Truist Securities initiated coverage on Protagonist Therapeutics Inc (NASDAQ:PTGX), citing its first-in-class lead asset with encouraging Phase 2 data in a rare form of blood cancer and a multi-billion dollar opportunity.
Protagonist Therapeutics' lead assets, rusfertide and JNJ-2113, have shown promising clinical results across various trials, leading to partnerships with Takeda Pharmaceutical Co Ltd (NYSE:TAK) and Johnson & Johnson (NYSE:JNJ).
Truist models peak end user unadjusted sales of $2.8 billion vs. the consensus of $2 billion to rusfertide, which are reflected in ~$660 million adjusted peak revenues to Protagonist Therapeutics (profit-share in US + royalties ex-US).
The analyst has initiated with a Buy rating and a price target of $60. Talking about JNJ-2113, an oral IL-23, is a well-established pathway with four FDA-approved inhibitors for various conditions.
The analyst emphasizes that JNJ-2113 stands out as the only orally administered IL-23 inhibitor, offering a significant advantage over others in the field with improved dosing and administration.
Phase 2 trial data for psoriasis demonstrate improved efficacy compared to other oral treatments and IL-23 inhibitors like Johnson & Johnson's Tremfya and Stelara, though cross-trial comparisons have limitations.
Truist highlights a significant unmet need in Inflammation & Immunology (I&I), particularly for an oral IL-23 treatment that could expand market opportunities and potentially lead to switching from other oral therapies with different mechanisms of action. Truist also sees potential for JNJ-2113 to be effective in additional indications.
The analyst models around $4 billion in peak unadjusted end-user sales for JNJ-2113 in psoriasis, reflected as ~$300 million in peak adjusted royalties to the company vs. the consensus of $320 million.
The analyst also sees a potential peak opportunity of $2.7 billion in ulcerative colitis but awaits data from the trial expected in the fourth quarter of 2024 before assigning any value.
Price Action: PTGX stock is up 0.83% at $44.96 at the last check on Tuesday.
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