DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION ® Client-Driven Solutions, Insights, and Access 19 January 2016 Americas/United States Equity Research Biotechnology PTC Therapeutics, Inc. (PTCT) Rating OUTPERFORM [V] Price (15-Jan-16,US$) 23.11 Target price (US$) 36.00 52-week price range 77.53 - 22.66 Market cap (US$ m) 792.02 Enterprise value (US$ m) 893.30 *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. ¹Target price is for 12 months. [V] = Stock Considered Volatile (see Disclosure Appendix) Research Analysts Alethia Young 212 538 0640 [email protected]Eliana Merle 212 538 0678 [email protected]Grant Hesser 212 325 2587 [email protected]INITIATION Low Expectations May Create the Opportunity ■ We are initiating coverage of PTC Therapeutics with an Outperform rating and a $36 target price. Much of the pipeline remains a free call option, including cystic fibrosis and SMA. We think that there is still a shot for approval in the US with its Ph2 and Ph3 dataset. At these levels, key focus is on whether the company remains on the EU/ROW market, and we think that it's likely. ■ US Advisory Panel Likely Early 2H 2016: We should know in early February whether the FDA accepts PTC's ataluren filing. One strong point that PTC has going is that atuluren's safety profile is good after being exposed to hundreds of patients in the EU. We estimate 2021 sales of $320M and assign a 40% probability of success. ■ Key Sales Oppy from Conditionally Approved ROW Territory: Our checks suggest the majority of the WW DMD population resides ex-US (EMEA & LatAm) where Translarna is conditionally approved. As we stated, the biggest risk is whether the EMA will allow it to remain on market after the conditional didn't hit significance. We assume 100% success to $350M 2020 ROW sales, and we may learn about the approval status mid-year. ■ Many Pipeline Call Options: We assume a 0% POS in Europe to CF & a 0% POS in the US. PTC submitted its CF drug in the EU for full approval on the Ph2. We may learn more about that in the middle of the year. We are cautious on approval before the ph3, which is set to read out in late 2016. ■ Valuation: Our $36 TP and Outperform rating is derived from DCF valuation. We assumed a 12% discount rate, which is in-line with small-cap peers, and a 2% terminal growth rate since the company has a platform technology. Downside risks include clinical delays, conditional approval removed in Europe, no FDA approval in US, and CF trial failure. Share price performance On 15-Jan-2016 the S&P 500 INDEX closed at 1880.33 Daily Jan16, 2015 - Jan15, 2016, 01/16/15 = US$58.6 Quarterly EPS Q1 Q2 Q3 Q4 2014A -0.42 -0.69 -0.77 -0.54 2015E -0.85 -0.89 -1.04 -1.05 2016E -1.02 -1.00 -1.04 -1.08 Financial and valuation metrics Year 12/14A 12/15E 12/16E 12/17E EPS (CS adj.) (US$) -2.45 -3.84 -4.15 -2.13 Prev. EPS (US$) - - - - P/E (x) -9.4 -6.0 -5.6 -10.8 P/E rel. (%) -52.9 -34.0 -33.6 -73.8 Revenue (US$ m) 25.2 35.7 92.9 192.2 EBITDA (US$ m) -73.0 -125.3 -136.1 -67.8 OCFPS (US$) -1.97 -4.31 -4.10 -1.99 P/OCF (x) -26.3 -5.4 -5.6 -11.6 EV/EBITDA (current) -10.2 -7.1 -7.6 -16.5 Net debt (US$ m) -47 101 248 328 ROIC (%) -28.74 -47.23 -50.00 -24.91 Number of shares (m) 34.27 IC (current, US$ m) 251.00 Net debt (Next Qtr., US$ m) - EV/IC (x) - Net debt/tot eq (Next Qtr.,%) - Dividend (current, US$) - Source: Company data, Thomson Reuters, Credit Suisse estimates
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DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business
with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION®
Client-Driven Solutions, Insights, and Access
19 January 2016 Americas/United States
Equity Research Biotechnology
PTC Therapeutics, Inc. (PTCT) Rating OUTPERFORM [V] Price (15-Jan-16,US$) 23.11 Target price (US$) 36.00 52-week price range 77.53 - 22.66 Market cap (US$ m) 792.02 Enterprise value (US$ m) 893.30 *Stock ratings are relative to the coverage universe in each
analyst's or each team's respective sector.
