What happened

Shares of PTC Therapeutics (NASDAQ:PTCT) fell exactly 18% last month, according to data provided by S&P Global Market Intelligence. The development-stage biopharma stock took a breather in October -- along with the majority of the stock market -- following a nearly 175% surge from the beginning of the year to the beginning of the month, although it's still up over 110% on the year.

However, the broad stock market losses last month might have masked a real concern for PTC Therapeutics. While the company's drug candidate for treating spinal muscular atrophy (SMA), a genetic disease that's often fatal, was long thought to have a shot to dominate the blockbuster market opportunity, recent data from a competitor hint that it might not even get that chance.

A researcher in a lab with a disappointed look on his face.

Image source: Getty Images.

So what

Until recently, there weren't any FDA-approved options for treating SMA, which severely impairs motor function over time. As the disease progresses, individuals can lose the ability to walk, swallow, and breathe. But Biogen and Ionis Pharmaceuticals gained marketing approval for Spinraza in late 2016, providing patients with the first-ever treatment for the disease. The drug became a blockbuster overnight and delivered $468 million in revenue in the third quarter of 2018. 

There's a solid argument to be made in favor of Spinraza, including safe and effective use in 6,000 patients, but it has notable drawbacks, such as the fact that it's injected into the spine. That opened the door for PTC Therapeutics and Roche, which are developing an oral treatment called risdiplam. It has demonstrated promising results in smaller trials and bested Spinraza on several important metrics. As the smaller player's stock chart demonstrates, investors didn't need any help imagining what could be. 

But things move fast in biopharma. In October Novartis reported even better results than those reported by risdiplam. The company's gene therapy AVXS-101, added to the pipeline from the $8.7 billion acquisition of AveXis, demonstrated 100% survival rates at the two-year mark. Even better, only one dose (administered through an IV) was required. While the data included only 15 patients, regulatory agencies across the world are expected to review the drug for use in infants up to nine months old and announce decisions by mid-2019.

Now what

Novartis will continue developing AVXS-101 to collect more data in larger trials and different patient groups (read: older than infants), but it appears likely to beat risdiplam to the market by at least 12 months. If the impressive results continue to hold up, then the battle for the SMA market may be largely settled -- and not in favor of PTC Therapeutics. Then again, with Novartis toying with the idea of charging a whopping $4 million for the treatment, there could be an opportunity for lower-priced therapies, especially in less severe cases of the disease.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.