2018 Q2 Form 10-Q Financial Statement

#000107008118000050 Filed on May 09, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2018 Q1 2017 Q1
Revenue $68.74M $56.06M $26.55M
YoY Change 43.33% 111.18% 40.5%
Cost Of Revenue $2.572M $3.045M $39.00K
YoY Change 239.31% 7707.69%
Gross Profit $66.17M $53.02M $26.51M
YoY Change 40.18% 100.0% 40.29%
Gross Profit Margin 96.26% 94.57% 99.85%
Selling, General & Admin $33.55M $32.97M $25.50M
YoY Change 16.21% 29.29% -1.69%
% of Gross Profit 50.69% 62.19% 96.2%
Research & Development $32.61M $31.36M $27.36M
YoY Change 5.75% 14.62% -12.85%
% of Gross Profit 49.28% 59.16% 103.23%
Depreciation & Amortization $6.220M $6.022M $612.0K
YoY Change 640.48% 883.99% -27.92%
% of Gross Profit 9.4% 11.36% 2.31%
Operating Expenses $74.32M $72.81M $52.90M
YoY Change 22.92% 37.62% -7.73%
Operating Profit -$5.574M -$16.74M -$26.36M
YoY Change -55.4% -36.47% -31.44%
Interest Expense -$2.884M -$3.303M -$2.219M
YoY Change -4.12% 48.85% 13.45%
% of Operating Profit
Other Income/Expense, Net -$673.0K $1.004M -$318.0K
YoY Change -63.02% -415.72% -55.89%
Pretax Income -$9.131M -$19.04M -$28.89M
YoY Change -47.3% -34.09% -29.74%
Income Tax $389.0K $221.0K $165.0K
% Of Pretax Income
Net Earnings -$9.520M -$19.26M -$29.06M
YoY Change -45.52% -33.71% -29.53%
Net Earnings / Revenue -13.85% -34.36% -109.45%
Basic Earnings Per Share
Diluted Earnings Per Share -$206.1K -$463.9K -$848.4K
COMMON SHARES
Basic Shares Outstanding 46.45M shares 41.80M shares 34.56M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2018 Q2 2018 Q1 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $296.1M $178.3M $202.6M
YoY Change 63.5% -11.99% -32.17%
Cash & Equivalents $223.8M $97.68M $54.11M
Short-Term Investments $72.30M $80.60M $148.5M
Other Short-Term Assets $6.300M $5.800M $4.600M
YoY Change 21.15% 26.09% -9.8%
Inventory $13.85M $12.36M $1.354M
Prepaid Expenses
Receivables $59.40M $45.60M $32.20M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $375.6M $242.0M $240.7M
YoY Change 65.5% 0.53% -26.25%
LONG-TERM ASSETS
Property, Plant & Equipment $8.217M $8.302M $7.059M
YoY Change 20.15% 17.61% -15.96%
Goodwill
YoY Change
Intangibles $126.3M $127.6M
YoY Change -14.75%
Long-Term Investments
YoY Change
Other Assets $1.600M $1.500M $900.0K
YoY Change 45.45% 66.67% 125.0%
Total Long-Term Assets $136.1M $137.4M $7.918M
YoY Change -12.8% 1635.48% -10.02%
TOTAL ASSETS
Total Short-Term Assets $375.6M $242.0M $240.7M
Total Long-Term Assets $136.1M $137.4M $7.918M
Total Assets $511.8M $379.4M $248.6M
YoY Change 33.59% 52.59% -25.82%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $4.364M $3.104M $3.579M
YoY Change -28.01% -13.27% -77.63%
Accrued Expenses $13.00M $9.200M $7.600M
YoY Change 17.12% 21.05% 123.53%
Deferred Revenue $0.00
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $1.666M
YoY Change
Total Short-Term Liabilities $86.47M $72.72M $45.42M
YoY Change 27.2% 60.1% 3.46%
LONG-TERM LIABILITIES
Long-Term Debt $147.2M $146.9M $99.90M
YoY Change 4.22% 47.03% 6.95%
Other Long-Term Liabilities $153.0K $209.0K $311.0K
YoY Change -47.6% -32.8% -84.45%
Total Long-Term Liabilities $147.4M $147.1M $100.2M
YoY Change 4.11% 46.78% 5.04%
TOTAL LIABILITIES
Total Short-Term Liabilities $86.47M $72.72M $45.42M
Total Long-Term Liabilities $147.4M $147.1M $100.2M
Total Liabilities $244.4M $229.1M $147.8M
YoY Change 14.54% 54.99% 6.19%
SHAREHOLDERS EQUITY
Retained Earnings -$839.6M -$830.1M -$764.2M
YoY Change 7.42% 8.63%
Common Stock $47.00K $42.00K $34.00K
YoY Change 14.63% 23.53%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $267.4M $150.3M $100.8M
YoY Change
Total Liabilities & Shareholders Equity $511.8M $379.4M $248.6M
YoY Change 33.59% 52.59% -25.82%

