PTC Therapeutics Inc. (NASDAQ: PTCT) traded higher Friday following the release of an incredibly positive analyst report. Oppenheimer reiterated an Outperform rating but lowered its price target to $135 from $155, still implying incredible upside.

The results from the PTC Phase 4 trial highlighted a statistically significant benefit in pre-specified subgroup of 99 patients, which Oppenheimer believes is supportive of the U.S. Food and Drug Administration’s (FDA’s) approval for Translarna, and satisfies conditional approval requirements in the European Union.

Importantly, the meta-analysis was “okayed” with the FDA during protocol determination for statistical-analysis and the predefined subset analysis is in line with the FDA draft guidance for Duchenne muscular dystrophy (DMD). Promisingly, data in pre-specified groups was concordant with secondary endpoints, also demonstrating statistically significant results. The firm sees near-term investor focus on approvability of Translarna in nonsense-mutation DMD with further clarity to come in 2015 from drisapersen.

The firm doesn’t believe the market will credit Translarna’s potential in nonsense-mutation cystic fibrosis in next 12 months, as ACT-DMD results are not outright positive, unequivocally supporting much contested proof of mechanism. Importantly, Translarna market expectations are unchanged as risk/benefit profile supports broad utilization.

The trial results and pre-specified analysis were supported by modern-understanding of endpoints and DMD-pathogenesis. Translarna benefit was demonstrated in subset-of-patients (300 million to 400 million) that were likely to decline but also still able to benefit from dystrophin-restoration. New MRI-data suggests patients with basline-6MWT<300m are already severely impacted by disease, with fat and fibrosis infiltrating their muscles and would therefore be unlikely to benefit from dystrophin restoration.

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The label is unlikely to be limiting. Oppenheimer looks to Translarna’s EU label to guide assumptions. In the EU, Translarna’s label includes ambulant patients ages five and up and not limited by 6MWT-baseline or any other efficacy/disease progression measure, nor sub-group, but driven by mechanism. Expansion into the older-than-five population is likely to be supported by clinical-experience/registry rather than a trial in this patient population.

Shares of PTC rose more than 10% Friday morning to $35.75, were down fractionally at $31.61 in the noon hour. The consensus analyst price target is $98, and the 52-week trading range is $24.63 to $78.72.

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