¹Target price is for 12 months.
[V] = Stock Considered Volatile (see Disclosure Appendix)
Number of shares (m) 34.27 IC (current, US$ m) 251.00 Net debt (Next Qtr., US$ m) - EV/IC (x) - Net debt/tot eq (Next Qtr.,%) - Dividend (current, US$) - Source: Company data, Thomson Reuters, Credit Suisse estimates
19 January 2016
PTC Therapeutics, Inc. (PTCT) 2
PTC Therapeutics, Inc. (PTCT)
Price (15 Jan 2016): US$23.11; Rating: OUTPERFORM; Target Price: US$36
Priority Review (6 months PDUFA) DMD 3Q16 Late Aug
Official notes from EMA posted Cystic fibrosis June-July 2016
Top-line data for cystic fibrosis Phase 3 DMD 3Q16 Late Aug
SMA early data (potentially new RG7916) SMA Over 2016
19 January 2016
PTC Therapeutics, Inc. (PTCT) 5
On the potential US approval, we think that it really comes down to PTC's potential upcoming panel if the FDA accepts its filing. The following are key points to consider.
■ The safety profile is relatively benign, which makes the risk/benefit ratio better than
what would be the case for Kyndrisa.
■ Pooled efficacy and pre-specified analysis showed significance.
■ EMA reviewers are very familiar with ataluren and the details of the data. The same
people that reviewed it before will likely review again. These are also the same people
reviewing ataluren's full approval for cystic fibrosis.
We still give 40% probability of success to our US revenues. We can't really predict
what the FDA might do for ataluren. We think it is hard to make a read from other
DMD drugs that are not even the same mechanism or for the same type of DMD
Our peak estimates in the US are $320M. We think 40% is a fair probable adjustment
since we view regulatory decision making, especially in DMD, as hard to predict.
For now, cystic fibrosis and SMA are free call options to the PTC story.
Global CF ataluren sales could be as large as DMD. We assume about a $900M
opportunity in cystic fibrosis. PTC has submitted on a rolling basis its data for CF in
Europe. We assume a 0% probability of success in the EU and 0% probability of success
in the US. We think that we may get some clarity by mid-2016 but note the process is
iterative when working with the EMA. So, there could likely be some back and forth, which
is typical. In speaking to PTC, we think that mid-2016 is a reasonable timepoint to highlight
as to when we might know more details.
Valuation
We rate PTC shares Outperform with a $36 TP.
We assume a 12% discount rate, which is in-line with small-cap peers. We assume a 2%
terminal growth rate since the company has a platform technology. Downside risks include
clinical delays, conditional approval removed in Europe, no FDA approval in US, and CF
trial failure.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 6
Figure 6: PTC DCF
Source: Credit Suisse estimates.
Risks to our $36 TP and Outperform Rating:
■ Ataluren is removed from the market in Europe
■ Ataluren does not receive approval in the US for nmDMD
2016 Is Pivotal for DMD regulatory landscape 3 main players in DMD but PTC treats a different mutation
Sarepta and PTC are the key players to watch after Drisapersen was rejected in mid-
January. Sarepta's eteplirsen and BioMarin's Kyndrisa are used for exon skipping. PTC
has a drug ataluren for a nonsense read-through.
Figure 7: Key DMD Events
Source: Company data, Credit Suisse estimates.
We think the FDA will review each approval case separately as we have seen different issues discussed when comparing the Sarepta and BioMarin briefing documents
If the FDA accepts PTC's filing around Feb, we think the FDA will focus on understanding
consistency between the two Ph2 and Ph3 PTC studies.
