UPDATE: Stifel Nicolaus Initiates Coverage on Ocera Therapeutics on Best-In-Class Mechanism of Action
In a report published Monday, Stifel analyst Stephen Willey initiated coverage on Ocera Therapeutics, Inc. (NASDAQ: OCRX) with a Buy rating and $19.00 price target.
According to the report, OCRX’s lead product OCR-002 (ornithine phenylacetate) represents a best-in-class mechanism of action for the treatment of hepatic encephalopathy (HE) in patients with acute and chronic liver disease.
“We believe the combination of palatable clinical development risk, steady data/news flow,
strong patent estate, and potential to meaningfully improve the treatment algorithm in an already greater than $1B HE market opportunity with a rapidly expanding patient demographic creates a highly favorable risk/reward at these levels,” the report said. “We believe OCR-002’s dual mechanism of action represents a distinct competitive advantage that will prove complementary to current standard of care therapy and translate into improved patient outcomes.”
Some highlights from the report included:
-”We believe OCR-002’s Orphan Drug designation appropriately reflects the significant unmet medical need that currently exists in the acute-care setting.”
-”We believe continued progress on the development of an oral formulation to address an even larger maintenance market opportunity provides a significant source of optionality that remains excluded from our estimates.”
-”Risks to our investment thesis and target price include clinical development (trial failures), regulatory, commercialization (reimbursement and competitive), and balance sheet risks.”
OCRX closed Friday at $11.70.
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