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Embattled Marathon may shut down by May 1

April 25, 2017

Only a month or so after making an public relations gaff in pricing its steroid for Duchenne muscular dystrophy (DMD) for $89,000, Marathon Pharmaceuticals apparently has plans to close its doors.

On February 10, Northbrook, Ill.-based Marathon announced that the U.S. Food and Drug Administration (FDA) had approved Emflaza (deflazacort) to treat DMD. Deflazacort is a corticosteroid that has been on the market in other countries for decades. It is widely used as an anti-inflammatory agent. A similar anti-inflammatory corticosteroid, Prednisone, is used to treat DMD. Marathon, at the time, indicated it would charge $89,000 for a year’s supply of the drug. The drug is available in Canada, for example, for about $1,000.

On March 16, Marathon sold the rights to Emflaza to South Plainfield, NJ-based PTC Therapeutics (PTCT). There was no word on what price PTC might slap on the drug.

John Carroll, writing for Endpoints News, got hold of an email that had been sent to the DMD community in late March by Marathon’s director of R&D, Tim Cunniff. It said, in part, “With the divestiture of deflazacort to PTC, the company is winding down and probably won’t exist much past May 1.”

As part of the approval of deflazacort, Marathon had received a priority review voucher. A priority review voucher allows the holder to knock about four months off the standard FDA review time. That means instead of taking about 10 months for a review, it takes about six months. For companies in a race against other companies with similar drugs, it can mean getting onto the market earlier. Recently, Sarepta Therapeutics (SRPT) received a priority review voucher for approval of Exondys 51 for DMD. It subsequently sold the voucher to Gilead (GILD) for $125 million.

Which brings up the question of whether Marathon would wait to close its doors until after it sold its priority review voucher. Carroll contacted Marathon and asked, receiving the statement: “With the wind down of our Emflaza business following the close of the PTC transaction on April 20, we will continue to manage the legacy matters of Marathon Pharmaceuticals.”

On April 21, Marathon left the Pharmaceutical Research and Manufacturers of America (PhRMA), a lobbying organization for the pharmaceutical industry. After Marathon had announced its pricing, PhRMA released a statement criticizing the company and that its strategy could threaten its membership in the organization.

PhRMA, at the very least, has become increasingly sensitive to the pricing controversies that marked the U.S. presidential election and were dramatically exacerbated by Turing Pharmaceuticals’s Martin Shkreli and issues with Valeant Pharmaceuticals (VRX). There were also concerns over Marathon’s rationale for the pricing. The company has indicated that it had conducted 17 new preclinical and clinical studies, as well as the two additional clinical studies, and it would take years of marketing to pay for the program.

However, as Carroll wrote on April 21, “After posting a slide outlining the trials it needed to perform, experts told us that the company didn’t spend nearly what it had implied. The Wall Street Journal provided the final piece of the puzzle, reporting that Marathon had paid only $350,000 to get its hands on efficacy data accepted by regulators.”

PTC acquired the rights to the drug for $140 million with another $50 million for a milestone payment. Pretty much any price the company puts on it will create headlines, whether the price is high or low.

Several things about Emflaza are notable. First, Marathon had indicated it modified DMD. In an earlier Endpoints News post, Carroll wrote, “Claiming that deflazacort is a disease modifying therapy will surprise many in the Duchenne community. Like any steroid, it strengthens patients at a cost. Many of the parents came to prefer deflazacort over prednisone because it is associated with less weight gain.”

And as mentioned before, the drug was already available, although not in the U.S. Christine McSherry, a DMD advocate and head of The Jett Foundation, noted that many DMD families were able to get the steroid without any particular problem. She estimated that 40 percent to 50 percent of DMD patients were already on deflazacort, although she later dropped the estimate to 25 percent. She also suggested that, because of the approval, the families will be forced to buy the drug through higher priced U.S. suppliers.


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