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Proteostasis Therapeutics' FDA Breakthrough Therapy Designation Gives It An Edge


* Proteostasis Therapeutics obtains breakthrough therapy designation from the FDA based on positive data from a phase 2 trial with PTI-428 treating cystic fibrosis.

* PTI-428 and all other candidates in Proteostasis' pipeline are being developed as both monotherapy and combinations which provides for more potential upside.

* Financials are good for now, but it is highly likely that the company will have to raise cash towards the end of 2018.

Recently, Proteostasis Therapeutics (PTI) announced some highly positive news. It announced that the FDA had granted its lead drug PTI-428 for cystic fibrosis with a breakthrough therapy designation. I like this biotech because I believe it offers a great opportunity for investors at this point in time despite the pullback in the stock. It has a focus on developing treatments for cystic fibrosis. But it does so in such a way that it uses different modes of action. In addition, the beauty of this biotech is that its technology can be used in combination with existing cystic fibrosis therapies such as those stemming from Vertex Pharmaceuticals (VRTX). Such drugs that could possibly be combined with PTI-428 could be: Kalydeco, symdeko and orkambi. Proteostasis even has other cystic fibrosis drugs that can be combined with current CFTR treatments.

Push Forward

It was announced recently that PTI-428 received FDA breakthrough therapy designation. Breakthrough therapy designation is important for a few reasons. For starters, it is given to biotechs that treat a serious or life-threatening disease with an unmet medical need. In addition, it will also speed up the approval process with the FDA. This means more talks with the FDA for guidance on this clinical candidate. The final thing to mention, which is important, is that the FDA only gives this indication when it sees potential that a drug may offer a superior benefit over existing therapies. That is highly encouraging for Proteostasis. Investors seemed to agree as well as they sent the stock higher by 54% on the day that the news was released. I believe that an investment is still worthy at this point in time despite the pullback that has occurred over the past few trading days in the stock. The stock has traded lower since it hit its high of $8.15 per share last week. It has now dropped to around $5.61 per share, which presents itself as a great opportunity to get in. That drop in share price gives Proteostasis a market cap of $185 million. That is a tiny market cap for a company that has such an extensive pipeline for cystic fibrosis treatments. In terms of cystic fibrosis it has three shots on goal with different aspects of the disease. The point is, that I believe there is a ton of potential here to combine PTI-428 with other current and future cystic fibrosis medications. In my opinion, that's the main aspect with this company. It is not just the treatment of cystic fibrosis itself with one drug alone, but that everything it is developing has the potential to be combined with other current and future cystic fibrosis treatments.

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