Emflaza is the first treatment approved in the US for all Duchenne muscular dystrophy (DMD) patients five years and older, regardless of their genetic mutation.
DMD is a rare and fatal genetic disorder that results in progressive muscle weakness from early childhood and leads to premature death due to heart and respiratory failure.
Emflaza aligns with PTC's mission to bring therapies to patients who have rare diseases with limited or no treatment options.
PTC Therapeutics CEO Stuart W. Peltz said: "With our nearly 20-year commitment to the Duchenne community, it is deeply meaningful for us to bring this critical therapy to U.S. patients.
"We believe Emflaza is a disease-modifying therapy that has been shown to slow disease progression. In keeping with PTC's mission, we are excited to work with the community to raise the standard of care for DMD patients."
DMD treatment guidelines recommend steroids as a foundational component of the standard of care. Emflaza reduces inflammation, which is critical to preserving muscle function and delaying disease progression. It received FDA approval on February 9, 2017 and has the potential to benefit many DMD patients in the U.S.
Marathon Pharmaceuticals president and CEO Jeff Aronin said: "Our goal has always been to ensure Emflaza is studied, understood and available to any Duchenne patient who needs it, and we determined that this transaction is the best path for ensuring that will happen.
"Now that we have achieved FDA approval of Emflaza, the focus can turn to ensuring patients have access to this important therapy. PTC is well known by the Duchenne community and is ideally positioned to achieve this shared goal."
PTC chief commercial officer Mark Rothera said: "Based on our long-standing experience with DMD and strong partnership with the community, we believe PTC is uniquely positioned to launch Emflaza in the U.S.
"We are finalizing our commercialization plans and intend to share more information after the transaction closes."
Under the terms of the asset purchase agreement, Marathon will receive total upfront consideration of $140m upon closing of the transaction, comprised of approximately $75m in cash and approximately $65m in PTC common stock, subject to a maximum 6.9 million share limit (with any shortfall to be made whole with additional cash consideration).
Marathon is also entitled to receive payments from PTC based on annual net sales of Emflaza beginning in 2018, which PTC expects will range as a percentage of net sales between the low to mid-20s on a blended average basis. In addition, Marathon has the opportunity to receive a single $50m sales-based milestone.
The transaction is expected to be accretive to both earnings and cash flow beginning in 2018. The transaction is expected to close in the second quarter of 2017, subject to customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Act.
Evercore is acting as financial advisor to PTC on the transaction. Wilmer Hale is acting as legal advisor to PTC.