Editor's note: This story has been corrected to note that Sarah Holland is head of CNS, not of business development at Roche, and to correctly identify ataluren's mechanism of action.

PTC Therapeutics' GEMS technology platform certainly has lived up to its name of late. The privately held biotech announced a new R&D collaboration with Roche on Sept. 2 that could yield nearly $1 billion in milestones over the life of the deal. And on the same day, PTC also reported that Celgene exercised its option to advance work on a joint oncology discovery project.

Based in South Plainfield, N.J., PTC will receive $12 million upfront from Roche, along with research funding, in a partnership that will use the GEMS (Gene Expression Modulation by Small molecules) technology to identify candidates for four central nervous system targets the companies will select jointly.

The GEMS platform identifies small molecules that modulate post-transcriptional control mechanisms, according to PTC. It yields orally available compounds that act by targeting processes that occur through the untranslated, regulatory regions of messenger RNA molecules.

PTC also could earn up to $239 million per target in research, development, regulatory and commercialization milestones under the deal. The biotech also would receive up to double-digit royalties on sales from any products resulting from the collaboration that reach market. Finally, Roche gets an option to add four targets across various therapeutic areas in exchange for additional cash payments.

PTC has its own pipeline of clinical candidates, including ataluren, a protein restoration therapy that suppresses nonsense mutations, which has reached Phase III for treating Duchenne muscular dystrophy. The orally available compound, which is partnered with Genzyme in a deal that leaves PTC with North American commercialization rights, also has reached the clinic in cystic fibrosis and hemophilia (Also see "PTC Fully Enrolls Duchenne MD Trial; Expects Top-Line Data In Early 2010" - Pink Sheet, 14 April, 2009.).

The GEMS platform has yielded the small-molecule PTC299, a novel vascular endothelial growth factor inhibitor which is in clinical development for four different types of cancer. But the Roche deal is PTC's first foray into the CNS market, and the company decided a partner was the best way to get there.

PTC believes the GEMS platform can be applied to many therapeutic areas, Claudia Hirawat, the firm's senior vice president of corporate development, explained in an interview. But the biotech feels it doesn't have the in-house scientific expertise in CNS disorders to advance a program on its own.

Balancing interests and not over-extending

"We have to balance the potential of our technology, which is very broad, with our interest in being a fully integrated company [with] a broad commercial basis, which obviously is not going to be in every therapeutic area," she said. "So in areas where we don't see ourselves being on the ground, selling products, those become particularly strong areas of interest for partnering. CNS is one of the best examples of that."

The deal came together in part because PTC officials already knew Roche's head of CNS Sarah Holland. A discussion of the GEMS technology led Holland to conclude the platform would be a "a really good fit" with Roche's efforts in CNS disorders, Hirawat said.

"The discussions advanced extremely smoothly," Hirawat said. "I don't take it lightly that a Europe-based company signed a deal in the middle of August. I think it's a great statement to how agile they can be."

Several deals leverage the GEMS platform

The biotech's payment from Celgene for the continuation of their oncology work is undisclosed. That partnership began with a $20 million equity investment by Celgene in PTC in 2007 ([See Deal]).

On Aug. 10, PTC announced that it had earned a $2 million milestone from Schering-Plough after GEMS discovery work yielded a development candidate for hepatitis C therapy. PTC also has GEMS-related discovery deals with Pfizer and Gilead ([See Deal]).

PTC's financial strategy seems to be based largely on exploiting the value of the GEMS platform. The company raised approximately $132 million in venture capital between 2000 and 2005 and announced an initial public offering in 2006. But PTC pulled the plug on the IPO a year later, stating it had sufficient funds for its current needs ([See Deal]).

Hirawat said grants from the U.S. government and from disease-specific advocacy groups comprise another part of PTC's financial strategy. PTC considers its options on a regular basis, she added, and those might include a mezzanine financing round or an IPO "if the time and circumstances are right."

The company's general policy is to keep about two year's cash on hand, partly so that whatever decisions it makes come from a position of strength, Hirawat said. With a goal of commercializing PTC299 itself and participating in the marketing of ataluren, PTC's outlook appears to be longer-term than that of many privately held biotechs.

"We do plan to have a role in commercializing PTC299 - we have not engaged in any partnering discussions for that program. We want the clinical proof of concept to be in our hands first," Hirawat explained. "That does spell out, I think, that we're obviously in a comfortable financial position [since] we are conducting clinical trials for multiple indications on ... '299 on our own."

PTC's current goal, she added, is not just to finance itself through a certain period of time, but through to its participation in the commercialization of ataluren and '299, "which we expect to be very much an active role."

-Joseph Haas (j.haas@elsevier.com)

A Pair Of GEMS: PTC Unveils Two Platform-Based Deals In One Day

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