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Genzyme Corporation and PTC Therapeutics Announce Collaboration on Small Molecule for Genetic Diseases


Potential New Treatment Paradigm, PTC124

Genzyme Corporation (Nasdaq: GENZ) and PTC Therapeutics, Inc. (PTC) today announced an exclusive global collaboration to develop and commercialize PTC124, PTC’s novel oral therapy in late-stage development for the treatment of genetic disorders due to nonsense mutations.

Under the terms of the agreement, PTC will commercialize PTC124 in the United States and Canada, and Genzyme will commercialize the treatment in all other countries. Genzyme will make an up-front payment of $100 million to PTC, plus potential milestone and royalty payments. PTC will be financially responsible for one ongoing and three additional clinical trials of PTC124, which is potentially applicable to hundreds of genetic diseases.

PTC124 is currently being evaluated in a phase 2b trial for Duchenne muscular dystrophy (DMD), and a phase 2b trial in cystic fibrosis (CF) is expected to begin by the end of this year. In its collaboration with PTC, Genzyme will draw on its expertise in genetic disorders and its strong regulatory, manufacturing and marketing infrastructure outside of the United States. Genzyme has extensive experience with cystic fibrosis, having conducted more than six clinical trials among CF patients. In the field of DMD, Genzyme’s experience with Myozyme® (alglucosidase alfa), for the treatment of the genetic disorder Pompe disease, will be directly applicable as patients with both diseases are treated by the same specialist physicians.

“Over the past two decades, Genzyme has successfully developed four therapies for patients with severe genetic diseases. PTC124 is a powerful new approach that holds great potential to help CF and DMD patients, and many others with a variety of devastating diseases,” stated Henri A. Termeer, Genzyme’s chairman and chief executive officer. “This collaboration is an excellent strategic fit for Genzyme and will be managed within the company’s stated financial guidance.”

“One of PTC’s earliest scientific insights was that targeting nonsense mutations represented a novel approach to treating a large number of genetic disorders. The translation of that insight through the discovery and rapid development of PTC124 has been very gratifying,” commented Stuart W. Peltz, Ph.D., PTC’s president and chief executive officer. “This collaboration supports PTC’s business strategy of establishing a fully integrated biopharmaceutical company by retaining commercial rights in the United States and Canada while engaging an experienced and capable partner to swiftly address additional markets.”

PTC initiated the clinical development of PTC124 in 2004. Based on phase 2a clinical proof of concept in both DMD and CF, further development in each of these indications is being pursued in international, multicenter trials. A phase 2b trial of PTC124 in DMD is currently enrolling, and is expected to include 165 patients. A phase 2b trial of PTC124 in CF is planned to begin by the end of this year. With demonstration of clinical benefit, these two trials are expected to serve as the basis for registration of PTC124 in these indications. Further development of PTC124 will include clinical trials in multiple additional genetic disorders.

In the United States, there are an estimated 10,000 DMD patients, approximately 13 percent of which have nonsense mutations. Of the more than 30,000 U.S. patients with CF, about 10 percent have nonsense mutations. There is a significant unmet medical need for new treatments for these diseases. In addition to DMD and CF, the companies plan to explore PTC124’s potential to make a difference for patients with other types of severe and debilitating genetic diseases.

“We are impressed by the quality of the preliminary PTC124 data, which suggest broad applicability to a large number of genetic disorders,” said Geoff McDonough, M.D., Genzyme’s senior vice president and general manager of LSD Therapeutics. “PTC124 is an excellent example of the promise that personalized medicine holds to address significant unmet medical needs, and we are excited about its potential to make a major positive difference in the lives of patients and their families.”

“We are delighted to enter into this collaboration with Genzyme, a world-recognized pioneer and leader in the development of treatments for genetic disorders,” commented Cláudia Hirawat, PTC’s senior vice president of corporate development. “Because of its novel mechanism of action, PTC124 has the potential to address the underlying cause of disease in a subset of patients affected by more than 2,400 rare genetic disorders. PTC and Genzyme are well suited as partners to realize the full potential inherent in the broad applicability of PTC124.”

Deal Terms

Under the terms of the agreement, Genzyme will make a $100 million up-front payment to PTC Therapeutics. PTC will conduct and be financially responsible for the phase 2b trial of PTC124 in DMD, the phase 2b trial in CF, and two proof-of-concept studies in other indications to be determined. Once these four studies are completed, the companies will share research and development costs equally. Genzyme and PTC will each bear the sales, marketing and other costs associated with commercialization of PTC124 in their respective territories.

PTC is eligible to receive up to $337 million in total milestone payments, as follows: up to $165 million in development and approval milestones, the majority of which are to be paid upon approvals in Genzyme territories; and up to $172 million in sales milestones, contingent upon the achievement of specific sales levels. The sales milestone payments begin when annual net revenues reach $300 million, and increase in increments through revenues of $2.4 billion. PTC is also eligible to receive tiered double-digit royalties from sales in Genzyme territories.
PTC Therapeutics® and PTC124TM are trademarks of PTC Therapeutics, Inc. All rights reserved.
Genzyme Safe Harbor Statement

This press release contains forward-looking statements, including without limitation, statements regarding the commercialization of PTC124; the benefits and potential broad applicability of PTC124 to treat multiple diseases; the development plan for PTC124 and expectations regarding phase 2b trials of PTC124 in Duchenne muscular dystrophy and cystic fibrosis; and the management of the collaboration within Genzyme’s stated financial guidance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, the ability of Genzyme and PTC to successfully complete the necessary clinical research on PTC124, including the risk that PTC124 will not meet its expected clinical endpoints; the parties’ ability to obtain and maintain the necessary regulatory approvals for PTC124 in the expected indications and the timing of those approvals; the actual safety and efficacy of PTC124; the parties’ ability to manufacture and commercialize PTC124; the possibility that other companies will seek to enter the same market or markets; the availability and extent of reimbursement for PTC124; and the risks and uncertainties described in reports filed by Genzyme with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, including without limitation the information under the heading “Risk Factors” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Genzyme Quarterly Report on Form 10-Q for the quarter ended March 31, 2008. Genzyme cautions investors not to place substantial reliance on the forward-looking statements contained in this press release. These statements speak only as of the date of this press release, and Genzyme undertakes no obligation to update or revise the statements.

Genzyme® is a registered trademark of Genzyme Corporation. All rights reserved.


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