PTC Therapeutics Stock Eyes Further Rally After Price-Target Hikes On Huntington’s Therapy Deal With Novartis: Retail Buzz Grows
By Stocktwits Inc | First Published Dec 3, 2024, 8:12 PM ISTWells Fargo highlighted the agreement’s $1.9 billion milestone potential, 40% U.S. profit-sharing terms, and double-digit royalties on ex-U.S. sales.
Shares of PTC Therapeutics Inc. climbed nearly 1% pre-market Tuesday, poised to extend their rally to levels last seen in April 2023.
The stock’s momentum follows the company’s $1 billion global licensing and collaboration agreement with Novartis for its Huntington’s disease therapy, PTC518.
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Announced on Monday, the deal grants Novartis responsibility for the development, manufacturing, and commercialization of PTC518, following the completion of the placebo-controlled portion of PIVOT-HD, PTC’s ongoing Phase 2 trial, expected to conclude in the first half of 2025.
The agreement includes $1 billion in upfront payments and up to $1.9 billion in milestone-based payments.
Analysts responded positively to the announcement, with several raising their price targets for PTCT:
• UBS lifted its target to $71 from $47, maintaining a ‘Buy’ rating, calling PTC a “high conviction call” into 2025, driven by its diversified rare disease portfolio.
• Baird increased its target to $70 from $52, keeping an ‘Outperform’ rating, noting that the deal’s value isn’t fully reflected in the stock yet.
• Wells Fargo reiterated its ‘Overweight’ rating and $68 target, highlighting the agreement’s $1.9 billion milestone potential, 40% U.S. profit-sharing terms, and double-digit royalties on ex-U.S. sales as a significant value unlock for PTC.
• Bank of America was more cautious, raising its target to $41 from $31 but maintaining an ‘Underperform’ rating, pointing to uncertainties around regulatory alignment and future development risks despite the deal’s cash infusion.
Retail investors on Stocktwits have embraced the Novartis partnership, with message volume for PTCT jumping 20% in the past 24 hours and an impressive 900% over the past week.
Despite some lingering overhang from PTC’s late October decision to discontinue its ALS treatment following a failed Phase 2 trial, investor sentiment remains robust, with shares up over 85% year-to-date.
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