Aerie Pharma Target 'Back To $40' At Canaccord

In a report published Friday, Canaccord Genuity analyst Corey Davis upgraded the rating on Aerie Pharmaceuticals Inc AERI from Hold to Buy, while raising the price target from $12 to $40.

In the report Canaccord Genuity said that Aerie's interactions with the FDA have resulted in:

• “Allow ROCKET 2's primary endpoint to include patients with a baseline IOP of 25 mmHg or below
• Agreement that the company may use a hierarchically-based statistical approach such that the three arms of the trial remain adequately powered (>85%) and no further enrollment is needed.”

ROCKET 2 is expected to have results in 3Q15. If ROCKET 2 is successful, Aerie would be filing an NDA in the back half of this year.

In case the FDA requests additional data or issues a CRL, the ROCKET 4 data being ready could prevent further delays. This trial would be designed similar to the revised ROCKET 2, which means that it could enroll patients up to 30mmHg and could have efficacy readout at three months for primary endpoint and at six months for secondary endpoint.

Analyst Corey Davis wrote, “MERCURY 1, 2 and 3 are expected to start in Q3, 2016 in the US and 2016 in the EU, respectively. The first trial is similar to Roclatan's Ph2b, which is designed to see whether the drug is superior to its components Rhopressa and latanoprost over 28 days. MERCURY 2 is a 3-month efficacy study and MERCURY 3 will compare Roclatan to a leading combination glaucoma drug marketed in the EU, which has the biggest combo market in glaucoma.”

“Since we know from ROCKET 1 that prostaglandins may sensitize the trabecular meshwork to a better Rhopressa response, we are optimistic that synergistic effects can be shown in the Roclatan Ph3s,” Davis said.

“We are now MUCH more comfortable about the approvability of Rhopressa, and have thus added it back to our model,” Davis added.