Shares of PTC stock on Thursday continued a seven-day run —including a 41% sprint this week — on promising test results for its Duchenne muscular dystrophy treatment.
Although the drug is already on the market in Europe, PTC Therapeutics had to confirm its benefit in additional testing. RBC Capital Markets analyst Brian Abrahams said the results are likely strong enough to retain the drug's status in Europe.
The drug isn't approved in the U.S., however. Duchenne muscular dystrophy progressively weakens muscles. Patients treated with PTC's Translarna walked farther over six minutes and were able to stand quicker. But the differences from placebo-treated patients weren't statistically significant.
"Given the totality of resulting supporting a treatment effect, we now model estimated U.S. sales starting in late 2023 with seven years of revenue through the orphan exclusivity period," Abrahams said in a note to clients. Orphan drugs treat rare illnesses and stay on the market longer before facing generics.
On the stock market today, PTC stock jumped 11.4% to 40.11. This week, alone, shares have surged 41% as of Thursday's close.
PTC Stock: European Market Secure
Abrahams says he always expected Translarna to stay on the European market. The data unveiled on Monday should help.
Translarna-treated patients walked 8 meters farther over six minutes than placebo recipients. The difference wasn't statistically significant.
"There is likely enough here — and perhaps even more than expected — to at least raise some small hope (the Food and Drug Administration) might consider the totality of the data in this high unmet need (use)," Abrahams said in a second note.
Abrahams raised his price target on PTC stock to 46 from 42, but kept his sector perform rating. He sees a 25% chance the FDA approves Translarna for Duchenne muscular dystrophy. He also models a 95% chance Translarna stays on the market in Europe.
Biotech Trends Higher
PTC stock has trended higher for seven trading days. On Tuesday, the day after the biotech reported its Translarna test results, shares soared close to 20% higher and leapt over their 50-day moving average, according to MarketSmith.com.
On Thursday, shares surged above their 200-day line.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