■ We think consistency of response between primary and secondary endpoints will be a
focus
■ Ataluren has been dosed in many patients and has been safe. Discontinuations in the
real world have been low. We don't think that safety will be a major focus
Event Company Date
Etepliresen briefing docs Sarepta Jan 20, 2016
Eteplirsen AdCom Sarepta Jan 22, 2016
Eteplirsen PDUFA Sarepta Feb 26, 2016
Eteplirsen PDUFA Sarepta Jan 22, 2016
Completed submission of US filing for
ataluren PTC End of 2015
Enrollment completed for eteplirsen
Ph3Sarepta End of 2015
Completed submission of US filing for
ataluren PTC End of 2015
EMA filing for eteplirsen Sarepta 2016
Top-line (48 week) data from Ph3
(PROMOVI) confirmatory trial of
etepliresen exon 51
Sarepta 2017
19 January 2016
PTC Therapeutics, Inc. (PTCT) 8
Figure 8: Key Programs Moving Toward Approval
Source: Company data, Credit Suisse.
We think about the risk/benefit profile of each drug separately and PTC has no competitors in the nonsense mutation market.
Unlike Sarepta and BioMarin that have drugs in the same Exon 51 market, PTC's ataluren
is used in the nonsense mutation form of DMD. Both markets have about 2,000 patients in
the US. PTC is already approved in Europe conditionally. However, its Phase 3 did not hit
its primary endpoint. A key question to the PTC story is whether it remains on the market
in Europe.
Exon 51 is about 13% of the market, but nonsense mutations make up about a similar size of the market
We have included how BioMarin and Sarepta both characterize the market. Both have
cited about 20% of the population that may not be amenable to exon skipping therapies.
the Outcome Is Not Completely Driven by a BioMarin
Rejection. There is definitely risk
Before Kyndrisa was rejected, sentiment seemed to be that if BioMarin was ot approved, it
would not bode well for PTC. We think there are some important decisions to consider.
Different drug, different mutation, different mechanism vs. Kyndrisa when thinking about what the FDA will do.
We think the FDA will ultimately look at every potential DMD approval case separately.
The profiles and populations of these drugs are quite different, while not achieving
statistical significance is the only similarity.
A key risk is whether Europe will keep ataluren on the market; we think that the safety profile, patient advocates, and subgroup analysis may compel them.
The drug was conditionally approved in Europe, and that regulatory body has closely given
the data due diligence. Upon first review, ataluren was not approved in Europe. After PTC
provided more data and analysis at the request of the EMA, it was conditionally approved.
We think consistency is a key measure in its two studies (ACT DMD and Study 007). In the case of BioMarin, we think the agency did focus on pooled analysis, which was a key discussion point during their panel.
PTC conducted a Phase 2b that was 174 patients and a Phase 3 that was 200 patients.
The trial did not meet its endpoint in the overall ITT population. Six-min walk benefit was
15 meters with a p value of .21. Pre-specified population was with a 300-400 meter
baseline. The pooled studies of its Ph2b and Ph3 was a pre-specified meta-analysis that
showed significance as well.
Figure 11: Pooled Ataluren Studies—All Baselines Figure 12: Pooled Ataluren Studies—300-400 Meters
Source: Company data. Source: Company data.
Consistent results were seen across the 300-400 meter walking subgroup.
There is consensus that, after patients fall below 350 meters walking, a decline happens
faster. Our checks think the FDA will make a decision on the entire group rather than a
narrow label. PTC would agree with that statement as well we think. For the sake of a
potential PTC panel, we do think there will be a lot of discussion about this subgroup. We
saw in the BioMarin panel that the FDA did look closely at its subgroup analysis. 99
patients in their ACT-DMD study had a baseline six-min walk of 300-400 meters. This is
due to the fact that they did enrich their population on walk and age.
■ This population showed 47 meters. vs. 15m seen in the overall ITT.
■ Secondary endpoints such as a ten-min run/walk, stair climb, and stair descend
showed numerical trends favoring ataluren.
