A month after filing for an initial public offering (IPO), PTC Therapeutics Inc. priced the offering, upsizing to 8.4 million shares at $15 apiece, above the midpoint of its proposed range of $13 to $16 per share, for a $125.6 million haul. The company granted underwriters the option to purchase up to 1.26 million additional shares at the offering price, potentially garnering another $18.8 million. (See BioWorld Today, May 20, 2013.)

On Thursday, the South Plainfield, N.J.-based company, focused primarily on genetic disorders, made a strong debut on Nasdaq, trading under the symbol "PTCT." Shares opened at $15.85 and gained as much as 16 percent before closing at $16.49, a 9.9 percent premium over the IPO's price on a day the broader market was hammered, with the Dow off more than 370 points and Nasdaq sliding 85 points.

J.P. Morgan and Credit Suisse are serving as joint book-running managers for the offering, with Cowen and Co. acting as co-lead manager and Wedbush PacGrow Life Sciences acting as co-manager. PTC filed as an emerging growth company under the Jumpstart Our Business Startups Act of 2012.

Though solid, PTC's performance fell short of the achievement on Wednesday by gene therapy firm Bluebird Bio Inc., which upsized its IPO, priced above the range and subsequently enjoyed a 58 percent run-up on its opening day. (See BioWorld Today, June 20, 2013.)

The size and early success of the back-to-back IPOs for biotechs that still have much to prove in the clinic raised some eyebrows, especially coming a month after nine biotechs closed IPOs – the most in a single month since 17 biotechs closed IPOs in August 2000, following 15 the previous month, according to BioWorld Snapshots. Some observers suggested the offerings represented a return to pre-recessionary levels while others hinted at the specter of a biotech bubble, particularly in light of nervousness in the broader market.

Although the long-term outcome of the current crop of biotech IPOs remains to be seen, PTC appears to be off and running, despite some cautionary flags. The company's free writing prospectus, filed Wednesday, indicated that insiders, including principal stockholders or their affiliates and entities associated with certain company directors, expressed interest in purchasing 3.25 million of the IPO's shares, for an investment of $48.75 million. The combined stake – nearly 40 percent of the total offering – represented a strong endorsement by the company's existing investors but also potentially limited the breadth of PTC's investment base.

Still, the move by PTC's investors was not surprising, given that they saw an immediate increase in pro forma net tangible book value of $4.03 per share. Those investors included Brookside Capital Partners Fund LP, HBM Healthcare Investments (Cayman) Ltd., Section Six Partners LP, Longwood Fund LP and Vulcan Ventures Inc.

Following the IPO, the company reported 23.7 million outstanding common shares.

After IPO, All Eyes on Ataluren

PTC also has a raft of potentially lucrative partnerships, including a 2007 deal with New York-based Pfizer Inc. valued at up to $1.2 billion, a potential $1.9 billion agreement with Roche AG, of Basel, Switzerland, and additional arrangements with Astrazeneca plc, Celgene Corp., Gilead Sciences Inc. (through its acquisition of CV Therapeutics Inc.) and Merck & Co. Inc. (through its acquisition of Schering-Plough Corp.). (See BioWorld Today, Jan. 9, 2007, Sept. 2, 2009, and June 30, 2011.)

However, the company hasn't yet demonstrated unambiguous efficacy in a pivotal study. PTC, an acronym for "post-transcriptional control" processes – the regulatory events that occur in cells after a messenger RNA molecule is copied from DNA – completed a Phase IIb study of lead compound ataluren (formerly PTC124) in Duchenne's muscular dystrophy caused by nonsense mutations (nmDMD) and a Phase III study in cystic fibrosis caused by nonsense mutations (nmCF) but failed to achieve the primary efficacy endpoint in either trial with the pre-specified level of statistical significance. The company maintained that collective data from the trials, including retrospective and subgroup analyses, supported the conclusion that ataluren was active and showed clinically meaningful improvements over placebo. (See BioWorld Today, March 4, 2010.)

