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Proteostasis Therapeutics Inc Sparks Optimism Among Investors; Here’s Why


In a compelling tale for investors, shares of Proteostasis Therapeutics Inc (NASDAQ:PTI) are surging nearly 50% higher as of this writing. Why the excitement? The FDA’s decision to grant the biotech company’s lead candidate PTI-428 a Breakthrough Therapy designation is the main driving force behind today’s gain. As a reminder, PTI-428 is a cystic fibrosis transmembrane conductance regulator (CFTR) protein modulator, also known as an “amplifier.”

The FDA gives this designation to expedite the development and review of drugs that have demonstrated clinical evidence indicating the potential for significant improvement over available therapy. The designation was based on the results from a recent Phase 2, randomized, placebo controlled study of PTI-428, in 24 CF subjects on background treatment with Orkambi® and who were treated with either 50 mg PTI-428 once daily or placebo for 28 consecutive days. The study results showed that treatment with PTI-428 led to mean absolute improvement in percent predicted forced expiratory volume in 1 second (ppFEV1) of 5.2 percentage points from baseline through Day 28 compared to placebo (p<0.05).  Additionally, consistent with the CFTR amplifier mechanism of action, a positive increase in nasal mucosal CFTR protein was observed in PTI-428 treated subjects and the magnitude of change compared to baseline was consistent with the changes in CFTR protein levels observed in the in vitro human bronchial cell model, whereas the placebo subjects had no significant increase in CFTR protein during the treatment period.

“We believe the Breakthrough Therapy Designation for PTI-428 reflects the strength of the recent Phase 2 study results for our amplifier, a novel and proprietary class of CFTR modulators,” said Meenu Chhabra, president and chief executive officer of Proteostasis.  “PTI-428 can potentially be added to current and future standards of care, offering the potential for improvement in pulmonary function for patients with cystic fibrosis. We look forward to working closely with the FDA as we advance our clinical programs for PTI-428, including as part of our proprietary triple combination with PTI-801 and PTI-808, our third generation corrector and potentiator, respectively.”

Analyst Ratings

On the ratings front, Proteostasis stock has been the subject of a number of recent research reports. In a report issued on Friday, March 9, RBC analyst Brian Abrahams initiated coverage on shares of PTI with an Outperform rating and price target of $11.00, which implies an 81% upside from current levels. (To watch Abrahams’ track record, click here)

Abrahams wrote, “As one of the only companies developing multiple clinicalstage CFTR modulators for the treatment of CF, we believe that PTI’s potential for commercial success is currently underappreciated. The company is developing a CFTR amplifier (PTI-428), a CFTR corrector (PTI-801), and a CFTR potentiator (PTI-808), all of which are potentially diseasemodifying treatments for CF. Preclinical studies indicate that PTI’s doublet and triplet combinations produce additive effects on CFTR that are greater than Orkambi or Kalydeco alone, and early clinical data indicate that patients who are already stable on Orkambi may benefit from the addition of PTI-428 or PTI-801 to their treatment regimen. Given the large potential opportunity for a proprietary triple-combo in CF and the many shots-on-goal for individual modulators to be approved as adjunctive therapies for currently marketed combinations, we believe the shares are undervalued.”