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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended: December 31, 2022

Commission file number: 001-35969

PTC THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

100 Corporate Court

South Plainfield, NJ 07080

(Address of principal executive offices) (Zip Code)

(908) 222-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol (s) Name of each exchange on which registered

Common Stock, $0.001 par value per share PTCT Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). □

The aggregate market value of the Common Stock held by non-affiliates of the registrant, based upon the last sale price of the Common Stock reported on the Nasdaq Global Select Market on June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, was $2,129,532,394. For purposes of this calculation, shares of Common Stock held by directors and officers have been treated as shares held by affiliates.

As of February 16, 2023, the registrant had 73,815,144 shares of Common Stock, $0.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Annual Report incorporates by reference information from the definitive Proxy Statement for the registrant’s 2023 Annual Meeting of Shareholders which is expected to be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2022.

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TABLE OF CONTENTS

PTC Therapeutics, Inc.

Page No.

PART I

Item 1. Business 6

Item 1A. Risk Factors 64

Item 1B. Unresolved Staff Comments 119

Item 2. Properties 119

Item 3. Legal Proceedings 119

Item 4. Mine Safety Disclosures 119

PART II

Item 6. [Reserved] 120

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 142

Item 8. Financial Statements and Supplementary Data 144

Item 9A. Controls and Procedures 202

Item 9B. Other Information 205

PART III

Item 10. Directors, Executive Officers and Corporate Governance 206

Item 11. Executive Compensation 206

Item 14. Principal Accountant Fees and Services 206

PART IV

Item 15. Exhibits and Financial Statement Schedules 207

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:

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● the potential advantages of our products and any product candidate;

● our intellectual property position;

● the impact of government laws and regulations;

● our competitive position.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Annual Report on Form 10-K, particularly under the heading “Summary of Risk Factors” and the risk factors detailed further in Part I, Item 1A. Risk Factors that we believe could cause actual results or events to differ materially from the forward-looking statements that we make.

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits to this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

In this Annual Report on Form 10-K, unless otherwise stated or the context otherwise requires, references to “PTC,” “PTC Therapeutics,” “we,” “us,” “our,” “the Company,” and similar references refer to PTC Therapeutics, Inc. and, where appropriate, its subsidiaries. The trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners.

All website addresses given in this Annual Report on Form 10-K are for information only and are not intended to be an active link or to incorporate any website information into this document.

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SUMMARY OF RISK FACTORS

Below is a summary of the principal risk factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found in Item 1A. Risk Factors, of this Annual Report on Form 10-K, and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities Exchange Commission, before making an investment decision regarding our common stock. The forward-looking statements discussed above are qualified by these risk factors. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.

Summary of Risk Factors

● Our products and product candidates may be difficult to manufacture;

● We face substantial competition;

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● We may fail to properly allocate our resources;

● We may be subject to product liability and other civil lawsuits;

● We may be unable to retain our key executives;

● We may encounter difficulties in managing our growth as a company;

● Without patent protection, our marketed products may face generic competition;

● The price of our common stock may be volatile and fluctuate substantially.

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PART I

Item 1. Business

Overview

We are a science-driven global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines. Our mission is to provide access to best-in-class treatments for patients who have little to no treatment options. Our strategy is to leverage our strong scientific and clinical expertise and global commercial infrastructure to bring therapies to patients. We believe that this allows us to maximize value for all of our stakeholders.

Our Pipeline

We have a portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology, metabolism and oncology. The chart and the disclosure directly below summarizes the status of our clinical-stage programs and commercial products as of the date of this report, including those with our strategic partners:

● Global Commercial Footprint

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● Diversified Development Pipeline

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● Multi-platform Discovery

Global Commercial Footprint

Global DMD Franchise

Duchenne muscular dystrophy (DMD)

Muscular dystrophies are genetic disorders involving progressive muscle wasting and weakness. DMD is the most common and one of the most severe types of muscular dystrophy. DMD occurs when a mutation in the dystrophin gene prevents the cell from making a functional dystrophin protein. Dystrophin is a muscle membrane associated protein and is critical to the structural and membrane stability of muscle fibers in skeletal, diaphragm and heart muscle. The absence of normally functioning dystrophin results in muscle fragility, such that muscle injury occurs when muscles contract or stretch during normal use. As muscle damage progresses, connective tissue and fat replace muscle fibers, resulting in inexorable muscle weakness.

Because the dystrophin gene is located on the X chromosome, DMD occurs primarily in young boys, although approximately 10% of female carriers show some disease symptoms. DMD is rare, and estimates of occurrence include approximately 1 in every 3,500 live male births, according to the National Organization for Rare Diseases and approximately 1 in every 5,000 live male births according to Ryder (2017) in the European Journal of Human Genetics. We estimate that there are between approximately 10,000 to 15,000 DMD patients in the United States. Several different types of mutation in the dystrophin gene can result in DMD, including deletion, duplication and nonsense mutations. A test known as multiplex ligation-dependent probe amplification (MLPA) can detect large deletions and duplications, which account for approximately 75% of all mutations. However, gene sequencing is required to identify small mutations such as nonsense mutations. We estimate that nonsense mutations account for approximately 13% of cases of DMD. Without treatment, patients with DMD typically lose walking ability by their early teens, require ventilation support in their late teens, and eventually experience premature death due to heart and lung failure. Even with medical care, most people with DMD die from cardiac or respiratory failure before or during their 30s.

Marketing authorization matters

Translarna for the treatment of nonsense mutation Duchenne muscular dystrophy

European Economic Area

We received marketing authorization from the European Commission in August 2014 for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older in the member states of the EEA, subject to annual renewal and other conditions. In July 2018, the European Commission approved a label-extension request to our marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. In July 2020, the European Commission approved the removal of the statement “efficacy has not been demonstrated in non-ambulatory patients” from the indication statement for Translarna.

The marketing authorization is subject to annual review and renewal by the European Commission following reassessment by the EMA of the benefit-risk balance of continued authorization, which we refer to as the annual EMA reassessment. In June 2022, the European Commission renewed our marketing authorization, making it effective, unless extended, through August 5, 2023. In February 2023, we submitted a marketing authorization renewal request to the EMA.

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This marketing authorization is further subject to a specific obligation to conduct and submit the results of an 18 month, placebo-controlled trial, followed by an 18 month open-label extension, which we refer to together as Study 041. Within the placebo-controlled trial, Translarna showed a statistically significant treatment benefit across the entire intent to treat population as assessed by the 6-minute walk test, assessing ambulation and endurance, and in lower-limb muscle function as assessed by the North Star Ambulatory Assessment, a functional scale designed for boys affected by DMD. Additionally, Translarna showed a statistically significant treatment benefit across the intent to treat population within the 10-meter run/walk and 4-stair stair climb, each assessing ambulation and burst activity, while also showing a positive trend in the 4-stair stair descend although not statistically significant. Within the primary analysis group, Translarna demonstrated a positive trend across all endpoints, however, statistical significance was not achieved. Translarna was also well tolerated. In September 2022, we submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension. We expect an opinion from the Committee for Medicinal Products for Human Use, or CHMP, in the first half of 2023.

Marketing authorization is required in order for us to engage in any commercialization of Translarna in the EEA, including through participation in the market access process and related pricing and reimbursement negotiations, on a country-by-country basis with each country in the EEA, and is also required to make Translarna available under early access programs, or EAP programs. There is substantial risk that if we are unable to renew our EEA marketing authorization during any annual renewal cycle, if our product label is materially restricted, or if Study 041 does not provide the data necessary to maintain our marketing authorization, we would lose all, or a significant portion of, our ability to generate revenue from sales of Translarna in the EEA and other territories.

See “Item 1. Business-Commercial Matters-Market Access Considerations” and “Item 1A. Risk Factors-Risks Related to the Development and Commercialization of our Product and our Product Candidates” and “-Risks Related to Regulatory Approval of our Product and our Product Candidates” for further information regarding the marketing authorization in the EEA, the market access process and related risks.

As the marketing authorization holder, we are obligated to monitor the use of Translarna for nmDMD to detect, assess and take required action with respect to information that could impact the safety profile of Translarna and to report this information, through pharmacovigilance submissions, to the EMA. Following its assessment of these submissions, the EMA can recommend to the European Commission actions ranging from the continued maintenance of the marketing authorization to its withdrawal.

United States

Translarna is an investigational new drug in the United States. During the first quarter of 2017, we filed a New Drug Application, or NDA, for Translarna for the treatment of nmDMD over protest with the FDA. In October 2017, the Office of Drug Evaluation I of the FDA issued a Complete Response Letter, or CRL, for the NDA, stating that it was unable to approve the application in its current form. In response, we filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied our appeal of the CRL. In its response, the Office of New Drugs recommended a possible path forward for our ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness and safety of ataluren with new data to be generated on dystrophin production in nmDMD patients’ muscles. We followed the FDA’s recommendation and collected, using newer technologies via procedures and methods that we designed, such dystrophin data in a new study, Study 045, and announced the results of Study 045 in February 2021. Study 045 did not meet its pre-specified primary endpoint. In June 2022, we announced top-line results from the placebo-controlled trial of Study 041. Following this announcement, we submitted a meeting request to the FDA to gain clarity on the regulatory pathway for a potential re-submission of an NDA for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support NDA re-submission. We recently had an informal meeting with the FDA, during which we discussed the potential path to an NDA re-submission for Translarna. Based on the meeting discussion, we plan to request an additional Type C meeting with the FDA in the near future to review the totality of data collected to date, including dystrophin and other mechanistic data as well as additional analyses that could support the benefit of Translarna.

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See “Item 1. Business-Government Regulation-The new drug and biologic approval process” below for further discussion with respect to the NDA process. See “Item 1. Business-Translarna (ataluren)” and “Item 1A. Risk Factors-Risks Related to the Development and Commercialization of our Product and our Product Candidates” and “-Risks Related to Regulatory Approval of our Product and our Product Candidates” for further detail regarding the results of our completed trials and studies of Translarna for the treatment of nmDMD, our regulatory strategy in the United States, our history with submissions to the FDA and the related risks to our business.

Other Territories

Translarna received marketing authorization for the treatment of nmDMD in Israel and South Korea in 2015, Chile in 2018, Brazil in 2019 and Russia in 2020, in addition to approvals from other countries, and these licenses are currently active. Many territories outside of the EEA, including Israel, South Korea and Chile, reference and depend on the determinations by the EMA when considering the grant of a marketing authorization. It is unlikely that we would be able to maintain our marketing authorizations in these regions in the event the EMA decides not to renew or otherwise modifies or withdraws our marketing authorization in the EEA. The marketing authorization for Translarna in Brazil and Russia are subject to renewal every five years. We have been pursuing and expect to continue to pursue marketing authorizations for Translarna for the treatment of nmDMD in other regions.

Emflaza for the treatment of Duchenne muscular dystrophy in the United States

Emflaza, both in tablet and suspension form, received approval from the FDA in February 2017 as a treatment for DMD in patients five years of age and older in the United States. In June 2019, the FDA approved our label expansion request for Emflaza for patients two to five years of age. We estimate that there are between approximately 10,000 and 15,000 DMD patients in the United States.

Emflaza has a seven-year exclusive marketing period in the United States for its approved indications, commencing on the date of FDA approval, under the provisions of the Orphan Drug Act of 1983, or the Orphan Drug Act. See “Item 1. Business-Government Regulation” for further discussion with respect to marketing protection we rely on.

Upstaza

Upstaza is a gene therapy for the treatment of AADC deficiency, a rare CNS disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the European Commission approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare Products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom. We are also preparing a BLA for Upstaza for the treatment of AADC deficiency in the United States and we expect to submit a BLA to the FDA in the first half of 2023.

AADC is the enzyme responsible for the conversion of L-dopa to dopamine. Dopamine is a key neurotransmitter that acts within the striatum (caudate and putamen), a component of the brain’s deep grey matter, to modulate output of neurons that project to the motor and premotor cortices of the brain that plan and execute normal motor function. Dopamine is required in the brain for humans to develop and maintain proper motor function.

AADC deficiency is a monogenic disorder of neurotransmitter synthesis that manifests in young children and most commonly results in profound developmental delay, often seen as complete arrest of motor development. AADC deficiency generally causes the inability to develop motor control, resulting in breathing, feeding, and swallowing problems, frequent hospitalizations, and the need for life-long care. On average, patients with AADC deficiency die in the first decade of life due to profound motor dysfunction and secondary complications such as choking, hypoxia, and pneumonia. Currently, no treatment options are available for the underlying cause of the disorder, and care is limited to palliative options with significant burden on caregivers.

The prevalence of AADC deficiency has been estimated to be approximately 5,000 patients worldwide, with a live-birth incidence of up to 1 in 40,000 worldwide. While several diagnostic tests for AADC deficiency are available, we believe the condition remains largely undiagnosed or misdiagnosed and may be confused with cerebral palsy.

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Upstaza is an adeno-associated virus, or AAV, gene therapy, which has been assessed in two completed clinical trials, and one ongoing trial. The two completed trials include a total of 18 children with severe AADC deficiency who were treated with a one-time total dose of 1.8 x 1011 vg of Upstaza during a single procedure in which the gene therapy was administered directly to the region of the brain, called the putamen, where dopamine is made and released. The targeted micro-dosing approach administering small amounts of gene therapy directly to focal regions of affected cells in the putamen has the benefit of keeping the supply requirements for materials low, improving access of the therapeutic gene to key cells, potentially limiting immune and complement-mediated responses and reducing the risk of off-target uptake and excretion of the gene therapy by the liver and kidneys. To date, results from these trials suggest that patients may have a gain of motor functions and improvement in cognitive scales following gene therapy administration and have shown significant increases in motor function, which contrasts with the published natural history.

