In the first week of May, Biopharmaceutical company PTC Therapeutics (NASDAQ: PTCT) reported a fiscal 2016 first-quarter net loss of $1.16 per share. The reported net loss was in line with the analysts’ estimates. In spite of this, the share price hardly saw any kind of volatility. On Tuesday, the share price closed at $8.14, up 5.58% from the prior close. There are also some other important developments, discussed below, which definitely point to an uptrend in the share price.
For the fiscal 2016 first-quarter, the manufacturer of Translarna, a drug for Duchenne muscular dystrophy, reported revenue of $18.895 million, up 152.5% from $7.482 million in the corresponding period last year.
During the first quarter, the company reported a widened net loss of $41.233 million or $1.22 per share, from $37.915 million or $1.15 per share in the similar period of last year.
The company, which is concentrating on modulating the protein expression within the cell, saw the sales of Translarna hit $18.9 million in the first quarter of 2016. The first-quarter sales saw a sequential increase of 49% compared to the fourth quarter of 2016. It should be noted that the total sales of Translarna were only $33.7 million last year. So, in line with the expectation of the management, we can anticipate Translarna to achieve sales revenue of $65 million.
If the company is able to negotiate price deals with several more EU countries, then Translarna can record exponential growth. The sale of Translarna is expected to begin soon in the UK, following the recommendation of the drug by the National Institute for Health and Care Excellence (NICE).
The drug is also being studied in an ongoing phase 3 study in patients with a nonsense mutation. If the study goes as per plan, then it will pave way for Translarna to be used by 14,000 patients globally.
As of the first quarter ended March, the company had $299 million in cash. The management is hopeful that it would end 2016 with a cash of at least $200 million even after spending $185 million this year.
Finally, PTC Therapeutics has a market capitalization of only about $233 million. Thus, a firm growth in the sales of Translarna would possibly result in a steep uptrend in the price. So, fundamentally, a trader should only consider purchasing the stock at this point in time.
The stock has very strong support at 6.30 levels. The RSI indicator is pointed upwards and on the verge of crossing above 50.
Thus, a one-touch call option contract would be the best choice for a binary options trader. A strike price of $11 or lower would be ideal under the current scenario. Likewise, an expiry date in the third week of June would improve the prospects of ending the trade in the money.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
