Prothena Corp (PRTA) PT Lowered to $31 at BofA Securities

BofA Securities analyst Tazeen Ahmad lowered the price target on Prothena Corp (NASDAQ: PRTA) to $31.00 (from $33.00) while maintaining a Neutral rating.

The analyst comments "We connected with management following the late Friday announcement that CMO, Hideki Garren, MD, PhD was leaving the company. Garren joined Roche as the new head of Neurology Product Development. CEO Gene Kinney stated that Garren has created a strong team at Prothena (PRTA). The company does not expect this will have any impact on any of the ongoing clinical programs and they are actively looking to find a new CMO. The company also announced the appointment of Chad Swanson, PhD as the new Chief Development Officer. We agree with what we were told Dr. Garren’s view is that the opportunity at Roche is one that doesn’t present itself frequently, but that said we also note that departures of chief medical officers of development stage companies historically does place more attention on ongoing clinical studies at those companies. We continue to look for more substantial clinical validation for the pipeline, particularly PRX012 in Alzheimer’s disease (AD), to better understand the potential commercial opportunity in different indications. We also discussed the article that appeared late last week in the journal Science regarding a scientist whose work in Parkinson’s helped PRTA with FDA interactions surrounding its drug prasinezumab partnered with Roche (data readout later this year). Some of that scientist’s work is reportedly now being scrutinized for potential misconduct. Importantly, PRTA management noted there is no evidence of research misconduct directly related to prasinezumab at this point. We reiterate our Neutral with new $31 PO from $33 (assuming slightly higher risk adjustment for the pras’ program, now based on a WACC of 13% (12% prior) and model value of $5/sh ($7/sh prior)) and note that the biggest drivers to our valuation for PRTA are not Parkinson’s but rather the AD program and the AL amyloidosis program."

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