Cowen Heads to Sidelines on Proteon Therapeutics Inc (PRTO) Following Clinical Trial Setback


Proteon Therapeutics Inc (NASDAQ:PRTO) investors are wildly disappointed today amid the firm’s Phase 3 sunken ship for its sole drug contender vonapanitase, sending shares plummeting almost 75% yesterday. In the first of two Phase 3 trials (PATENCY-1), the drug missed the primary endpoint in patients undergoing vascular access surgery.

In reaction, Cowen analyst Boris Peaker downgrades from an Outperform to a Market Perform on PRTO without listing a price target.

The analyst highlights his concern, noting, “Despite signs of drug activity in the PATENCY-1 trial, we believe a path/timeline and cost to approval are increasingly uncertain.”

Nonetheless, there may be some silver lining left in the wake of the firm’s colossal setback. “Proteon’s valuation is based on single drug, vonapanitase, which has failed the first of its two Phase 3 studies. Its second Phase 3 study remains ongoing with data expected in 2Q18. We see a negative risk/reward moving into this data readout given that one Phase 3 and one Phase 2 trial have now failed to reach statistical significance in their primary endpoint. However, feedback from our consultants indicates that if vonapanitase were to receive approval, the drug is likely to be commercially successful. If approved, we believe vonapanitase is likely to become the standard of care in this indication with a US peak sales potential of $700M+/yr,” Peaker contends.

Moving forward, PRTO management is strategizing to bolster the size of its second ongoing Phase 3 (PATENCY-2) study in hopes of bettering the statistical powering of the trial.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Boris Peaker is ranked #670 out of 4,285 analysts. Peaker has a 39% success rate and gains 6.3% in his yearly returns. However, when recommending PRTO, Peaker loses 72.8% in average profits on the stock.

TipRanks analytics exhibit PRTO as a Buy. Based on 6 analysts polled by TipRanks in the last 3 months, 4 rate a Buy on PRTO stock while 2 maintain a Hold. The 12-month average price target stands at $14.75, marking a 490% upside from where the stock is currently trading.

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