More Data Needed On Proteostasis Therapeutics' Cystic Fibrosis Candidate, RBC Says In Downgrade

After Proteostasis Therapeutics Inc PTI’s mixed Phase 2 results from a study of its PTI-801 cystic fibrosis transmembrane conductance regulator, RBC Capital Markets said more data is necessary to de-risk the asset.

The Analyst

Analyst Brian Abrahams downgraded PTI from Outperform to Sector Perform and lowered the stock’s price target from $11 to $5.

The Thesis

The data showed sweat chloride improvements, but negligible benefits to forced expiratory volume in 1 second, Abrahams said in the downgrade note.

The FEV1 benefits appeared marginal, while other correctors have shown clearer improvement in two weeks, the analyst said. 

“While there were signs of activity in the ph.II, given a lack of clear FEV1 benefit we believe more work will need to be done to more fully de-risk the asset." 

A large opportunity exists in cystic fibrosis, with price points of over $250,000 per year for approved treatments — and Proteostasis could be primed for market penetration, Abrahams said. 

“PTI is one of the only companies developing multiple clinical stage CFTR modulators for the treatment of CF."

Clinical studies have indicated PTI’s combinations produce additive effects on CFTR function, and patients who are on Orkambi CF treatment could benefit from the addition of PTI-801 and PTI-428 to their treatment regimen, the analyst said. 

If subsequent studies show competitive efficacy benefits, PTI has the opportunity for greater market penetration, according to RBC. 

Price Action

Proteostasis shares were down 38.16 percent at $3.03 at the close Thursday. 

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