JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Monday, Oppenheimer reaffirmed its confidence in Kala Pharmaceuticals (NASDAQ:KALA), maintaining an Outperform rating and a $15.00 price target on the company’s shares. The stock, currently trading at $3.37, sits near its 52-week low of $3.35, presenting what InvestingPro analysis suggests is an undervalued opportunity. The endorsement follows a virtual non-deal roadshow (NDR) with Kala’s management, during which the biopharmaceutical company’s progress on its Phase 2b trial of KPI-012 was discussed. This drug candidate is being developed for the treatment of persistent corneal epithelial defect (PCED), a condition with a significant patient population and limited treatment options. With a market capitalization of just $21.74 million and a strong current ratio of 3.11, the company maintains solid financial flexibility for its development programs.
Stifel analysts shared their increased optimism about the trial after learning about positive Phase 1b results, which demonstrated complete healing of PCED. They believe that the Phase 2b trial is relatively de-risked due to the consistency of the primary endpoints between the two trial phases. The recent decision to expand the enrollment by adding 13 patients with central reader confirmation is expected to further enhance the robustness of the trial.
PCED affects approximately 100,000 individuals in the United States, yet there are no FDA-approved treatments that cover the broad spectrum of PCED. The current treatment, Oxervate, is approved only for Neurotrophic Keratitis, which represents about one-third of all PCED cases and requires a demanding administration protocol. Therefore, KPI-012, which has been granted Fast Track Designation (FTD) by the FDA, presents a significant commercial opportunity.
Kala Pharmaceuticals is looking ahead to the third quarter of 2025, when the top-line results from the Phase 2b trial are expected to be released. The reaffirmation of the Outperform rating and the $15 price target by Oppenheimer reflects the firm’s anticipation of positive outcomes from the upcoming trial data. InvestingPro data reveals strong analyst consensus supporting this outlook, with additional metrics and insights available to subscribers. The stock’s negative beta of -1.72 suggests it could provide portfolio diversification benefits, moving contrary to broader market trends.
In other recent news, Kala Bio announced its 2024 financial results, revealing a net loss of $38.5 million, which was slightly better than the projected $40.0 million loss. The company also reported an earnings per share of ($1.74) for the fourth quarter, surpassing both Oppenheimer’s forecast of ($2.47) and the consensus estimate of ($2.28). H.C. Wainwright maintained a Buy rating on Kala Bio, with a price target of $15, while Oppenheimer reaffirmed an Outperform rating with the same price target. In a leadership update, Todd Bazemore has been appointed as interim CEO following the resignation of Mark Iwicki, who will remain as Chair of the Board of Directors. Bazemore’s appointment comes as Kala Bio continues to progress with its Phase 2b CHASE trial for KPI-012, targeting persistent corneal epithelial defect (PCED). The trial has faced a minor setback, requiring additional patient enrollment, but aims to complete by the end of the second quarter of 2025. KPI-012 has received Fast Track Designation from the FDA, which may expedite its review process. Additionally, Kala Bio has implemented retention agreements for key executives, including Bazemore, to ensure leadership stability during this critical period.
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