RBC Affirms PTC Therapeutics (PTCT) at 'Sector Perform'; Doesn't See Translarna Appeal with Solid Chance

October 17, 2016 11:21 AM EDT
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Price: $6.39 -0.31%

Rating Summary:
    3 Buy, 9 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 50 | New: 20
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RBC Capital affirms PTC Therapeutics, Inc. (Nadaq: PTCT) at Sector Perform with a price target of $5 after the company announced that at the end of last week, the Office of Drug Evaluation I (ODE-I) of the U.S. Food and Drug Administration (FDA) denied the company's first appeal of the refuse to file letter issued by the FDA's Division of Neurological Products (DNP) on February 22, 2016 regarding PTC's New Drug Application (NDA) for Translarna for the treatment of nonsense mutation Duchenne muscular dystrophy (nmDMD).

RBC noted that PTC will escalate the effort. The firm commented, we think that PTCT does not have much of a leg to stand on on this effort. The simple reason is that while eteplirsen's dataset may indeed be weak and incomplete (again, we agree 100% with this view), and thus we may truly not know right now whether eteplirsen works, this also means that there is a real possibility that eteplirsen could actually work and indeed provide a real benefit to DMD patients. We just don't know this from the existing eteplirsen dataset, and thus one could buy FDA's argument that it had to make eteplirsen available to patients (NOTE: again, we don't personally agree with this argument; we're stating what the argument for eteplirsen's approval was).

This, however, is NOT the case with ataluren. The reason is that ataluren has failed to show a benefit to patients in two large, randomized, placebo-controlled trials, the second one of which was designed based on the subset of patients that did show a benefit on a post-hoc analysis of the first failed trial. In addition to the two failed trials in DMD, this compound failed to show a benefit in a third, large, randomized, placebo-controlled trial in an additional indication (CF). Therefore, while we still disagree with FDA's decision to approve eteplirsen, given the weak/incomplete dataset, we can at least agree with FDA that we don't know with certainty that it does not help patients.

For an analyst ratings summary and ratings history on PTC Therapeutics click here. For more ratings news on PTC Therapeutics click here.

Shares of PTC Therapeutics closed at $13.27 yesterday.

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