Oppenheimer Sees Translarna Approval 'Likely,' Believes PTC Is 'Catalyst Rich' Through 1H'16

• PTC Therapeutics, Inc. PTCT shares have declined 52.87 percent over the last six months, touching a low of $25.11 on September 29.
• Oppenheimer’s Christopher Marai has reiterated an Outperform rating on the company, while lowering the price target from $155 to $135.
• Marai expressed optimism regarding the approval for Translarna by the FDA and EU, while mentioning that the stock was “catalyst rich” through 1H16.

Analyst Christopher Marai reported that the company discussed the results of the Phase 3 trial on October 15, highlighting the statistically significant benefit to the patients as compared to the placebo group.

Marai believes that the results are “supportive of FDA approval for Translarna, and satisfies conditional approval requirements in the EU.” In addition, the meta-analysis has already been “okayed” by the FDA, while the predefined subset analysis was in-line with the draft guidance of the FDA for DMD.

“Promisingly, data in pre-specified groups was concordant with secondary endpoints also demonstrating statistically significant results,” Marai stated, while adding, “We don't believe the market will credit Translarna's potential in nmCF in next 12 months, as ACT-DMD results are not outright positive, unequivocally supporting much contested proof of mechanism.”

PTC Therapeutics also disclosed that it had conducted prespecified analyses. Marai explained that “drugs for ultra-rare diseases are often approved on results from pre-specified sub-datasets.”

According to the Oppenheimer report, “In the EU, Translarna's label includes ambulant patients ages 5+ and not limited by 6MWT-baseline or any other efficacy/disease progression measure, nor sub-group, but driven by mechanism.”

Marai believes that the expansion of the drug into the above 5-years-old population would be supported via clinical experience and registry rather than through trials.