Credit Suisse Weighs In Ahead Of PTC Therapeutics' Thursday AdCom Panel For Translarna - PTC Therapeutics (NASDAQ:PTCT)

PTC Therapeutics, Inc. PTCT is already experiencing some major volatility Tuesday ahead of its upcoming AdCom meeting for Duchenne muscular dystrophy drug candidate Translarna on Thursday. The stock took a 22-percent dive Tuesday morning ahead of the meeting as investors have started to doubt an FDA approval following the release of FDA briefing documents Tuesday morning.

On Monday, Credit Suisse analyst Alethia Young said PTC investors are right to be concerned. According to Young, PTC stock will likely be heading hard in one direction or the other Thursday.

“Based on our review of the data, we remain unsure that the FDA will approve this drug,” Young wrote. “We think the decision will depend on whether totality of the data would justify the primary endpoint miss in ACT DMD and Phase 2b study.”

Fortunately for PTC bulls, Credit Suisse estimated 72 percent upside for shares in the case of a positive upside compared to only 20-percent downside in the event of a rejection. Following Tuesday’s big sell-off, downside should be even more limited.

The FDA said Tuesday that Translarna efficacy data “are not persuasive,” language that triggered the large market sell-off. The FDA has twice rejected review of Translarna due to lack of convincing data, but PTC opted to push forward with its application.

The FDA’s decision on Translarna will be under intense scrutiny after its controversial 2016 approval of Sarepta Therapeutics Inc SRPT DMD drug Exondys 51 against the recommendations of the agencies advisory panel resulted on the resignation of one panel member.

Credit Suisse has an Outperform rating and $25 price target for PTC Therapeutics stock.

PTC Therapeutics shares were down 16.71 percent at $16.25.

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