RETA - Reata adds 21% as PTC's Friedreich's ataxia drug fails Phase 3 trial

2023-05-24 14:26:51 ET

Shares of Reata Pharmaceuticals ( NASDAQ: RETA ) and PTC Therapeutics ( PTCT ) moved in opposite directions on Wednesday after the latter faced a setback for vatiquinone, a Phase 3 candidate for the neuromuscular disorder Friedreich's ataxia (FA).

While PTC ( PTCT ) fell ~18% Reata ( RETA ), which recently won FDA approval for its FA treatment Skyclarys, added ~21% on above-average volumes.

PTC's ( PTCT ) selloff added to post-market declines on Tuesday when the company said that Vatiquinone, a small molecule designed to inhibit an enzyme that regulates the disrupted biological pathways in FA, did not achieve the primary endpoint in a Phase 3 trial.

In the wake of the setback, the company announced a portfolio reorganization and a decision to discontinue gene therapy programs which it said would lead to about an 8% reduction in its workforce.

In reaction, investment firms including Citi, Credit Suisse, and Barclays moved to lower the per share target on PTC ( PTCT ) to $48 – $50 from $55 – $70.

PTCT's ( PTCT ) loss is expected to give a leg up to Reata's ( RETA ), which is awaiting regulatory action on a supplemental application for Skyclarys ahead of plans to launch the product by mid-August 2023.

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