Tuesday turned out to be a nightmare for shareholders of PTC Therapeutics, Inc. (NASDAQ:PTCT) as the stock price tumbled over 55%, after the biotech company received a refuse to file letter (RTF) from the FDA for its muscle disorder drug. RTFs are usually given for administrative deficiencies (e.g. margins, hyperlinks etc) or absence of pivotal data required for review.

In reaction, J.P. Morgan analyst Anupam Rama downgraded the stock from Overweight to Neutral, while slashing the price target to $22 (from $81), which still implies an upside of 79% from current levels.

Rama commented, “The press release does not provide much clarity on core issues, and, based on our conversation with the company, PTCT is still working through next steps. PTCT shares are down 40%+ and justifiably so. Currently, there are more questions than answers, including 1) nature / details of RTF, 2) the possibility of additional pivotal trial work in DMD for US approval, 3) status of EU conditional approval for Translarna, 4) pricing in the EU and 5) credibility of management.”

“Indeed, the fact that limited details have been disclosed on the RTF leads us to believe the setback is likely not to be a minor delay (i.e., addressable in a short timeframe / a paper work issue). While we had been constructive on PTCT shares for some time, at this point with limited clarity on key value drivers, we cannot justify an Overweight rating,” the analyst concluded.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Anupam Rama has a yearly average return of 1.6% and a 26.3% success rate. Rama has a -17.8% average return when recommending PTCT, and is ranked #1503 out of 3638 analysts.

Out of the 5 analysts polled by TipRanks (in the past 3 months), 3 rate PTC Therapeutics stock a Buy, 1 rates the stock a Hold and 1 recommends Sell. With a return potential of 406.8%, the stock’s consensus target price stands at $62.29.