PTC Therapeutics (PTCT) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information
Entity Registrant Name	PTC THERAPEUTICS, INC.
Entity Central Index Key	1,070,081
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		34,265,019
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 40,165	$ 58,022
Marketable securities	258,547	280,903
Prepaid expenses and other current assets	5,104	5,930
Trade receivables, net	22,618	11,094
Total current assets	326,434	355,949
Fixed assets, net	8,426	8,974
Deposits and other assets	372	358
Total assets	335,232	365,281
Current liabilities:
Accounts payable and accrued expenses	43,493	45,247
Deferred revenue	396	139
Total current liabilities	43,889	45,386
Long-term debt	93,366	91,848
Other long-term liabilities	1,976	2,046
Total liabilities	139,231	139,280
Stockholders' equity:
Common stock, $0.001 par value. Authorized 125,000,000 shares; issued and outstanding 33,919,684 shares at March 31, 2016. Authorized 125,000,000 shares; issued and outstanding 33,916,559 shares at December 31, 2015	34	34
Additional paid-in capital	829,114	820,165
Accumulated other comprehensive income (loss)	1,084	(1,200)
Accumulated deficit	(634,231)	(592,998)
Total stockholders' equity	196,001	226,001
Total liabilities and stockholders' equity	$ 335,232	$ 365,281

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	125,000,000	125,000,000
Common stock, issued shares	33,919,684	33,916,559
Common stock, outstanding shares	33,919,684	33,916,559

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Net product revenue	$ 18,878	$ 5,069
Collaboration and grant revenue	17	2,413
Total revenues	18,895	7,482
Operating expenses:
Research and development	31,399	27,938
Selling, general and administrative	25,938	17,615
Total operating expenses	57,337	45,553
Loss from operations	(38,442)	(38,071)
Interest (expense) income, net	(1,956)	524
Other expense, net	(721)	(368)
Loss before income tax expense	(41,119)	(37,915)
Income tax expense	(114)
Net loss attributable to common stockholders	$ (41,233)	$ (37,915)
Weighted-average shares outstanding:
Basic and diluted (in shares)	33,919,169	33,067,752
Net loss per share-basic and diluted (in dollars per share)
Net loss per share-basic and diluted (in dollars per share)	$ (1.22)	$ (1.15)

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements of Comprehensive Loss
Net loss	$ (41,233)	$ (37,915)
Other comprehensive loss:
Unrealized gain on marketable securities	658	125
Foreign currency translation gain (loss)	1,626	(124)
Comprehensive loss	$ (38,949)	$ (37,914)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net loss	$ (41,233)	$ (37,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	849	634
Change in valuation of warrant liability	(47)	41
Non-cash interest expense	1,446
Amortization of premiums on investments	631	486
Amortization of debt issuance costs	72
Share-based compensation expense	8,915	9,748
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	702	(2,231)
Trade receivables, net	(10,678)	1,267
Deposits and other assets	(12)	138
Accounts payable and accrued expenses	(2,452)	(5,589)
Other long-term liabilities	(23)	(23)
Deferred revenue	243	(2,981)
Net cash used in operating activities	(41,587)	(36,425)
Cash flows from investing activities
Purchases of fixed assets	(265)	(883)
Purchases of marketable securities	(19,413)	(19,108)
Sale & redemption of marketable securities	41,795	40,598
Net cash provided by investing activities	22,117	20,607
Cash flows from financing activities
Proceeds from exercise of options	34	3,019
Net cash provided by financing activities	34	3,019
Effect of exchange rate changes on cash	1,579	(124)
Net decrease in cash and cash equivalents	(17,857)	(12,923)
Cash and cash equivalents, beginning of period	58,022	49,748
Cash and cash equivalents, end of period	40,165	36,825
Supplemental disclosure of cash information
Cash paid for interest	2,263
Cash paid for income taxes	225
Supplemental disclosures of non-cash information related to investing and financing activities
Change in unrealized gain on marketable securities	$ 658	$ 125

