| 2016-10-04 10:26:17|
OPHT, REGN 10:26 10/04 10/04/16
Before the Move: Ophthotech worries seen as opportunity ahead of Phase 3 data
Regeneron Pharmaceuticals' (REGN) disappointing Phase 2 data evaluating aflibercept co-formulated with rinucumab in neovascular age-related macular degeneration, or AMD, released on Friday have been a drag on shares of Ophthotech (OPHT), which are down about 15% over the last few sessions. The latter is also focused on developing therapeutics for AMD, but JPMorgan analyst Anupam Rama believes the treatments being developed by the companies show "important differences." Further, the analyst recommended buying Ophthotech's shares amid the weakness ahead of its Phase 3 data, which is expected to be released before the end of the year. BACKGROUND: Ophthotech has initiated a pivotal Phase 3 clinical program to evaluate Fovista 1.5mg combination with anti-VEGF drugs compared to anti-VEGF monotherapy for the treatment of newly diagnosed patients with wet AMD, which is the more advanced type of the disease. Although it affects only 10%-15% of those who have the condition, it accounts for 90% of the severe vision loss caused by macular degeneration. BUY ON WEAKNESS: In a note to investors this morning, JPMorgan's Rama raised his price target for Ophthotech to $110 from $95, citing the elimination of its key competitor Regeneron from the Wet AMD space following its trial failure. Noting that Ophthotech's stock was down amid mechanism concerns following Regeneron's data, Rama said he views the weakness as a buying opportunity. Further, he sees "important mechanistic differences" between the company's Fovista and Regeneron's REGN2176-3, adding that early Phase 1 data for Fovista is "comparatively more compelling." Rama told investors that Ophthotech's Phase 3 results with Fovista and Lucentis combination therapy are expected this quarter, and reiterated an Outperform rating on the company's shares. COMPETITOR DATA: On Friday, Regeneron announced topline results from its Phase 2 CAPELLA study evaluating aflibercept co-formulated with rinucumab, an anti-platelet-derived growth factor receptor beta antibody, in patients with neovascular AMD. The combination therapy did not demonstrate an improvement in best corrected visual acuity compared to intravitreal aflibercept injection monotherapy at 12 weeks, the primary endpoint of the study. PRICE ACTION: In morning trading, shares of Ophthotech's shares have gained about 5.5% to $45.97, while Regeron's stock is flat near $402 per share. "Before the Move" is The Fly's recurring series of exclusive stories that identify potentially market moving events, along with analyst predictions, ahead of the news.