PTC Therapeutics (PTCT) - Get Report suffered another late-stage clinical trial failure of its lead drug ataluren, adding to a growing body of clinical evidence that could make it more difficult for the company to win marketing approval in the U.S.

Shares of PTC are down 16% to $11.06 in early Thursday trading.

The latest setback occurred in a phase III study of cystic fibrosis patients, where treatment with ataluren over 48 weeks failed to improve lung function compared to a placebo, PTC said Thursday.

This is the second losing outcome for ataluren in cystic fibrosis. As a result, PTC is halting development of ataluren in cystic fibrosis and will withdraw a pending marketing application in Europe.

Ataluren is also dead as a cystic fibrosis drug in the U.S., but PTC continues to fight with the FDA over the right to market the drug for Duchenne muscular dystrophy (DMD).

Last year, the FDA rejected PTC's ataluren filing in DMD, citing the failure of the drug to prove a benefit for patients in a phase III study. PTC appealed that rejection but FDA refused to reverse its decision. In January, PTC said it planned to file a protest against the FDA rejection of ataluren before the end of the first quarter.

PTC's argument supporting ataluren's use in DMD would have been strengthened by a positive result from the cystic fibrosis study. But that strategy is now off the table.

With the U.S. shut off, PTC will rely on Europe, where ataluren (under the brand name Translarna) was granted conditional approval to treat DMD patients with nonsense mutations. PTC has another five years to conduct another clinical trial in DMD, which if positive, will convert the conditional approval to a final approval.

In January, PTC forecast 2017 Translarna sales in the range of $105 to $125 million for 2017.

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