PTC Therapeutics (NASDAQ:PTCT)

CAPS Rating: 1 out of 5

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Member Avatar zzlangerhans (99.80) Submitted: 2/15/2015 1:30:44 AM : Underperform Start Price: $53.65 PTCT Score: -7.44

PTC Therapeutics could have been another huge winner in the zzporte portfolio if I hadn't insisted on taking profits before CHMP issued an opinion on ataluren for nonsense mutation DMD. The pivotal trial had not reached stat sig, and the company was basing their MAA on post hoc analyses. Furthermore, the whole premise of ataluren activity had been called into question. It seemed like the kind of binary event that I wanted no part of.

At first, I felt vindicated when CHMP issued a negative opinion in January 2014. We were already out and I forgot about the company as I traveled extensively. In May I was taken completely by surprise when CHMP reversed themselves and adopted a positive opinion for ataluren which resulted in conditional approval by the EMA in August. Ataluren became available in Germany in December, and PTC has begun a rolling submission of an NDA for ataluren in the US.

PTC's share price has enjoyed substantial appreciation since CHMP reversed themselves, with a recent high of 60. This upward grind has taken place despite the possibility that ataluren will fail in the ACT confirmatory phase III trial of ataluren in nonsense mutation DMD. Topline data from that trial has been pushed back from mid 2015 to Q4 2015.

The situation bears some close parallels to Intermune and their drug pirfenidone for pulmonary fibrosis. In that case, the confirmatory phase III trial turned out unequivocally positive and Intermune went on to be bought out at a premium. However, pirfenidone didn't seem to attract quite the level of criticism that ataluren has. In fact, it has been questioned if the very codon-skipping activity that purportedly makes ataluren work actually exists.

PTC currently has a market cap of 1.6B, which could easily double of ACT demonstrates stat sig efficacy of ataluren in DMD. I'd be loath to short the stock or the calls ahead of topline data. On the other hand, if the trial fails it could definitely be the mid cap flush of the year for 2015. I'll be looking at options prices very carefully once we start getting close to topline data.

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Member Avatar noataluren (< 20) Submitted: 5/28/2014 12:49:44 PM : Underperform Start Price: $23.38 PTCT Score: -138.22

As a former PTC employee, this recommendation for conditional approval is a joke. None of the data are strong. The improvement for the 40 mg/kg/day dose over placebo was significant (after eliminating 2 patients whose baseline data was faulty) in the DMD trial, however the results from the higher 80 mg/kg/day dose almost perfectly matched the placebo. Moreover, the CF Phase 3 trial was not only negative on the primary endpoint, but also on pretty much all the secondaries. Most importantly, the endpoint that was the primary in the Phase 2 studies in CF, used to show proof of concept, was highly nonsignificant in the Phase 3 study. Don't be surprised to see this one land flat on its face.

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