The two completed clinical trials, AADC-1601, a trial in which patients were enrolled under individual compassionate use consents, and AADC-010, were both single-arm, open-label, interventional trials that enrolled a total of 18 patients. The primary and secondary objectives of these trials were to assess the safety and efficacy of Upstaza administered via bilateral putaminal-infusions in patients with severe AADC deficiency at a total one-time dose of 1.8 x 1011 vg. Study enrollment required a diagnosis of AADC deficiency, defined as decreased homovanilic acid, or HVA, and 5-hydroxyindoleacetic acid, or 5-HIAA, and elevated levels of L-DOPA in the cerebrospinal fluid, or CSF, the presence of more than one DDC gene mutation, and the presence of clinical symptoms of AADC deficiency (including developmental delay, hypotonia, dystonia, and oculogyric crisis), and a patient age of older than 2 years.

Patients were evaluated monthly for safety assessments and every three months for efficacy assessments that included tests of motor developmental testing (Peabody Developmental Motor Scale, Second Edition, or PDMS-2, and Alberta Infant Motor Scale, or AIMS) through the first year after treatment with Upstaza and at periodic intervals thereafter through five years following treatment. The PDMS-2 and AIMS are validated scales used to assess motor skills in young children. Pharmacodynamic testing of CNS AADC activity over time included analyses of CSF neurotransmitter metabolites and F-DOPA PET imaging intervals, also through five years.

8 patients were enrolled in the AADC-1601 study. 10 patients were enrolled in the AADC-010 study. In both studies, the average age of patients was less than 5 years of age.

At baseline, patients had no functional movement and failed to achieve any motor milestones, including head control, sitting or standing capabilities, consistent with the published natural history of severe AADC deficiency. Compared to baseline, at one-year and at five-years after Upstaza administration, patients had objective evidence of de novo dopamine production as visualized by F-DOPA PET imaging of the brain, consistent with successful and stable gene expression and enzyme activity over time.

Based on preliminary analysis, following administration of Upstaza, the combined group of patients showed significant improvements from baseline capabilities at one-year post-treatment in functional motor skills assessed with the PDMS-2 total score, as well as on the locomotion, grasping, visual-motor integration and stationary subscales. Significant improvements from baseline at one-year post-treatment were also observed for the combined group of patients on the AIMS total score and on the prone, supine, sit and stand subscales.

Compared to published natural history data, patients in these trials showed statistically significant improvements at both two- and five-year post-treatment in achievement of motor milestones of full head control (at 2 and 5 years), sitting unassisted (at 2 and 5 years) and standing with support (at 5 years), reinforcing the clinical benefit and sustainability of functional motor improvements.

Surgical injection of Upstaza in both completed trials was well tolerated, with no adverse events occurring during the surgical procedure. Adverse events were generally associated with the disease state. The most frequent adverse event associated with Upstaza was dyskinesia and these events completely resolved over time. No serious adverse events have been attributed to Upstaza.

The ongoing clinical trial, AADC-011, is a single-center, open-label trial to assess the efficacy and safety of Upstaza in patients with AADC deficiency. The primary outcomes for this trial include assessing a change in the PDMS-2 score and

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measuring the change in the neurotransmitter metabolite HVA or 5-HIAA in the cerebrospinal fluid. 10 patients have been enrolled and treated to date. With these 10 patients, we now have 28 patients from our three trials being evaluated in safety and efficacy studies.

An end-of-phase 2 meeting was held with the FDA in July 2017, and the clinical, non-clinical and chemistry, manufacturing and control, or CMC, data available to date from the two completed clinical trials were reviewed. The FDA provided feedback indicating that the clinical and non-clinical data available to date were sufficient to support the submission of a BLA without undertaking additional trials or studies at this time. In a late 2019 interaction with the FDA, the agency requested additional information concerning the use of the commercial delivery system for Upstaza in young patients. In response to the FDA’s request, we provided additional information concerning the use of the commercial cannula for Upstaza in young patients. In October 2022, we held a type C meeting with the FDA to discuss the details of a potential submission package for Upstaza. At such meeting, the FDA asked for additional bioanalytical data in support of comparability between the drug product used in the clinical studies and the commercial drug product. We have completed these analyses and provided the results to the FDA for review. We expect to submit a BLA to the FDA in the first half of 2023.

Upstaza for the treatment of AADC deficiency has orphan drug designation in the United States and EU, and rare pediatric disease designation in the United States, and upon BLA approval the FDA may grant us a priority review voucher.

Due to its orphan medicinal product designation by the EMA, we rely on a ten-year exclusive marketing period for Upstaza in the EEA, which may potentially be extended for two additional years if we receive approval for a pediatric exclusivity incentive. If Upstaza for the treatment of AADC deficiency receives FDA approval, we expect that Upstaza would have a twelve-year exclusive marketing period in the United States for the approved indication, commencing on the date of FDA approval, under the provisions of the Biologics Price Competition and Innovation Act of 2009, or BPCIA, as well as a concurrent seven-year exclusive marketing period, which would commence on the date of FDA approval, under the provisions of the Orphan Drug Act. We expect to rely on the twelve-year BPCIA regulatory exclusivity and concurrent seven-year Orphan Drug Act exclusivity to commercialize Upstaza in the United States, if it is approved.

See “Item 1. Business-Government Regulation-The new drug and biologic approval process” below for further discussion with respect to the BLA process.

Tegsedi and Waylivra

In August 2018 we entered into a Collaboration and License Agreement with Akcea Therapeutics, Inc., or Akcea, a subsidiary of Ionis Pharmaceuticals, Inc., or Ionis, for the commercialization by us of Tegsedi, Waylivra and products containing those compounds in countries in Latin America and the Caribbean, or the PTC Territory. See “Item 1. Business-Our Collaborations, License Agreements and Funding Arrangements-Tegsedi and Waylivra” below for further discussion with respect to this collaboration and license agreement.

Tegsedi

Tegsedi, a product of Ionis’ proprietary antisense technology, is an antisense oligonucleotide, or ASO, inhibitor of human transthyretin, or TTR, production. Tegsedi is the world’s first RNA-targeted therapeutic to treat patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. In October 2019, it received marketing authorization from ANVISA, the Brazilian health regulatory authority, for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis in Brazil. Our marketing authorization for Tegsedi in Brazil is subject to renewal every five years. It has also received marketing authorization in the United States and EU for the same indication. We began to make commercial sales of Tegsedi for the treatment of hATTR amyloidosis in Brazil in the second quarter of 2022 and we continue to make Tegsedi available in certain other countries within Latin America and the Caribbean through EAP programs.

hATTR amyloidosis is a progressive, systemic and fatal inherited disease caused by the abnormal formation of the TTR protein and aggregation of TTR amyloid deposits in various tissues and organs throughout the body, including in peripheral nerves, heart, intestinal tract, eyes, kidneys, central nervous system, thyroid and bone marrow. The progressive

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accumulation of TTR amyloid deposits in these tissues and organs leads to sensory, motor and autonomic dysfunction often having debilitating effects on multiple aspects of a patient’s life. Patients with hATTR amyloidosis often present with a mixed phenotype and experience overlapping symptoms of polyneuropathy and cardiomyopathy.

Ultimately, hATTR amyloidosis generally results in death within three to fifteen years of symptom onset. Therapeutic options for the treatment of patients with hATTR amyloidosis are limited and there are currently no disease-modifying drugs approved for the disease. There are an estimated 50,000 patients with hATTR amyloidosis worldwide, including approximately 6,000 patients with polyneuropathic hATTR amyloidosis in Latin America.

Waylivra

Waylivra is an ASO that has received marketing authorization in the EU for the treatment of FCS, subject to certain conditions. The United States and EU regulatory agencies have granted orphan drug designation to Waylivra for the treatment of FCS. In connection with the marketing approval for Waylivra in the EU, the European Commission is requiring Akcea to provide results of a study based on a registry of patients to investigate how blood checks and adjustments to frequency of injections are carried out in practice and how well they work to prevent thrombocytopenia and bleeding in FCS patients taking Waylivra. In August 2021, ANVISA approved Waylivra as the first treatment for FCS in Brazil and we began to make commercial sales of Waylivra in Brazil in the third quarter of 2022 while continuing to make Waylivra available in certain other countries within Latin America and the Caribbean through EAP programs. Our marketing authorization for Waylivra in Brazil is subject to renewal every five years.

FCS is an ultra-rare disease caused by impaired function of the enzyme lipoprotein lipase, or LPL, and characterized by severe hypertriglyceridemia (>880mg/dL) and a risk of unpredictable and potentially fatal acute pancreatitis. Because of limited LPL function, people with FCS cannot break down chylomicrons, lipoprotein particles that are 90% triglycerides. In addition to pancreatitis, FCS patients are at risk of chronic complications due to permanent organ damage. They can experience daily symptoms including abdominal pain, generalized fatigue and impaired cognitions that affect their ability to work. People with FCS also report major emotional and psychosocial effects including anxiety, social withdrawal, depression and brain fog. There is no effective therapy for FCS currently available.

Additionally, we received approval of Waylivra for the treatment of FPL in Brazil in December 2022. FPL is a rare genetic metabolic disease characterized by selective, progressive loss of body fat (adipose tissue) from various areas of the body leading to ectopic fat deposition in liver and muscle and development of insulin resistance, diabetes, dyslipidemia and fatty liver disease. Individuals with FPL often have reduced subcutaneous fat in the arms and legs and the head and trunk regions may or may not have loss of fat. Conversely, affected individuals may also have excess subcutaneous fat accumulation in other areas of the body, especially the neck, face and intra-abdominal regions.

Evrysdi

Evrysdi was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the European Commission in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies. Evrysdi also received marketing authorization for the treatment of SMA in Brazil in October 2020 and Japan in June 2021. In May 2022, the FDA approved a label expansion for Evrysdi to include infants under two months old with SMA and we expect the EMA to make a regulatory decision on approval for a label expansion for Evrysdi to include infants under two months old with SMA in the 2023. Evrysdi is a product of our SMA program and our collaboration with Roche and the SMA Foundation. For additional information, see “Item 1. Business – Our Collaborations, License Agreements and Funding Arrangements – Roche and the SMA Foundation.”

SMA is a genetic neuromuscular disease characterized by muscle wasting and weakness. The disease generally manifests early in life. SMA is caused by mutation or deletion of the Survival of Motor Neuron 1, or SMN1, gene that encodes the survival of motor neuron, or SMN, protein. The SMN protein is critical to the health and survival of the nerve cells in the spinal cord responsible for muscle contraction. A second gene, Survival of Motor Neuron 2, or SMN2, is very similar to SMN1, contains a T nucleotide at position 6 in exon 7 and produces low, insufficient levels of functional SMN protein due to alternative splicing of exon 7. According to the SMA Foundation, SMA is the leading genetic cause of death in

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infants and toddlers. Approximately 1 in 10,000 children is born with the disease. We estimate that there are between 20,000 to 30,000 children and adults living with SMA in the United States, Europe and Japan.

Using our splicing technology and in collaboration with the SMA Foundation and Roche, we identified highly potent small molecule splicing modifiers that, in non-clinical studies in cultured cells derived from patients with SMA, increased both the inclusion of exon 7 in the SMN2 messenger RNA, or mRNA, transcript and the levels of SMN protein produced by the SMN2 gene. Importantly, in studies in transgenic mice carrying only the SMN2 gene, these orally bioavailable compounds penetrated the blood-brain barrier and increased the levels of full-length SMN2 mRNA and protein in brain, spinal cord, muscle and other tissues. In these same mouse studies, treatment with these compounds resulted in increased survival, restoration of body weight, prevention of motor neuron loss and improved motor function.

Diversified Development Pipeline

Our pipeline has a number of development programs in the clinical stages. These include splicing, Bio-e, metabolic, gene therapy and oncology programs as well as studies in our current commercial products for maintaining authorizations, label extensions and additional indications.

Splicing Platform

Our splicing platform focuses on the development of innovative therapies for diseases, such as SMA, that involve regulation of mRNA splicing in the cell.

In addition to Evrysdi and our SMA program, our splicing platform also includes PTC518, which is being developed for the treatment of HD. HD is a neurodegenerative and progressive brain disorder caused by a toxic gain-of-function triplet repeat expansion in the Huntingtin gene resulting in uncontrolled movements and cognitive loss. There are currently no disease-modifying therapies approved to delay the onset or slow the progression of HD. We believe that there are approximately 135,000 HD patients globally. PTC518 is an orally bioavailable molecule with broad central nervous system and systemic distribution that has been designed to target Huntingtin protein expression with high selectivity and specificity. We announced the results from our Phase 1 study of PTC518 in healthy volunteers in September 2021 demonstrating dose-dependent lowering of huntingtin messenger ribonucleic acid and protein levels, that PTC518 efficiently crosses blood brain barrier at significant levels and that PTC518 was well tolerated. We initiated a Phase 2 study of PTC518 for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on PTC518 biomarker effect. Enrollment in the Phase 2 study remains active and ongoing outside of the United States. Enrollment within the United States is paused as the FDA has requested additional data to allow the Phase 2 study to proceed; discussions are ongoing with the FDA to allow the resumption of U.S. enrollment. We expect data from the initial 12-week phase of the Phase 2 study in the second quarter of 2023.

Our splicing platform clinical development program also includes several studies evaluating Evrysdi in a broad SMA patient population covering the ages from newborns to 60 years old that remain ongoing. In addition to the Firefish (infantile onset SMA; age at enrollment of one to seven months) and Sunfish (later onset SMA; age at enrollment of two to 25 years) studies that established the safety profile of Evrysdi, the Jewelfish (patients who previously received other SMA targeted therapies; age at enrollment of six months to 60 years) and Rainbowfish (pre-symptomatic patients; age at enrollment of newborns to 6 weeks) studies may potentially be used to support future applications for label extensions.

