Good News And Bad News For Ohr Pharmaceuticals

H.C. Wainwright launched coverage of OHR Pharmaceutical Inc OHRP with a Buy rating and $10 target price on potential success of squalamine in Phase 3 for wet age-related macular degeneration (AMD).

“There is tremendous interest in this category given the success of Lucentis and Eylea (~$8B combined), and yet Ohr is mostly overlooked by the Street, in our view,” analyst Corey Davis wrote in a note.

The key advantage of squalamine is it's an eye drop, rather than intravitreal injections to be taken once every 4-8 weeks. Further, Davis noted the drug could enter the market easily as it being studied as an add-on therapy with Lucentis and not as a direct competitor.

The market isn't giving Ohr its due because of the failed phase 2 study. But, after reassessment, Ohr is proceeding with Phase 3 excluding patients with large vessels. Davis expects phase 3 data in 2018, with a launch in 2019.

“[T]his gives us good confidence that Phase 3 has a reasonable chance for success since Ohr is excluding patients with large vessels in its Phase 3 protocol that was approved by the FDA in the form of an SPA (special protocol assessment),” Davis highlighted.

Meanwhile, the market is also expecting year-end Phase 3 results for Ophthotec's Fovista. But, the analyst said the results will not determine squalamine's chance for success regardless of the outcome.

“[W]e feel that if Fovista works, OHRP should see meaningful upside, but if it fails, there is little downside—both because of the low valuation, and the mechanistic differentiation,” Davis added.

At time of writing, shares of Ohr surged 10.17 percent to $3.25.