Shareholders of biotech firm PTC Therapeutics, Inc. (NASDAQ:PTCT) and financial technology firm On Deck Capital Inc (NYSE:ONDK) are having a rough day, as both companies fell sharply following FDA setback and disappointing earnings guidance, respectively. Let’s take a look and see what analysts have to say about PTCT and ONDK.
PTC Therapeutics, Inc.
PTC Therapeutics shares lost almost half of their value today after the company received a refuse to file letter from the FDA for its new drug, Translarna, a protein restoration treatment meant to allow the functioning protein formation in patients with genetic disorders due to a nonsense mutation.
However, Cowen analyst Ritu Baral remain positive on the stock, reiterating an Outperform rating and price target of $120, which represents a potential upside of 808% from where the stock is currently trading.
Baral commented, “In our experience, Refuse To File Letters (RTFs) are only given for administrative deficiencies (e.g. margins, hyperlinks etc) or absence of pivotal data required for review. Our discussion with PTCT management suggests it is NOT the former. Therefore, given this and the fact that PTCT will not give additional detail on the path forward until their Monday call, we believe there is a profound absence of some type of required pivotal data in the current NDA.”
The analyst continued, “We think the lack of dystrophin data is the most likely reason driving FDA’s decision to give Translarna an RTF. While PTCT did not have Ph3 dystrophin data (and indeed did not even conduct biopsies in ACT-DMD), we thought data from a Ph2a open label study, which evaluated Translarna’s ability to restore dystrophin in nmDMD patients, was sufficient to prove evidence of MOA. FDA seems to rely more on dystrophin data when clinical data is inconsistent, in order to provide further evidence of a biological effect.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ritu Baral has a yearly average return of 6.7% and a 39% success rate. Baral has a -5.0% average return when recommending PTCT, and is ranked #371 out of 3638 analysts.
Out of the 10 analysts polled by TipRanks, 7 rate PTC Therapeutics stock a Buy, 2 rate the stock a Hold and 1 recommends Sell. With a return potential of 370%, the stock’s consensus target price stands at $62.29.
On Deck Capital Inc
Canaccord analyst Michael Graham reiterated a Buy rating on shares of On Deck, while reducing the price target to $12 (from $18), after the company reported fourth-quarter results, beating expectations by $0.01 but guiding lower than market consensus. On Deck’s shares reacted to the lower-than-expected guidance, falling more than 20% at the time of writing.
Graham observed, “OnDeck reported Q4 results that were solidly ahead of our estimates on all metrics, including originations, revenue, and EBITDA. Guidance was weaker, however, as management is focused on: 1) controlling marketing spend in an effort to focus on rational originations (i.e. better quality but slower growth); 2) slightly lower gain on sale as investors are pricing in higher defaults (despite loss ratios performing well in Q4); and 3) increased technology spend to support major partnerships. We are essentially pushing earnings power out by 1-2 years and are lowering our price target in concert.”
“We lower our revenue estimates significantly and push out our earnings estimates by over a year. We lower our price target to $12 (from $18), based on 20x our 2020 nonGAAP EPS estimate of $1.07, discounted to present at 12%,” the analyst added.
According to TipRanks.com, analyst Michael Graham has a yearly average return of 5% and a 50.5% success rate. Graham has a -23.8% average return when recommending ONDK, and is ranked #398 out of 3638 analysts.
Out of the 11 analysts polled by TipRanks, 7 rate On Deck stock a Buy, while 4 rate the stock a Hold. With a return potential of 114%, the stock’s consensus target price stands at $14.44.