(Reuters) - PTC Therapeutics Inc's experimental muscle disorder drug failed to meet the main goal in a keenly watched late-stage study, but the company said data from all trials on the drug supported a U.S. marketing application.
The company's stock fell about 16 percent in extended trading on Thursday, before reversing course to notch marginally gains.
PTC said the drug failed to show a statistically significant benefit over a placebo in patients with Duchenne muscular dystrophy (DMD), for which there is no therapy approved by the U.S. Food and Drug Administration.
However, in a sub-group of patients with less advanced DMD, the effect of the drug, Translarna, was deemed clinically meaningful.
PTC said the new data, combined with findings from previous trials on the drug, supported a U.S. marketing application for Translarna, which won conditional European approval last year.
"Without a doubt these results confirm - from the totality of data - Translarna's ability to slow disease progression, and we are actively planning for a U.S. launch in 2016," Chief Financial Officer Shane Kovacs told Reuters.
DMD is a progressive degenerative disorder that hampers muscle movement and affects one in 3,600 newborn boys, most of whom die by the age of 30.
Oppenheimer's Christopher Marai said the findings were positive enough to support an FDA approval and the continued sale of Translarna in the European Union.
"It was always difficult to show results on the primary endpoint in the first place and that's the because of the nature of the endpoint and disease progression," he said.
PTC conducted the trial on 228 boys, the largest-ever study on DMD patients, and aimed to show Translarna was more effective than a placebo in helping patients walk 30 meters more than they could without medication.
However, data showed Translarna helped patents walk only 15 meters more on average, but in less advanced patients it was able to induce a highly significant benefit of 47 meters.
Translarna met all secondary and tertiary endpoints, with a robust safety profile.
Translarna targets DMD caused by nonsense mutations. This form of DMD affects roughly 7,000 boys globally, including about 2,000 in the United States and Canada.
PTC said its will present data from the study to the European Medicines Agency in the near term and to the FDA, as part of its rolling marketing application, by the end of 2015.
Oppenheimer's Marai estimates the drug represents a $1.2 billion global opportunity.
Reporting by Natalie Grover in Bengaluru; Editing by Savio D'Souza