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Roche Enters Race to Cure Genetic Disease With $490 Million Deal

Roche Holding AG will pay as much as $490 million for experimental drugs from PTC Therapeutics Inc. to treat a genetic muscle-weakening disease, in a deal that sets up a race with rival Novartis AG.

The Basel, Switzerland-based drugmaker will pay closely held PTC Therapeutics $30 million up front, and another $460 million if a drug for spinal muscular atrophy achieves certain regulatory and commercial goals, the companies said today in a statement. PTC, based in South Plainfield, New Jersey, would also get royalties on sales of drugs from the collaboration.

Spinal muscular atrophy afflicts 18,000 people in the U.S. and Europe and causes progressive muscle weakness, according to the Spinal Muscular Atrophy Foundation. Kids with severe cases die within a few years, while those with mild cases can live a normal lifespan with disabilities. There are no approved medicines to treat the causes of the rare disorder, said Luca Santarelli, senior vice president of neuroscience at Roche.

“There are absolutely no therapeutic options for these children,” said Santarelli in a phone interview. “It is a frightening disease.”

As part of the agreement announced today, the two companies will work with the SMA Foundation in New York to advance a drug for spinal muscular atrophy into human trials. The foundation also is collaborating with Novartis, based in Basel, Switzerland, on a separate program to develop drugs for SMA, also at the preclinical stage.

In a third effort, the foundation has funded a researcher at Cold Spring Harbor Laboratory whose work has led to an experimental drug for the disease at Isis Pharmaceuticals Inc. in Carlsbad, California. The therapy may enter human trials in December or January, an Isis spokesman said in an e-mail.

Hedge-Fund Founder

In an unusual arrangement, experts from the foundation will sit on a steering committee with scientists from Roche and PTC to help move the drugs into human trials. The foundation was created in 2003 by Dinakar Singh, who started and runs the hedge fund TPG-Axon Capital Management LP, to help find a cure for his sixth-grade daughter Arya and other patients with the disease.

Singh and his wife, Loren Eng, have spent almost $100 million of their money on research toward an SMA treatment, including $13 million in grants the foundation has given to PTC since 2006.

‘Breaking New Ground’

The three-way collaboration among Roche, PTC and the SMA Foundation “is certainly breaking new ground,” said Claudia Hirawat, senior vice president for corporate development at PTC, in a telephone interview. “I am not aware of any collaboration that follows exactly this structure.”

Children with the disease lack a gene called SMN1 that produces a protein crucial for the health of neurons that control muscles, said Santarelli. The PTC drugs activate a backup gene so it produces more of the needed protein, he said.

PTC has been working with Roche on other diseases since 2009. Early this year, PTC’s Hirawat told Roche about the progress the company been making on spinal muscular atrophy, leading to serious discussions about a potential collaboration starting in June, she said.

PTC’s experimental compounds “target the cause not the symptoms” of the genetic disease,’’ said Santarelli of Roche. “Not too many times do you get to do that.”

Santarelli said he was driving from Switzerland to Italy during a vacation last July when he got an urgent call from two of his colleagues who had seen data from PTC’s tests of its compounds in mice.

“They were super-excited,” he said. “They were saying, ‘You have to see this, you have to see this.’”

Mice Findings

The data showed that mice that normally die in two weeks were “living 10 times as long” after being treated with PTC’s drug, he said. It was compelling enough that he and Jean-Jacques Garaud, Roche’s head of pharma research and early development, flew in September to visit PTC, leading to the deal, Santarelli said.

Santarelli said that it may be two years before a drug from the collaboration could reach human trials if all goes well.

“If we are lucky,” the pace may be faster, he said, “but I don’t want to raise expectations. We are going into children so we have to be very sure that the drug is safe.”

Eng, president of the SMA Foundation, said her organization is working with numerous drug companies because multiple types of drugs acting on different mechanisms may be needed to treat the disease, in the same way that AIDS is treated with multidrug cocktails

“At the time your child is diagnosed with something like this and they tell you there is no treatment, your fantasy is that some big drug company is going to come and save the day,” Eng said in a phone interview. “It borders on a miracle given all the little diseases they could be working on, they are working on this.”

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