocal physician and patient advocacy groups,” they stated in a note on September 29.
As a result, PTC Therapeutics recently announced that it would be laying off 25% of its staff to save operational costs. PTC stated in a regulatory filing that it planned to finish its process by January 15 of the following year.
The business claimed that the cost-cutting initiatives would result in a 20 percent reduction in yearly operating expenses. This caused its shares to increase by nearly 3% in aftermarket trade. The company focuses on therapies with high unmet needs and assets. This is because they would generate a sizable return on investment, which coincides with a workforce reduction!
