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What: Shares in PTC Therapeutics (PTCT -3.50%) slumped by more than 10% earlier today after releasing first quarter results after the bell yesterday.
So What: The emerging-stage biotech company reported that sales of its recently launched drug Translarna for the treatment of Duchenne Muscular Dystrophy, or DMD, grew steadily to $5.1 million in the quarter as the number of patients taking it nearly doubled to 82 people.
PTC Therapeutics received marketing approval for Translarna in the EU last August and in December, the company filed a rolling submission for approval with the FDA. Results from a phase 3 trial that would finalize that submission for approval are expected by year end. As a result, the company has begun building out its team to support a U.S. launch in 2016.
Those preparation costs contributed to R&D spending climbing to $27.9 million last quarter, versus $15.9 million a year ago, and SG&A expenses increasing to $17.6 million from $7.5 million last year.
Overall, those rising costs more than offset Translarna sales resulting in PTC Therapeutics reporting a net loss of $37.9 million in the quarter, which was far worse than the net loss of $14.1 million the year before.
Now What: PTC Therapeutics is in the early stages of its product launch, but sales remain tepid. Costs are likely to increase throughout the year in preparation of a U.S. roll-out, so investors are going to need to endure losses for a while longer.
PTC Therapeutics has a solid cash stockpile of $280.5 million, but that is down $34.7 million from December, and given that cash burn is likely to continue due to rising expenses and a slow build in sales, PTC Therapeutics is too risky for me to justify buying it on this sell-off.