J.P. Morgan Reiterates a Hold Rating on PTC Therapeutics

By Austin Angelo

In a report released yesterday, Anupam Rama from J.P. Morgan reiterated a Hold rating on PTC Therapeutics (NASDAQ: PTCT), with a price target of $15. The company’s shares opened today at $6.25, close to its 52-week low of $4.13.

Rama noted:

“PTC reported a GAAP loss per share of $1.03 and Translarna sales of $22M beat consensus estimate by ~$5-6M (cons: ~$16-17M). While the beat was encouraging, more importantly, however, it was noted on the call that ongoing discussions with EU regulators have introduced “a higher degree of uncertainty” regarding an outcome. In our view, this will not be well received by the Street, given the implication of higher risk of Translarna being pulled from the market and essentially removing any valuation backstop on PTCT shares in the near term. At current levels, a valuation argument can still be made for PTCT shares (PTCT shares are trading only ~2X net cash), given ongoing regulatory process in DMD, Translarna pivotal phase 3 cystic fibrosis data on the horizon (expected late 1Q17), and progress on the SMA program. That said, we maintain that PTC is a “show me” story at this point. We anticipate shares could be volatile going into YE16, particularly as it relates to regulatory uncertainty.”

According to TipRanks.com, Rama is ranked 0 out of 5 stars with an average return of -8.1% and a 23.4% success rate. Rama covers the Healthcare sector, focusing on stocks such as Merrimack Pharmaceuticals, Alexion Pharmaceuticals, and Array Biopharma.

Currently, the analyst consensus on PTC Therapeutics is Hold and the average price target is $17.50, representing a 180.0% upside.

In a report issued on October 20, Jefferies also initiated coverage with a Hold rating on the stock with a $7 price target.

The company has a one year high of $35.40 and a one year low of $4.13. Currently, PTC Therapeutics has an average volume of 1.58M.

Based on the recent corporate insider activity of 7 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PTCT in relation to earlier this year. Last month, Mark Rothera, the CCO of PTCT bought 1,950 shares for a total of $21,158.

PTC Therapeutics, Inc. engages in the discovery, development, and commercialization of orally administered, small molecule therapeutics targeting an area of RNA biology. Its preclinical and discovery programs are focused on the development of new treatments for multiple therapeutic areas, including neuromuscular disease, oncology and infectious disease. It product, candidate ataluren, is used for the treatment of patients with genetic disorders that arise from a type of genetic mutation known as a nonsense mutation. The company was founded by Allan S. Jacobson and Stuart W. Peltz on March 31, 1998 and is headquartered in South Plainfield, NJ.