Pooled (all pts, n=291) meters walked p value
6 min walk 22 meters 0.015
10 min walk 1.4 seconds 0.025
Stair climb 1.6 seconds 0.018
Stair descend 2 seconds 0.004
300-400 meters pts
(n=143)meters walked p value
6 min walk 45 meters <.001
10 min walk 2.2 seconds 0.008
Stair climb 3.4 seconds <.001
Stair descend 4.3 seconds <.001
19 January 2016
PTC Therapeutics, Inc. (PTCT) 10
Figure 13: Enrollment Strategy in Two Studies Figure 14: Six-Min Walk in Two Studies, Groups
Source: Company data. Source: Company data.
Safety is very benign and favorable risk/benefit profile.
Both PTC and BioMarin trials failed their Ph3 studies. However, the safety profile is
different. Therefore, we think that the risk/benefit formula is more favorable for ataluren
than drisapersen in our opinion.
We think that having years of safety is meaningful to the agency. PTC conducted its first
Phase 2b in 2008 for 48 weeks and its Phase 3 in 2013. PTC has dosed close to 400
patients in Phase 2b and 3. This makes its patient experience the most robust in the
industry.
Figure 15: Patient & Study Experience with PTC
Source: Company data, Credit Suisse.
FDA confirmed that PTC did not need dystrophin as a measurement Ph3, which gives us some comfort that this will not be a point of contention with the agency.
Therefore, we think that it will not be a major focus at its upcoming panel. We note that it
was discussed at BioMarin's panel in a fair amount of detail. Our checks tended to believe
that dystrophin should be showing something, but it didn't view it as a strong measure of
clinical outcomes either.
As reference with Kyndrisa (BioMarin product), we expect PTC will learn from feedback given to BioMarin in explaining their not significant result in Phase 3
We think PTC will spend more time educating the FDA about the natural history of DMD.
PTC has conducted varying ranges of sensitivity analysis around the different subgroups
around walk
Study Phase Population # of patients Start date
Safety 1 Healthy patients 62 2004
004 2a nmDMD patients 38 2005
007 2b nmDMD patients 174 2008
020 3 nmDMD patients 220 2013
19 January 2016
PTC Therapeutics, Inc. (PTCT) 11
Figure 16: Ataluren sensitivity analysis on walk
Source: PTC Therapeutics
19 January 2016
PTC Therapeutics, Inc. (PTCT) 12
Modeling DMD Assuming peak share of 75%, we model 2021 WW sales of ~$670M for PTC.
We start our DMD model with total DMD patients of ~15k in the US with ~19k in the EU.
These figures were back-calculated based on nonsense mutation prevalence rates cited
by both PTC and Sarepta at ~13%. We then looked at the diagnosis rate of DMD and
noted that the diagnosis rate is higher than other rare diseases. We assume the current
US diagnosis rate at 75% and believe it will increase to 80% over time.
We model a 2017 US launch for PTC but factor in a 40% probability of success.
Figure 17 is a chart that outlines our major DMD model assumptions.
Figure 17: DMD Model Assumptions
Source: Company data, Credit Suisse estimates.
DMD Model Assumptions US EU
Total DMD Patients 15,000 19,000
Patients with nonsense mutation (NM) 13% 13%
% Diagnosed 80% 80%
Translarna peak market share 75% 75%
Price per patient $300,000 $300,000
Gross to net 95% 95%
Compliance 90% 90%
Launch Year 2017 2014
Peak Sales (2023) $390 M $370 M
19 January 2016
PTC Therapeutics, Inc. (PTCT) 13
Nonsense Mutation Cystic Fibrosis — A Free Shot on a Big Goal?
First Phase 3 Missed, but a Second Phase 3 Trial Is
Reading Out in 2H16
It is suspected that the first Phase 3 was confounded by use of an inhaled antibiotic Tobi.
The first Phase 3 was a randomized, placebo-controlled worldwide trial. It is expected that
TOBI binds in the same place as ataluren, preventing the drug's effect.
We expect Phase 3 ACT CF data in late 2016–early 2017
The company is running a second Phase 3 trial – ACT CF. Patient screening closed in
October, and it expects to have completed enrollment by the end of 2015 and have data
about a year later in late 2016–early 2017.
