Stifel cuts Protagonist Therapeutics to hold; PT to $11 from $32

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Stifel downgraded Protagonist Therapeutics (NASDAQ:PTGX) to “hold” from “buy” and slashed its price target to $11 from $32 after the company discontinued its Phase 2b PROPEL study of PTG-100 in patients with moderate-to-severe ulcerative colitis (UC).

Shares of Protagonist were quoted at $8.73, down $11.70, or 57%, in afternoon trading on March 26.

Analyst Adam Walsh writes that the trial was discontinued after an interim analysis by an independent Data Monitoring Committee, which suggested that the trial was futile based on a primary endpoint of clinical remission. Safety was clean.

He pointed out that Protagonist plans to review the entire data set and provide further information in the next month about placebo response rate and PTG-100 dose-response, among other things.

Mr. Walsh notes that the company had $155-million of cash at the end of 2017, or about $7 a share, which is “sufficient through 2019, per management - but we note that discontinuation of PTG-100 trials and associated expense reductions could lengthen the cash runway.”

Jennifer Poland