2019 Q4 Form 10-Q Financial Statement

#000107008119000057 Filed on October 30, 2019

View on sec.gov

Income Statement

Concept 2019 Q4 2019 Q3 2018 Q3
Revenue $96.50M $71.42M $53.59M
YoY Change 12.43% 33.26% 28.05%
Cost Of Revenue $3.500M $3.006M $3.292M
YoY Change -7.89% -8.69% 108.09%
Gross Profit $92.90M $68.41M $50.30M
YoY Change 12.47% 36.01% 24.9%
Gross Profit Margin 96.27% 95.79% 93.86%
Selling, General & Admin $63.50M $49.28M $38.37M
YoY Change 30.39% 28.45% 22.1%
% of Gross Profit 68.35% 72.04% 76.28%
Research & Development $81.80M $63.08M $54.37M
YoY Change 52.61% 16.02% 81.08%
% of Gross Profit 88.05% 92.2% 108.09%
Depreciation & Amortization $9.280M $8.140M $7.080M
YoY Change 37.08% 14.97% -31.2%
% of Gross Profit 9.99% 11.9% 14.08%
Operating Expenses $169.2M $131.9M $101.8M
YoY Change 28.73% 29.53% 39.97%
Operating Profit -$72.78M -$60.48M -$48.23M
YoY Change 61.25% 25.39% 56.12%
Interest Expense -$5.500M -$2.666M -$3.118M
YoY Change 71.88% -14.5% -8.86%
% of Operating Profit
Other Income/Expense, Net $11.20M $2.800M $734.0K
YoY Change -1344.44% 281.47% -4.18%
Pretax Income -$67.00M -$60.34M -$50.61M
YoY Change 35.9% 19.22% 50.87%
Income Tax $10.60M -$344.0K $355.0K
% Of Pretax Income
Net Earnings -$77.68M -$60.00M -$50.97M
YoY Change 60.72% 17.71% 51.07%
Net Earnings / Revenue -80.49% -84.01% -95.11%
Basic Earnings Per Share
Diluted Earnings Per Share -$1.251M -$1.062M -$1.060M
COMMON SHARES
Basic Shares Outstanding 61.63M shares 58.95M shares 46.71M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2019 Q4 2019 Q3 2018 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $686.6M $708.6M $249.4M
YoY Change 201.67% 184.12% 47.31%
Cash & Equivalents $288.0M $523.6M $206.9M
Short-Term Investments $398.5M $185.1M $42.50M
Other Short-Term Assets $17.90M $20.70M $8.000M
YoY Change 94.57% 158.75% 48.15%
Inventory $19.29M $17.11M $13.66M
Prepaid Expenses
Receivables $55.50M $60.40M $42.20M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $779.3M $806.9M $313.3M
YoY Change 142.88% 157.55% 41.59%
LONG-TERM ASSETS
Property, Plant & Equipment $21.55M $18.48M $8.805M
YoY Change 69.76% 109.93% 27.94%
Goodwill $82.34M $82.30M $82.30M
YoY Change 0.0% 0.0%
Intangibles $710.5M $702.9M $604.6M
YoY Change 1.35% 16.26% 336.79%
Long-Term Investments
YoY Change
Other Assets $16.40M $17.20M $1.600M
YoY Change 613.04% 975.0% 33.33%
Total Long-Term Assets $844.5M $834.6M $715.3M
YoY Change 5.78% 16.67% 388.42%
TOTAL ASSETS
Total Short-Term Assets $779.3M $806.9M $313.3M
Total Long-Term Assets $844.5M $834.6M $715.3M
Total Assets $1.624B $1.641B $1.029B
YoY Change 45.08% 59.58% 179.73%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $10.32M $8.959M $6.538M
YoY Change 72.04% 37.03% 9.08%
Accrued Expenses $70.00M $50.70M $18.00M
YoY Change 153.62% 181.67% 39.53%
Deferred Revenue $8.242M $8.810M $2.004M
YoY Change 121.8% 339.62%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $20.00M $20.00M $6.667M
YoY Change 71.42% 199.99%
Total Short-Term Liabilities $235.9M $183.5M $114.9M
YoY Change 41.4% 59.67% 59.84%
LONG-TERM LIABILITIES
Long-Term Debt $293.9M $293.1M $144.3M
YoY Change 107.9% 103.21% 0.82%
Other Long-Term Liabilities $141.0K $9.455M $101.0K
YoY Change 143.1% 9261.39% -62.45%
Total Long-Term Liabilities $294.0M $302.6M $144.4M
YoY Change 107.91% 109.62% 0.7%
TOTAL LIABILITIES
Total Short-Term Liabilities $235.9M $183.5M $114.9M
Total Long-Term Liabilities $294.0M $302.6M $144.4M
Total Liabilities $1.029B $977.8M $642.5M
YoY Change 33.96% 52.18% 189.64%
SHAREHOLDERS EQUITY
Retained Earnings -$1.190B -$1.113B -$890.6M
YoY Change 26.79% 24.95% 9.22%
Common Stock $62.00K $61.00K $51.00K
YoY Change 21.57% 19.61% 24.39%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $594.3M $663.7M $386.1M
YoY Change
Total Liabilities & Shareholders Equity $1.624B $1.641B $1.029B
YoY Change 45.08% 59.58% 179.73%

