Imminent Key Cystic Fibrosis Read-Outs for Proteostatis


Proteostasis (PTI) is scheduled to release data from 4 early-phase trials in Cystic Fibrosis (CF) imminently (i.e. this quarter) for all 3 of its drug candidates. Two of the readouts are add-on trials, adding on one of 2 proprietary PTI compounds to Vertex's CF drug Symdeko. Similar prior trials with Vertex's ORKAMBI instead of Symdeko were mixed positive, with significant improvement in sweat chloride but not in the more direct lung function FEV test for one of PTI's compounds, and significant FEV results for another PTI compound (See slides 1 and 23 of the current PTI investor deck).

Two other readouts are likely to affect PTI's stock price even more, as they are trials that include combinations of Proteostasis' proprietary compounds on their own. Prior results from Proteostatis trials for a PTI doublet drug combination showed mixed positive results last fall ( CLICK HERE FOR PRESS RELEASE, CLICK HERE TO LISTEN TO CONFERENCE CALL), that appeared to show signs of efficacy at the middle dose in both sweat chloride and FEV. We will now get results at the high dose, for which we are looking for significant results at least as good as the mid-dose, and hopefully better. The other readout is for PTI's triple drug combination, for which we are looking for results at least good, and hopefully better than the doublet at the same concentrations.

These imminent readouts are hugely important to the value of PTI as this relates to all their current clinical assets, and whether they have a chance to compete with, or at least complement Vertex's successful CF drugs in the coming years. From the limited past trial results with these drug candidates noted above, it appears that PTI's imminent CF readouts are likely to be mixed positives. It's hard to predict exactly how the market will react to mixed positive results, but likely in sum we feel the readouts will move the stock at least 25% one way or the other. We give a slight advantage to the upside because of the early efficacy signal seen in prior trials, as indicated above, and the fact that PTI is only a ~$200M market cap company currently. The proprietary high dose doublet and triplet data seem to be the most meaningful, potentially moving the stock more than 25% if strongly positive or negative.

With the considerable uncertainty in the readout, we only have a small position in our most diverse fund, and for a few of our other funds we traded slightly bullish options plays that cap our downside and upside but still provide significant upside as long as the stock doesn't decrease significantly in value. Details of our options play were provided to our Core subscribers. You can become one today, with a 30-day money back guarantee. Learn more here. As always, this post is only informational. Please perform your own diligence to make any investment decisions.

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