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On Monday, BofA Securities adjusted its outlook on Ocular Therapeutix (NASDAQ:OCUL), reducing the price target to $17 from the previous $18, while continuing to recommend a Buy rating for the stock. Currently trading at $6.24, the stock sits well below analyst targets ranging from $14 to $22, with InvestingPro analysis suggesting the shares are undervalued. The strong analyst consensus of 1.44 (where 1 is a Strong Buy) reflects continued confidence in the company’s prospects. The firm’s analysts highlighted the recent amendment to the Special Protocol Assessment (SPA) for the SOL-1 trial, which now includes additional re-dosing at weeks 52 and 76. The management at Ocular Therapeutix emphasized that the primary 9-month endpoint for the study remains unchanged. However, the introduction of masking through week 52 will shift the topline readout to the first quarter of 2026, later than the previously anticipated fourth quarter.
The amendment to the SPA is designed to yield further insights into the long-term durability of Axpaxli in treating wet age-related macular degeneration (wAMD). It is also expected to potentially support a flexible dosing schedule of 6 to 12 months on the product’s label. Furthermore, these modifications have allowed for a reduction in the size of the SOL-R trial, which is anticipated to speed up the completion of enrollment.
BofA Securities analysts believe that the changes, while delaying the SOL-1 readout, should streamline the overall timeline leading to a New Drug Application (NDA) filing. The firm maintains a positive stance on Axpaxli’s unique long-acting profile, which they suggest has the potential to significantly lessen the treatment burden for patients with various retinal diseases.
The analysts reiterated their Buy rating, expressing confidence in the drug’s prospects despite the adjusted timeline. They underscored the benefits of the recent trial modifications, which are seen as strategic steps towards enhancing the understanding of Axpaxli’s effectiveness and optimizing its path to market. The new price target of $17 reflects the firm’s adjusted expectations following the recent developments in Ocular Therapeutix’s clinical program. With a market capitalization of $990 million, the company maintains a healthy balance sheet with more cash than debt, though InvestingPro data reveals challenges including weak gross profit margins and negative EBITDA of -$139 million over the last twelve months. For deeper insights into OCUL’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Ocular Therapeutix reported fourth-quarter financial results that did not meet analyst expectations. The company posted a loss of $0.29 per share, which was wider than the projected $0.25 loss. Revenue for the quarter reached $17.08 million, slightly below the consensus estimate of $17.21 million, but it represented a 15.4% increase from the $14.8 million reported in the same period last year. For the entire year of 2024, Ocular Therapeutix achieved total revenue of $63.7 million, marking a 9% rise from $58.4 million in 2023. This growth was primarily driven by increased sales of its DEXTENZA product. The company also provided updates on its clinical programs, specifically for its AXPAXLI treatment for wet age-related macular degeneration, aimed at accelerating the path to NDA submission. Ocular Therapeutix ended 2024 with a cash balance of $392.1 million, which it anticipates will support operations into 2028. The company has announced that it does not plan to raise additional capital this year.
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