Cashflow Statement

Concept 2019 Q4 2019 Q3 2018 Q3
OPERATING ACTIVITIES
Net Income -$77.68M -$60.00M -$50.97M
YoY Change 60.72% 17.71% 51.07%
Depreciation, Depletion And Amortization $9.280M $8.140M $7.080M
YoY Change 37.08% 14.97% -31.2%
Cash From Operating Activities -$10.21M -$15.50M $3.380M
YoY Change -32.56% -558.58% -121.43%
INVESTING ACTIVITIES
Capital Expenditures -$4.660M -$4.250M -$1.300M
YoY Change 1.08% 226.92% 170.83%
Acquisitions
YoY Change
Other Investing Activities -$224.3M $34.68M -$22.81M
YoY Change 1022.26% -252.04% -215.49%
Cash From Investing Activities -$229.0M $30.43M -$24.12M
YoY Change 831.27% -226.16% -225.17%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 2.280M 382.4M 5.080M
YoY Change -38.71% 7426.77% 197.08%
NET CHANGE
Cash From Operating Activities -10.21M -15.50M 3.380M
Cash From Investing Activities -229.0M 30.43M -24.12M
Cash From Financing Activities 2.280M 382.4M 5.080M
Net Change In Cash -236.9M 397.3M -15.66M
YoY Change 557.96% -2636.97% -400.58%
FREE CASH FLOW
Cash From Operating Activities -$10.21M -$15.50M $3.380M
Capital Expenditures -$4.660M -$4.250M -$1.300M
Free Cash Flow -$5.550M -$11.25M $4.680M
YoY Change -47.29% -340.38% -130.61%