Jewelfish, an open-label study investigating the safety, tolerability, pharmacokinetics, and pharmacokinetics/pharmacodynamic relationship of Evrysdi in patients aged from 6 months to 60 years with SMA previously treated with one of several experimental or approved SMA therapies, initiated in the first quarter of 2017. Preliminary pharmacodynamic data from twelve Jewelfish patients presented in October 2018 at the World Muscle conference demonstrated sustained >2-fold increase in median SMN protein levels versus baseline over 12 months of treatment. Updated two-year results were presented in October 2022 at the World Muscle conference demonstrating an overall stabilization in the mean score of exploratory efficacy outcomes from baseline to Month 24. Also, Evrysdi was well tolerated, with no drug-related adverse events leading to withdrawal from the study. The study has completed recruitment.

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Rainbowfish is an open-label, single-arm, multicenter study, investigating the efficacy, safety, pharmacokinetics and pharmacodynamics of Evrysdi in babies, from birth to six weeks of age (at first dose) with genetically diagnosed SMA who are not yet presenting with symptoms. The study has completed recruitment. Interim data from Rainbowfish showed that 80 percent of pre-symptomatic infants with SMA treated with Evrysdi for at least 12 months achieved motor milestones such as sitting without support, rolling, crawling, standing unaided, and walking independently.

Bio-e Platform

Our Bio-e platform consists of small molecule compounds that target oxidoreductase enzymes that regulate oxidative stress and inflammatory pathways central to the pathology of a number of CNS diseases. Oxidation-reduction, or redox, reactions are an essential component of the generation and regulation of energy in living systems. These reactions are regulated through a set of enzymes known as oxidoreductase enzymes that uniquely require the transfer of an electron, or a redox chemical reaction, to affect their biological activity.

One of the advanced molecules in our Bio-e platform is vatiquinone. Vatiquinone is a small molecule orally bioavailable compound that has been in development for inherited mitochondrial diseases and related genetic disorders of oxidative stress. Vatiquinone targets 15-lipoxygenase, or 15-LO, a key regulator of oxidative stress, lipid-based neuro-inflammation, alpha-synuclein oxidation and aggregation and cell death. In the third quarter of 2020, we initiated a registration-directed Phase 2/3 randomized, placebo-controlled trial of vatiquinone in approximately 60 children with mitochondrial disease associated seizures, called MIT-E. We have completed enrollment in this trial after previously experiencing delays in enrollment due to the COVID-19 pandemic. All subjects were followed for one month to ensure a baseline seizure frequency, and have been randomized to receive vatiquinone or placebo for six months. We anticipate results from the Phase 2/3 trial to be available in the second quarter of 2023. Mitochondrial disease associated seizures is a highly morbid condition of refractory seizures in patients with inherited mitochondrial disease. We estimate that there are approximately 20,000 patients with mitochondrial disease associated seizures globally. The clinical rationale for the MIT-E trial is based on reports of decreased seizure frequency, disruption of status epilepticus and reduced mortality risk and disease-associated morbidity recorded through compassionate use studies of vatiquinone in mitochondrial disease patients conducted in the United States and EU.

Additionally, we initiated a registration-directed Phase 3 trial of vatiquinone in approximately 120 patients with Friedreich ataxia in the fourth quarter of 2020, called MOVE-FA. The MOVE-FA trial is an 18-month parallel arm, placebo-controlled study evaluating vatiquinone versus placebo in children and young adults with Friedreich ataxia. We have completed enrollment for the MOVE-FA trial and we anticipate results to be available in the second quarter of 2023. Friedreich ataxia is a rare and life-shortening neurodegenerative disease caused by a single defect in the FXN gene which causes reduced production of the frataxin protein. We believe that there are approximately 25,000 Friedreich ataxia patients globally. Vatiquinone has previously been studied in Friedreich ataxia patients in a Phase 2 trial that included a six-month placebo-controlled phase followed by an 18-month open label extension. In this trial, long-term vatiquinone treatment (18-24 months) was associated with an improvement in overall disease severity and neurological function relative to natural history. Vatiquinone has been dosed in over 500 subjects and has been generally well-tolerated in the clinic.

The other advanced molecule in our Bio-e platform is utreloxastat, a small molecule orally bioavailable compound that targets 15-LO and is in development for the potential treatment of adult CNS patients. In the third quarter of 2021, we completed a Phase 1 trial in healthy volunteers to evaluate the safety and pharmacology of utreloxastat. Utreloxastat was found to be well-tolerated with no reported serious adverse events while demonstrating predictable pharmacology. We initiated a Phase 2 trial of utreloxastat for ALS in the first quarter of 2022 and enrollment is ongoing. ALS is a rapidly progressing neurodegenerative disease caused by oxidative damage which leads to neuronal cell death and muscular atrophy. We believe that there are approximately 150,000 ALS patients globally.

Metabolic Platform

Our metabolic platform seeks to identify potential treatments for metabolic disorders. The most advanced molecule in our metabolic platform is sepiapterin, a precursor to intracellular tetrahydrobiopterin, which is a critical enzymatic cofactor involved in metabolism and synthesis of numerous metabolic products. Sepiapterin has been pursued as a possible treatment for orphan metabolic diseases associated with defects in the tetrahydrobiopterin biochemical pathways, including

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PKU. PKU is an inborn error of metabolism caused predominantly by mutations in the phenylalanine hydroxylase gene resulting in toxic buildup of the amino acid phenylalanine, or Phe, in the brain, and, if left untreated, severe and irreversible disabilities such as permanent intellectual disability, seizures, delayed development, behavioral problems and possibly psychiatric disorders can occur. We believe that there are approximately 58,000 PKU patients globally. In December 2019, it was announced that the Phase 2 trial for sepiapterin as a potential treatment for PKU met its primary and secondary endpoints, achieving statistically-significant and clinically-meaningful reduction in blood Phe levels compared to both baseline and an active control group. We initiated a registration-directed Phase 3 trial for sepiapterin for PKU in the third quarter of 2021 with the primary endpoint in the study of achieving statistically-significant reduction in blood Phe level. The primary analysis population includes those patients who have a greater than 30% reduction in blood Phe levels during the Part 1 run-in phase of the trial. In January 2023, we announced preliminary data from the Part 1 run-in phase of this trial, including that the mean reduction in blood Phe levels in an initial cohort of subjects during the Part 1 would be recognized as clinically meaningful if maintained in Part 2 of the trial. We now expect results from Part 2 of this trial to be available in May 2023 as the trial is overenrolled and additional time is required for the entirety of the primary analysis population to complete the study.

Gene Therapy Platform

Our gene therapy platform focuses on the development of innovative therapies for rare, debilitating diseases of the CNS. In addition to Upstaza, our gene therapy platform includes an asset targeting Friedreich ataxia continues to undergo preclinical studies. We continue to work towards initiating a clinical study for this program. Additionally, the gene therapy platform includes our program targeting Angelman syndrome, a rare, genetic, neurological disorder characterized by severe developmental delays. We continue to work towards submitting a filing in support of the first-in-human study for this program.

Oncology Platform

Unesbulin is our most advanced oncology agent. Unesbulin is a small molecule inhibitor of tubulin polymerization that is associated with cell cycle arrest. In addition, administration is associated with a hyperphosphorylation of tumor BMI1 protein that subsequently leads to BMI1 protein degradation and reduction in BMI1 protein function. We have assessed unesbulin in a Phase 1 multi-center study in patients with advanced solid tumors. Unesbulin is also being evaluated in LMS in patients who have relapsed or are refractory to current treatments. LMS is a type of sarcoma that manifests as malignant soft tissue tumors of muscle tissue. Preclinical evaluations suggested that unesbulin had synergistic effects in combination with dacarbazine. Approximately 4,000 patients are diagnosed with LMS annually in the United States. We completed a Phase 1 dose escalation study of unesbulin for LMS in the fourth quarter of 2021. Unesbulin in combination with dacarbazine was found to be well-tolerated and a dose was selected for subsequent trials. We initiated a registration-directed Phase 2/3 trial of unesbulin for the treatment of LMS in the first quarter of 2022 and enrollment is ongoing.

We are also assessing unesbulin for the treatment of DIPG. DIPG is a rapidly fatal pediatric cancer with 90% of patients dying within two years of diagnosis. There are approximately 300 patients diagnosed annually in the United States. We completed a Phase 1 dose-escalation trial in DIPG patients in the fourth quarter of 2021. The initiation of our registration-directed Phase 2 trial of unesbulin for DIPG was delayed as we continued to track the progress of patients in our Phase 1 trial and analyze the corresponding data. We now expect to initiate a registration-directed Phase 2/3 trial of unesbulin for the treatment of DIPG in the fourth quarter of 2023.

While we have decided to deprioritize the emvododstat program for the treatment of acute myeloid leukemia, or AML, we are exploring other potential treatments for AML as part of our oncology platform.

We received grant funding of $5.4 million for our oncology platform from the Wellcome Trust. To the extent that we develop and commercialize certain program intellectual property on a for-profit basis ourselves or in collaboration with a partner (provided we retain overall control of worldwide commercialization), we may become obligated to pay to Wellcome Trust development and regulatory milestone payments. Our first such milestone payment of $0.8 million to Wellcome Trust occurred in the second quarter of 2016. During the year ended December 31, 2022, we incurred $2.5 million of development milestones in connection with the enrollment of patients in the registration-directed Phase 2/3 trial of unesbulin for the treatment of LMS, which is recorded in other long-term liabilities on the balance sheet and will

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be payable upon the earlier to occur of the first dose administered to the last patient enrolled in the study or the termination of dosing of all patients in the study. Additional milestone payments of up to an aggregate of $14.5 million may become payable by us to Wellcome Trust under this agreement. For additional information, see “Item 1. Business – Our Collaborations and Funding Arrangements.”

As part of our continuous portfolio review, we have decided to deprioritize our program for emvododstat for the treatment of COVID-19.

Translarna (ataluren)

Mechanism of action

We discovered Translarna by applying our technologies to identify molecules that promote or enhance the suppression of nonsense mutations. Nonsense mutations are implicated in a variety of genetic disorders. Nonsense mutations create a premature stop signal in the translation of the genetic code contained in mRNA and prevent the production of full-length, functional proteins. Based on our research, we believe that Translarna interacts with the ribosome, which is the component of the cell that decodes the mRNA molecule and manufactures proteins, to enable the ribosome to read through premature nonsense stop signals on mRNA and allow the cell to produce a full-length, functional protein. As a result, we believe that Translarna has the potential to be an important therapy for genetic disorders which are the result of a nonsense mutation. Genetic tests are available for many genetic disorders, including those noted above, to determine if the underlying cause is a nonsense mutation. Translarna has been generally well-tolerated in all of our clinical trials to date, which have enrolled over 1,000 individuals to date.

Planned and ongoing clinical development of Translarna in nonsense mutation Duchenne muscular dystrophy

Study 041

Overview. As a specific obligation to our marketing authorization in the EEA, we are required to conduct and submit to the EMA the results of a three-year clinical trial to confirm the efficacy and safety of Translarna in the treatment of ambulatory patients with nmDMD aged five years or older. The trial is comprised of two stages: an 18-month randomized, double-blind, placebo controlled clinical trial followed by an 18-month open label extension period. We refer to the 18-month clinical trial portion as “Stage 1” and the 18-month extension period as “Stage 2”. We refer to Stage 1 and Stage 2 together as Study 041. In September 2022, as part of our specific obligation, we submitted a report on Stage 1 and data from Stage 2 in connection with a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization.

For a discussion of the risks related to conducting clinical trials, in general, and Study 041, in particular, please see “Item 1A. Risk Factors-Risks Related to the Development and Commercialization of our Product and our Product Candidates” and “-Risks Related to Regulatory Approval of our Product and our Product Candidates”.

Enrollment. According to the study protocol, Study 041 enrolled nmDMD patients aged five years and above who achieve a 6-minute walk distance, or 6MWD, equal to or greater than 150 meters at three pre-treatment evaluation times (screening, baseline day one and baseline day two), tested as set forth in the protocol. Qualified participants also needed to perform timed function tests of running/walking 10 meters, climbing/descending four stairs and standing from supine within 30 seconds at both screening and baseline, and meet the other criteria set forth in the protocol.

We completed enrollment of Study 041 in the fourth quarter of 2020. Of the 363 patients enrolled in Study 041, 185 patients meet the criteria for inclusion in the primary analysis population, which we refer to as the modified intention-to-treat population, or mITT. Patients included in the mITT must be at least 7, but less than 16, years old, with a 6MWD of equal to or greater than 300 meters and a stand from supine time of five seconds or more, each as tested at screening and baseline.

Objectives and endpoints. The primary objective of Study 041 is to evaluate the effect of Translarna on ambulation and endurance as assessed by the 6-minute walk test, or 6MWT. Based on the study protocol, the primary analysis of Stage 1

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was to evaluate the difference in slope of change in 6MWD from baseline to week 72 between Translarna and placebo in the mITT population. Data from participants who did not qualify for inclusion in the mITT were used for summary and analysis of efficacy endpoints.

Slope of change in 6MWD over 144 weeks will also be assessed as a secondary endpoint at the conclusion of Stage 2, and the consistency of the results at 144 weeks against week 72 will be assessed. Changes in 6MWD from baseline to week 72 and week 144 respectively will also be assessed as secondary endpoints.

A secondary objective of Study 041 is to determine the effects of Translarna on ambulation and burst activity as assessed by timed function tests (10-meter run/walk, 4-stair stair-climb, and 4-stair stair descend). Each timed function test was analyzed as a secondary endpoint for both the mITT and ITT populations at the end of Stage 1 and will also be analyzed at the end of Stage 2. A separate analysis evaluates 10-meter run/walk results in participants with a baseline 6MWD below 300 meters. An additional analysis evaluates a composite endpoint of average change in times to run/walk 10 meters, climb 4 stairs, and descend 4 stairs. We also assess each of time to loss of ambulation, stair-climbing and stair-descending over 72 weeks and over 144 weeks.