Cashflow Statement

Concept 2018 Q2 2018 Q1 2017 Q1
OPERATING ACTIVITIES
Net Income -$9.520M -$19.26M -$29.06M
YoY Change -45.52% -33.71% -29.53%
Depreciation, Depletion And Amortization $6.220M $6.022M $612.0K
YoY Change 640.48% 883.99% -27.92%
Cash From Operating Activities $0.00 -$15.88M -$28.90M
YoY Change -100.0% -45.06% -30.51%
INVESTING ACTIVITIES
Capital Expenditures -$710.0K $479.0K $225.0K
YoY Change 102.86% 112.89% -15.09%
Acquisitions
YoY Change
Other Investing Activities $8.450M -$1.170M $24.64M
YoY Change -64.54% -104.75% 10.1%
Cash From Investing Activities $7.750M -$1.648M $24.42M
YoY Change -66.98% -106.75% 10.39%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $117.9M $0.00
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 121.6M $1.136M $663.0K
YoY Change 204.08% 71.34% 2110.0%
NET CHANGE
Cash From Operating Activities 0.000 -$15.88M -$28.90M
Cash From Investing Activities 7.750M -$1.648M $24.42M
Cash From Financing Activities 121.6M $1.136M $663.0K
Net Change In Cash 129.4M -$16.39M -$3.821M
YoY Change 68.49% 328.95% -80.34%
FREE CASH FLOW
Cash From Operating Activities $0.00 -$15.88M -$28.90M
Capital Expenditures -$710.0K $479.0K $225.0K
Free Cash Flow $710.0K -$16.36M -$29.13M
YoY Change -94.81% -43.84% -30.41%

