Roth Capital On PTC Therapeutics: 'Staying On The Sidelines' Until Regulatory Clarity - PTC Therapeutics (NASDAQ:PTCT)

Shares of PTC Therapeutics, Inc. PTCT spiked higher by more than 7 percent on Friday, but are still lower by nearly 35 percent year-to-date.

The company reported results from a Phase 3 ACT DMD clinical trial of Translarna on Thursday.

Debjit Chattopadhyay of Roth Capital maintained a Neutral rating and $63 price target.

PTC Therapeutics reported results from a Phase 3 ACT DMD clinical trial of Translarna on Thursday.

In a report published Friday, Roth Capital Partners analyst Debjit Chattopadhyay, Ph.D., noted that the study did not meet its primary endpoint, which was an outcome that was in-line with his expectations. The analyst did note that the company appears to have "activity in a subset of patients based on meta-analysis across both primary and secondary endpoints."

"The appearance of a ‘new subgroup' is troubling, but the safety profile is comforting (especially compared to Bio Marin's drisapersen for exon-51 amenable patients), which could clinch the regulatory case," the analyst noted.

Chattopadhyay continued two four takeaways from the results.

Key Points

Takeaway #1:

"Primary endpoint was not met. A 15 meter benefit was observed in 6MWD in overall study population, which was not significant (p=0.213, n=228). Recall, the study was designed and informed based on the outcome of the prior large randomized phase 2 study and specifically enriched to demonstrate efficacy."

Takeaway #2: "A new (pre-specified) subgroup has now been identified, boys with baseline 6MWT between 300m to 400m, although the exact age and baseline has not been specified. In this subgroup a 47m benefit was observed (p=0.007, n=99)."

Takeaway #3: "Safety profile of the drug remains stellar with over 800 patients now having been treated."

Takeaway #4: "Pre-specified meta-analysis of combined ACT DMD and Phase 2b studies demonstrated benefit in Translarna-treated patients across primary (p=0.015, n=291) and key secondary efficacy endpoints. Overall, the combination of 6MWT, 10-m walk/run, 4-stair climb, 4-stir descend, all seem to be favoring treatment with ataluren, which coupled with the safety profile potentially clinches the case for Translarna approval."

Finally, the analyst argued that the lack of a "clear clinical benefit" in the "other groups" is "troubling and hard to explain." He added that over the near-term, a regulatory decision on BioMarin's drisapersen is "likely to have an impact" on PTC, and a conditional approval for BioMarin "bodes well" for a potentially full approval for PTC.

Bottom line, the analyst stated that he is "staying on the sidelines" until "regulatory clarity emerges."

Shares remain Neutral rated with an unchanged $63 million price target.

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