Determination of the effects of Translarna on lower-limb muscle function as assessed by the North Star Ambulatory Assessment, or NSAA, a functional scale designed for boys affected by DMD, serves as an additional secondary objective. NSAA scores were analyzed as secondary endpoints for both the mITT and ITT populations at the end of Stage 1 and will also be analyzed as at the end of Stage 2. A separate analysis for Stage 2 will evaluate changes in total score in participants with a baseline 6MWD of equal to or greater than 400 meters and under 7 years of age. We also assess the risk of loss of NSAA items over 72 weeks and 144 weeks.

The safety profile of Translarna has been evaluated throughout Stage 1 and will continue to be evaluated for Stage 2 as a secondary objective.

Certain exploratory endpoints are also assessed in Study 041. In patients aged 7 years and above, change from baseline in upper limb function is assessed using both functional testing and parent/caregiver-reported questionnaires. In patients under 7 years of age, muscle strength is assessed by change from baseline in myometry parameters. At pre-qualified sites only, magnetic resonance imaging are used to assess change from baseline in muscle fat fraction. The effects of Translarna on pulmonary function are assessed by change from baseline in forced vital capacity. In addition, subject- and parent/caregiver-reported questionnaires and at-home diaries are assessed to evaluate the effect of Translarna on health-related quality of life (HRQL) changes from baseline.

Stratification. In Stage 1, participants were randomized 1:1 to placebo or Translarna (10, 10, 20 mg/kg). The randomization was stratified based on type of concomitant corticosteroid used at baseline (deflazacort versus prednisone/prednisolone), maximum of the two valid 6-minute walk tests performed at baseline day 1 and day 2 (<300 meters versus ≥300 to <350 meters, versus ≥350 to <400 meters, versus ≥400 meters), and time to stand from supine at baseline (<5 seconds versus ≥5 seconds).

Results. In June 2022, we announced top-line results from Stage 1. Within Stage 1, Translarna showed a statistically significant treatment benefit across the entire ITT population as assessed by the 6MWT as assessed by the NSAA. Additionally, Translarna showed a statistically significant treatment benefit across the ITT population within the 10-meter run/walk and 4-stair stair climb, while also showing a positive trend in the 4-stair stair descend although not statistically significant. Within the mITT population, Translarna demonstrated a positive trend across all endpoints, however, statistical significance was not achieved. Translarna was also well tolerated.

Observational study, data collection, and open label, extension trials of Translarna for treatment of nmDMD

We are undertaking a multi-center, observational post-approval study of patients receiving Translarna on a commercial basis, or Study 025o, as required by the Pharmacovigilance Risk Assessment Committee of the EMA and in collaboration with TREAT-NMD and the Cooperative International Neuromuscular Research Group. During the study we will gather data on the safety, effectiveness, and prescription patterns of Translarna in routine clinical practice. We have successfully enrolled more than 200 patients in Study 025o and we expect to follow their progress over five years.

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Pursuant to a temporary managed access agreement entered into in July 2016 between us, the UK National Institute for Health and Care Excellence, or NICE, National Health Services England, or NHS England, and other interested parties, the NorthStar Network is collecting data on the efficacy of Translarna for the treatment of nmDMD as measured by the NorthStar Ambulatory Assessment test. Patients receiving Translarna will be compared to an historical natural history population as well as a matched control group in order to assess response to treatment over the period specified in the managed access agreement.

An open label, extension trial, Study 016, involving patients who participated in ACT DMD is also ongoing, across multiple sites in the United States and Canada with patients on commercial supply. We ended the two open label extension trials involving patients who had participated in our prior trials for nmDMD and have transitioned U.S. and Canadian patients from these trials to Study 016 while other patients have transitioned to commercial supply via commercial pathways or EAP programs.

Completed clinical trials of Translarna in nonsense mutation Duchenne muscular dystrophy

Phase 2 pediatric study

As part of our pediatric development commitments under our marketing authorization in the EEA and to support the potential expansion of the Translarna label to younger patients with nmDMD, we initiated a Phase 2 pediatric clinical study to evaluate the safety and pharmacokinetics of Translarna in patients two to five years of age. The study, initiated in June 2016, included a four-week screening period, a four-week study period, and a 48-week extension period for patients who complete the four-week study period (52 weeks total treatment). In July 2018, the EMA approved a label-extension request to our marketing authorization for Translarna in the EEA to include patients from two to up to five years of age, based on data from this study.

Phase 3 clinical trial of Translarna for nmDMD (ACT DMD)

In October 2015, we announced results from ACT DMD, also referred to as Study 020, our Phase 3, double-blind, placebo-controlled, 48-week clinical trial to evaluate the safety and efficacy of Translarna in patients with nmDMD. ACT DMD involved 228 patients at 53 sites across 18 countries.

In the overall intent-to-treat, or ITT, study population, the primary endpoint of change from baseline at week 48 in the 6MWT, showed a 15 meter benefit in favor of Translarna, which did not meet statistical significance.

A summary of the safety and efficacy results from ACT DMD is outlined below.

Safety and tolerability. The results of ACT DMD confirmed the favorable safety profile of Translarna seen in our 48-week, 174-patient Phase 2b double-blind, placebo controlled clinical trial evaluating the long-term safety and efficacy of Translarna in patients with nmDMD completed in 2009, or the Phase 2b trial.

Translarna was generally well tolerated at both dose levels in our Phase 2b clinical trial. There were no study discontinuations due to adverse events. Most treatment-emergent adverse events were mild or moderate in severity. Investigators’ attributions of drug-related adverse effects were generally similar across the placebo and Translarna arms. The most common adverse events in this trial were vomiting (46.6% overall), headache (29.3%), diarrhea (24.1%), nasopharyngitis (20.7%), fever (19.0%), cough (19.0%) and upper abdominal pain (17.8%). These events were generally balanced across treatment arms and are typical of pediatric illnesses. Adverse events with at least a 10% incidence in any treatment arm that were seen with increased frequency from the placebo group to the Translarna 40 mg dose group to the Translarna 80 mg dose group were nausea (12.3% for placebo, 14.0% for the Translarna 40 mg group and 16.7% for the Translarna 80 mg group), abdominal pain (7.0% for placebo, 12.3% for the Translarna 40 mg group and 16.7% for the Translarna 80 mg group), pain in extremity (10.5% for placebo, 12.3% for the Translarna 40 mg group and 13.3% for the Translarna 80 mg group), flatulence (7.0% for placebo, 8.8% for the Translarna 40 mg group and 11.7% for the Translarna 80 mg group) and nasal congestion (7.0% for placebo, 8.8% for the Translarna 40 mg group and 10.0% for the Translarna 80 mg group). There were no serious adverse events observed during the trial that were considered possibly or probably

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related to Translarna. Determination of relatedness of the serious adverse event to Translarna was made by the trial investigator, based on his or her judgment.

Translarna was generally well tolerated in ACT DMD. There were two study discontinuations due to adverse events, including one in the Translarna arm (constipation) and one in the placebo arm (disease progression). Most treatment-emergent adverse events were mild or moderate in severity. The most common adverse events in this trial were vomiting (20.4% overall), nasopharyngitis (20.0%), headache (18.3%), and fall (17.8%). These events were generally balanced across treatment arms and are typical of pediatric illnesses and/or patients with DMD. Adverse events with at least a 10% incidence in either treatment arm that were seen with increased frequency from the placebo group to the Translarna 40 mg dose group were vomiting (18.3% for placebo, 23.6% for the Translarna 40 mg group), nasopharyngitis (19.1% for placebo, 20.9% for the Translarna 40 mg group), fall (17.4% for placebo, 18.3% for the Translarna 40 mg group), cough (11.3% for placebo, 16.5% for the Translarna 40 mg group) diarrhea (8.7% for placebo, 17.4% for the Translarna 40 mg group), and pyrexia (10.4% for placebo, 13.9% for the Translarna 40 mg group). An overview of adverse events in this trial is shown in the table below.

Overview of treatment-emergent adverse events in Phase 3 clinical trial (as-treated population)

Translarna All

Placebo 40 mg group patients

Adverse events by severity

Grade 4 (life-threatening) — — —

Adverse events by relatedness

Discontinuations due to adverse events 1 (0.9) % 10(.9) % 20(.9) %

Serious adverse events 4 (3.5) % 43(.5) % 83(.5) %

Deaths — — —

There were no serious adverse events observed during the trial that were considered possibly or probably related to Translarna. Determination of relatedness of the serious adverse event to Translarna was made by the trial investigator, based on his or her judgment.

Intent to Treat (ITT) Population. The primary efficacy endpoint in ACT DMD was change in 6MWD from baseline to week 48. In the ITT population, a 15 meter benefit (p=0.213) was observed in the primary endpoint which did not meet statistical significance.

Secondary endpoints in the trial included the proportion of patients with at least 10% worsening in 6MWD at week 48 of the trial compared to baseline, or 10% 6MWD worsening, and change in timed function tests of time to run/walk 10 meters, climb four stairs and descend four stairs. The hazard ratio for Translarna versus placebo was 0.75 (p=0.160) for 10% 6MWD worsening. Benefits trended in favor of Translarna over placebo in the timed function tests in the ITT population, including observed results in time to run/walk 10 meters (1.2 seconds; p=0.117), time to climb four stairs (1.8 seconds; p=0.058), and time to descend four stairs (1.8 seconds; p=0.012).

Additional endpoints included the NSAA test and the Pediatric Outcomes Data Collection Instrument, or PODCI, a validated tool for measuring quality of life in pediatric patients with orthopedic conditions. These additional endpoints favored Translarna in the ITT population but did not meet statistical significance.

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Pre-Specified Analyses. The statistical analysis plan submitted to the FDA for ACT DMD set forth pre-specified analyses of efficacy to be conducted, including subgroups of patients with baseline 6MWD less than 350 meters and patients with baseline 6MWD of greater than or equal to 300 and less than 400 meters, which we refer to as our key subgroups.

The pre-specification of our key subgroups was scientifically justified based upon knowledge of the biology and natural history of the disease and the evolving understanding of the of the six minute walk test as used to assess DMD patients. We considered the pre-specified less than 350 meter baseline 6MWD population as a key subgroup based on the knowledge that 350 meters represents a transition point for patients towards a more rapid decline in walking ability as supported by analysis from our Phase 2b trial. Furthermore, we considered the pre-specified 300 to 400 meter baseline 6MWD population as a key subgroup based on an increasing understanding of the sensitivity limitations of the six minute walk test as an endpoint in 48-week studies. Natural history data suggest that the 6MWT may not be the optimal tool to demonstrate efficacy in patients with either a baseline 6MWD of less than 300 meters, as these patients have significant muscle loss as monitored by magnetic resonance spectroscopy and are at high risk for losing ambulation regardless of treatment, or in high walking patients, such as those with a baseline 6MWD at or greater than 400 meters, as these patients are likely to remain stable over a 48 week testing period.

By defining these key subgroups, we thereby also defined corresponding subgroups of patients with baseline 6MWD greater than or equal to 350 meters, greater than or equal to 400 meters, and less than 300 meters. We also pre-specified a meta-analysis of the combined results from ACT DMD and the Phase 2b ambulatory decline phase patients.

Pre-specified sub-group analysis. We saw strong evidence of clinical benefit in the pre-specified subgroup of patients with baseline 6MWD between 300 and 400 meters. Specifically, we observed a benefit in Translarna-treated patients of 47 meters (nominal p=0.007) in the 6MWT in this subgroup. This was consistent with an observed benefit of 49 meters (nominal p=0.026) in our Phase 2b clinical trial in the 300 to 400 meters baseline 6MWD population. We also saw clinically meaningful benefit for Translarna over placebo in each of the timed function tests, including observed results in time to run/walk 10 meters (2.1 seconds; nominal p=0.066), time to climb four stairs (3.6 seconds; nominal p=0.003), and time to descend four stairs (4.3 seconds; nominal p<0.001). The hazard ratio for Translarna versus placebo was 0.79 (nominal p=0.418) for 10% 6MWD worsening. In addition, a benefit of 4.5 points over placebo (nominal p=0.041) was observed in the NSAA test, which we believe is clinically meaningful. We believe that the benefits observed in this key pre-specified subgroup support the use of the 6MWT in the patients with a walking ability in the 300 to 400 meters range and the understanding that the reliability of the 6MWT over a 48 week period was limited at both the lower and upper ends of our 6MWD enrollment range.

In the pre-specified subgroup of patients with baseline 6MWD less than 350 meters, we observed a benefit of 24 meters (nominal p=0.210) in favor of Translarna in the 6MWT. An analysis of the results from our Phase 2b clinical trial in the less than 350 meters baseline 6MWD population, defined post-hoc, demonstrated a 68 meter benefit in the 6MWT (nominal p=0.006). In the timed function tests for the subgroup of ACT DMD patients with baseline 6MWD less than 350 meters, we observed benefits for Translarna over placebo in time to run/walk 10 meters (2.3 seconds; nominal p=0.033), time to climb four stairs (4.2 seconds; nominal p=0.019) and time to descend four stairs (4.0 seconds; nominal p=0.007).

Typically, a trial result is statistically significant if the chance of it occurring when the treatment is like placebo is less than one in 20, resulting in a p-value of less than 0.05. A nominal p-value is the result of one particular comparison when more than one comparison is possible, such as when two active treatments are compared to placebo or when two or more subgroups are analyzed.

As described above, we believe the 6MWT lacks sensitivity to detect a clinical effect in patients with baseline less than 300 meters in a 48-week trial. However, the timed function tests trended in favor of patients treated with Translarna with a baseline 6MWD below 300 meters, including observed benefit over placebo in time to run/walk 10 meters (2.5 seconds; nominal p=0.066), time to climb four stairs (2.4 seconds; nominal p=0.790), and time to descend four stairs (2.1 seconds; nominal p=0.595). We believe the positive trends in this population reflect that short muscle burst activity tests may be a better clinical measure for patients that are at a more advanced stage of disease progression. Consistent with the natural history of ambulatory DMD patients with 6MWD greater than 400 meters, which indicates stability in walking ability over a 48 week period, we observed no meaningful difference in 6MWT between patient groups. Similarly, we observed no meaningful difference in 6MWT between patient groups with baseline 6MWD greater than 350 meters.

