Staff Writer

PTC Therapeutics Inc. is expected to announce two drug discovery deals on Wednesday, a potential $1.9 billion whopper with Roche AG and an option exercise by Celgene Corp. for which terms were not disclosed.

Both deals center on PTC's Gene Expression Modulation by Small-molecules (GEMS) technology platform, which identifies small molecules that regulate post-transcriptional control mechanisms.

In the Roche deal, PTC will get $12 million up front as well as research funding to find small molecules that hit four jointly selected central nervous system disease targets. Each target could eventually bring up to $239 million in research, development, regulatory and commercial milestone payments, plus double-digit royalties, and Roche has an option to add four more targets under the same terms.

All-told that's $1.9 billion in potential milestones. PTC's senior vice president of corporate development, Cláudia Hirawat, noted that the payments are spread across the development and commercialization continuum with no particular emphasis on the front or back end.

Concurrent with the new Roche deal, PTC announced that Celgene exercised its option to partner on a GEMS oncology target. Two years ago, Celgene made a $20 million equity investment in PTC in exchange for options on two targets, and the exercise of one of them will trigger an undisclosed stream of discovery, development, regulatory and commercial milestone payments as well as royalties. (See BioWorld Today, Sept. 14, 2007.)

Roche and Celgene are only the latest to notice the sparkle of PTC's GEMS. The company previously inked a $212 million hepatitis C deal with Schering-Plough Corp., a $345 million cardiovascular deal with CV Therapeutics Inc. (now part of Gilead Sciences Inc.) and a $1.2 billion deal with Pfizer Inc. (See BioWorld Today, March 21, 2006, June 13, 2006, and Jan. 9, 2007.)

Stuart Peltz, president and CEO of PTC, explained that the attraction of GEMS lies in its ability to provide control over difficult, intractable or uncharacterized protein targets.

While the middle of an RNA molecule serves as a blueprint for making proteins, the untranslated ends of the molecule determine how much protein gets made. By focusing on the untranslated ends, PTC's GEMS platform churns out drugs that can increase or decrease the amount of protein produced. In addition to providing a new approach to tough targets, GEMS can be used to replace temperamental biologics with convenient small molecules, Peltz said.

PTC has its own GEMS molecule, PTC299, moving through Phase II trials for breast cancer, solid tumors, Kaposi's sarcoma associated with human immunodeficiency virus infection and brain tumors associated with neurofibromatosis type 2.

PTC299 targets vascular endothelial growth factor (VEGF), placing it into a crowded field that includes Avastin (bevacizumab, Genentech/Roche) and loads of experimental drugs, but Hirawat said PTC's drug works "upstream of what everyone else is doing" and thus far hasn't elicited typical VEGF inhibitor side effects.

Yet the crown jewel of PTC's pipeline has nothing to do with GEMS. Ataluren (formerly PTC124) is based on PTC's nonsense suppression technology, which allows cellular machinery to read through nonsense mutations in genetic disorders, resulting in production of a functional protein.

Ataluren is in a pivotal Phase IIb trial for muscular dystrophy and a pivotal Phase III trial for cystic fibrosis. A proof-of-concept trial in hemophilia also is under way, and Peltz said PTC is "just nailing down" a fourth program, which likely will focus on a metabolic disorder. PTC inked a $437 million partnership with Genzyme Corp. on the drug last year but retained U.S. and Canadian rights. (See BioWorld Today, July 18, 2008.)

Moving forward, "we think this is going to be a pretty exciting next couple of years," Peltz said.

In a time when many biotechs are struggling and experts claim you can't build a fully integrated pharmaceutical company, PTC is well funded and moving the first of its internally discovered candidates toward the commercial realm.