CF application submitted in the EU in September, and we expect a decision by the
EMA in mid-2016.
PTCT says it is expecting a potential CF launch in 2016 in the EU. We are skeptical
whether PTC will have to wait for its new Ph3 trial to be complete. We assume a 0%
probability of success on EU CF revenues and no probability of success on US CF
revenues as well until we get additional data.
High Unmet Need for nmCF: We Model $900M Peak
Sales If It Works
Of the CF population (7k patients worldwide), approximately 10% have a nonsense
mutation.
Nonsense mutation is the most severe form of cystic fibrosis, as no CFTR protein is
produced at all. In other mutations (e.g., the gating mutation), small levels of CFTR protein
are produced. We note that Vertex is not developing treatments for nonsense mutation
and that PTC has no competitors in this space for which the only treatments available are
palliative.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 14
Figure 18: Different Types of Mutations Causing CFTR Deficiency (CF)
Source: Company data.
Of the 70K+ CF prevalence, roughly 10% is due to nonsense mutations. PTC’s
ataluren is the only drug in development here.
Vertex is not developing therapies for nonsense mediated CF mutations. To our
knowledge, PTC is the only player in this particular market. About 7K patients have
nonsense mediated form of cystic fibrosis. Ataluren can promote read-through of CFTR
protein in nonsense mutation models.
In the mouse model, ataluren showed selectively dose dependent ribosome read-through
of premature stop codons. Read-through was not induced for normal stop codons. These
types of data were consistent with the profile of ataluren in DMD.
Figure 19: How Nonsense Read-Through Works
Source: Company data.
Ph3 ataluren CF study did not reach primary endpoint but that may have been due
to use of an inhaled antibiotic that binds at the same place as ataluren.
PTC conducted a large Ph3 study for ataluren over 2009-2010.
PTC’s Phase 3 was conducted in 11 countries in North America and Europe.
Randomization was 1 to 1. There were three stratification factors, including age (under 18
and over 18), chronic inhaled antibiotic use (yes or no), and percent predicted FEV1
(45-< 65% or >65-90%). All antibiotics were allowed.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 15
Figure 20: Study Design for Phase 3 Study
Source: Company data.
The study did not hit on its primary endpoint (change in FEV1 at 48 weeks), but
average treatment effect was stat sig.
The primary endpoint was mean relative change in percent predicted FEV1 from baseline
to week 48. Figure 21 shows the data from the ITT population. Placebo patients lost 5.5%
of their predicted FEV1 function vs ataluren patients that lost 2.5% of their predicted lung
function. There was a 3% difference between the two groups. The result was not stat sig
at 48 weeks. However, if you average treatment effect across all visits, it was stat sig.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 16
Figure 21: Mean Change in % FEV Over Visits
Source: Company data.
Younger patients and higher baseline FEV1 patients performed better on the study.
Younger patients had a larger effect than older patients. Patients who had an FEV1 over
65% had a greater treatment effect. The goal is to preserve lung function, which may be
why younger patients & higher FEV1 patients performed better. No antibiotics (or
aminoglycosides) were excluded from this study, which is a key aspect that ultimately
affected the study results.
Figure 22: Key Baseline Characteristics for Phase 3 Ataluren Study
Source: Company data.
Excluding patients not on TOBI (an inhaled antibiotic) led to a very stat sig result.
A pre-specified subset analysis suggested that inhaled aminoglycosides (like tobramycin)
may have affected the response. For patients not receiving inhaled tobramycin, the FEV1
was 5.7%. Patients taking tobramycin had a FEV1 of -1.4%.
Ataluren
(n=116)
Placebo
(n=116)
Median age (range) 22 (6-49) 22 (8-53)
Median Baseline FEV (range)63.4% (39.4-
90.3%)
59% (36.2-
92.6%)
Baseline inhaled antibiotic use
Aminoglycoside (tobramycin) 44 (38%) 42 (36%)
Colistin 30 (26%) 22 (19%)
Aztreonam 10 (8%) 8 (7%)
19 January 2016
PTC Therapeutics, Inc. (PTCT) 17
Figure 23: Subset Analysis Patients with Tobramycin or Without Tobramycin
Source: Company data.