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Pre-specified meta-analysis. The meta-analysis combined efficacy results from the ACT DMD ITT population and Phase 2b ambulatory decline phase subgroup. The Phase 2b ambulatory decline phase group includes the patients from our randomized, double-blind, placebo controlled, Phase 2b clinical trial in patients with nmDMD who would have met the enrollment criteria of ACT DMD.

Results from the meta-analysis showed a statistically significant 21 meter improvement in 6MWD (p = 0.015) favoring Translarna.

Additionally, the meta-analysis showed statistically significant benefit for Translarna over placebo across each timed function test including time to run/walk 10 meters (1.4 seconds; p=0.025), time to climb four stairs (1.6 seconds; p =0.018) and time to descend four stairs (2.0 seconds; p=0.004). The hazard ratio for Translarna versus placebo was 0.66 (p=0.023) for 10% 6MWD worsening. We believe that we are able to demonstrate a statistically significant outcome in the 6MWD in the meta-analysis, despite the significant variability in baseline 6MWD among patients in both ACT DMD and the Phase 2b trial’s ambulatory decline phase, due to the substantially larger patient population available in the pooled analysis.

Retrospective Analysis. We also looked back at the observed results in the meta-analysis for all patients with a baseline 300 to 400 meter 6MWD from ACT DMD and the Phase 2b trial. The meta-analysis of these data demonstrated a 45 meter benefit (nominal p<0.001) in the 6MWT as well as clinically meaningful benefits across each secondary endpoint timed function test, including benefit over placebo in time to run/walk 10 meters (2.2 seconds; nominal p=0.008), time to climb four stairs (3.4 seconds; nominal p<0.001) and time to descend four stairs (4.3 seconds; nominal p<0.001). This meta-analysis of patients with baseline 6MWD of 300 to 400 meters was not pre-specified and is defined post-hoc.

A retrospective analysis performed after unblinding trial results can result in the introduction of bias if the analysis is inappropriately tailored or influenced by knowledge of the data and actual results. In addition, nominal p-values cannot be compared to the benchmark p-value of 0.05 to determine statistical significance without being adjusted for the testing of multiple dose groups or analyses of subgroups. Because of these limitations, regulatory authorities typically give greatest weight to results from pre-specified analyses and adjusted p-values and less weight to results from post-hoc, retrospective analyses and nominal p-values.

Statistical Considerations. The pre-specified meta-analysis results, which favored Translarna in the 6MWT and each of the timed function tests, are considered statistically significant. In the pre-specified subgroups of ACT DMD patients with a baseline 6MWD less than 350 meters and 300 to 400 meters, the p-values for the 6MWT and each of the timed function tests are considered nominal. For information with respect to the use of nominal p-values and post-hoc analyses, see Item 1A. Risk Factors, “Subgroup, retrospective, post-hoc, and certain statistical analyses may not be reliable and typically will not form the basis for regulatory approval.”

Participation Criteria and Stratification. Certain key inclusion criteria were specified in the ACT DMD trial protocol for enrollment: the patient had to be 7 through 16 years of age; at the screening visit the patient had to be able to walk no more than 80% of predicted 6MWD compared to healthy boys matched for age and height, but had to be able to walk at least 150 meters during the 6MWT; and the patient must have used systemic corticosteroids for a minimum of six months prior to start of treatment. The ACT DMD trial protocol provided for the exclusion of patients from the trial if, among other things, they recently used systemic aminoglycoside antibiotics, recently initiated or changed corticosteroid therapy or previously received Translarna treatment. Patients enrolled in ACT DMD underwent 48 weeks of blinded treatment prior to the final analysis and the randomization was stratified based on age (<9 years versus ≥9), baseline 6MWD (<350 versus ≥350 meters), and duration of prior use of corticosteroids (<12 months versus ≥12 months).

Study 045

In the fourth quarter of 2018, following the FDA’s recommendation to collect dystrophin data using validated quantification methods, we initiated Study 045, a Phase 2 open label clinical study of 20 boys with nmDMD from ages two to seven, to evaluate the ability of ataluren to increase dystrophin protein levels in boys with nmDMD. Study 045 did not meet its pre-specified primary endpoint. Patients received baseline biopsies prior to the initiation of treatment and follow-up biopsies scheduled at 40 weeks following the start of treatment. However, certain patients were delayed in obtaining the final study muscle biopsies performed at our clinical trial site at the University of California, Los Angeles

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as a result of the COVID-19 pandemic. 8 of 20 patients were unable to undergo biopsies at week 40, and these patients had their second biopsies between 62 and 70 weeks of treatment. Full-length dystrophin levels were measured using both the Electrochemiluminescence, or ECL assay, as the primary endpoint and Immunohistochemistry, or IHC, assay as the secondary endpoint.

The ITT population included the 20 patients enrolled in the study. However, one subject was determined to be non-compliant, as he only took half of the study drug, and one subject did not have adequate biopsy samples to establish baseline levels. Therefore, 18 patients were compliant with the study drug and had evaluable biopsy samples. These 18 patients are considered the evaluable population. 10 of these 18 patients had their second biopsy at week 40 and 8 had their second biopsy between weeks 62 and 70. Patient characteristics, including age and steroid use were consistent across both cohorts.

Overall in the ITT population, there was an increase in dystrophin expression from baseline, on both ECL as the primary endpoint and IHC as the secondary endpoint, but these did not meet a p-value of <0.05. Nevertheless, when studying the 18 patients in the evaluable cohort, we identified a greater increase in dystrophin expression, and this increase did reach a nominal p-value of 0.04 in the analysis of the IHC assay. Also, over 80% of the evaluable subjects demonstrated an increase in dystrophin expression. 8 patients in the evaluable population had longer treatment exposure, ranging from 62-70 weeks, and these 8 patients had markedly greater levels of dystrophin increase with an average of approximately 24% in the ECL assay. We believe that these results suggest that longer duration of treatment resulted in greater biological effect, which is consistent with the long-term Translarna treatment benefit we have previously reported from our other clinical studies and our international drug registry for DMD patients receiving Translarna.

We also measured creatine kinase, or CK, levels of patients in Study 045 as an objective measure of muscle damage. Dystrophin acts as a shock absorber during a muscle contraction and would be expected to protect against muscle damage and therefore reduce CK levels. Consistent with an increase in the level of dystrophin, we observed a marked reduction of approximately 20% in creatine kinase and that longer treatment with Translarna was associated with a greater magnitude of biological effect.

Multi-platform Discovery

We continue to invest in our pre-clinical product pipeline by committing significant resources to research and development programs and business development opportunities within our areas of scientific expertise, including potential collaborations, alliances, and acquisitions or licensing of assets that complement our strategic mission to provide access to best-in-class treatments for patients who have an unmet medical need.

Our Approach

We use multiple drug discovery platforms to discover and develop therapies to target diseases with high-unmet need. Intervening at DNA, RNA and energy production pathways are post-transcriptional control processes, which are the events that occur in a cell following the transcription of DNA into RNA. These processes regulate, for example, how long RNA molecules exist in the cell, how precursor messenger RNA, or pre-mRNA, molecules are processed (spliced), and how efficiently mRNA molecules are translated into proteins. Additionally, several regions of mRNA do not code for the protein and are known as untranslated regions, or UTRs. They are unique to specific mRNAs or groups of mRNAs and are directly involved in the post-transcriptional control of protein production. Interactions of cellular factors with the UTRs in the mRNA determine when and how much protein is produced as well as how mRNA is degraded and eliminated from the cell.

Splicing

Post-transcriptional control processes are the events that occur in a cell following the transcription of DNA into RNA. These processes regulate, for example, how long RNA molecules last in the cell, how exons in precursor messenger RNA, or pre-mRNA, molecules are spliced, and how efficiently mRNA molecules are translated to proteins. In the majority of human protein-encoding genes, the sequence encoding the mature mRNA transcript is not contiguous in the pre-mRNA

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but rather has intervening non-coding regions called introns that interrupt the coding sequences, called exons. These introns are removed from the final mRNA product by a process called splicing that also joins the exons together such that only the exons are retained in the mature mRNA.

We use our splicing technology to identify molecules that modulate splicing of the pre-mRNA. Pre-mRNA splicing is a series of highly organized biochemical reactions. Approximately 94% of all human genes encode pre-mRNAs that undergo splicing. In addition, through splicing, one gene can often generate several mRNA products that include a different set of exons through a process called alternative splicing which results in mature mRNA that encodes different, related proteins. Splicing can be therapeutically targeted, in many human diseases, including SMA, Huntington’s disease, muscular dystrophy and various forms of cancer. We have developed several high-throughput drug discovery technology platforms that enable us to identify small molecule modifiers of pre-mRNA splicing. These technologies rely on sensitive quantification of pre-mRNA isoforms directly in human cells or tissue samples. Using this technology, we have successfully identified orally bioavailable small molecules that correct splicing of SMN2 mRNA. An example of one of these molecules is Evrysdi, which was approved in August 2020 by the FDA for the treatment of SMA in adults and children two months and older. Based on our knowledge of the mechanism of splicing and how small molecules interact with the cellular splicing machinery, we have identified additional small molecule drug candidates that modify splicing of pre-mRNA, promote inclusion of specific exons into mRNA, including pseudoexons, or force skipping of undesired exons from the mature mRNA. We believe that this technology is potentially widely applicable to a large number of target genes across many therapeutic areas.

Nonsense suppression

The protein coding region of mRNA contains the information for the amino acid sequence of the protein product, Additionally, certain sequences in the mRNA encode signals to start protein production and others to stop protein production. Mutations in DNA can result in stop signals within the mRNA that cause protein production to be stopped prematurely. These are termed premature stop codons.

We use our nonsense suppression technology to identify molecules that promote or enhance readthrough of premature stop codons in the mRNA. The presence of a premature stop codon results in translation termination before a full-length protein can be produced. Our nonsense suppression technologies identify small molecules that increase readthrough at the premature stop codon by facilitating the incorporation of a defined set of amino acids at the site of the premature stop codon resulting in the production of a full-length protein. We anticipate that this approach will be applicable to a wide variety of therapeutic areas.

In some instances, the nonsense, or premature stop, codon can cause the degradation of the mRNA through a process called nonsense-mediated decay. In addition to identifying molecules that increase readthrough, we are identifying molecules that can enhance the nonsense suppression effect of readthrough agents, such as Translarna, by preventing the decay of nonsense mutation containing mRNAs, a process known as nonsense mediated decay. We have developed a high throughput screen to identify molecules that increase the level of and stabilize premature stop codon-containing mRNAs. We can evaluate the effect of these molecules alone and in combination with Translarna in cell-based models of disease, identify lead compounds and initiate a chemical optimization program. We are currently in the process of evaluating compounds as single agents and in combination with readthrough compounds in preparation for an optimization program.

Gene therapy

Gene therapy is a technique that uses genes to treat or prevent disease through several approaches including 1) replacing a mutated gene that causes disease with a healthy copy of the gene, 2) inactivating, or “knocking out,” a mutated gene that is functioning improperly or 3) introducing a new gene into the body to help fight a disease. Utilizing our CNS delivery strategy and technologies, we are focused on developing gene therapy product candidates that are engineered and optimized to provide durable treatments, and potentially functional cures, for CNS diseases for which there are currently no approved treatments. By directly administering low doses our therapies using non-pathogenic AAV to deliver therapeutic genes to the target non-dividing neuronal cells in the CNS, which we term targeted micro-dosing, we believe we maximize the probability of achieving a therapeutic benefit and mitigate systemic antibody, cellular immunity and complement-based reactions, minimize the stimulation of new immune responses, and reduce off-target effects.

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We believe that our gene therapy platform will enable us to treat patients across a range of CNS disease indications. Our detailed knowledge and expertise in rare CNS diseases has enabled us to develop a gene therapy platform which we believe has important competitive advantages, is highly differentiated and provides practical approaches for delivery of gene therapies to the CNS in a range of disease indications. Our platform utilizes advanced, commercially-available delivery devices, instrumentation and software to optimize targeting to the region of the CNS known to be involved in the cause of the disease. Targeted micro-dosing ensures direct delivery to the CNS, thereby avoiding systemic administration, mitigating systemic immune and complement responses, minimizing the generation of newly mounted immunity to the gene therapy, and bypassing uptake and excretion of the gene therapy vector by organs such as the liver and kidney which further enhances safety. Our targeted micro-dosing strategy has the added benefit of requiring significantly lower gene therapy doses than systemic dosing would require. Our low dose requirements provide for efficient manufacturing approaches that reduce supply risks, enhance product quality, and lower production costs. Our direct delivery processes have also resulted in a deep understanding of routes of administration that result in effective gene therapy delivery to target cells.

Energy production and oxidative stress

Energy production in cells is critical to their survival. On the other hand, processes that induce oxidative stress in cells can negatively impact them. Energy production takes place in a part of the cell called mitochondria. The mitochondria use the transport of electrons via chemical reactions called redox reactions in their cell membranes to produce adenosine triphosphate, or ATP, which is the central energy molecule inside cells. This process of moving electrons to produce ATP is termed electron transfer or transport. The redox reactions, however, can also cause oxidative stress. We use our expertise in energy production via electron transfer chemical reactions and in oxidative stress to develop potentially first-in-class therapeutics for unmet medical needs. One area of our focus is on inherited mitochondrial diseases. Mitochondrial diseases often derive from defects in energy production and oxidative stress pathway. These diseases commonly result in severe neurological impairment and death at an early age. Through our screening processes, we have identified multiple drug targets which we are assessing in nonclinical studies with the aim of identifying additional product candidates to take into clinical development. Similar strategies potentially can be used for broader sets of diseases. We believe such approaches to these types of intractable diseases have the potential to lead to novel therapies to address areas of high unmet medical need.

