PTC Therapeutics Remains Well Positioned With A Broad Clinical Pipeline, Says Roth Capital
In a research report released this morning, Roth Capital analyst Debjit Chattopadhyay initiated coverage on shares of PTC Therapeutics (PTCT). He issued a Buy rating and a price target of $34.00, which represents a potential upside of 24% from where the stock is currently trading.
The following bullets contain some highlights from that call:
- PTCT is pioneering the development of small molecules for the treatment of rare genetic disorders and other chronic conditions. The conditional approval for ataluren in the EU for the treatment of nonsense mutation-mediated Duchenne Muscular Dystrophy (nmDMD) is a $300M commercial opportunity, with no near-term competitive threat, in our view.
- We believe that the recent TRAFFIC and TRANSPORT data from Vertex could serve as a framework for the upcoming ataluren phase 3 program. We believe that a 3% absolute improvement in percent predicted FEV1 could be very compelling in nmCF, which is potentially the most severe form of CF. Positive readouts from the nmDMD and nmCF studies could transform ataluren into a blockbuster product, in our opinion.
- In our opinion, PTCT remains well positioned with a broad clinical pipeline spread across early and late-stage development, bolstered by the conditional approval in the EU, and backed by a robust balance sheet (~$8/ share in cash). We initiate coverage of PTCT shares with a Buy rating and a $34 price target. Risks to our target include failure of phase 3 nmDMD program, which would invalidate the conditional approval in the EU as well as significantly decrease the odds of successful nmCF phase 3 program.
- We are taking a conservative approach and are assuming a 19% probability of success for ataluren in nmDMD. Our modest success assumptions reflects the prior unsuccessful phase 2b program and subgroup-driven phase 3 powering assumptions. However we note that there are no other therapies in late-stage testing targeting nmmediated DMD, significant pricing power in the rare disease setting, and likely chronic long-term use of ataluren if approved, which drives our NPV of $15/share for this indication.
According to TipRanks.com, which measures analysts and bloggers success rate based on how their calls perform, analyst Debjit Chattopadhyay currently has an average return of 2.5% and a 33% success rate. Chattopadhyay is ranked #2364 out of 3160 analysts.