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On Monday, Raymond (NSE:RYMD) James analyst Dane Leone reiterated a Strong Buy rating for Ocular Therapeutix (NASDAQ:OCUL), a $1.2 billion market cap biotech company, with a steady price target of $19.00. Following the company’s first-quarter earnings report for 2025, Leone highlighted that the revenue of $10.6 million did not meet the firm’s expectation of $17.4 million. The diluted earnings per share (EPS) were also below the projected $(0.30), coming in at $(0.38). According to InvestingPro, three analysts have recently revised their earnings estimates downward for the upcoming period.
Ocular Therapeutix’s revenue decline was primarily attributed to its product Dextenza, which saw a quarter-over-quarter decrease of approximately 38% and a year-over-year drop of around 28%. The reduction has been linked to factors such as pricing adjustments, changes in stocking patterns, and the product’s inclusion in the CMS MIPS for 2025. InvestingPro data shows the company’s overall revenue growth rate at 9% over the last twelve months, with analysts forecasting 10% growth for FY2025.
Despite the lower-than-anticipated financial results, the company’s cash and equivalents, totaling around $350 million at the end of the first quarter, are expected to sustain operations well into 2028. This projection goes beyond the anticipated topline results for two of its key product candidates, SOL-1 and SOL-R. InvestingPro analysis confirms the company’s strong liquidity position, with a current ratio of 10.66x and cash holdings exceeding debt levels. Get access to 6 more exclusive InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
Leone’s sustained confidence in Ocular Therapeutix is partly based on the prospects of Axpaxli, which is viewed favorably in comparison to other sustained release tyrosine kinase inhibitors (TKIs). The strategic design of the Axpaxli pivotal program also contributes to the positive outlook. The company’s immediate focus includes the first-quarter 2026 topline readout of SOL-1, which achieved full enrollment in December 2024, the rapid enrollment of SOL-R with a reduced study size of 555 patients, and upcoming study initiations for NPDR and DME. While analysts maintain optimism with price targets ranging from $14 to $22, InvestingPro data indicates the company is not expected to achieve profitability this year.
In other recent news, Ocular Therapeutix reported first-quarter results that did not meet analyst expectations. The company posted a loss of $0.38 per share, which was wider than the anticipated loss of $0.29 per share. Revenue for the quarter was $10.7 million, falling short of the consensus estimate of $17.07 million and marking a 27.6% decrease from the previous year. Ocular attributed the revenue decline to its pricing strategy and changes in buying patterns among distributors and surgical centers. The company also noted the impact of its DEXTENZA product’s inclusion in Medicare’s Merit-based Incentive Payment System for 2025. Despite these financial setbacks, Ocular emphasized progress in its clinical programs, with the SOL-1 Phase 3 trial for the AXPAXLI product on track for topline data in Q1 2026. The company also reported strong enrollment in the SOL-R Phase 3 trial following recent protocol adjustments. Ocular ended the quarter with $349.7 million in cash and cash equivalents, which it expects will fund operations into 2028.
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