The Company

The Company	3 Months Ended
	Mar. 31, 2016
The Company
The Company	1. The Company PTC Therapeutics, Inc. (the “Company” or “PTC”) was incorporated as a Delaware corporation on March 31, 1998. PTC is a global biopharmaceutical company focused on the discovery, development and commercialization of orally administered, small molecule therapeutics targeting an area of RNA biology referred to as post transcriptional control. Post-transcriptional control processes are the regulatory events that occur in cells during and after a messenger RNA molecule is copied from DNA through the transcription process. PTC has discovered all of its compounds currently under development using its proprietary technologies. PTC plans to continue to develop these compounds both on its own and through selective collaboration arrangements with leading pharmaceutical and biotechnology companies. PTC’s internally discovered pipeline addresses multiple therapeutic areas, including rare disorders and oncology. PTC’s lead product candidate is ataluren, an investigational new drug in the United States, for the treatment of patients with genetic disorders that arise from a type of genetic mutation known as a nonsense mutation. The Company holds worldwide commercialization rights to ataluren for all indications in all territories. The brand name of ataluren is Translarna™. In October 2015, the Company announced the initial results of our Phase 3 clinical trial of Translarna for the treatment of nonsense mutation Duchenne muscular dystrophy, or ACT DMD, including that the primary efficacy endpoint in the intent to treat population, or ITT, did not achieve statistical significance. The Company recently participated in a Type A meeting with the United States Food and Drug Administration, or FDA, to discuss the Refuse to File letter we received from the FDA on February 22, 2016 regarding our New Drug Application, or NDA, for Translarna for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD. There is substantial risk that, notwithstanding any dialogue the Company has had or any further dialogue that it may be able to initiate with the agency, the FDA will continue to disagree with the Company’s interpretation of its trial results for Translarna for the treatment of nmDMD and it may be required to perform additional clinical and non-clinical trials or complete additional analyses, which, if successful, may enable FDA review of an NDA submission. Any such requirement for additional trials would also result in additional significant costs and would most likely result in the Company’s inability to sell Translarna in the United States for a significant period of time, if ever. Translarna received marketing authorization from the European Commission in August 2014 for the treatment of nmDMD in ambulatory patients age 5 years and over in the 31 member states of the European Economic Area, or EEA. nmDMD is a rare, life threatening disorder. The marketing authorization was primarily based upon the safety and efficacy results of our 48-week, 174-patient Phase 2b double-blind, placebo controlled clinical trial evaluating the long-term safety and efficacy of Translarna in patients with nmDMD completed in 2009, or the Phase 2b trial. The marketing authorization is conditioned upon the Company’s submission of the final clinical study report, including additional efficacy and safety data, from ACT DMD. The Company submitted this data to the European Medicines Agency, or EMA, in January 2016 as a type II variation request. The type II variation request seeks to have the specific condition to our marketing authorization removed and a full marketing authorization granted. The marketing authorization in the EEA is subject to annual review and renewal by the European Commission following reassessment by the EMA of the risk-benefit balance of the authorization, or the annual EMA reassessment, as well as the Company’s satisfaction of other conditions and obligations. In February 2016, the Company submitted a request with the EMA to renew its marketing authorization, which will otherwise expire on August 5, 2016. The EMA has provided the Company with assessment reports with respect to each of our type II variation and our annual EMA reassessment request. As noted in the reports from the EMA, based on the outcome of ACT DMD, the risk-benefit profile of Translarna needs to be re-assessed within the EMA’s annual renewal procedure based on the totality of the data including the data from our Phase 2b and ACT DMD clinical trials of Translarna for the treatment of nmDMD. Both reports include requests for supplementary information. One such request, included in our annual EMA reassessment report, is classified as a major objection. Generally speaking, a failure to adequately address a major objection would preclude a recommendation for renewal of a marketing authorization. In June 2014, the Company initiated a reimbursed expanded access program, or EAP program, for Translarna for nmDMD patients in selected territories in the EEA and recorded its first sales of Translarna in the third quarter of 2014 pursuant to the EAP program. In December 2014, the Company recorded its first commercial sales in Germany. As of March 31, 2016, Translarna was available in over 20 countries on a commercial basis or pursuant to the EAP program. The Company expects to expand its commercial launch activities across the EEA pursuant to the marketing authorization granted by the EMA throughout 2016 and future years, subject to continued renewal of its marketing authorization following annual EMA reassessments and successful completion of pricing and reimbursement negotiations. Concurrently, the Company plans to continue to pursue EAP programs in select countries where those mechanisms exist, both within the EEA and in other countries. During 2016, the Company’s revenues have been and are expected to be primarily generated from sales of Translarna in countries in the EEA where pricing and reimbursement approval is obtained at acceptable levels and in other territories where the Company is permitted to distribute Translarna under reimbursed early access programs, or EAPs. The Company is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, the difficulties inherent in the development of commercially usable products, the potential need to obtain additional capital necessary to fund the development of its products, and competition from other companies. As of March 31, 2016, the Company had an accumulated deficit of approximately $634.2 million. The Company has financed its operations to date primarily through the private offering in August 2015 of 3.00% convertible senior notes due 2022 (see Note 9), public offerings of common stock in February 2014 and October 2014, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company’s product candidates.

Summary of significant accounti

Summary of significant accounting policies	3 Months Ended
	Mar. 31, 2016
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of significant accounting policies The Company’s complete listing of significant accounting policies are described in Note 2 of the notes to the Company’s audited financial statements as of December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 29, 2016 (2015 Form 10-K). Basis of presentation The accompanying financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2015 and notes thereto included in the 2015 Form 10-K. Certain prior year balances have been reclassified to conform to current year presentation. In the opinion of management, the unaudited financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three month periods ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for any other interim period or for any other future year. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company’s research and development expenses, stock-based compensation, valuation procedures for the convertible notes and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become know. Inventories and cost of product revenue In 2014, the Company was notified that the European Commission, or EC, granted marketing authorization for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older. The conditional marketing authorization allows the Company to market Translarna for the treatment of nmDMD in the 31 member states of European Economic Area. The launch in these countries is on a country by country basis. This marketing authorization is subject to annual review and renewal by the European Commission following reassessment by the European Medicines Agency, or EMA, of the risk benefit balance of the authorization, which the Company refers to as the annual EMA reassessment. In the third quarter of 2015, the EMA approved the annual renewal of the marketing authorization for Translarna for the treatment of nmDMD. The authorization was further conditioned on the Company’s submission of the final report, including additional efficacy and safety data, from ACT DMD and the Company’s ability to implement measures, including pharmacovigilance plans that are detailed in the risk management plan for Translarna that was submitted to EMA. In January 2016, the Company submitted the final ACT DMD report to the EMA. The Company plans to seek to renew the marketing authorization on an annual basis until the Company’s obligations have been fulfilled and the approval is converted from a conditional approval into a full approval. If the Company fails to satisfy such requirements, or if it is determined that the balance of risks and benefits of using Translarna changes materially, the European Commission could, at the EMA's recommendation, vary, suspend, withdraw or refuse to renew the marketing authorization for Translarna or require additional clinical trials. Recently issued accounting standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle-based approach for determining revenue recognition. ASU No. 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017. Early application is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on its financial statements and accompanying notes. In April 2015, the FASB issued ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs topic of the Codification”. This standard provides a simplified presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for public companies for annual periods beginning after December 15, 2015. The Company adopted the guidance on January 1, 2016 on a retrospective basis and reclassed $2.8 million from “Deposits and other assets” to “Long-term debt” on the balance sheet as of December 31, 2015. The Company’s unamortized debt issuance cost at March 31, 2016 was $2.7 million which is included within “Long-term debt” on the consolidated balance sheet. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. This standard requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company’s deferred tax assets is provided with full valuation allowance as of March 31, 2016. As such, the Company does not expect that this standard will have a significant impact upon adoption. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The new guidance affects all reporting organizations (whether public or private) that hold financial assets or owe financial liabilities. ASU 2016-01 is effective for years beginning after December 15, 2017, including interim periods within those fiscal years. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-01 will have on its financial statements and accompanying notes. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This standard will require organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-02 will have on its financial statements and accompanying notes. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. This standard requires the recognition of all income tax effects of awards in the income statement when the awards vest or are settled, with Additional Paid in Capital (APIC) pools to be eliminated. In addition, the standard will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation as well as allowing companies to elect whether to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. This standard is effective for public companies for fiscal years beginning after December 15, 2016 and interim periods within those years, with early adoption permitted but only if all of the guidance is adopted in the same period. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-09 will have on its financial statements and accompanying notes. Revenue recognition The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. Net Product Sales The Company’s net product sales have consisted solely of sales of Translarna for the treatment of nmDMD in territories outside of the U.S. The Company began recognizing revenue for payments received under the reimbursed EAPs for Translarna in nmDMD patients in select countries in the third quarter of 2014. The Company has now established a pattern of collectability and, since January 2015, the Company recognizes revenue from product sales when there is persuasive evidence that an arrangement exists, title to product and associated risk of loss has passed to the customer, the price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition—Products. The Company has recorded revenue on sales where Translarna is available either on a commercial basis or through a reimbursed EAP program. Orders for Translarna are generally received from hospital and retail pharmacies and, in some cases, one of the Company’s third-party partner distributors. The Company’s third-party distributors act as intermediaries between the Company and end users and do not typically stock significant quantities of Translarna. The ultimate payor for Translarna is typically a government authority or institution or a third-party health insurer. The Company records revenue net of estimated third party discounts and rebates. Allowances are recorded as a reduction of revenue at the time revenues from product sales are recognized. Allowances for government and other third-party rebates and discounts are established or estimated at the time of delivery. These allowances are adjusted to reflect known changes in factors and may impact such allowances in the quarter those changes are known. Collaboration and Grant Revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if a milestone payment is substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered a substantive milestone and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities.

