William Blair Upgrades PTC Therapeutics On Risdiplam Prospects

PTC Therapeutics, Inc. PTCT traded sigificantly higher Monday after having published a positive update from its risdiplam trial in type 1 SMA babies.

The Rating

William Blair analyst Raju Prasad accordingly upgraded PTC to Outperform.

The Thesis

Risdiplam’s efficacy data compares favorably with that of Spinraza, and the drug also boasts superior convenience and strong tolerability.

“Risdiplam results shown at CureSMA give us increased confidence that the drug is achieving a clinical benefit and while Roche is responsible for commercialization, we believe that, if successful, risdiplam could conservatively net about $150 million in peak royalties to PTC as well as an additional $410 million in remaining milestones,” Prasad wrote in a note.

The prospects for risdiplam compound additional opportunities for Translarna’s label and geographic market expansion.

Translarna recently received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use to expand the patient range. PTC has projected 2018 revenue of $170 million to $185 million with 15-percent compound annual growth through 2022.

“Overall, we believe that PTC has several promising pipeline therapies, highlighted by the presentations of its programs in Huntington's disease, familial dysautonomia, spinal muscular atrophy, and oncology (PTC596 and PTC299), and we will continue to monitor these preclinical programs as they advance into the clinic,” Prasad wrote.

Price Action

At time of publication, PTC shares were trading up 26 percent at a rate of $47.32.

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