Stifel Remains Buyers Of Ophthotech As Year-End Binary Event Looms

Top-line data is expected from two of Ophthotech Corp OPHT's pivotal Phase III trials in the next month. Leading into the catalyst, which could take the stock either way, Stifel analyst Stephen Willey maintains a Buy rating and $75 price target on the stock, representing about 135 upside potential.

In addition to the firm's bullish price target, Willey provided an assumed negative scenario of $7 per share in the event of negative data and $100 to $120 per share in the event of a positive report.

A Word (Or 3) Of Caution

The analyst acknowledged three necessary warnings against Stifel's scenario:

1. Distinctions in mechanisms between Ophthotech’s Fostiva and Regeneron Phamaceuticals Inc REGN's failed rinucumab.
2. Comparison between “largely uninterruptable” Phase I results.
3. Phase IIb data on Fostiva lacking anatomical evidence.

Taking the caveats into account, Willey said the current Ophthotech valuation favorably resets the risk/reward profile.