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Protagonist Therapeutics: How Much More Upside is Left?
Stock Analysis & Ideas

Protagonist Therapeutics: How Much More Upside is Left?

The new week began with a bang at Protagonist Therapeutics (PTGX). In Monday’s session, shares took off to the tune of 94% after the FDA delivered the company some encouraging news.

Specifically, the agency lifted the clinical hold on the testing of its experimental blood diseases therapy rusfertide. The biotech is testing rusfertide in patients with rare blood diseases. These include a type of cancer, polycythemia vera, and hereditary hemochromatosis (HH).

In September, the FDA had verbally instructed the company to halt all clinical trials after Protagonist informed the regulatory body about mice that had contracted skin cancer following exposure to the treatment. Additionally, a more in-depth examination was needed after four new cancer cases cropped up during a clinical study.

The investigators did not deem these to be related to Rusfertide and no additional cancer cases, or unexpected safety signals, have come to the fore. Protagonist had provided all the necessary data requested by the regulatory body, undertook a comprehensive review of the latest safety database, and new safety and stopping rules in the study protocols have also been included.

“On the heels of [yesterday’s] positive news,” said JMP’s Gobind Singh, “We expect shares will continue to climb higher headed into next month’s oral presentation at AASLD.”

Singh had previously called September’s post-halt sell-off “unwarranted and overdone,” and thought the measures taken were due to an abundance of caution. And the fact the FDA lifted the clinical hold after a record low time of 21 days is not the only reason for encouragement.

“In addition to [the] release confirming next steps for Rusfertide clinical development, [this] also indirectly confirmed continued BTD (breakthrough therapy designation) status by the FDA,” the analyst said. “We think this should not be trivialized given our view that recently released abstract results for Rusfertide in HH provided compelling evidence for yet another breakthrough opportunity.”

Unsurprisingly, the analyst reiterated an Outperform (i.e. Buy) rating for PTGX stock, backed by a $47 price target. Following Monday’s huge share gains, there’s still upside potential of 48% from current levels. (To watch Singh’s track record, click here)

All of Singh’s colleagues agree here; based on a unanimous 7 Buys, the stock boasts a Strong Buy consensus rating. The average price target remains a positive one, too; at $56.43, the figure is set to generate returns of 72% in the year ahead. (See PTGX stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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