PTC Therapeutics PTCT already sells a drug for Duchenne muscular dystrophy that does not work. Now, the drug maker is buying a second, approved Duchenne drug mired in a price-gouging controversy.

The company announced Thursday a deal to acquire Emflaza from Marathon Pharmaceuticals for $140 million in cash and stock plus another $50 million in potential contingent payments.

Emflaza, for those who don't remember, is an old and very inexpensive steroid (its scientific name is deflazacort) that has been available outside the U.S. for decades. DMD patients have been prescribed deflazacort or some other steroid for years.

In February, Marathon used various loopholes allowed under FDA law to secure deflazacort's approval here as a treatment for Duchenne patients. The company then launched the drug under the Emflaza brand name at a price of $89,000 per year, even though generic deflazacort (same drug) is available in Europe for $1,000 per year.

That's when the proverbial s--t hit the fan. Marathon was accused by just about everyone of profiteering at the expense of Duchenne patients. Politicians seeking another drug company to pillory for price gouging painted a bullseye on Marathon's back. The company eventually backtracked, not by cutting Emflaza's price but by putting a hold on the commercial launch.

Now, PTC owns Emflaza and all its baggage.

On a call Thursday morning, PTC said it would "re-examine" Emflaza's price but did not offer specifics. The company also claimed Emflaza is a "disease modifying" drug for approximately 9,000 Duchenne patients even though anti-inflammatory steroids are commonly used only to alleviate symptoms of the disease.

PTC's acquisition of Emflaza comes on the heels of the company's effort to strong-arm the FDA into reviewing Translarna, a drug that has failed every late-stage clinical trial conducted in Duchenne and cystic fibrosis. The company re-filed Translarna to FDA under protest, seeking approval for patients with Duchenne due to nonsense mutations. PTC sells Translarna in Europe under a conditional approval, despite clinical trials showing the drug does not work.

Shares of PTC fell 11% to $9.55 in Thursday trading.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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