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PTC Therapeutics Scores Early FDA Nod For Evrysdi; Analyst Stays Sidelined

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support@smarteranalyst.com (Ben Mahaney)
·3 min read
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PTC Therapeutics (PTCT) has announced that the US Food and Drug Administration (FDA) has approved Evrysdi (risdiplam), the first at-home, orally administered treatment for spinal muscular atrophy (SMA) in adults and children 2 months and older. The treatment will now be available in the US within two weeks for direct delivery to patients’ homes

Spinal muscular atrophy (SMA) is a severe, inherited, progressive neuromuscular disease that causes devastating muscle atrophy and disease-related complications. It is the most common genetic cause of infant mortality and one of the most common rare diseases, affecting approximately one in 11,000 babies.

Evrysdi showed clinically meaningful improvements in motor function and developmental milestones across two trials in patients age two months and above and across all levels of disease severity, including types 1, 2, and 3 SMA. It also preserved vital functions and improved survival at 12 months, including survival without permanent ventilation when measured at 12 and 23 months.

“Today marks an incredibly important moment for the broader SMA patient community that had been in dire need of safe and effective treatment options,” said Stuart W. Peltz, CEO of PTC Therapeutics. “We are proud that the first oral treatment for spinal muscular atrophy patients was discovered through our splicing platform.”

Evrysdi was studied in a clinical trial program with over 450 patients aged 2 months to 60 with a range of symptoms and motor function. Patients previously treated for SMA with other medications were also included.

In the US the treatment will be marketed by Roche’s Genentech. Evrysdi, a product of the SMA collaboration between PTC, the SMA Foundation, and Roche, is a survival motor neuron 2 (SMN2)-directed RNA splicing modifier designed to treat SMA caused by mutations in chromosome 5q that lead to SMN protein deficiency.

Shares in PTCT surged 7% on the news, but later pulled back in Friday’s trading to end the day 1.7% higher. Year-to-date, the stock is down 0.4% and the Street has a cautiously optimistic Moderate Buy consensus on PTCT’s outlook. That’s alongside a $59 average analyst price target for upside potential of 23%.

“Though we believe this was generally expected, approval in hand ahead of PDUFA [on August 24] is an important step towards the potential out-year royalty opportunity we continue to see – though we acknowledge recent monetization may cap near-term upside” commented RBC Capital analyst Brian Abrahams following the news.

“Somewhat surprisingly, the agent will be priced at a meaningful discount to Spinraza and Zolgensma, which could help increase market share and rapidity of adoption, though will produce lower revenue per patient than we had estimated” he added.

He believes Evrysdi will be priced according to weight and SMA Type, with an annual price of < $100K/year for typical Type 1 infants and capped at $340K/year list price, approximately a 25% discount below Spinraza and Zolgensma list prices at its max.

Net-net, the analyst continues to view PTC shares as fairly valuing the commercial assets, future risdiplam royalty stream, and pipeline potential. He has a hold rating on the stock with a $46 price target. (See PTCT stock analysis on TipRanks).

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