Our Collaborations, License Agreements and Funding Arrangements

We currently have ongoing collaborations with Roche and the SMA Foundation for SMA, a license agreement with National Taiwan University, or NTU, for Upstaza, a collaboration and license agreement with Akcea for Tegsedi and Waylivra and a license agreement with Shiratori Pharmaceutical Co., Ltd., or Shiratori, relating to the manufacturing processes and technology for sepiapterin. We also have received grant funding from Wellcome Trust pursuant to funding agreements under which we have continuing obligations.

Roche and the SMA Foundation

Overview. In November 2011, we entered into a license and collaboration agreement with Roche and the SMA Foundation to further develop and commercialize compounds identified under our SMA sponsored research program with the SMA Foundation and to research other small molecule compounds with potential for therapeutic use in patients with SMA. The research term of this agreement was terminated effective December 31, 2014. The ongoing collaboration is governed by a joint steering committee consisting of an equal number of representatives of us, the SMA Foundation and Roche. We, the SMA Foundation and Roche have agreed to endeavor to make decisions by consensus, but if the joint steering committee cannot reach agreement after following a specified decision resolution procedure, Roche’s decision will control. However, Roche may not exercise its final decision-making authority with respect to certain specified matters, including any decision that would increase our or the SMA Foundation’s obligations, reduce our or the SMA Foundation’s rights, expand Roche’s rights, or reduce Roche’s obligations under the license and collaboration agreement.

Commercialization. We have granted Roche worldwide exclusive licenses, with the right to grant sublicenses, to our patent rights and know-how with respect to such compounds and products. Roche is responsible for pursuing worldwide

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clinical development of compounds from the research program and has the exclusive right to develop and commercialize compounds from the collaboration.

Payments and Contingent Payments. Pursuant to the license and collaboration agreement, Roche paid us an upfront non-refundable payment of $30.0 million. During the research term, which was terminated effective December 31, 2014, Roche provided us with funding, based on an agreed- upon full-time equivalent rate, for an agreed-upon number of full- time equivalent employees that we contributed to the research program. We are eligible to receive up to an aggregate of $135.0 million in payments if specified development and regulatory milestones are achieved and up to an aggregate of $325.0 million in payments if specified sales milestones are achieved. We are also entitled to tiered royalties ranging from 8% to 16% on worldwide net product sales of products developed pursuant to the collaboration. Roche’s obligation to pay us royalties will expire generally on a country-by- country basis at the latest of the expiration of the last-to-expire patent covering a product in the given country, the expiration of regulatory exclusivity for that product in such country or 10 years from the first commercial sale of that product in such country. However, the royalties payable to us may be decreased in certain circumstances. For example, the royalty rate in a particular country is reduced if the product is not protected by patents in that country and no longer entitled to regulatory exclusivity in that country. We remain responsible for making any payments to the SMA Foundation that may become due under our pre-existing sponsored research agreement with the SMA Foundation.

As of December 31, 2022, we had recognized a total of $210.0 million in milestone payments and $172.9 million royalties on net sales pursuant to the SMA License Agreement. As of December 31, 2022, there are no remaining development and regulatory event milestones that we can receive. The remaining potential sales milestones as of December 31, 2022 are $250.0 million upon achievement of certain sales events.

In July 2020, we entered into a Royalty Purchase Agreement with RPI 2019 Intermediate Finance Trust, or RPI, and, for the limited purposes set forth in the agreement, Royalty Pharma PLC, or the Royalty Purchase Agreement. Pursuant to the Royalty Purchase Agreement, we sold to RPI 42.933%, or the Assigned Royalty Payment, of our right to receive sales-based royalty payments, or the Royalty, on worldwide net sales of Evrysdi and any other product developed pursuant to the SMA License Agreement. In consideration for the sale of the Assigned Royalty Payments, RPI paid us $650.0 million in cash consideration. We have retained a 57.067% interest in the Royalty and all economic rights to receive the remaining potential regulatory and sales milestone payments under the SMA License Agreement. The Royalty Purchase Agreement will terminate 60 days following the earlier of the date on which Roche is no longer obligated to make any payments of the Royalty pursuant to the SMA License Agreement and the date on which RPI has received $1.3 billion in respect of the Assigned Royalty Payments.

Termination. Unless terminated earlier, the license and collaboration agreement will expire on the date when no royalty or other payment obligations are or will become due under the agreement. Roche’s termination rights under the license and collaboration agreement include the right to terminate the agreement at any time after November 22, 2013 on a product-by-product and country-by-country basis upon three months’ notice before the launch of the applicable product or upon nine months’ notice thereafter; and the right to terminate the agreement in specified circumstances following a change of control of us. The license and collaboration agreement provides that we or Roche may terminate the agreement in the event of an uncured breach by the other party of a material provision of the agreement, or in the event of the other party’s bankruptcy or insolvency. Upon termination of the collaboration agreement by Roche for convenience or termination by us as a result of Roche’s breach, bankruptcy, change of control or patent challenge, we have the right to assume the development and commercialization of product candidates arising from the license and collaboration agreement. In that event, we may become obligated to pay royalties to Roche on sales of any such product.

SMA Foundation

Overview. In June 2006, we entered into a sponsored research agreement with the SMA Foundation under which we and the SMA Foundation have collaborated in the research and preclinical development of small molecule therapeutics for SMA. As discussed above, we are also collaborating with the SMA Foundation and Roche to further develop these compounds. Pursuant to the sponsored research agreement, as amended, the SMA Foundation provided us with $13.3 million in funding. The SMA Foundation is not obligated to provide any further funding under this agreement.

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Continuing financial obligations. We may become obligated to pay the SMA Foundation single-digit royalties on worldwide net product sales of any collaboration product that we successfully develop and subsequently commercialize or, with respect to collaboration products we outlicense, including Evrysdi, a specified percentage of certain payments we receive from our licensee. As discussed above, we have outlicensed rights to Roche pursuant to a license and collaboration agreement. We are not obligated to make such payments unless and until annual sales of a collaboration product exceed a designated threshold. Since inception, the SMA Foundation has earned $28.5 million, $24.5 million which was paid and $4.0 million which was accrued as of December 31, 2022. Our obligation to make such payments would end upon our payment to the SMA Foundation of an aggregate of $52.5 million, which we refer to as the repayment amount.

Reversion rights. In specified circumstances, including those involving our decision to discontinue development or commercialization of a collaboration product, our uncured failure to meet agreed timelines or those that might arise following our change of control, we may be obligated to grant the SMA Foundation exclusive or non-exclusive sublicensable rights under our intellectual property, in certain collaboration products, among other rights, to assume the development and commercialization of such collaboration products and to provide the SMA Foundation with other transitional assistance, which we refer to as a reversion. In some such cases, we may be entitled to receive licensing fee payments from the SMA Foundation and single-digit royalties on sales of the applicable collaboration product, which amounts we collectively refer to as reversion payments. In other cases, the SMA Foundation is not required to make any payments to us in connection with the licenses it receives from us.

Termination. Unless terminated earlier, the sponsored research agreement will continue until the earliest of the SMA Foundation’s receipt of the repayment amount or, if there was a reversion, either our receipt of all reversion payments that the SMA Foundation may be obligated to make to us or, if the SMA Foundation is not obligated to make reversion payments, the expiration of the last-to-expire patent we licensed to the SMA Foundation in connection with such reversion. The sponsored research agreement provides that either party may terminate the agreement in the event of an uncured material breach by the other party or in the event of the other party’s bankruptcy or insolvency.

National Taiwan University

Overview. Pursuant to the license and technology transfer agreement, originally entered into between Agilis Biotherapeutics, Inc., or Agilis, NTU and Professor Wuh-Liang (Paul) Hwu, in December 2015, or the NTU Licensing Agreement., NTU granted to us an exclusive, perpetual license, with the right to grant sublicenses through all tiers, to research and use the intellectual property, data, chemistry, manufacturing and controls, or CMC, records, documents, confidential information, materials and know-how pertaining to the Research, including Upstaza for the treatment of AADC deficiency,under the NTU Collaboration Agreement (as defined below), or the Technology, and to develop, make, manufacture, use, sell, import and market the Technology and any other products made, invented, developed or incorporated by or with the Technology, or the Licensed Products. Subject to any regulatory delays or issues, we are obligated to research, use and develop the Technology to manufacture Licensed Products by December 23, 2025. Additionally, we are obligated to obtain marketing approval of Upstaza for the treatment of AADC deficiency, either by the FDA or by the EMA, by December 31, 2024. In July 2022, the European Commission approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA, satisfying that obligation.

Funding Obligations. NTU received a lump sum of $100,000 upon execution of the NTU Licensing Agreement, as well as $2.0 million milestones payments based on the achievement of certain clinical and regulatory milestones, including $1.2 million that became due and payable in July 2022 upon the European Commission’s approval of Upstaza for the treatment of AADC deficiency. Additionally, NTU will be entitled to receive contingent payments from us based on (i) annual license maintenance fees, (ii) a low double-digit percentage royalty of annual net sales of Licensed Products, and (iii) a percentage of sublicense revenue, ranging from low-twenties to mid-twenties. The annual license maintenance fees are non-refundable, but creditable against annual net sales payments.

Intellectual Property. All intellectual property relating to the manufacture, production, assembly, use or sale of Technology and any Licensed Products derived thereof are owned by NTU.

Termination. The NTU Licensing Agreement expires on December 23, 2035. Upon expiration, we will have a fully paid-up, perpetual, royalty-free exclusive license to the Technology. We may terminate the NTU Licensing Agreement upon

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60 days’ written notice to NTU in the event of (a) the failure of a pivotal clinical study, or serious adverse event in a clinical study, with respect to Upstaza for the treatment of AADC deficiency, that prevents continuing such clinical study under reasonable circumstances or (b) the rejection of a BLA with the FDA or an MAA with the EMA, or equivalent biologics approval application in another territory with respect to Upstaza for the treatment of AADC. In such termination event, we must pay $100,000 to NTU within 30 days of termination and NTU would retain all rights to the Technology. We may terminate the NTU Licensing Agreement for material breach by another party following a 30-day cure period. NTU may terminate the NTU Licensing Agreement for our failure to pay any undisputed license fees or net sales or sublicensing royalty fees within the applicable deadline following a 30-day cure period.

We are also a party to collaborative research agreements with NTU, or the NTU Collaboration Agreements, that govern the collaboration between us and NTU with respect to the research and clinical trials for AADC deficiency gene therapy. NTU is responsible for performing the research and clinical trials and we are responsible for providing related funding. As of December 31, 2022, an aggregate amount of $3.2 million in funding payments has been paid to NTU pursuant to the NTU Collaboration Agreements.

Tegsedi and Waylivra

Overview. PTC Therapeutics International Limited, our subsidiary, entered into a Collaboration and License Agreement, or the Tegsedi-Waylivra Agreement, dated August 1, 2018 by and between us and Akcea, for the commercialization by us of Tegsedi, Waylivra and products containing those compounds, which we refer to collectively as the Products, in countries in Latin America and the Caribbean, or the PTC Territory. In addition, Akcea has granted to us a right of first negotiation, or ROFN, to commercialize AKCEA-TTR-Lrx, a follow-on product candidate to inotersen, on an exclusive basis in the PTC Territory. We are responsible for all meetings, communications and other interactions with regulatory authorities in the PTC Territory. The activities of the parties pursuant to the Tegsedi-Waylivra Agreement is overseen by a Joint Steering Committee, composed of an equal number of representatives appointed by each of us and Akcea.

Commercialization. Under the terms of the Tegsedi-Waylivra Agreement, Akcea has granted to us an exclusive right and license, with the right to grant certain sublicenses, under Akcea’s product-specific intellectual property to develop, manufacture and commercialize the Products in the PTC Territory. In addition, Akcea has granted to us a non-exclusive right and license, with the right to grant certain sublicenses, under Akcea’s core intellectual property and manufacturing intellectual property to develop, manufacture and commercialize the Products in the PTC Territory and to manufacture the Products worldwide in accordance with a supply agreement with Akcea. Akcea has in-licensed certain of the Akcea intellectual property from its parent company, Ionis. Each party has agreed not to, independently or with any third party, commercialize any competing oligonucleotide product in the PTC Territory for the same gene target as inotersen.

Payments and Contingent Payments. We paid to Akcea an upfront licensing fee of $18.0 million, consisting of an initial payment of $12.0 million paid in connection with entering into the Tegsedi-Waylivra Agreement in August 2018, and a second payment of $6.0 million that was paid after Waylivra received regulatory approval from the EMA in May 2019. In addition, Akcea was eligible to receive milestone payments, on a Product-by-Product basis, of $4.0 million upon receipt of regulatory approval for a Product from ANVISA, subject to a maximum aggregate amount of $8.0 million for all such Products. We paid Akcea $4.0 million upon our receipt of marketing authorization from ANVISA in October 2019 for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis in Brazil with Tegsedi and an additional $4.0 million upon our receipt of marketing authorization from ANVISA in August 2021 for the treatment of FCS. Akcea is also entitled to receive royalty payments in the mid-twenty percent range of net sales on a country-by-country and Product-by-Product basis, commencing on the earlier to occur of (1) 12 months after the first commercial sale of such Product in Brazil or (2) the date when we, our affiliates or sublicensees have recognized revenue of $10.0 million or more in cumulative net sales for such Product in the PTC Territory. The royalty payments are subject to reduction in certain circumstances as set forth in the Tegsedi-Waylivra Agreement.

