Proteostasis Stock Surges on CF Fast Track Designation


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Company shares spiked 12.4 percent higher in premarket trading today after the U.S. Food and Drug Administration (FDA) granted Proteostasis Therapeutics’ triple combination for cystic fibrosis (CF) Fast Track Designation.

The triple combination, made up of PTI-428, PTI-801 and PTI-808 are, respectively, a transmembrane conductance regulator (CFTR) amplifier, a third-generation corrector, and an amplifier. The company plans to initiate a clinical trial for the combo-therapy this quarter. It has received endorsement and a high strategic fit score from the Therapeutics Development Network (TDN) and the Clinical Trial Network (CTN), which are the development arms of the Cystic Fibrosis Foundation (CFF) and the European CF Society (ECFS), respectively.

All three drugs were developed internally and are designed to work together through complementary mechanisms of action. All three drugs have active Investigational New Drug (INDs) status under the FDA and are being evaluated in clinical trials in the U.S. and Europe.

“Fast Track designation represents another positive step for the development of our triple combination therapy and underscores the serious unmet need that remains for the vast majority of CF patients,” said Meenu Chhabra, president and chief executive officer of Proteostasis, in a statement. “We believe this designation, together with other recent designations from regulators and CF organizations following review of our results with PTI-428, PTI-801 and PTI-808, is recognition of the potential of these programs in this disease. We believe combinations of CFTR modulators hold the promise of improving treatment efficacy for different segments of the CF population, including F508del heterozygotes and F508 homozygotes, where patients have limited access to treatment, are underserved by existing treatments or see a declining benefit in lung function over time.”

Today’s stock jump is another example of the company’s volatility. On March 20, shares dropped almost 18 percent after Kerrisdale Capital published a report on the company. The report said, in part, “Stock has run up on unimportant breakthrough-therapy designation, but the underlying clinical data is terrible. The drug is a dud.”

And the week before that, shares had jumped when the FDA granted it orphan drug designation. The company also had reported a smaller-than-expected loss in the fourth quarter.

The company’s current market cap is $178.94 million. The high for the year has been $7.29 per share with a low of $1.56. 24/7 Wall Street notes, “Excluding Wednesday’s move, Proteostasis had underperformed the markets in 2018, with the stock down about 24 percent. However, over the past six months the stock is up roughly 112 percent. Shares of Proteostasis were last seen up about 6 percent at $4.72, with a consensus analyst price target of $16 and a 52-week trading range of $1.41 to $8.61.”

On March 19, the company announced it was planning an underwritten public offering of 9,000,000 shares of its common stock. A day later, it announced it was withdrawing the offer, citing unfavorable market conditions.

At its year-end and fourth-quarter financial report on March 14, Proteostasis indicated a net loss of about $59.4 million for the full year, up from a net loss of $37.2 million the previous year. Research and development costs for the full year were $53.7 million, up from $34 million the previous year, due to moving the CF programs into the clinic. General and administrative expenses for the year were $11.7 million, about the same as the $11.9 million in 2016. The company finished the year with $74.5 million in cash, cash equivalents and short-term investments.

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