'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 Claudia 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.

About PTC124

PTC124 is an orally delivered, investigational new small molecule drug for the treatment of genetic disorders due to nonsense mutations. Nonsense mutations are single-point alterations in the genetic code that prematurely stop the translation process, preventing production of a full-length, functional protein. In phase 2a clinical trials in nonsense-mutation-mediated cystic fibrosis and in nonsense-mutation-mediated Duchenne muscular dystrophy, PTC124 has demonstrated the ability to produce functional protein across a variety of nonsense mutation types.

Across all clinical studies to date, PTC124 has been generally well tolerated and has achieved target plasma concentrations associated with activity in preclinical models. PTC124 is currently in phase 2b development with the goal of demonstrating that increasing functional protein levels in patients with nonsense-mediated genetic disorders will provide clinical benefits.

PTC124 has been granted orphan drug status for the treatment of DMD and CF due to nonsense mutations by the FDA and the European Commission. The FDA has also granted PTC124 Subpart E designation for expedited development, evaluation and marketing. The development of PTC124 is supported by grants from the Cystic Fibrosis Foundation, the Muscular Dystrophy Association, Parent Project Muscular Dystrophy, FDA's Office of Orphan Products Development and by General Clinical Research Center grants from the National Center for Research Resources.

About Duchenne Muscular Dystrophy

Duchenne muscular dystrophy is characterized by rapid progression of muscle degeneration, eventually leading to loss in ambulation, paralysis, and death. DMD eventually affects all voluntary muscles, as well as the heart and breathing muscles, and patients rarely survive beyond their early 30s. Each year, approximately 20,000 children worldwide are born with DMD (one of every 3,500 male children), making it the most prevalent of muscular dystrophies. There is a commercially available test to determine whether a patient's DMD is caused by a nonsense mutation. More information on DMD is available through the Muscular Dystrophy Association (www.mdausa.org) and the Parent Project Muscular Dystrophy (www.parentprojectmd.org).

About Cystic Fibrosis

Cystic fibrosis affects the mucus glands of the lungs, liver, pancreas, and intestines, causing progressive disability due to multisystem failure. It is among the most common life-threatening genetic disorders, affecting nearly 70,000 people worldwide. There is a commercially available test to determine whether a patient's CF is caused by a nonsense mutation.