On Wednesday, Citi increased its price target on shares of PTC Therapeutics (NASDAQ:PTCT) to $32.00, up from the previous target of $26.00, while keeping a Sell rating on the stock. According to InvestingPro data, the stock has surged over 100% in the past year, currently trading near its 52-week high of $54.16.
Analyst targets for PTCT range widely from $26 to $80, reflecting mixed sentiment about the company's prospects. The adjustment follows the announcement of PTC (NASDAQ:PTC) Therapeutics' collaboration with Novartis (SIX:NOVN) on the drug candidate PTC518, which is currently being evaluated for the treatment of Huntington's disease.
PTC518 has been developed using the same splicing platform that produced the successful drug Evrysdi, in partnership with Roche. Earlier in the week, PTC Therapeutics revealed that it had entered into a partnership with Novartis for PTC518, after interim data from its Phase 2 PIVOT-HD trial was released earlier this year. The management of PTC Therapeutics regards Novartis as an ideal partner, given their extensive experience in neurology drug development and commercialization.
The deal with Novartis is significant, including a $1.0 billion upfront payment, a profit share of 40% in the US and 60% for Novartis, double-digit royalties outside the US, and the potential for up to $1.9 billion in future milestone payments.
With a current market capitalization of $3.88 billion and an overall Financial Health score rated as GOOD by InvestingPro, PTC Therapeutics appears well-positioned to execute this partnership. Subscribers to InvestingPro can access 12 additional investment tips and comprehensive financial analysis for PTCT. The company is expected to present the full data from the ongoing PIVOT-HD trial in the second quarter of 2025.
With the support of a major pharmaceutical company like Novartis, PTC Therapeutics plans to design a Phase 3 efficacy trial, which is intended to be a pivotal trial for full approval. However, if the FDA permits accelerated approval based on biomarker data from the PIVOT-HD trial, this Phase 3 trial would then act as the confirmatory study. This partnership is seen as a strategic move that could enhance the development and potential commercialization of PTC518.
While analysts anticipate a sales decline in the current year, InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 2.1, providing financial flexibility for its development programs. A detailed Pro Research Report covering PTCT's comprehensive financial analysis and future prospects is available to InvestingPro subscribers.
In other recent news, PTC Therapeutics has been the focus of significant financial adjustments and strategic partnerships.
Goldman Sachs increased the price target for PTC Therapeutics to $42, while maintaining a Sell rating. The firm acknowledged a $1 billion upfront payment from a global licensing agreement with Novartis for PTC518, a promising mid-stage pipeline asset for Huntington's disease. Meanwhile, Baird raised the price target for PTC Therapeutics to $52 and retained an Outperform rating, highlighting the potential of sepiapterin, a drug in the company's pipeline.
The company reported strong third-quarter earnings with total revenue of $197 million, largely driven by the Duchenne muscular dystrophy franchise, and raised its 2024 revenue outlook to between $750 million and $800 million. Moreover, PTC Therapeutics is preparing for global product launches, including those of sepiapterin and vatiquinone, with potential revenue exceeding $1 billion in the U.S. alone.
However, Goldman Sachs pointed out ongoing risks for PTC Therapeutics, including the durability of Translarna sales in the EU and forthcoming regulatory decisions in the US for Translarna and vatiquinone.
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