European regulators voted against fully approving a Duchenne muscular dystrophy treatment from PTC Therapeutics, and PTC stock crashed Friday.
On today's stock market, PTC shares collapsed 29.8% to 26.26.
The Committee for Medicine Products for Human Use for the European Medicines Agency issued a negative opinion of the PTC drug, Translarna, for patients with the muscle-weakening disease.
The advisors also voted against renewing the conditional approval for Translarna. Conditional approval allows a medicine to be fast-tracked for approval while still under testing. But the drugmaker must continue testing the drug to prove its benefit. The European advisors says PTC's evidence didn't pass muster.
"We are surprised and extremely disappointed by the CHMP decision, given the well-established and favorable safety and (effectiveness) profile of Translarna," Chief Executive Matthew Klein said in a written statement.
PTC stock hit its lowest point since March 2018 just after the opening bell Friday.
PTC Stock: Evidence Insufficient
Translarna initially won conditional approval in Europe in 2014 based on the results of a test called Study 007. Regulators renewed the conditional approval in 2017 on the basis PTC would run a third placebo-controlled test, dubbed Study 041.
The results weren't statistically significant in the primary testing group. But PTC says a broader group of patients showed "nominally statistically significant" improvements. Duchenne muscular dystrophy weakens the muscles and eventually robs patients of the ability to walk.
In Study 041, patients showed improvements in how far they could walk for six minutes, on a 17-item scale of functional motor abilities and timed function tests. Further, a real-world registry known as Stride showed 300 boys with the disease could still walk after taking Translarna for 3.5 years.
But, bearishly for PTC stock, European regulators said the evidence isn't sufficient for another review.
Reexamination Requested
PTC says it will now ask the European Commission to reexamine its decision. Leerink analyst Joseph Schwartz said he expects the commission to issue its new opinion in January.
Schwartz kept his market perform rating on PTC stock.
"PTC said that they will focus on the evidence of benefit in the overall population of 700 boys included in Studies 007, 020 and 041, attempt to designate a different primary analysis for Study 041 and address concerns raised around the robustness of Stride data in the reexamination," he said in a note.
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