The FDA stated that substantial evidence of efficacy was not demonstrated for Vatiquinone and that an additional adequate and well-controlled study would be needed to support application resubmission.
PTC Therapeutics, Inc. (PTCT) said on Tuesday that the U.S. Food and Drug Administration refused to approve its application for Vatiquinone for the treatment of children and adults living with Friedreich’s ataxia.
CEO Matthew B. Klein said that the company is disappointed by the FDA’s decision and plans to meet with the agency to discuss potential steps to address the issues flagged in its complete response letter to the company.
In its letter, the FDA stated that substantial evidence of efficacy was not demonstrated for Vatiquinone and that an additional adequate and well-controlled study would be needed to support application resubmission. Friedreich’s ataxia (FA) is a rare, inherited neurodegenerative disease that primarily affects the nervous system, causing progressive damage to the spinal cord, peripheral nerves, and cerebellum. This leads to impaired muscle coordination, balance problems, and other neurological symptoms.
On Stocktwits, retail sentiment around PTCT jumped from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘normal’ to ‘high’ levels.
A Stocktwits user expressed surprise at the stock trading in the green despite the news.
TD Cowen analyst Joseph Thome lowered their price target on PTC Therapeutics to $50 from $56 while keeping a ‘Hold’ rating on the shares following the company’s update. The firm removed Friedreich’s ataxia from its model and believes a second successful late-stage study will likely be required for approval.
RBC Capital, which has an ‘Outperform’ rating and $63 price target on the stock, meanwhile, believes this was generally expected and already baked into the stock. The firm said that it would still buy the company’s shares, according to TheFly.
Jefferies analyst Kelly Shi also lowered the firm’s price target on PTC Therapeutics to $63 from $64 while keeping a ‘Buy’ rating on the shares. The letter “didn’t come in as a surprise to us,” said the analyst, who calls the regulatory update “a clearing event” that allows investors to now focus on the launch of a treatment for phenylketonuria.
PTCT stock is up by 14% this year and by about 50% over the past 12 months.
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