Fair value of financial instrum

Fair value of financial instruments and marketable securities	3 Months Ended
	Mar. 31, 2016
Fair value of financial instruments and marketable securities
Fair value of financial instruments and marketable securities	3. Fair value of financial instruments and marketable securities The Company follows the fair value measurement rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority).  Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date.  Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).  Level 3—Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of grant and collaboration receivables, accounts payable and accrued expenses, and debt approximates fair value due to the short-term nature of those instruments. Fair value of certain marketable securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The following represents the fair value using the hierarchy described in Note 3 for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015: March 31, 2016 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant liability — — December 31, 2015 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant Liability — — No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the periods ended March 31, 2016 and December 31, 2015. The following is a summary of marketable securities accounted for as available-for-sale securities at March 31, 2016 and December 31, 2015: March 31, 2016 Amortized Gross Unrealized Fair Cost Gains Losses Value Commercial paper $ $ $ — $ Corporate debt securities ) Government obligations ) $ $ $ ) $ December 31, 2015 Amortized Gross Unrealized Fair Cost Gains Losses Value Commercial paper $ $ $ — $ Corporate debt securities — ) Government obligations ) $ $ $ ) $ At March 31, 2016 and December 31, 2015, the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income in stockholders’ equity. As of March 31, 2016 and December 31, 2015, the Company did not have any realized gains/losses from the sale of marketable securities. Marketable securities on the balance sheet at March 31, 2016 and December 31, 2015 mature as follows: March 31, 2016 Less Than 12 Months More Than 12 Months Commercial paper $ $ — Corporate debt securities Government obligations Total Marketable securities $ $ December 31, 2015 Less Than 12 Months More Than 12 Months Commercial paper $ $ — Corporate debt securities Government obligations Total Marketable securities $ $ Level 3 valuation The warrant liability is classified in Other long-term liabilities on the Company’s balance sheet. The warrant liability is marked-to-market each reporting period with the change in fair value recorded as a gain or loss within Other income (expense), net on the Company’s statement of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for warrant liability for the period ended March 31, 2016: Level 3 assets Beginning balance as of January 1, 2016 $ Change in fair value of warrant liability ) Ending balance as of March 31, 2016 $ Fair value of the warrant liability is estimated using an option-pricing model, which includes variables such as the expected volatility based on guideline public companies, the stock fair value, and the estimated time to a liquidity event. The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of March 31, 2016 include (i) volatility (67%—72%), (ii) risk free interest rate (0.59%—0.87%), (iii) strike price ($128.00-$2,520), (iv) fair value of common stock ($6.44), and (v) expected life (1.21—3.48 years). The significant assumptions used in preparing the option pricing model for valuing the Company’s warrants as of December 31, 2015 include (i) volatility (62%-70%), (ii) risk free interest rate (0.86%-1.54%), (iii) strike price ($128.00-$2,520.00), (iv) fair value of common stock ($32.40) and (v) expected life (1.5 — 3.7 years).

Other comprehensive income (los

Other comprehensive income (loss) and accumulated other comprehensive items	3 Months Ended
	Mar. 31, 2016
Other comprehensive income (loss) and accumulated other comprehensive items
Other comprehensive income (loss) and accumulated other comprehensive items	4. Other comprehensive income (loss) and accumulated other comprehensive items Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as unrealized gains and losses on marketable securities. The following tables summarize other comprehensive income (loss) and the changes in accumulated other comprehensive items for the three months ended March 31, 2016: Unrealized Gains (Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2015 $ ) $ ) $ ) Other comprehensive income before reclassifications Amounts reclassified from other comprehensive items — — — Other comprehensive income Balance at March 31, 2016 $ $ $

Accounts payable and accrued ex

Accounts payable and accrued expenses	3 Months Ended
	Mar. 31, 2016
Accounts payable and accrued expenses
Accounts payable and accrued expenses	5. Accounts payable and accrued expenses Accounts payable and accrued expenses at March 31, 2016 and December 31, 2015 consist of the following: March 31, 2016 December 31, 2015 Employee compensation, benefits, and related accruals $ $ Consulting and contracted research Professional fees Accounts payable Accrued severance — Other $ $

Warrants

Warrants	3 Months Ended
	Mar. 31, 2016
Warrants
Warrants	6. Warrants All of the Company’s outstanding warrants were classified as liabilities as of March 31, 2016 and December 31, 2015 because they contained non-standard antidilution provisions. The following is a summary of the Company’s outstanding warrants as of March 31, 2016 and December 31, 2015: Warrant shares Exercise price Expiration Common stock $ Common stock $ Common stock $