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CY2018Q1 us-gaap Nature Of Operations
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">The Company</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">PTC Therapeutics,&#160;Inc. (the &#8220;Company&#8221; or &#8220;PTC&#8221;) is a science-led global biopharmaceutical company focused on the discovery, development and commercialization of clinically-differentiated medicines that provide benefits to patients with rare disorders. The Company has launched two rare disease products and has a global commercial footprint. The Company&#8217;s recent ability to commercialize products is the foundation that drives its continued investment in a robust pipeline of transformative medicines and its mission to provide access to best-in-class treatments for patients who have an unmet medical need.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has two products, Translarna</font><font style="font-family:inherit;font-size:8pt;">&#8482; </font><font style="font-family:inherit;font-size:10pt;">(ataluren) and Emflaza&#8482; (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder. Translarna received marketing authorization from the European Commission in August 2014 for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in ambulatory patients aged </font><font style="font-family:inherit;font-size:10pt;">five</font><font style="font-family:inherit;font-size:10pt;"> years and older in the </font><font style="font-family:inherit;font-size:10pt;">31</font><font style="font-family:inherit;font-size:10pt;"> member states of the European Economic Area, or EEA. Emflaza is approved in the United States for the treatment of DMD in patients five years and older. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission following reassessment by the European Medicines Agency, or EMA, of the benefit-risk balance of the authorization, which the Company refers to as the annual EMA reassessment. This marketing authorization is further subject to the specific obligation to conduct and submit the results of a multi-center, randomized, double-blind, 18-month, placebo-controlled trial, followed by an 18-month open-label extension, according to an agreed protocol, in order to confirm the efficacy and safety of Translarna in the approved patient population. The final report on the trial and open-label extension is to be submitted by the Company to the EMA by the end of the third quarter of 2021. The Company refers to the trial and open-label extension together as Study 041.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The marketing authorization in the EEA was last renewed in June 2017 and is effective, unless extended, through August 5, 2018. In February 2018, the Company submitted a marketing authorization renewal request to the EMA. The renewal was based on the Company&#8217;s commitment to conduct Study 041 and the totality of the clinical data available from its trials and studies of Translarna for the treatment of nmDMD, including the safety and efficacy results of the Phase 2b and Phase 3 clinical trials. The primary efficacy endpoint was not achieved in either trial within the pre-specified level of statistical significance.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2014, the Company initiated reimbursed early access programs, or EAP programs, for Translarna for nmDMD patients in selected territories in the EEA and recorded its first sales of Translarna in the third quarter of 2014 pursuant to an EAP program. In December 2014, the Company recorded its first commercial sales in Germany. As of </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, Translarna was available in over </font><font style="font-family:inherit;font-size:10pt;">25</font><font style="font-family:inherit;font-size:10pt;"> countries on a commercial basis or pursuant to an EAP program. The Company expects to expand its launch activities across the EEA pursuant to the marketing authorization granted by the EMA throughout 2018 and future years, subject to continued renewal of its marketing authorization following annual EMA reassessments and successful completion of pricing and reimbursement negotiations. Concurrently, the Company plans to continue to pursue EAP programs in select countries where those mechanisms exist, both within the EEA and in other countries that will reference the marketing authorization in the EEA.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Translarna is an investigational new drug in the United States. During the first quarter of 2017, the Company filed a New Drug Application, or NDA, over protest with the United States Food and Drug Administration, (the "FDA"), for which the FDA granted a standard review. In October 2017, the Office of Drug Evaluation I of the FDA issued a complete response letter for the NDA, stating that it was unable to approve the application in its current form. In response, the Company filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied PTC&#8217;s appeal of the Complete Response Letter. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production in nmDMD patients&#8217; muscles. The Company intends to follow the FDA&#8217;s recommendation and will collect such dystrophin data using newer technologies via procedures and methods that it is currently designing and expects to initiate such a study by the end of 2018. Additionally, should a re-submission of an NDA receive accelerated approval, the Office of New Drugs stated that Study 041, which is currently enrolling, could serve as the confirmatory post-approval trial required in connection with the accelerated approval framework.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The NDA, which seeks approval of Translarna for the treatment of nmDMD in the United States, was initially submitted by the Company in December 2015. In February 2016, following the submission, the Company received a Refuse to File letter from the FDA regarding the NDA. The FDA stated in the Refuse to File letter that the NDA was not sufficiently complete to permit a substantive review. Specifically, the Company was notified in the letter that, in the view of the FDA, both the Phase&#160;2b and Phase&#160;3 ACT DMD trials were negative and do not provide substantial evidence of effectiveness and that the NDA did not contain adequate information regarding the abuse potential of Translarna. Additionally, the FDA stated that the Company had proposed a post-hoc adjustment of ACT DMD that eliminates data from a majority of enrolled patients. During July 2016, the Company appealed the Refuse to File decision via the formal dispute resolution process within FDA&#8217;s Center for Drug Evaluation and Research; however, this appeal was denied by the FDA&#8217;s Office of Drug Evaluation I in October 2016. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On April 20, 2017, the Company completed its acquisition of all rights to Emflaza, or the Transaction. Emflaza is approved in the United States for the treatment of DMD in patients five years and older. The Transaction was completed pursuant to an asset purchase agreement, dated March 15, 2017, as amended on April 20, 2017, (the "Asset Purchase Agreement"), by and between the Company and Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), or Marathon. The Transaction was accounted for as an asset acquisition. The assets acquired by the Company in the Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. The Company assumed certain liabilities and obligations in the Transaction arising out of, or relating to, the assets acquired in the Transaction. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon the closing of the Transaction, the Company paid to Marathon total upfront consideration comprised of </font><font style="font-family:inherit;font-size:10pt;">$75.0 million</font><font style="font-family:inherit;font-size:10pt;"> in cash, funded through cash on hand, and </font><font style="font-family:inherit;font-size:10pt;">6,683,598</font><font style="font-family:inherit;font-size:10pt;"> shares of the Company&#8217;s common stock. The number of shares of common stock issued at closing was determined by dividing </font><font style="font-family:inherit;font-size:10pt;">$65.0 million</font><font style="font-family:inherit;font-size:10pt;"> by the volume weighted average price per share of the Company&#8217;s common stock on the Nasdaq Stock Market for the </font><font style="font-family:inherit;font-size:10pt;">15</font><font style="font-family:inherit;font-size:10pt;"> trading-day period ending on the third trading day immediately preceding the closing. Marathon will be entitled to receive contingent payments from the Company based on annual net sales of Emflaza beginning in 2018, up to a specified aggregate maximum amount over the expected commercial life of the asset, and a single </font><font style="font-family:inherit;font-size:10pt;">$50.0 million</font><font style="font-family:inherit;font-size:10pt;"> sales-based milestone, in each case subject to the terms and conditions of the Asset Purchase Agreement.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of </font><font style="font-family:inherit;font-size:10pt;">March&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Company had an accumulated deficit of approximately </font><font style="font-family:inherit;font-size:10pt;">$830.1 million</font><font style="font-family:inherit;font-size:10pt;">. The Company has financed its operations to date primarily through the private offering in August&#160;2015 of </font><font style="font-family:inherit;font-size:10pt;">3.00%</font><font style="font-family:inherit;font-size:10pt;"> convertible senior notes due 2022 (see Note 9), public offerings of common stock in February 2014 and October 2014, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company&#8217;s product candidates. Since 2014, the Company has also relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States, and in May 2017, the Company began to recognize revenue generated from net sales of Emflaza for the treatment of DMD in the United States. The Company expects that the cash flows from the sales of its products, together with the Company's cash, cash equivalents and marketable securities, including the net proceeds from the Company's underwritten public offering of its common stock that close in April 2018 as discussed in Note 12, will be sufficient to fund its operations for at least the next twelve months.</font></div></div>
CY2018Q1 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company&#8217;s research and development expenses, stock-based compensation, valuation procedures for the convertible notes, allowance for doubtful accounts, inventory, acquired intangible assets, and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.</font></div></div>

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