Jefferies Upgrades PTC Therapeutics To Hold; Sees FDA Approvalability Priced In And Is Uncertain On EU Decision

Jefferies' Gena Wang has upgraded the rating on PTC Therapeutics, Inc. PTCT from Underperform to Hold, while lowering the price target from $18 to $12.

Following the FDA refusing to file the letter for ataluren, Wang believes the chances of approval of the drug in Duchenne muscular dystrophy (DMD) in the US appear slim, although the EU decision is still unclear.

Related Link: Citi Downgrades PTC Therapeutics Following Major Setback

"With few precedents, we see reasonable probability of EMA withdrawing marketed ataluren based on prior mixed panel voting results," the analyst mentioned, while lowering the probability of success of the drug in DMD from 20 percent to 5 percent in the US and C.F. and from 50 percent to 30 percent in the EU/ROW.

According to the Jefferies report, 70 percent and 42 percent of the CHMP panel members voted against the conditional approval of the drug in DMD, with 23 and 14 of the 33 voting members voting against approval at the first and second round of review, respectively.

Wang also believes that there could be high risk in the Phase 3 data for cystic fibrosis (CF) due to lack of clarity into the mechanism of action, with low probability of success for ataluren in meeting the primary endpoint of the ongoing CF Phase 3 trial.