Shares of Proteostasis Therapeutics Inc (NASDAQ: PTI) were moving higher Monday after the clinical stage biopharmaceutical company announced a worldwide exclusive license agreement with Roche Group's Genentech unit.
Proteostasis Therapeutics develops therapies for the treatment of cystic fibrosis, or CF, and other diseases and struck an agreement with Genentech for the rights to a potential therapeutic small molecule modulators of an undisclosed target within the Proteostasis Network. In exchange for the rights, Proteostasis will receive upfront milestone payments of more than $100 million from Genentech and tiered royalties on sales of future medicines from the license agreement.
Proteostasis shares were trading up 10.4 percent to $5.31 at the time of publication.
Why It's Important
Proteostasis Therapeutics' new licensing agreement validates its network potential and could be seen as a sign that future agreements will arise, Cantor Fitzgerald's Elemer Piros said in a research report.
The analyst named two reasons for this view:
- The library of indicators caused by inefficient folding as a result of inherited mutations.
- The company's encouraging early proof-of-concept in CF.
Proteostasis Therapeutics continues to oversee multiple Phase 2 clinical studies relating to CF, which is a "well-understood disease" that has the support of multiple foundations, Piros said. The company appears to be on track to become "the next significant CF player" based on early clinical readouts, he said.
Cantor Fitzgerald maintains an Overweight rating on Proteostasis Therapeutics' stock with an unchanged $21 price target.
More Data Needed On Proteostasis Therapeutics' Cystic Fibrosis Candidate, RBC Says In Downgrade
Baird: Prospects For Proteostasis Therapeutics' PTI-428 Are Not Priced Into The Stock
Latest Ratings for PTI
|Nov 2018||Cantor Fitzgerald||Initiates Coverage On||Overweight|
|Oct 2018||PiperJaffray||Initiates Coverage On||Overweight|
|Oct 2018||RBC Capital||Upgrades||Sector Perform||Outperform|
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