Right of first negotiation. Akcea has granted to us a ROFN to commercialize AKCEA-TTR-Lrx in the PTC Territory, subject to negotiation of the terms of a definitive agreement and certain other terms and conditions. Such a definitive agreement would provide for a royalty rate to be paid by us for AKCEA-TTR-Lrx equal to the royalty rate we have agreed to pay for Tegsedi under the Tegsedi-Waylivra Agreement, or in the mid-twenty percent range of net sales, and the term of such royalty payments would be the same as the term of the Tegsedi royalty payments. During a specified period in the

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Agreement, neither Akcea nor Ionis may enter into an agreement or grant any license to AKCEA-TTR-Lrx that is inconsistent with PTC’s ROFN.

Termination. The Tegsedi-Waylivra Agreement will continue until the expiration of the last to expire royalty term with respect to all Products in all countries in the PTC Territory. Either party may terminate the Tegsedi-Waylivra Agreement on written notice to the other party if such other party is in material breach of its obligations thereunder and has not cured such breach within 30 days after notice in the case of a payment breach or 60 days after notice in the case of any other breach.

Shiratori

Overview. In connection with our acquisition of Censa Pharmaceuticals, Inc., or Censa, in May 2020, we became a party to a license agreement dated as of February 8, 2015, as amended, between Shiratori and Censa, or the Shiratori License Agreement. Pursuant to the Shiratori License Agreement, Shiratori granted Censa the sole and exclusive worldwide right and license, with the right to sublicense, under certain licensed know-how, or the Licensed Know-How, and licensed patents, or the Licensed Patents, relating to manufacturing processes and technology for sepiapterin, to research, have researched, develop, have developed, use, import, export, market, have marketed, offer for sale, sell and have sold, and otherwise commercialize any final pharmaceutical product in finished form containing sepiapterin as an active pharmaceutical ingredient, including sepiapterin, collectively the Sepiapterin Products, covered by the Licensed Patents or using the Licensed Know-How in all countries and territories of the world outside of Japan, or the Sepiapterin Territory.

Payments and Contingent Payments. Under the Shiratori License Agreement, we are obligated to pay to Shiratori a low single digit percentage of annual net sales of the Sepiapterin Products in each country in the Sepiapterin Territory until the expiration of the last-to-expire Licensed Patent controlled by Shiratori covering the relevant country followed by an obligation to pay a reduced royalty rate for a specified period of time thereafter. We are also obligated to pay to Shiratori certain regulatory and development milestones.

Termination. Unless earlier terminated, the Shiratori License Agreement will continue in full force and effect on a country-by-country and product-by-product basis until the obligation to pay royalties with respect to the sale of such Sepiapterin Product in such country expires. The parties may agree to mutually terminate the Shiratori License Agreement. Shiratori may elect to terminate the Shiratori License Agreement upon sixty days’ prior written notice to us in the event that we fail to (i) achieve regulatory approval for a Sepiapterin Product in either the United States or EU by February 8, 2026 or (ii) commercially launch a Sepiapterin Product in the United States or European Union by February 8, 2027. We may elect to terminate the Shiratori License Agreement upon sixty days’ prior written notice to Shiratori.

Wellcome Trust

We have two separate funding agreements with Wellcome Trust for the research and development of small molecule compounds in connection with our oncology platform and antibacterial program. Pursuant to the agreement relating to the antibacterial program, Wellcome Trust awarded us a $5.0 million grant of which we received $4.8 million between 2011 and 2015. We are no longer actively pursuing an antibacterial program and do not expect to receive additional funding under this agreement. The materials terms of these funding agreements are similar in substance, except as described below.

The other agreement, entered into in May 2010, relates to the research and development of certain small molecule compounds under our oncology platform, including unesbulin. Pursuant to this agreement, Wellcome Trust awarded us a $5.4 million grant, of which approximately $0.9 million was paid in connection with execution of the agreement and the balance of which was paid to us in 2010 and 2012 based on our achievement of specified milestones.

Development and commercialization. We own all intellectual property that arises from the conduct of the research programs under these funding agreements, which we refer to as program intellectual property, and are responsible for developing and commercializing the program intellectual property, including unesbulin (for our oncology platform), and other compounds. However, we will require Wellcome Trust’s written consent prior to any such development or commercialization. If Wellcome Trust withholds such consent and we and Wellcome Trust are not able to resolve

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Wellcome Trust’s concerns, the parties have agreed to follow a specified dispute resolution procedure that gives neither party final decision-making authority.

Reversion rights. Under both funding agreements, if we fail to take reasonable steps to develop or commercialize program intellectual property during specified timeframes, we may be obligated to grant exclusive rights to Wellcome Trust or its nominee under the program intellectual property, along with non-exclusive rights under our background intellectual property, so that Wellcome Trust or its nominee can assume such development and commercialization. If we grant such a license, we would be entitled to a share of any consideration received by Wellcome Trust in connection with any subsequent development or commercialization of program intellectual property on a for-profit basis, which share would be proportionate to our contribution to the development and commercialization.

Continuing financial obligations-oncology platform. To the extent that we develop and commercialize certain program intellectual property on a for-profit basis ourselves or in collaboration with a partner (provided we retain overall control of worldwide commercialization), we may become obligated to pay to Wellcome Trust development and regulatory milestone payments and single-digit royalties on sales of any research program product under our oncology platform. We made the first development milestone payment of $0.8 million to Wellcome Trust under this agreement during the second quarter of 2016. During the year ended December 31, 2022, we incurred $2.5 million of development milestones in connection with the enrollment of patients in the registration-directed Phase 2/3 trial of unesbulin for the treatment of LMS, which is recorded in other long-term liabilities on the balance sheet. Additional milestone payments of up to an aggregate of $14.5 million may become payable by us to Wellcome Trust under this agreement.

Additional continuing financial obligations. Our obligation to pay the royalties described above would continue on a country-by-country basis until the longer of the expiration of the last patent in the program intellectual property in such country covering the research program product and the expiration of market exclusivity of such product in such country. To the extent that we develop and commercialize program intellectual property on a for-profit basis through outlicensing, we will be obligated to pay to Wellcome Trust a specified share of any consideration we receive from our licensee, provided that Wellcome Trust would be entitled to receive a minimum amount equal to its original contribution. We would incur no payment obligations to Wellcome Trust to the extent that we elect to develop and commercialize program intellectual property on a non-profit basis.

Termination. Unless terminated earlier, each funding agreement will continue until we have received the full amount of the grant, the research program has ended, the last-to-expire of the patents in the program intellectual property has expired, any agreement entered into for the exploitation of the program intellectual property or our background intellectual property has expired, and there are no remaining payment obligations relating to the exploitation of the program intellectual property or our background intellectual property. Each funding agreement provides that either party may terminate the agreement in the event of an uncured material breach by the other party or in the event of the other party’s bankruptcy or insolvency and that Wellcome Trust may terminate the agreement under specified circumstances, including, among others, in specified circumstances following a change in control of us or if Wellcome Trust believes that an uncorrected serious failure exists in the progress, management or conduct of the research program or that an act or omission by us is incompatible with or has an adverse effect on Wellcome Trust’s charitable objectives or reputation.

If Wellcome Trust terminates either or both funding agreements in specified circumstances, including as a result of our material breach, bankruptcy or insolvency, or following our change of control, we may be obligated to assign to Wellcome Trust ownership of the applicable program intellectual property, grant to Wellcome Trust royalty-free non-exclusive rights under the applicable background intellectual property for the continuation of the research program (if applicable) and the development and commercialization of the applicable program intellectual property, and provide Wellcome Trust with other specified transitional assistance.

Certain specified rights and obligations of the parties will generally survive termination of the funding agreements, including Wellcome Trust’s right to receive payments from us with respect to development and commercialization of program intellectual property on a for-profit basis.

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If a funding agreement terminates prior to the end of a research program, we are obligated to return all funding we received from Wellcome Trust that is unspent at the date of termination (after deduction of costs and non-cancellable commitments incurred prior to such date).

Our Ongoing Acquisition-Related Obligations

From time to time, we have engaged in strategic transactions to expand and diversify our product pipeline, including through the acquisition of assets or businesses. In connection with these acquisitions, we have entered into agreements through which we have ongoing obligations, including obligations to make contingent payments upon the achievement of certain development, regulatory and net sales milestones or upon a percentage of net sales of certain products.

Complete Pharma Holdings, LLC

On April 20, 2017, we completed our acquisition of all rights to Emflaza, or the Emflaza Transaction. The Emflaza Transaction was completed pursuant to an asset purchase agreement, dated March 15, 2017, as amended on April 20, 2017, or the Emflaza Asset Purchase Agreement, by and between us and Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), or Marathon. The assets acquired by us in the Emflaza Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. We assumed certain liabilities and obligations in the Emflaza Transaction arising out of, or relating to, the assets acquired in the Emflaza Transaction.

In addition to the upfront consideration paid to Marathon upon the closing of the Emflaza transaction, Marathon is entitled to receive contingent payments from us based on annual net sales of Emflaza, up to a specified aggregate maximum amount over the expected commercial life of the asset, subject to the terms and conditions of the Emflaza Asset Purchase Agreement. In 2022, we paid Marathon a single $50.0 million sales-based milestone in accordance with the Emflaza Asset Purchase Agreement.

Agilis Biotherapeutics, Inc.

On August 23, 2018, we completed our acquisition of Agilis pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018, or the Agilis Merger Agreement, by and among us, Agility Merger Sub, Inc., a Delaware corporation and our wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC, or the Merger.

In addition to the upfront consideration paid to Agilis equityholders upon the closing of the Merger, Agilis equityholders may become entitled to receive contingent payments from us based on the achievement of certain development, regulatory and net sales milestones, as well as based upon a percentage of net sales of certain products.

On April 29, 2020, we, certain of the former equity holders of Agilis, or the Participating Rightholders, and, for the limited purposes set forth in the agreement, Shareholder Representative Services LLC, entered into a Rights Exchange Agreement, or the Rights Exchange Agreement. Pursuant to the Right Exchange Agreement, we issued 2,821,176 shares of our common stock and paid $36.9 million, in the aggregate, to the Participating Rightholders in exchange for the cancellation and forfeiture by the Participating Rightholders of their rights to receive certain milestone-based contingent payments under the Agilis Merger Agreement.

As of December 31, 2022, we have paid former equity holders of Agilis a total of $52.4 million in connection with the achievement of certain milestone-based contingent payments under the Agilis Merger Agreement. Our outstanding obligations under the Agilis Merger Agreement include obligations to pay up to an aggregate maximum amount of $20.0 million upon the achievement of certain development milestones, up to an aggregate maximum amount of $311.0 million upon the achievement of certain regulatory milestones, up to a maximum aggregate amount of $150.0 million upon the achievement of certain net sales milestones and a percentage of annual net sales for Friedreich ataxia and Angelman syndrome during specified terms, ranging from 2% to 6%, pursuant to the terms of the Agilis Merger Agreement. In October 2022, we paid the former Agilis equityholders $50.0 million in regulatory milestone payments as a result of the European Commission’s marketing approval of Upstaza for the treatment of AADC deficiency in July 2022.

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We expect to pay the former Agilis equityholders an additional $20.0 million upon the acceptance for filing by the FDA of a BLA for Upstaza for the treatment of AADC deficiency, which we expect to occur in the first half of 2023.

BioElectron Technology Corporation

On October 25, 2019, we completed the acquisition of substantially all of the assets of BioElectron Technology Corporation, or BioElectron, pursuant to an Asset Purchase Agreement by and between the Company and BioElectron, dated October 1, 2019, or the BioElectron Asset Purchase Agreement.

In addition to the upfront consideration paid to BioElectron upon the closing of the asset acquisition, subject to the terms and conditions of the BioElectron Asset Purchase Agreement, BioElectron may become entitled to receive contingent milestone payments of up to $200.0 million (in cash or in shares of our common stock, as determined by us) from us based on the achievement of certain regulatory and net sales milestones. Subject to the terms and conditions of the BioElectron Asset Purchase Agreement, BioElectron may also become entitled to receive contingent payments based on a percentage of net sales of certain products.

Censa Pharmaceuticals, Inc.

On May 29, 2020, we acquired Censa pursuant to an Agreement and Plan of Merger, dated as of May 5, 2020, or the Censa Merger Agreement, by and among us, Hydro Merger Sub, Inc., our wholly owned, indirect subsidiary, and, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Censa, Shareholder Representative Services LLC, or the Censa Merger.

In addition to the upfront consideration paid to the Censa securityholders upon the closing of the Censa Merger, pursuant to the Censa Merger Agreement, Censa securityholders will be entitled to receive contingent payments from us based on (i) the achievement of certain development and regulatory milestones up to an aggregate maximum amount of $217.5 million for sepiapterin’s two most advanced programs and receipt of a priority review voucher from the FDA as set forth in the Censa Merger Agreement, (ii) $109 million in development and regulatory milestones for each additional indication of sepiapterin, (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $160.0 million, (iv) a percentage of annual net sales during specified terms, ranging from single to low double digits of the applicable net sales threshold amount, and (v) any sublicense fees paid to us in consideration of any sublicense of Censa’s intellectual property to commercialize sepiapterin, on a country-by-country basis, which contingent payment will equal to a mid-double digit percentage of any such sublicense fees. In February 2023, we completed enrollment of our Phase 3 placebo-controlled clinical trial for sepiapterin for PKU. In connection with this event, we are obligated to pay a $30.0 million development milestone to the former Censa securityholders, which we have the option to pay in cash or shares of our common stock. We also expect to make additional payments to the former Censa securityholders of $50.0 million in the aggregate upon the potential achievement in 2023 of certain development and regulatory milestones relating to sepiapterin.

Intellectual Property

Patents and trade secrets

Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and certain ex-U.S. patent applications related to our proprietary technology, inventions and improvements that we believe are important to the development of our business, where patent protection is available. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.

