Cowen Says Ocular Therapeutix's OTX-DP Miss 'Meaningless' To Bull Thesis

Shares of Ocular Therapeutix Inc OCUL were trading down more than 42 percent on Monday, after the company announced its second Phase 3 clinical trial evaluating its lead product candidate DEXTENZA (sustained release dexamethasone) for the treatment of ocular itching associated with chronic allergic conjunctivitis failed to outperform the placebo.

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Cowen analysts Ken Cacciatore and Tyler Van Buren reiterated an Outperform rating on the stock, pointing out that, even though any failure in clinical trial is always disappointing, “in this instance, the OTX-DP miss in allergic conjunctivitis is meaningless” to the firm’s thesis.

The analysts continue to have a “very positive view of this asset and technology nearly entirely on the OTX-TP opportunity for the treatment of glaucoma, which should initiate Phase III next quarter.” In fact, the firm’s “Clinician Consultants Remain Steadfast In Their Views Of Ocular's Technology [as] OTX-TP Targets The Largest Unmet Need In Glaucoma And Appears To Have An Optimal Clinical Profile.”

Consequently, the new data on DEXTENZA, although unsatisfactory, does not change Cowen’s bull thesis or Outperform rating.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.