Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
On Monday, Leerink Partners maintained a Market Perform rating with a $52.00 price target for PTC (NASDAQ:PTC) Therapeutics (NASDAQ:PTCT) stock. According to InvestingPro data, the company, currently valued at $3.2 billion, is trading at $40.88, with analyst targets ranging from $40 to $113. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. The firm’s decision follows PTC Therapeutics’ recent update on its Phase 2 PIVOT-HD study of PTC518/votoplam for Huntington’s disease (HD). The company’s presentation highlighted dose-dependent reductions in mutant huntingtin (mHTT) and corresponding changes in clinical outcomes, suggesting potential associations necessary for FDA consideration of an accelerated approval pathway. InvestingPro data shows the company maintains a GOOD overall Financial Health score, with liquid assets exceeding short-term obligations (Current Ratio: 2.35).
During the conference call, PTC Therapeutics indicated that they had more analyses to complete, despite not presenting definitive data supportive of a correlation between mHTT reduction and clinical outcomes. Leerink Partners noted that the data presented raised questions about the effects on Stage 3 patients, specifically regarding mHTT lowering in the cerebrospinal fluid (CSF) and some clinical outcomes. This observation suggests that future Phase 3 studies may need to focus on earlier-stage patients.
Leerink Partners pointed out that while the 24-month data for Stage 2 patients compared favorably to natural history, the total motor score (TMS) trend observed at 12 months was not evident at 24 months. This has led to a significant drop in PTC Therapeutics’ stock price, which fell approximately 20% against the XBI’s 1% decline.
The firm reiterated its Market Perform rating, indicating that while the data may support moving towards a Phase 3 trial, the update casts doubt on whether PTC Therapeutics and its partner NVS will meet the FDA’s requirements for associations that would allow for accelerated approval without a large and lengthy Phase 3 trial.
In other recent news, PTC Therapeutics has announced positive results from its Phase 2 PIVOT-HD study of PTC518 for Huntington’s disease. The study achieved its primary endpoint, showing a significant reduction in blood Huntingtin protein levels and a favorable safety profile. Despite this, investor skepticism remains due to concerns over the drug’s potential for accelerated approval, especially given the less pronounced effects in Stage 3 patients. Analysts from Leerink Partners and TD Cowen have expressed doubts about the likelihood of near-term accelerated approval, citing the need for more mature functional data.
Additionally, PTC Therapeutics received a positive opinion from the European Medicines Agency’s CHMP for Sephience, intended to treat phenylketonuria (PKU), potentially paving the way for its European launch. The company also shared progress from its Phase 3 APHENITY trial, indicating that sepiapterin could allow PKU patients to increase dietary protein intake while maintaining blood phenylalanine control. However, PTC Therapeutics faced a setback when the European Commission declined to renew the marketing authorization for Translarna for Duchenne muscular dystrophy, though individual EU states may still provide access. The company remains committed to addressing unmet medical needs despite these challenges.
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