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<div style="line-height:120%;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;font-weight:bold;">The Company</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">PTC Therapeutics, Inc. (the “Company” or “PTC”) 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’s ability to globally 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.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The Company has </span><span style="font-family:inherit;font-size:10pt;"><span>two</span></span><span style="font-family:inherit;font-size:10pt;"> products, Translarna</span><span style="font-family:inherit;font-size:8pt;">™ </span><span style="font-family:inherit;font-size:10pt;">(ataluren) and Emflaza™ (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 five years and older in the </span><span style="font-family:inherit;font-size:10pt;"><span>31</span></span><span style="font-family:inherit;font-size:10pt;"> member states of the European Economic Area, or EEA. In July 2018, the European Commission approved a label-extension request to the marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. </span></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The Company has a pipeline of gene therapy product candidates, including PTC-AADC for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC, deficiency, or AADC deficiency. The Company is preparing a biologics license application, or BLA, for PTC-AADC for the treatment of AADC deficiency in the United States, which it anticipates submitting to the U.S. Food and Drug Administration, or FDA, in late 2019, with anticipated commercial launch in 2020, subject to approval. The Company is also preparing a marketing authorization application, or MAA, for PTC-AADC for the treatment of AADC deficiency in the European Union, or EU, for submission to the European Medicines Agency, or EMA, which will follow its BLA submission to the FDA. </span></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The Company holds the rights for the commercialization of Tegsedi™ (inotersen) and Waylivra™ (volanesorsen) for the treatment of rare diseases in countries in Latin America and the Caribbean. Tegsedi has received marketing authorization in the U.S., EU and Canada for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis. Tegsedi also received marketing authorization from ANVISA in October 2019 for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis in Brazil. Waylivra has received conditional marketing authorization in the EU for the treatment of familial chylomicronemia syndrome, or FCS. </span></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The Company also has a spinal muscular atrophy ("SMA") collaboration with F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc., referred to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. Currently, its collaboration has two pivotal clinical trials ongoing to evaluate the safety and effectiveness of risdiplam (RG7916, RO7034067), the lead compound in the SMA program. Roche is preparing an NDA and a MAA for risdiplam for the treatment of SMA in the United States and the EU, respectively, which Roche anticipates submitting to the FDA in the second half of 2019 and the EMA in the first half of 2020. In addition, the Company has a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas, including rare diseases and oncology.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The Company’s marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission following reassessment by the 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. 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 2022. The Company refers to the trial and open-label extension together as Study 041.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">The marketing authorization in the EEA was last renewed in July 2019 and is effective, unless extended, through August 5, 2020. The renewal was based on the Company’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. </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span 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 </span><span style="font-family:inherit;font-size:10pt;">September 30, 2019</span><span style="font-family:inherit;font-size:10pt;">, Translarna was available in over </span><span style="font-family:inherit;font-size:10pt;"><span>40</span></span><span style="font-family:inherit;font-size:10pt;"> countries on a commercial basis or pursuant to an EAP program. The Company expects to expand its commercial </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">activities across the EEA pursuant to the marketing authorization granted by the EMA throughout 2019 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.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span 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 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’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’ muscles. The Company intends to follow the FDA’s recommendation and will collect, using newer technologies via procedures and methods that the Company designed, such dystrophin data in a new study, Study 045, which the Company initiated in the fourth quarter of 2018. The Company expects that a potential re-submission of an NDA could occur in 2020. 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.</span></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">Emflaza was initially approved in the United States for the treatment of DMD in patients five years and older. In June 2019, the FDA approved the Company's label expansion request for Emflaza for patients two to five years of age. </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span 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 two 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. </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">Upon the closing of the Transaction, the Company paid to Marathon total upfront consideration comprised of </span><span style="font-family:inherit;font-size:10pt;"><span>$75.0 million</span></span><span style="font-family:inherit;font-size:10pt;"> in cash, funded through cash on hand, and </span><span style="font-family:inherit;font-size:10pt;"><span>6,683,598</span></span><span style="font-family:inherit;font-size:10pt;"> shares of the Company’s common stock. The number of shares of common stock issued at closing was determined by dividing </span><span style="font-family:inherit;font-size:10pt;"><span>$65.0 million</span></span><span style="font-family:inherit;font-size:10pt;"> by the volume-weighted average price per share of the Company’s common stock on the Nasdaq Stock Market for the </span><span style="font-family:inherit;font-size:10pt;"><span>15</span></span><span style="font-family:inherit;font-size:10pt;"> trading-day period ending on the third trading day immediately preceding the closing. Marathon is entitled to receive contingent payments from the Company based on annual net sales of Emflaza, up to a specified aggregate maximum amount over the expected commercial life of the asset, and a single </span><span style="font-family:inherit;font-size:10pt;"><span>$50.0 million</span></span><span style="font-family:inherit;font-size:10pt;"> sales-based milestone, in each case subject to the terms and conditions of the Asset Purchase Agreement.