Raymond James Sees Potential for Large Gains in Aerie Pharma (AERI); Analyst Starts with 'Strong Buy' Rating and Price Target of $48
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(Updated - September 14, 2016 10:00 AM EDT)
Raymond James initiated coverage on Aerie Pharma (NASDAQ: AERI) with a Strong Buy rating and a price target of $48, and a High Risk/Speculation suitability rating. The price target implies upside of 144%. Analyst Elliot Wilbur thinks the company is well-positioned to capture large swaths of market share in the ophthalmology space.
"Assuming clinical and regulatory success, we believe these products could vie for top-position within glaucoma’s expanding $2.7 billion domestic market and that AERI could emerge as a major player in the ophthalmology space," said Wilbur.
The analyst continued, "Aerie’s flagship asset is Rhopressa, netarsudil ophthalmic solution 0.02%. Rhopressa functions as a “triple-action” once-daily eye drop that lowers inter-ocular pressure (IOP) by inhibiting both Rho kinase (ROCK) and norepinephrine transporter (NET). Buttressed by its achievement of its primary endpoint and demonstration of a compelling safety profile in pivotal Phase III trial ROCKET 2, with additional supporting evidence provided by ROCKET 1, the company has filed its new drug application (NDA) and is readying a commercial infrastructure and gathering safety data for Rhopressa’s international submissions; we forecast a 1Q18 launch in the U.S."
Discussing its second asset, Wilbur added, "Aerie’s second key asset is Roclatan- a combination of Rhopressa and latanoprost, a key conventional therapy currently used in the treatment of glaucoma. Top-line 90-day data from Roclatan’s first Phase III trial (MERCURY 1) is expected in September, with an anticipated NDA filing date in 2H17 and estimated 1Q19 launch. Roclatan’s growth potential is derived from the addition of a tried-and-true glaucoma treatment latanoprost to the already-proven safe and efficacious nature of Rhopressa. Roclatan adds an additional mechanism of action (MoA) via latanoprost- making it, if approved, the only glaucoma product to cover the full spectrum of intraocular pressure lowering MoAs. As observed in its Phase 2B work, Roclatan hopes to again demonstrate synergy between its components and prove itself as a uniquely effective therapeutic option."
Shares of Aerie Pharma closed at $20.89 yesterday.
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