BofA raises PTC Therapeutics stock rating, price target to $55

On Tuesday, BofA Securities shifted its perspective on PTC (NASDAQ:PTC) Therapeutics (NASDAQ:PTCT), upgrading the stock from Underperform to Neutral and increasing the price target to $55 from the previous $41. The company, currently valued at $4.14 billion, has seen its stock surge 71% over the past year. According to InvestingPro data, analyst price targets for PTCT range from $42 to $113, reflecting diverse views on the company’s potential. This change in rating comes as the U.S. Food and Drug Administration (FDA) has expedited the review process for vatiquinone, PTC Therapeutics’ investigational drug aimed at treating Friedrich’s ataxia (FA), a rare genetic neuromuscular disorder.

The upgrade reflects a more positive outlook despite the challenges faced by the company. A phase 3 study of vatiquinone did not show a statistically significant benefit on the primary FA rating scale. Nonetheless, the analysts at BofA Securities believe that the New Drug Application (NDA) for vatiquinone, which is expected to receive a decision by August 19, provides sufficient grounds to reevaluate the stock’s value, especially considering the substantial unmet need for FA treatments.

BofA Securities has adjusted its sales projections for vatiquinone, now estimating peak risk-adjusted sales of $416 million. This forecast contributes an additional $6 per share to the revised price objective of $55. The upgrade also takes into account the potential value of another of PTC Therapeutics’ drugs, Translarna, which is designed to treat Duchenne muscular dystrophy (DMD) caused by nonsense mutations. While the company reported annual revenue of $806.78 million, InvestingPro analysis indicates the stock is trading above its Fair Value, with a strong current ratio of 2.35 suggesting solid short-term financial health. For deeper insights into PTCT’s valuation and 12+ additional ProTips, consider accessing the comprehensive Pro Research Report available on InvestingPro.

The FDA’s fast-tracking of vatiquinone indicates a recognition of the urgent need for new treatments for FA. PTC Therapeutics is now awaiting the regulatory decision, which could significantly impact the company’s future revenue and position in the market for rare disease therapies. The updated valuation by BofA Securities suggests that the market may have a renewed interest in the company’s prospects following the FDA’s recent move. The stock is currently trading near its 52-week high of $55.60, though InvestingPro data shows the company remains unprofitable with a net loss of $363.3 million in the last twelve months.

In other recent news, PTC Therapeutics reported its Q4 2024 earnings, revealing a slight miss in earnings per share (EPS) but meeting revenue expectations. The company posted an EPS of -$0.85, compared to the forecasted -$0.79, while revenue came in at $213 million, aligning closely with the anticipated $213.45 million. For the full year 2024, PTC Therapeutics exceeded its guidance, achieving revenue of $877 million. Cantor Fitzgerald maintained its Overweight rating on the company with a price target of $113.00, reflecting confidence in PTC Therapeutics’ potential despite slightly adjusted revenue projections for 2025. Meanwhile, Scotiabank (TSX:BNS) initiated coverage on PTC Therapeutics with a Sector Perform rating and a price target of $55.00, noting the company’s fair market valuation. These developments come as the company maintains a strong cash position, bolstered by a $1 billion payment from Novartis (SIX:NOVN). PTC Therapeutics has also provided revenue guidance for 2025 between $600 million and $800 million, anticipating significant milestones, including the global launch of cepiakarin.

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