Net loss per share

Net loss per share	3 Months Ended
	Mar. 31, 2016
Net loss per share
Net loss per share	7. Net loss per share Basic earnings per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period. The following tables set forth the computation of basic and diluted net loss per share for common stockholders: Three months ended March 31, 2016 2015 Numerator Net loss attributable to common stockholders $ ) $ ) Denominator Denominator for basic and diluted net loss per share Net loss per share: Basic and diluted $ )* $ )* *In the three months ended March 31, 2016 and 2015, the Company experienced a net loss and therefore did not report any dilutive share impact. The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. As of March 31, 2016 2015 Stock Options Unvested restricted stock awards and units Total

Stock award plan

Stock award plan	3 Months Ended
	Mar. 31, 2016
Stock award plan
Stock award plan	8. Stock award plan On March 5, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. In May 2013, the Company’s Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Equity and Long Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 122,296 shares of common stock available for issuance under the Company’s 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, the 2009 Equity and Long Term Incentive Plan, and the 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company’s Board of Directors. As of March 31, 2016, awards for 290,868 shares of common stock are available for issuance. From January 1, 2016 through March 31, 2016, the Company issued a total of 1,357,045 stock options to various employees. Of those, 67,100 were inducement grants for non-statutory stock options. The inducement grant awards were made pursuant to the NASDAQ inducement grant exception as a material component of our new hires’ employment compensation and not under the 2013 Long Term Incentive Plan. A summary of stock option activity is as follows: Number of options Weighted- average exercise price Weighted- average remaining contractual term Aggregate intrinsic value (in thousands) Outstanding at December 31, 2015 $ 8.38 yrs Granted $ Exercised ) $ Forfeited/Cancelled ) $ Outstanding at March 31, 2016 $ $ Vested or Expected to vest at March 31, 2016 $ $ Exercisable at March 31, 2016 $ $ — The fair value of grants made in the period ended March 31, 2016 was contemporaneously estimated on the date of grant using the following assumptions: Three months ended March 31, 2016 Risk-free interest rate 1.32%—2.24% Expected volatility 67%—70% Expected term 5.05 years—10.00 years The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the three month period ended March 31, 2016 was $18.42 per share. The Company uses the “simplified method” to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. Restricted Stock Awards —Restricted stock awards are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. Restricted Stock Units —Restricted stock units are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock units, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. The following table summarizes information on the Company’s restricted stock awards and units: Restricted Stock Awards and Units Number of Shares Weighted Average Grant Date Fair Value January 1, 2016 $ Granted Vested — $ — Forfeited ) $ Unvested at March 31, 2016 $ The Company recorded share-based compensation expense in the statement of operations as follows: Three Months Ended March 31, 2016 2015 Research and development $ $ General and administrative Total $ $ As of March 31, 2016, there was approximately $89.9 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2009 Equity and Long Term Incentive Plan, the 2013 Stock Incentive Plan, the 2013 Long Term Incentive Plan, and equity award plans made pursuant to the NASDAQ inducement grant exception for new hires. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 2.84 years.

Convertible Senior Notes

Convertible Senior Notes	3 Months Ended
	Mar. 31, 2016
Convertible Senior Notes.
Convertible Senior Notes	9. Convertible Senior Notes In August 2015, the Company issued, at par value, $150.0 million aggregate principal amount of 3.0% convertible senior notes due 2022 (the Convertible Notes). The Convertible Notes bear cash interest at a rate of 3.0% per year, payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The Convertible Notes will mature on August 15, 2022, unless earlier repurchased or converted. The net proceeds to the Company from the offering were $145.4 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The Convertible Notes are governed by an indenture (the Convertible Notes Indenture) with U.S Bank National Association as trustee (the Convertible Notes Trustee). Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2022 only under the following circumstances: · during any calendar quarter commencing on or after September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; · during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; · during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or · upon the occurrence of specified corporate events. On or after February 15, 2022, until the close of business on the business day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of Convertible Notes being converted. The conversion rate for the Convertible Notes was initially, and remains, 17.7487 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $56.34 per share of the Company’s common stock. The Company may not redeem the Convertible Notes prior to August 20, 2018. The Company may redeem for cash all or any portion of the Convertible Notes, at its option, on or after August 20, 2018 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes, which means that the Company is not required to redeem or retire the Convertible Notes periodically. If the Company undergoes a “fundamental change” (as defined in the Indenture governing the Convertible Notes Indenture), subject to certain conditions, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Convertible Notes Indenture contains customary events of default with respect to the Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the Convertible Notes when due and payable) occurring and continuing, the Convertible Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Convertible Notes by notice to the Company and the Convertible Notes Trustee, may, and the Convertible Notes Trustee at the request of such holders (subject to the provisions of the Convertible Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. The Company accounts for the Convertible Notes as a liability and equity component where the carrying value of the liability component will be valued based on a similar instrument. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven-year term of the Convertible Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the issuance of the Convertible Notes, the Company allocated the total costs incurred to the liability and equity components of the Convertible Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven-year term of the Convertible Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. Additionally, the Company initially recorded a net deferred tax liability of $22.3 million in connection with the Notes. The Convertible Notes consist of the following: Liability component March 31, 2016 December 31, 2015 (in thousands) Principal $ $ Less: Debt issuance costs ) ) Less: Debt discount, net(1) ) ) Net carrying amount $ $ (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method. The fair value of the Convertible Notes was approximately $56.8 million as of March 31, 2016. The Company estimates the fair value of its Convertible Notes utilizing market quotations for debt that have quoted prices in active markets. As of March 31, 2016, the remaining contractual life of the Convertible Notes is approximately 6.4 years. The following table sets forth total interest expense recognized related to the Convertible Notes: Three Months Ended March 31, 2016 2015 (in thousands) Contractual interest expense $ $ — Amortization of debt issuance costs — Amortization of debt discount — Total $ $ — Effective interest rate of the liability component % —

Restructuring

Restructuring	3 Months Ended
	Mar. 31, 2016
Restructuring
Restructuring	10. Restructuring In March 2016, the Company commenced implementation of a reorganization of its operations intended to improve efficiency and better align the Company’s costs and employment structure with its strategic plans. The Company expects to complete its reorganization by June 30, 2016, with approximately $2.6 million in total one-time charges related to work-force reductions. The Company recorded a one-time charge of $1.9 million for the period ended March 31, 2016. Of the $1.9 million in one-time charges, $1.6 million related to severance and $0.3 million related to benefits and other related charges. The total $1.9 million in one-time charges is recorded in research and development and selling, general and administrative expenses in the accompanying statement of operations.

