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by trader on February 22, 2016

PTC Therapeutics, Inc. (NASDAQ:PTCT) Jefferies Gena Wang has upgraded the rating from Underperform to Hold

PTC Therapeutics, Inc. (NASDAQ:PTCT) Jefferies Gena Wang has upgraded the rating from Underperform to Hold, while lowering the price target from $18 to $12.

Following the FDA refusing to file the letter for ataluren, Wang believes the chances of approval of the drug in Duchenne muscular dystrophy (DMD) in the US appear slim, although the EU decision is still unclear.

With few precedents, we see reasonable probability of EMA withdrawing marketed ataluren based on prior mixed panel voting results, the analyst mentioned, while lowering the probability of success of the drug in DMD from 20 percent to 5 percent in the US and C.F. and from 50 percent to 30 percent in the EU/ROW.

According to the Jefferies report, 70 percent and 42 percent of the CHMP panel members voted against the conditional approval of the drug in DMD, with 23 and 14 of the 33 voting members voting against approval at the first and second round of review, respectively.

Wang also believes that there could be high risk in the Phase 3 data for cystic fibrosis (CF) due to lack of clarity into the mechanism of action, with low probability of success for ataluren in meeting the primary endpoint of the ongoing CF Phase 3 trial.

PTC Therapeutics Equity Analysis

PTC Therapeutics, Inc. (NASDAQ:PTCT) opened trading today as $10.90 and is trading in the range of 10.11-11.47 today. PTC Therapeutics’ current market cap stands at $373.56 million.

Compared to other peers in the Biotechnology sector, PTC Therapeutics hasn’t performed in terms of quarterly revenue growth year over year at 4.77 vs. the industry average of 0.18. PTC Therapeutics’ earnings per share is currently at -4.15, which is below then the sector average of -0.36.

PTC Therapeutics is currently covered by 10 Wall Street analysts. The mean target price is $75.10 according to First Call. This presents a solid upside to the current price of the equity. The Mean Recommendation sits at 2.0 which is based on 4 Strong Buy, 5 Buy ratings.

The most recent analyst actions consisted of Citigroup downgrading the stock on February 24th and RBC Capital Mkts initiating coverage with a downgrade rating back in February.

The current quarter revenue estimates is 13.29M. Sales are expected to grow at a 5.00% rate. PTC Therapeutics reported actual earnings last quarter of -1.27 which beats the -1.15 consensus estimate, a -10.40% surprise.

Corporate Profile

PTC Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery and development of orally administered, proprietary small-molecule drugs that target post-transcriptional control processes. Its lead product candidate is ataluren for the treatment of patients with genetic disorders that arise from a type of genetic mutation known as a nonsense mutations or nmCF. The company had completed a Phase IIb clinical trial of ataluren for the treatment of nmDMD and a Phase III clinical trial of ataluren for the treatment of nmCF. In addition, it develops spinal muscular atrophy, which is in Phase I clinical program. The company’s preclinical development programs include PTC596, a development candidate used for the treatment of chemotherapy resistant cancers; and antibacterial small molecule compounds for the treatment of life-threatening infections caused by multidrug-resistant Gram-negative bacteria. PTC Therapeutics, Inc. has collaborations with Roche and the SMA Foundation to develop and commercialize compounds identified under its spinal muscular atrophy sponsored research program; and AstraZeneca AB for the discovery and development of potential new therapies for cancer and other diseases. The company was founded in 1998 and is based in South Plainfield, New Jersey.

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