What happened
Despite a 10-1 advisory committee vote against PTC Therapeutics, Inc.'s (PTCT -0.14%) experimental Duchenne muscular dystrophy (DMD) drug Thursday, the stock is on the rise on Friday. A slight glimmer of hope the FDA might ignore the panel's recommendation, as it did a year ago for Sarepta Therapeutics (SRPT -0.25%), or eventually approve the drug, lifted the stock 12% higher as of 11:47 a.m. EDT Friday.
So what
The FDA had already refused to file PTC's application for Translarna earlier this year citing a lack of evidence that the experimental drug provides a clinical benefit for DMD patients. Pre-meeting briefing documents released earlier this week confirmed that the Agency still wants more data, and the advisory committee panel backed the Agency up with a 10-1 vote against the drug on Thursday.
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If the result had been surprising, the stock would probably be falling again on Friday. Instead, PTC Therapeutics stock is rising on a technicality. Although just one physician on the panel thinks there's enough positive data to conclude Translarna is effective, none thought the data suggests the drug is not effective. Instead, the 10 physicians that voted it down think the drug might be effective, but they need more data.
Now what
Translarna appears relatively well tolerated, which is why European regulators approved its marketing approval years ago with some conditions. The company needs to prove the drug is effective with a three-year outcome study, and renew the application each year until the study is complete. If successful, there's a chance results from this trial will also satisfy the FDA.
In the meantime, investors will want to keep an eye on PTC Therapeutics' dwindling cash reserves, which stood at about $181 million at the end of June. Although Translarna sales more than doubled in the first half of the year to $74 million, the company lost about $47 million during the same period.
