Cowen Says PTC Therapeutics Is A Buy

Shares of PTC Therapeutics, Inc. PTCT rose 7 percent on Wednesday after Cowen analysts Ritu Baral and Elyse Shapiro upgraded the stock from Market Perform to Outperform, setting a $120 price target. The promotion comes in anticipation of the upcoming ACT-DMD data in the fourth quarter.

The firm expects "positive Ph3 data in Oct/Nov based on the totality of Ph2 data precedent." The analysts also see "underappreciated value in the Ph1/2 MPS1 program, which will have first biomarker data in late '15."

Cowen highlights a few points to take into account:

• The totality of ataluren's Ph2 DMD data "Establishes Proof of Concept [and] Derisks Ph3 ACT-DMD." They now see a chance of success of more than 50 percent for upcoming Ph3 DMD data.
• "A prospective subgroup analysis of patients by baseline 6MWD < or >350m, showed patients with a baseline <350m treated with the Ph3 dose showed a 68m improvement versus PBO (p=0.0053)."
• The Ph3 ACT-DMD is better designed: it minimizes variability and "enriches the study for those patients most likely to respond."
• "Ataluren's bell-shaped dose response curve, while unusual, has been replicated in almost every preclinical and clinical model investigated, and even seen with other read-through therapies. While the hypothesis behind the phenomenon has not yet been conclusively proven, the consistency of the signal" gives analysts comfort.