Chardan Initiates Eyegate Pharma At Buy, Sets $6 Target

• Eyegate Pharmaceuticals Inc EYEG shares are down 30 percent in the last three months, and have traded below $3 for most of December.
• Chardan Capital’s Keay Nakae initiated coverage of the company with a Buy rating and a price target of $6.
• Eyegate Pharma’s lead compound is promising and results from the Phase1b/2a clinical trial could be the next key catalyst, Nakae stated.

Analyst Keay Nakae believes that Eyegate Pharma’s lead compound, EGP-437, is “a promising approach” for the treatment of eye diseases. The company has completed a Phase 3 clinical trial for this compound for the treatment of non-infectious anterior uveitis.

Eyegate Pharma is currently preparing for EGP-437 to enter a larger Phase 3 confirmatory clinical study, which could commence shortly, Nakae said.

He added that the next key catalyst for Eyegate Pharma’s shares would be the results from the company's Phase 1b/2a clinical trial, which is evaluating the compound in patients who have undergone cataract surgery with implantation of a posterior chamber intraocular lens. The company is expected to report top-line data from this study in 1Q16.

“A positive result here will increase the probability that EGP-437 can be used to treat a second indication in the front of the eye, which is a substantially larger addressable market than uveitis,” the Chardan Capital report noted.

Eyegate Pharma had inked a licensing agreement with for EGP-437 for uveitis with Valeant Pharmaceuticals Intl Inc VRX in July 2015. Eyegate Pharma received $1 million in upfront cash payment, clinical development support, milestone payments, and high single digit royalties based on net sales. “We believe that this agreement provides additional external validation of EGP-437,” Nakae wrote.