PTC stock surged Wednesday after the biotech company unveiled promising results for its rare disease treatment, a rival to BioMarin Pharmaceuticals' Kuvan.
The company tested its drug, dubbed sepiapterin, in 98 children and adults with phenylketonuria, or PKU. In this disorder, the body can't break down an amino acid called phenylalanine due to a genetic defect. Without treatment, PKU can lead to intellectual disabilities.
On average, recipients of PTC Therapeutics' drug had a 63% reduction in phenylalanine. Promisingly, the average reduction in patients with classical PKU — the most severe form of the disease — was 69%.
In response, PTC stock popped 7.6% to close at 58.29. BioMarin shares rose 0.3%, ending the regular session on today's stock market at 92.27.
PTC Stock: High Expectations
Expectations were high heading into the study due to favorable results in an open-label study, RBC Capital Markets analyst Brian Abrahams said in a report to clients. There is no placebo in open-label studies; all patients know they're receiving the experimental drug.
Doctors have suggested a 40%-50% reduction in phenylalanine would prompt PKU patients to switch to sepiapterin, he said. PTC met that bar, he added.
"Interestingly, classical patients (who do not typically respond to Kuvan) showed a 69% phenylalanine reduction — which could speak to the potential for broader use, but patient numbers are low in this subgroup," he said.
Safety details were limited. PTC said sepiapterin was generally well tolerated and didn't lead to any serious side effects.
Abrahams kept his sector perform rating and 52 price target on PTC stock.
Top 5% Biotech Stock
Abrahams estimates sepiapterin can capture a third of the estimated 4,800 eligible U.S. patients. At a net price of roughly $190,000 per year would lead to worldwide revenue of $400 million.
There could be upside to that estimate "provided the results continue to look promising across Kuvan naive/experienced patients," he said.
PTC stock recently broke out of a consolidation with a buy point at 55.68, MarketSmith.com shows. But shares later fell more than 8% below that entry, triggering a sell rule.
Still, PTC stock is highly rated with an IBD Digital Relative Strength Rating of 95, putting it in the top 5% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