Subsequent events

Subsequent events	3 Months Ended
	Mar. 31, 2016
Subsequent events
Subsequent events	11. Subsequent events The Company has evaluated all subsequent events and transactions through the filing date. There were no material events that impacted the unaudited consolidated financial statements or disclosures.

Summary of significant accoun18

Summary of significant accounting policies (Policies)	3 Months Ended
	Mar. 31, 2016
Summary of significant accounting policies
Basis of presentation	Basis of presentation The accompanying financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2015 and notes thereto included in the 2015 Form 10-K. Certain prior year balances have been reclassified to conform to current year presentation. In the opinion of management, the unaudited financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three month periods ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ended December 31, 2016 or for any other interim period or for any other future year.
Use of estimates	Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company’s research and development expenses, stock-based compensation, valuation procedures for the convertible notes and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become know.
Inventories and cost of product revenue	Inventories and cost of product revenue In 2014, the Company was notified that the European Commission, or EC, granted marketing authorization for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older. The conditional marketing authorization allows the Company to market Translarna for the treatment of nmDMD in the 31 member states of European Economic Area. The launch in these countries is on a country by country basis. This marketing authorization is subject to annual review and renewal by the European Commission following reassessment by the European Medicines Agency, or EMA, of the risk benefit balance of the authorization, which the Company refers to as the annual EMA reassessment. In the third quarter of 2015, the EMA approved the annual renewal of the marketing authorization for Translarna for the treatment of nmDMD. The authorization was further conditioned on the Company’s submission of the final report, including additional efficacy and safety data, from ACT DMD and the Company’s ability to implement measures, including pharmacovigilance plans that are detailed in the risk management plan for Translarna that was submitted to EMA. In January 2016, the Company submitted the final ACT DMD report to the EMA. The Company plans to seek to renew the marketing authorization on an annual basis until the Company’s obligations have been fulfilled and the approval is converted from a conditional approval into a full approval. If the Company fails to satisfy such requirements, or if it is determined that the balance of risks and benefits of using Translarna changes materially, the European Commission could, at the EMA's recommendation, vary, suspend, withdraw or refuse to renew the marketing authorization for Translarna or require additional clinical trials.
Recently issued accounting standards	Recently issued accounting standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principle-based approach for determining revenue recognition. ASU No. 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017. Early application is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on its financial statements and accompanying notes. In April 2015, the FASB issued ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs topic of the Codification”. This standard provides a simplified presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The standard is effective for public companies for annual periods beginning after December 15, 2015. The Company adopted the guidance on January 1, 2016 on a retrospective basis and reclassed $2.8 million from “Deposits and other assets” to “Long-term debt” on the balance sheet as of December 31, 2015. The Company’s unamortized debt issuance cost at March 31, 2016 was $2.7 million which is included within “Long-term debt” on the consolidated balance sheet. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. This standard requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company’s deferred tax assets is provided with full valuation allowance as of March 31, 2016. As such, the Company does not expect that this standard will have a significant impact upon adoption. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The new guidance affects all reporting organizations (whether public or private) that hold financial assets or owe financial liabilities. ASU 2016-01 is effective for years beginning after December 15, 2017, including interim periods within those fiscal years. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-01 will have on its financial statements and accompanying notes. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This standard will require organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-02 will have on its financial statements and accompanying notes. In March 2016, the FASB issued ASU No. 2016-09, “ Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. This standard requires the recognition of all income tax effects of awards in the income statement when the awards vest or are settled, with Additional Paid in Capital (APIC) pools to be eliminated. In addition, the standard will increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation as well as allowing companies to elect whether to account for forfeitures of share-based payments by recognizing forfeitures of awards as they occur or estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. This standard is effective for public companies for fiscal years beginning after December 15, 2016 and interim periods within those years, with early adoption permitted but only if all of the guidance is adopted in the same period. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2016-09 will have on its financial statements and accompanying notes.
Revenue Recognition	Revenue recognition The Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of the amounts due are reasonably assured. Net Product Sales The Company’s net product sales have consisted solely of sales of Translarna for the treatment of nmDMD in territories outside of the U.S. The Company began recognizing revenue for payments received under the reimbursed EAPs for Translarna in nmDMD patients in select countries in the third quarter of 2014. The Company has now established a pattern of collectability and, since January 2015, the Company recognizes revenue from product sales when there is persuasive evidence that an arrangement exists, title to product and associated risk of loss has passed to the customer, the price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition—Products. The Company has recorded revenue on sales where Translarna is available either on a commercial basis or through a reimbursed EAP program. Orders for Translarna are generally received from hospital and retail pharmacies and, in some cases, one of the Company’s third-party partner distributors. The Company’s third-party distributors act as intermediaries between the Company and end users and do not typically stock significant quantities of Translarna. The ultimate payor for Translarna is typically a government authority or institution or a third-party health insurer. The Company records revenue net of estimated third party discounts and rebates. Allowances are recorded as a reduction of revenue at the time revenues from product sales are recognized. Allowances for government and other third-party rebates and discounts are established or estimated at the time of delivery. These allowances are adjusted to reflect known changes in factors and may impact such allowances in the quarter those changes are known. Collaboration and Grant Revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. The Company evaluates all contingent consideration earned, such as a milestone payment, using the criteria as provided by the Financial Accounting Standards Board (FASB), guidance on the milestone method of revenue recognition. At the inception of a collaboration arrangement, the Company evaluates if a milestone payment is substantive. The criteria requires that (1) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from our activities to achieve the milestone; (2) the milestone be related to past performance; and (3) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement. If these criteria are met then the contingent milestones can be considered a substantive milestone and will be recognized as revenue in the period that the milestone is achieved. The Company recognizes royalties as earned in accordance with the terms of various research and collaboration agreements. If not substantive, the contingent consideration is allocated to the existing units of accounting based on relative selling price and recognized following the same basis previously established for the associated unit of accounting. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities.

