What: PTC Therapeutics (NASDAQ:PTCT) shares jumped by 10% earlier today after JP Morgan upgraded the company's shares from neutral to overweight.

So what: Investors' improving outlook likely stems from optimism that PTC Therapeutics Duchenne Muscular Dystrophy, or DMD, drug Translarna could soon win approval for use in the United States.

Currently, Translarna is conditionally approved for use in European patients possessing a specific nonsense gene mutation occurring in a subset of DMD patients.

Despite the fact that European regulators determined that the 80 mg dose of Translarna offers no statistical improvement versus placebo, they did note a marginal improvement in patients taking a smaller 40 mg dose. Since there aren't any major safety concerns and because there's a significant need for new DMD therapies, the agency agreed to give PTC Therapeutics a conditional green light for use in the EU last fall; however, PTC Therapeutics still needs to complete and submit results from its ongoing confirmatory phase 3 trial.

In December, PTC Therapeutics began its rolling submission for FDA approval, which it expects to complete in the fourth quarter of 2015 once its confirmatory phase 3 trial wraps up.

Now what: There's a significant need for new DMD therapies like Translarna, but investors might also want to approach PTC Therapeutics cautiously. There's no guarantee that phase 3 trials will succeed, and the commercial opportunity for Translarna is muted given that it addresses a fairly small number of DMD patients. Additionally, because other DMD therapies are making their way through regulators, it's increasingly challenging to model for potential market share and peak sales potential. Given PTC Therapeutics reported sales of just $5.1 million in Europe in Q1 and its potential in the U.S. isn't clear, I'm content to stay on the sidelines on this one -- at least for now.