BofA Securities Explains Its Underperform Rating on PTC Therapeutics (PTCT) While Raising the PT to $34

BofA Securities analyst Tazeen Ahmad raised the price target on PTC Therapeutics (NASDAQ: PTCT) to $34.00 (from $32.00) but reiterated an Underperform rating after the company announced that they received a positive opinion from the CHMP for Upstaza (PTC-AADC) for AADC deficiency in patients >18mos old. Upstaza will be the first marketed gene therapy directly administered to the brain. PTCT expects the EC will ratify the marketing authorization for Upstaza in ~2 mos. Guidance of $20-$40mn in Upstaza sales in 2022, is already included in the $700-$750mn FY22 revenue guidance.

The analyst stated "We are encouraged by the positive CHMP opinion but reiterate our view that the market opportunity is still unclear given the limited number of patients and the high expected cost of the therapy. After making adjustments to our estimates, Upstaza now contributes $5/sh (prev. $2/sh) to our PO. We will look for initial launch metrics and continued updates on patient identification efforts to inform our view on the market opportunity for Upstaza. We reiterate our Underperform with $34 PO (prev. $32) on our key questions of market opportunity, commercial headwinds and near-term catalysts as we await the BLA submission in 3Q and EC ratification."

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