PTC Therapeutics (NASDAQ:PTCT)

CAPS Rating: 1 out of 5

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Member Avatar clangmead (< 20) Submitted: 7/30/2015 7:11:57 AM : Outperform Start Price: $51.27 PTCT Score: -0.95

mpor2

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Member Avatar pchop12316 (77.59) Submitted: 7/29/2015 6:56:19 PM : Underperform Start Price: $51.27 PTCT Score: +0.95

not optimistic

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Member Avatar zzlangerhans (99.65) Submitted: 7/15/2015 8:56:33 PM : Underperform Start Price: $53.30 PTCT Score: +4.48

I haven't had much luck with my trading decisions over the last couple of weeks, but one good move was to cover the zzporte short of PTC Therapeutics for a small gain close to recent lows. The stock has roared back since the market stabilized capped by a 7 point gain on an outperform rating from JP Morgan today. Of course, none of that changes my long-term negative view on PTC, which I've previously elaborated on.

Pivotal trials of ataluren, PTC's inducer of read-through in nonsense mutations, for Duchenne muscular dystrophy and cystic fibrosis failed to meet their primary endpoints several years ago but the company claims the drug is effective based on post hoc analyses. The FDA refused to accept this Procrustean approach and demanded repeat phase III trials which are now in progress. Surprisingly, the EU was more lenient and allowed conditional approval of ataluren for DMD in mid 2014 after initially denying it. As of the last earnings report, 82 patients are being treated with ataluren in the EU and quarterly revenues were 5.1M. Topline data from the ACT DMD redo phase III trial is expected in Q4 2015, and the ACT CF redo phase III trial is expected to complete enrollment by the end of 2015. Failure in these trials will of course eliminate any hope of approval in the US and have a good chance of leading to revocation of approval in Europe. PTC doesn't have much else going for them except the 280M they've raised in dilutive financing, and the market cap is currently about 1.9 billion.

Oh yeah, JP Morgan. Analyst ratings don't mean sh_t. They're just about getting or keeping business for the banking side, which is why 90% of those ratings are buy or outperform. Sellside analyst ratings have zero accountability, which is why they keep their jobs no matter how many times they are wrong about stocks being good investments. The only reason sellside ratings have any effect on a stock at all is that they're like corner kicks in soccer - they put a dead ball back in play. Momentum traders like to pile in to turn the non-event into a pseudocatalyst. Unless one is an expert at that game, it's best to let the volatility and the trading volumes die down before shorting an upgrade bump.

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Member Avatar noataluren (< 20) Submitted: 5/28/2014 12:49:44 PM : Underperform Start Price: $23.38 PTCT Score: -106.95

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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