Analysts are weighing in on medical test maker GenMark Diagnostics, Inc (NASDAQ:GNMK) and biotech firm PTC Therapeutics, Inc. (NASDAQ:PTCT), as both stocks hit their 52-week low today. The analysts reflect on GenMark’s 4Q15 update and ePlex delays, and on FDA’s refuse-to-file letter which throws a significant roadblock in front of PTCT’s regulatory plans for ataluren.
GenMark Diagnostics, Inc
GenMark shares fell nearly 8% today after the company reported fourth-quarter results, and noted that it expects to need more time, beyond Q1, to address “manufacturing variability” related to the launch of its ePlex product in Europe.
Subsequently, Needham analyst Michael Matson reiterated a Buy rating on GenMark shares, with a price target of $11, which implies an upside of 137% from current levels.
Matson observed, “GNMK’s 4Q15 revenue was consistent with its 1/12/16 preannouncement while its EPS beat consensus. GNMK placed 17 XT-8 systems and its revenue grew by 34% Y/Y to $13.2M. Management now expects to launch the sampleto-answer ePlex system in Europe sometime after 1Q16 (vs. in 1Q16 previously) and submit it to the FDA shortly thereafter (vs. 2Q16 previously). For 2016, management guided to revenue of $47-51M and but did not provide system placement guidance given the ePlex launch. While the repeated ePlex delays are clearly disappointing, we reiterate our Buy rating since we continue to expect the differentiated ePlex platform to drive an expected acceleration in revenue growth once it is ultimately launched.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Matson has a yearly average return of -5% and a 41% success rate. Matson has a -26% average return when recommending GNMK, and is ranked #3368 out of 3664 analysts.
PTC Therapeutics, Inc.
Jefferies analyst Gena Wang upgraded shares of PTC Therapeutics from Underperform to Hold, with a price target of $12, following significant deterioration in the stock price, as the company received a refuse to file letter (RTF) from the FDA for its muscle disorder drug.
Wang commented, “After FDA’s Refuse to File letter, we see slim chance of approval for ataluren in DMD in US; however, EU decision remains unclear. With few precedents, we see reasonable probability of EMA withdrawing marketed ataluren based on prior mixed panel voting results. We lower prob of success to 5% from 20% for DMD in US and CF, to 30% from 50% for DMD in EU/ROW. We lower our PT from $18 to $12; however, upgrade PTCT to Hold given priced-in valuation.”
According to TipRanks.com, analyst Gena Wang has a yearly average return of -29.5% and a 23% success rate. Wang has a 4% average return when recommending PTCT, and is ranked #3499 out of 3664 analysts.
Out of the 6 analysts polled by TipRanks (in the past 3 months), 3 rate PTC Therapeutics stock a Buy, while 3 rate the stock a Hold. With a return potential of 390%, the stock’s consensus target price stands at $40.60.