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">On August 23, 2018, the Company completed its acquisition of Agilis Biotherapeutics, Inc., or Agilis, pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018 (the “Merger Agreement”), by and among the Company, Agility Merger Sub, Inc., a Delaware corporation and the Company's wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC (the "Merger"). </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">Upon the closing of the Merger, the Company paid to Agilis equityholders total upfront consideration comprised of </span><span style="font-family:inherit;font-size:10pt;"><span>$49.2 million</span></span><span style="font-family:inherit;font-size:10pt;"> in cash and </span><span style="font-family:inherit;font-size:10pt;"><span>3,500,907</span></span><span style="font-family:inherit;font-size:10pt;"> shares of the Company’s common stock (the “Closing Stock Consideration”). The Closing Stock Consideration was determined by dividing </span><span style="font-family:inherit;font-size:10pt;"><span>$150.0 million</span></span><span style="font-family:inherit;font-size:10pt;"> by the volume-weighted average price per share of the Company’s common stock on the Nasdaq Global Select Market for the </span><span style="font-family:inherit;font-size:10pt;"><span>10</span></span><span style="font-family:inherit;font-size:10pt;"> consecutive trading-day period ending on the second trading-day immediately preceding the closing of the Merger. Agilis equityholders may become entitled to receive contingent payments from the Company based on the achievement of certain development, regulatory and net sales milestones as well as based upon a percentage of net sales of certain products. Under the Merger Agreement, the Company is required to pay </span><span style="font-family:inherit;font-size:10pt;"><span>$40.0 million</span></span><span style="font-family:inherit;font-size:10pt;"> of the development milestone payments no later than the second anniversary of the closing of the Merger, regardless of whether the applicable milestones have been achieved.</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">As of </span><span style="font-family:inherit;font-size:10pt;">September 30, 2019</span><span style="font-family:inherit;font-size:10pt;">, the Company had an accumulated deficit of approximately </span><span style="font-family:inherit;font-size:10pt;"><span>$1,112.8 million</span></span><span style="font-family:inherit;font-size:10pt;">. The Company has financed its operations to date primarily through the private offerings in September 2019 of </span><span style="font-family:inherit;font-size:10pt;">1.5%</span><span style="font-family:inherit;font-size:10pt;"> convertible senior notes due 2026 and in August 2015 of </span><span style="font-family:inherit;font-size:10pt;"><span>3.0%</span></span><span style="font-family:inherit;font-size:10pt;"> convertible senior notes due 2022 (see Note 11), public offerings of common stock in February 2014, October 2014, April 2018, January 2019, and September 2019, "at the market offerings" of its common stock, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company’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 since May 2017, the Company has generated revenue </span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;">from net sales of Emflaza for the treatment of DMD in the United States. The Company expects that cash flows from the sales of its products, together with the Company's cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months.</span></div>
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<div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of estimates</span></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;font-size:10pt;"><span 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’s research and development expenses, stock-based compensation, valuation procedures for the convertible notes, allowance for doubtful accounts, inventory, acquired intangible assets, fair value of the contingent consideration, 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.</span></div>
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2600000 USD
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P3Y10D
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ptct Contract With Customer Liability Amounts Recognized Beginning Of Measurement Period
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ptct Net Product Sales
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CY2019Q3 us-gaap Contract With Customer Liability
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12700000 USD
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7000000.0 USD
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5800000 USD
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19700000 USD
us-gaap Amortization Of Intangible Assets
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16800000 USD
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28136000 USD
CY2019Q3 us-gaap Finite Lived Intangible Assets Amortization Expense Year Four
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28136000 USD
CY2019Q3 ptct Finite Lived Intangible Assets Amortization Expense Year Five And Thereafter
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34968000 USD
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126410000 USD
us-gaap Indefinitelived Intangible Assets Acquired
IndefinitelivedIntangibleAssetsAcquired
576500000 USD
CY2019Q3 us-gaap Goodwill
Goodwill
82300000 USD

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