Fair value of financial instr19

Fair value of financial instruments and investments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair value of financial instruments and marketable securities
Schedule of financial assets and liabilities that are required to be measured at fair value on a recurring basis	March 31, 2016 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant liability — — December 31, 2015 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ $ — $ $ — Warrant Liability — —
Summary of marketable securities accounted for as available-for-sale securities	March 31, 2016 Amortized Gross Unrealized Fair Cost Gains Losses Value Commercial paper $ $ $ — $ Corporate debt securities ) Government obligations ) $ $ $ ) $ December 31, 2015 Amortized Gross Unrealized Fair Cost Gains Losses Value Commercial paper $ $ $ — $ Corporate debt securities — ) Government obligations ) $ $ $ ) $
Schedule of marketable securities on the balance sheet	March 31, 2016 Less Than 12 Months More Than 12 Months Commercial paper $ $ — Corporate debt securities Government obligations Total Marketable securities $ $ December 31, 2015 Less Than 12 Months More Than 12 Months Commercial paper $ $ — Corporate debt securities Government obligations Total Marketable securities $ $
Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability	Level 3 assets Beginning balance as of January 1, 2016 $ Change in fair value of warrant liability ) Ending balance as of March 31, 2016 $

Other comprehensive income (l20

Other comprehensive income (loss) and accumulated other comprehensive items (Tables)	3 Months Ended
	Mar. 31, 2016
Other comprehensive income (loss) and accumulated other comprehensive items
Summary of other comprehensive income (loss) and the changes in accumulated other comprehensive items	Unrealized Gains (Losses) On Marketable Securities Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2015 $ ) $ ) $ ) Other comprehensive income before reclassifications Amounts reclassified from other comprehensive items — — — Other comprehensive income Balance at March 31, 2016 $ $ $

Accounts payable and accrued 21

Accounts payable and accrued expenses (Tables)	3 Months Ended
	Mar. 31, 2016
Accounts payable and accrued expenses
Schedule of components of accounts payable and accrued expenses	March 31, 2016 December 31, 2015 Employee compensation, benefits, and related accruals $ $ Consulting and contracted research Professional fees Accounts payable Accrued severance — Other $ $

Warrants (Tables)

Warrants (Tables)	3 Months Ended
	Mar. 31, 2016
Warrants
Summary of the Company's outstanding warrants	The following is a summary of the Company’s outstanding warrants as of March 31, 2016 and December 31, 2015: Warrant shares Exercise price Expiration Common stock $ Common stock $ Common stock $

Net loss per share (Tables)

Net loss per share (Tables)	3 Months Ended
	Mar. 31, 2016
Net loss per share
Schedule of computation of basic and diluted net loss available to common stockholders	Three months ended March 31, 2016 2015 Numerator Net loss attributable to common stockholders $ ) $ ) Denominator Denominator for basic and diluted net loss per share Net loss per share: Basic and diluted $ )* $ )* *In the three months ended March 31, 2016 and 2015, the Company experienced a net loss and therefore did not report any dilutive share impact.
Schedule of historical dilutive common share equivalents outstanding	As of March 31, 2016 2015 Stock Options Unvested restricted stock awards and units Total

Stock award plan (Tables)

Stock award plan (Tables)	3 Months Ended
	Mar. 31, 2016
Stock award plan
Summary of stock option activity	Number of options Weighted- average exercise price Weighted- average remaining contractual term Aggregate intrinsic value (in thousands) Outstanding at December 31, 2015 $ 8.38 yrs Granted $ Exercised ) $ Forfeited/Cancelled ) $ Outstanding at March 31, 2016 $ $ Vested or Expected to vest at March 31, 2016 $ $ Exercisable at March 31, 2016 $ $ —
Schedule of assumptions used to estimate fair values of grants made on the date of grant	Three months ended March 31, 2016 Risk-free interest rate 1.32%—2.24% Expected volatility 67%—70% Expected term 5.05 years—10.00 years
Summary of information on the Company's restricted stock	Restricted Stock Awards and Units Number of Shares Weighted Average Grant Date Fair Value January 1, 2016 $ Granted Vested — $ — Forfeited ) $ Unvested at March 31, 2016 $
Schedule of share-based compensation expense recorded in the statement of operations	Three Months Ended March 31, 2016 2015 Research and development $ $ General and administrative Total $ $

Convertible Senior Notes (Table

Convertible Senior Notes (Tables)	3 Months Ended
	Mar. 31, 2016
Convertible Senior Notes.
Summary of convertible notes	Liability component March 31, 2016 December 31, 2015 (in thousands) Principal $ $ Less: Debt issuance costs ) ) Less: Debt discount, net(1) ) ) Net carrying amount $ $ (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method.
Summary of interest expense recognized related to the Convertible Notes	Three Months Ended March 31, 2016 2015 (in thousands) Contractual interest expense $ $ — Amortization of debt issuance costs — Amortization of debt discount — Total $ $ — Effective interest rate of the liability component % —

The Company (Details)

The Company (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Aug. 31, 2014stateitem	Mar. 31, 2016USD ($)country	Dec. 31, 2015USD ($)	Aug. 31, 2015
Minimum age of ambulatory patient	5 years
Number of member states of the European Economic Area | state	31
Period of placebo controlled clinical trail	336 days
Number of patients tested in placebo controlled clinical trail | item	174
Number of countries made availability of Translarna on a commercial basis | country		20
Accumulated deficit | $		$ (634,231)	$ (592,998)
Convertible debt | 3.00% Convertible senior notes due 2022
Interest rate				3.00%

Summary of significant accoun27

Summary of significant accounting policies (Details) $ in Millions	Jan. 01, 2016USD ($)	Aug. 31, 2014state	Mar. 31, 2016USD ($)
Minimum age of ambulatory patient		5 years
Number of member states of the European Economic Area | state		31
Accounting Standards Update 2015-03 | Deposits and Other Assets
Debt issuance cost	$ 2.8
Accounting Standards Update 2015-03 | Long-term debt.
Debt issuance cost	$ 2.8
Unamortized debt issuance cost			$ 2.7

