Chardan initiated coverage on Outlook Therapeutics Inc OTLK with a Buy rating and a price target of $10 based on the company's commercial potential with its lead ophthalmic formulation of ONS-5010 (bevacizumab, Avastin), an anti-VEGF antibody in development for wet age-related macular degeneration (wet AMD).
The company recently re-submitted the marketing application with the FDA for ONS-5010. It expects to learn of a potential PDUFA date by the end of October, with the potential FDA approval in late August 2023.
Chardan notes that ONS-5010 is being developed as an ophthalmic formulation of Roche Holdings AG's RHHBY Avastin (bevacizumab) that was initially approved in 2004 for metastatic colorectal cancer.
But it has been widely adopted for off-label use by eyecare practitioners as an effective treatment for several retinal diseases.
Despite several approved anti-VEGF treatments available for wet AMD, off-label Avastin remains the treatment of choice, accounting for ~50% share of the anti-VEGF market, primarily driven by comparable efficacy and safety at a much lower cost ($50-$100 for Avastin injection compared to ~$2k for treatments from Regeneron Pharmaceuticals Inc REGN and Novartis AG NVS.
We believe it is unlikely that practitioners will move away from bevacizumab, so providing an option for an FDA-approved ophthalmic formulation of the drug at a reasonable price point would likely be met with enthusiasm.
Price Action: OTLK shares are up 6.25% at $1.19 on the last check Tuesday.
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