Wall Street Says Johnson And Johnson’s FDA-Approved Psoriasis Drug Should Create 'Significant Value’ For Protagonist Therapeutics

• Icotyde was jointly discovered by Protagonist and Johnson & Johnson but it will now be commercialized by Johnson & Johnson alone under a license and collaboration agreement established in 2017. 
• H.C. Wainwright analyst Douglas Tsao said that while Icotyde's approval was expected, the earlier than expected approval and "clean" label represent upside surprises.
• Clear Street raised the firm's price target on Protagonist Therapeutics to $104 from $91 and kept a ‘Buy’ rating on the shares following the FDA approval of Icotyde.

Wall Street on Wednesday reiterated confidence in Protagonist Therapeutics (PTGX) after John and Johnson received U.S. Food and Drug Administration’s approval for Icotyde for the treatment of moderate-to-severe plaque psoriasis.

The FDA approved the drug in adults and pediatric patients 12 years of age and older. The approval was based on four late-stage studies that met all primary endpoints and demonstrated a favorable safety profile in 2,500 patients.

Protagonist’s Role In Icotyde

Icotyde was jointly discovered by Protagonist and Johnson & Johnson but it will now be commercialized by Johnson & Johnson alone under a license and collaboration agreement established in 2017.

FDA approval of Icotyde triggers a $50 million milestone payment to Protagonist, the company said, while adding that it is eligible eligible to receive up to $580 million in potential additional regulatory and sales milestone payments, as well as tiered royalties ranging from 6% to 10% on global net sales.

Analyst Take

H.C. Wainwright analyst Douglas Tsao said that while Icotyde's approval was expected, the earlier than expected approval and "clean" label represent upside surprises. Johnson & Johnson is committed to building Icotyde into a blockbuster, which should create "significant value" for Protagonist Therapeutics (PTGX), the analyst told investors in a research note.

H.C. Wainwright believes Icotyde is positioned to "transform the plaque psoriasis landscape with a differentiated label that highlights its superior efficacy and safety profile." The firm reiterated a ‘Buy’ rating on Protagonist with a $117 price target.

Clear Street raised the firm's price target on Protagonist Therapeutics to $104 from $91 and kept a ‘Buy’ rating on the shares following the FDA approval of Icotyde. The approval transitions Protagonist into a company with royalty-bearing commercial exposure, while retaining upside from lifecycle expansion and the broader pipeline, the firm said.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around PTGX stock rose from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume remained at ‘high’ levels.

PTGX stock has gained 78% over the past 12 months. 

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