Report on

MW is Short Prothena Corp PLC (PRTA:US)

Questioning Whether NEOD001 is Efficacious

We are short PRTA. The publicly-available data, in our opinion, does not show that NEOD001 is efficacious. Our impression appears to run contrary to that of the sell-side. We believe that perceived positive responses to the drug are quite possibly – if not likely – due to previous plasma cell directed (“PCD”) therapy, and also to the manner in which some early trial data has been presented. Further, NEOD001’s proposed mechanism of action is not proven.

AL amyloidosis is a horrible disease. We would be happy to be wrong about our reading of the data. However, even if NEOD001 were to be approved, we see the Street’s peak annual sales estimates generally of over $1.5 billion as unrealistic. The patient population is small, and we believe most payers are unlikely to reimburse for this drug if it were priced at a level sufficient to put the peak annual sales estimates within reach.

We note that insiders hold virtually no shares, immediately sell substantially all stock received through option exercises; and, that PRTA raised an additional $155.3 million gross in an equity offering in March 2017. A recent investor conversation with PRTA’s CFO led him to take a tone described as defensive when asked pointed questions about the trial data. These observations lead us to believe that management might share our concern about the efficacy of NEOD001. We also find it noteworthy that PRTA presently plans not to release interim data from its Phase 3.

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