Fair value of financial instr28

Fair value of financial instruments and marketable securities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financial assets and liabilities measured at fair value on recurring basis
Marketable securities	$ 258,547	$ 280,903
Fair value transfers of assets between Level 1 and Level 2	0	0
Fair value transfers of assets between Level 2 and Level 1	0	0
Recurring basis | Total
Financial assets and liabilities measured at fair value on recurring basis
Marketable securities	258,547	280,903
Warrant liability	1	48
Recurring basis | Significant other observable inputs (level 2)
Financial assets and liabilities measured at fair value on recurring basis
Marketable securities	258,547	280,903
Recurring basis | Significant unobservable inputs (level 3)
Financial assets and liabilities measured at fair value on recurring basis
Warrant liability	$ 1	$ 48

Fair value of financial instr29

Fair value of financial instruments and marketable securities (Details 2) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Marketable securities accounted for as available-for-sale securities
Amortized Cost	$ 258,478	$ 281,492
Gross Unrealized Gains	187	83
Gross Unrealized Losses	(118)	(672)
Marketable securities	258,547	280,903
Commercial paper
Marketable securities accounted for as available-for-sale securities
Amortized Cost	28,923	26,877
Gross Unrealized Gains	46	80
Marketable securities	28,969	26,957
Corporate debt securities
Marketable securities accounted for as available-for-sale securities
Amortized Cost	209,080	226,959
Gross Unrealized Gains	139
Gross Unrealized Losses	(116)	(640)
Marketable securities	209,103	226,319
Government obligations
Marketable securities accounted for as available-for-sale securities
Amortized Cost	20,475	27,656
Gross Unrealized Gains	2	3
Gross Unrealized Losses	(2)	(32)
Marketable securities	$ 20,475	$ 27,627

Fair value of financial instr30

Fair value of financial instruments and marketable securities (Details 3) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Marketable securities on the balance sheet
Total Marketable securities, Less Than 12 Months	$ 195,021	$ 186,782
Total Marketable securities, More Than 12 Months	63,526	94,121
Commercial paper
Marketable securities on the balance sheet
Total Marketable securities, Less Than 12 Months	28,969	26,957
Corporate debt securities
Marketable securities on the balance sheet
Total Marketable securities, Less Than 12 Months	148,785	140,831
Total Marketable securities, More Than 12 Months	60,318	85,488
Government obligations
Marketable securities on the balance sheet
Total Marketable securities, Less Than 12 Months	17,267	18,994
Total Marketable securities, More Than 12 Months	$ 3,208	$ 8,633

Fair value of financial instr31

Fair value of financial instruments and marketable securities (Details 4) - Warrants. - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Changes in the fair value of warrant liability
Beginning balance	$ 48
Change in fair value of warrant liability	(47)
Ending balance	$ 1	$ 48
Minimum
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model
Volatility (as a percent)	67.00%	62.00%
Risk-free interest rate (as a percent)	0.59%	0.86%
Strike price (in dollars per share)	$ 128	$ 128
Expected life	1 year 2 months 16 days	1 year 6 months
Maximum
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model
Volatility (as a percent)	72.00%	70.00%
Risk-free interest rate (as a percent)	0.87%	1.54%
Strike price (in dollars per share)	$ 2,520	$ 2,520
Expected life	3 years 5 months 23 days	3 years 8 months 12 days
Common stock
Assumption used to estimate the fair value of warrant liability by utilizing the Black-Scholes option-pricing model
Fair value of shares (in dollars per share)	$ 6.44	$ 32.40

Other comprehensive income (l32

Other comprehensive income (loss) and accumulated other comprehensive items (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Other comprehensive income (loss) and accumulated other comprehensive items
Balance at the beginning of the period	$ (1,200)
Other comprehensive income before reclassifications	2,284
Other comprehensive income	2,284
Balance at the end of the period	1,084
Unrealized Gains (Losses) On Marketable Securities
Other comprehensive income (loss) and accumulated other comprehensive items
Balance at the beginning of the period	(589)
Other comprehensive income before reclassifications	658
Other comprehensive income	658
Balance at the end of the period	69
Foreign Currency Translation
Other comprehensive income (loss) and accumulated other comprehensive items
Balance at the beginning of the period	(611)
Other comprehensive income before reclassifications	1,626
Other comprehensive income	1,626
Balance at the end of the period	$ 1,015

Accounts payable and accrued 33

Accounts payable and accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts payable and accrued expenses
Employee compensation, benefits, and related accruals	$ 3,416	$ 11,187
Consulting and contracted research	14,033	13,753
Professional fees	3,169	2,523
Accounts payable	16,023	11,940
Accrued severance	1,909
Other	4,943	5,844
Accounts payable and accrued expenses	$ 43,493	$ 45,247

Warrants (Details)

Warrants (Details) - Warrants. - Common stock - $ / shares	Mar. 31, 2016	Dec. 31, 2015
2,017
Warrants
Warrant shares	6,250	6,250
Exercise price (in dollars per share)	$ 128	$ 128
2,019
Warrants
Warrant shares	7,030	7,030
Exercise price (in dollars per share)	$ 128	$ 128
2,019
Warrants
Warrant shares	130	130
Exercise price (in dollars per share)	$ 2,520	$ 2,520

Net loss per share (Details)

Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator
Net loss attributable to common stockholders	$ (41,233)	$ (37,915)
Denominator
Denominator for basic and diluted net loss per share (in shares)	33,919,169	33,067,752
Net loss per share:
Basic and diluted (in dollars per share)	$ (1.22)	$ (1.15)

Net loss per share (Details 2)

Net loss per share (Details 2) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net loss per share
Total shares excluded from calculation	6,488,359	4,992,803
Stock Options
Net loss per share
Total shares excluded from calculation	6,034,918	4,627,833
Unvested restricted stock awards and units
Net loss per share
Total shares excluded from calculation	453,441	364,970

Stock award plan (Details)

