Ovascience Has Lack Of Visibility And 'Sluggish' Uptake, Warns Leerink

• OvaScience Inc OVAS shares have declined 73.72 percent year-to-date, from $51 on January 7.
• Leerink’s Paul Matteis has downgraded the rating on the company from Outperform to Market Perform, while reducing the price target from $16 to $14.
• Matteis prefers to remain on the sidelines until there is increased visibility into the near- and long-term path of the AUGMENT launch.

Analyst Paul Matteis commented, “Given that the IVF market is comprised of a very motivated patient population, we've been surprised that only 35 commercial cycles were completed or underway through September 29.”

Matteis continues to see a “large potential market” for AUGMENT, especially given the 1.5 million worldwide in vitro fertilization cycles and the high unmet need. However, management indicated that it was “difficult to predict whether or not commercial treatments will grow linearly in the near term.”

The lack of visibility into the launch of AUGMENT is likely to be a headwind that constrains the performance of the stock in the near future. Matteis believes that “tangible commercial progress that is reflected in the OVAS top-line will be required for the stock to outperform.”

OvaScience is currently in the process of modifying its salesforce, although Matteis believes that the transition to an account based structure, from a region-based one, would “best position the company for the long-term.”

“While we understand that the global launch of a novel product can take time, the clinical networks where AUGMENT is available perform thousands of cycles/yr and thus have capacity for greater use,” Matteis added.