On Tuesday, Goldman Sachs (NYSE:GS) adjusted its outlook on shares of PTC Therapeutics (NASDAQ: NASDAQ:PTCT), increasing the price target to $42 from the previous $32, while continuing to recommend a Sell on the stock.
The firm acknowledged the addition of a $1 billion upfront payment as a buffer against the potential removal of Translarna in the European Union, noting the favorable deal terms that shift developmental risk to a collaborator. According to InvestingPro data, the stock is currently trading near its 52-week high of $52.97, with the RSI suggesting overbought conditions.
PTC (NASDAQ:PTC) Therapeutics recently announced a global licensing agreement with NVS for PTC518 and related molecules targeting Huntington's disease, a move Goldman Sachs views favorably. The deal is seen as beneficial for PTCT's most promising mid-stage pipeline asset, particularly due to the transfer of future developmental risk to its new partner.
The company's stock has shown remarkable momentum, delivering a 117% return over the past year. For deeper insights into PTCT's valuation and growth prospects, InvestingPro subscribers have access to over 30 additional financial metrics and analysis tools.
Despite the positive aspects of the licensing deal, Goldman Sachs points out that the durability of Translarna sales in the EU and forthcoming regulatory decisions in the US for Translarna and vatiquinone present ongoing risks for PTCT. In light of these considerations, the Sell rating is maintained, but the 12-month price target has been raised to account for the recent PTC518 deal.
The licensing agreement for PTC518 is a strategic step for PTC Therapeutics, potentially strengthening the company's position in the development of treatments for Huntington's disease. However, the financial institution remains cautious about the company's overall prospects, reflecting this stance in the updated price target while reaffirming the Sell rating.
In other recent news, PTC Therapeutics has entered into a substantial agreement with Novartis (SIX:NOVN) Pharmaceuticals, focusing on its Huntington's disease program. The deal includes a $1.0 billion upfront payment and potential milestone payments up to $1.9 billion.
Novartis will assume global development, manufacturing, and commercial responsibilities for PTC518 after the completion of the ongoing PIVOT-HD study. The financial services firm Baird has raised PTC Therapeutics' stock price target to $52.00, maintaining an Outperform rating.
The rating reflects Baird's confidence in PTC Therapeutics' market performance and potential future earnings from the Novartis collaboration and its robust pipeline of treatments, including sepiapterin for phenylketonuria (PKU).
The company also reported strong third-quarter earnings with total revenue of $197 million, largely driven by the Duchenne muscular dystrophy franchise. It has raised its 2024 revenue outlook to between $750 million and $800 million.
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. These are recent developments in PTC Therapeutics' operations.
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