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Here is Why Prothena (PRTA) is Up More Than 155% in Three Months

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Shares of Prothena Corporation (PRTA - Free Report) have surged 155.8% in the past three months compared with the industry’s growth of 7.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Most of the upside came after the FDA approval of Biogen’s (BIIB - Free Report) Alzheimer's disease (AD) drug, Aduhelm. On Jun 7, 2021, Biogen and partner Eisai won the FDA approval for Aduhelm (aducanumab-avwa) as the first and only AD treatment, after a few setbacks.

The approval has brought the spotlight on other companies that are developing drugs for AD. Investors are optimistic about the prospects of these pipeline candidates.

Prothena’s PRX005 is being evaluated for the treatment of AD. The candidate is being developed as a part of the global neuroscience research and development collaboration with Bristol Myers Squibb (BMY - Free Report) .  The candidate is an investigational antibody that targets tau, a protein implicated in diseases including AD, frontotemporal dementia (FTD), progressive supranuclear palsy (PSP), chronic traumatic encephalopathy (CTE) and other tauopathies.

Bristol Myers recently exercised its option under the collaboration and entered into an exclusive U.S. license for PRX005. Prothena is expected to receive $80 million from Bristol Myers Squibb in the ongoing quarter.

The company has another candidate, PRX012, which is a potential treatment for AD. The candidate is a high-affinity monoclonal antibody targeting a key epitope within the N-terminus of Aβ. An IND for the same is expected by the first quarter of 2022.

The approval of Biogen’s AD drug has raised hopes for these candidates as well. While the candidates hold promise, given their mechanism of action, they still have a long way to go and are a few years away from approval.

Last month, Prothena announced a collaboration with Denmark-based Novo Nordisk (NVO - Free Report) , whereby the latter will acquire Prothena’s clinical-stage antibody, PRX004, and broader ATTR amyloidosis program. In exchange, Prothena is eligible to receive development and sales milestone payments of approximately $1.2 billion, including $100 million in upfront and near-term clinical milestone payments.

The influx of cash will help the company to advance its pipeline further. The progress so far has been impressive.

The company is also developing prasinezumab, a potential treatment for Parkinson’s disease, in collaboration with Roche and earned a $60 million clinical milestone payment upon dosing of the first patient in the global phase IIb PADOVA study.

Prothena currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.