Stock award plan (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 05, 2013	May. 31, 2013	Mar. 31, 2016	Dec. 31, 2015
Unvested restricted stock awards and units
Number of options
Granted (in shares)			141,185
Stock option
Number of options
Outstanding at the beginning of the period (in shares)			4,826,477
Granted (in shares)			1,357,045
Exercised (in shares)			(3,125)
Forfeited/Cancelled (in shares)			(145,479)
Outstanding at the end of the period (in shares)			6,034,918	4,826,477
Vested or expected to vest at the end of the period (in shares)			3,716,134
Exercisable at the end of the period (in shares)			2,026,638
Weighted-average exercise price
Outstanding at the beginning of the period (in dollars per share)			$ 37.20
Granted (in dollars per share)			29.78
Exercised (in dollars per share)			10.85
Forfeited (in dollars per share)			49.51
Outstanding at the end of the period (in dollars per share)			35.38	$ 37.20
Vested or expected to vest at the end of the period (in dollars per share)			36.19
Exercisable at the end of the period (in dollars per share)			$ 33.63
Weighted-average remaining contractual term
Outstanding at the end of the period			8 years 5 months 19 days	8 years 4 months 17 days
Vested or expected to vest at the end of the period			8 years 10 months 6 days
Exercisable at the end of the period			7 years 8 months 9 days
Aggregate intrinsic value
Outstanding at the end of the period (in dollars)			$ 1	$ 32,391
Vested or expected to vest at the end of the period (in dollars)			$ 1
Valuation assumptions
Inducement grants for non-statutory stock options			67,100
Expected dividend yield (as a percent)			0.00%
Weighted average grant date fair value (in dollars per share)			$ 18.42
Stock option | Minimum
Valuation assumptions
Risk-free interest rate (as a percent)			1.32%
Expected volatility (as a percent)			67.00%
Expected term			5 years 18 days
Stock option | Maximum
Valuation assumptions
Risk-free interest rate (as a percent)			2.24%
Expected volatility (as a percent)			70.00%
Expected term			10 years
2009 Equity and Long Term Incentive Plan
Stock option plan
Number of additional shares authorized		2,500,000
2013 Stock Incentive Plan
Stock option plan
Number of shares available for issuance	0
2013 Stock Incentive Plan | Unvested restricted stock awards and units
Stock option plan
Number of shares of restricted stock granted	735,324
2013 Stock Incentive Plan | Stock option
Number of options
Granted (in shares)	4,613
2013 Stock Incentive Plan | Common stock
Stock option plan
Number of shares authorized	739,937
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | Common stock
Stock option plan
Number of shares available for issuance		122,296
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | Common stock | 1998 Employee, Director and Consultant Stock Option Plan | Maximum
Stock option plan
Number of shares subject to outstanding awards		3,040,444
2013 Long Term Incentive Plan | Minimum
Stock option plan
Annual increase in the number of shares on the first day of the fiscal year		2,500,000
Annual increase in the number of shares outstanding on the first day of the fiscal year (as a percent)		4.00%
2013 Long Term Incentive Plan | Common stock
Stock option plan
Number of shares available for issuance			290,868

Stock award plan (Details 2)

Stock award plan (Details 2) - Unvested restricted stock awards and units	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of Shares
Balance at the beginning of the period (in shares) | shares	344,335
Granted (in shares) | shares	141,185
Forfeited (in shares) | shares	(32,079)
Balance at the end of the period (in shares) | shares	453,441
Weighted Average Grant Date Fair Value
Balance at the beginning of the period (in dollars per share) | $ / shares	$ 10.85
Granted (in dollars per share) | $ / shares	30.86
Forfeited (in dollars per share) | $ / shares	16.26
Balance at the end of the period (in dollars per share) | $ / shares	$ 16.70

Stock award plan (Details 3)

Stock award plan (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based compensation expense recorded in the statement of operations
Share-based compensation expense	$ 8,915	$ 9,748
Unrecognized compensation cost	$ 89,900
Weighted average remaining service period for recognition of unrecognized compensation cost	2 years 10 months 2 days
Research and development
Share-based compensation expense recorded in the statement of operations
Share-based compensation expense	$ 4,328	4,667
General and administrative
Share-based compensation expense recorded in the statement of operations
Share-based compensation expense	$ 4,587	$ 5,081

Convertible Senior Notes (Detai

Convertible Senior Notes (Details)	1 Months Ended	3 Months Ended
	Aug. 31, 2015USD ($)item$ / shares	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Long-term debt
Amortization of debt issuance costs		$ 72,000
3.00% Convertible senior notes due 2022 | Convertible debt
Long-term debt
Principal amount of Notes	$ 150,000,000	150,000,000	$ 150,000,000
Less: Debt issuance costs		(2,688,000)	(2,760,000)
Less: Debt discount, net		(53,946,000)	(55,392,000)
Net carrying amount.		93,366,000	$ 91,848,000
Interest rate	3.00%
Net proceeds from issuance of convertible notes	$ 145,400,000
Trading days, number | item	20
Consecutive trading days, period	30 days
Stock price trigger (as a percent)	130.00%
Business days, period	5 days
Consecutive trading-day period	5 days
Common stock per principal amount	$ 1,000
Maximum product of the closing sale price of shares of the Company's common stock and the applicable conversion rate for such trading day (as a percent)	98.00%
Conversion ratio	17.7487
Conversion price per share | $ / shares	$ 56.34
Minimum percentage of principal held by convertible debt instrument holders required to issue notice for declaration of principal and unpaid interest payable upon events of default (as a percent)	25.00%
Convertible Instruments Principal And Unpaid Interest Payable Upon Events Of Default	100.00%
Term of the convertible notes	7 years
Net deferred tax liability in connection with convertible notes	$ 22,300,000
Fair value of convertible notes		$ 56,800,000
Remaining contractual life of the convertible notes		6 years 4 months 24 days
Contractual interest expense		$ 1,116,000
Amortization of debt issuance costs		72,000
Debt discount recorded to interest expense		1,446,000
Total		$ 2,634,000
Effective interest rate of the liability component (as a percent)		11.00%
3.00% Convertible senior notes due 2022 | Convertible debt | Redemption on or after August 20, 2018
Long-term debt
Trading days, number | item	19
Consecutive trading days, period	30 days
Stock price trigger (as a percent)	130.00%
Redemption price (as a percent)	100.00%
Sinking fund	$ 0

Restructuring (Details)

Restructuring (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Jun. 30, 2016
Restructuring charges	$ 1.9
Severance	1.6
Benefits and other related charges	0.3
Research and development and selling, general and administrative expenses
Restructuring charges	$ 1.9
Forecast
Work-force reduction charges		$ 2.6