RBC Capital maintains outperform rating for PTC Therapeutics stock

On Monday, RBC Capital analysts reiterated their Outperform rating and maintained a $58.00 price target on PTC Therapeutics (NASDAQ: NASDAQ:PTCT) stock. The company, currently valued at $3.85 billion, has demonstrated remarkable revenue growth of 91% over the last twelve months. According to InvestingPro data, the stock trades at an attractive P/E ratio of 6.25, with analysts expecting continued net income growth this year. The analysts highlighted the potential positive impact from competitor QURE’s alignment with the FDA on its statistical analysis plan for approval. This alignment uses a three-year change in cUHDRS as a clinical endpoint for potential accelerated approval.

The analysts noted key differences between PTC Therapeutics’ ’518 program and QURE’s Huntington’s Disease (HD) programs, particularly in the endpoints of interest for accelerated approval. Despite these differences, the analysts believe the FDA’s flexibility in approving another HD program bodes well for PTC (NASDAQ:PTC)’s ’518 program ahead of its end-of-Phase II meeting.

RBC Capital emphasized that while recent Phase II data alone may not be sufficient for accelerated approval, the FDA might consider the program’s efficacy signals, safety profile, and open-label data in its decision-making process. The analysts see potential for the ’518 program to achieve a shortened approval pathway if additional data supports its efficacy and safety.

The analysts remain conservative about the probability of success for the ’518 program, estimating it at 25%. However, they acknowledge the substantial revenue potential if the program succeeds. Supporting this outlook, InvestingPro analysis shows PTC maintains an excellent financial health score of 3.85, with a strong current ratio of 3.89, indicating robust liquidity. The company’s cash position and financial metrics align closely with RBC’s Fair Value assessment. For deeper insights into PTCT’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In conclusion, RBC Capital views the FDA’s flexibility as a positive sign for PTC Therapeutics’ ’518 program, with potential upside opportunities in Huntington’s Disease and existing revenue opportunities in PKU. With its strong financial metrics and growth trajectory, PTCT presents an interesting case for investors. Discover more detailed analysis and 7 additional key InvestingPro Tips by visiting InvestingPro.

In other recent news, PTC Therapeutics reported first-quarter 2025 earnings that exceeded expectations, with a total net product and royalty revenue of $190 million, surpassing the consensus estimate of $168 million. The company’s strong performance was bolstered by the success of Translarna, which generated $86.2 million in revenue, and a significant payment from Novartis (SIX:NOVN), contributing to a robust bottom line. William Blair analysts maintained an Outperform rating on PTC Therapeutics, emphasizing the impact of the Novartis collaboration revenue. The company’s financial position remains solid, with $2.03 billion in cash reserves following a licensing deal with Novartis for PTC518.

In terms of stock ratings, BofA Securities upgraded PTC Therapeutics from Neutral to Buy, setting a price target of $68, while Barclays (LON:BARC) reduced its price target to $42, maintaining an Equalweight rating. Additionally, Citi upgraded the stock from Sell to Neutral, adjusting the price target to $40. JPMorgan also adjusted its price target to $67, maintaining an Overweight rating. Analysts from these firms are closely watching the upcoming Prescription Drug User Fee Act (PDUFA) dates for Sephience and vatiquinone, which are key regulatory milestones for the company.

PTC Therapeutics has raised its revenue guidance for 2025 to a range of $650-800 million, with a $50 million increase at the lower end. The company is also engaged in discussions with the FDA and Novartis regarding the next steps for PTC518 in Huntington’s disease, although the potential for accelerated approval is considered limited. These developments come amid a 28% decline in the company’s stock value, reflecting investor reactions to recent data and regulatory challenges.

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