This effect was not seen with other inhaled antibiotics, so patients have other
options if they want to take ataluren and an antibiotic.
Chronic bacterial infections of the CF airways happen often. This means that most patients
will be on an inhaled antibiotic. There are many different antibiotics that are given, which
are tobramycin (TOBI), aztreonam lysinate (Caytson), and colistin.
It was later learned that TOBI binds to the same site as ataluren. We think that this
confounded the results from the study since TOBI pts were included.
TOBI binds to ribosome at the same site where ataluren acts, and it interferes with the
mechanism of action. In this study, patients on TOBI had no treatment effect. The
investigators were unsure at the start of the study whether this may be a confounding
issue, so they stratified for use vs no use of antibiotics.
Pulmonary exacerbation data showed a similar result (meaning data were better
when excluding TOBI).
Subgroup analysis of no inhaled antibiotics and just no TOBI showed a 40-43% reduction
in pulmonary events vs. placebo. The ITT population showed only a 23% reduction in
pulmonary events.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 18
Figure 24: Pulmonary Exacerbations
Source: Company data.
The safety profile was consistent with the DMD study.
Most common AEs were related to cystic fibrosis, which are pulmonary and
gastrointestinal. As far as lab values go, there were mildly elevated increases in the
Excluding Gilead, Biotech CFROI performance is more muted with near-term forecasts (2016) and market expectations implying an acceleration in future CFROI.
CFROI (ex-Gilead)
* Metrics shown is US Biotechnology weighted aggregate. Source: Credit Suisse HOLT Lens
Asset Growth Levels (ex-Gilead)
Biotech (ex-Gilead) Expectations
Recent pullback in share prices has resulted in a discount to near-term forecasts
Acknowledgement The author of this report, Alethia Young, wishes to acknowledge the contributions made by
Ashitha John, employee of Irevna, a division of CRISIL limited, a third-party provider of
offshore research support services to Credit Suisse.
19 January 2016
PTC Therapeutics, Inc. (PTCT) 25
Companies Mentioned (Price as of 15-Jan-2016) Biomarin Pharmaceuticals, Incorporated (BMRN.OQ, $83.14) Gilead Sciences, Incorporated (GILD.OQ, $91.84) PTC Therapeutics, Inc. (PTCT.OQ, $23.11, OUTPERFORM[V], TP $36.0) Sarepta Therapeutics, Inc. (SRPT.OQ, $14.28)
Disclosure Appendix
Important Global Disclosures Alethia Young, Eliana Merle and Grant Hesser each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
3-Year Price and Rating History for Biomarin Pharmaceuticals, Incorporated (BMRN.OQ)
BMRN.OQ Closing Price Target Price
Date (US$) (US$) Rating
31-May-13 62.70 68.00 N *
18-Feb-14 76.39 73.00
09-Jun-14 61.51 73.00 O
31-Jul-14 61.82 74.00
02-Sep-14 70.39 74.00 *
24-Oct-14 81.03 75.00
11-Dec-14 92.90 95.00
26-Feb-15 108.84 115.00
13-May-15 121.47 NR
* Asterisk signifies initiation or assumption of coverage.
N EU T RA L
O U T PERFO RM
N O T RA T ED
3-Year Price and Rating History for Gilead Sciences, Incorporated (GILD.OQ)
GILD.OQ Closing Price Target Price
Date (US$) (US$) Rating
19-Feb-13 42.28 55.00 O
04-Apr-13 47.74 60.00
17-May-13 56.30 67.00
29-Oct-13 69.50 80.00
20-Nov-13 71.08 90.00
10-Dec-13 72.81 110.00
28-Oct-14 113.45 130.00
06-Feb-15 97.48 115.00 N
13-May-15 106.39 NR
* Asterisk signifies initiation or assumption of coverage.
