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On Friday, Mizuho (NYSE:MFG) Securities adjusted its outlook on EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT), currently trading at $5.72 with a market capitalization of $394 million, reducing the 12-month price target from $30.00 to $26.00. Despite this change, the firm maintained an Outperform rating on the company’s shares. The revision follows EyePoint Pharmaceuticals’ first quarter 2025 financial report last week, which revealed higher than anticipated research and development expenses. According to InvestingPro data, eight analysts have recently revised their earnings expectations downward for the upcoming period.
These increased costs have prompted Mizuho to update its financial model for EyePoint, projecting the elevated R&D spending to continue not only for the remainder of 2025 but also into 2026. This adjustment underpins the new price target set by the firm.
EyePoint Pharmaceuticals is currently focused on the development of Duravyu, a pioneering treatment for wet Age-related Macular Degeneration (wAMD). Duravyu is a tyrosine kinase inhibitor (TKI)-based, sustained-release maintenance therapy, and it is in the midst of pivotal Phase 3 trials, LUGANO and LUCIA. Enrollment rates for these studies have surpassed expectations, signaling strong progress in the company’s clinical endeavors.
Mizuho’s analysis highlights the stock’s perceived undervaluation, especially when considering the commercial potential of Duravyu. The firm notes that EyePoint’s valuation is significantly lower compared to its closest competitor, which trades at nearly three times the multiple. This assessment aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently undervalued. Subscribers can access the comprehensive Pro Research Report for detailed valuation metrics and expert analysis, along with 10 additional ProTips about EYPT’s financial health and market position.
Ending on a reaffirming note, Mizuho’s analyst stated, "With strong momentum continuing in the pivotal Phase 3 LUGANO and LUCIA studies, where enrollment rates continue to be far better than originally anticipated, we remain impressed by EYPT’s execution." The firm’s positive stance on EyePoint Pharmaceuticals remains steadfast, as they reiterated their Outperform rating. This optimism comes despite the stock’s high volatility (Beta of 1.6) and projected revenue decline of 21% for the current year.
In other recent news, EyePoint Pharmaceuticals reported a notable increase in its Q1 2025 revenue, reaching $24.5 million, up from $11.7 million the previous year. The company also reported a narrower-than-expected loss per share at $0.65, compared to the forecasted loss of $0.67. Despite this positive earnings surprise, the company’s operating expenses rose significantly to $73.3 million, up from $45 million, reflecting its ongoing investment in research and development. The revenue boost was primarily driven by royalties and collaborations, which contributed $23.7 million to the total net revenue, while net product revenue remained flat at $700,000.
EyePoint Pharmaceuticals is advancing its clinical trials for DuraVu, with strong progress reported in Phase III trials for wet age-related macular degeneration (AMD (NASDAQ:AMD)). The company anticipates completing Phase III enrollment for its DuraVu trials in the second half of 2025. Additionally, EyePoint has extended its cash runway into 2027, supporting its financial stability as it continues to develop its clinical programs. In other developments, the company is preparing for an upcoming FDA meeting regarding its diabetic macular edema (DME) pivotal program, which is expected to be a critical milestone.
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