Maxim cuts Proteon Therapeutics to hold; removes PT

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Maxim Group downgraded Proteon Therapeutics (NASDAQ:PRTO) to “hold” from “buy” and withdrew its previous $5 price target after the company’s second Phase 3 study of vonapanitase failed to reach statistical significance on both co-primary endpoints: secondary patency and fistula use for hemodialysis.

At mid-day on March 28, the stock was quoted at 51 cents, down $2.97, or 85%, in heavy turnover.

The company is evaluating its strategic options and has $16.5-million in cash on the balance sheet, writes analyst Jason McCarthy.

PATENCY-2 is the second Phase 3 study of vonapanitase in this indication. In the prior trial, vonapanitase missed on the primary endpoint of primary patency but reached P values on secondary endpoints of secondary patency and fistula use.

With that data and FDA feedback, the PATENCY-2 protocol was amended to use secondary patency and fistula use as co-primary endpoints, along with increasing the trial size.

“We got it wrong,” Mr McCarthy said. “Our assumption had been that based on the trial design changes for PATENCY-2 that the probability of success was skewed towards Proteon.”

Mr. McCarthy now wonders where does Proteon goes from here? “In our view, the damage is done and Proteon shares are now trading near cash,” he said. “The outcome of PATENCY-2 is both surprising and a disappointment for the hemodialysis community as fistula creation, maintenance and durability remain challenges for surgeons and patients.”

Abby Hardy