Ocular Therapeutix Makes Lots of Buzz. Wall Street Notices


Reporting positive top-line clinical trial results, initiating two other clinical trials, getting wider Medicare coverage of its lead product, resolving a regulatory warning letter, and reporting preliminary third-quarter results that exceed analysts’ expectations, Ocular Therapeutix has seen a burst of activity in recent weeks, and Wall Street has taken notice, pushing the stock to a 52-week high in the past week.

“We have been very pleased with the pace of development at Ocular,” President and CEO Antony Mattessich told OIS Weekly. “The pipeline continues to move forward, providing us the opportunity to put four new high-potential programs into Phase II within the next 12 months, and, of course, with Dextenza, where the promise of additional indications and the recent reimbursement of the associated procedure code for drug placement have created tremendous momentum.”

Clinical Trials Progress
Just last week the company reported positive top-line results from a Phase I clinical trial of OTX-CSI, the bioabsorbable cyclosporine intracanalicular insert for dry eye disease. The five study subjects tolerated the insert without any serious adverse events, and none dropped out after 16 weeks. Tear production, measured by Schirmer’s test, improved from an average of 4.2 mm at baseline to 8.2 mm at 12 weeks.

Shortly before those results came out, Ocular Therapeutix reported that patient dosing had started in a Phase II trial of OTX-CSI of 105 patients with dry eye disease.

In September, the company announced dosing of the first patients in a Phase III clinical trial of Dextenza (dexamethasone ophthalmic insert) 0.4 mg for post-surgical ocular inflammation and pain in children following cataract surgery. The trial, designed to evaluate the safety and biological activity of Dextenza compared with an active control (prednisolone acetate suspension eye drops), intends to enroll approximately 60 subjects between the ages of birth and 3 years.

“One area critical to surgical outcomes is postoperative medication non-compliance,” CMO Michael Goldstein, MD, MBA, said. “It can be very challenging to successfully administer topical eye drops to children, particularly when they have recently had surgery. If approved for pediatric use, Dextenza could provide pediatric ophthalmic surgeons with an interesting product to use to help their patients.”

Another MAC Establishes Fee Schedule for Inserts
In another positive development, National Government Services (NGS), one of seven Medicare Administrative Contractors (MACs), became the third MAC to establish a physician fee schedule for procedure code 0356T for the administration of drug-eluting intracanalicular inserts, including Dextenza. The professional fee for CPT code 0356T is now eligible to be paid per the established local fee schedule, which can be found on the NGS website.

Mattessich said the three MACs (NGS, First Coast Service Options, and Novitas Solutions) together cover approximately 50% of all Medicare beneficiaries. “This continues to be a positive development and one that could impact adoption, not only for Dextenza, but also for the other product candidates in our pipeline utilizing the same route of administration,” he said.

Successful Resolution for ReSure
The company has also received a letter from the US Food and Drug Administration (FDA) regarding ReSure sealant, a hydrogel ophthalmic wound medical device indicated for management of certain clear corneal incisions with a demonstrated wound leak following cataract surgery. This letter closes out an October 2018 FDA warning letter. The violation cited in the warning letter (CMS #564663) has been addressed, and Ocular Therapeutix says it’s committed to sustained compliance with all federal regulations.

Financial Situation
The company also reported preliminary third-quarter results that show a 250% increase in product revenue over the second quarter. Dextenza accounted for about $5.4 million of quarterly sales and ReSure about $500,000. The company expects to come out with full third-quarter results next month. That includes nearly 10,000 billable inserts for the quarter, Ocular Therapeutix reported, with a sharp jump in September.

Said Mattessich, “We are experiencing tremendous momentum, and we believe that there is strong receptivity to the Dextenza hands-free value proposition in the COVID environment.”
Third-quarter sales surpassed some analysts’ estimates. MarketBeat reported that analysts expected Ocular Therapeutix to post sales of $3.49 million for the quarter.

The company is also getting passing grades for its balance sheet. Simply Wall St explains that in June Ocular Therapeutix had debt of $51.5 million, up from $48.8 million in a year. But the company also had $84.3 million in cash to offset that. The company’s most recent balance sheet showed liabilities of $13.8 million falling due within a year, and liabilities of $88.1 million due beyond that. With an estimated $2.87 million in receivables due within a year, liabilities outweigh cash and near-term receivables by $14.7 million. However, with a market capitalization of $486 million, Simply Wall St describes the liabilities as “manageable,” adding, “While it does have liabilities worth noting, Ocular Therapeutix also has more cash than debt, so we’re pretty confident it can manage its debt safely.”

InvestorsObserver gives Ocular Therapeutix an analyst rating rank of 72, meaning the stock is ranked higher by analysts than 72% of stocks. This site says the average projection by analysts is $10.333 over the next 12 months, and analysts classify the stock as a strong buy. Within the week, the stock hit a one-year high of around $11 a share.

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About The Author

Steve Lenier

Steve Lenier began a career in medical literature over 30 years ago. He has worked on a variety of publications and projects, and across a number of specialties. Since 2005 most of his time has been spent covering ophthalmology, both print and online.

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