In April, the first patient was dosed in a confirmatory Phase III trial of ataluren in nmDMD. PTC plans to begin enrolling patients in a confirmatory Phase III in nmCF in the second half of the year, with the first patient expected to be dosed in the first half of 2014.

But the company acknowledged in its S-1/A filing last week that the European Medicines Agency (EMA) rebuffed its marketing authorization request for conditional approval of ataluren in nmDMD prior to completion of its confirmatory Phase III in the indication. In its day 120 list of questions, the EMA informed PTC "of major objections that would preclude a recommendation for marketing authorization unless adequately addressed," according to the filing. "These major objections relate to, among other things, the EMA's views regarding insufficient evidence of efficacy based on our single Phase IIb clinical trial, resulting in a negative risk-benefit balance for purposes of conditional approval, uncertainties about the effective dose and questions about whether our confirmatory Phase III clinical trial for this indication could be continued if the EMA grants conditional approval."

PTC said it plans to respond next month to the questions, with a view to gaining conditional approval based on "reasonable responses to all of the EMA's major objections."

PTC plans to complete its confirmatory Phase III trial of ataluren in nmDMD before applying for FDA approval. The trial design was developed with input from the FDA and EMA, according to the company.

In other financings news:

• Cempra Inc., of Chapel Hill, N.C., said underwriters partially exercised the overallotment option in conjunction with its underwritten public offering of 7.3 million shares of common stock, adding 1 million shares at $7 apiece for additional proceeds of $7.2 million, or a total raise of $57.9 million. Barclays, Stifel and Cowen and Co. acted as joint book-running managers for the offering, with Needham & Co. and SunTrust Robinson Humphrey acting as co-managers. On Thursday, the company's shares (NASDAQ:CEMP) lost 22 cents, closing at $7.10. (See BioWorld Today, June 17, 2013.)

• Diffusion Pharmaceuticals LLC, of Charlottesville, Va., closed a $5 million private financing, adding to a $5 million round in September 2012. The new funding consists of convertible notes issued primarily to existing investors. Proceeds will support the company's ongoing Phase II trial for its lead candidate, trans sodium crocetinate (TSC), which has completed dosing in all 59 patients with newly diagnosed glioblastoma multiforme (GBM). The multicenter U.S. trial is evaluating the effect on patient safety and survival when TSC is added to standard-of-care radiation and chemotherapy in GBM.

• Lorus Therapeutics Inc., of Toronto, completed a private placement of units priced at $1,000 each for proceeds of $893,000. Each unit consisted of a $1,000 principal amount of unsecured promissory notes and 1,000 common share purchase warrants. The promissory notes bear interest at 10 percent annually, payable monthly, and are due June 19, 2014. Each warrant entitles the holder to acquire one common share at 25 cents apiece prior to June 19, 2015. Lorus plans to use the proceeds for general corporate purposes, including the maintenance of current R&D activities, while in discussion with potential partners about an equity investment, license payments or other nondilutive financing.

• Progenics Pharmaceuticals Inc., of Tarrytown, N.Y., priced a public offering of 8.5 million shares of common stock at $4.40 apiece, seeking to raise $37.4 million. The company granted underwriters a 30-day option to purchase 1.275 million additional shares, potentially raising another $12.75 million. The offering is expected to close on or about June 25, with proceeds expected to be used for R&D. Jefferies LLC is acting as sole book-running manager for the offering, and Needham & Co. LLC, Stifel and Brean Capital LLC are acting as co-managers. Earlier this month, the FDA said it will hold an advisory committee meeting to review the supplemental new drug application by partner Salix Pharmaceuticals Ltd., of Raleigh, N.C., for Relistor (methylnaltrexone bromide) subcutaneous injection in opioid-induced constipation for patients with chronic pain. The compound was licensed from Progenics in 2011. In the meantime, Progenics repositioned itself to compete in oncology, acquiring Molecular Insight Pharmaceuticals Inc., of Cambridge, Mass., in January through an all-stock deal. On Thursday, shares of Progenics (NASDAQ:PGNX) lost 52 cents, or 10.8 percent, closing at $4.28. (See BioWorld Today, Feb. 8, 2011, and March 18, 2013.)