Wall Street Really Blew It On PTC Therapeutics

It’s been about six weeks since Credit Suisse initiated coverage of PTC Therapeutics, Inc. PTCT with an Outperform rating and $36 price target on the stock. Now, less than two months later, the stock is down more than 76 percent and trading at $5.70 per share.

On February 23, PTC disclosed that it had received a "Refuse to File" letter from the FDA concerning its new drug application to clear Translarna for treatment of nonsense mutation Duchenne muscular dystrophy (nmDMD). The news sent PTC’s stock plummeting and Wall Street analysts backpedaling.

Related Link: What You May Be Missing About PTC Therapeutics In Germany

The timing of Credit Suisse’s initiation was embarrassingly bad, but the firm wasn’t the only one on Wall Street that completely whiffed on PTC. Prior to February 23, Citi had a $90 price target on PTC, Oppenheimer had a $111 target and Cowen had a $120 target on the stock as recently as February 26.

Jefferies analyst Gena Wang, who lowered the firm’s target from $18 to $12 on February 24, is still holding out hope for a Translarna approval. “We await more clarity regarding the next steps for resubmission of ataluren NDA to the FDA,” she explained.

Unfortunately, with the stock now trading below $6 per share, additional clarity may come a bit too late for PTC investors who had high hopes for the stock based on some extremely high analyst targets that ended up majorly missing the mark.

Disclosure: The author holds no position in the stocks mentioned.