Proteostasis shares shattered as weak triplet data inspires a scorching backlash
You almost have to pity Proteostasis $PTI today. The micro-cap biotech sallied out into the stock market early in the day trying to float some mediocre efficacy results for their triple for cystic fibrosis and got gunned down on every side.
Already quick to entice skepticism after earlier shots on goal aroused a short attack from Kerrisdale Capital, some prominent analysts made short work of Proteostasis’ numbers this morning. Its share price is down 65% to an all-time low and the market cap has shriveled to a paltry $76 million — less than current assets on hand.
That’s a far cry from the big spike of last October, when some positive doublet data whipped up a bit of controversial support for the biotech — always dangerous when you factor in the Sturm und Drang reactions from the brigade of Vertex supporters out there anxious to mug anything that could compare with one of their champion’s new triplets.
Even by excluding some patients from their per protocol evaluation, though, these weren’t competitive numbers, and Proteostasis shares were quickly led to the slaughter.
Here’s Geoffrey Porges from SVB Leerink:
Bottom Line: Proteostasis’ (PTI, OP) proprietary triple therapy phase I results for homozygous F508del cystic fibrosis (CF) did not match the efficacy of Vertex’s CF medicines, and will not compete for our estimated $10bn peak CF sales to Vertex. Proteostasis’ triple increased lung function measured by percent predicted forced expiratory volume (FEV1) from baseline by +5%, compared to the +13-14% hurdle established by Vertex.
Leerink’s Joseph Schwartz has been a bullish advocate of the triples and remains modestly hopeful about better numbers with longer therapy. But even Schwartz can’t swallow data points involving tiny patient numbers.
Although the company reported an FEV benefit of 5.2% when ‘428 was added onto Orkambi, some investors question the FEV benefit of ‘428 because the data was highly variable and largely driven by two patients on placebo who worsened more than one would expect. Unfortunately, patients did not gain a statistically significant improvement in FEV for both studies — 10 mg or 30 mg ‘428 added to Symdeko (28 days) and 400 mg ‘801 added to Symdeko (14 days) compared to placebo. However, the patients in the ‘801 + Symdeko cohort experienced an average sweat chloride improvement of -20 mM (p<0.05) compared to baseline. Based on today’s update, PTI will deprioritize their add-on study and focus on their proprietary triplet and doublet combination therapy.
Will investors come back for more? Many turned the channel this morning and don’t seem prepared to give this latest rival to Vertex’s throne another chance.
Not on board to inspect the data was Baird’s Brian Skorney, who had called the October results viable. Skorney dropped coverage soon after the October data were released and Proteostasis raised cash with its inflated share price.