O U T PERFO RM
N EU T RA L
N O T RA T ED
19 January 2016
PTC Therapeutics, Inc. (PTCT) 26
3-Year Price and Rating History for PTC Therapeutics, Inc. (PTCT.OQ)
PTCT.OQ Closing Price Target Price
Date (US$) (US$) Rating
15-Jul-13 17.17 24.00 O *
31-Jan-14 26.07 R
18-Feb-14 28.43 35.00 O
23-May-14 20.03 40.00
23-Sep-14 40.45 55.00
08-Oct-14 39.42 R
10-Oct-14 34.59 55.00 O
06-Nov-14 42.17 66.00
24-Feb-15 71.16 100.00
05-May-15 53.13 100.00 *
15-Jun-15 50.25 NR
* Asterisk signifies initiation or assumption of coverage.
O U T PERFO RM
REST RICT ED
N O T RA T ED
3-Year Price and Rating History for Sarepta Therapeutics, Inc. (SRPT.OQ)
SRPT.OQ Closing Price Target Price
Date (US$) (US$) Rating
23-Sep-14 20.61 36.00 O *
15-Jun-15 28.54 NR
* Asterisk signifies initiation or assumption of coverage.
O U T PERFO RM
N O T RA T ED
The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities
As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark* over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non -Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional ben chmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiv eness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, the expected total return (ETR) calculation includes 12 -month rolling dividend yield. An Outperform rating is assigned where an ETR is greater than or equal to 7.5%; Underperform where an ETR less than or equal to 5%. A Neutral may be assigned where the ETR is between -5% and 15%. The overlapping rating range allows analysts to assign a rating that puts ETR in the context of associated risks. Prior to 18 May 2015, ETR ranges for Outperform and Underperform ratings did not overlap with Neutral thresholds between 15% and 7.5%, which was in operation from 7 July 2011. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.
Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.
Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.
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PTC Therapeutics, Inc. (PTCT) 27
Credit Suisse's distribution of stock ratings (and banking clients) is:
Global Ratings Distribution
Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 56% (34% banking clients) Neutral/Hold* 31% (26% banking clients) Underperform/Sell* 12% (42% banking clients) Restricted 1% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, and Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.
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Target Price and Rating Valuation Methodology and Risks: (12 months) for PTC Therapeutics, Inc. (PTCT.OQ)
Method: Our PTC TP of $36 and Outperform rating is derived from DCF valuation. We assumed a 12% discount rate, which is in-line with small-cap peers, and a 2% terminal growth rate since the company has a platform technology.
Risk: Downside risks to our PTC $36 TP and Outperform rating include: (1) Ataluren is removed from the market in Europe (2) Ataluren does not receive approval in the US for nmDMD (3) Cystic fibrosis Ph3 trial fails (4) SMA study has more safety setbacks (5) Delays to clinical and regulatory timelines
Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the target price method and risk sections.
See the Companies Mentioned section for full company names The subject company (PTCT.OQ, BMRN.OQ, SRPT.OQ) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (PTCT.OQ, SRPT.OQ) within the past 12 months. Credit Suisse has managed or co-managed a public offering of securities for the subject company (PTCT.OQ, SRPT.OQ) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject company (PTCT.OQ, SRPT.OQ) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (PTCT.OQ, BMRN.OQ, SRPT.OQ, GILD.OQ) within the next 3 months. As of the date of this report, Credit Suisse makes a market in the following subject companies (BMRN.OQ, SRPT.OQ, GILD.OQ). Credit Suisse has a material conflict of interest with the subject company (PTCT.OQ) . Credit Suisse Asset Management maintains a Board seat and a seat on the Investment Committee through Martin Schmertzler.
Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report may participate in events hosted by the subject company, including site visits. Credit Suisse does not accept or permit analysts to accept payment or reimbursement for travel expenses associated with these events. Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit https://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html. Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (PTCT.OQ, SRPT.OQ) within the past 3 years. As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.
Important Credit Suisse HOLT Disclosures With respect to the analysis in this report based on the Credit Suisse HOLT methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the Credit Suisse HOLT methodology and (2) no part of the Firm’s compensation was, is, or will be d irectly related to the specific views disclosed in this report.
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PTC Therapeutics, Inc. (PTCT) 28
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