Piper Jaffray sees ‘huge valuation disconnect’ between Proteostasis, Vertex

Piper Jaffray analyst Edward Tenthoff notes that Proteostasis (PTI) ended Q3 with cash of $46M million subsequently completed an equity financing and sold 1.4M shares through an ATM, bringing pro forma cash to about $138M, which he estimates will fund the company into 2020. The primary driver remains initial Phase I data on Proteostasis’ proprietary TripleRx regimen in homozygous F508del Cystic Fibrosis this quarter, he contends, adding that he remains encouraged based on recently reported positive Phase I data on proprietary CFTR potentiator PTI-808 and corrector PTI-801 in homozygous F508del CF patients. The analyst sees a “huge valuation disconnect” between Proteostasis and CF market leader Vertex (VRTX), and reiterates an Overweight rating and $14 price target on the former’s shares.

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