Sell Rating for Prothena Due to Reliance on Partnered Programs and Uncertainties in Phase 3 Trials

Analyst Tazeen Ahmad of Bank of America Securities reiterated a Sell rating on Prothena, boosting the price target to $8.00.

Tazeen Ahmad has given his Sell rating due to a combination of factors impacting Prothena’s stock. The primary concern is the company’s reliance on partnered phase 3 programs, specifically with Novo Nordisk and Roche, as Prothena lacks internal research and development initiatives. The Alzheimer’s drug PRX012 has been removed from valuation considerations, which further emphasizes the importance of these partnered assets.
While the phase 3 trials for Coramitug and prasinezumab are promising, they face significant challenges. Coramitug, developed with Novo Nordisk, is entering a competitive market and is projected to be a later-line therapy, requiring substantial commercial success to achieve milestone payments. Prasinezumab, in collaboration with Roche, has shown mixed results in previous studies, and demonstrating efficacy in Parkinson’s disease has historically been difficult. These uncertainties contribute to a cautious outlook, leading to a Sell rating with a price objective of $8.