As of January 31, 2023, our patent portfolio included a total of 143 active U.S. patents and 63 pending U.S. non-provisional patent applications, including continuations and divisional applications, that are owned, co-owned, or exclusively in-licensed. Our patent portfolio also includes numerous International and ex-U.S. patents and patent applications. The patent

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portfolio includes patents and patent applications with claims including composition of matter, pharmaceutical formulation and methods of use of our commercial products including ataluren, the active ingredient in the formulated product Translarna, and risdiplam, the active ingredient in the formulated product Evrysdi.

The patent rights relating to ataluren owned by us include 42 issued U.S. patents relating to composition of matter, methods of use, formulations, dosing regimens and methods of manufacture and multiple pending U.S. patent applications relating to methods of use, formulation, and dosing regimens. We do not license any material patent rights relating to ataluren to unaffiliated parties. The issued U.S. patents relating to composition of matter are currently scheduled to expire in 2024 and all U.S. patents that issue from U.S. patent applications arising from the composition of matter would also be expected to expire in 2024. Issued U.S. patents relating to therapeutic methods of use are currently scheduled to expire in 2026 and 2027, including patent term adjustment. Our patent rights relating to ataluren include granted patents or pending counterpart patent applications in a number of other jurisdictions, including Canada, certain South American countries, Europe, certain Middle Eastern countries, certain African countries, certain Asian countries and certain Eurasian countries. We own 15 European patents relating to composition of matter, uses, dosing regimens and methods of manufacture of ataluren, as well as multiple pending European patent applications relating to composition of matter, uses and formulations. Granted European patents will expire in 2024 for those patents drawn to composition of matter, in 2026 and 2027 for those patents drawn to dosing regimen, and in 2027 for those patents drawn to the manufacturing process. Except as indicated above, the anticipated expiration dates referred to above are without regard to potential patent term extension, patent term adjustment or other marketing exclusivities that may be available to us.

The patent rights relating to risdiplam co-owned by us and Roche include 4 issued U.S. patents relating to composition of matter, methods of use, and methods of manufacture and pending U.S. patent applications. We do not license any material patent rights relating to risdiplam to unaffiliated parties. The issued U.S. patents relating to composition of matter are currently scheduled to expire in 2033 and 2035. Our patent rights include granted patents or pending counterpart patent applications in a number of other jurisdictions, including Canada, certain South American countries, Europe, certain Middle Eastern countries, certain African countries, certain Asian countries and certain Eurasian countries. We co-own 2 European patents relating to composition of matter, and uses of risdiplam. The expiration dates of the granted European patents relating to composition of matter are currently scheduled to expire in 2033 and 2035. Except as indicated above, these anticipated expiration dates are without regard to potential patent term extension, patent term adjustment or other marketing exclusivities that may be available to us.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier filed patent. The term of a U.S. patent that covers a drug, biological product or medical device approved pursuant to a pre-market approval, or PMA, may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met.

Analogous patent term extension provisions are available in Europe and certain other ex-U.S. jurisdictions to extend the term of a patent that covers an approved drug. One means of patent term extension in Europe after EMA approval is based on obtaining a Supplementary Protection Certificate, or SPC. We have applied for SPCs for ataluren in all applicable European countries in which we have a European patent and have obtained SPCs or expect to obtain SPCs in all applicable European countries. The maximum patent term extension provided by an SPC is a total of 5 years from the date of patent term expiration. For example, in jurisdictions where an SPC with maximum patent term extension has been granted, the ataluren composition of matter patent would be scheduled to expire in 2029. In the future, if and when our product candidates receive approval by the FDA or other non-European ex-U.S. regulatory authorities, we expect to apply for patent term extensions on issued patents covering those products, depending upon the length of the clinical trials for each drug and other factors.

We have no patents covering Emflaza or the approved use of Emflaza. We rely on non-patent market exclusivity periods under the Orphan Drug Act to commercialize Emflaza in the United States. See “Item 1. Business-Government Regulation” for further information regarding the exclusivity periods that we expect to rely on.

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We rely on orphan drug exclusivity in the EEA for Upstaza for the treatment of AADC deficiency. If Upstaza is approved in the United States, we expect to rely on the non-patent market exclusivity periods under the Orphan Drug Act and the BPCIA to commercialize Upstaza in the United States. If approved elsewhere, we expect to rely on orphan drug exclusivity in other countries or regions where such exclusivity is available. See “Item 1. Business-Government Regulation” for further information regarding the exclusivity periods that we expect to rely on.

We may rely, in some circumstances, on trade secrets to protect our technology. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, using confidentiality agreements with our employees, consultants, scientific advisors, contractors and collaborators. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, such agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, former employees, consultants, scientific advisors, contractors or collaborators use intellectual property owned by us or licensed to us by others in their work for us, trade secret disputes may arise. If such disputes arise in the U.S., we may protect our trade secrets and pursue remedies available under federal statute using either the Economic Espionage Act of 1996 and/or the Defend Trade Secrets Act of 2016 and, if necessary, under state law using either the Uniform Trade Secrets Act or other State law available in the applicable venue. If such disputes arise ex-US, we may protect our trade secrets and pursue remedies available under local or international law.

License agreements

We are a party to a number of license agreements under which we license patents, patent applications and other intellectual property from third parties. We enter into these agreements to augment our proprietary intellectual property portfolio. The licensed intellectual property covers some of the compounds that we are researching and developing, some post-transcriptional control targets and some of the scientific processes that we use. These licenses impose various diligence and financial payment obligations on us. We expect to continue to enter into these types of license agreements in the future.

We exclusively in-licensed know-how and materials related to the production and use of Upstaza. For a further discussion of the material agreements relating to our in-licensing of Upstaza for the treatment of AADC deficiency, see “Item 1. Business-Our Collaborations, License Agreements and Funding Arrangements-National Taiwan University.” We also exclusively in-license or jointly own patent applications with claims directed to composition of matter, formulation and methods of use of other gene therapy products candidates currently in development.

Manufacturing

Other than as described below with respect to certain of our gene therapy product candidates, we do not currently own or operate functional manufacturing or distribution facilities for the production of clinical or commercial quantities of our products or product candidates or compounds that we are testing in our preclinical programs. We currently rely, and expect to continue to rely, on third parties for the manufacture, packaging, labeling and distribution of clinical and commercial supplies of our products or product candidates that we may develop, other than small amounts of compounds that we may synthesize ourselves for preclinical testing.

The active pharmaceutical ingredients in our products and product candidates are provided by third-parties. We currently rely on a single source for the production of some of our raw materials and we obtain our supply of the drug substance for Translarna from two third-party manufacturers.

We engage two separate manufacturers to provide bulk drug product for Translarna. We have a relationship with three manufacturers that are capable of providing fill and finish services for our finished commercial and clinical Translarna product.

We currently obtain our supplies of Translarna and most of our other products and product candidates from our third-party manufacturers pursuant to agreements that include specific supply timelines and volume expectations. If a manufacturer should become unavailable to us for any reason, we would seek to obtain supply from another manufacturer engaged by

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us for the applicable product or service. In the event that we were unable to procure the applicable supply from a validated manufacturer, we believe that there are a number of potential replacements for each of our outsourced services, however we likely would experience delays in our ability to supply Translarna to patients or in advancing our clinical trials while we identify and qualify replacement suppliers.

We obtain our supply of the drug substance for Emflaza through a third-party manufacturer that is currently the only third-party manufacturer qualified to provide Emflaza drug substance for use in the United States. All of our drug product manufacturing, processing and packaging needs for Emflaza tablet and suspension product are fulfilled pursuant to two different exclusive supply agreements assumed by us in connection with our acquisition of Emflaza. We expect to fulfill all of our requirements for Emflaza tablets as well as secondary packaging of pre-filled Emflaza oral suspension bottles pursuant to one of these agreements, which has an automatic renewal provision subject to the termination rights of each party. We expect to fulfill all of our requirements for Emflaza suspension product pursuant to the other agreement. Through the seventh year anniversary of FDA approval of Emflaza, we are obligated to pay to the manufacturer of the Emflaza suspension product royalty payments, on a quarterly basis, based on a percentage (ranging from low to middle-low double digits) of, or a fixed payment with respect to, our annual net sales of suspension product in the United States, subject to reduction in accordance with the terms of the agreement. The royalty payments for the suspension product are subject to a minimum aggregate annual payment ranging from €0.5 million to €1.5 million per year.

If our drug substance provider or either of our drug product manufacturers was to be unable to provide drug substance or manufacture Emflaza product in sufficient quantities to meet projected demand, future sales could be adversely affected, which in turn could have a detrimental impact on our ability to maintain our marketing authorization in the United States and on our ability to commercialize Emflaza, which in turn would have a material adverse effect on our business, financial results and results of operations. Further, as we presently have no patent rights to protect the approved use of Emflaza, we rely on market exclusivity periods available to us under the Orphan Drug Act to commercialize Emflaza for DMD in the United States. As the holder of orphan exclusivity, we are required to assure the availability of sufficient quantities of Emflaza to meet the needs of patients. Failure to do so could result in loss of the drug’s orphan exclusivity in the United States, which would have a material adverse effect on our ability to generate revenue from sales of Emflaza.

Translarna and Emflaza are manufactured in reliable and reproducible synthetic processes. Our raw materials are not scarce and are readily available subject to supply chain disruptions. We currently rely on a single source for the production of some raw materials and switching to an alternative source could, in some instances, take time and could lead to delays in manufacturing. We maintain inventories for such materials such that any delays with raw materials will not affect or delay our manufacturing. No material shortages or delays of raw materials were encountered in 2022 and no manufacturing delays are currently expected in 2023. The chemistry is amenable to scale up and does not require unusual equipment in the manufacturing process. We expect to continue to develop drug candidates that can be produced cost-effectively at contract manufacturing facilities or internally, in the case of our gene therapy platform.

We do not currently have any agreements with third-party manufacturers for the long-term commercial supply of Translarna or any of our product candidates, although we may seek to establish such arrangements in the future. In the event that we are unable to procure supply from a validated manufacturer, we would seek to identify and qualify replacement suppliers, however this process would likely delay our ability to supply Translarna to patients or advance our clinical trials. We may be unable to conclude agreements for commercial or clinical supply of Translarna with third-party manufacturers, or we may be unable to do so on acceptable terms.

We currently have contracts with multiple pharmacy and hospital distributors in the EU that distribute Translarna for limited commercial and EAP programs. We have engaged with third party logistic providers, or 3PLs, which distribute Translarna for the majority of our commercial and EAP programs on our behalf.

We utilize third parties for the commercial distribution of Emflaza, including a 3PL to warehouse Emflaza as well as specialty pharmacies to sell and distribute Emflaza to patients. The specialty pharmacies provide us with third-party call center services to provide patient support and financial services, prescription intake and distribution, reimbursement adjudication, and ongoing compliance support.

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Pursuant to the Tegsedi-Waylivra Agreement, we have entered into a master supply agreement with Akcea whereby Akcea or its affiliates will manufacture and supply, or cause to be manufactured and supplied, Tegsedi and Waylivra in quantities sufficient to support the commercialization of Tegsedi and Waylivra in the PTC Territory. This is currently the only manufacturing and supply agreement that we have entered into for the drug substance of Tegsedi and Waylivra. If the master supply agreement is terminated and we are unable to find an alternative third party contractor, we may encounter delays in manufacturing Tegsedi and Waylivra.

We have a commercial manufacturing services agreement with MassBiologics of the University of Massachusetts Medical School, or MassBio, to provide sufficient quantities of our Upstaza program materials to meet anticipated clinical trial and commercial scale demands. We also manufacture clinical material at our leased biologics manufacturing and laboratory space located in Hopewell Township, New Jersey, or the Hopewell Facility, for certain of our gene therapy product candidates. We still rely on third-party manufacturers to complete product testing for all of our gene therapy product candidates that we manufacture at the Hopewell Facility as well as to provide sufficient quantities of certain program materials that we have not yet transitioned to the Hopewell Facility. We have personnel with manufacturing and quality experience to oversee our contract manufacturers.

We further utilize the Hopewell Facility to produce plasmid DNA and AAV vectors for gene therapy applications for external customers.

Manufacturers and suppliers of product candidates are subject to the FDA’s current Good Manufacturing Practices, or cGMP, requirements, and other rules and regulations prescribed by ex-U.S. regulatory authorities. We depend on our third-party suppliers and manufacturers for continued compliance with cGMP requirements and applicable ex-U.S. standards.

Commercial Matters

Sales and marketing team

Our product revenue has primarily been attributable to sales of Translarna for the treatment of nmDMD in territories outside of the United States and to sales of Emflaza for treatment of DMD in the United States. We have employees across the globe, with the largest concentrations being in the United States, Latin America and Europe.

In addition, in select territories, we have engaged full time consultants, marketing partners and distribution partners to assist us with our international commercialization efforts for our products. We continue to evaluate new territories to determine in which geographies we might, if approved, choose to commercialize our products ourselves and in which geographies we might choose to collaborate with third parties. We expect that our internal team and partnership network will continue to grow, as needed, to maximize access to patients.

Customers

During 2022, our product revenue was primarily attributable to Translarna for the treatment of nmDMD and to Emflaza for treatment of DMD. Translarna for the treatment of nmDMD was available on a commercial basis or via reimbursed EAP programs in multiple territories outside of the United States. In some territories, orders for Translarna are placed directly with us and in other territories we have engaged with third-party distributors. As a result, orders for Translarna are generally received from hospital and retail pharmacies and, in some cases, one of our third-party partner distributors. Our third-party distributors act as intermediaries between us and end-users and do not typically stock significant quantities of Translarna. The ultimate payor for Translarna is typically a government authority or institution or a third-party health insurer. The payment terms are generally 30 to 90 days after receipt of products.

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PTCT · 10-K · period ended 2022-12-31

Item 1. Business

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PTCT · 10-K · period ended 2022-12-31

Item 1. Business

PTCT US Equity